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Hello, and welcome to Drivechain Friday Conversations.

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Today is July 7th, and we're excited for another weekly chat about Drivechain,

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which is Bitcoin Improvement Proposal 300 and 301.

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These are recorded spaces. We do them once a week.

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We are LayerTwo Labs, and we are advocates for BIP300 and 301,

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which we think is an extraordinarily powerful upgrade for Bitcoin,

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bringing potentially immense value accrual to Bitcoin,

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potentially immense increases in adoption of Bitcoin,

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as well as transaction fee revenue for miners,

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potentially immensely growing.

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Drivechain has solutions for all kinds of users and all kinds of interests.

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Everyone who is interested in promoting Bitcoin and encouraging its use

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would benefit in many different interesting ways from Drivechain adoption.

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It's a very powerful idea, enabling people to get what they want,

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whether they want larger blocks or more privacy or more programmability,

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oracles, DNS, all kinds of innovation and experimentation could be built on Bitcoin

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in a way that enables Bitcoin's mainchain to be stable and conservative and small block,

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while sidechains exist in a very successful and economically powerful way,

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contributing to the number go up of the token.

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Because all of the sidechains and the mainchains share monetary policy and share hash rate.

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So, as Bitcoin grows, the sidechains would all be sharing the same monetary policy

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and contributing to that growth.

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Welcome to the stage, Paul.

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Everyone's free to come on up and ask questions.

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Welcome to those who've joined the audience.

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You can come on up and ask questions, share comments and thoughts on Drivechain.

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Happy Friday, Paul.

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Hello, happy Friday.

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We've had a lot of really great discourse on Twitter and in the Telegram group.

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Thank you for joining. Welcome to the stage.

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We love it when you join and bring your questions and comments.

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What's on your mind?

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Hey, guys. Happy Friday.

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I had a question, Paul, for you about the, you know,

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I'm required for hash rate escrow for like a sidechain withdrawal.

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I think I heard you say at one point that the current proposal is something like three months.

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Is that right?

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That is. It's correct.

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But the timing is kind of hard to understand sometimes because...

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It's like three months of consistent, like, yes votes, right?

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Right. And it's kind of like there's a train leaving, you know, like New York and going to L.A.

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and it takes three months to get there.

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And so if you miss the train, it can be six months.

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And then if the trains both move half as slow, it can be, it could theoretically be 12 months.

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Yeah, sure.

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Yeah, I was thinking about this the other day.

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I was thinking about other peg-in mechanisms and, you know, something that I realized was

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even if you had, like, say that you have a really good, like, zero-knowledge proof, like, verification opcode, right?

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You could, you know, like the original dream of the sidechain paper with, like, SPV proofs

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was that you would, like, get a lightweight SPV verification

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that a withdrawal conformed to, like, the consensus rules of the sidechain

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without actually having to, like, validate them on mainchain.

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But then the problem there is that you don't know if that transaction is actually part of, like, the longest sidechain

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or if somebody can, you know, forge a proof with, like, enough hash power.

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And I was thinking that you might actually have a really similar problem

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even if we had, like, some ZKP system.

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And so you would need some way of letting the users of that sidechain, like, intervene in a withdrawal that's gone bad.

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And I realized that a kind of neat attribute of using hashrate escrow for sidechain withdrawals

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is that if you have a really popular sidechain, it's, like, super valuable.

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You know, everybody in the world is using it for coffee payments.

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There's a lot of economic value there.

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And the current set of miners decide to collude and steal from that sidechain.

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Like, a thing that you could do is you could raise a bunch of money as those sidechain users

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and go buy a bunch of ASICs and become part of the hashrate and actually, like, fight back on it.

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Right?

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And really, you can either rent them or you could actually cut a deal with the other miners.

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Yeah, like, pay the miners more.

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Say, like, hey, you know, I'll bribe you to not do this.

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Yeah, that's a very good game theoretic analysis.

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In fact, there's a word for this, but I can't remember exactly what it is.

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But it's strongly related to Tom Schelling's famous Schelling salience idea.

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In particular, the withdrawal destination has to be declared up front.

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So you have to say, I'm withdrawing these coins.

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I'm taking 14 to this address, 3 to this address, 12 to this address, 12.5 to this other address.

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So you have to declare that in advance.

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And yet, no one really knows who will own what hashrate or who will find which blocks over the next three months.

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So actually, the miners who want to steal face a weird little conundrum.

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And their coalition can collapse because it's going to be very easily melted down and reformed.

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So the whole drivechain idea is just that this is a very, very accurate measurement

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of whether or not the miners as a group give the whole sidechain idea as a group the thumbs up or not.

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And the reason why I built it like that is because my view is just that the sidechain-enabled Bitcoin

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will have a higher market price and more net present value of fees total than one that does not.

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And so then the miners will just be like, well, we really cannot.

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They'll be in a position where they just really cannot.

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They'll feel as though they cannot miswithdraw the coins ever because it'll be like a nuclear war.

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And I put this in the original November 15 post,

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the guys with the nuclear warheads who are shooting bows and arrows at each other.

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And they're like, it's a bridge too far. The retaliation would be too great.

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So yes, that's exactly the line of thinking that I used.

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You can see for yourself, I'm sure you've noticed it.

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I'm sure it's very apparent to you now that people have this kind of obsession with the ZK proof thing.

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It's like this obsession that the miners, we want to keep the miners on a very short leash.

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We want to make it impossible for them to ever even be able to steal.

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But as you've pointed out, this is kind of a fool's errand because it's not even so much breaking the rules of the sidechain.

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It's like, which sidechain is the longest? Was something hidden from me later?

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So I have this emphasis on auditability instead that is very different.

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It's very, very different. And in fact, me allowing the miners to steal,

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that's just the loose coupling that gets us away from the criticism

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that drivechain is a block size increase or something.

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Because it is not a layer one block size increase in the slightest.

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But it does solve the problem for people who wanted to opt into larger blocks.

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So it's a long answer.

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I also wonder if you had, let's just imagine a magical opcode.

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Call it opmagic. I don't know how it works.

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It's magic, but it lets you do a trustless peg out.

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If your threat model is that the miners are actively hostile,

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like a super majority of the miners are actively hostile to your sidechain,

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then it seems that if they had an opcode,

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then they could actively reorg blocks that used opmagic

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to process withdrawals from your sidechain.

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So either the miners are not actively attacking your blockchain,

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your sidechain, or they are.

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And if a super majority of miners are actively attacking your sidechain,

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then you're kind of screwed no matter what.

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Yeah, you're absolutely correct.

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You have the full expert level understanding of it.

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I mean, when I was designing it, what I did is,

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literally, I remember doing this.

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I had a blank piece of paper, and I drew a line down the middle.

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And on the left, I kind of put,

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what would everyone want to be happy in the small blocker camp?

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They don't want to have to audit a lot of data.

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So it has to be the case that they could ignore the data,

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the data of the large block sidechain.

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It has to be the case that they could ignore that.

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And then I thought, well, what do the large blockers want?

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They want a different blockchain with larger blocks.

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And I thought, what are they willing to give up?

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They are willing to give up SPV mode.

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And they are willing to –

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So I kind of thought, like, how do we bridge this gap?

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And I was just kind of, like, literally writing things on each side of the page.

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And I was like, well, already the small blockers don't mine.

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No one mines, so mining is not in the left column.

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And we can just have –

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And then on the right side of the column, I thought, like,

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well, what if 51% attacks the sidechain?

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Won't those people, the large blockers, feel bad about that?

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But then on the right side, I had already written or something, like,

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if 51% turns against –

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These people already buy –

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They're already into believing that 51% of the hash rate is not destroying Bitcoin.

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So it's kind of, like, more or less how I came up with the idea.

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And the fact that it's easier for miners to steal from the BIV300 sidechain,

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which is the truth, that's true.

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And the critics point that out, and they're right.

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But what they don't really point out is that that's why it's three months.

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And that's why all the outstanding activity is pre-compressed into just one hash.

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So it's just one hash every three months.

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So that's sort of supposed to offset the fact that it's easier for them

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to just kind of arbitrarily take the coins and to withdraw them to any destination they want.

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But the three months and what you just described about the strategic instability,

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they'd have to organize this coalition in advance, this 51% coalition in advance,

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if the coalition fails, they'll be at the very least sort of shamed and humiliated.

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The mining pools, the only thing they own is their brand.

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The underlying clients, the hashers, the people with the ASIC chips,

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they can switch at any moment.

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Now, would they switch because of this?

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Like, the pool could say, hey, I'm trying to get you more money.

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Unclear, but the only thing the pools have is their brand.

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And for people to even talk about doing this, I think, would be itself subversive.

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And even if they succeeded, they would just be, so, yeah, so this is me rambling,

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but I think you have a very, you know, A-plus, basically,

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understanding of what I was thinking when I made it, which was just,

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this is something that will help resolve the dispute of the block size war.

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The small blockers will get what they want.

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The large blockers will get what they want.

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No one will get – no one will be harmed at all.

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It turns out that was a little naive because actually a lot of people had made a little,

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something of a career out of fighting the block size war,

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and a lot of people had made a career out of like, you know,

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they're like professional defenders of Bitcoin,

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and people have worked on similar, like maybe what you might call competing ideas.

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So there were still, there was still this group of people who are harmed.

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These are enemies of Bitcoin, enemies of Bitcoin's success, in my view,

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who are harmed by this idea, but it ultimately didn't matter

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because the large blockers decided to declare war and fork off,

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first with the SegWit2x and then with BCH,

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and as a result no one became interested in like a win-win solution to this problem,

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and it sort of just languished, and that's the history of the idea.

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Yeah, another, and the reason why I, you know,

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started by asking about the time limit was when I realized that

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a strength of hash rate escrow is that you have a time window

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during which you can go strike a deal with the miners,

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or go rent hash power, or go buy hash power, whatever.

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It actually made me think, you know, maybe that period should be longer, right?

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Like I originally thought like six months was too long,

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and now I'm wondering if three months is too short, you know,

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especially if you can do like cross-chain atomic swaps

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to like get liquidity out of the sidechain, right?

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Like I imagine that, you know, the people who would actually be doing

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sidechain withdrawals might be like exchanges or service providers,

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and you would just go buy your sidechain coins from them, right?

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It would be something like that.

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Well, I can, this is an interesting point.

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So what I was thinking, when I first designed it, I made it two weeks,

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and I thought this is so long, and what I was thinking of

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was two events that had happened recently, relatively recently,

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in Bitcoin's history.

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They were recently, from my point of view, in 2015.

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And one was the LevelDB lock database incident

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that had like just happened in July,

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and that one was a total freak surprise

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that happened at like 2 a.m. Eastern time or something.

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Maybe I'm not remembering that detail correctly,

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but the point is it was a complete surprise, and no one knew.

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Like Luke Dax Jr. was just like on the IRC chat saying,

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like, LOL, Bitcoin has forked, and like no one had noticed.

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But even still, even despite this kind of emergency surprise attack,

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this issue was resolved.

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This issue which had to resolve, this was like a relatively complex situation,

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and it was resolved within five or six hours.

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And then previously there was a value overflow or value underflow incident

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where like 2 billion Bitcoin had been created.

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That was a long time ago.

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But that one also was a surprise, and someone just posted a Bitcoin talk,

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and then they had to write, they wrote new code and shipped the thing,

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and that was resolved within five hours.

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So I was thinking about that, and I thought two weeks is a long time.

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And then I went to Scaling 3 in October 2016 in Milan.

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After having presented on scaling via sidechains,

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I did some presentations, and then people were meeting and talking with me,

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including people like Adam Back, Matt Corallo, people who were great people,

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and they were talking about the idea.

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And they asked why it was two weeks, and I explained to them

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about what you were saying about how you could swap out instantly

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so it doesn't really matter.

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So the more time is more security, but it's kind of free

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because time value of money.

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And so they said, well, why not make it longer?

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And that's when I decided to just make it three months

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because I was like it doesn't really make any difference.

233
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And then what happened after that was as years went by,

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I realized that none of the critics really knew anything about Drivechain at all.

235
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So then I started to second-guess myself.

236
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I said I made it three months just because someone made a comment,

237
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but none of these people really get it.

238
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And I was kind of like, so I kind of, the timing thing,

239
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I kind of go a little bit back and forth on,

240
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but I really do believe that there is no actual cost.

241
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So to address your last point, what I really think will happen

242
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or could happen is that the people who, when you swap out instantly,

243
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who's collecting those coins?

244
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They're going to clump up on certain individuals,

245
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and these are the individuals who are either the most patient

246
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and they think the risk of the sidechain of BIP300 withdrawal failing is the lowest.

247
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So these coins are going to be changing hands.

248
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Some of those people could themselves be miners or mining pool operators.

249
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So just in the very next instant, over the next whatever it is, 12 hours or so,

250
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all the withdrawals will be piling up in the hands of whoever it is out there

251
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that thinks that they can get them across BIP300 the honest way,

252
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across the withdrawal the honest way.

253
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And so it's kind of like very quickly, they'll just be already,

254
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that idea you expressed before about people negotiating a coalition,

255
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it's kind of like the coalition will already be pre-made,

256
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the coalition of people who want to fight for the honest BIP300 withdrawal.

257
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They'll already have kind of opted into it in exchange for a tiny yield.

258
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And so it's kind of like I still now think like maybe I made it three months

259
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and maybe it was too long because remember it's three months

260
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if 100% of the hash rate is participating in every withdrawal.

261
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And then still you can miss that one.

262
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They can be going like a Mussolini fascism train on time.

263
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They could be going every three months.

264
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And if you just barely miss one, you really have to wait six months.

265
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So I kind of thought it was pretty long.

266
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But yeah, you're right.

267
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A lot of people don't grasp that only specialists will be using the BIP300 withdrawal.

268
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Regular laypeople will just be swapping out.

269
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Yeah, and another idea that I think is really interesting,

270
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it came up in a thread that I was on, I believe you were on,

271
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and then John Light was on.

272
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One of my evergreen concerns that I had had with drivechain had been over time

273
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if a miner wants to make sure that they are processing the correct withdrawal

274
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or just doing right by the sidechain,

275
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do they have to run very computationally or bandwidth or data intensive processing

276
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in order to validate those sidechain rules

277
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and make sure that they're picking the right proposal?

278
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And a thing that John Light said that I thought was really interesting was,

279
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so you have that dynamic maybe playing out, maybe not, but maybe playing out.

280
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And then on the other side of it, with things like Stratum V2,

281
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we really want individual miners to be doing their own transaction selection for blocks

282
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instead of having a small number of pools deciding what transactions get into blocks.

283
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And the thing that John Light said that was kind of a big unlock for me

284
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was you could always have some ZK client that's really inexpensive to run

285
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that, you know, like if...

286
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If Paul is a proponent of the big block sidechain, and he wants to make sure that all of the miners process his withdrawals,

287
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then the economic incentive is there for him to spend all the processing power on producing, you know, ZKPs or something that are very cheap to validate by individual miners who are running Stratum V2.

288
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So, you know, like we can use some of the new moon math to make it still very cheap for miner decentralization to move in the right direction while still having, you know, really complex sidechain rules that people don't actually need all the data for.

289
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So I thought that was just a really interesting point that I hadn't seen expressed or talked about, and it allayed one of my bigger concerns around drivechains.

290
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I don't know if that made sense. I haven't had enough coffee yet today, but it's interesting.

291
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Paul, did you have thoughts on that question?

292
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I don't even think it was a question. I think I'm just saying it out loud.

293
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Maybe he's disconnected for the moment, but those are great thoughts, Reindahl.

294
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Reindahl, do you share John Light's interest in a privacy sidechain being an exciting thing? Do you think that has potential?

295
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You know, if let's say hypothetically drivechain were adopted as soon as possible, so, you know, 12 months from now, the, you know, perhaps the privacy sidechain with zero cash technology would exist or something like that.

296
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Do you think maybe the privacy altcoin community and just, you know, do you think generally there could be a big adoption of the Bitcoin privacy sidechain in your view?

297
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Or what are the, you know, the things that would make you feel that might happen or might not happen?

298
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So I think the mistake would be to make like a privacy sidechain that's just like the privacy sidechain.

299
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I think it has to be a sidechain that's like very desirable for some other reason and then has privacy built in.

300
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So if we did a sidechain that was really optimized for payments and you can do like lots of very low latency micropayments, you can do, you know, your daily coffee purchase.

301
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It like replaces lightning. It does the thing that lightning wants to be, but without all of the liquidity provisioning requirements.

302
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And it just so happens to use, you know, ZK shielding or some other like privacy technology.

303
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I think that makes sense. Like one of the problems that I have with kind of privacy coins is that the anonymity set is all people who decide to use that privacy coin and not something else.

304
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Right. Like if the number one feature for some network is that it's like the privacy thing, then your anonymity set is like the people who chose that as their primary feature.

305
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If instead it's like, hey, the reason why I'm using this sidechain is because it's the best thing for payments.

306
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And it just so happens to have really, really, really good privacy.

307
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Then you kind of get like a more useful anonymity set to sit in that that's like bigger and has more diverse payment activity.

308
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And. Yeah, I mean, it's like. Yeah, totally.

309
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I just wanted to say that I heard you the first question, but for some reason, the mic wasn't working. I don't really know why.

310
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So I had to restart. But the question about is if do miners have to validate sidechains?

311
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The answer is that it's like this. The whole framing of the question is wrong.

312
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And it's an unfortunate thing because the you have to separate everything to two columns again, which is that the column on the sort of left is like what the small blocker column of someone who doesn't want the sidechain.

313
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That person never has to validate the sidechain, but then there's the people on the right who want to use the sidechain and they obviously they want it to work and they want it to work perfectly.

314
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They want the withdrawals and deposits to work. So we have to care about that person.

315
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So it's an idea of giving two people, two groups of people what they want, even though they have a dispute.

316
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And if you don't think about it that way, then I don't think any of it will make sense to you.

317
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And I think that's what a lot of people don't don't understand. I think you get it.

318
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But I think so. The answer is. That do miners have to validate the side?

319
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The answer is no, because not to mine a valid L1 block, they can mine an L1 block without validating the sidechain and they can collect all the blind merge mining fees.

320
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One hundred percent or ninety nine point nine percent, whatever the fees minus the cost of the notice of the effective, all of it without doing any of that.

321
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But if they don't do the withdrawals the right way, then users will not really be using sidechains.

322
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As I say, the withdrawal. How do I know that I actually withdraw the coins that are sent into the sidechain?

323
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And if I own some over there, how will I get them back?

324
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So since I, as the designer, want to appease both groups of people, I've gone to extraordinary lengths to make it very easy for everyone to figure out, not just the miners, but everyone to figure out whether or not the withdrawals are being done correctly.

325
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And that starts by making them very slow and making only one withdrawal per period and making the entire withdrawal be covered by one hash and having the sidechain node, the full node will be screaming the single valid hash.

326
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And every single block and in every single block header, in fact.

327
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So the way the question is sometimes, as with many drivechain questions, when I answer it, it's actually misleading somewhat to people, even though I'm doing my best to answer it honestly.

328
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Because I'll start talking about all these things I do to make it easy to validate.

329
00:27:14,551 --> 00:27:21,551
But when push comes to shove, the answer is that no, no one has to do any validation of the L2 at all.

330
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It's not mandatory at all.

331
00:27:22,551 --> 00:27:31,551
And yet we have to point out that what the miner can do is they can just assume that everything's working until enough people complain.

332
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Then, just like anyone who investigates anything, they could start to maybe run the sidechain node in SPV mode, which costs almost nothing, a few megabytes per year of block space to check the headers.

333
00:27:48,551 --> 00:27:58,551
And then if they wanted to, they could start up a full node and sync like a pruned node or an assumed valid node or something or a ZK node, exactly as you were saying.

334
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They have an enormous continuum of possibilities open to them.

335
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And we, of course, like any intelligent person, we would rearrange what is – we would want it so that whatever things are very easy to check and most indicative of the validity, the truth or falsehood of the claim, you check all those things first.

336
00:28:20,551 --> 00:28:25,551
It's like you're investigating a murder and someone says, well, I have HD video on my video camera.

337
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I have the video for the last 10 years, and I have a video of the person, and I'm an unimpeachable witness.

338
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So there's a whole continuum of things that you can do to investigate it and make it as easy as possible for everyone to figure out.

339
00:28:39,551 --> 00:28:44,551
But when I do that, that makes me look like I'm saying that, oh, no, no, it's going to be really easy.

340
00:28:44,551 --> 00:28:47,551
But that's not – when push comes to shove, the answer is that no one has to do this.

341
00:28:47,551 --> 00:28:52,551
But the easier it is, just the harder it is, the more of a deterrent it is to –

342
00:28:52,551 --> 00:29:06,550
Well, I mean, yeah, and I think the thing that's important, right, is that there's steps that might take progressively more resources but give increasing fidelity to let you –

343
00:29:07,550 --> 00:29:17,550
if there is some dispute and if there's a big Twitter hashtag campaign because the wrong withdrawal is happening, you can go find out.

344
00:29:17,550 --> 00:29:23,550
And you don't have to go from zero to now I have to run a big block node.

345
00:29:23,550 --> 00:29:25,550
There's steps along the way.

346
00:29:26,550 --> 00:29:30,550
And there could totally be market solutions to this, right?

347
00:29:30,550 --> 00:29:39,550
The same way that in other chains there's now kind of third-party block producers that maximize MEV.

348
00:29:39,550 --> 00:29:49,550
I'm not saying that's what we'd have here, but you could imagine that maybe if there's a lot of individual home miners in a post-Stratum V2 world who don't want to deal with any of this,

349
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they just want to know which sidechain block headers to include, they use a service that just tells them for these 20 sidechains, this is the hash you should use.

350
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And if they start getting yelled at on Twitter, then they leave that service.

351
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And so that service is strongly incentivized to do the right thing because it's cheap for people to switch, and they basically get free money as long as they're being honest.

352
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There's a lot of interesting economic ways that this can just be self-correcting.

353
00:30:22,550 --> 00:30:27,550
That was a very high-level, very technical discussion on the miners.

354
00:30:27,550 --> 00:30:42,550
And I thought maybe for our less technical members of the audience, if there are any, they might enjoy hearing a brief kind of elaboration on the part of Paul's response that addressed what you were saying, Reindahl,

355
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which is you said that for the privacy sidechain, it would be great from a privacy enthusiast's standpoint if tons of people of all different types were using the privacy blockchain.

356
00:30:56,550 --> 00:31:09,550
So right now what we have is some privacy altcoins and then the Bitcoin blockchain, and they're not synergistic in the sense that they aren't sharing hash rate and they're not sharing monetary policy.

357
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So the drivechain vision, and I know you know all of this already, but I want to hear your reaction to any part of it that you don't agree with in my view.

358
00:31:19,550 --> 00:31:30,550
The drivechain vision is that we want to make every change of Bitcoin's main chain opt-in unless it's proven.

359
00:31:31,550 --> 00:31:45,550
So what we should do is have a privacy sidechain and privacy enthusiasts currently using Bitcoin or altcoins would all potentially use that privacy sidechain.

360
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And therefore it would be strictly better, one might argue, than using an altcoin because the altcoin doesn't benefit from Bitcoin's number go up.

361
00:31:54,550 --> 00:32:00,550
But on the sidechain, you wouldn't have to worry about a currency rate fluctuation against Bitcoin's token.

362
00:32:00,550 --> 00:32:08,550
Like if you're holding Monero, you might worry that it might drop against Bitcoin any moment, but you're using it for the privacy tech.

363
00:32:09,550 --> 00:32:20,550
So it's strictly better to have the privacy tech and the Bitcoin unit of account if we assume all else is equal, which of course we can't assume except in theory.

364
00:32:20,550 --> 00:32:36,550
But strictly speaking, it's much better for all of these experimental blockchains to be Bitcoin sidechains because then they get the Bitcoin hash rate and the Bitcoin monetary policy with their tech that's different.

365
00:32:36,550 --> 00:32:51,550
And if the privacy chain were to grow and accrue hundreds of billions of value and be very successful, then that would enable the Bitcoin technical community to consider bringing that tech down to main chain after it's been proven in terms of use and stability.

366
00:32:51,550 --> 00:32:55,550
Does that vision resonate in your view?

367
00:32:55,550 --> 00:33:10,550
I mean, so I don't know if people holding big bags of other coins will dump them to come over to a Bitcoin sidechain.

368
00:33:10,550 --> 00:33:21,550
I think it's like alts will live forever because you don't really have the ability to get 10,000x on Bitcoin anymore.

369
00:33:22,550 --> 00:33:32,550
If you just want to pump your bags, the best move is still to market a new coin from zero to a dollar and ride that all the way up.

370
00:33:33,550 --> 00:33:48,550
But I think what is exciting is there's a lot of people who are in Bitcoin or aren't in anything and or would be willing to sell their alt bags.

371
00:33:48,550 --> 00:33:57,550
And, you know, I think like lightning has a bunch of problems. I think a lot of other systems have a lot of problems.

372
00:33:58,550 --> 00:34:21,550
If we could, you know, drop some of the constraints that we have on everything being verifiable by everybody and instead say we're going to build a layer that's like hyper optimized for payments that uses the lessons from these other chains to also be really private, then we could just like have a really good privacy preserving payment layer for Bitcoin.

373
00:34:21,550 --> 00:34:25,550
And maybe like maybe that doesn't actually need to come into main chain, right?

374
00:34:25,550 --> 00:34:37,550
Like maybe in the fullness of time, Bitcoin is where like very high value public transactions happen and it's the anchoring layer for sidechains.

375
00:34:37,550 --> 00:34:44,550
But like all the payment activity actually just happens in this thing that is not globally replicated to all of the users.

376
00:34:44,550 --> 00:34:51,550
And like that's that's probably OK. Yeah, I don't know. So I think I see it a little bit differently.

377
00:34:51,550 --> 00:34:58,550
I don't see I don't think it's the case that if we were to have something like drivechain that all of the alts would just evaporate.

378
00:34:58,550 --> 00:35:08,550
But I do think it would be net positive for Bitcoin and for, you know, it would make Bitcoin more useful for more people, which is how Bitcoin becomes more valuable.

379
00:35:08,550 --> 00:35:20,550
Like, you know, like podcasts and pontifications like only put so much more money into Bitcoin, like the real way to grow Bitcoin's value is to have it actually be useful for things.

380
00:35:20,550 --> 00:35:31,550
And, you know, I think we need some kind of sidechain mechanism, whether it's drivechain or something else to like make Bitcoin more useful for more use cases.

381
00:35:32,550 --> 00:35:40,550
Yeah, you're right about all of that. But I do think that there is the idea that drivechain will kill alt coins.

382
00:35:40,550 --> 00:35:52,550
I think this idea is not this idea is misunderstood. It's often misrepresented as like, yeah, the idea that drivechain comes out and then all the coins just vanish the next day.

383
00:35:53,550 --> 00:36:14,550
I don't believe that that will happen. But the what I do think is the way a lot of the alt coins are kind of only possible because we've had no sidechains, all the big alt coins or any ones that have gotten any use, the ones that have given legitimacy to the whole category.

384
00:36:14,550 --> 00:36:23,550
Those are all people who tried to do their thing on Bitcoin for a long time, you know, years of just effort and desperate attempts.

385
00:36:23,550 --> 00:36:37,550
And then they just launched an alt coin because they had no other choice. And those, you know, those like four or five legitimate alt coins, Namecoin, now Ethereum, you know, Monero, whatever.

386
00:36:38,550 --> 00:36:47,550
Small number. These things like Zcash also. They gave enough legitimacy to the category to allow the category to exist.

387
00:36:47,550 --> 00:36:55,550
And Bith 300 solves a similar problem. It says, if you want to do your new thing, you can now do it with this.

388
00:36:55,550 --> 00:37:12,550
So that's one sense in which drivechain kills the alt coin idea. But the other sense is that it's not as though the Ethereum people will just switch tomorrow on day one, but eventually it will become clear that Ethereum, the alt coin has no future in the sidechain world.

389
00:37:12,550 --> 00:37:25,550
Because people make the copy of Ethereum to start copying everything. It'll be exactly the same, except it'll be plugged into Bitcoin's network and it'll be full of people who are committed to the idea of having one coin defeat everything.

390
00:37:25,550 --> 00:37:29,550
And money has very strong network effects. Technology has very strong network effects.

391
00:37:29,550 --> 00:37:45,550
So it'll eventually just become clear that the Ethereum sidechain is better for many users. And then eventually it'll just become clear that the ETH token is superfluous and has no future.

392
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And then with a heavy heart and resignation, they will then abandon it.

393
00:37:53,550 --> 00:38:17,550
But yeah, you're right. People like to do this podcast stuff and they like to do this idea of complacency. It's very, very attractive because it's very easy to just go up there and be a cheerleader and say, yeah, we're going to go to the moon and we're going to go to whatever, $200,000 per coin, 200k by conference day, and just chant memes like a weird cult.

394
00:38:17,550 --> 00:38:39,550
And that gets you a little further along, but it ends up harming Bitcoin because anyone who wants to suggest that we do something real, something real is always going to be messy and it's going to have details and it's going to have trial and error.

395
00:38:39,550 --> 00:38:53,550
It's easy to just say something sacred and abstract and just say, never go up, whatever. But yeah, unfortunately, I think the biggest enemies of Bitcoin now are the complacency mouthpieces.

396
00:38:54,550 --> 00:39:16,550
Which would ironically include basically Michael Saylor at this point. People who just think Bitcoin success is inevitable. When I think of that, I always think of a Star Wars episode one about how everyone thought that it would be an inevitable success. And that one thought, I think, is exactly just what destroyed it.

397
00:39:17,550 --> 00:39:21,550
We have a hand.

398
00:39:22,550 --> 00:39:25,550
Hey, DJ, thanks for joining. What's up?

399
00:39:26,550 --> 00:39:38,550
Thanks for having me. Appreciate it. Great conversation. It's always, always interesting to listen into you guys. You guys are definitely way more technical than I probably will ever be. So I love listening and learning.

400
00:39:39,550 --> 00:40:00,550
I'm curious if you can maybe help me out here and explain. I really appreciated what Rendell just said, right? Because that's kind of how I'm seeing the future with Bitcoin is where the base layer will be more for the larger transactions, for final settlements of like these billion dollar level kind of transactions.

401
00:40:01,550 --> 00:40:17,550
And then everything like micropayments and smaller transactions will happen on other layers. So this brings me to my question. If you can help me understand, what's the difference between a sidechain and a layer two or layer three?

402
00:40:17,550 --> 00:40:36,550
Well, if you ask me, a sidechain is a layer two, but the definition is sort of contested by people. I think layer two is just something where the money is changing hands and layer one doesn't see it. So in that sense, a bar tab is like a custodial layer two.

403
00:40:37,716 --> 00:40:39,316
And even something like Mt.

404
00:40:39,316 --> 00:40:40,436
Gox, there used to be like Mt.

405
00:40:40,436 --> 00:40:49,196
Gox, like credits or something that had like transferable BTC, transferable USD, like on an exchange, Coinbase, whatever, used to have that type of thing.

406
00:40:49,996 --> 00:40:58,516
They probably still do. So anything where it's transferred on some layer, the coins can change hands, but layer one doesn't have to know about it.

407
00:40:58,516 --> 00:41:06,796
So you have one, I think what my understanding of it is colored by economics because I have a background in economics.

408
00:41:06,796 --> 00:41:20,035
And actually, I have a I think a pretty decent understanding, maybe better than most, that the way like what the Fed is, the Fed is a bank in the United States where in order to have an account there, you have to be a bank.

409
00:41:20,596 --> 00:41:21,876
It'd be a lower bank.

410
00:41:21,916 --> 00:41:23,076
It's all in a big pyramid.

411
00:41:23,876 --> 00:41:36,355
So like Bank of America has an account at the Fed and Chase, JPMorgan Chase, Manhattan, et cetera, as in they have an account at the Fed, Wells Fargo, they have an account.

412
00:41:36,355 --> 00:41:39,796
So the Fed is just a bank of banks.

413
00:41:40,556 --> 00:41:44,076
And then you have an account at Wells Fargo and so does your friend.

414
00:41:44,716 --> 00:41:53,196
If you and your friend, if you send money to someone who's also a Wells Fargo customer, they just, you know, they just update their, you know, their Excel spreadsheet or whatever.

415
00:41:53,196 --> 00:41:55,315
It's not literally an Excel spreadsheet, but you know what I mean?

416
00:41:55,995 --> 00:41:57,116
They don't have to do anything.

417
00:41:57,116 --> 00:41:58,156
They say we lucked out.

418
00:41:59,556 --> 00:42:11,315
But what if you what if I want to send money to you, DJ Satoshi, and you have an account at Bank of America or something or whatever, some credit union?

419
00:42:12,035 --> 00:42:13,235
Well, it's still not a big deal.

420
00:42:13,556 --> 00:42:15,076
They just they net it out.

421
00:42:15,076 --> 00:42:18,876
And then at the end of the day, the Fed will, you know, have everyone settle up.

422
00:42:20,635 --> 00:42:24,836
But it has to go through the other level, so it's better if it stays in their system.

423
00:42:24,836 --> 00:42:27,556
And that's why sometimes people charge fees for things.

424
00:42:28,116 --> 00:42:34,516
If it leaves, charge fee for a wire transfer because wire transfer has to use a more expensive system.

425
00:42:34,675 --> 00:42:42,436
So I don't know if that's helpful, but really the way the money works is there's this Bank of International Settlements that is in order to have an account there.

426
00:42:42,436 --> 00:42:43,756
You have to be a central bank.

427
00:42:43,756 --> 00:42:45,556
So the Fed has an account.

428
00:42:46,716 --> 00:42:51,155
The, you know, whatever, European Central Bank has an account, Bank of Japan.

429
00:42:52,836 --> 00:42:55,515
So they all have an account there and then that's for people who move.

430
00:42:55,515 --> 00:43:01,396
But of course, well, these are nuanced issues, but basically it's a big pyramid, you know, like the bar tab.

431
00:43:01,675 --> 00:43:02,836
You go to the bar tab.

432
00:43:03,315 --> 00:43:05,595
You say, I want to I want another one.

433
00:43:06,636 --> 00:43:07,836
You buy three or four drinks.

434
00:43:07,836 --> 00:43:08,955
You buy drinks for your friends.

435
00:43:09,836 --> 00:43:15,035
Then you settle up with one payment with the credit card company, and then the credit card company is itself netting them up.

436
00:43:15,556 --> 00:43:18,595
It's netting them all up, net, net, net, net, net.

437
00:43:18,595 --> 00:43:23,756
And then at the end of the month, it gives you the statement and then you pay the statement with your bank account.

438
00:43:25,116 --> 00:43:26,556
So I don't know if that's making any sense.

439
00:43:26,556 --> 00:43:27,836
Maybe that's too long of an answer.

440
00:43:28,315 --> 00:43:29,875
No, it makes perfect sense.

441
00:43:29,875 --> 00:43:41,675
So basically, at that level, then can't it just be that even layer twos can transact with each other?

442
00:43:41,675 --> 00:43:55,075
If you look at it where Bitcoin, for example, the base layer one would be the Fed and then any other layer two will simply be a banking institution?

443
00:43:56,916 --> 00:43:58,155
Yes, that could be the case.

444
00:43:58,155 --> 00:44:03,155
I wrote a little article about this that I called Funder as a kind of joke, but it's called The Futures.

445
00:44:03,196 --> 00:44:04,955
It's just search for TruthCoin Thunder.

446
00:44:05,235 --> 00:44:07,756
You should find it on my blog, TruthCoin.info.

447
00:44:07,996 --> 00:44:10,916
And I wrote a big thing about all this in that kind of detail.

448
00:44:10,996 --> 00:44:14,116
I touched on all that, all those points.

449
00:44:14,595 --> 00:44:22,836
And yeah, I think what I would say is that most people, most people have never seen the Fed and they've never seen a Federal Reserve.

450
00:44:22,875 --> 00:44:24,435
They know what a dollar is, but they don't.

451
00:44:24,836 --> 00:44:28,116
You have when you have a dollar or something, that's like an abstraction.

452
00:44:28,116 --> 00:44:31,196
So you could have four quarters or you could have one dollar bill.

453
00:44:32,116 --> 00:44:34,396
And if you have five, you could have a five dollar bill.

454
00:44:34,396 --> 00:44:40,276
It could be a five dollar bill or five singles or it could be whatever that is, 20 quarters.

455
00:44:41,955 --> 00:44:52,795
And so you the having a dollar or something is just like you could have a dollar of oil, you could have a dollar's worth of arcade tokens, a dollar's worth of rice.

456
00:44:53,596 --> 00:44:55,396
So the Fed has these reserves.

457
00:44:55,396 --> 00:44:56,915
No one has a bank account at the Fed.

458
00:44:56,915 --> 00:44:58,156
No one has seen a reserve.

459
00:44:58,235 --> 00:44:59,876
No one has ever used a reserve.

460
00:44:59,876 --> 00:45:03,075
Most people have never heard of the Bank of International Settlements.

461
00:45:04,316 --> 00:45:11,996
And so most of what I'm trying to say to answer your question is that most people live their whole lives like in like level four and five or something.

462
00:45:12,635 --> 00:45:16,996
They have like IOUs, they have credit cards, they have an account with Wells Fargo.

463
00:45:17,156 --> 00:45:19,876
They don't even know about the lower layers.

464
00:45:19,915 --> 00:45:23,235
You know, they don't even know anything about the Bank of International Settlements.

465
00:45:23,235 --> 00:45:28,436
They don't know anything about gold, which would have been theoretically like a kind of layer one, layer zero.

466
00:45:30,436 --> 00:45:34,596
So most people just they don't even need to know, they just care about what they have to care about.

467
00:45:35,355 --> 00:45:36,596
They learn what they have to learn.

468
00:45:37,075 --> 00:45:43,075
And they're not really harmed in any way by not knowing about how the banking system works.

469
00:45:43,075 --> 00:45:49,316
Other than, of course, it's going to be harder for them to get into Bitcoin and make their own financial future.

470
00:45:49,755 --> 00:45:51,355
That way, so in that way, it does suck.

471
00:45:51,355 --> 00:45:58,316
But they're also harmed because the foundation is always debased from under them.

472
00:45:58,316 --> 00:46:04,156
So therefore, all of the currency that they continue to earn is being rugged and stolen from them.

473
00:46:04,876 --> 00:46:06,716
All right. I think these issues are related.

474
00:46:06,716 --> 00:46:14,195
In fact, the idea that so few people understand it just means that it's a great vector for scamming the public, which, of course.

475
00:46:15,716 --> 00:46:18,836
Every inflation tax is being paid by someone.

476
00:46:18,836 --> 00:46:20,836
They get free money and someone is paying.

477
00:46:21,515 --> 00:46:24,755
It's very hard to tell who it is, but someone, some people are paying.

478
00:46:25,396 --> 00:46:37,116
So couldn't it be then that all these layer twos, that basically anyone who has access to the base layer today could become a banking institution and therefore could create their own layer two?

479
00:46:37,436 --> 00:46:52,116
And then everyone who wants to like transact from layer two to layer two, then couldn't it potentially be that in the future a layer two wouldn't even need to go back to the main chain?

480
00:46:52,116 --> 00:46:57,755
They could simply pass private keys between one another every three months or every year?

481
00:46:57,955 --> 00:47:04,795
Oh, well, they wouldn't. Yeah, the answer is that they don't even have to go back down a layer if they don't want to.

482
00:47:05,156 --> 00:47:06,716
So you're right about that.

483
00:47:06,915 --> 00:47:08,396
They don't have to move private keys around.

484
00:47:08,396 --> 00:47:10,276
All they have to do is if they're transacting.

485
00:47:11,036 --> 00:47:16,316
What I think I read about this in the article, I actually just think it will just clump up geographically.

486
00:47:16,316 --> 00:47:22,876
We just like have people like in the US East or like in Southeast Asia.

487
00:47:24,475 --> 00:47:28,515
And those will be like the chains, the chain will just be like a chain that is.

488
00:47:29,515 --> 00:47:49,515
Most of where most of the trade is internal to that network, but plenty of people want to like go on vacation or they want to ship goods internationally, those people will sort of in theory need to transactions because they'll have to transact off of their L2 and onto someone else's just to send their own money to themselves.

489
00:47:50,515 --> 00:48:04,515
But in practice, they won't really like we would be just new people or, you know, new ways of just netting it out where they, you know, in practice, this would be like very, very, very, very straightforward to do.

490
00:48:05,836 --> 00:48:16,836
You just have money on all the networks that you transact on and then you you net everything up and then sometimes you send the coins back and forth among the network.

491
00:48:16,836 --> 00:48:21,716
Sometimes you have to use L1 if you can't find anyone who will swap the coins for you.

492
00:48:22,396 --> 00:48:31,915
But L1 is already pretty big because it can already do about twenty five hundred transactions every block, which is every 10 minutes and there's about a thousand blocks every week.

493
00:48:32,635 --> 00:48:37,716
So it's already twenty five hundred per block, a thousand blocks a week.

494
00:48:37,716 --> 00:48:43,075
So whatever that is, two point five million every week is the current L1 capacity.

495
00:48:43,436 --> 00:48:48,075
So you can compare that to some other markets where, like, for example, the London Gold.

496
00:48:50,195 --> 00:48:55,876
I don't I think I don't remember the exact number, but it's something like they do five or six actual transactions per day.

497
00:48:55,876 --> 00:48:57,836
Everything else is just netted up.

498
00:48:57,836 --> 00:49:03,515
They net, net, net everything and then they actually do like very, very small number.

499
00:49:03,515 --> 00:49:05,915
That would be on the order and they're closed on weekends.

500
00:49:05,915 --> 00:49:08,475
So that's like twenty five a week.

501
00:49:08,716 --> 00:49:13,515
So we're already a million times more throughput than than that situation.

502
00:49:13,995 --> 00:49:17,236
So there's already a lot on layer one and layer one is.

503
00:49:18,676 --> 00:49:30,315
People have been using L1 directly this whole time, so to switch to layer twos or even have more layer twos, layer threes, et cetera, will be a huge geometric increase.

504
00:49:30,315 --> 00:49:37,036
And there's yeah, I think a lot of people will not feel the need to go back to L1.

505
00:49:37,036 --> 00:49:39,515
But some people will.

506
00:49:39,515 --> 00:49:45,555
And if if the cost is cheap enough, a lot of people will do it because of the more security and reliability.

507
00:49:45,555 --> 00:49:47,356
And that's what that's a good thing.

508
00:49:47,356 --> 00:49:51,836
We want to make it as we want to drive down the cost for everything as little as possible.

509
00:49:51,836 --> 00:49:56,036
We want to have like some L3, L4 where it's like Venmo, where it's practically free.

510
00:49:57,476 --> 00:50:05,955
And then we want to have everyone who wants to stay on L1, if they're willing to pay the five dollar transaction fee, ten dollar transaction fee, fifty dollar transaction fee.

511
00:50:06,596 --> 00:50:07,875
Then they should be able to.

512
00:50:07,875 --> 00:50:11,075
And that could be like long term cold storage.

513
00:50:11,075 --> 00:50:13,236
That could be like a savings account or like a CD.

514
00:50:14,036 --> 00:50:20,676
I don't even know if people use CDs anymore, but not the compact disc, the certificate of deposit.

515
00:50:21,315 --> 00:50:26,356
But like, you know, this is like you store your longer term wealth in a safer place.

516
00:50:26,955 --> 00:50:29,716
You do your retirement savings quarterly.

517
00:50:29,716 --> 00:50:31,596
You sweep it in into there or something.

518
00:50:31,596 --> 00:50:33,716
I can see that. I think that would be very reasonable.

519
00:50:33,716 --> 00:50:39,635
What we should have is a continuum where the relative costs and benefits match the scenario.

520
00:50:39,635 --> 00:50:46,156
So something where you can rapidly turn it over, like the bar tab at low risk, rapid turnover.

521
00:50:46,596 --> 00:50:49,875
And then we have alternatively, we have something where there's.

522
00:50:51,796 --> 00:50:58,836
Where you're very, very paranoid, you have the vault, very, very paranoid, but it's slightly more expensive to enter and exit.

523
00:50:58,836 --> 00:51:00,036
So you should have the full range.

524
00:51:00,036 --> 00:51:03,396
Hey, Alex, nice to have you on stage here.

525
00:51:03,396 --> 00:51:04,195
Thanks for joining.

526
00:51:04,195 --> 00:51:08,515
I put one of your pro drivechain tweets in the nest.

527
00:51:09,075 --> 00:51:11,555
It's always great to read your technical writing online.

528
00:51:12,515 --> 00:51:13,555
What's on your mind today?

529
00:51:13,555 --> 00:51:14,276
Thanks for joining.

530
00:51:16,276 --> 00:51:17,396
Hey, thanks for having me.

531
00:51:17,396 --> 00:51:17,875
Hey, Paul.

532
00:51:17,875 --> 00:51:18,596
How are things going?

533
00:51:19,875 --> 00:51:22,356
Yeah, I just saw there was a space and I thought I'd hop in.

534
00:51:23,476 --> 00:51:26,916
I have two questions and I think it might be beneficial.

535
00:51:26,916 --> 00:51:29,635
I'm sure, Paul, you get tired answering one of those.

536
00:51:30,515 --> 00:51:33,075
So feel free to just point to links.

537
00:51:34,515 --> 00:51:36,276
But then the second one might be interesting.

538
00:51:36,276 --> 00:51:39,875
So the first one is like, I mean, there's a lot of with any upgrade.

539
00:51:39,875 --> 00:51:41,716
Obviously, there's debates back and forth.

540
00:51:41,716 --> 00:51:46,195
I follow it on Twitter and I feel it often gets very political and personal about, you know,

541
00:51:46,195 --> 00:51:48,356
where the drivechain should be at it or not.

542
00:51:48,356 --> 00:51:55,075
And what I personally really care about is like, so the technical pros, we, I think, understand those quite well.

543
00:51:55,075 --> 00:51:55,875
What are the risks?

544
00:51:56,115 --> 00:51:57,315
What are them?

545
00:51:57,315 --> 00:52:02,755
Can we pinpoint maybe the two biggest kind of technical challenges of drivechains and why,

546
00:52:03,315 --> 00:52:08,195
you know, things that might be a problem and like maybe something that, you know,

547
00:52:09,396 --> 00:52:13,955
like drivechain supporters, like we could actually look into and try to fix.

548
00:52:14,596 --> 00:52:19,476
And the second question would be more on like people migrating from Ethereum to.

549
00:52:20,115 --> 00:52:21,555
But that's to be fair.

550
00:52:21,555 --> 00:52:22,435
That's for later.

551
00:52:25,875 --> 00:52:31,156
Well, I really don't think if you look at the risks, like the risks of not doing it versus doing it,

552
00:52:31,156 --> 00:52:32,356
I don't really think there are.

553
00:52:32,356 --> 00:52:32,995
I think it's.

554
00:52:32,995 --> 00:52:38,995
But that's not the spirit of the question is sort of like what could go wrong if we do this.

555
00:52:38,995 --> 00:52:47,716
But also just the way I think people are confused about soft versus hard forks, like soft forks

556
00:52:47,716 --> 00:52:51,555
tighten the rules, hard forks loosen the rules.

557
00:52:51,555 --> 00:52:58,676
But this little post-it note thing has, I think, confused people.

558
00:52:58,676 --> 00:53:04,916
But I'll say everyone straight, which is that you do a soft fork to add BIP300.

559
00:53:04,916 --> 00:53:11,236
And then if people later decide that it's a huge mistake, you could just soft fork again.

560
00:53:11,955 --> 00:53:15,315
It's more or less the same thing to just close it off.

561
00:53:15,315 --> 00:53:20,676
So the first soft fork is doing is taking this like anyone can spend script and it's reducing it to

562
00:53:20,676 --> 00:53:22,676
it's subtracting everything else that's not BIP-3.

563
00:53:22,676 --> 00:53:24,995
It's just like a marble block.

564
00:53:24,995 --> 00:53:27,716
You chisel away everything that's not BIP300.

565
00:53:28,836 --> 00:53:30,276
And you're left with BIP300.

566
00:53:31,796 --> 00:53:33,716
That's the soft fork that activates BIP300.

567
00:53:33,716 --> 00:53:34,916
Then people use the statue.

568
00:53:36,115 --> 00:53:39,396
But then if you want to get rid of BIP300, you just chisel away the entire statue.

569
00:53:39,396 --> 00:53:40,435
And there's just nothing there.

570
00:53:40,435 --> 00:53:41,156
It's gone.

571
00:53:41,156 --> 00:53:42,836
And now no one can ever broadcast this.

572
00:53:42,836 --> 00:53:47,796
It's true you burned one message type that can never be broadcast in the blockchain again.

573
00:53:47,796 --> 00:53:52,836
But there's literally billions of those, endless surplus of those.

574
00:53:52,836 --> 00:53:54,195
There's not a scarce resource.

575
00:53:57,635 --> 00:53:59,555
So there's really like you add it.

576
00:53:59,555 --> 00:54:02,276
And then if people don't like it, they can unadd it.

577
00:54:02,276 --> 00:54:05,396
I suppose the risk would be that there's some kind of like big social

578
00:54:06,115 --> 00:54:08,916
drama about not adding it or something.

579
00:54:08,916 --> 00:54:11,396
But then there's the...

580
00:54:11,955 --> 00:54:15,555
So that's just this type of soft fork in general, having no risks.

581
00:54:15,555 --> 00:54:20,356
But the core idea is really not any different than things that people already do.

582
00:54:20,356 --> 00:54:26,356
So like for a start, the only people who are really affected by this

583
00:54:27,315 --> 00:54:30,995
are the people who choose to send their coins into the L2.

584
00:54:30,995 --> 00:54:37,796
So if you just don't do that, then you're really no different than you were pre-BIP300 activation.

585
00:54:38,435 --> 00:54:41,875
So it's kind of like those people, they choose to opt into a risk.

586
00:54:41,875 --> 00:54:42,676
They take a risk.

587
00:54:44,596 --> 00:54:46,036
It should be an informed decision.

588
00:54:46,596 --> 00:54:47,476
Hopefully it is.

589
00:54:47,476 --> 00:54:48,115
Maybe it's not.

590
00:54:49,476 --> 00:54:51,156
But you know, those people volunteer.

591
00:54:51,156 --> 00:54:53,796
You know, the volunteer can't claim injury.

592
00:54:55,875 --> 00:54:59,476
And so for everyone else, it's just enforcing the BIP300, not the sidechain rules.

593
00:54:59,476 --> 00:55:04,195
They're enforcing only the BIP300 rules, which is just like an integer that counts up to 13,150,

594
00:55:04,195 --> 00:55:05,476
which is the three-month block.

595
00:55:06,435 --> 00:55:08,836
Which is really just an integer counting up.

596
00:55:09,716 --> 00:55:13,476
And then as far as the overall ecosystem effect, it's really just merge mining,

597
00:55:13,476 --> 00:55:16,195
which was invented by Satoshi himself in 2010.

598
00:55:16,195 --> 00:55:18,995
And we've been doing it for 12 years with Namecoin.

599
00:55:18,995 --> 00:55:20,836
No one ever complained about it before.

600
00:55:20,836 --> 00:55:24,435
It's true that this is a totally souped up version of merge mining,

601
00:55:24,435 --> 00:55:30,916
which I regard as correcting a long mistake, which is the neglect of merge mining,

602
00:55:30,995 --> 00:55:37,075
the neglect of miner revenues, the neglect of wanting miners,

603
00:55:37,075 --> 00:55:41,315
wanting everyone to just maximize the transaction throughput,

604
00:55:41,315 --> 00:55:42,995
maximize the usage of the chain,

605
00:55:43,796 --> 00:55:47,476
just utterly dominate the world and use Bitcoin for every type of thing.

606
00:55:48,356 --> 00:55:52,836
I think that that was what Satoshi wanted to do in 2010

607
00:55:52,836 --> 00:55:58,195
when he invented merge mining for Namecoin, for BitDNS, as it was called.

608
00:55:58,195 --> 00:56:00,995
So I think that's just correcting yet another mistake,

609
00:56:00,995 --> 00:56:02,515
killing two birds with one stone.

610
00:56:02,515 --> 00:56:04,916
But even whatever you think, we've already been doing it.

611
00:56:04,916 --> 00:56:07,796
And of course, altcoin merge mining has the feature

612
00:56:07,796 --> 00:56:11,396
that it cannot possibly be stopped on layer one.

613
00:56:11,955 --> 00:56:15,156
You cannot stop any altcoin from merge mining with Bitcoin

614
00:56:15,156 --> 00:56:16,195
because it's just the way it is.

615
00:56:16,195 --> 00:56:20,515
You modify the altcoin so that part of it is a Bitcoin block header.

616
00:56:20,515 --> 00:56:22,596
So it's impossible to stop.

617
00:56:22,596 --> 00:56:25,236
So it's already something we've already been doing

618
00:56:25,236 --> 00:56:27,716
that's impossible to stop anyway.

619
00:56:27,716 --> 00:56:30,836
And that Satoshi invented to help Bitcoin dominate the world

620
00:56:30,836 --> 00:56:33,156
that we just kind of have neglected this whole time.

621
00:56:33,156 --> 00:56:38,195
So that's like, you know, and then you compare this to the risks of not doing it.

622
00:56:38,195 --> 00:56:41,635
We have all the, we have the SegWit2x, we have a hard fork campaign.

623
00:56:41,635 --> 00:56:45,796
We have people, we have the possibility that an altcoin will flip in BTC,

624
00:56:45,796 --> 00:56:50,036
which would send it to zero and cause the entire project to fail completely.

625
00:56:50,916 --> 00:56:52,995
We have the risk of all the toxicity.

626
00:56:52,995 --> 00:56:54,596
We have the lack of creativity.

627
00:56:55,236 --> 00:56:56,836
We have the security budget problem.

628
00:56:57,396 --> 00:56:59,796
We have the fact that the only realistic way

629
00:56:59,796 --> 00:57:05,476
of shrinking the layer one block size and ossifying the layer one code

630
00:57:05,476 --> 00:57:09,796
is to give people more, give people the flexibility

631
00:57:09,796 --> 00:57:13,716
and openness that they want on the upper optional layers.

632
00:57:14,276 --> 00:57:16,356
It's the really only realistic way to achieve

633
00:57:17,396 --> 00:57:19,716
an increase in decentralization on layer one.

634
00:57:21,555 --> 00:57:25,555
What about the fact that Zcash and these people working on Zk-SNARKs,

635
00:57:25,555 --> 00:57:30,515
they have so much better privacy scalability than Bitcoin has.

636
00:57:30,515 --> 00:57:35,635
We could have that, you know, tomorrow with, if we had side...

637
00:57:35,635 --> 00:57:40,356
So I think there's really no risks at all to the idea.

638
00:57:41,156 --> 00:57:43,156
Even if something does go wrong,

639
00:57:43,156 --> 00:57:46,276
the idea can just be shut off as easily as it was turned on

640
00:57:46,276 --> 00:57:48,436
and it will be exactly where we started before,

641
00:57:48,436 --> 00:57:54,355
except for one code out of like 4.2 billion will be burned, one prefix.

642
00:57:54,355 --> 00:57:57,715
And then I think if you just zoom out and look at the whole thing in context,

643
00:57:57,715 --> 00:58:00,515
it's just the bigger risk is just not to do it.

644
00:58:01,156 --> 00:58:04,196
Especially once you have all these people now being so complacent

645
00:58:04,196 --> 00:58:06,196
and overconfident in the face of such...

646
00:58:06,196 --> 00:58:08,036
You know, like Michael Saylor has been, you know,

647
00:58:08,036 --> 00:58:09,396
shilling lightning, which is great.

648
00:58:11,235 --> 00:58:12,755
I think Michael Saylor is a smart guy.

649
00:58:12,755 --> 00:58:14,595
I think he's an ally of Bitcoin.

650
00:58:14,595 --> 00:58:16,916
But, you know, he is kind of a bullshitter, basically.

651
00:58:16,916 --> 00:58:17,715
He doesn't really know.

652
00:58:18,436 --> 00:58:21,715
Like we can now see that, like,

653
00:58:22,995 --> 00:58:24,916
the idea that he knows what he's talking about

654
00:58:24,916 --> 00:58:26,676
when he's talking about lightning is not true.

655
00:58:27,475 --> 00:58:31,316
Rhindol, when you said earlier here that it was so interesting,

656
00:58:31,316 --> 00:58:35,316
when you said that you think perhaps there will always be altcoins

657
00:58:35,316 --> 00:58:41,875
because people want to get in early to something with a small market cap.

658
00:58:42,835 --> 00:58:47,475
But I think that's actually an incomplete and inaccurate

659
00:58:48,115 --> 00:58:48,515
theory.

660
00:58:50,276 --> 00:58:53,635
The power of network effects in economics

661
00:58:53,635 --> 00:58:57,396
is most present in the market for money

662
00:58:57,396 --> 00:59:01,396
more than the market for any other kind of economic good.

663
00:59:02,436 --> 00:59:05,235
So network effects are very powerful in money.

664
00:59:06,995 --> 00:59:11,156
Money is the most liquid, the most tradable, the most saleable asset.

665
00:59:11,796 --> 00:59:18,196
And when you say that people will always want to get in on smaller,

666
00:59:19,076 --> 00:59:22,755
you know, newer altcoins because they want that 10,000x,

667
00:59:22,755 --> 00:59:24,196
which they can't get from Bitcoin,

668
00:59:24,196 --> 00:59:28,436
you're right that when Bitcoin has fully matured and taken over the world,

669
00:59:29,875 --> 00:59:33,875
a very high rate of real return from holding Bitcoin won't exist

670
00:59:33,875 --> 00:59:37,715
because the adoption cycle will have been completed globally.

671
00:59:37,875 --> 00:59:41,796
So there won't be any more new early adopters

672
00:59:41,796 --> 00:59:44,916
once Bitcoin has reached its total addressable market.

673
00:59:45,475 --> 00:59:51,156
So you're right that Bitcoin won't offer the real return rate that it offers today.

674
00:59:51,156 --> 00:59:55,556
It'll offer a lower real return once it's fully adopted globally.

675
00:59:55,556 --> 01:00:01,556
However, your point, so that's the correct part of your view, I would say.

676
01:00:01,556 --> 01:00:04,595
But your other point was that people will always be

677
01:00:04,676 --> 01:00:10,515
developing and speculating and boosting slightly the price of newer,

678
01:00:10,515 --> 01:00:13,715
smaller coins because of the chance they could do a 10,000x.

679
01:00:13,715 --> 01:00:18,355
But that assumes there will always be a narrative

680
01:00:19,076 --> 01:00:24,276
among those building and buying altcoins that they might succeed.

681
01:00:24,276 --> 01:00:26,515
They might have that 10,000x.

682
01:00:26,515 --> 01:00:32,436
However, if Bitcoin becomes massively huge and it has a natural

683
01:00:33,396 --> 01:00:38,436
and it has a narrative where when someone has a new good idea for a blockchain,

684
01:00:38,436 --> 01:00:40,595
they launch a Bitcoin sidechain.

685
01:00:40,759 --> 01:00:44,279
They try to launch a Bitcoin sidechain with that idea.

686
01:00:44,279 --> 01:00:52,359
If that's the dominant narrative, if that's like the status quo, then no one will have hope for these startup altcoins.

687
01:00:52,359 --> 01:00:56,519
It'd be like starting a whole new language today, like people aren't starting, go ahead.

688
01:00:56,519 --> 01:00:59,959
They're starting a new keyboard layout or something, you know.

689
01:00:59,959 --> 01:01:02,359
But Alexei, didn't you say you have a second question?

690
01:01:02,359 --> 01:01:04,759
Was it related to that?

691
01:01:04,759 --> 01:01:09,398
Yeah, so that's on the technical side, like something that we've been kind of thinking about.

692
01:01:09,478 --> 01:01:17,639
So, you know, outside of like Bitcoin right now, you have a lot of new projects spinning out from like smart contracts to their own chains.

693
01:01:17,639 --> 01:01:22,439
And it kind of, you know, drivechains would kind of fit this slightly somewhat.

694
01:01:22,439 --> 01:01:28,919
And please don't kill me for saying that for like in this option thesis that it makes sense to have like stand like specialized chains that do something specific.

695
01:01:28,919 --> 01:01:31,398
And the question is, well, where to plug them in, right?

696
01:01:31,398 --> 01:01:34,119
And like drivechains will be why to plug them into Bitcoin.

697
01:01:34,759 --> 01:01:39,159
But how do you get like how do you counter liquidity fragmentation?

698
01:01:39,159 --> 01:01:56,199
How do you really convince people in these bigger projects to move off Ethereum, where the biggest benefit is composability and being able to, you know, move between different applications, borrow, lend, swap, do all of this with like compose all these like things into one transaction.

699
01:01:56,199 --> 01:02:00,519
Whereas the moment we are fragmented across different chains, we run into a big problem.

700
01:02:00,519 --> 01:02:02,278
So how would drivechains address that?

701
01:02:02,278 --> 01:02:13,398
How would we be able to, you know, interact between different drivechains in a way that, you know, let's say one there is a drivechain that specializes in in trading and the other one in fast payments?

702
01:02:13,398 --> 01:02:14,759
How do we interact between them?

703
01:02:16,038 --> 01:02:16,998
Yeah, it's a very good question.

704
01:02:16,998 --> 01:02:26,998
We sort of got a little of this question before, but it's good when we can answer it in more technical detail now, because you're right that Ethereum has its own network effects.

705
01:02:26,998 --> 01:02:34,519
And it enjoys being like in a world where the smart contracts are all interoperable with each other.

706
01:02:34,519 --> 01:02:45,718
And I think that that if that effect is strong enough, it inevitably implies that a general there'll be a general purpose sidechain that is popular.

707
01:02:46,678 --> 01:02:48,678
Perhaps.

708
01:02:48,678 --> 01:03:06,678
I'm not sure that, see, like, as you know, because you've known me a long time, since like 2017, at least, I think, I kind of have always thought that Ethereum shouldn't work, like it wouldn't work optimally the way it is with everything on one chain, because like everything should have like a different gas rate.

709
01:03:07,158 --> 01:03:19,158
And sometimes, sometimes these weird predictions I made have come true, where like a certain type of contract uses gas at a certain rate and prices everything else out for a short time.

710
01:03:19,719 --> 01:03:24,279
But yeah, in general, Ethereum has its own network effect of its state.

711
01:03:24,279 --> 01:03:36,759
And so just copying the ETH rules and the ETH reality, the ETH protocol would not draw these people over.

712
01:03:37,079 --> 01:03:59,479
And as I said in the previous answer, the real angle is something like convincing people that now that the now that Bitcoin can do anything, including an ETH thing, some people would start to copy the low hanging fruits, you know, like the stuff on ETH that is good, but maybe just a little expensive at the moment, it would be on its new.

713
01:03:59,559 --> 01:04:13,559
So like ETH has already gone through many phases where fees have risen, and then someone does like a copycat, like a Binance Smart Chain or Solana or whatever, Avalanche, they do EVM, but it's just for the for making more block space.

714
01:04:14,038 --> 01:04:16,919
So you can kind of have that going to the sidechain.

715
01:04:16,919 --> 01:04:23,639
But the really the angle is that eventually, the Ethereum altcoiners lose hope.

716
01:04:24,518 --> 01:04:26,279
They just see the writing on the wall.

717
01:04:26,759 --> 01:04:35,398
And they think, more or less, that I love the stuff I'm doing with ETH, but we are doomed because we're number two.

718
01:04:36,359 --> 01:04:37,639
We're playing musical chairs.

719
01:04:37,639 --> 01:04:38,518
There's only one chair.

720
01:04:39,158 --> 01:04:45,479
And even though it's very respectable to come in second place, the earlier we jump ship, the better.

721
01:04:46,119 --> 01:04:47,238
And they all jump ship.

722
01:04:47,238 --> 01:04:49,158
But yeah, you're definitely right.

723
01:04:49,158 --> 01:04:51,798
Like, I don't actually think it would be very easy.

724
01:04:51,798 --> 01:04:52,678
It would be possible.

725
01:04:53,238 --> 01:05:05,239
But I don't think it would be very easy to write stuff that uses multiple sidechains at once, where they say like, well, I want this chain C to interact with chain F and G.

726
01:05:05,959 --> 01:05:12,359
And if something happens, it would be possible, but it would just be kind of probably clunky, you know.

727
01:05:14,038 --> 01:05:24,519
So I think they would, if there is benefit to having a bunch of features co-located in a chain, then probably people have a chain that does that.

728
01:05:25,639 --> 01:05:34,998
However, I'm still to this day, I still kind of hold my original position, which is that most of the stuff on Ethereum is just as exactly as I predicted in 2015.

729
01:05:35,158 --> 01:05:47,799
It's like it's all mostly gambling or just most of what Ethereum is, is like what I would think of as the BitAsset sidechain, where it's just it's basically a counterparty of the sidechain where you're issuing stuff and trading it to other people.

730
01:05:48,438 --> 01:05:51,558
And some of that stuff is digital art, like NFTs.

731
01:05:52,199 --> 01:06:01,158
Some of it is like maybe represents something else, like stock, like ICOs or something, you know, just represents proportional ownership of something.

732
01:06:01,878 --> 01:06:05,479
And people are trading them back and forth, staking them, using as liquidity.

733
01:06:05,718 --> 01:06:07,718
That's awfully self-referential to me.

734
01:06:07,878 --> 01:06:13,399
But most of that is just basically if this payment goes through, trigger some other payment.

735
01:06:13,959 --> 01:06:29,158
So it's not really I mean, what on Ethereum is really, really is has a novelty that goes past a payment being triggered by some other payment.

736
01:06:29,639 --> 01:06:33,639
It's mostly but, you know, obviously I'm going to be wrong about that.

737
01:06:33,639 --> 01:06:35,399
It's mostly something like that.

738
01:06:35,399 --> 01:06:38,438
And I think there will be specialized sidechains to do the cool things.

739
01:06:38,919 --> 01:06:42,359
They will be like the ZK, Zcash privacy sidechain.

740
01:06:42,359 --> 01:06:43,479
They'll be the prediction markets.

741
01:06:43,479 --> 01:06:45,718
Oracle side will be on its own sidechain.

742
01:06:45,718 --> 01:06:48,598
I think they'll be the Namecoin will be its own thing, maybe.

743
01:06:49,558 --> 01:07:11,158
On the flip side, on the other hand, I can I can see it being the case that the large block sidechain, just because it has a high number of people on it, that might be where the privacy stuff starts to break in, because with with abundant block space and cheap fees and a lot of users, that can be very helpful.

744
01:07:11,239 --> 01:07:13,558
So I can actually see that happening also where.

745
01:07:14,998 --> 01:07:24,919
Something that is made for payments just ends up becoming, you know, it has it just has a lot of stuff and ends up having its own counterparty and etc.

746
01:07:27,878 --> 01:07:31,639
But again, fair enough, that's a fair take.

747
01:07:31,639 --> 01:07:35,079
I mean, the question for me is so looking at, for example, Namecoin, right.

748
01:07:35,079 --> 01:07:36,519
So for me to succeed.

749
01:07:36,519 --> 01:07:38,759
So why would I get a DNS name?

750
01:07:38,759 --> 01:07:38,919
Right.

751
01:07:38,919 --> 01:07:50,598
I mean, if a Namecoin name would be ideal, if I can use that as a universal identifier to receive funds instead of giving you my account, you know, my address, I just give you my Namecoin name and that's how you send funds to me.

752
01:07:50,598 --> 01:07:56,759
That's, I think, a very big usability improvement that and like some other chains have been trying, like doing things like that.

753
01:07:56,759 --> 01:07:58,838
But the Namecoin is a standalone chain, right?

754
01:07:58,838 --> 01:08:01,479
So it's kind of would be one possible drivechain.

755
01:08:01,479 --> 01:08:07,158
But how do I use Namecoin names, for example, on a chain that specializes in payments then?

756
01:08:07,158 --> 01:08:10,919
So that's, I think, something that I would really love to do that.

757
01:08:10,919 --> 01:08:16,838
I think that if we can get that to work, that would be I think it would be a benefit and an added benefit questions, obviously, how?

758
01:08:17,479 --> 01:08:29,399
Because I I'm not so sure I would bet on their like emerging one single drivechain that has all these functionalities in it just because you need different teams to build them.

759
01:08:29,959 --> 01:08:32,919
And building on a smart contract is limited, right?

760
01:08:32,919 --> 01:08:35,079
Because you can't really specialize your chain.

761
01:08:35,079 --> 01:08:38,359
So Namecoin is specialized to do to do names.

762
01:08:38,359 --> 01:08:39,079
Right.

763
01:08:39,079 --> 01:08:45,799
So I think it would be interesting to see, like, how can we have Namecoin and that's that that's where we register names.

764
01:08:45,799 --> 01:08:48,038
And then we can use that to receive payments.

765
01:08:48,038 --> 01:08:55,079
And I can use that also potentially to pay for storage and another one and have this kind of composability.

766
01:08:55,079 --> 01:09:02,359
It's definitely tricky, but that's what that comes to mind to answer to try to answer your question.

767
01:09:02,359 --> 01:09:15,959
I think is that since all the sidechains are optional, there's a sense there's a very easy way where if there is a service that says this requires both things, just like I'm trying to think of some kind of analogy.

768
01:09:15,959 --> 01:09:25,719
But it's kind of like if you say like you want to play a game on your computer and you need Windows and you need DirectX or something and you need something else.

769
01:09:25,719 --> 01:09:26,118
I don't know.

770
01:09:26,998 --> 01:09:30,519
So in that way, you build a protocol that is on top of both.

771
01:09:32,199 --> 01:09:37,159
Chains, and then it's very easy because then you just say, I want to be paid on sidechain number four.

772
01:09:37,798 --> 01:09:50,519
Look at my this is me on the you know, the Namecoin sidechain, which is such a number three or something, and then it will just do it for you because it'll just say, OK, we're both looking at the same two block chains.

773
01:09:51,079 --> 01:09:52,678
So then it would be as if you had them both.

774
01:09:52,678 --> 01:09:56,039
And in that sense, it would be very, very easy since anyone can opt into both.

775
01:09:56,039 --> 01:10:00,118
You can just have the application maker do all of that.

776
01:10:01,639 --> 01:10:02,519
One hundred percent.

777
01:10:03,079 --> 01:10:07,318
So and there's something else you said that I wanted to react to, but I can't remember what it was, but.

778
01:10:08,998 --> 01:10:15,318
Oh, well, it was great, whatever it was, but you're right that I think that's an easy way to answer your question.

779
01:10:15,318 --> 01:10:20,438
I remember you were saying I was thinking of something interesting based on what you had said, but I can't remember.

780
01:10:20,839 --> 01:10:21,639
Never mind.

781
01:10:21,639 --> 01:10:23,079
Anyway, thanks for having me.

782
01:10:23,079 --> 01:10:24,358
I'm super interested in conversation.

783
01:10:29,878 --> 01:10:31,478
I think I fully agree about.

784
01:10:32,918 --> 01:10:33,719
Like Namecoin.

785
01:10:33,719 --> 01:10:35,558
Oh, I remember now it was like.

786
01:10:36,998 --> 01:10:42,678
There will be specialized chains for a lot of reasons, I think one is disputes.

787
01:10:42,678 --> 01:10:47,238
So like programmers have big egos, but also the community will grow and grow.

788
01:10:47,238 --> 01:10:50,279
And then there'll be just some kind of dispute over something.

789
01:10:50,279 --> 01:10:52,519
It doesn't even, you know, it could be the block size.

790
01:10:52,519 --> 01:10:53,959
It could be about privacy.

791
01:10:53,959 --> 01:10:56,039
It could be about when do we add?

792
01:10:56,039 --> 01:10:58,199
How aggressively do we add new features?

793
01:10:58,199 --> 01:11:03,079
There'll be like a liberal and conservative group in each group.

794
01:11:03,079 --> 01:11:09,639
And then eventually the liberal group will get so tired of the conservative group that they will just make their own thing.

795
01:11:09,639 --> 01:11:13,639
So I think it is inevitable that like, you know, we're going to have a lot of disputes.

796
01:11:14,199 --> 01:11:14,998
Make their own thing.

797
01:11:14,998 --> 01:11:18,279
So I think it is inevitable that lots of stuff will be tried.

798
01:11:18,279 --> 01:11:22,599
Some will come up with a great idea and they'll first they'll try to present it to the world.

799
01:11:23,399 --> 01:11:24,678
And so here's my great idea.

800
01:11:24,678 --> 01:11:27,478
It's really new and everyone will say that idea sucks.

801
01:11:27,478 --> 01:11:28,759
And then they'll say, no, it doesn't suck.

802
01:11:29,478 --> 01:11:31,079
And then the world will say it does.

803
01:11:31,079 --> 01:11:33,478
And then they'll say, fine, I'll start my own chain.

804
01:11:35,318 --> 01:11:37,639
And then that idea will make it into the world.

805
01:11:37,639 --> 01:11:45,079
So there will be, I think there will be new sidechains being made all the time.

806
01:11:45,079 --> 01:11:52,519
I think there'll only be like 12, 15 that are actually used by people.

807
01:11:53,159 --> 01:11:55,079
But I could easily be totally wrong about that.

808
01:11:56,279 --> 01:11:57,639
And that would be better if I was.

809
01:11:57,639 --> 01:12:07,079
Because that would mean that there's so many ideas out there of different shapes and sizes that would have gone totally neglected.

810
01:12:07,079 --> 01:12:14,678
And no one would have brought into the world had we not done the 300 sidechains.

811
01:12:16,759 --> 01:12:22,358
But Rindale, did you have your hand up at some point?

812
01:12:23,399 --> 01:12:23,878
Oh, yeah.

813
01:12:23,878 --> 01:12:30,678
I mean, on the question about like, how do you get the Ethereum people to move their stuff over?

814
01:12:31,639 --> 01:12:33,719
My hot take is I don't think you do.

815
01:12:34,279 --> 01:12:43,558
I think the first sidechain that gets built after the ones that Paul already has ready to go is a

816
01:12:44,358 --> 01:12:47,079
basically a better version of RapidBitcoin.

817
01:12:47,079 --> 01:12:48,599
And it's just a bridge to Ethereum.

818
01:12:49,159 --> 01:12:57,238
And like, you know, like, there's already Rootstock, which lifted EVM and tried to recreate

819
01:12:57,238 --> 01:13:02,199
the Ethereum ecosystem and something that's, you know, pegged to Bitcoin.

820
01:13:02,759 --> 01:13:05,959
Liquidity is super thin, and usage is really small.

821
01:13:05,959 --> 01:13:12,438
Because like, nobody wants to dump their ETH bags to go and recreate the same applications

822
01:13:12,438 --> 01:13:15,159
on something else and kind of start over.

823
01:13:15,878 --> 01:13:21,159
So I think, you know, what you would end up with is all the Ethereum people would keep using

824
01:13:21,159 --> 01:13:26,839
Ethereum, but they would have a less trusted way to move between Bitcoin and Ethereum.

825
01:13:26,839 --> 01:13:32,279
And then I think, you know, to Paul's last point, I don't think there ends up being a lot

826
01:13:32,279 --> 01:13:32,918
of sidechains.

827
01:13:32,918 --> 01:13:35,238
I think there ends up being a really small number of them.

828
01:13:35,238 --> 01:13:40,279
You get one that's like, really optimized for payments, and maybe has really good privacy.

829
01:13:40,279 --> 01:13:45,639
And you have like, a trustless bridge to Ethereum for people who want to do Ethereum-y stuff.

830
01:13:46,199 --> 01:13:47,719
And I think that's kind of it.

831
01:13:47,719 --> 01:13:51,159
Like, I don't think you end up with a huge number of these things.

832
01:13:51,639 --> 01:13:52,918
But I don't actually know.

833
01:13:52,918 --> 01:13:54,678
That's just my guess.

834
01:13:54,678 --> 01:13:55,639
But I think I'm...

835
01:13:55,639 --> 01:13:56,918
Yeah, I agree.

836
01:13:56,918 --> 01:14:00,358
But I think it's like, it's always dangerous to bet against innovation, right?

837
01:14:00,358 --> 01:14:01,878
Because you never really know.

838
01:14:01,878 --> 01:14:03,318
Like, you'd be like, oh, I just never thought...

839
01:14:03,318 --> 01:14:09,238
I mean, people could be playing this recording in years, and they'll be like, that's what

840
01:14:09,238 --> 01:14:10,279
they thought back then.

841
01:14:10,279 --> 01:14:12,199
You know, like, because think about it.

842
01:14:12,199 --> 01:14:17,878
What if you said something like, well, there's an awful lot of people who are like, well,

843
01:14:18,199 --> 01:14:24,839
there's an awful lot of things where the actual use of them is not understood immediately,

844
01:14:24,839 --> 01:14:26,118
you know, throughout history.

845
01:14:26,118 --> 01:14:27,478
It's happened many, many times.

846
01:14:29,079 --> 01:14:30,279
Yeah, I mean, that's definitely true.

847
01:14:30,279 --> 01:14:37,318
But you know, like, what I would say is, I think the current cryptocurrency landscape

848
01:14:37,318 --> 01:14:43,159
is a bad prophecy for trying to forecast how many sidechains we would have if we had an

849
01:14:43,159 --> 01:14:45,639
actual trustless pegout mechanism.

850
01:14:45,639 --> 01:14:54,599
Because most of them are either, you know, outright scams, or they are governance tokens

851
01:14:54,599 --> 01:14:59,878
for applications that don't actually need their own, like layer one, like they're, you

852
01:14:59,878 --> 01:15:06,599
know, a voting token or something, or like the NFT ecosystem is collectibles that in

853
01:15:06,599 --> 01:15:11,399
the fullness of time, maybe they end up being transferable DRM tokens, but they're just

854
01:15:11,399 --> 01:15:11,959
collectibles.

855
01:15:12,039 --> 01:15:18,199
Like, most things in the ecosystem today, don't actually need their own network, which

856
01:15:18,199 --> 01:15:24,599
is why they're all like Ethereum tokens, or clones of Ethereum tokens, like Avalanche

857
01:15:24,599 --> 01:15:27,798
or, you know, Binance Smart Chain or something, right?

858
01:15:27,798 --> 01:15:30,678
So I like, I agree with you.

859
01:15:30,678 --> 01:15:34,678
So maybe there's not two chains, maybe there's five or 10 or something.

860
01:15:34,678 --> 01:15:39,959
But, you know, I don't think that there's thousands, right?

861
01:15:40,118 --> 01:15:45,238
I think that there could be thousands of tokens, right?

862
01:15:45,238 --> 01:15:49,318
But it's thousands of tokens on three chains or something.

863
01:15:50,118 --> 01:15:51,399
That's exactly right.

864
01:15:51,399 --> 01:15:57,238
You're exactly right that we should not make the error of projecting the market cap of

865
01:15:57,238 --> 01:16:01,238
Ethereum onto a future hypothetical drivechain world.

866
01:16:01,959 --> 01:16:06,358
We should not make the error of thinking that the largest sidechain on Bitcoin, if drive

867
01:16:06,358 --> 01:16:10,839
chain is adopted, would be akin necessarily to Ethereum.

868
01:16:11,719 --> 01:16:18,199
There would be a whole different constellation of narratives at hand, which is why earlier

869
01:16:18,918 --> 01:16:24,519
I wanted to address that idea that there won't always necessarily be this ocean of altcoins.

870
01:16:25,079 --> 01:16:30,039
Drivechain might completely change the narratives in all of crypto.

871
01:16:30,039 --> 01:16:36,039
Because if Bitcoin gains a narrative that deprives the altcoin founders and investors

872
01:16:36,039 --> 01:16:41,798
of hope, then people will just say, well, everything is getting built on Bitcoin.

873
01:16:41,798 --> 01:16:43,719
There's no reason to even start an altcoin.

874
01:16:43,719 --> 01:16:45,399
No one's going to invest in that.

875
01:16:45,399 --> 01:16:46,118
Well, I mean, maybe.

876
01:16:46,118 --> 01:16:52,519
And maybe what ends up happening is that for each incremental new project, there's a harder

877
01:16:52,519 --> 01:16:58,759
decision to be made about, do I go and make this an ERC20 token or do I build it on a

878
01:16:58,759 --> 01:16:59,558
Bitcoin sidechain?

879
01:16:59,558 --> 01:17:05,798
But there's also a future here where there's enough network effects and enough money on

880
01:17:05,798 --> 01:17:13,719
something like Ethereum that the first sidechain that comes out is just a better bridge between

881
01:17:13,719 --> 01:17:14,839
those two networks.

882
01:17:14,839 --> 01:17:20,118
And you still have kind of money-centric use cases happening on Bitcoin, and you have other

883
01:17:20,118 --> 01:17:23,399
stuff happening on another network, and you just have a bridge between them.

884
01:17:23,399 --> 01:17:25,959
And it doesn't kill all the alts.

885
01:17:25,959 --> 01:17:34,118
It just makes it so that the next incremental project has more optionality on Bitcoin.

886
01:17:34,918 --> 01:17:39,238
That's, I think, an equally likely use case or outcome.

887
01:17:39,878 --> 01:17:40,279
I don't know.

888
01:17:40,279 --> 01:17:41,318
I'll give up my talking stick.

889
01:17:41,318 --> 01:17:43,399
I saw Bob just joined and DJ has his hand up.

890
01:17:43,399 --> 01:17:44,199
Yeah, welcome, Bob.

891
01:17:44,998 --> 01:17:46,519
Bob, thank you for joining.

892
01:17:46,519 --> 01:17:47,639
I really appreciate it.

893
01:17:47,639 --> 01:17:52,519
I had tweeted to you to please join the conversation, and I thank you very much for joining.

894
01:17:56,838 --> 01:17:58,679
OK, so apologies to Paul.

895
01:17:58,679 --> 01:17:59,559
Respect you very much.

896
01:17:59,559 --> 01:18:00,998
But let me throw out the opposite opinion.

897
01:18:01,559 --> 01:18:07,319
This whole conversation sounds a lot like the conversation over the last 10 years, literally,

898
01:18:07,319 --> 01:18:12,279
with every single altcoin, every single ICO, and every single thing on top of Ethereum.

899
01:18:12,279 --> 01:18:16,439
I posted on the Twitter thread this lemonade coin skit that was done.

900
01:18:16,439 --> 01:18:17,478
Like, you want to buy lemonade?

901
01:18:17,478 --> 01:18:18,919
No, you have to have lemonade coin.

902
01:18:20,279 --> 01:18:24,838
And that sounds a whole lot like the description Paul gave a little bit ago about having like

903
01:18:24,838 --> 01:18:26,039
kind of geographic centers.

904
01:18:27,319 --> 01:18:29,319
And, you know, at the end of the day, we already have that, right?

905
01:18:29,319 --> 01:18:29,958
We have dollars.

906
01:18:29,958 --> 01:18:30,598
We have euros.

907
01:18:30,759 --> 01:18:32,118
We have Chinese yuan.

908
01:18:32,118 --> 01:18:33,639
We have, you know, lots of currencies.

909
01:18:33,639 --> 01:18:36,279
We already have a Byzantine fragmented thing.

910
01:18:36,919 --> 01:18:39,399
But, you know, for various reasons, you don't actually have to pay a Chinese supplier in

911
01:18:39,399 --> 01:18:40,998
dollars because somebody does that for you.

912
01:18:40,998 --> 01:18:44,519
But nobody actually wants a wallet with a whole bunch of different currencies, right?

913
01:18:44,519 --> 01:18:46,279
That's what we want to get away from, right?

914
01:18:47,559 --> 01:18:52,919
But so I guess what I'm seeing here is more of the same, right?

915
01:18:52,919 --> 01:18:56,679
We have attempted to make experimental chains before, right?

916
01:18:56,679 --> 01:19:01,559
Liquid was like a lot of the narratives I hear around drivechains are exactly the same

917
01:19:01,559 --> 01:19:03,559
as those made around Liquid when Liquid was launched.

918
01:19:03,559 --> 01:19:04,919
Like, we want to do experimentation.

919
01:19:04,919 --> 01:19:06,759
We can't experiment on Bitcoin.

920
01:19:06,759 --> 01:19:09,478
We need a platform to do that, right?

921
01:19:09,478 --> 01:19:13,478
And so this spawned, you know, thousands of altcoins and they did their experimentation.

922
01:19:13,478 --> 01:19:15,319
Some of that experimentation is quite good, to be honest.

923
01:19:16,439 --> 01:19:18,279
Liquid did their experimentation.

924
01:19:18,279 --> 01:19:22,519
And today, you know, if you want to go do some kind of experiment, you can go to Liquid

925
01:19:22,519 --> 01:19:27,159
and you can go if you want to use, you know, Ethereum smart contracts, you can go to Rootstock.

926
01:19:28,279 --> 01:19:29,478
And it's not happening.

927
01:19:29,478 --> 01:19:35,399
You know, I think, you know, one should zoom out here and say, I like to zoom out and say,

928
01:19:35,399 --> 01:19:39,319
what are the asset classes present that are going to be useful?

929
01:19:39,319 --> 01:19:39,478
Right.

930
01:19:39,478 --> 01:19:40,838
So one is money.

931
01:19:40,838 --> 01:19:42,519
Money you want to be universal.

932
01:19:42,519 --> 01:19:46,519
Bitcoin is the first time we can have a truly global currency, right?

933
01:19:47,319 --> 01:19:50,679
Nowadays, you know, you've got to trade your dollars for euros or whatever when you go

934
01:19:50,679 --> 01:19:51,639
to another country.

935
01:19:51,639 --> 01:19:55,478
But if Bitcoin is accepted globally, we could have a uniform global currency.

936
01:19:55,478 --> 01:19:56,519
And I don't need to do all that.

937
01:19:56,519 --> 01:20:02,118
I don't need layers upon layers of intermediaries and market makers to trade all of my 27 different

938
01:20:02,118 --> 01:20:03,319
lemonade coins in my wallet.

939
01:20:03,319 --> 01:20:03,718
Right.

940
01:20:03,718 --> 01:20:05,399
I have one global currency.

941
01:20:05,399 --> 01:20:10,439
The second valuable use case is ICOs, which are basically equities, right?

942
01:20:11,159 --> 01:20:15,238
They're holding ownership or some other kind of responsibility to a company.

943
01:20:15,238 --> 01:20:18,039
This is completely legitimate to do, completely valuable to do.

944
01:20:18,039 --> 01:20:21,159
And in my mind is a completely separate use case, right?

945
01:20:21,639 --> 01:20:27,159
The censorship resistant properties of stocks are wildly different from that of currency.

946
01:20:27,159 --> 01:20:29,958
If you want to pay somebody for coffee, who really gives a shit?

947
01:20:29,958 --> 01:20:31,078
You know, go ahead and pay.

948
01:20:31,958 --> 01:20:35,799
But equities have a lot of constraints around them.

949
01:20:36,358 --> 01:20:39,799
And I think that's, you know, that is what has happened with Ethereum, with all the ICOs.

950
01:20:39,799 --> 01:20:42,198
All of the ICOs are effectively equities.

951
01:20:42,198 --> 01:20:44,198
And anybody who says otherwise is lying.

952
01:20:45,256 --> 01:20:48,976
The what remains is is is currency, right?

953
01:20:49,336 --> 01:20:53,896
We don't want a Byzantine currency model where we have 27 different local currencies.

954
01:20:53,896 --> 01:20:54,896
We already have that.

955
01:20:59,456 --> 01:21:00,576
That's really the best you got.

956
01:21:02,696 --> 01:21:03,936
I knew you wouldn't like what I had to say.

957
01:21:05,576 --> 01:21:07,736
Bob, I mean, it's ridiculous what you're saying.

958
01:21:07,736 --> 01:21:12,616
You're saying that a 20 dollar bill in cash, you put it into a an ATM and you get 20

959
01:21:12,616 --> 01:21:14,016
dollars in your checking account.

960
01:21:14,456 --> 01:21:17,055
That's having 27 different currencies, according to you.

961
01:21:17,776 --> 01:21:22,055
The whole point of the currency is that they exchange at a bar, one to one pegged to each

962
01:21:22,055 --> 01:21:23,895
other. It's like the whole point.

963
01:21:25,136 --> 01:21:31,136
OK, so fine. All right. So I have 27 different one to one pegged BTC variants, right?

964
01:21:31,656 --> 01:21:34,736
Now, you can go back to the block size debate, right?

965
01:21:34,736 --> 01:21:38,456
Would we have been better off making a larger block size rather than having 27 points?

966
01:21:38,456 --> 01:21:42,816
A lot more complex. Everybody involved have 27 different versions of Bitcoin than just

967
01:21:42,816 --> 01:21:44,175
one. And that's a block size.

968
01:21:45,215 --> 01:21:48,576
Well, of course, we would not have been better off with 27 different versions of Bitcoin

969
01:21:48,576 --> 01:21:53,656
because of network effects, because it's it's not the same thing if you had ATM coin and

970
01:21:53,656 --> 01:21:59,535
then you had cash and then you had and then somehow you had quarters where four quarters

971
01:21:59,535 --> 01:22:01,656
doesn't exactly add up to a dollar all the time.

972
01:22:02,256 --> 01:22:05,976
That would be annoying and ridiculous for everyone when you write someone a check for

973
01:22:05,976 --> 01:22:07,175
one hundred and forty dollars.

974
01:22:07,616 --> 01:22:10,696
Sometimes they get one hundred and eighty dollars in their checking account.

975
01:22:11,095 --> 01:22:15,815
That the whole point of the whole point, you understand that when you deposit five

976
01:22:15,815 --> 01:22:20,095
Bitcoin to the Lightning Network, you get five Bitcoin on the Lightning Network, right?

977
01:22:20,095 --> 01:22:23,976
Does that let's let's say there are only two.

978
01:22:23,976 --> 01:22:25,976
Right. There's there's two I have to track.

979
01:22:25,976 --> 01:22:29,095
Right. So one is going to be, let's say, a big block drivechain, right, which can which

980
01:22:29,095 --> 01:22:30,535
can handle lots of transaction volume.

981
01:22:30,815 --> 01:22:31,855
Another is native Bitcoin.

982
01:22:31,855 --> 01:22:33,855
Right. And my wallet holds both.

983
01:22:34,056 --> 01:22:38,696
Right. And to your previous claims, you keep saying this is not a block size increase.

984
01:22:38,696 --> 01:22:43,416
But if I want to track both my native Bitcoin and this large block drivechain, which has

985
01:22:44,016 --> 01:22:48,376
much more transaction capacity because that's what's needed to get everybody one of

986
01:22:48,376 --> 01:22:51,976
these. Right. This is effectively block size increase.

987
01:22:52,016 --> 01:22:53,776
Now, everybody has to track both of these chains.

988
01:22:53,776 --> 01:22:54,776
We wouldn't.

989
01:22:59,056 --> 01:23:02,136
Yeah, but you again, you missed the entire point is that the whole point of the block

990
01:23:02,295 --> 01:23:06,815
size dispute was that a bunch of small blockers who did not want the block size to

991
01:23:06,815 --> 01:23:12,056
increase were pitted against large blockers who did not want it to

992
01:23:12,056 --> 01:23:15,616
stay the same. So you had two groups of people who wanted different things.

993
01:23:15,856 --> 01:23:20,895
So when the idea of it being a block size increase for someone

994
01:23:20,895 --> 01:23:23,136
who wants that is a good thing.

995
01:23:23,136 --> 01:23:26,655
But it for it being it's the difference between, you know, being raped and having sex.

996
01:23:26,655 --> 01:23:29,336
I mean, it's like the no one.

997
01:23:29,895 --> 01:23:31,336
I can't choose not to do it.

998
01:23:31,336 --> 01:23:35,375
Right. If the payment is already, you just don't use the L2.

999
01:23:35,455 --> 01:23:39,295
You just don't use the L2. And then when you build someone, you say when you conduct it,

1000
01:23:39,295 --> 01:23:40,976
when you agree to work for someone.

1001
01:23:41,856 --> 01:23:45,895
It's not like they it's like they're not going to tell you, but you go if you go to New York

1002
01:23:45,895 --> 01:23:49,015
City or somewhere and you say, I want a job and it pays one hundred thousand a year.

1003
01:23:49,496 --> 01:23:52,416
Everyone knows you're talking about one hundred thousand dollars, US dollars.

1004
01:23:53,136 --> 01:23:57,336
They you know, or if you work for someone and they say we can only pay you in yen, you

1005
01:23:57,375 --> 01:24:01,535
know, they're going to tell you that before before if I buy something from Europe, they

1006
01:24:01,535 --> 01:24:05,976
charge in euros. So you just if you want the L1 coin, you charge the L1 coin.

1007
01:24:06,696 --> 01:24:08,815
These things are a lot more to negotiate, difficult to negotiate.

1008
01:24:08,815 --> 01:24:12,856
You might imagine I literally signed a contract today for a consulting gig in another

1009
01:24:12,856 --> 01:24:17,455
currency. Right. I didn't even bother trying to go and get them to pay me in US dollars

1010
01:24:17,455 --> 01:24:19,216
because I know what that where that conversation would go.

1011
01:24:19,216 --> 01:24:20,256
I mean, how many of you have done that?

1012
01:24:20,895 --> 01:24:26,015
Yeah, but the alternative, Bob, is that the layer two chain doesn't exist at all or it

1013
01:24:26,015 --> 01:24:30,655
becomes an altcoin, pure altcoin or it's some kind of custodial garbage.

1014
01:24:31,535 --> 01:24:36,295
So the idea that you at least have something that's now denominated in the twenty one

1015
01:24:36,295 --> 01:24:37,295
million bitcoin.

1016
01:24:38,256 --> 01:24:43,576
Bob, when you said that there would be twenty seven different currencies if there were

1017
01:24:43,776 --> 01:24:47,136
twenty seven different sidechains, if I heard you correctly, that's what you were

1018
01:24:47,136 --> 01:24:51,776
saying. To me, that's that's not making sense to me because.

1019
01:24:52,776 --> 01:24:57,935
That's kind of like saying people who use Venmo, which is denominated in U.S.

1020
01:24:57,935 --> 01:25:02,296
dollars for me in America, you know, I go into Venmo, it's in dollars, it's as if

1021
01:25:02,296 --> 01:25:06,696
you're saying that's a different currency than dollars in my pocket physically.

1022
01:25:07,976 --> 01:25:11,495
Well, on a technical level, it is a different currency, right, because it's on a

1023
01:25:11,495 --> 01:25:13,095
different blockchain with a different consensus.

1024
01:25:13,095 --> 01:25:17,535
Right. So now can you make an interface like Venmo that hides the fact that there are

1025
01:25:17,535 --> 01:25:19,615
actually a bunch of different block chains underneath it?

1026
01:25:19,696 --> 01:25:21,176
Sure. Yes, you can.

1027
01:25:21,535 --> 01:25:25,935
But the consequence of that is that anybody implementing such a thing has to track all

1028
01:25:25,935 --> 01:25:27,256
of the chains that are doing that.

1029
01:25:27,416 --> 01:25:28,976
And now we're back to the big block debate.

1030
01:25:29,495 --> 01:25:33,696
This is now effectively a big block, which I think we're not at all black.

1031
01:25:33,815 --> 01:25:38,215
I find it somewhat disturbing that because you do seem like a smart guy and I find it

1032
01:25:38,215 --> 01:25:43,535
disturbing that you have some kind of weird glitch out on this point because the block

1033
01:25:43,736 --> 01:25:49,576
size dispute, that dispute was about the entire group having to go in one direction

1034
01:25:49,935 --> 01:25:52,176
that not everyone enjoyed.

1035
01:25:52,176 --> 01:25:53,176
I'm not talking about those.

1036
01:25:53,615 --> 01:25:56,215
Yeah, that's someone who is someone who says, oh, can you pay me on Venmo?

1037
01:25:56,215 --> 01:25:57,215
And they say yes.

1038
01:25:58,215 --> 01:26:00,775
I'm not talking about who says, can you pay me on Venmo?

1039
01:26:00,775 --> 01:26:04,775
And they say no. And they say, well, too bad, because we're all Venmo now and now you

1040
01:26:04,775 --> 01:26:05,775
have to do it.

1041
01:26:05,775 --> 01:26:10,416
So Bob, you're not talking about the death and burial.

1042
01:26:11,016 --> 01:26:15,335
Bob, I'm talking about how much state do I have to track as a provider like Venmo?

1043
01:26:15,416 --> 01:26:18,095
If I want to be Venmo, how many nodes do I have to run?

1044
01:26:18,095 --> 01:26:19,775
How many gigabytes of disk space does it take?

1045
01:26:19,976 --> 01:26:20,976
How much bandwidth do I need?

1046
01:26:21,375 --> 01:26:24,416
There there would be professional arbitrageurs.

1047
01:26:24,416 --> 01:26:25,495
Don't you don't we?

1048
01:26:26,016 --> 01:26:30,775
No, I mean, we already have like if you want to build a wallet that abstracts the

1049
01:26:30,775 --> 01:26:35,296
difference between on chain and lightning, you already have a bunch of additional

1050
01:26:35,296 --> 01:26:37,495
infrastructure and a whole bunch of additional state to track.

1051
01:26:37,696 --> 01:26:39,896
And if you don't want to do that, then you don't support lightning.

1052
01:26:39,896 --> 01:26:41,655
You say we're a layer one wallet.

1053
01:26:42,856 --> 01:26:49,055
Yes, Bob, there would be professional arbitrageurs who monitor the real purchasing

1054
01:26:49,055 --> 01:26:56,535
power, who monitor the exchange rate among these different sidechain bitcoins and

1055
01:26:56,535 --> 01:26:58,495
equilibrium and force them to equal.

1056
01:26:58,495 --> 01:27:00,256
I can't tell them having network issues.

1057
01:27:00,615 --> 01:27:02,256
Is Bob coming through for anybody else?

1058
01:27:03,495 --> 01:27:05,576
I was not speaking. I was OK.

1059
01:27:05,815 --> 01:27:08,736
I was just saying, Bob, yeah, but that's not the point.

1060
01:27:08,736 --> 01:27:12,296
Even though Henry is because that will just confuse people further about these tiny

1061
01:27:12,296 --> 01:27:17,775
details about that are related to the 30 days time value of money that are not.

1062
01:27:18,856 --> 01:27:22,736
They're not even germane to the one to one peg, I think it is a little bit important.

1063
01:27:22,736 --> 01:27:25,416
So let's say we do have a bunch of different sidechains.

1064
01:27:25,416 --> 01:27:27,416
Right. And I say, OK, somehow this is all going to be automatic.

1065
01:27:27,696 --> 01:27:28,896
This can be done. Right.

1066
01:27:29,055 --> 01:27:32,495
You can have a bunch of different, quote unquote, bitcoins, each of which have

1067
01:27:32,495 --> 01:27:35,736
different, you know, on chain representations or on different blockchains.

1068
01:27:35,935 --> 01:27:37,736
You can even do it between Bitcoin and Litecoin.

1069
01:27:37,775 --> 01:27:39,856
Let's say let's let's use Litecoin as a payment.

1070
01:27:40,136 --> 01:27:43,335
And many people have tried this idea where you say, all right, some arbitrageur is

1071
01:27:43,335 --> 01:27:45,055
going to come in and do the arbitrage.

1072
01:27:45,055 --> 01:27:47,856
And so I look like I'm paying in my native currency, but actually it's going on

1073
01:27:47,856 --> 01:27:51,655
Litecoin. This is exactly what the strike app does in dollars to Bitcoin.

1074
01:27:51,655 --> 01:27:57,535
Right. So this requires the development of an ecosystem of exchanges.

1075
01:27:57,576 --> 01:28:00,136
Right. Our history with exchanges is fucking terrible.

1076
01:28:00,416 --> 01:28:02,576
Right. And we really need decentralized exchanges.

1077
01:28:02,815 --> 01:28:06,256
We, in my opinion, we do not have any form of decentralized exchange which is

1078
01:28:06,256 --> 01:28:08,176
capable of fulfilling this role right now.

1079
01:28:08,495 --> 01:28:12,495
I do think it's technically possible, but we don't have it right now.

1080
01:28:12,495 --> 01:28:15,176
And what will end up happening is we'll end up creating Wall Street.

1081
01:28:15,215 --> 01:28:16,495
We'll have a bunch of arbitrageurs.

1082
01:28:16,736 --> 01:28:19,655
They're going to arbitrage all of these different things and make it look like one

1083
01:28:19,655 --> 01:28:22,856
currency. The only people who can implement a payment process have a lot of

1084
01:28:22,856 --> 01:28:25,055
resources. No one can run a home node.

1085
01:28:25,375 --> 01:28:30,095
This is no longer a self-sufficient, decentralized currency because no one can

1086
01:28:30,095 --> 01:28:33,375
run a home node anymore. And now we also have the centralization pressure of

1087
01:28:33,375 --> 01:28:35,896
those arbitrageurs because they're using centralized exchanges.

1088
01:28:36,615 --> 01:28:39,576
The full node cost is totally unaffected from what it is now.

1089
01:28:39,576 --> 01:28:43,136
If you because right now you're only running L1, you're not running any side

1090
01:28:43,136 --> 01:28:48,136
chain nodes. If that's the full node thing you want, then just keep that

1091
01:28:48,136 --> 01:28:50,856
experience. Just keep doing that.

1092
01:28:51,375 --> 01:28:55,296
But then I can't pay a guy who wants a Bitcoin on one of the direct chains.

1093
01:28:56,655 --> 01:28:59,655
It's what if he'd asked you for an altcoin?

1094
01:29:00,416 --> 01:29:05,215
You also couldn't pay him. Or if he asked for a marble statue.

1095
01:29:06,296 --> 01:29:11,016
The goal is to get down to a set of possible currencies I can pay and that has

1096
01:29:11,016 --> 01:29:12,136
exactly one thing in it.

1097
01:29:12,696 --> 01:29:14,176
Right. I mean, that's that's kind of the global goal.

1098
01:29:14,215 --> 01:29:18,735
Right. You know, I could give you rhinestones or seashells or gold or whatever.

1099
01:29:18,776 --> 01:29:22,536
And, you know, over time, the number of currencies globally has reduced.

1100
01:29:22,536 --> 01:29:25,216
Right. And we're still on that trajectory of reducing the number of currencies.

1101
01:29:25,696 --> 01:29:28,295
Randal, what do you think of Bob's view?

1102
01:29:28,815 --> 01:29:31,256
What do you think he's saying and do you agree with it or not?

1103
01:29:35,216 --> 01:29:41,975
Randal? Oh, maybe Randal is not available.

1104
01:29:47,855 --> 01:29:49,256
What they want is what they want.

1105
01:29:49,295 --> 01:29:50,896
You want they want something from you.

1106
01:29:51,216 --> 01:29:52,576
You want something from them.

1107
01:29:54,295 --> 01:29:55,295
That's between the two of you.

1108
01:29:55,295 --> 01:30:04,656
So if you say I am committed to L1 and I will never leave L1 ever, then luckily for

1109
01:30:04,656 --> 01:30:06,855
you, the sidechains all exchange at par.

1110
01:30:06,855 --> 01:30:09,456
So they have an absolutely equal purchasing power.

1111
01:30:09,456 --> 01:30:12,696
It's twenty dollars worth of cash or twenty dollars worth of ATM.

1112
01:30:13,175 --> 01:30:18,055
So if someone says that's like someone saying I demand to be paid in a cashier's

1113
01:30:18,055 --> 01:30:21,256
check and you say I only have I'm Bob McElrath.

1114
01:30:21,256 --> 01:30:24,175
I only have cash or whatever.

1115
01:30:24,776 --> 01:30:27,456
And you say I refuse to get this cashier's check.

1116
01:30:28,096 --> 01:30:33,216
Well, then, you know, you and that person, I'm sure someone will work something out

1117
01:30:33,216 --> 01:30:38,016
where they have whatever some intermediaries and some intern will go.

1118
01:30:39,776 --> 01:30:43,656
Collect the cash from your house, get the cashier's check or the trade will fall

1119
01:30:43,656 --> 01:30:46,735
apart, but if it was going to fall apart over that, then how serious is it really?

1120
01:30:47,536 --> 01:30:50,495
I mean, that's friction. I mean, the fact of the matter is any form of.

1121
01:30:52,175 --> 01:30:54,576
Right now, the L2 doesn't exist at all.

1122
01:30:54,576 --> 01:30:57,776
It doesn't exist. So it'd have to be an altcoin or have to be some something even

1123
01:30:57,776 --> 01:31:04,975
where to be some custodial Bitcoin thing that that might be mandatory KYC or some

1124
01:31:04,975 --> 01:31:09,576
completely fully centralized CBDC universe.

1125
01:31:09,576 --> 01:31:10,696
As far as anyone is aware.

1126
01:31:12,336 --> 01:31:16,815
So at least you've got this thing that exchanges that is the exact same currency

1127
01:31:17,136 --> 01:31:18,136
as the universe.

1128
01:31:18,136 --> 01:31:24,136
I think at the heart, maybe of Bob's objection is maybe he thinks that if drive

1129
01:31:24,136 --> 01:31:27,935
chain is adopted, then the sidechains wouldn't be demanded.

1130
01:31:28,055 --> 01:31:30,855
Maybe he thinks that they wouldn't be large, even though.

1131
01:31:31,495 --> 01:31:32,896
No, I think he's saying the opposite.

1132
01:31:32,896 --> 01:31:37,495
He's saying they'll be so big that I won't be able to spend my L1 coins anywhere.

1133
01:31:38,375 --> 01:31:43,016
I think this is effectively a block size increase and everybody's going to move to

1134
01:31:43,016 --> 01:31:45,495
a drivechain, which has a tremendously large block.

1135
01:31:45,495 --> 01:31:48,295
And the only people who can actually run that blockchain are industrial service

1136
01:31:48,295 --> 01:31:51,216
providers. And we're going to put centralization around that one chain.

1137
01:31:51,536 --> 01:31:56,136
The fact that you can you can peg back into main chain Bitcoin will only use for

1138
01:31:56,136 --> 01:32:03,055
international settlements or large settlements, which, you know, that's a way things

1139
01:32:03,055 --> 01:32:07,855
could go. But that does mean that this is no longer the decentralized currency where

1140
01:32:07,855 --> 01:32:12,216
I can run a home node. So what's a better solution than Bob?

1141
01:32:12,216 --> 01:32:17,456
I'm just curious, in your perspective, how do we solve the scalability solution?

1142
01:32:17,456 --> 01:32:21,536
Because like based off of what Paul was saying earlier, right, so there's two and a

1143
01:32:21,536 --> 01:32:24,336
half million transactions on the base layer per week.

1144
01:32:24,735 --> 01:32:27,656
There's 52 weeks in a year.

1145
01:32:27,935 --> 01:32:29,495
So we're coming to roughly like what?

1146
01:32:29,495 --> 01:32:32,815
One hundred and thirty is that million or is that I don't know.

1147
01:32:33,175 --> 01:32:37,016
Not really good with that kind of big number math in my head, but one hundred and

1148
01:32:37,016 --> 01:32:39,696
thirty ish million transactions per year.

1149
01:32:40,696 --> 01:32:45,016
I'm guessing I can double check the math in a second, but what's the better scalability

1150
01:32:45,016 --> 01:32:49,896
solution? Or do you think like what you just said would happen where the base layer

1151
01:32:49,896 --> 01:32:55,295
will simply be used for the larger value transactions and final settlement of those

1152
01:32:55,295 --> 01:32:59,656
transactions between bigger banking institutions, which will all basically be the

1153
01:32:59,656 --> 01:33:00,776
layer two solution.

1154
01:33:00,815 --> 01:33:05,536
So any layer two will basically become the new banking institution like Lightning and

1155
01:33:06,055 --> 01:33:08,336
anything else like ARK or whatever comes up next.

1156
01:33:09,336 --> 01:33:13,175
The latter. So in other words, we can't scale Bitcoin, period, full stop.

1157
01:33:13,175 --> 01:33:16,656
Right. We can't keep it and keep its properties that we like.

1158
01:33:16,656 --> 01:33:20,896
Right. We compromise and we lose its decentralization properties.

1159
01:33:20,896 --> 01:33:22,295
We lose the ability to run a home number.

1160
01:33:22,295 --> 01:33:24,815
We lose the ability for everybody to check that what's going on is kosher.

1161
01:33:25,615 --> 01:33:30,576
And we, you know, by making big blocks, you can only run it on a big server, et cetera.

1162
01:33:30,855 --> 01:33:36,096
So the answer in the short term is don't try and scale Bitcoin or rather don't try and

1163
01:33:36,136 --> 01:33:39,576
scale Bitcoin today, but trust that we will come up with a solution in the future.

1164
01:33:39,975 --> 01:33:44,175
But one thing, one statistic I'd like to pull up occasionally is, do you know how long

1165
01:33:44,175 --> 01:33:47,975
it took for credit cards to penetrate the market and across the world?

1166
01:33:48,776 --> 01:33:49,175
How long?

1167
01:33:49,175 --> 01:33:50,975
It was more than 40 years.

1168
01:33:51,696 --> 01:33:55,656
Right. And this was because, you know, the credit card processing companies had to

1169
01:33:55,656 --> 01:34:01,935
distribute credit card readers to the companies as well as, you know, credit cards to

1170
01:34:01,935 --> 01:34:03,536
the banks, which ultimately went to the customers.

1171
01:34:04,136 --> 01:34:05,375
This is a chicken and egg problem.

1172
01:34:05,495 --> 01:34:07,696
We are also in a chicken and egg problem with Bitcoin.

1173
01:34:07,855 --> 01:34:09,336
There aren't any vendors that accept Bitcoin.

1174
01:34:09,336 --> 01:34:11,776
So this whole conversation about drivechain is somewhat moot.

1175
01:34:12,776 --> 01:34:19,175
I think we should really focus on pretending this problem doesn't exist.

1176
01:34:19,336 --> 01:34:23,295
Right. And actually using Bitcoin in the ways that we can use it demonstrate there's

1177
01:34:23,295 --> 01:34:27,055
actually an economy here without trying to build an economy that can service every

1178
01:34:27,055 --> 01:34:28,096
single human on the planet.

1179
01:34:28,136 --> 01:34:33,656
Right. With Bitcoin on main chain and lightning, we can actually go out in a lot of

1180
01:34:33,656 --> 01:34:37,016
different countries in the world and pay for things we want to pay for without actually

1181
01:34:37,016 --> 01:34:40,495
having thought that. And I think that this conversation is happening around drive

1182
01:34:40,495 --> 01:34:41,815
change and all the other things is very healthy.

1183
01:34:41,815 --> 01:34:44,855
I'm really happy to see all the discussion around all this, because ultimately this

1184
01:34:44,855 --> 01:34:50,295
will lead to a good solution, whether it's lightning or Ark or anything else.

1185
01:34:51,336 --> 01:34:53,576
We'll get there, but we're not going to get there.

1186
01:34:55,576 --> 01:35:01,656
What is the difference between a custodial like you still don't grasp that there is

1187
01:35:01,656 --> 01:35:07,336
no effect on the layer one full node cost, even if there's an eight gigabyte side

1188
01:35:07,336 --> 01:35:09,615
chain, which is the whole point.

1189
01:35:09,815 --> 01:35:12,295
So you don't get the one full node.

1190
01:35:13,735 --> 01:35:17,656
If I could check the international transfers of Chase Bank, but I can't check my own

1191
01:35:17,656 --> 01:35:19,576
coffee transaction. What's the point of that?

1192
01:35:20,495 --> 01:35:26,055
Because right now you don't lose anything net of where you are now.

1193
01:35:27,096 --> 01:35:30,896
Right now you can run your layer one node and you could still do that in a world where

1194
01:35:30,896 --> 01:35:31,975
a sidechain is popular.

1195
01:35:32,656 --> 01:35:37,096
But what if instead of a sidechain, what if instead of it being a BIP300 sidechain,

1196
01:35:38,096 --> 01:35:42,896
Bob, what if instead I just started my own company, Paul Corp, and I do all the payment

1197
01:35:42,896 --> 01:35:48,295
processing through that and I accept and I allow I dispense Bitcoin and I accept

1198
01:35:48,295 --> 01:35:52,136
Bitcoin when you it's like a big casino or something or a bank.

1199
01:35:52,576 --> 01:35:56,096
People send Bitcoin in and I give them credit and it's fully custodial.

1200
01:35:56,096 --> 01:35:58,295
And then I do all the payments there.

1201
01:35:58,295 --> 01:36:01,975
And now the cost of running a Paul Corp full node.

1202
01:36:02,415 --> 01:36:07,696
Well, let's say I let anyone who gives me ten million dollars, I let them I let them

1203
01:36:07,696 --> 01:36:12,776
look at the database. So that's a ten million dollar per year full node of Paul Corp.

1204
01:36:13,735 --> 01:36:15,256
Would you be opposed to that?

1205
01:36:18,536 --> 01:36:23,055
I wouldn't want to build such a thing, but I think what you do use the exact same

1206
01:36:23,055 --> 01:36:26,935
argument you just used that Bitcoin has now lost its so we no longer have a

1207
01:36:26,935 --> 01:36:28,016
decentralized currency.

1208
01:36:28,656 --> 01:36:29,656
Which is what you just said.

1209
01:36:30,295 --> 01:36:35,536
Custodial solutions are a solution to scaling.

1210
01:36:35,935 --> 01:36:37,855
Netting is also a solution to scaling.

1211
01:36:38,896 --> 01:36:41,096
Both of those are going to happen, whether we like it or not.

1212
01:36:41,855 --> 01:36:44,776
I think the goal of everyone in this group is to build other solutions.

1213
01:36:44,776 --> 01:36:46,456
But those things are going to happen.

1214
01:36:46,576 --> 01:36:47,175
I mean, look, right.

1215
01:36:47,175 --> 01:36:51,855
The cash, right now, but other things that.

1216
01:36:53,096 --> 01:36:54,096
That is what it is.

1217
01:36:55,096 --> 01:36:59,336
It's the non-custodial Paul Corp.

1218
01:37:01,935 --> 01:37:06,055
Those already exist with Bitcoin, with the cash app that already exists.

1219
01:37:06,375 --> 01:37:09,375
No, that's not it is the non-custodial version.

1220
01:37:11,975 --> 01:37:14,576
That's the thing that you said you wanted, you were looking to find.

1221
01:37:15,815 --> 01:37:16,735
This is the thing.

1222
01:37:17,615 --> 01:37:19,336
All right, let me let me understand.

1223
01:37:19,536 --> 01:37:24,495
You want Paul Coin to be non and what it does here, want to be non-custodial.

1224
01:37:24,495 --> 01:37:26,975
And what you're doing is you're introducing friction by saying you can't run a node.

1225
01:37:27,055 --> 01:37:30,415
It's non-custodial, but you can't run a node unless you pay me much money.

1226
01:37:30,415 --> 01:37:30,935
Is that what you're saying?

1227
01:37:31,216 --> 01:37:33,415
We're complaining about how the nodes are so expensive.

1228
01:37:33,415 --> 01:37:36,096
I'm saying, hey, here's something that has a $10 million a year per node, or

1229
01:37:36,096 --> 01:37:40,776
maybe even infinite, because I have a monopoly on Paul Corp, I'm the legal

1230
01:37:40,776 --> 01:37:46,216
owner, I own the whole thing and I don't let anyone run a node.

1231
01:37:46,216 --> 01:37:47,375
So the cost is now infinite.

1232
01:37:47,896 --> 01:37:49,176
Now that's possible today.

1233
01:37:49,615 --> 01:37:53,296
And I could scale Bitcoin, as you just said, people will do custodial stuff.

1234
01:37:54,575 --> 01:37:56,896
So I, we use the same L1 Bitcoin.

1235
01:37:56,896 --> 01:37:58,975
There's no BIP300, but I start Paul Corp.

1236
01:37:59,016 --> 01:38:02,575
According to you, this is an improvement for everyone, for Bitcoin and

1237
01:38:02,575 --> 01:38:03,936
for all the users of Bitcoin.

1238
01:38:04,455 --> 01:38:05,095
It's an improvement.

1239
01:38:05,095 --> 01:38:09,615
If instead of we have a decentralized peer to peer sidechain with open source

1240
01:38:09,615 --> 01:38:13,455
software and a blockchain that anyone can and people holding their own keys and

1241
01:38:13,455 --> 01:38:17,176
this decentralized deposit withdrawal process with an incentive aligned dynamic

1242
01:38:17,176 --> 01:38:18,495
group of anonymous members.

1243
01:38:18,776 --> 01:38:23,536
If instead of doing that, I start Paul Corp and I accept people's Bitcoin, which

1244
01:38:23,536 --> 01:38:28,215
is the same as them, maybe opening a lightning channel or depositing to a side

1245
01:38:28,215 --> 01:38:29,495
chain, that would be the analogy.

1246
01:38:29,936 --> 01:38:33,136
They do, they send coins to me and then I let them do payments and I

1247
01:38:33,136 --> 01:38:34,615
become like a super visa.

1248
01:38:35,735 --> 01:38:40,056
And I do all the payments and all the, and I do all the coffee payments.

1249
01:38:40,095 --> 01:38:43,136
And this is what you were just complaining about when you said, oh, I

1250
01:38:43,136 --> 01:38:44,575
can't validate my coffee payments.

1251
01:38:44,575 --> 01:38:45,215
What's the point?

1252
01:38:46,176 --> 01:38:48,936
And now you can't validate your coffee payments because they go through Paul

1253
01:38:48,936 --> 01:38:53,855
Corp and I'm telling you, are you going to say the exact same thing you just

1254
01:38:53,855 --> 01:38:56,936
said about the large block sidechain, which is that we no longer have a

1255
01:38:56,936 --> 01:38:58,975
decentralized currency.

1256
01:39:02,256 --> 01:39:03,375
I'm still a bit confused.

1257
01:39:03,416 --> 01:39:08,615
I mean, like, so, uh, so first of all, it sounds like every single altcoin,

1258
01:39:08,816 --> 01:39:09,056
right?

1259
01:39:09,536 --> 01:39:10,695
Uh, that's literally what they do.

1260
01:39:12,056 --> 01:39:12,936
There's no altcoin.

1261
01:39:13,016 --> 01:39:13,855
Why would you say that?

1262
01:39:15,256 --> 01:39:16,215
I could be an altcoin.

1263
01:39:16,215 --> 01:39:17,056
It could be Bitcoin, right?

1264
01:39:17,056 --> 01:39:17,495
So I mean,

1265
01:39:20,536 --> 01:39:20,855
okay.

1266
01:39:20,896 --> 01:39:21,536
All on Bitcoin.

1267
01:39:21,656 --> 01:39:21,896
All right.

1268
01:39:21,896 --> 01:39:22,776
So I'm gonna start with Paul Corp.

1269
01:39:23,335 --> 01:39:26,656
Um, in one sense, this is called a payment services processor, right?

1270
01:39:27,136 --> 01:39:34,455
Uh, it is, uh, lots of these, BitGo.

1271
01:39:34,455 --> 01:39:34,735
Yeah.

1272
01:39:34,936 --> 01:39:39,776
I mean, this is a valuable corner of the, of the sector of this economy, right?

1273
01:39:39,776 --> 01:39:43,136
We must have those because a coffee shop owner does not want to run his own order.

1274
01:39:43,136 --> 01:39:44,495
He is going to hire somebody to do it.

1275
01:39:44,975 --> 01:39:46,816
And this does increase scalability.

1276
01:39:47,455 --> 01:39:49,776
Um, now we don't want all people to be doing that.

1277
01:39:49,896 --> 01:39:52,416
Like I think everyone, everyone in this conversation says, well, let's,

1278
01:39:52,455 --> 01:39:53,695
what's the other solution here.

1279
01:39:53,855 --> 01:39:54,095
Right.

1280
01:39:54,455 --> 01:39:55,495
But it will happen.

1281
01:39:56,776 --> 01:40:01,256
No, I'm not holding a gun to anyone's head to use Paul Corp, but it's,

1282
01:40:01,455 --> 01:40:04,416
let's say it's popular and there's also lightning and arc and there's a layer

1283
01:40:04,416 --> 01:40:08,575
one on chain layer one, it's the whole world out there, but let's just say Paul

1284
01:40:08,575 --> 01:40:13,056
Corp is as big as the large, the group of large block sidechains would have

1285
01:40:13,056 --> 01:40:13,176
been.

1286
01:40:13,656 --> 01:40:14,136
It's exact.

1287
01:40:14,136 --> 01:40:15,656
Coincidentally, it's exactly as big.

1288
01:40:16,495 --> 01:40:17,575
You say this is an improvement.

1289
01:40:17,575 --> 01:40:20,695
You say somehow this is an improvement over the BIP300 sidechains.

1290
01:40:21,536 --> 01:40:22,536
I'm not saying it's improvement.

1291
01:40:22,536 --> 01:40:23,575
I'm saying we can't help it.

1292
01:40:23,855 --> 01:40:24,695
We can't stop this.

1293
01:40:24,735 --> 01:40:27,575
I mean, so there's always a better or worse for the same.

1294
01:40:30,536 --> 01:40:32,136
It's definitely worse, right?

1295
01:40:32,455 --> 01:40:36,375
It is an improvement over the Paul Corp idea.

1296
01:40:37,056 --> 01:40:37,776
That's all I'm saying.

1297
01:40:37,776 --> 01:40:42,536
And that's what you were just asking a moment ago was about what do we do instead?

1298
01:40:42,536 --> 01:40:43,816
And you said, well, it'd be custodial.

1299
01:40:43,816 --> 01:40:45,176
And I'm saying now this is an improvement.

1300
01:40:45,864 --> 01:40:47,864
I'm getting lost here, Paul. I'm sorry.

1301
01:40:47,864 --> 01:40:57,864
You can put it on a big continuum. L1 is the cumbersome to use. L1 is what we would prefer everyone use.

1302
01:40:57,864 --> 01:41:11,864
We don't want people to use custodial, but instead we would take this. We would take a team of large block sidechains that are all optional and that have open source code and auditable blockchain.

1303
01:41:11,864 --> 01:41:23,864
And they have an open. You can audit the whole blockchain. You can hold your own keys. You can spend with multi-signal. Yeah, not everyone's going to use that. But that's an improvement over custodial.

1304
01:41:23,864 --> 01:41:31,864
Well, OK. Sometimes I think we need to make a matrix here of all the different desires. So holding your own keys and not custodial is a row in the matrix.

1305
01:41:31,864 --> 01:41:35,864
Being able to run a node and not having the blocks be too big is another row in this matrix.

1306
01:41:35,864 --> 01:41:43,864
But it's better on both, though, because you can't run a PaulCorp node because it's private and you can't hold your own keys either.

1307
01:41:43,864 --> 01:41:56,864
PaulCorp is a straw man that immediately throws me to LemonadeCoin. That's where my head goes. So let's throw that out as that straw man and just go back to what Drivechains actually does.

1308
01:41:56,864 --> 01:42:04,864
That's basically what PaulCorp would do, except that it's on a blockchain instead of as a private corporation.

1309
01:42:04,864 --> 01:42:08,864
So when we say PaulCorp, are we referring to custodial scaling?

1310
01:42:08,864 --> 01:42:11,864
Yeah, like Visa.

1311
01:42:11,864 --> 01:42:27,864
So I want to see if I understand Bob's view. So, Bob, I think what you're saying is that if Bitcoin had a large block sidechain, which would share Bitcoin's monetary policy and miners, it would be potentially extremely successful.

1312
01:42:28,864 --> 01:42:43,864
And this would mean that billions of people would be using, for their daily cash purchases, a blockchain, which would be more expensive to validate than Bitcoin main chain.

1313
01:42:43,864 --> 01:42:46,864
And I think what Paul is saying in response to that...

1314
01:42:46,864 --> 01:42:47,864
That's correct.

1315
01:42:47,864 --> 01:42:51,864
I'm sorry. Did you say something?

1316
01:42:51,864 --> 01:42:53,864
I said that's correct.

1317
01:42:54,864 --> 01:43:09,864
I'm just trying to give a less technical discussion for anyone who wants to hear that and just to make sure that we're all following along together, because you and Paul are able to have a much more challenging discussion than what the average listener might...

1318
01:43:09,864 --> 01:43:13,864
Yeah, I know. Just be honest. It's about me. I don't get it.

1319
01:43:13,864 --> 01:43:42,864
It's about me. So I think what you're saying, Bob, is that if billions of people were using a large block sidechain for some of their money and keeping only their occasional big purchases money on main chain, then you think that it might be like the case that for some people, the only thing they're using is the large block sidechain.

1320
01:43:42,864 --> 01:43:43,864
And they don't have a node.

1321
01:43:43,864 --> 01:43:48,864
So, you know, because let's say the cost is more.

1322
01:43:48,864 --> 01:43:56,864
So let's say it always will cost, you know, maybe a couple hundred dollars of laptop and Internet to validate main chain Bitcoin.

1323
01:43:56,864 --> 01:44:03,864
But let's say people's coffee purchases are using the thunder sidechain, the big block sidechain.

1324
01:44:03,864 --> 01:44:05,864
And most people aren't having a node.

1325
01:44:05,864 --> 01:44:08,864
So it's not as self-sovereign.

1326
01:44:09,864 --> 01:44:19,864
But I think I think what Paul's response to that is that if you want Bitcoin main chain as it exists today, small block, highly decentralized, cheap to validate.

1327
01:44:19,864 --> 01:44:34,864
If you want that to be the base layer of the future blockchain economy, if you want that to be the L1 to every other blockchain, then we need to enable something like drivechain.

1328
01:44:34,864 --> 01:44:49,864
And if you don't do that, then, Bob, your own statements, which are very interesting to read on Twitter, like you say that if I read correctly, like Ethereum has a massive total addressable market much larger than the market for money because Ethereum is trying to do stock markets on blockchain.

1329
01:44:49,864 --> 01:44:59,864
And so the network effect of that blockchain growing forever might be according to your own view.

1330
01:45:00,864 --> 01:45:07,864
Let me stop you there. So everything you said, let's let's just cut off the conversation when we got to stock markets, because that's a whole other can of worms.

1331
01:45:07,864 --> 01:45:11,864
Right. Everything you said up to that point, I think, is a correct characterization of my views.

1332
01:45:11,864 --> 01:45:16,864
Effectively, what we're doing is we're saying that we're actually going to have a big block blockchain.

1333
01:45:16,864 --> 01:45:21,864
I want to buy coffee with it, but I can't run a node because it's just it's too much data.

1334
01:45:21,864 --> 01:45:27,864
And I'm gonna have to hire a service provider. Right. And that service provider is dominantly going to be custodial.

1335
01:45:27,864 --> 01:45:32,864
Right. How is that different? How is that any better than what we have now? Service providers are going to net out. They're going to go and maintain Bitcoin.

1336
01:45:32,864 --> 01:45:36,864
They don't need this large block blockchain because they're all just custodial.

1337
01:45:36,864 --> 01:45:43,864
But the guys on the large block blockchain are also going to be custodial. They're also going to do everything for you.

1338
01:45:43,864 --> 01:45:47,864
The situation isn't actually different. It's enormously different.

1339
01:45:47,864 --> 01:45:54,864
First of all, let me address this claim about how expensive this is, because the reality is it's not significant.

1340
01:45:54,864 --> 01:45:59,864
It's touted as though there's this night and day difference between. But there's really not.

1341
01:45:59,864 --> 01:46:08,864
Most people don't run a full node, even of the small block Bitcoin Core that we have today for a wide variety of reasons that we could discuss.

1342
01:46:08,864 --> 01:46:14,864
But it's just it's just cumbersome to download 550 gigabytes if you can get away with not doing it.

1343
01:46:14,864 --> 01:46:19,864
And in fact, I've been on more than one panel, including more than one that was recorded.

1344
01:46:19,864 --> 01:46:27,864
So, for example, at TabConf when I was on panel with people and it was me and some other small blockers because I was a small blocker and I still am.

1345
01:46:27,864 --> 01:46:38,864
I'm for layer one. But we said, you know, we admitted that we don't even run a full node because we mostly get payments from people that we know and that we just don't think are.

1346
01:46:38,864 --> 01:46:43,864
You know, we're not running like a like a Ralph Albright Silk Road empire.

1347
01:46:43,864 --> 01:46:49,864
So it doesn't really matter to us. But so a lot of people don't that people already don't run the full node, even with the blocks being small.

1348
01:46:49,864 --> 01:46:57,864
The cost of I have estimated with actual numbers that even a cost of a one gigabyte block node.

1349
01:46:57,864 --> 01:47:06,864
Which is outrageous overkill orders of magnitude more than what we would have and even what we would need to meet all the demand.

1350
01:47:06,864 --> 01:47:10,864
Since we will actually do is we'd phase one or two or three in over time.

1351
01:47:10,864 --> 01:47:14,864
They each grow geometrically. I can go into more detail on this if you want.

1352
01:47:14,864 --> 01:47:20,864
But really, the total cost is like a few thousand dollars up front, a few hundred dollars a month.

1353
01:47:20,864 --> 01:47:25,864
So the idea that it's like some kind of complete and that's for absurd overkill.

1354
01:47:25,864 --> 01:47:31,864
And so the idea that there's some kind of thing where it's just like impossible for people to do is not true.

1355
01:47:31,864 --> 01:47:35,864
There's people are different. People are all around the world.

1356
01:47:35,864 --> 01:47:39,864
They're very different in their in their need for payments and their net worth.

1357
01:47:39,864 --> 01:47:44,864
And there's some region of people for which this will not be a problem at all.

1358
01:47:44,864 --> 01:47:50,864
Other people will have either a friend or they'll rely on some other node.

1359
01:47:50,864 --> 01:47:55,864
They'll rely on fraud proofs or SPV, which are very reliable.

1360
01:47:55,864 --> 01:48:02,864
You're willing to accept trust in someone running a big node, but you're not willing to accept trust in someone holding your funds.

1361
01:48:02,864 --> 01:48:11,864
No, I'm saying that it's bad. I'm saying trust is not not every person is in the same situation and not every transaction is in the same situation.

1362
01:48:11,864 --> 01:48:18,864
So the coffee transaction is not the same as the Russell Bright drug transaction, which would need to be more.

1363
01:48:18,864 --> 01:48:24,864
That latter one needs to be more private and more decentralized. But the coffee one really doesn't need to be.

1364
01:48:24,864 --> 01:48:28,864
And so it doesn't matter as much for the people who are using it.

1365
01:48:28,864 --> 01:48:34,864
That that that block size be small for the coffee transactions.

1366
01:48:34,864 --> 01:48:39,864
Coffee is a silly example, to be honest. Right.

1367
01:48:39,864 --> 01:48:44,864
I mean, Ross Albrecht's been in jail for a while. You know, the whole that whole thing imploded.

1368
01:48:44,864 --> 01:48:48,864
Let's say I live in Louisiana and my girlfriend needs to get an abortion.

1369
01:48:48,864 --> 01:48:53,864
She has to drive another state. I want to pay for that. Right. Maybe that's a more kind of modern example.

1370
01:48:53,864 --> 01:48:57,864
You know, this is a this is a transaction I want to get hidden. I get prosecuted for this transaction.

1371
01:48:57,864 --> 01:49:03,864
I think it's my whatever you think of this subject. Lots of people think it's their human right to do this.

1372
01:49:03,864 --> 01:49:11,864
Right. So there's a there's a large gray market and we need to, you know, Bitcoin ends up supporting this gray market, whether it likes it or not.

1373
01:49:11,864 --> 01:49:19,864
And the goal here is that the thesis of Bitcoin is that a guy in Africa on solar power can run a node.

1374
01:49:19,864 --> 01:49:24,864
Right. What can we possibly get away with?

1375
01:49:24,864 --> 01:49:29,864
And, you know, when we make the compromise, we say, OK, let's just increase the cost a little bit, a little bit, a little bit.

1376
01:49:29,864 --> 01:49:34,864
You know, we're doing this really disturbs me that you can't grasp this point.

1377
01:49:34,864 --> 01:49:41,864
The whole point of the 300 is that it makes both groups.

1378
01:49:41,864 --> 01:49:45,864
It gives both groups of people what they want. The people who want small.

1379
01:49:45,864 --> 01:49:50,864
No one knows that people who are larger blocks, no one.

1380
01:49:50,864 --> 01:49:57,864
Right. I didn't. You can't. No one can run a node that can that can validate terabyte blocks.

1381
01:49:57,864 --> 01:50:02,864
We centralize that you have. Well, there's no terabyte.

1382
01:50:02,864 --> 01:50:11,864
I explained to you that there's one where I did one with a one gigabyte node that only costs a small amount of money that we can be absolutely certain that a few people would.

1383
01:50:12,864 --> 01:50:20,864
Well, like, Bob, I think that the drivechain vision is that you did claim what other people may or may not do.

1384
01:50:20,864 --> 01:50:24,864
And each person is in their own situation. That's very presumptuous.

1385
01:50:24,864 --> 01:50:33,864
I think the the drivechain vision is that there will always be disagreements about what the blockchain should contain.

1386
01:50:34,864 --> 01:50:54,864
So if people want Bitcoin as it exists today, small block Bitcoin, highly decentralized to last, then we must enable everyone who doesn't like that blockchain to opt in to a variation such as more private, more scalable, more expressive.

1387
01:50:55,864 --> 01:51:15,864
While maintaining Bitcoin as it is today as the base layer, and if we don't do that, some other blockchain that has those features and those opt in extensibility will accrue much more network effect and completely destroy the network effect of Bitcoin in the long run.

1388
01:51:15,864 --> 01:51:37,864
So, Bob, I feel that your criticism is that that this idea doesn't resonate with you, but that you also said we should just wait and until something different comes along that achieves these same goals without any of the perceived tradeoffs that you note or that you perceive.

1389
01:51:37,864 --> 01:51:43,864
But the the drivechain vision is that, like, the sooner we act, the stronger Bitcoin will be.

1390
01:51:43,864 --> 01:51:46,864
We should experiment. Go ahead.

1391
01:51:47,864 --> 01:51:52,864
I'm going to push back on that point. I I I'll be completely honest here.

1392
01:51:52,864 --> 01:51:55,864
I think something like drivechain is inevitable.

1393
01:51:55,864 --> 01:52:05,864
Right. You know, if you read the L2 paper, ELTOO, right, you can maintain an alternate chain via state updates on L2.

1394
01:52:05,864 --> 01:52:11,864
Right. We already have five different versions of this that don't have the custodian.

1395
01:52:11,864 --> 01:52:15,864
The only thing that's different about drivechains is the peg in peg out mechanism.

1396
01:52:15,864 --> 01:52:20,864
We already have, you know, liquid Rootstock counterparty, Omni and Ethereum.

1397
01:52:20,864 --> 01:52:24,864
Right. And they're doing their thing. And I think it's early days.

1398
01:52:24,864 --> 01:52:31,864
I think the conversation I mean, one of the problems with drivechains is that there there's a number of different narratives around it.

1399
01:52:31,864 --> 01:52:35,864
Right. I like the conversation we're having about like a big block sidechain versus the main chain.

1400
01:52:35,864 --> 01:52:37,864
It's very narrow. Let's let's talk about it. Right.

1401
01:52:37,864 --> 01:52:44,864
But it very quickly gets diverted into ICOs and stock assets and, you know, all kinds of other things.

1402
01:52:44,864 --> 01:52:52,864
And, you know, Paul's previous description having like geographically localized currencies and then my description of 27 different currencies.

1403
01:52:52,864 --> 01:52:59,864
All right. This is all very confusing. Right. I don't see the emergency, I guess, is my big picture.

1404
01:52:59,864 --> 01:53:06,864
The tail emission argument is correct. You know, the that paper is correct.

1405
01:53:06,864 --> 01:53:10,864
And but we have 100 years to solve it. So why now?

1406
01:53:10,864 --> 01:53:15,864
The tail emissions argument, I would suggest, and I'm not sure which paper you're referring to,

1407
01:53:15,864 --> 01:53:21,864
but they're all very interesting about Bitcoin's long term fee reliant security model.

1408
01:53:22,864 --> 01:53:24,864
That that argument every day.

1409
01:53:24,864 --> 01:53:28,864
It's something with any bad times.

1410
01:53:28,864 --> 01:53:32,864
Yeah, Paul. Yeah. You lost perception, but you're back now. That's great.

1411
01:53:32,864 --> 01:53:36,864
So you would like to actually can't hear me right now.

1412
01:53:36,864 --> 01:53:40,864
Yes, we can hear you. I can hear you, Bob.

1413
01:53:40,864 --> 01:53:45,864
We summarize that we I mean, I appreciate that you just said that.

1414
01:53:46,864 --> 01:53:53,864
I appreciate you said drivechain is is something or something like it is inevitable.

1415
01:53:53,864 --> 01:53:58,864
And also that you are if I heard you correctly just now,

1416
01:53:58,864 --> 01:54:05,864
you're somewhat persuaded by concerns related to Bitcoin's long term fee reliant security model.

1417
01:54:05,864 --> 01:54:08,864
So I would argue that it isn't a problem for the future.

1418
01:54:08,864 --> 01:54:16,864
That that concern exists today and is eroding Bitcoin's credibility in the eyes of not just alt coiners,

1419
01:54:16,864 --> 01:54:22,864
but some at in within Bitcoin's community like Peter Todd and Paul Sztorc

1420
01:54:22,864 --> 01:54:30,864
and others see it as a more concerning problem than what you described, which is that it's 100 years away.

1421
01:54:30,864 --> 01:54:37,864
So anyone who doubts Bitcoin's security model might not invest in Bitcoin.

1422
01:54:37,864 --> 01:54:45,864
And the alt coiners, you know, voice this concern daily to erode Bitcoin's narrative of monetary stability.

1423
01:54:45,864 --> 01:54:49,864
Right. They say that Bitcoin is a problem.

1424
01:54:49,864 --> 01:54:53,864
The by the way, the paper I'm talking about specifically is from a group of Princeton.

1425
01:54:53,864 --> 01:54:57,864
And the title of the paper is Bitcoin is unstable without the block reward.

1426
01:54:57,864 --> 01:55:01,864
I believe this is the tail emissions argument. As far as I can tell, that is correct.

1427
01:55:01,864 --> 01:55:06,864
Oops. The argument being that you can see tonight.

1428
01:55:06,864 --> 01:55:11,864
OK, go back. What happened to my phone? No, that paper. Can you guys hear me?

1429
01:55:11,864 --> 01:55:15,864
Yeah, that paper is not. Yes, we can. We can, Paul.

1430
01:55:15,864 --> 01:55:26,864
Yeah, that paper, Bob, is not about the need for tail emissions so much as an argument that when security becomes fee reliant,

1431
01:55:26,864 --> 01:55:39,864
then the array of selfish mining and other kind of mining attacks or mining behaviors would increase that are not incentive compatible.

1432
01:55:39,864 --> 01:55:50,864
So they think that variable block rewards because of fees being all of the block reward or even just more of the block reward creates a risk for network performance.

1433
01:55:50,864 --> 01:55:54,864
They didn't explicitly call for tail emission in that paper.

1434
01:55:54,864 --> 01:56:00,864
But I think you're right that there is there are questions around whether the fees will be robust enough.

1435
01:56:00,864 --> 01:56:06,864
Right now, they're quite low. We're 14 years in a couple hundred million people own Bitcoin in some form.

1436
01:56:06,864 --> 01:56:11,864
And and yet there is still a question about why aren't the fees higher?

1437
01:56:11,864 --> 01:56:16,864
So it would be great. I think you would agree that all things equal like Ceteris Paribus.

1438
01:56:16,864 --> 01:56:26,864
Ceteris Paribus, would you agree that boosting fees by having more users use blockchains that pay to Bitcoin that would you agree that is a favorable thing?

1439
01:56:26,864 --> 01:56:36,864
If we keep everything else equal, it's better if Bitcoin has more users on more chains that merge-mined with Bitcoin main chain.

1440
01:56:36,864 --> 01:56:41,864
No, I think having more people use Bitcoin is better. That's what creates that.

1441
01:56:41,864 --> 01:56:47,864
And that what causes that having people have people having Bitcoin, it's on ramps, it's off ramps.

1442
01:56:47,864 --> 01:56:54,864
It is payment providers. And, you know, one of my long term frustrations is that I see very, very few.

1443
01:56:54,864 --> 01:57:03,864
I work on evaluating startups and I see very, very few, almost zero applications for VC funding for payment processor.

1444
01:57:03,864 --> 01:57:07,864
I will take your Bitcoin. I'll give you dollars. It's very fucking simple. You're in three percent off the board.

1445
01:57:07,864 --> 01:57:12,864
It's really fucking simple. You know, Bitcoin, Bitco, quit this business.

1446
01:57:12,864 --> 01:57:18,864
Sorry, not Bitco, the other one. Anyway, I don't know why people aren't doing this.

1447
01:57:18,864 --> 01:57:24,864
And all of this stuff we're talking about about blockchains is fucking irrelevant if nobody actually has it in their wallet.

1448
01:57:24,864 --> 01:57:28,864
And a payment processor isn't either side saying, I want to take that money. Right.

1449
01:57:29,864 --> 01:57:36,864
You know, it's a payment processor and it also is an on ramp because you can be on boarded directly to layer two.

1450
01:57:36,864 --> 01:57:43,864
Without this is all abstract, I'm talking about a physical coffee shop with a physical iPad that has physical software on it actually takes my payment.

1451
01:57:43,864 --> 01:57:48,864
I don't give a shit what that payment is, you know, whether it's like coin or whatever, that doesn't exist.

1452
01:57:48,864 --> 01:57:51,864
Yeah, well, it's true that Bitpay used to do that.

1453
01:57:51,864 --> 01:57:58,864
And Bitpay, I think it's partly because of the lack of sidechains that we had the whole block size war at all.

1454
01:57:58,864 --> 01:58:08,864
And that's partly that that whole half of the community that was more interested in payments got completely marginalized, which is enormous.

1455
01:58:08,864 --> 01:58:19,864
So I don't know. The last thing I heard Bob McElrath say was that before my phone sort of like something happened to the battery and it shut off the 5G or something.

1456
01:58:19,864 --> 01:58:29,864
But he said something like drives are inevitable. So if something really important happened, then that someone would love to hear me respond to them.

1457
01:58:29,864 --> 01:58:36,864
I would love it if they would repeat it. But if I was inevitable, we already have five different versions of them operating right now.

1458
01:58:36,864 --> 01:58:38,864
You know, Rootstock, Omni, et cetera.

1459
01:58:38,864 --> 01:58:47,864
Yeah, but, you know, the federated model is night and day different in my eyes to BIP300.

1460
01:58:47,864 --> 01:58:51,864
You have to choose the federation. You have to prove to people the federation is trustworthy.

1461
01:58:51,864 --> 01:58:58,864
The federation, as more coins go in, the federation has more upside from stealing.

1462
01:58:58,864 --> 01:59:04,864
But they don't have a corresponding increase in downside as the miners get paid more transaction fees from every sidechain.

1463
01:59:04,864 --> 01:59:08,864
They get paid in BTC, which has an exchange rate that they want to be high.

1464
01:59:09,864 --> 01:59:20,864
So the miners are already a group of people that have an incentive to have the sidechains work and generate lots of fees for the far future, whereas the federation gets nothing.

1465
01:59:20,864 --> 01:59:27,864
If the Bitcoin price goes up or if the fees go up, they don't get nothing else for themselves.

1466
01:59:28,864 --> 01:59:36,864
Exactly. Just to elaborate on that for a moment.

1467
01:59:36,864 --> 01:59:47,864
If you say to us, as you have, that we already have Liquid and Rootstock and a few others, why do we need Drivechain?

1468
01:59:47,864 --> 01:59:53,864
But you also say that Drivechain in the long run is Drivechain or something like it is inevitable.

1469
01:59:53,864 --> 02:00:02,864
I want to ask, suppose we use SuperTestNets phrasing, which is that, as he's tweeted, Drivechain gives us slightly better sidechains.

1470
02:00:02,864 --> 02:00:05,864
And he supports BIP300. I shared his tweet in the nest.

1471
02:00:06,864 --> 02:00:29,864
Do you agree or would you agree that if we get slightly better sidechains, that would improve Bitcoin's total addressable market, improve Bitcoin's security budget expectations and thereby strengthen Bitcoin's rate of value accrual and miner revenue and grow Bitcoin adoption?

1472
02:00:30,864 --> 02:00:36,864
I agree with that statement. The latter half of that statement sounds like Ponzinomics.

1473
02:00:36,864 --> 02:00:40,864
Like, let's make the number go up, which I really don't like.

1474
02:00:40,864 --> 02:00:42,864
Second of all, the...

1475
02:00:44,740 --> 02:00:53,740
We already have five of these things. And the fact of the matter is that if you're a business and I want to make a sidechain to do blah, blah, blah, I can go do that.

1476
02:00:53,740 --> 02:01:01,740
I can do it on Liquid. Bitcoin is really important and that's better than making my own chain or doing it on Ethereum. I could go do that. It's not happening.

1477
02:01:01,740 --> 02:01:11,740
The business use cases for using sidechains is not happening. So I don't think the reason that's not happening is because of the pegout mechanism.

1478
02:01:11,740 --> 02:01:20,740
And if you really think that is the reason, go find some CEOs who started a business and said, yeah, I was going to do this on Bitcoin, but I couldn't.

1479
02:01:20,740 --> 02:01:22,740
And the reason...

1480
02:01:31,590 --> 02:01:32,830
Jeremy Rand, and Dinkcoin.

1481
02:01:34,130 --> 02:01:36,750
Everyone, myself with the Prediction Markets Project.

1482
02:01:37,230 --> 02:01:40,190
Roger Veer and Roger Veer tried to do all of that.

1483
02:01:40,610 --> 02:01:43,990
Roger Veer was obviously a Bitcoiner before the split.

1484
02:01:44,390 --> 02:01:46,510
everyone tried to do it Bitcoin first.

1485
02:01:47,290 --> 02:01:48,850
all of the legitimate options.

1486
02:01:51,090 --> 02:01:51,470
The

1487
02:01:51,740 --> 02:02:03,740
The Federation has many problems, but one is that all that anyone can prove is that it's controlled by 15 keys or so. As far as anyone knows, all those 15 keys are the same person.

1488
02:02:03,740 --> 02:02:10,740
So this, I think, creates a somewhat of... Liquid is not even open source. So I think it's not quite...

1489
02:02:10,740 --> 02:02:17,740
In a business, you can handle that risk, right? Every business has risks. Your investors understand those risks. You put in your disclosure, you take out insurance.

1490
02:02:19,740 --> 02:02:30,740
Unfortunately, I have to go do a real... I'll be back, but I have to temporarily leave and do actual work, a meeting for a moment. So I'll be back. So everyone hang out and have fun.

1491
02:02:30,740 --> 02:02:32,740
Okay. Thanks, Paul.

1492
02:02:32,740 --> 02:02:35,740
I'll be back. See you later in a second.

1493
02:02:36,740 --> 02:02:43,740
Bob, you tweeted in the past and we discussed yesterday on Twitter and some very nice tweets and thank you for responding to all of them.

1494
02:02:43,740 --> 02:02:50,740
Like I tweeted to you that you have said in writing on Twitter that Ethereum is a sidechain of Bitcoin.

1495
02:02:51,740 --> 02:03:06,740
So when I heard you just now say that there's very limited use of Liquid, if I heard you correctly, I think that if you want to steal a man the case for drivechain, then you should say something as follows.

1496
02:03:06,740 --> 02:03:17,740
You might say, and let me know if this is what you're thinking, you believe that drivechain would bring potentially many billions of dollars of demand for Bitcoin.

1497
02:03:17,740 --> 02:03:30,740
But since you believe that Ethereum is a sidechain, therefore there's enormous market for sidechains on Bitcoin and making them better by your own terms, because you wrote that Ethereum is like a sidechain of Bitcoin.

1498
02:03:30,740 --> 02:03:42,740
So you and also you object, it seems you have this principled kind of objection to talking about making Bitcoin's price higher through Bitcoin development, technically.

1499
02:03:42,740 --> 02:03:48,740
We should think that that's something we can, not something that makes the number go up.

1500
02:03:48,740 --> 02:03:53,740
Because if you want to make the number go up, you fool with interest rates, which is exactly what Ethereum did.

1501
02:03:53,740 --> 02:03:55,740
That is not interesting.

1502
02:03:55,740 --> 02:04:03,740
You mean interest rates like the way they have staking and that sort of thing?

1503
02:04:03,740 --> 02:04:05,740
Yeah, moving from proof of work to staking, right?

1504
02:04:05,740 --> 02:04:07,740
So now there's interest rates and now they can manipulate that interest rate.

1505
02:04:07,740 --> 02:04:25,740
I feel that a lot of people in Bitcoin's community and even in Bitcoin's technical community would agree that if something were to make Bitcoin's total addressable market much larger, in other words, increasing Bitcoin's potential for value accrual and return to Bitcoin holders.

1506
02:04:25,740 --> 02:04:31,740
Then that is not morally dubious, you know, all else equal.

1507
02:04:31,740 --> 02:04:39,740
Don't we want Bitcoin to be enormously successful and aren't we literally invested in it?

1508
02:04:39,740 --> 02:04:44,740
I think everyone in this conversation wouldn't be in this conversation if that wasn't the case.

1509
02:04:44,740 --> 02:04:50,740
Right. Myself included. Now, it's a scammy argument.

1510
02:04:50,740 --> 02:04:53,740
Right. Let's do whatever we can to make our number go up.

1511
02:04:53,740 --> 02:05:05,740
Right. And because there are a lot of things you can do to make the number go up, whether it's insider trading or whether it's, you know, pink slip stocks or whether it's fooling with the interest rate like the Fed and Ethereum Foundation does.

1512
02:05:05,740 --> 02:05:09,740
If the goal is number go up, that leads to a lot of terrible outcomes.

1513
02:05:09,740 --> 02:05:13,740
Right. That shouldn't be the goal. And I don't think that should be the argument.

1514
02:05:13,740 --> 02:05:20,740
It's a scammy argument. The argument that let's try and get Bitcoin to as many people as possible and make it a uniform payment across the world.

1515
02:05:20,740 --> 02:05:26,740
That's compelling. And it also makes number go up. But the narrative can't be I want my own personal profits to increase.

1516
02:05:26,740 --> 02:05:30,740
You can't you can't go out on Twitter and say I want to be rich. Right.

1517
02:05:30,740 --> 02:05:36,740
And, you know, that's what the whole number go up and television argument stuff sounds like.

1518
02:05:36,740 --> 02:05:41,740
I think it's I understand what you're saying. But, you know, I've been a libertarian my whole life.

1519
02:05:41,740 --> 02:05:47,740
I identify as an anarcho capitalist. I love the writings of Von Mises and Rothbard.

1520
02:05:47,740 --> 02:05:57,740
I think Bitcoin's value accrual and the growth of its network effect as rapidly as possible is a moral imperative.

1521
02:05:57,740 --> 02:06:14,740
And. If it offends. You know, someone who is as science oriented as you to hear the phrase number go up, then I would suggest that your view and reaction is totally appropriate.

1522
02:06:14,740 --> 02:06:25,740
But I think that, you know, the growth of the protocol economically is simply a fact that would attend its success.

1523
02:06:25,740 --> 02:06:34,740
So I get what you're saying, which is we don't want to have scammy marketing that resembles the bad acts in the other communities.

1524
02:06:34,740 --> 02:06:59,740
And we don't want to do everything that makes Bitcoin's number go up. But if there is a powerful upgrade that would increase Bitcoin's total addressable market and help secure the miner revenue, the, you know, the reabsorption of the communities that have left Bitcoin and the and the absorption of all of the good technology that you've noted in this conversation.

1525
02:06:59,740 --> 02:07:10,740
There is innovation and experimentation going on in altcoins. It would be better if those were going on on Bitcoin sidechains. Who knows what good idea somebody will have tomorrow.

1526
02:07:10,740 --> 02:07:16,740
We want them to build it on a Bitcoin sidechain instead of an altcoin if those are the choices.

1527
02:07:16,740 --> 02:07:27,740
I disagree. And here's why. Ninety nine percent of the things that happened in Ethereum, all the ICOs were straight up scams. Right. We do not want to bring those straight up scams to Bitcoin.

1528
02:07:27,740 --> 02:07:35,740
Right. We we gain guilt by association. We want to remain pure in our focus. And I don't think number go up should ever be a part of any conversation.

1529
02:07:36,740 --> 02:07:44,740
You might know it in the back of your head and you might vote on things. You know, we all have our own biases in our own portfolio and our own. But that should never be the motivation.

1530
02:07:44,740 --> 02:07:53,740
You know, in public discussion, you should never say, I want to be rich, therefore I'm going to do X. Right. That's what number go up really means. That's a stupid fucking thing to say. Right.

1531
02:07:54,740 --> 02:08:03,740
You really need to focus the narrative on something much more concrete and much more valuable. Another another goal, another purpose. I want to be the one that's raspberry pie. OK, fine.

1532
02:08:03,740 --> 02:08:12,740
I want everybody to be able to pay for their coffee. Fine. All right. Let's big bucks. You know, pick your pick your goal. But it shouldn't be. I want to be rich.

1533
02:08:13,740 --> 02:08:21,740
I want to be rich. I'm going to fool you. I'm going to scam you. And that's what has been done across the Ethereum ecosystem through, you know, thousands of ICOs. Right.

1534
02:08:21,740 --> 02:08:26,740
We don't want to emulate that. We need to be higher, maybe better. Right. We need a better argument.

1535
02:08:27,740 --> 02:08:39,740
I agree with you. We can make the argument in terms that do not involve in any kind of investment dimension. We can simply say, like the libertarian cause of sound money.

1536
02:08:39,740 --> 02:08:49,740
And, you know, as Hayek said on that TV show in the early 80s, you know, something coming around that sly and roundabout and that the government can't stop.

1537
02:08:49,740 --> 02:08:56,740
And that's how we wrest control of money away from government. Right. That's not a narrative of getting rich.

1538
02:08:56,740 --> 02:09:09,740
That's a narrative of freedom and financial empowerment for the world, especially the poor people everywhere having, you know, no longer having to suffer the burden of inflationism from the from the US.

1539
02:09:10,740 --> 02:09:17,740
So I agree with you. We can talk about it that way. And that's great. I think the drivechain, you know, since you say it's inevitable.

1540
02:09:17,740 --> 02:09:23,740
Can I respond to what you said? Yeah, please.

1541
02:09:23,740 --> 02:09:28,740
When when you say number go up. Right. This this comes down to investment advice. Right.

1542
02:09:28,740 --> 02:09:33,740
And there are a lot of people in this world that have less technical capacity of the people on this call.

1543
02:09:33,740 --> 02:09:37,740
All of us may know in the back of our mind that a given thing might cause number go up. Right.

1544
02:09:37,740 --> 02:09:44,740
We might vote for it for those reasons. Right. When you go out in a public forum and you say on Twitter number go up,

1545
02:09:44,740 --> 02:09:51,740
what you're really doing is you're encouraging people to invest in Bitcoin. Now, this is security fraud, basically.

1546
02:09:51,740 --> 02:10:00,740
Right. It's promising future returns. And the people looking at that don't have the capability to evaluate whether that's really true.

1547
02:10:00,740 --> 02:10:09,740
Right. That is that the security is all about. Right. And we don't want to walk ourselves into that corner because so far Bitcoin has been lucky.

1548
02:10:09,740 --> 02:10:16,740
We've been in the commodities corner, not the securities corner. But as soon as enough people are saying number go up,

1549
02:10:16,740 --> 02:10:22,740
there's a lot of people on Twitter promising future returns. This now satisfies one of the one of the pegs of the Howie test.

1550
02:10:22,740 --> 02:10:27,740
Right. And all of a sudden, Bitcoin is a security because a lot of people on Twitter are saying the number is going to go up. Right.

1551
02:10:27,740 --> 02:10:33,740
Let's not get there. Let's let's let's bring it down and bring it to a technical level and say and have other goals.

1552
02:10:33,740 --> 02:10:38,740
Right. Sure. We all want to get rich. Everybody here is here because they care about Bitcoin.

1553
02:10:38,740 --> 02:10:44,740
But that can't be the goal and it can't be the narrative and it can't be the thing you talk about on Twitter.

1554
02:10:44,740 --> 02:10:54,740
Well said. I mean, I think we're in agreement. I think the liberty argument and the innovation argument are just as dimensions are just as important.

1555
02:10:54,740 --> 02:11:01,740
Reindahl, please. And DJ, jump in any time. I was going to take the conversation in a slightly different direction.

1556
02:11:01,740 --> 02:11:07,740
Getting back to something that Bob said a few minutes ago, I wasn't able to speak. I was doing something else.

1557
02:11:07,740 --> 02:11:16,740
But, you know, I think it's important to look at, like, what use cases have gotten traction for Bitcoin and other things. Right.

1558
02:11:16,740 --> 02:11:19,740
Like, you never know what people want to use some piece of technology for.

1559
02:11:20,740 --> 02:11:37,740
And it seems like, you know, even though Bitcoin doesn't have certain features or expressibility, like it still has much broader adoption and, you know, like a larger market cap.

1560
02:11:37,740 --> 02:11:45,740
Like like there's there's more people transacting more value or storing more value in Bitcoin than the rest of the ecosystem combined.

1561
02:11:45,740 --> 02:11:51,740
And I think it's because, you know, people like the network effects of money are real.

1562
02:11:51,740 --> 02:12:03,740
And I think Bitcoin has found more traction as, you know, programmable money than, you know, other applications that maybe people would want to try to use it for.

1563
02:12:04,740 --> 02:12:17,740
I think something that's interesting is if if we say that the goal of drivechain is to try to absorb the other capabilities of these other networks.

1564
02:12:17,740 --> 02:12:29,740
I think it's interesting that, you know, it's not like the whole crypto ecosystem is like size one and Bitcoin is size like point one.

1565
02:12:29,740 --> 02:12:32,740
Like Bitcoin is bigger than everything else combined.

1566
02:12:32,740 --> 02:12:45,740
And so if you could like snap your fingers and drivechain could absorb all of the people development effort use cases like all of that stuff of all of the other networks combined.

1567
02:12:45,740 --> 02:12:53,740
You know, maybe it doubles like the size of Bitcoin in terms of, you know, utility market cap, like all these things.

1568
02:12:53,740 --> 02:13:08,740
But I don't know if it thousand X is it like I don't know if, you know, the reason why Bitcoin isn't more useful to more people is because they they really need to be able to like run a theorem contracts on it or something.

1569
02:13:08,740 --> 02:13:23,740
Right. Like to a thing that Bob said a few minutes ago that I think I've said before, too, is like, I don't I'm not really convinced that the reason why people don't use Rootstock is because they don't like the peg out mechanism.

1570
02:13:23,740 --> 02:13:30,740
Like, it'd be really interesting to find people who say, like, oh, man, Rootstock would be perfect if not for the peg out.

1571
02:13:30,740 --> 02:13:32,740
So I had to go use a theorem instead.

1572
02:13:32,740 --> 02:13:34,740
Like, I don't I don't know if you're going to find those people.

1573
02:13:34,740 --> 02:13:41,740
I think the reason why people pick a theorem over Rootstock is because it has its own network effects.

1574
02:13:41,740 --> 02:13:51,740
And people who want to build IBM applications want to do it where there's more tokens, more tooling, more developers, like more services, more applications.

1575
02:13:51,740 --> 02:14:12,740
So, like, I don't know if like if we think that Bitcoin is programmable money, you know, maybe we should be aiming at soft forks that improve the money use cases and not really worry about trying to, you know, add features that don't address those use cases.

1576
02:14:12,740 --> 02:14:23,740
I think SuperTestNet has said that he's not sure if he would use a federated sidechain.

1577
02:14:24,740 --> 02:14:47,740
So I think some people are in the Bitcoin community attuned to the lower level of the security design of a federated sidechain as opposed to a drivechain sidechain, because the federated sidechain, as Paul mentioned earlier, even if you're happy with it right now, it doesn't scale well.

1578
02:14:47,740 --> 02:14:54,740
It's the same 15 people, whether there's $50 million or $50 billion in the sidechain.

1579
02:14:55,740 --> 02:15:22,740
So as the value of the sidechain increases, the risk of collusion or coercion of the functionaries increases, whereas in a drivechain, it's, as Adam Back says, more peer to peer because anyone can participate in mining and run a node and get involved in the security model without a social privilege.

1580
02:15:22,740 --> 02:15:24,740
They don't have to be chosen for it.

1581
02:15:24,740 --> 02:15:26,740
They just need the resources.

1582
02:15:26,740 --> 02:15:32,740
What it really is, is it the dynamic federation whose membership is set by hash rate, right?

1583
02:15:32,740 --> 02:15:34,740
Like that's really what we're talking about.

1584
02:15:34,740 --> 02:15:35,740
Yes.

1585
02:15:35,740 --> 02:15:42,740
Yes, although I think that saying it's more peer to peer, which is Adam Back's phrase, is right because that's what Bitcoin is all about.

1586
02:15:42,740 --> 02:15:56,740
Anyone can participate in any part of Bitcoin without a social privilege, whereas in a federated sidechain, people are chosen socially and that means it's, one might say, not peer to peer.

1587
02:15:56,740 --> 02:16:08,740
So I would argue that drivechain sidechains are more like Bitcoin, whereas a federated sidechain is literally like the model that like Coinbase and Gemini would use to secure their Bitcoin.

1588
02:16:08,740 --> 02:16:17,740
It's a group of people who aren't named who are walking around with the keys to the billions of Bitcoin there.

1589
02:16:18,740 --> 02:16:26,740
You can't participate in that security model if you have hash rate, but in a drivechain sidechain, you can participate in the security model.

1590
02:16:26,740 --> 02:16:28,740
So it's more like Bitcoin.

1591
02:16:28,740 --> 02:16:31,740
It is making Bitcoin layered, layered money.

1592
02:16:31,740 --> 02:16:33,740
Like that's the future.

1593
02:16:33,740 --> 02:16:36,740
Like as Bob says, things like this are inevitable.

1594
02:16:36,740 --> 02:17:00,740
So the real question is, you know, does the community feel like Bob does that there isn't a crisis or does the community feel more that something big like this should be embraced to strengthen Bitcoin and attempt to absorb the whole crypto community into the Bitcoin community, accelerating Bitcoin's growth and network effect?

1595
02:17:01,740 --> 02:17:11,740
Like if Bob says it's inevitable, then a question becomes, is it inevitable on Bitcoin or will it eventually be achieved on an altcoin?

1596
02:17:11,740 --> 02:17:19,740
And then that altcoin would, would compete with Bitcoin in a very serious way.

1597
02:17:23,740 --> 02:17:24,740
How do you feel, Rheindahl?

1598
02:17:25,740 --> 02:17:31,740
I also don't think it's a given that if we had drivechains tomorrow, it would absorb the whole ecosystem.

1599
02:17:31,740 --> 02:17:46,740
Like I think I said earlier, I think the first drivechain that comes out that's from somebody other than LayerTwo Labs, it ends up being a BIP300 powered peg to Ethereum.

1600
02:17:47,740 --> 02:18:01,740
Right. Because like, like if you're, if you're out there and you, you know, want to earn fees and you follow all this, I think you don't say, all right, I'm going to go make Rootstock as drivechain.

1601
02:18:02,740 --> 02:18:10,740
You say, I'm going to go and try to knock over WBTC by having a less trusted peg to Ethereum.

1602
02:18:11,740 --> 02:18:15,740
And, you know, like does that provide mining revenue for Bitcoin miners?

1603
02:18:15,740 --> 02:18:21,740
Like, yep, absolutely. It's also less trusted than, you know, WBTC right now.

1604
02:18:21,740 --> 02:18:30,740
But I, I don't think it's a given that, you know, drivechains lets Bitcoin just swallow all of the other alts.

1605
02:18:32,740 --> 02:18:33,740
Bob?

1606
02:18:33,740 --> 02:18:45,740
For what it's worth, the narrative that a sidechain could swallow all the other alts is exactly the same narrative that the Liquid consortium had in the early days.

1607
02:18:45,740 --> 02:18:53,740
I don't know how many of you were around then. This is like 2018, I think, 2017, when they started Liquid.

1608
02:18:53,740 --> 02:18:57,740
And they said, all right, so like, it's hard to experiment on Bitcoin. Let's make a sidechain to do it.

1609
02:18:57,740 --> 02:19:00,740
So they did it. And then, you know, there's a federated peg out peg in mechanism.

1610
02:19:01,740 --> 02:19:08,740
As far as I'm concerned, when I said it's inevitable, it's already happened at least five times.

1611
02:19:08,740 --> 02:19:11,740
There's probably more I don't even know about. Right. It's already happened. Right.

1612
02:19:11,740 --> 02:19:18,740
Now, if this sidechain mechanism is truly valuable, somebody will build a business on those things. Right.

1613
02:19:18,740 --> 02:19:23,740
Why haven't they? And I think the reason that they haven't is that.

1614
02:19:23,740 --> 02:19:27,740
And the reason drivechains is getting subtracted from the community is name affinity. Right.

1615
02:19:28,740 --> 02:19:34,740
If I build a, you know, something on a Rootstock, who the fuck knows? Well, what's Rootstock? I don't know. Is it Bitcoin? I don't know.

1616
02:19:34,740 --> 02:19:41,740
Right. So there is an affinity scam going on where we say, oh, but we're actually on Bitcoin. Right.

1617
02:19:41,740 --> 02:19:46,740
That's that's what's really going on. I think there are a number of ways to do peg in and peg out.

1618
02:19:47,740 --> 02:19:53,740
You could use a federation. In fact, you can use a federation of miners who do things but don't involve the mining process.

1619
02:19:53,740 --> 02:19:59,740
Use a federation of, you know, two thirds plus one of a bunch of people and do that.

1620
02:19:59,740 --> 02:20:08,740
But a federation with two thirds plus one is effectively the same as a mining federation. Right.

1621
02:20:08,740 --> 02:20:13,740
It's just a different set of players. So what's really the point here? Right.

1622
02:20:13,740 --> 02:20:21,740
The point is that none of these things have succeeded. No one is building businesses on any of these five alternative chains.

1623
02:20:22,740 --> 02:20:27,740
And I want to see, you know, before I vote for something like drivechains, which, again, I think is inevitable.

1624
02:20:27,740 --> 02:20:32,740
I want to see businesses built on. I want to see the sidechains actually make sense.

1625
02:20:32,740 --> 02:20:38,740
But Bob is the original discussion where we have like a big block, small block discussion, which doesn't make sense.

1626
02:20:41,740 --> 02:20:44,740
No, those are great comments. I appreciate you sharing them.

1627
02:20:45,826 --> 02:20:51,986
So this brings me back to your tweet where you wrote that Ethereum is a sidechain of Bitcoin.

1628
02:20:52,426 --> 02:21:03,465
So since you believe it is, you cannot say that sidechains don't have hundreds of billions of dollars of market right now.

1629
02:21:04,106 --> 02:21:15,465
So one more thing, one more quick thing is, you know, I wasn't around in Bitcoin when Liquid was launched, but I've heard Paul say a number of times

1630
02:21:15,465 --> 02:21:25,265
in these spaces that when it was launched, one of the founders, who I think he said his name was Matt Corallo, you know, said and so I

1631
02:21:25,265 --> 02:21:32,546
might be getting this wrong in terms of the name I'm remembering, but said that Liquid should never be used by anyone who is an

1632
02:21:32,546 --> 02:21:38,506
ordinary user. It is only for exchanges to move Bitcoin around in high volume.

1633
02:21:38,546 --> 02:21:40,105
It's not for ordinary people.

1634
02:21:40,346 --> 02:21:48,866
So you said, I think the opposite, which was that the original narratives of Liquid were that it could be an innovation platform for ordinary

1635
02:21:48,866 --> 02:21:50,105
people at large scale.

1636
02:21:50,465 --> 02:21:57,506
But that wasn't the original historical record, I think, according to Hompas.

1637
02:21:57,866 --> 02:21:59,105
Maybe Hompas didn't pop in.

1638
02:21:59,105 --> 02:21:59,745
Both are true.

1639
02:21:59,906 --> 02:22:02,986
Right. So I know Matt, Matt worked at Blockchain at the time.

1640
02:22:04,226 --> 02:22:08,986
And yeah, so there's a business narrative and there's a practical narrative, right?

1641
02:22:08,986 --> 02:22:13,306
So the business narrative like Blockstream as a company created a Liquid platform at the time.

1642
02:22:13,306 --> 02:22:16,986
I worked at Fidelity and they really wanted Fidelity to be one of the validating nodes.

1643
02:22:16,986 --> 02:22:20,666
Right. And so they came to us and we looked at it and we said, all right, so you want us to host this thing?

1644
02:22:20,666 --> 02:22:22,065
And they're like, oh, we're a service provider.

1645
02:22:22,306 --> 02:22:23,506
We're just going to hand you the box.

1646
02:22:23,506 --> 02:22:24,705
Why don't you put your data center and run it?

1647
02:22:25,145 --> 02:22:26,226
We're like, that's weird.

1648
02:22:26,385 --> 02:22:28,266
What's the liability considerations around that?

1649
02:22:28,306 --> 02:22:30,666
What if somebody loses money when on their payout?

1650
02:22:30,705 --> 02:22:31,705
Right. What do we do with that?

1651
02:22:32,546 --> 02:22:33,666
How do I how do I handle that?

1652
02:22:33,666 --> 02:22:35,025
How do we even know that that's happened?

1653
02:22:35,986 --> 02:22:49,145
And, you know, so long story short, Fidelity declined to be a validating node for Liquid because there are important liability concerns.

1654
02:22:49,145 --> 02:22:55,506
You know, I think one of one of the narratives in this community that we like to say is let's make a federation that will solve all problems.

1655
02:22:55,705 --> 02:23:01,425
Well, no, in actual business, you know, in the way business works, you want to know who to sue.

1656
02:23:01,985 --> 02:23:04,586
And so when something goes wrong and you lose money, you need to know who to sue.

1657
02:23:04,586 --> 02:23:07,625
And if that's like seven or 15 people, you're kind of fucked.

1658
02:23:07,705 --> 02:23:09,026
Right. You're never going to sue them.

1659
02:23:09,065 --> 02:23:09,826
Right. Yeah.

1660
02:23:09,826 --> 02:23:11,586
It might work better from a computer science perspective.

1661
02:23:11,586 --> 02:23:13,425
From a business perspective, it doesn't make any sense at all.

1662
02:23:13,705 --> 02:23:17,026
You're right. So we chose not to be your validator.

1663
02:23:18,065 --> 02:23:19,226
So go ahead. You're right.

1664
02:23:19,226 --> 02:23:34,545
I just wanted to jump in and say that the fact that you can't sue Bitcoin because it is totally decentralized and peer to peer and you can't, as Satoshi said, you can't chop off the head of something that's having to

1665
02:23:34,545 --> 02:23:39,026
apology. So that's what we want for Bitcoin's sidechains.

1666
02:23:39,386 --> 02:24:01,065
We want to enable people to be free to create protocols for oracles, privacy tech, variations on Bitcoin with large blocks or other features and have Bitcoin be bigger and broader and enable people to have more freedom in a way that can't be sued and coerced.

1667
02:24:01,746 --> 02:24:07,026
OK, now let's say I'm starting a business and I want that business to use sidechain for whatever reason.

1668
02:24:07,065 --> 02:24:12,785
There's a sidechain, right? Do I want to let's say something goes wrong with the sidechain?

1669
02:24:12,946 --> 02:24:21,506
Are my investors going to be happier with a sidechain that has a custodial peg in, peg out mechanism where they can identify the custodian and say, you fucked up.

1670
02:24:21,506 --> 02:24:28,425
We know who to sue. Or are they going to be happier with a federated peg in, peg out mechanism like Liquid where I don't know who to sue?

1671
02:24:28,425 --> 02:24:31,065
It's 15 people. Maybe I can get blockchain to tell me who they are.

1672
02:24:31,506 --> 02:24:39,625
I don't know. Or are they going to be happy with a miner federated peg in, peg out where it's, you know, literally impossible to figure out who these people are?

1673
02:24:39,746 --> 02:24:44,185
Good. From a business perspective, the first one is preferable.

1674
02:24:44,345 --> 02:24:52,345
No, I think no one is doing all of all of the businesses who want who everybody claims wants this would not want the first option.

1675
02:24:52,826 --> 02:24:59,106
I would only want to keep on coming back to the fact that you've said that Ethereum is a sidechain.

1676
02:24:59,145 --> 02:25:08,625
And then you seem to me, if I'm not mistakenly hearing you, you seem to be saying that people aren't using Liquid and that shows that there isn't demand for sidechains.

1677
02:25:08,666 --> 02:25:15,305
But you also believe, as you wrote, that Ethereum is a sidechain, which is so large that it's rivaling Bitcoin, right?

1678
02:25:15,345 --> 02:25:16,986
It's almost half the value of Bitcoin.

1679
02:25:17,506 --> 02:25:19,345
So I don't understand your view.

1680
02:25:19,666 --> 02:25:22,625
Are sidechains popular or unpopular, Bob?

1681
02:25:26,226 --> 02:25:28,185
Why is why is Ethereum popular?

1682
02:25:28,865 --> 02:25:32,386
It's because of ICOs. It's because the ability to issue unregulated securities.

1683
02:25:32,785 --> 02:25:38,345
Right. And again, Bitcoin so far has survived not being a regulated security.

1684
02:25:38,625 --> 02:25:47,106
If we suddenly tie, you know, thousands of drivechain unregulated securities to ourselves, we will suddenly find ourselves in the crosshairs of every regulator on the globe.

1685
02:25:47,826 --> 02:26:00,546
And they're going to say, oh, you know, OK, another another important statistic to keep in fact in mind is that the total market cap of equities across the world is approximately 10 times that of gold.

1686
02:26:01,025 --> 02:26:09,185
We can expect that ICOs and things like them and equities are going to exceed the market cap of Bitcoin by approximately a factor of 10.

1687
02:26:09,666 --> 02:26:15,625
Right. So, you know, when those things exceed Bitcoin's market cap, what does it matter?

1688
02:26:15,666 --> 02:26:22,025
This 10 percent little payment system that somebody created back in 2009, who cares about that?

1689
02:26:22,226 --> 02:26:26,345
There's billions and billions of dollars of fraud happening in the securities market.

1690
02:26:26,745 --> 02:26:29,785
Let's go for that. If we have to shut down that other system to do it.

1691
02:26:30,185 --> 02:26:44,106
They're going to do it. If you want Bitcoin main chain as it exists today to survive and thrive and be a permanent fixture as the foundation to the future economy, then we should build everything else on top of it.

1692
02:26:44,305 --> 02:26:47,905
And if we don't aim to do that, then a different protocol will.

1693
02:26:47,946 --> 02:26:54,106
No, false. The security concerns of a security of an equity are very, very different than that of money.

1694
02:26:54,826 --> 02:26:59,785
I think that's a very important concept to think you can tie everything to Bitcoin.

1695
02:26:59,785 --> 02:27:01,986
It's technically possible. That's why I said it's inevitable.

1696
02:27:02,146 --> 02:27:04,185
We already have five different implementations of this.

1697
02:27:04,185 --> 02:27:06,506
You can do it right now.

1698
02:27:06,785 --> 02:27:11,745
The security concerns of a stock or an equity are very different.

1699
02:27:12,745 --> 02:27:14,426
You know, you've got to register with your local thing.

1700
02:27:14,426 --> 02:27:16,826
You've got to not short sell. You've got to register the executives.

1701
02:27:17,106 --> 02:27:19,546
You've got to not do insider trading.

1702
02:27:19,546 --> 02:27:20,745
You've got to do all these things.

1703
02:27:20,785 --> 02:27:22,666
Right. And that needs to be regulated.

1704
02:27:22,666 --> 02:27:23,785
It should be regulated.

1705
02:27:24,905 --> 02:27:27,065
We're all we're all for the worse.

1706
02:27:27,065 --> 02:27:29,506
If we allow insider trading, we say, fuck it.

1707
02:27:29,865 --> 02:27:31,185
Everybody can register anything.

1708
02:27:31,305 --> 02:27:33,226
We're going to insiders to trade as much as they want.

1709
02:27:33,266 --> 02:27:35,506
Right. We are all fucked by doing that.

1710
02:27:35,585 --> 02:27:37,585
We want the regulators to actually do their job.

1711
02:27:38,345 --> 02:27:42,305
And the security concerns around a securities chain.

1712
02:27:42,506 --> 02:27:43,826
Salon is a great example.

1713
02:27:44,185 --> 02:27:47,826
Better than Ethereum, in my opinion, are different from Bitcoin.

1714
02:27:47,826 --> 02:27:51,905
And when you mix the two, you risk bringing in the regulators to Bitcoin.

1715
02:27:53,025 --> 02:27:57,345
Well, that's an interesting line of reasoning.

1716
02:27:57,345 --> 02:28:02,546
It sounds like, you know, compliance is top of mind for you.

1717
02:28:03,065 --> 02:28:09,625
And the cypherpunk vision, which is the cypherpunk perspective,

1718
02:28:09,625 --> 02:28:15,185
which is what can we build using cryptography and.

1719
02:28:16,785 --> 02:28:19,745
And, you know, the vision of electronic commerce,

1720
02:28:20,386 --> 02:28:22,745
you know, peer to peer technology, what can be built there,

1721
02:28:22,745 --> 02:28:25,546
let's build everything we can to empower people.

1722
02:28:25,826 --> 02:28:27,986
That's not a compliance first mentality.

1723
02:28:28,305 --> 02:28:31,826
I think the Satoshi mentality, that cypherpunk mentality

1724
02:28:32,025 --> 02:28:36,386
is different than what you seem to present, which is like compliance first.

1725
02:28:36,585 --> 02:28:38,585
No, no, no, no, no, no, no, no, no, no, no.

1726
02:28:38,585 --> 02:28:39,426
The different things. Right.

1727
02:28:39,426 --> 02:28:43,426
So the security first compliance mentality is not one I espouse.

1728
02:28:43,426 --> 02:28:45,666
It's not what I appreciate. It's not what I want. Right.

1729
02:28:45,905 --> 02:28:48,266
But it is the way the rest of the world works.

1730
02:28:48,266 --> 02:28:51,345
And we have to we live in that world right now.

1731
02:28:51,546 --> 02:28:54,625
Let's try and make sure our cypherpunk experiment

1732
02:28:55,106 --> 02:28:57,546
doesn't get tainted by that bullshit.

1733
02:28:57,745 --> 02:28:59,826
That that's what that's what I'm really concerned about.

1734
02:29:01,106 --> 02:29:03,706
I mean, I would argue that it's not just my sense

1735
02:29:03,785 --> 02:29:05,785
like of what Satoshi would say about this.

1736
02:29:05,785 --> 02:29:10,025
We know for a fact that he explicitly countenanced,

1737
02:29:10,426 --> 02:29:14,625
meaning he acknowledged and approved of bit DNS.

1738
02:29:14,625 --> 02:29:17,586
And he referred to a whole multitude when he used the phrase

1739
02:29:17,745 --> 02:29:19,266
all the networks in the world.

1740
02:29:19,266 --> 02:29:23,506
So he believed that perhaps every blockchain ever would be merged

1741
02:29:23,506 --> 02:29:25,305
mine with Bitcoin.

1742
02:29:25,305 --> 02:29:28,706
And it follows logically that I think if he had known about a mechanism

1743
02:29:28,706 --> 02:29:33,026
for a two way peg, he would, of course, preferred that all the block chains

1744
02:29:33,026 --> 02:29:37,346
share not only hash rate, but also share monetary policy

1745
02:29:37,545 --> 02:29:39,026
through the two way peg.

1746
02:29:39,026 --> 02:29:41,466
I think that is an unstoppable vision.

1747
02:29:41,706 --> 02:29:45,105
And suppressing it or delaying it endangers Bitcoin

1748
02:29:45,305 --> 02:29:50,225
because another protocol, as you say, will eventually it'll be adopted.

1749
02:29:51,185 --> 02:29:52,665
OK, so here's the thesis, right?

1750
02:29:52,665 --> 02:29:55,506
There are two potential theses with respect to the long term

1751
02:29:56,586 --> 02:29:57,745
value of Bitcoin.

1752
02:29:57,745 --> 02:29:59,865
The first thesis is that

1753
02:30:00,946 --> 02:30:05,065
it remains gold like, let's say, right?

1754
02:30:05,386 --> 02:30:07,225
It is digital gold, right?

1755
02:30:07,225 --> 02:30:10,865
And it behaves like gold is that gold is approximately 10 percent

1756
02:30:10,865 --> 02:30:13,906
of the total equities market cap is a small fraction of the total

1757
02:30:15,625 --> 02:30:17,305
economy of the world. Right.

1758
02:30:17,305 --> 02:30:18,625
So that's one thesis.

1759
02:30:18,625 --> 02:30:21,625
Bitcoin remains for all time, 10 percent of equities.

1760
02:30:21,665 --> 02:30:22,466
All right.

1761
02:30:22,466 --> 02:30:26,706
The second thesis is that we tie everything to Bitcoin, all equities,

1762
02:30:26,706 --> 02:30:28,826
all everything to Bitcoin, right?

1763
02:30:29,146 --> 02:30:33,706
This means that the the price of Bitcoin has to accelerate

1764
02:30:34,065 --> 02:30:38,586
to a number that is not just equal to the total market

1765
02:30:38,586 --> 02:30:41,305
cap of all other equities, but far beyond that. Right.

1766
02:30:41,706 --> 02:30:43,745
And this comes back to the argument. Right.

1767
02:30:43,985 --> 02:30:46,425
So if I can short one thing

1768
02:30:46,425 --> 02:30:49,786
and then trade another, right, that's that's basically right.

1769
02:30:50,506 --> 02:30:54,146
In order for Bitcoin to be the consensus model

1770
02:30:54,346 --> 02:30:57,665
for all these other things, that means I can't short this other thing

1771
02:30:57,985 --> 02:31:01,346
and degrade Bitcoin's consensus to

1772
02:31:02,425 --> 02:31:04,745
make my trade profitable. Right.

1773
02:31:05,185 --> 02:31:08,105
Which means Bitcoin has to have a higher market cap

1774
02:31:08,105 --> 02:31:10,985
than all of these other things combined.

1775
02:31:10,985 --> 02:31:12,545
So these are the two theses in my mind.

1776
02:31:12,545 --> 02:31:15,466
Bitcoin remains gold like remains about 10 percent of total equities

1777
02:31:15,826 --> 02:31:17,425
or Bitcoin remains.

1778
02:31:17,425 --> 02:31:21,625
It goes the other direction and says Bitcoin is like basically proportional

1779
02:31:21,625 --> 02:31:24,745
to the total sum of the market cap of everything in the world.

1780
02:31:25,545 --> 02:31:29,065
I think the latter thesis is rather hard to believe.

1781
02:31:30,185 --> 02:31:32,026
I think it's possible.

1782
02:31:32,026 --> 02:31:33,466
I think it's hard to believe.

1783
02:31:33,466 --> 02:31:35,225
I think in the interim, while we're arguing about drive

1784
02:31:35,225 --> 02:31:38,745
chains and stuff like this, bringing regulators is not a good thing.

1785
02:31:38,745 --> 02:31:41,065
Let's try to remain independent as long as we fucking can.

1786
02:31:42,065 --> 02:31:44,026
But those are the two things, right?

1787
02:31:44,026 --> 02:31:45,625
And there's nothing in the middle.

1788
02:31:45,625 --> 02:31:48,946
OK, so I think the middle ground, the the strategy.

1789
02:31:49,466 --> 02:31:53,745
OK, you suggest, which is to try to avoid regulatory pushback.

1790
02:31:53,946 --> 02:31:58,706
That's one that Satoshi mentioned in the early discussions back in 2010.

1791
02:31:58,985 --> 02:32:03,026
He said, let's not bring the heat from, you know, associating Bitcoin

1792
02:32:03,026 --> 02:32:03,985
with WikiLeaks.

1793
02:32:03,985 --> 02:32:07,346
However, another way of looking at it at this point, 14 years,

1794
02:32:07,826 --> 02:32:13,026
roughly 14 years later, is that if Bitcoin grows as fast as possible,

1795
02:32:13,346 --> 02:32:18,266
then we would be following in the roadmap that Hayek mentioned in 84,

1796
02:32:18,545 --> 02:32:23,225
which is sly and roundabout and then something they can't stop.

1797
02:32:23,386 --> 02:32:28,985
So if we blitz scale, if we increase Bitcoinization as rapidly as possible,

1798
02:32:28,985 --> 02:32:32,266
trying to absorb every blockchain community onto Bitcoin,

1799
02:32:32,266 --> 02:32:34,386
strengthening it in every way,

1800
02:32:34,386 --> 02:32:39,706
that is an end run around the regulatory state, the welfare warfare state.

1801
02:32:40,225 --> 02:32:44,706
And we get to the touchdown end zone, which is it's global money.

1802
02:32:45,105 --> 02:32:47,706
There's innumerable projects built on top of it.

1803
02:32:47,906 --> 02:32:49,346
Everyone is using it.

1804
02:32:49,346 --> 02:32:50,745
It's unstoppable.

1805
02:32:50,745 --> 02:32:52,266
It's succeeded.

1806
02:32:52,266 --> 02:32:57,865
Isn't that a better strategy than one of fear and limitation?

1807
02:32:58,545 --> 02:33:00,786
Yes, I think you're completely correct about all of that.

1808
02:33:01,026 --> 02:33:03,906
Do you really think we're anywhere near the latter thing you said?

1809
02:33:04,466 --> 02:33:06,305
How many things can you buy with Bitcoin?

1810
02:33:06,305 --> 02:33:09,105
Right. If all the governments in the world said, fuck this shit,

1811
02:33:09,305 --> 02:33:12,346
this interferes with our monetary policy, we're not going to allow it.

1812
02:33:12,386 --> 02:33:13,906
Right. This is not a technical argument.

1813
02:33:13,906 --> 02:33:17,146
Right. I mean, like governments can say you cannot do Bitcoin and go to jail.

1814
02:33:17,185 --> 02:33:18,985
Right. All governments can do that.

1815
02:33:18,985 --> 02:33:24,985
Right. The inevitability argument relies upon commerce first.

1816
02:33:25,386 --> 02:33:27,586
We don't have commerce today.

1817
02:33:27,826 --> 02:33:30,586
We have to develop commerce before we get to that point.

1818
02:33:30,865 --> 02:33:33,865
Developing drivechains where we can develop a stock market

1819
02:33:33,865 --> 02:33:36,225
on top of it is way, way, way premature.

1820
02:33:36,826 --> 02:33:39,946
I think the stock market idea is so different

1821
02:33:39,946 --> 02:33:43,665
than what the drivechain community has contemplated.

1822
02:33:43,906 --> 02:33:45,586
So it's sort of out of left field.

1823
02:33:45,586 --> 02:33:48,625
I mean, the sidechains that we think will have traction

1824
02:33:48,865 --> 02:33:52,026
such as privacy, scaling and others

1825
02:33:53,346 --> 02:33:55,625
aren't about the stock market.

1826
02:33:55,625 --> 02:33:58,146
I think that the whole idea of

1827
02:33:58,865 --> 02:34:00,346
scaling chains are there.

1828
02:34:00,346 --> 02:34:02,305
Right. Most of them are equities.

1829
02:34:02,305 --> 02:34:06,665
Right. Again, ten times the market cap of equities is ten times that of gold.

1830
02:34:06,906 --> 02:34:09,346
You're going to get ten times more equities than you're going to get gold.

1831
02:34:09,586 --> 02:34:12,146
And if you include scammers, you're going to get a hundred times more equities.

1832
02:34:12,786 --> 02:34:16,706
So if, Bob, if the if Ethereum is blessed

1833
02:34:16,865 --> 02:34:20,425
hypothetically tomorrow by the SEC, then it seems like your

1834
02:34:20,786 --> 02:34:25,346
your own statements would lead us to conclude, if they're correct,

1835
02:34:25,425 --> 02:34:28,225
that Ethereum is going to have ten times the market cap of Bitcoin.

1836
02:34:30,786 --> 02:34:31,985
Sorry, I missed the last part.

1837
02:34:31,985 --> 02:34:32,985
Ethereum is going to what?

1838
02:34:34,305 --> 02:34:37,586
It just seems like you are you are saying that the total market,

1839
02:34:37,586 --> 02:34:40,665
the total addressable market of the Ethereum roadmap, in your view,

1840
02:34:40,826 --> 02:34:44,146
is much larger than the total addressable market of Bitcoin

1841
02:34:44,146 --> 02:34:46,105
in its current form, in your view.

1842
02:34:46,105 --> 02:34:50,665
And therefore, I wonder how you reconcile that with the fact

1843
02:34:50,665 --> 02:34:54,346
that network effects in money will cause a larger protocol

1844
02:34:54,865 --> 02:34:58,225
unit of account to displace a competitor.

1845
02:35:02,586 --> 02:35:06,146
So Ethereum is not going to supplant Bitcoin

1846
02:35:06,146 --> 02:35:07,865
and be a stock market 2.0.

1847
02:35:07,865 --> 02:35:09,425
I mean, again, there are two theses.

1848
02:35:09,425 --> 02:35:11,305
One is money and the other is stock market 2.0.

1849
02:35:12,865 --> 02:35:14,826
Ethereum is never going to be stock market 2.0

1850
02:35:14,826 --> 02:35:16,625
because of scalability concerns, right?

1851
02:35:18,026 --> 02:35:20,625
Now, there are 17 different ways of doing

1852
02:35:21,146 --> 02:35:23,665
polygon chain and all this other shit.

1853
02:35:23,665 --> 02:35:26,425
I don't even know all of them, but it's not going to happen.

1854
02:35:26,545 --> 02:35:28,425
Right. But isn't that kind of the problem, though?

1855
02:35:28,425 --> 02:35:31,946
But isn't that the thing for a stock market 2.0?

1856
02:35:34,105 --> 02:35:37,586
Isn't this kind of the problem, though, is that if you're against sidechains,

1857
02:35:38,146 --> 02:35:40,786
you kind of have to claim infallibility.

1858
02:35:40,786 --> 02:35:43,946
You have to say, I know everything that every altcoin is doing,

1859
02:35:44,386 --> 02:35:48,346
and I know that it's not as good as the BTC strategy,

1860
02:35:49,225 --> 02:35:52,745
which seems like an awfully big risk to take for in exchange for no benefit.

1861
02:35:52,745 --> 02:35:55,745
Because remember, if anything bad happens because of Bith 300,

1862
02:35:56,506 --> 02:35:58,665
we can just soft forked out

1863
02:35:58,665 --> 02:36:02,185
either any individual sidechain or just the entire Bith 300 thing.

1864
02:36:02,185 --> 02:36:06,305
So just rewind for a second.

1865
02:36:06,305 --> 02:36:07,826
I'm talking about general market structure here.

1866
02:36:07,826 --> 02:36:09,545
And you just made me very lost.

1867
02:36:09,545 --> 02:36:11,225
And Rindle's been holding up his hand for a long time.

1868
02:36:11,225 --> 02:36:12,386
I think you let him speak, too.

1869
02:36:12,386 --> 02:36:17,146
Oh, it was just as a kind of, I don't know, rhetorical bit of feedback.

1870
02:36:17,146 --> 02:36:21,026
Like, I generally don't find appeals to Satoshi to be very convincing arguments.

1871
02:36:21,026 --> 02:36:25,026
So I would just like, be careful how many of your arguments are appeals

1872
02:36:25,026 --> 02:36:27,425
to Satoshi Post from like 2010.

1873
02:36:29,105 --> 02:36:30,985
Yeah, that's fair. That's totally fair.

1874
02:36:30,985 --> 02:36:33,425
And I do that. We know a little bit about history.

1875
02:36:34,346 --> 02:36:36,625
No, I did it. It's Henry. It's me. It's all me.

1876
02:36:38,346 --> 02:36:40,026
I make mistakes all the time.

1877
02:36:40,026 --> 02:36:43,706
I mean, yeah, I I totally respect that, Rindle, of course.

1878
02:36:44,745 --> 02:36:46,625
You're 100 percent right on that point.

1879
02:36:46,625 --> 02:36:48,706
And also, you know, thanks, everyone.

1880
02:36:48,706 --> 02:36:53,346
I just want to take a moment, just a breather to say thank you, Bob, for being here.

1881
02:36:53,346 --> 02:36:59,665
Thank you, Rindle and DJ and others who've who've come up or who who've requested to.

1882
02:37:00,266 --> 02:37:05,466
We've had a bunch of requests, but I we had such a an in-depth conversation going.

1883
02:37:05,906 --> 02:37:07,865
I didn't want to have the stage become too crowded.

1884
02:37:07,865 --> 02:37:10,266
So thanks, everyone, for your patience.

1885
02:37:10,266 --> 02:37:12,346
Just to reset the room for a moment.

1886
02:37:12,346 --> 02:37:16,665
We meet every week here on Twitter to talk about drive

1887
02:37:16,665 --> 02:37:18,586
chain and related topics.

1888
02:37:18,586 --> 02:37:19,906
Everyone's welcome.

1889
02:37:19,906 --> 02:37:25,185
We especially appreciate it when when, you know, excellent thinkers

1890
02:37:25,906 --> 02:37:29,826
like Bob and others who aren't fully on board

1891
02:37:29,826 --> 02:37:33,586
with drivechain at this moment come in to share their view

1892
02:37:34,146 --> 02:37:38,625
because it's essential that the community develop the best possible understanding

1893
02:37:39,346 --> 02:37:42,786
so that they can make the best informed view and decision.

1894
02:37:43,346 --> 02:37:45,985
So it's so valuable to have you here.

1895
02:37:45,985 --> 02:37:48,665
Why don't we go for another half hour or so

1896
02:37:49,065 --> 02:37:53,546
and then we can maybe wrap for next week and let's jump back into it.

1897
02:37:55,906 --> 02:37:57,506
I need a fucking calendar to do this.

1898
02:37:57,506 --> 02:37:59,585
I just saw it on Twitter and I did fucking jumped in.

1899
02:38:04,386 --> 02:38:09,786
Right, well, Rindle, why don't you kind of give your take on these recent topics

1900
02:38:09,786 --> 02:38:13,786
because you've been listening for a while, what's your take on on Bitcoin's total

1901
02:38:13,786 --> 02:38:17,506
addressable market, whether it should be money or whether it should be

1902
02:38:18,585 --> 02:38:22,386
a platform for many things other than just money like oracles

1903
02:38:22,865 --> 02:38:26,825
and or more scalable money, more private money, multiple blockchains.

1904
02:38:27,146 --> 02:38:28,906
Does that excite you?

1905
02:38:28,906 --> 02:38:30,465
What do you think about that?

1906
02:38:30,465 --> 02:38:31,906
I'm I'm just listening.

1907
02:38:31,906 --> 02:38:35,945
I mean, like is Bitcoin money or Bitcoin smart contract fuel

1908
02:38:35,945 --> 02:38:38,705
is a debate that's been happening for a really long time.

1909
02:38:39,426 --> 02:38:42,666
So I'm I'm just listening to the conversation.

1910
02:38:44,786 --> 02:38:50,186
And again, the sidechain point is that everyone should be able to get

1911
02:38:51,026 --> 02:38:52,625
exactly what they want.

1912
02:38:52,625 --> 02:38:55,266
They should get it like a la carte.

1913
02:38:55,266 --> 02:38:58,386
And if they want, if you all you want is layer one

1914
02:38:58,985 --> 02:39:01,906
ossified layer one that doesn't change and is just the same thing,

1915
02:39:02,066 --> 02:39:05,945
you can just keep that and you can ignore all the sidechains.

1916
02:39:05,985 --> 02:39:10,906
Your layer one node does not need to know about any sidechain software

1917
02:39:10,906 --> 02:39:15,705
or any sidechain blockchains to be a fully validating node on L1.

1918
02:39:16,985 --> 02:39:18,186
Can ignore all of that.

1919
02:39:18,186 --> 02:39:21,465
That's why the whole miners can steal thing is even possible.

1920
02:39:21,506 --> 02:39:24,186
It would be easy to make that impossible.

1921
02:39:24,186 --> 02:39:26,146
By just flipping that other trade.

1922
02:39:26,146 --> 02:39:28,786
I'm not saying the miners can steal, but I want to go back to our previous

1923
02:39:28,786 --> 02:39:32,146
argument where we end up with one drivechain with very big blocks.

1924
02:39:32,146 --> 02:39:35,426
Right. And that becomes a payment infrastructure versus the main chain.

1925
02:39:35,705 --> 02:39:38,306
What's the value of running a Bitcoin node in that circumstance?

1926
02:39:38,345 --> 02:39:41,985
Right. It's like as much as we can't even get

1927
02:39:41,985 --> 02:39:46,546
like speaker participants in conferences to run, you know, main chain today.

1928
02:39:47,865 --> 02:39:51,426
Someone who just wants to buy coffee or get an abortion for his girlfriend in Florida

1929
02:39:52,105 --> 02:39:54,426
is definitely not going to run a node with big blocks.

1930
02:39:54,906 --> 02:39:58,306
So. I don't I don't look at you, I don't think.

1931
02:39:58,345 --> 02:40:00,266
Yeah, well, I guess you don't. I mean,

1932
02:40:02,225 --> 02:40:05,186
yeah, like right now they don't accept Bitcoin at all.

1933
02:40:05,266 --> 02:40:07,066
So you're in the exact same problem.

1934
02:40:07,066 --> 02:40:10,705
So, yeah, the way I see it is relative to you have to compare

1935
02:40:11,066 --> 02:40:15,465
where we are today to where we would go in the large block sidechain world.

1936
02:40:16,825 --> 02:40:21,705
Which is exactly the same if they only accept the large block sidechain,

1937
02:40:21,865 --> 02:40:23,985
except better because they're going to accept Bitcoin.

1938
02:40:23,985 --> 02:40:26,945
So whoever's doing it, BitPay or whatever, I mean, look at it from BitPay's

1939
02:40:26,945 --> 02:40:30,146
point of view, they're going to run the large block sidechain.

1940
02:40:30,146 --> 02:40:32,345
Right. Or whoever it is, the payment processor.

1941
02:40:33,345 --> 02:40:35,345
It stands to reason they would.

1942
02:40:35,745 --> 02:40:41,546
First of all, in order to run a sidechain node, just the technology.

1943
02:40:42,537 --> 02:40:49,217
Requires that you run a layer one node, it's impossible to only run the L2 node, the L2 node requires a layer one node.

1944
02:40:49,657 --> 02:40:55,497
It's a fundamental requirement because it needs to know about which deposits are being sent to it, needs to know about merge mining.

1945
02:40:56,057 --> 02:41:08,776
So everyone who accepts the scenario you've laid out is not even possible technically about someone only accepting the layer two coin, because at the end of the day, BitPay or whoever it is, they're running both nodes.

1946
02:41:09,096 --> 02:41:10,936
So maybe they can make a management decision.

1947
02:41:13,337 --> 02:41:17,976
The marginal cost of running a layer one node when you're running a drivechain node is small, right?

1948
02:41:19,976 --> 02:41:25,577
It's literally zero because you cannot run any sidechain node without the layer one node, so you must be done.

1949
02:41:25,577 --> 02:41:28,057
You already have the node, you may decide to use it.

1950
02:41:30,057 --> 02:41:33,097
You're trying to make the argument you said has no layer one impact,

1951
02:41:33,097 --> 02:41:35,097
which means I can run a layer one node.

1952
02:41:35,097 --> 02:41:38,136
I have no idea who I'm fucking paying, can't pay any of my payments.

1953
02:41:38,937 --> 02:41:39,737
Why would I do that?

1954
02:41:39,737 --> 02:41:40,617
You pay on layer one.

1955
02:41:40,617 --> 02:41:41,496
You pay on layer one.

1956
02:41:42,217 --> 02:41:46,856
You say, listen, your preference right now is that people pay you with Bitcoin on layer one.

1957
02:41:47,577 --> 02:41:50,377
Your preference is that you be paid with layer one Bitcoin.

1958
02:41:51,257 --> 02:41:52,537
We're not scaling, you know why?

1959
02:41:53,416 --> 02:41:57,176
No, I have to make a payment.

1960
02:41:59,096 --> 02:42:00,056
No, that's not the case.

1961
02:42:00,056 --> 02:42:04,776
If I understand what you're saying correctly, is that today, here we are, it's a Friday in 2023,

1962
02:42:05,416 --> 02:42:12,937
you want to be able to use your layer one Bitcoin to buy whatever, coffee, doesn't matter.

1963
02:42:13,897 --> 02:42:15,657
That's what you want, right?

1964
02:42:17,816 --> 02:42:19,977
I'm all about abortions at this point, but anyway, go ahead.

1965
02:42:21,657 --> 02:42:22,617
I got onto that topic.

1966
02:42:22,617 --> 02:42:23,176
Oh, go ahead.

1967
02:42:23,657 --> 02:42:24,537
I'm pissing off Apple.

1968
02:42:28,697 --> 02:42:36,136
Well, yes, but what you're trying to say is your concern is that when we move to a world

1969
02:42:36,136 --> 02:42:40,537
where there is an optional large block sidechain at the coffee shop,

1970
02:42:41,657 --> 02:42:43,577
that that will somehow be bad for your position.

1971
02:42:44,697 --> 02:42:47,496
But I'm saying is that at worst, it's exactly the same

1972
02:42:47,496 --> 02:42:51,416
because that coffee shop is already not taking L1 Bitcoin, or if they are,

1973
02:42:51,416 --> 02:42:55,737
they have no reason to stop because they are taking the large block one as well.

1974
02:42:56,856 --> 02:42:59,336
Bad for node operators and bad for decentralization.

1975
02:42:59,336 --> 02:43:02,136
It's not bad, but you understand there's different operators though.

1976
02:43:02,856 --> 02:43:07,577
You understand every single layer two node operator is a layer one operator, but not the reverse.

1977
02:43:08,217 --> 02:43:09,017
Correct.

1978
02:43:09,017 --> 02:43:09,737
Correct.

1979
02:43:09,737 --> 02:43:16,136
But I mean, coming back to your point, if all I care about is paying for coffee or paying

1980
02:43:16,136 --> 02:43:18,937
for an abortion or whatever else, I want to pay for something, right?

1981
02:43:18,937 --> 02:43:21,256
And I want to be able to pay for that.

1982
02:43:21,976 --> 02:43:22,537
Apologies.

1983
02:43:22,537 --> 02:43:23,037
Sorry.

1984
02:43:30,457 --> 02:43:32,377
I can't verify that payment, right?

1985
02:43:32,377 --> 02:43:36,537
So I can't run a node that can verify that I actually paid for the service provided, right?

1986
02:43:37,496 --> 02:43:39,416
You understand there's two different nodes though, right?

1987
02:43:39,416 --> 02:43:41,657
You understand it's two completely different pieces of software.

1988
02:43:46,937 --> 02:43:48,136
Both require a node.

1989
02:43:49,336 --> 02:43:49,657
Yeah.

1990
02:43:49,657 --> 02:43:50,937
Different node though.

1991
02:43:50,937 --> 02:43:51,577
One is a node.

1992
02:43:55,896 --> 02:43:57,416
My payment is on layer two.

1993
02:43:57,416 --> 02:43:58,537
I need a layer two node.

1994
02:43:58,537 --> 02:44:00,297
I need the full giant fucking block.

1995
02:44:01,336 --> 02:44:09,496
If you meet the demand of the coffee shop, they demand to be paid on layer two and then you do it.

1996
02:44:10,297 --> 02:44:12,457
Well, first of all, you don't need to run a full node to send.

1997
02:44:13,336 --> 02:44:15,177
You will know that you only need it to receive, right?

1998
02:44:16,136 --> 02:44:17,416
You can send all you like.

1999
02:44:17,416 --> 02:44:18,217
You don't actually care.

2000
02:44:19,017 --> 02:44:22,297
You couldn't care less one bit if it's in a block or not.

2001
02:44:22,297 --> 02:44:27,256
You're going to send it and they're the ones who want to know that it's in a valid block.

2002
02:44:27,256 --> 02:44:29,817
It has two, three, four, five confirmations.

2003
02:44:30,377 --> 02:44:31,896
So you really only need the node to receive.

2004
02:44:33,097 --> 02:44:34,616
But maybe you own the coffee shop.

2005
02:44:34,616 --> 02:44:35,017
I don't know.

2006
02:44:35,017 --> 02:44:38,537
I don't really understand where this is going because none of it makes any sense to me because

2007
02:44:39,177 --> 02:44:40,056
it's all optional.

2008
02:44:41,097 --> 02:44:42,136
It's all optional.

2009
02:44:42,136 --> 02:44:45,017
I think we're getting close to a good understanding.

2010
02:44:45,017 --> 02:44:46,776
I think that we're making progress here.

2011
02:44:47,496 --> 02:44:50,776
Like I think like things you're saying, Bob, are very interesting.

2012
02:44:50,776 --> 02:44:56,776
But I am truly optimistic that you're going to grok drivechain in the near future.

2013
02:44:56,776 --> 02:45:01,896
I feel like you're pretty close when you say that you're you're somewhat attuned to like

2014
02:45:01,896 --> 02:45:03,257
security budget concerns.

2015
02:45:03,257 --> 02:45:06,137
You think drivechain is inevitable for Bitcoin in the long run.

2016
02:45:06,776 --> 02:45:09,097
So you're you're really there.

2017
02:45:09,817 --> 02:45:10,697
Well, yeah, but let's.

2018
02:45:13,496 --> 02:45:14,857
But this is a key point.

2019
02:45:15,016 --> 02:45:19,417
So the nodes are two different nodes.

2020
02:45:19,417 --> 02:45:25,896
So it's like the analogy is the what if the coffee shop only took, you know, Bitcoin SV

2021
02:45:25,896 --> 02:45:31,176
or something that's quite similar to the current situation where they only take U.S.

2022
02:45:31,176 --> 02:45:31,496
dollar.

2023
02:45:31,496 --> 02:45:32,537
Maybe they only take Visa.

2024
02:45:33,657 --> 02:45:34,217
You know what I mean?

2025
02:45:34,217 --> 02:45:40,776
It's like you draw a line and you say Bitcoin Core is here and then a little ways down is

2026
02:45:40,776 --> 02:45:46,377
large block sidechain and then further down is Bitcoin SV and then further down is the

2027
02:45:46,377 --> 02:45:47,097
U.S. dollar.

2028
02:45:47,736 --> 02:45:48,697
So we want to move it.

2029
02:45:50,137 --> 02:45:53,016
As far along in the good direction as possible.

2030
02:45:54,377 --> 02:45:58,937
But you don't have to right now, you already run a full node of the U.S.

2031
02:45:58,937 --> 02:46:03,336
dollar blockchain or whatever you want to call it, you already meet the demands of the

2032
02:46:03,336 --> 02:46:05,576
coffee Oracle database.

2033
02:46:05,576 --> 02:46:07,496
I do not want one of those anyway.

2034
02:46:08,776 --> 02:46:10,377
Yeah, but you know what I'm saying, right?

2035
02:46:10,377 --> 02:46:11,576
You meet the demand.

2036
02:46:11,576 --> 02:46:13,496
They say we take U.S.

2037
02:46:13,496 --> 02:46:13,896
dollar here.

2038
02:46:13,896 --> 02:46:15,176
We don't take any Bitcoin at all.

2039
02:46:15,736 --> 02:46:17,576
And you still buy coffee there.

2040
02:46:18,217 --> 02:46:21,097
OK, there are two solutions to this problem, right?

2041
02:46:21,097 --> 02:46:27,097
So one is I we have a common currency, right?

2042
02:46:27,097 --> 02:46:30,056
My your bills in the same unit as mine.

2043
02:46:30,056 --> 02:46:30,776
Right.

2044
02:46:30,776 --> 02:46:41,257
And I hate this phrase, but there is an economic phrase called the coincidence of common

2045
02:46:41,257 --> 02:46:41,657
wants.

2046
02:46:41,657 --> 02:46:42,937
I believe it is something like this.

2047
02:46:42,937 --> 02:46:44,137
Coincidence of wants.

2048
02:46:44,137 --> 02:46:44,697
Yes.

2049
02:46:44,697 --> 02:46:45,896
It's a rejection of order.

2050
02:46:46,537 --> 02:46:51,657
I think it's apparently just completely made up.

2051
02:46:51,657 --> 02:46:54,137
That's not the way primitive society has actually worked.

2052
02:46:54,137 --> 02:46:57,176
But nonetheless, the concept, I think maybe some of you know that.

2053
02:46:57,176 --> 02:46:58,616
And, you know, all right.

2054
02:46:58,616 --> 02:47:03,496
So the other solution is that there exists a situation with a bunch of arbitrageurs and

2055
02:47:03,496 --> 02:47:07,496
a bunch of markets where I can pay in one thing and receive in another.

2056
02:47:07,496 --> 02:47:07,817
Right.

2057
02:47:07,817 --> 02:47:10,937
So the coffee maker receives euros.

2058
02:47:10,937 --> 02:47:14,537
The customer of the coffee maker pays in dollars.

2059
02:47:14,537 --> 02:47:15,097
Right.

2060
02:47:15,097 --> 02:47:16,937
And in between a bunch of magic happens.

2061
02:47:16,937 --> 02:47:22,377
And I know all of the magic in that latter situation is fundamentally centralized, increases

2062
02:47:22,377 --> 02:47:27,097
points of centralization, increases, frankly, increase the business opportunities.

2063
02:47:27,257 --> 02:47:35,336
For companies to perform that role, not decentralized, the more currencies that exist that we want

2064
02:47:35,336 --> 02:47:40,456
to pay in more payment currencies, the more friction there is and the more intermediaries

2065
02:47:40,456 --> 02:47:44,377
there is, and therefore the more centralization and regulation around those intermediaries.

2066
02:47:46,137 --> 02:47:46,857
That's not true, though.

2067
02:47:46,857 --> 02:47:51,417
That's no different than the coffee station saying we accept Visa and MasterCard and cash

2068
02:47:51,496 --> 02:47:58,056
and we accept checks and we accept quarters and we accept whatever gift cards.

2069
02:47:58,697 --> 02:47:59,977
They're all denominated in dollars.

2070
02:47:59,977 --> 02:48:01,016
They'll exchange at par.

2071
02:48:01,016 --> 02:48:02,217
So they're not different.

2072
02:48:02,217 --> 02:48:03,657
They don't cash out.

2073
02:48:03,657 --> 02:48:07,576
And I don't I don't question those places because they don't accept the preferred currency.

2074
02:48:07,576 --> 02:48:10,137
I think eventually you think eventually they will, though, right?

2075
02:48:10,137 --> 02:48:12,296
Probably eventually everyone will just accept Venmo.

2076
02:48:12,296 --> 02:48:13,257
WeChat pay.

2077
02:48:13,257 --> 02:48:17,817
Everyone will just take everybody will accept all 27 unless you're one of the unlucky ones

2078
02:48:17,817 --> 02:48:20,377
where you've got the 28th currency and they don't accept your shit.

2079
02:48:20,377 --> 02:48:20,937
Right.

2080
02:48:20,937 --> 02:48:26,697
Look, a single currency is a global human goal that I think we need to be striving for.

2081
02:48:26,697 --> 02:48:28,937
We need a global side.

2082
02:48:28,937 --> 02:48:30,616
Chains are part of that goal, though.

2083
02:48:30,616 --> 02:48:35,257
When you and this is what I understand that you don't get, Bob, is that it's it's the

2084
02:48:35,257 --> 02:48:36,616
difference between having the ATM.

2085
02:48:37,817 --> 02:48:41,576
You're saying an ATM is bad because it makes a new currency, but it's actually good because

2086
02:48:41,576 --> 02:48:45,977
it extends the reach of the US dollar in the cash direction and in the digital checking.

2087
02:48:46,616 --> 02:48:52,056
Yeah, Bob, Bob, the all the sidechains share the same monetary policy as the main chain

2088
02:48:52,056 --> 02:48:52,937
and drivechain.

2089
02:48:52,937 --> 02:48:57,657
The main chain monetary policy is extended across all the sidechains.

2090
02:48:57,657 --> 02:49:00,377
So there is only one currency, Bitcoin.

2091
02:49:01,817 --> 02:49:03,336
I'm not concerned about monetary policy.

2092
02:49:03,336 --> 02:49:07,016
I'm concerned about whether the receiver knows what I'm sending.

2093
02:49:07,657 --> 02:49:11,417
If it's if it's on a drivechain, maybe it says, I don't understand that driving shit.

2094
02:49:12,296 --> 02:49:16,936
Uh, you know, maybe the receiver requests the payment from you.

2095
02:49:16,936 --> 02:49:23,737
That's that's the other thing I was trying to say before, is that now they say they say

2096
02:49:23,737 --> 02:49:26,217
we only take we only accept Visa here.

2097
02:49:26,217 --> 02:49:29,177
When you go into the coffee shop, you say, oh, do you take MasterCard?

2098
02:49:29,177 --> 02:49:30,057
And they say, no.

2099
02:49:30,057 --> 02:49:32,057
They say, do you take this?

2100
02:49:32,057 --> 02:49:33,256
They're the ones who decide.

2101
02:49:33,256 --> 02:49:38,857
Now, of course, most businesses have every reasonable incentive to accept as many different

2102
02:49:38,857 --> 02:49:44,136
kinds of payment mechanism as they can reasonably do, which I presumably.

2103
02:49:45,097 --> 02:49:49,497
Presumably, I mean, I don't have too much trouble paying for things, but I think.

2104
02:49:51,336 --> 02:49:51,657
Right.

2105
02:49:51,657 --> 02:49:55,816
So the idea that every business wants to accept every form of currency, I think is false

2106
02:49:55,816 --> 02:49:57,336
because they quit.

2107
02:49:57,336 --> 02:50:00,617
And if you're a coffee shop and you don't want to deal with it, shouldn't want to hire

2108
02:50:00,617 --> 02:50:01,177
someone.

2109
02:50:01,177 --> 02:50:03,256
There is no one to hire.

2110
02:50:03,256 --> 02:50:06,456
Let's build that before we build alternative.

2111
02:50:07,417 --> 02:50:11,256
I mean, if I had like ten billion dollars, I think I would acquire.

2112
02:50:11,256 --> 02:50:12,696
I don't know what happened with BitPay.

2113
02:50:12,696 --> 02:50:15,737
I would probably either try to recreate BitPay or acquire them.

2114
02:50:15,737 --> 02:50:16,857
So I agree with you that.

2115
02:50:16,857 --> 02:50:21,576
But, you know, part of what happened, Bob, as you know, is there was this scaling war

2116
02:50:22,297 --> 02:50:26,537
and there's a whole crop of people who chant endlessly that it doesn't matter.

2117
02:50:27,576 --> 02:50:32,936
Bitcoin should never be used for payments and Bitcoin is just for saving and that it

2118
02:50:32,936 --> 02:50:36,857
doesn't matter if Bitcoin is actually ever used for anything.

2119
02:50:37,497 --> 02:50:42,376
And those people have a point, which is that it's not necessary for Bitcoin to be used,

2120
02:50:42,376 --> 02:50:44,376
but it's certainly better.

2121
02:50:44,376 --> 02:50:51,737
It's as if someone found out that gold could cure cancer and could allow you to teleport

2122
02:50:51,737 --> 02:50:52,696
across the universe.

2123
02:50:52,696 --> 02:50:53,896
That would be good for gold.

2124
02:50:53,896 --> 02:51:00,376
But a lot of people in Bitcoin have decided that any endorsement of payments is like Roger

2125
02:51:00,376 --> 02:51:04,136
Vera's large Roger Vera's and large block ism or something.

2126
02:51:05,417 --> 02:51:09,177
And so now that's all that's all hated now, including the people in BitPay are all.

2127
02:51:10,537 --> 02:51:15,816
BitPay also did a silly that silly QR code thing that like was that called the payment

2128
02:51:15,816 --> 02:51:16,297
protocol?

2129
02:51:16,297 --> 02:51:17,576
And everyone hated it.

2130
02:51:17,576 --> 02:51:18,776
Absolutely loathed it.

2131
02:51:18,776 --> 02:51:23,977
But BitPay really put it out there anyway.

2132
02:51:23,977 --> 02:51:27,177
Um, no, I can put my hand up.

2133
02:51:27,177 --> 02:51:27,417
Yeah.

2134
02:51:28,297 --> 02:51:30,936
Mike, should we let Mike say something, maybe?

2135
02:51:30,936 --> 02:51:32,376
Yeah, I have a question.

2136
02:51:32,376 --> 02:51:37,896
I have a question to Bob about his earlier point about Bitcoin losing its commodity status

2137
02:51:38,696 --> 02:51:41,016
by enabling these sidechain ICOs.

2138
02:51:41,896 --> 02:51:42,857
It's a two part question.

2139
02:51:42,857 --> 02:51:47,737
The first is, I don't actually follow how that would change Bitcoin from a commodity

2140
02:51:47,737 --> 02:51:48,617
to a security.

2141
02:51:48,617 --> 02:51:51,177
And the second part is, are you worried about BRC 20s?

2142
02:51:51,177 --> 02:51:52,456
And is this an early indicator?

2143
02:51:53,016 --> 02:51:59,256
Uh, OK, so so the second question, yes, to the first question, so BRC 20s are an early

2144
02:51:59,256 --> 02:52:02,376
indicator of potential stock market type behavior, right?

2145
02:52:02,376 --> 02:52:03,977
Which brings regulators.

2146
02:52:03,977 --> 02:52:05,576
Second, the question is how?

2147
02:52:07,497 --> 02:52:10,617
Basically, the simple answer is just make it illegal, right?

2148
02:52:11,336 --> 02:52:15,336
Every country, many countries have tried this, you know, when we all hope that that won't

2149
02:52:15,336 --> 02:52:16,617
work for them.

2150
02:52:16,617 --> 02:52:18,776
But in practice, it does work, right?

2151
02:52:18,857 --> 02:52:20,936
But in practice, it does work, right?

2152
02:52:20,936 --> 02:52:28,057
So if a country decides that there's a bunch of fraud happening in this particular ecosystem,

2153
02:52:29,097 --> 02:52:31,497
they can simply make it illegal to transact Bitcoin.

2154
02:52:31,497 --> 02:52:33,417
That's that's all there is to it, right?

2155
02:52:33,417 --> 02:52:34,376
It's very simple.

2156
02:52:34,376 --> 02:52:36,057
They don't have to do a 51% attack.

2157
02:52:36,057 --> 02:52:41,497
They don't have to, like, issue new dollar coin or make a CBDC or any of this kind of

2158
02:52:41,497 --> 02:52:43,336
complicated stuff people talk about on Twitter.

2159
02:52:43,336 --> 02:52:44,456
They just make it illegal.

2160
02:52:45,097 --> 02:52:48,456
And that's going to happen, right?

2161
02:52:48,456 --> 02:52:56,136
Because securities law has a whole lot more guardrails around it than commodities law.

2162
02:52:56,936 --> 02:53:02,456
So for context, I used to work for SolidX, their company in New York City.

2163
02:53:03,177 --> 02:53:07,016
We filed the first Bitcoin ETF in competition with the Winslow Voss brothers.

2164
02:53:07,016 --> 02:53:09,177
We got turned down, which is around the time I left the company.

2165
02:53:09,977 --> 02:53:15,737
So I was with them through that whole process and every conversation they had with the SEC

2166
02:53:16,857 --> 02:53:20,057
and talks about surveillance and manipulation and things like this.

2167
02:53:20,936 --> 02:53:27,737
So one of the things that stuck with me was that there's a copper ETF, right?

2168
02:53:28,776 --> 02:53:33,896
All of the copper, majority of the copper that's mined is outside the U.S.

2169
02:53:33,896 --> 02:53:35,016
I believe it's Argentina.

2170
02:53:35,016 --> 02:53:36,537
Somebody correct me if I'm wrong.

2171
02:53:36,537 --> 02:53:39,097
But anyway, copper is a huge commodity.

2172
02:53:39,097 --> 02:53:40,376
Like, you've got some in your house.

2173
02:53:40,376 --> 02:53:43,497
You're probably sitting within five inches of some copper right now.

2174
02:53:45,177 --> 02:53:52,456
But, you know, we accepted a copper ETF, even though it was entirely outside our jurisdiction,

2175
02:53:52,456 --> 02:53:52,936
right?

2176
02:53:52,936 --> 02:53:53,977
There was no surveillance.

2177
02:53:53,977 --> 02:53:55,097
There was no anything.

2178
02:53:55,097 --> 02:54:01,097
The constraints on the copper ETF were far, far less than they require on the Bitcoin ETF.

2179
02:54:02,057 --> 02:54:07,256
So I forgot where I was going with that.

2180
02:54:08,456 --> 02:54:12,217
We don't want to bring regulation, I think, is the point of that.

2181
02:54:13,576 --> 02:54:15,576
It can be terrible.

2182
02:54:16,376 --> 02:54:23,657
And I think the road to the ETF is a road to legitimacy within the eyes of the government

2183
02:54:24,297 --> 02:54:25,497
that we want to happen.

2184
02:54:26,057 --> 02:54:28,776
We want the government to be comfortable with this as an asset.

2185
02:54:29,417 --> 02:54:35,177
All of those, from my previous comments about number go up, don't say number go up.

2186
02:54:35,177 --> 02:54:39,657
But at the same time, an ETF is possibly the biggest thing that could happen to make number

2187
02:54:39,657 --> 02:54:45,097
go up, because you don't understand how much trapped capital there is in the world that

2188
02:54:45,097 --> 02:54:46,376
cannot invest in Bitcoin.

2189
02:54:47,177 --> 02:54:48,537
Retirement funds in particular.

2190
02:54:48,537 --> 02:54:52,217
There's trillions of dollars in retirement funds that cannot invest in Bitcoin today

2191
02:54:52,217 --> 02:54:53,256
because of custody laws.

2192
02:54:54,057 --> 02:54:54,696
So anyway.

2193
02:54:58,376 --> 02:55:04,936
Yeah, I think it's compliance first mentality is not probably what the community wants.

2194
02:55:04,936 --> 02:55:13,576
If I had to speculate, I feel like compliance as a top priority is a road towards just sort

2195
02:55:13,576 --> 02:55:17,417
of adopting the perspective of the state, which is that Bitcoin shouldn't exist because

2196
02:55:17,417 --> 02:55:23,016
it would deprive the state of the money printer.

2197
02:55:23,336 --> 02:55:26,057
So eventually there's going to be a war with the state.

2198
02:55:26,057 --> 02:55:31,336
And the way to win that war is to grow as rapidly as possible so that there is no political

2199
02:55:31,336 --> 02:55:32,537
I'm saying something very different.

2200
02:55:34,057 --> 02:55:35,097
I'm saying I'm very different.

2201
02:55:35,097 --> 02:55:39,896
I'm saying the securities law and currency law are wildly different animals.

2202
02:55:40,857 --> 02:55:43,097
And then separate from that is commodities law.

2203
02:55:43,097 --> 02:55:43,576
Right.

2204
02:55:43,576 --> 02:55:48,136
So right now, Bitcoin is a official currency of El Salvador.

2205
02:55:48,136 --> 02:55:48,617
Right.

2206
02:55:48,617 --> 02:55:52,617
That puts it into a special bucket within the regulatory regime of the U.S. and many

2207
02:55:52,617 --> 02:55:56,376
countries that says, oh, it's a currency of a foreign country.

2208
02:55:56,376 --> 02:55:58,376
Now we have to be able to trade.

2209
02:55:58,376 --> 02:55:59,417
We have to be able to transact.

2210
02:55:59,417 --> 02:56:00,456
So we have to like that.

2211
02:56:00,456 --> 02:56:02,857
That is that by itself is super fucking important.

2212
02:56:04,297 --> 02:56:08,936
The second thing is the commodities bucket.

2213
02:56:08,936 --> 02:56:13,497
So commodities don't have as much restriction around their trading because generally commodities

2214
02:56:13,497 --> 02:56:15,417
involve physical transport of goods.

2215
02:56:16,217 --> 02:56:20,936
I had a friend a while back who worked on gold trading and he told me stories about

2216
02:56:22,057 --> 02:56:23,657
like I've got a pilot of gold.

2217
02:56:23,657 --> 02:56:26,456
It's going to go on a 747 from Singapore to New York.

2218
02:56:26,456 --> 02:56:26,617
Right.

2219
02:56:27,417 --> 02:56:28,776
I've got to buy insurance.

2220
02:56:28,776 --> 02:56:36,857
I got my insurance between the time the plane leaves the gate to the time it hits the runway.

2221
02:56:36,857 --> 02:56:40,537
I got a different kind of insurance between the runway and wheels up.

2222
02:56:40,537 --> 02:56:44,696
I got my third kind of insurance between wheels up and crossing the Pacific.

2223
02:56:45,097 --> 02:56:47,497
I got to buy a fourth kind of insurance to land.

2224
02:56:48,057 --> 02:56:49,737
Gold trading is really fucking expensive.

2225
02:56:49,737 --> 02:56:51,977
This is why gold has a carrying cost, right?

2226
02:56:52,537 --> 02:56:56,776
There's an effective net negative interest rate on gold because it's cost.

2227
02:56:58,057 --> 02:56:59,737
You have to pay to keep it.

2228
02:56:59,737 --> 02:57:00,936
You got to pay custody costs.

2229
02:57:00,936 --> 02:57:03,336
Even if you don't move it, you got to keep it in a vault.

2230
02:57:03,336 --> 02:57:04,857
You got to pay somebody to keep it in that fucking vault.

2231
02:57:08,936 --> 02:57:09,977
We're doing this story.

2232
02:57:10,776 --> 02:57:11,417
I apologize.

2233
02:57:11,417 --> 02:57:11,896
I've been drinking.

2234
02:57:11,896 --> 02:57:14,136
I have a follow-up question because this is very interesting.

2235
02:57:14,136 --> 02:57:14,696
Go ahead, Mike.

2236
02:57:15,977 --> 02:57:21,016
Is your opinion, Bob, that in order to have a global currency, it has to go through the

2237
02:57:21,016 --> 02:57:23,977
phase of store of value first and then unit of account?

2238
02:57:23,977 --> 02:57:25,336
Or can they happen in parallel?

2239
02:57:30,136 --> 02:57:35,816
The reason I ask is because the BlackRock ETF is being marketed as digital gold.

2240
02:57:35,816 --> 02:57:39,256
To me, I think that's great because it's kind of like a Trojan horse, right?

2241
02:57:39,576 --> 02:57:45,977
The people are just buying it as a store of value, like gold, and then they adopt it.

2242
02:57:45,977 --> 02:57:50,137
And eventually, enough people do that, it can start stabilizing and being less volatile

2243
02:57:50,137 --> 02:57:53,497
and more compliant and more institutionalized.

2244
02:57:53,497 --> 02:57:57,737
And then eventually, over a decade or two, it can become a unit of account and a real

2245
02:57:57,737 --> 02:57:58,377
money.

2246
02:57:58,377 --> 02:58:01,416
I don't see how you go to a unit of account before it's a store of value.

2247
02:58:03,497 --> 02:58:05,656
I completely, 100% agree.

2248
02:58:05,656 --> 02:58:09,017
You must be a store of value before your unit of account.

2249
02:58:09,576 --> 02:58:11,257
I've got a ton of sand around me.

2250
02:58:12,456 --> 02:58:13,737
It could be a unit of account.

2251
02:58:13,737 --> 02:58:14,617
That's great.

2252
02:58:14,617 --> 02:58:16,456
But it does not store value.

2253
02:58:16,456 --> 02:58:18,617
This is a useless concept, right?

2254
02:58:19,816 --> 02:58:22,137
It must be a store of value first.

2255
02:58:22,137 --> 02:58:23,257
And Bitcoin has done that.

2256
02:58:23,257 --> 02:58:25,497
It has demonstrated its capability of being a store of value.

2257
02:58:25,497 --> 02:58:28,617
And I think a lot of people in the ecosystem, including Ethereum, have gotten that wrong.

2258
02:58:28,617 --> 02:58:32,217
They're going to be fuel for the world computer, which is some nebulous bullshit concept that

2259
02:58:32,217 --> 02:58:33,576
just doesn't make any fucking sense.

2260
02:58:34,696 --> 02:58:36,777
But you must be a store of value.

2261
02:58:36,777 --> 02:58:39,097
And Bitcoin has accomplished that in spades.

2262
02:58:43,336 --> 02:58:46,056
Well, Paul, we've been going for three hours today.

2263
02:58:47,017 --> 02:58:51,097
Do you feel that we should continue or resume next week?

2264
02:58:54,217 --> 02:58:55,497
I can stick around a little bit.

2265
02:58:55,497 --> 02:58:56,377
I'm not sure.

2266
02:58:56,377 --> 02:58:56,857
I don't know.

2267
02:58:56,857 --> 02:58:58,217
I'll stick around if people want to stick around.

2268
02:58:58,217 --> 02:59:00,137
Well, I just want to mention a couple of things again.

2269
02:59:01,017 --> 02:59:04,536
We meet every week on Friday to talk about Drivechain.

2270
02:59:04,536 --> 02:59:05,816
This is a recorded space.

2271
02:59:06,377 --> 02:59:11,737
And everyone is welcome to be here, whether you're a fan of Drivechain, a newcomer, or

2272
02:59:11,737 --> 02:59:13,257
a critic or skeptic.

2273
02:59:13,257 --> 02:59:14,456
Everyone's welcome to speak.

2274
02:59:15,576 --> 02:59:21,017
So if you didn't catch the whole conversation, we had a very good conversation with Reindahl

2275
02:59:21,017 --> 02:59:24,536
and others and Bob that started three hours ago.

2276
02:59:24,536 --> 02:59:29,897
So once this space ends, the whole thing will be recorded and available on the LayerTwo Labs

2277
02:59:30,456 --> 02:59:31,176
Twitter account.

2278
02:59:32,056 --> 02:59:37,017
Why don't we aim to wrap up in the next few minutes if you have further thoughts and questions

2279
02:59:37,017 --> 02:59:43,416
that would perhaps bring closure to this episode of our dialogue, Bob, Mike, or DJ?

2280
02:59:45,416 --> 02:59:47,416
I'll just say thank you for the space.

2281
02:59:47,416 --> 02:59:53,097
And I agree with the notion that we need to keep educating ourselves and other people

2282
02:59:53,097 --> 02:59:59,097
about Bitcoin and helping people adopt Bitcoin as the base layer money for the whole financial

2283
02:59:59,097 --> 02:59:59,656
world.

2284
02:59:59,656 --> 03:00:00,156
Thank you.

2285
03:00:01,816 --> 03:00:03,257
Yeah, thanks for hosting this.

2286
03:00:03,257 --> 03:00:10,056
I am a proponent of BIP300 myself, but I encourage as much possible debate and dissent

2287
03:00:10,056 --> 03:00:14,456
and argumentation because it's a very, you know, changing the protocol is very risky

2288
03:00:14,456 --> 03:00:16,056
and you want to be careful and take our time.

2289
03:00:16,617 --> 03:00:17,117
So thanks.

2290
03:00:20,696 --> 03:00:25,737
Paul or Bob, any further comments you want to share to kind of try to bring closure to

2291
03:00:26,296 --> 03:00:30,056
what you discussed for a couple hours today, which was a very interesting dialogue on

2292
03:00:30,056 --> 03:00:35,097
the nodes of the sidechains, the mainchain, whether or not, you know, there are multiple

2293
03:00:35,097 --> 03:00:39,737
currencies or only, as I would argue, as we would argue as drivechainers, one currency

2294
03:00:39,737 --> 03:00:43,017
involved in drivechain inherently or natively.

2295
03:00:43,816 --> 03:00:49,576
So why don't you address that, you know, Paul or Bob, kind of try to wrap up today's

2296
03:00:49,576 --> 03:00:50,217
conversation.

2297
03:00:51,017 --> 03:00:54,217
If you'll allow me, Paul, I'll go first unless you have the last word.

2298
03:00:54,696 --> 03:01:03,176
I, so I posted a thread on Twitter yesterday about the dynamics of creating new ideas in

2299
03:01:03,176 --> 03:01:05,176
Bitcoin, right, and how that goes, right.

2300
03:01:05,176 --> 03:01:15,816
And I characterize Paul as a passionate, I lost my word, passionate champion of the idea,

2301
03:01:15,816 --> 03:01:16,377
right.

2302
03:01:16,377 --> 03:01:17,576
He originated it.

2303
03:01:17,576 --> 03:01:20,056
It says he obviously is a passionate champion.

2304
03:01:20,377 --> 03:01:25,816
And, you know, it is a fucking difficult position to be in.

2305
03:01:25,816 --> 03:01:29,336
And, you know, Paul and I have gone back and forth on Twitter about various things.

2306
03:01:29,336 --> 03:01:34,617
And I want to I always want to bring it down to civil discourse, like, let's let's bring

2307
03:01:34,617 --> 03:01:35,176
it down.

2308
03:01:35,176 --> 03:01:37,176
Like, let's not be mad at each other.

2309
03:01:37,176 --> 03:01:39,097
Let's try and have the actual debate.

2310
03:01:40,137 --> 03:01:45,097
And I think Paul is reaching the point of, you know, I think he's reaching the point

2311
03:01:45,097 --> 03:01:50,857
of frustration.

2312
03:01:51,656 --> 03:01:54,456
And I described this in my post where there's two.

2313
03:01:54,456 --> 03:02:03,097
There's the passionate creator of things, and then there's the dispassionate maintainer

2314
03:02:03,097 --> 03:02:03,897
of something, right.

2315
03:02:04,617 --> 03:02:10,296
And, you know, I've been working in open source software since I was in my 20s, like 25

2316
03:02:10,296 --> 03:02:11,017
fucking years now.

2317
03:02:11,816 --> 03:02:18,617
I have seen this play out over and over and over again, where somebody shows up, they

2318
03:02:18,617 --> 03:02:19,737
say, I want to do this.

2319
03:02:19,737 --> 03:02:21,017
It's fucking awesome.

2320
03:02:21,017 --> 03:02:22,137
Why don't you guys agree?

2321
03:02:22,137 --> 03:02:23,257
It's fucking awesome.

2322
03:02:23,257 --> 03:02:26,936
And they just go through their thing and they have lots of mailing list posts and all kinds

2323
03:02:26,936 --> 03:02:27,497
of stuff.

2324
03:02:27,497 --> 03:02:30,617
I have seen this hundreds, literally hundreds of times.

2325
03:02:31,576 --> 03:02:33,097
It is a dynamic that is real.

2326
03:02:33,097 --> 03:02:34,056
It is human.

2327
03:02:34,056 --> 03:02:34,857
It's natural.

2328
03:02:34,857 --> 03:02:35,897
It is normal.

2329
03:02:35,897 --> 03:02:36,857
Nobody's at fault.

2330
03:02:36,857 --> 03:02:38,056
Nobody's wrong.

2331
03:02:38,056 --> 03:02:41,816
We need the person to show up with a fucking good idea and tell us it.

2332
03:02:41,816 --> 03:02:41,977
Right.

2333
03:02:41,977 --> 03:02:44,217
In this case, in this conversation is Paul.

2334
03:02:44,217 --> 03:02:49,176
He put a fucking lot of work into this and he put it, you know, put it into it.

2335
03:02:49,897 --> 03:02:56,056
But after that comes a bunch of people who say, let's discuss it for a while.

2336
03:02:56,056 --> 03:02:56,696
Right.

2337
03:02:56,696 --> 03:03:00,696
And to the person who created the idea, this is super fucking frustrating.

2338
03:03:00,696 --> 03:03:03,977
Like, no, I already, I already decided that I already evaluated that.

2339
03:03:03,977 --> 03:03:04,857
I already figured it out.

2340
03:03:05,497 --> 03:03:10,296
But there's so many things that happen in the process of creating an idea that you don't

2341
03:03:10,296 --> 03:03:11,416
communicate to other people.

2342
03:03:13,176 --> 03:03:15,097
It just takes time to percolate.

2343
03:03:15,097 --> 03:03:17,977
And there are going to be things you didn't see in the process of that.

2344
03:03:19,017 --> 03:03:22,296
So I think I want to, I want to call up Paul.

2345
03:03:22,296 --> 03:03:27,897
I want to, I want to say props for putting so much fucking effort into this and, you

2346
03:03:27,897 --> 03:03:29,017
know, good job.

2347
03:03:29,017 --> 03:03:30,777
Again, I do see this as inevitable.

2348
03:03:30,777 --> 03:03:33,497
There are five fucking examples of sidechains.

2349
03:03:33,497 --> 03:03:33,737
Right.

2350
03:03:34,536 --> 03:03:35,656
It is inevitable.

2351
03:03:35,656 --> 03:03:36,936
It is a good idea.

2352
03:03:36,936 --> 03:03:37,977
It has been done.

2353
03:03:37,977 --> 03:03:41,497
It has been used professionally and purposefully and in interesting ways.

2354
03:03:42,936 --> 03:03:47,176
His specific implementation, I really don't want to comment on.

2355
03:03:47,816 --> 03:03:52,617
I really want to see the whole concept of sidechains have some, have something.

2356
03:03:52,617 --> 03:04:01,576
But the point of that thread is let's all try and read more and debate less.

2357
03:04:03,737 --> 03:04:05,336
Read Paul's bips.

2358
03:04:06,056 --> 03:04:06,857
Have a journal club.

2359
03:04:07,737 --> 03:04:10,617
Read, you know, other competing ideas.

2360
03:04:12,617 --> 03:04:14,936
But, you know, debate less.

2361
03:04:14,936 --> 03:04:19,576
We live in a very volume-based world, very Twitter-based world where people just spout

2362
03:04:19,576 --> 03:04:23,656
their opinions without having much bullshit behind it.

2363
03:04:23,656 --> 03:04:24,936
And Paul accuses me of this.

2364
03:04:24,936 --> 03:04:26,377
And in certain cases, he's right.

2365
03:04:27,416 --> 03:04:29,257
But let's, let's evaluate.

2366
03:04:29,257 --> 03:04:29,576
Read.

2367
03:04:30,217 --> 03:04:32,137
Read is really the real thing.

2368
03:04:32,137 --> 03:04:32,456
Read.

2369
03:04:33,176 --> 03:04:34,617
I'll finish with that.

2370
03:04:35,176 --> 03:04:35,737
Well said.

2371
03:04:36,377 --> 03:04:37,897
All right, Paul, you get the last word today.

2372
03:04:40,857 --> 03:04:41,097
Paul?

2373
03:04:42,296 --> 03:04:42,617
Okay.

2374
03:04:43,816 --> 03:04:44,056
Yes.

2375
03:04:46,296 --> 03:04:47,416
That's mostly correct.

2376
03:04:48,217 --> 03:04:54,217
You know, I think that was very well put in general because the, but the idea is very

2377
03:04:54,217 --> 03:04:54,456
old.

2378
03:04:54,456 --> 03:04:55,977
It's from November 2015.

2379
03:04:56,777 --> 03:05:02,696
So, you know, it's like easy to be very patient for a while.

2380
03:05:03,497 --> 03:05:10,777
One thing that makes me sort of, I think one thing that happens is kind of like, I really

2381
03:05:10,777 --> 03:05:15,176
feel like Jeremy Rubin was treated very badly with respect to BIP119.

2382
03:05:16,137 --> 03:05:24,296
And then now it's kind of like years later, because of Ark, now everyone is going to just

2383
03:05:24,296 --> 03:05:26,777
flip and, you know, it's all going to be memory hold.

2384
03:05:26,777 --> 03:05:31,257
And everyone's going to say, oh, yeah, we always liked BIP119 when I remember it being

2385
03:05:31,257 --> 03:05:32,377
very differently.

2386
03:05:32,377 --> 03:05:36,377
And in a way, I kind of see that as a preview of with BIP300, where people are going to

2387
03:05:36,377 --> 03:05:37,257
just be like, oh, yeah.

2388
03:05:38,456 --> 03:05:41,257
And I don't know, that just kind of gives like an enormous eye roll from me.

2389
03:05:41,977 --> 03:05:54,617
After all this, what you might call toxicity, all this like kind of like disagreement over

2390
03:05:54,617 --> 03:05:57,816
the blockchain, what the blockchain should contain, and all these people just saying

2391
03:05:57,816 --> 03:05:58,857
like they have it right.

2392
03:05:58,857 --> 03:06:04,296
And it's in reality, we should try this harmless idea that lets people have different things.

2393
03:06:05,176 --> 03:06:10,936
Another thing that I kind of think is weird is that no one, you know, Ethereum has changed

2394
03:06:10,936 --> 03:06:11,336
a lot.

2395
03:06:11,336 --> 03:06:13,576
Like this is like a sour grapes.

2396
03:06:14,456 --> 03:06:16,536
Ethereum used to be complete and total garbage.

2397
03:06:17,336 --> 03:06:22,456
And now it's merely not very good, but it has improved by maybe like 500x.

2398
03:06:24,056 --> 03:06:29,576
And so in the past, people rightly were dismissive of it.

2399
03:06:29,576 --> 03:06:31,497
But now people are more dismissive of it.

2400
03:06:31,497 --> 03:06:32,617
But it's kind of gotten better.

2401
03:06:32,696 --> 03:06:36,857
There's no proportional increase in respect for it.

2402
03:06:37,656 --> 03:06:43,257
And like no one, people have heard of Vitalik Buterin, who they'll never hear of Greg Maxwell

2403
03:06:43,257 --> 03:06:44,696
or maybe even Gavin Andresen.

2404
03:06:45,497 --> 03:06:46,857
They'll probably never hear of those people.

2405
03:06:47,656 --> 03:06:49,656
And not that that makes it a success.

2406
03:06:49,656 --> 03:06:56,217
But I don't know, I just kind of feel like one thing that people should read more and

2407
03:06:56,217 --> 03:07:02,137
one thing they should read is the drivechain FAQ, where you'll see why it's so easy for

2408
03:07:02,217 --> 03:07:05,977
me to answer many of the questions in the space, because I've been getting it for the

2409
03:07:05,977 --> 03:07:06,936
last six years.

2410
03:07:07,977 --> 03:07:13,336
And then another thing that would be interesting to read is the original November 2015 post,

2411
03:07:13,336 --> 03:07:15,656
which is, you know, for 2015 with the five.

2412
03:07:15,656 --> 03:07:22,296
And then you may get an idea of like all this, a lot of stuff is pre-anticipated in there.

2413
03:07:23,576 --> 03:07:26,857
And then you just think, well, what is it going to be eight more years of repeating

2414
03:07:26,857 --> 03:07:27,097
this?

2415
03:07:27,816 --> 03:07:31,656
So yeah, I think it's true that there's an impatience idea.

2416
03:07:33,017 --> 03:07:38,456
To it, and I just kind of thought people would come around eventually, which they are actually.

2417
03:07:38,456 --> 03:07:44,857
So, but it is just kind of, it's very bizarre to get questions.

2418
03:07:44,857 --> 03:07:50,536
I mean, I think it is bizarre, the idea that $20 in cash is different than 20 is a different

2419
03:07:50,536 --> 03:07:52,857
currency than $20 in a checking account.

2420
03:07:52,857 --> 03:07:57,977
I think a lot of these ideas are bizarre, but I'm happy to keep coming back every Friday.

2421
03:07:58,296 --> 03:07:58,857
All right.

2422
03:07:59,576 --> 03:08:00,377
Thank you, Paul.

2423
03:08:00,377 --> 03:08:03,257
Thank you, Bob, DJ, and everyone.

2424
03:08:03,257 --> 03:08:04,056
Thank you.

2425
03:08:04,056 --> 03:08:05,897
We're going to meet one week from today.

2426
03:08:07,416 --> 03:08:12,696
So that'll be, if you follow LayerTwo Labs on Twitter, follow this account.

2427
03:08:12,696 --> 03:08:13,897
You'll see the space.

2428
03:08:13,897 --> 03:08:17,097
Everyone's welcome to come on up and talk more.

2429
03:08:17,097 --> 03:08:22,936
We aspire to be one of the best places for open conversation with critics and skeptics

2430
03:08:22,936 --> 03:08:25,737
and fans about the ideas here.

2431
03:08:25,816 --> 03:08:27,336
About the ideas here.

2432
03:08:27,336 --> 03:08:29,497
So this was a great conversation, Bob.

2433
03:08:29,497 --> 03:08:34,777
Your scientific perspective is so valuable and thanks for being here.

2434
03:08:34,777 --> 03:08:36,056
Please come back again soon.

2435
03:08:37,416 --> 03:08:38,056
All right, everybody.

2436
03:08:38,056 --> 03:08:39,257
Have a great Friday.

2437
03:08:39,257 --> 03:08:44,696
For more information, you can go to drivechain.info to find the FAQ.

2438
03:08:45,257 --> 03:08:47,257
That's drivechain.info.

2439
03:08:47,257 --> 03:08:49,656
You can also go to layer2labs.com.

2440
03:08:50,217 --> 03:08:57,097
At LayerTwo Labs, you can download the Drivechain testnet software and run it on your own computer.

2441
03:08:57,977 --> 03:09:04,377
You can also, at layer2labs.com, find links to GitHub where you can read the BIPs

2442
03:09:05,576 --> 03:09:07,656
written by Paul and CryptAxe.

2443
03:09:07,656 --> 03:09:09,737
BIP300 and BIP301.

2444
03:09:10,456 --> 03:09:12,056
So do what Bob said.

2445
03:09:12,056 --> 03:09:12,377
Read.

2446
03:09:12,936 --> 03:09:14,296
Read it and study it.

2447
03:09:15,017 --> 03:09:16,217
Understand it thoroughly.

2448
03:09:17,017 --> 03:09:18,936
It's an intellectual adventure.

2449
03:09:19,497 --> 03:09:22,137
It's very important for the cause of liberty.

2450
03:09:22,137 --> 03:09:22,696
Go for it.

2451
03:09:23,576 --> 03:09:27,257
We have a YouTube playlist also if you really hate reading.

2452
03:09:29,176 --> 03:09:30,217
YouTube is okay.

2453
03:09:31,336 --> 03:09:31,576
Yes.

2454
03:09:33,257 --> 03:09:34,137
That's right.

2455
03:09:34,137 --> 03:09:34,777
We're on YouTube.

2456
03:09:34,777 --> 03:09:37,897
You can find the links to YouTube if you go to layer2labs.com.

2457
03:09:37,897 --> 03:09:39,416
Our YouTube link is there as well.

2458
03:09:39,416 --> 03:09:42,217
We also have a Drivechain-focused Telegram group.

2459
03:09:42,217 --> 03:09:44,936
So there's a whole bunch of different ways you can get involved and learn more.

2460
03:09:45,897 --> 03:09:46,217
All right.

2461
03:09:46,217 --> 03:09:52,617
I'll see you all next week right here for more Drivechain conversation.