Welcome, everyone.
Come on up and share a comment or question if you'd like.
I have placed in the nest a recent tweet from LayerTwo Labs.
This is a link to an article about Drivechain published by CoinMarketCap.
The article by CoinMarketCap is quite good.
It's a lengthy article and it discusses Drivechain and other matters.
The main topic of the article by CoinMarketCap is the Bitcoin security budget and whether
it is sustainable.
One of the motivations for Drivechain today is to increase fees for Bitcoin so that the
miners have lots of income because that is what causes Bitcoin to be secure from an economic
security standpoint.
And by that, I mean, what would it cost someone to try to be a hostile majority miner attacker?
What would it cost someone to try to have so much hash rate that they can make the network
unusable as a hostile miner?
So if the cost of doing that is high, then we can say that Bitcoin is highly secure and
we want fees to go up to keep Bitcoin secure.
So that is one of the benefits of a successful adoption of Drivechain.
The idea that it would increase fees paid to miners.
And the article by CoinMarketCap that I have put in the nest here on the spaces addresses
those questions.
Will Bitcoin be secure in the future and could Drivechain increase the fees for Bitcoin?
Moon Settler, if you'd like to come up and chat, you're welcome to.
So this article that I'm talking about, which I put in the nest, is called The Ultimate
Deep Dive into Bitcoin's Security Model.
And it's by a reporter at CoinMarketCap.
And he asks, is Bitcoin's current security model flawed?
What could be done to the Bitcoin network to ensure it is sustainable?
And at the end of the article, he says, is merged mining a wildcard solution?
And he says, Bitcoin researcher Paul Sztorc suggests merged mining in his own two-part
deep dive into the Bitcoin security budget.
Mining these sidechains would increase miners' revenues and de facto increase the block size.
Storz refutes the claim that merged mining is prone to centralization and inherently
not secure enough.
He contends that mining is already significantly centralized and that centralization through
specialization is not a security risk as long as the decentralization of nodes is guaranteed.
So this article is pretty great.
It discusses many interesting things related to Bitcoin's security and touches on Drivechain.
So I liked it.
The article author also makes a strong claim.
He says, to conclude, Bitcoin's security model is unsustainable as it stands today.
In other words, Bitcoin with 2022 adoption rates and lower block rewards will be much
more vulnerable to an attack two halvings from now.
But luckily, the community still has time to figure things out.
So this author at CoinMarketCap apparently is convinced that Drivechain is very worthy
of consideration as a potential great solution to the security budget questions.
Welcome to those who've joined the listening group.
Everyone is welcome to raise your hand and come on up to the stage and talk about anything
you'd like related to Drivechain, sidechains, Bitcoin economic security, any of the topics
that we're touching on today.
Well, we have a quiet audience.
Nobody yet has raised their hand to come on up.
The goal of these Twitter spaces is to just be an open forum for conversation, interviews
and discussions about Drivechain.
So we host them every Monday and Thursday.
I'm Henry at LayerTwo Labs.
Well, surely someone has a comment.
Don't be shy.
Come on up to the stage if you'd like.
Moon Settler, I see your tweet that you are cooking and not able to speak.
That's understandable.
That's understandable.
No problem.
No problem.
I have sent a note to our special invitee today.
I was expecting a special guest to come and chat.
Hopefully he'll join soon.
Thank you.
There have been a lot of great Drivechain related tweets lately.
Various people online are sharing all kinds of interesting ideas about
Drivechain and sidechains.
Well, this is one of the calmest Drivechain Twitter spaces we've ever had.
Usually people want to come on up and share their thoughts and ideas.
Sometimes we've had many tweets to discuss.
I can find some and put them in the nest and maybe that will prompt more conversation.
There have been a number of tweets lately that were quite interesting.
We might have discussed this on Monday, but five days ago Adam Back put out a tweet on
Drivechain and I've put it in the nest now for our review.
He wrote to Roger Veer, better still, Bitcoin adds a Drivechain as I suggested to you in
person a few times pre-forks.
So this is a great tweet from Adam talking about how Roger and he had discussed Drivechain
in the past and he goes on in the tweets to describe Drivechain as a win-win large
block Drivechain.
So that's a great idea.
The idea of having a large block version of Bitcoin as a sidechain enabling everyone who
likes large blocks to use a sidechain of Bitcoin and pay fees to Bitcoin miners and
maintain exposure to Bitcoin as a unit of account and when they're done return to holding
actual layer one Bitcoin.
So this arrangement would avoid the creation of a speculative altcoin.
That's the beauty of Drivechain.
It enables people to have the software of an altcoin while having the economics of Bitcoin.
So ah, our special guest has arrived, delightful, Post Capone.
I've invited you to speak.
Come on up to the stage if you'd like.
Hey, I'm glad you're here.
All right, so you're our special guest today.
I look forward to this chat.
I've heard you speak just a couple of times on Twitter.
I know nothing about you and I found your Twitter bio kind of confusing.
You mentioned Ethereum and Bitcoin in there, if I recall.
So you are an interesting person as far as I'm concerned.
I have no idea what you do for a living or what your background is in Bitcoin, except
that I heard you talking about ordinals this week and you sounded pretty informed, pretty
technically savvy.
So I'm curious to hear what are your thoughts on Drivechain?
How do you feel about sidechains for Bitcoin?
Are you optimistic that this project of Drivechain, if it becomes adopted by the community, could
be transformative and great for Bitcoin?
What are your thoughts on these things?
Yeah, I mean, I think that additional layers are, you know, like an inescapable necessity.
And I also think that if you can preserve simplicity in the L1, then, you know, keeping
that simplicity as far as you can into the future is good.
Like offloading computational throughput to some other layer is like great.
To those ends, like BIP300, 301 makes a tremendous amount of sense.
I'd say that as far as like sort of like packaged implementable schemes for doing other
layers to Bitcoin or improving the general notion of like what a quote-unquote sidechain
or merge line chain or what have you might should be, it's the one that probably makes
the most sense, yeah.
So you mentioned preserving simplicity on L1, meaning keeping L1 not complex.
How do you feel about the fact that Ethereum has a complex L1 and with Drivechain, Bitcoin
would aim to avoid complexity on the L1?
Do you feel like there is like a future problem that could arise as a result of the complexity
on Ethereum's L1 and when do you think that'll play out?
And how would you, what would you call that problem?
Does it have a name as a category?
Oh, well, there's an inherent scaling limitation that you run into where the thing that, so
if you, for those people that have been paying attention to the Orgles discussion, this is
probably going to have a little bit more context, but maybe, you know, maybe we can circle back
and talk about some things for the sake of, you know, the comparative case.
But PSBTs, the mechanism by which we handle like trustless swaps of inscriptions would
be like a very, very good example of, maybe it's like a 101 in this idea of offloading
computation to some other sort of arbitrary or nebulously defined layer.
A partially signed Bitcoin transaction that, you know, has to be fulfilled by your counterparty
can be passed around off-chain.
The state there can be updated and modified.
You can increase the price, decrease the price.
I guess, you know, if you're decreasing the price, there's really nothing to do but just
simply create a new PSBT, right, because a rational actor is going to take whatever the
lowest one is.
So you can even do like Dutch auction formats where you like, you publish one, nobody buys
it, and then you lower it by a little bit, publish another one, nobody buys it, and you
lower it for a little bit, you know, nobody buys it, and you lower a bit, and then somebody
buys it.
So there's these steps, these iterative processes, this computation, this distribution of some
data that can all happen off-chain, and it could, you know, it could be people text messaging
each other, it could be posting it to a Discord, it could be stored to a database, it doesn't
really matter.
The L1 doesn't care.
It can be a sort of, you know, we can say it can be as centralized or distributed as
you want, and the scalability of that, like in that context, is really like the scalability
of the web itself, right?
So you're really not bound to much.
And there are perhaps many other ways that you could leverage like cryptographic signatures
and things like this to do other very neat, interesting things that fit the same sort
of idea.
And the L1 now, the sort of applications, extensibility, use cases of products in the
L1 has massively opened up without you necessarily requiring additional computational throughput
or design complexity in the L1.
And I think that both of those matter quite a lot.
You know, one, there's like these hard scaling limitations because the computation is like
very, very redundant.
The entire execution layer of Ethereum is burdened with, you know, the programmability
of everybody's smart contract.
If there's 10 people using the smart contract, 400,000 nodes got to, you know, they're not
actually 400,000 nodes, but you know, like 400,000 sort of validator assignments have
to have to attest to this computation, right?
May I ask, do you think with the Ordinal's success, the success of that project becoming
very popular and discussed, do you think that that is an indication that there is a growing
interest within the Bitcoin community and within the crypto community, an interest to
see Bitcoin be a platform for interesting applications other than simply money payments?
Oh, sure. Yeah.
I think that like the whole like NFTs on Bitcoin sort of meta conversation is like the head
turner. But in reality, there's this there's this whole other kind of world of like these
interesting things that have been going on in Bitcoin, right?
Like whether it's whether you're looking at it from the lens like RGB or Terra or what
have you. Like there's a lot of cool stuff that's gone on that I would imagine that kind
of continues that thread of excitement.
And I would think 300 301, as well as the validity rollups conversation, are also two
like really exciting things for people to look at, like, you know, potential forward
opportunities.
Which of the sidechains that have been discussed within the drivechain community do you
think is most interesting to you?
For example, would you like to see on Bitcoin a privacy focused sidechain that uses Zcash
technology? Or would you be interested in like a large block Thunder sidechain for
scaling with, you know, small fees and huge throughput?
Is that idea strike you as compelling or would it be a Ethereum clone that has smart
contracts? And, you know, which which of those three or is there or Hivemind, for
example, which is Paul Sztorc's own sidechain idea for a peer to peer Oracle network?
Do you which of those three or four strikes you as the most compelling or is it all the
above? Well, each side is just, you know, charming, you know, for a myriad of its own
sort of even if lousy purposes.
But also, I think the idea of like the Zcash drivechain, like a privacy focused drive
chain is definitely very interesting.
You like one of the ones you threw in there was like sort of the big block, right, like
massive throughput kind of thing.
This is like one of the only, I guess, criticisms of 301 that I can sort of like flirt
with and sort of rationalize is the notion of like convoluted miner incentives where
miners will some miners will participate in the verification of these drivechains and
they'll have these ancillary revenues, which that in and of itself seems fine, right?
Like miners can have whatever other hustle they want, but it could I could I could very
easily see a scenario where it it starts to pour, you know, better reinvestment capital,
more available revenues to miners with bigger and bigger infrastructures.
And so we see further and further deepening of like centralization across the interests
of miners, like, you know, perhaps mining pools can can sort of share resources for
this, but you really start to deeply intermediate the roles of mining pools.
And I can see that side of the criticism.
So the stuff like the idea of like the big block extensible throughput kind of thing,
those are the things where I'm like, I don't know that that might be where this gets a
little bit more complicated of a conversation.
Do you know how blind merged mining enables the miners to get the revenue from the sidechain without running the node of the sidechain?
So I'm familiar in broad strokes with this, but I would actually be very curious to hear like more of an explanation of it, especially from the horse's mouth, so to speak.
Yeah, maybe Moon Settler or others in the audience who are more technical technical than me can give like a review of it.
That would that would be at your level, I think, just a sense of like how you your level of understanding of Bitcoin, I think, would would be that you would like to hear it from someone who's like a true engineer.
In broad strokes, my understanding is what it enables is blind merged mining allows all Bitcoin miners to share in portions of the transaction fee revenue from the sidechains from these BIP301 sidechains without running the node of the sidechain.
Now, the objectors and skeptics to drivechain would say, well, the the amount of revenue that the miners get would be higher slightly if they run this if they run the node.
And of course, running the node of a large block sidechain with one gigabyte blocks every 10 minutes would be expensive.
So maybe the the miners who can run that would would benefit.
They get more revenue from the MEV or or other things, and then they have higher rates of profit.
And therefore there would be centralization because or the word could be concentration in the sector of mining because of the larger, larger participants having more profit.
And then that would lead to, you know, a diminution of of the of the decentralization of mining.
But I think the counter argument to that, which is compelling, is that that this this argument against the centralizing effects, if any, of run of the higher profit going to those who run the nodes of the sidechain.
The argument against that is that.
It is an arbitrary prejudice against profitable software.
The people who make this argument do not argue against the other centralizing effects in mining, such as large miners having a special arrangement with a power company to balance the grid at certain times.
People don't complain about the large miners having economies of scale and erecting server farms in locations that are most efficient, that are cold, that are next to a power source, perhaps next to a stranded power source.
So the people who object to merged mining, one of the errors they make is they have an arbitrary prejudice against profitable software.
They do not object to forms of profit that do not take the form of software.
And there is no rational basis for objecting to profitable software when the person is not objecting to the other many types of profitable activities that miners engage in that I just mentioned.
So it all boils down to an aversion to merged mining, not merged mining that's blind specifically, but just merged mining in general.
People say, oh, well, you have to run the node to make the most amount of money from the complex sidechains where there's MEV.
So then, therefore, merged mining is not good.
Merged mining has been in Bitcoin since the beginning of Bitcoin.
And Satoshi himself explicitly endorsed in writing publicly the notion that merged mining could be a significant source of revenue for miners in the future, boosting Bitcoin's security.
In other words, he explicitly acknowledged the security budget problem and said how merged mining could be a solution to it.
That's what he wrote in the BitDNS thread.
He said all the networks in the world would share CPU power, increasing total strength.
So he's explicitly talking about the strength of the network in relation to the fees and how he wanted every blockchain to be merged mine with Bitcoin, which is exactly what Drivechain aspires to create.
It will put everything on top of Bitcoin.
Everything is merged mine with Bitcoin.
And then we have much more fees because right now, you know, there are 15 times higher fees outside of Bitcoin than in Bitcoin.
Bitcoin is missing out on almost all of the fees paid on blockchains.
But if they were all merged mine with Bitcoin, we'd have a much higher rate of fees.
And then there would be no calls for inflation and there wouldn't be this security budget criticism.
Like every day on Twitter, I see the ETH Maxi saying Bitcoin doesn't have enough fees.
It's going to have to do inflation.
And what they don't know or what they don't want to say is that if Drivechain is adopted, the fees will go up.
Just like Satoshi said, merged mining can increase the strength of the network.
If we get more blockchains to be merged mined as Bitcoin sidechains, that would be great.
So I feel like the critics that you're talking about, who talk about the miner incentives becoming convoluted, as you say,
they need to, even if they're right, if we assume ad arguendo that they're correct.
Even then, they should balance their criticism with the benefits that merged mining offers,
which the creator of Bitcoin himself perceived.
And Bitcoin has had merged mining for over a decade.
And there has yet to be any problem from that.
So I find it very puzzling that people are opposed to merged mining when it already exists.
It's already a fine thing.
And it solves a problem that we know we have to contend with.
And if we don't go down the route of merged mining, then I think we'll have to eventually, you know,
come to a fork in the road where one path is inflation and the other path is do nothing and just hope for the best.
Do you agree with that analysis that we're going to confront that problem?
I agree with several things in there.
So one, I think that it's almost like a generic human tendency for us to sort of play telephone with each other's rationales.
And that sometimes you can see this pattern where somebody understands the sort of nugget of a criticism,
but doesn't necessarily extend the logic.
And then you get these, you know, like, I think that's what you're describing, right?
Like, OK, all right, I get it. So you've got this miner convolution argument, but you don't have that problem somewhere else.
So you just haven't really, like, applied this rationale universally.
You haven't really kind of consumed all the spaces that this affects.
And I think I think that's totally fair.
I do think that there are people that criticize it in that way and then would also have these other concerns and criticisms that might that might sort of like reduce down to.
And it would be very reductive to frame it this way, but it might reduce down to something like, you know,
Bitcoin needs to be considerate of like lowering the cost of beneficial participation in order to ensure that centralizing forces over time do not take root.
And become sort of irreversible. But I.
I would also agree that, like, we've seen a lot of, like, very deep similarities.
And I would, you know, I don't think that you can really even deny that in context,
there's sort of an implicit support from Satoshi for ideas such as this.
And I absolutely agree that Bitcoin has sort of a decision to make that you might describe as like an existential crisis on some sort of like 40, 60, 80 year time horizon kind of thing where you either have to generate more fees or you have to consider a change to monetary policy.
I so deeply just like so many people love to frame this under the context like Bitcoin must change its monetary policy.
I'm sorry, it just doesn't like, you know, whether it's whether it's 300, 301 or just accelerating the general demand for block space.
There are many ways in which it could be solved.
Now, if it's if it's just generically accelerating the demand for block space, I think you have to get up to, like, an average fee rate of like 260 sats per byte or something like that within within like 40 years.
So, like, really compensate on curve for the reduction in the block reward.
So, you know, it's a steep, steep acceleration that you've got to you've got to meet.
Yeah. Hopefully that answers that.
Yeah. Yeah. You totally are on the same page.
You understood everything I said completely.
I agree with you. There's an interesting back and forth.
Gabriel Kerman, welcome to the stage.
Please chime in.
Thank you very much, guys.
First of all, I want to say I'm super excited to see that there's at least 10 Bitcoiners interested in discussing drivechains.
So we're looking forward to see more of these discussions in the future.
Just for some background, I'm a co-founder of Rustok, the Bitcoin sidechain that does merge mining and is compatible with Ethereum.
So it's one of the examples that you guys were mentioning.
So I just thought it could be good to give you some some flavor on what's going on and how we are experiencing some of the examples,
theoretical examples that you mentioned that which are quite practical in every day for the Rustok ecosystem.
So first of all, I think that the whole concept of drivechains and the evolution of the crypto a little bit different.
So what I would try to focus on, what I answer when I get asked about the future of the ecosystem,
the way I like to frame it is I believe that everything that is interesting in the blockchain space or crypto space will eventually be forked and built as a Bitcoin sidechain.
So I believe that before these 40 years that we were mentioning before, we're going to see in the next decade a lot of censorship,
a lot of backlash from governments trying to block everything that can compete with the failing fiat currencies and everything else that Bitcoin will fail.
So if there is a good technology out there that's needed in the world, I believe eventually will be built as a Bitcoin sidechain.
And even Bitcoin sidechains will be challenged in their decentralization and censorship resistance.
And I believe the drivechain, it's the ultimate censorship resistance way to build the drivechain, to build a sidechain.
So I think they're absolutely a must.
That is something that we need to talk Bitcoiners and the ecosystem over the next couple of years to make sure that this is hopefully implemented because we will need it.
I'm from Latin America, assume my guess by my accent, and we need a full financial system.
We cannot solve the problems that we have in Argentina and Venezuela, Sri Lanka, Africa and Lebanon just with gold 2.0.
We need a full micro loan and financial system that is fully automated.
We believe smart contracts will probably be the ideal tool to build that.
And that's what took us to build Roostock, trying to get all the functionality from solidity smart contracts, but built on top of Bitcoin infrastructure.
So I'm super excited about we discussing drivechains.
I think there's a lot to be discussed and a lot of collaboration needed among the different layer two projects that are building technology on top of Bitcoin.
So we're very close to lightning, to liquid.
We love Paul's push on drivechain.
Regarding the centralization issue that you guys were mentioning in the case of RSK, the merchant mining is done through the mining pools.
So the actual extra node or the RSK Roostock node that is being run is run by the mining pool.
So it does not create any additional burden or hardware requirements for the miners.
So in that sense, it doesn't centralize the mining, the Bitcoin mining more than it is today.
So just to keep in mind, as of today, I think half of the Bitcoin hashing power is merchant mining RSK.
So it's an incredible high number that makes Roostock many times more secure than Ethereum before moving to proof of stake.
So now I think they cannot be compared, but it's quite exciting.
And not many people know that we already have a Bitcoin sidechain that is secured through merchant mining by around 50% of the total Bitcoin hash rate.
So this is around, I think today, around three Bitcoins per month that are being generated in extra fees because Roostock does not have a coin base.
This is all fees based, small still.
But if we fast forward a couple of decades with all the growth that we expect to see in DeFi on top of Bitcoin and the reduction in the coin base,
it's going to be interesting and definitely can add sustainability to Bitcoin mining and the security budget overall.
And just one final comment, the only argument that I've heard so far, which I know criticism that I think is compelling to the current drivechain proposal,
especially talking about the BIP300 and 301, is that the code is too complex.
I think it has around 6000 lines of code.
I might be wrong. I don't know. But this is the number that comes to my mind right now.
And I think after what we're seeing with SegWit, with Taproot, now with Ordinance and all the backlash, even for Softforks that we've seen recently in Bitcoin,
I understand that probably it's impossible to get consensus in implementing something with this kind of complexity in the code.
Even if all the core developers love the idea of drivechains, I find compelling the argument that the amount of code and changes required to implement this would open so many potential risks and backs and unexpected outcomes
that probably that makes the whole thing impossible to move forward.
Even like I'm a super drivechain fan and I think we have arguments that over time could be made to convince many Bitcoiners to support drivechains.
But in that sense, I believe we need a minimalistic approach.
And for those of you in the room who want to deep dive, Sergio Lerner, chief scientist of the Roostock project, has put together a proposal for a drivechain implementation.
It doesn't have a VIP number yet, something that we are working on and we would love to work with the community.
It's called R11. So if you Google and check R11 drivechain implementation by Sergio Lerner, you will see an approach that it's minimalistic in the number of lines of code that should be added to Bitcoin.
So I don't know, probably you guys can come up with a better idea.
But I think this is something that we should keep in mind.
We need to understand how Bitcoin ecosystem was seven years ago when Paul came up with these beeps, how the ecosystem looks like now and how the politics and governance of Bitcoin work.
You might like it, you might not.
I think the governance of Bitcoin is one of its strengths.
But it doesn't matter what I think.
I believe that it's an interesting conversation to discuss whether if we ever see a drivechain implemented on Bitcoin, it will probably be a minimalistic code that has the least amount of complexity possible, just adding that functionality and enabling fully decentralized sidechains or drivechains.
So overall, thank you very much for the invite.
I'm really excited to see Bitcoiners discussing drivechain.
And if anyone wants to learn more about what we're doing on Roostalk or if there's any way we can collaborate somehow to take drivechains forward, happy to help and participate.
Thanks.
Thank you.
That was very interesting.
So Roostalk is generating three Bitcoin per month in fees for Bitcoin miners.
That's great.
Yes.
So you can see all the statistics of the Roostalk blockchain in that website.
I saw Sergio's tweet where he said about a few weeks ago that it is the intention of the Roostalk community to develop into a drivechain.
Once drivechains are possible on Bitcoin.
And do you feel that Roostalk would benefit greatly because the peg would become peer-to-peer instead of federal?
Would you use those terms to describe what the drivechain version of Roostalk would be in distinction from its current approach?
Would you say that today it's federated and with a drivechain, it would be peer-to-peer?
And that that is the main difference between a drivechain and a peer-to-peer?
Yes.
That's a good question.
the Drivechain version of Rootstock would be in distinction from its current
approach. you say that today it's federated and with a Drivechain, it would be peer -to
-peer? And that that is the main difference between a sidechain today and a
drivechain in the future is that it goes from federated - different.
Peer to peer.
A bit different and let me explain why.
we as Bitcoiners, we want to be as decentralized as possible.
We
We believe that decentralization is the ultimate goal because we are building stuff that is so important that unless it's fully decentralized, it's going to get attacked by governments and organizations.
The things that are at stake are so important. The world leaders and the G20 do not want Africa to be free, do not want freedom in the exchange of value across the world.
So we need decentralization. There is a reason why we do not call the current version of Rustok federated because we need to make a distinction, for instance, between Rustok and Liquid.
So Liquid is a federation. You have parties that hold their private keys in a secure environment, in a computer. They create the transactions and they signed those transactions in a multi-sig.
So this is a federated sidechain. In the case of Liquid, they also create the blocks. So they do not have merge mining. So that's another difference from the Rustok architecture.
In the Rustok architecture, the security and the immutability of the blocks is done through merge mining. And the pegnatories, as we call those members that participate in the multi-sig on Rustok, only participate in the way Bitcoins move from Bitcoin to Rustok back and forth.
In the case of Rustok, when you move Bitcoins from Bitcoin to Rustok, that process is completely decentralized. So it's a smart contract on the Rustok side that reads what's happening on the Bitcoin side.
When the Bitcoins get locked in a specific address, the smart contract releases the same amount of Satoshis or Bitcoins on the Rustok side. So that part on the way in to Rustok is fully decentralized.
The challenge in sidechains is when you go back. Because Bitcoin is not smart and Bitcoins can only be held in multi-sig. So you need someone to sign that multi-sig. So what has the Rustok ecosystem developed?
We tried to be the most trust-minimized possible option before the drivechain. So we developed something called the Proof-of-Work peg. Because as opposed to Liquid, where the federation members create the transactions and sign them and have access to the private keys.
In the case of Rustok, the transactions to release the funds in Bitcoin are created by the bridge smart contract. So the pegnatories, as opposed to the federation members, are not the ones creating the transactions. They cannot make or include an illegal transaction into the way out of the sidechain.
So the transactions to release the funds are created by the smart contract and the bridge only follows those transactions with the longest proof-of-work. That's why it's called a Proof-of-Work peg. Because it's secured by the proof-of-work of the smart contract in the longest chain.
And the private keys of the pegnatories are held in tamper-proof physical devices. And the private keys cannot be accessed by the pegnatories. So pegnatories cannot collude to steal the funds.
The only possible attack that these pegnatories could do is unplug the devices. And if that happens, and enough pegnatories unplug the devices, there is a very long period of time where the funds cannot move. And then a new backup federation comes into place to replace the original Proof-of-Work peg and replace with new physical devices.
So it's not ideal, but the incentives to attack the pope are extremely low because these are well-known organizations. The whole ecosystem would know about the attack. And again, the only thing that that can do is unplug the devices.
With the drivechain, what would be added to this is that you would have miners or mining pools signing the release of the funds every time they build a new block. So this could go 100% pure drivechain. So you eliminate the pegnatories and now only miners decide what to do with the funds.
Or you could have a hybrid solution where you have separation of balance of powers, like in Western democracy, where you want to make sure that the miners make sure that the pope peg or pegnatories do not attack and the pegnatories make sure that the miners do not steal the funds.
If I may try to see if I understand fully because I've enjoyed reading on the website and I enjoy the RSK Block Explorer. I've learned a little bit about it. If I understand correctly, RSK has succeeded in developing something which is an attempt to replicate drivechain as much as possible without a soft fork.
So the peg in is not gated by parties. It's automatic. But the peg out, which is the essence of drivechain, the peg out, how do we get that to be as trustless as possible?
So the RSK model is involving hash rate to some extent, but it is not as optimal as if it were a true complete drivechain. Is that a fair, very simple, very simplistic summary of what's going on?
Yes, yes. And then we could discuss as an ecosystem the different alternatives, because I'm not convinced that a pure drivechain is the most secure. There are multiple attacks that mining pools could do. They could steal the funds.
So then you also have a whole new area to discuss with hybrid drivechains. But the good thing is once the opcode is implemented in Bitcoin, each drivechain, each sidechain could decide, each community could decide what's the best security solution for the use case.
But this would enable all kinds of drivechains, the pure drivechains only given the power to the miners, something hybrid, multiple options. But this would enable every single innovative technology built in the crypto space to be copied and built on top of Bitcoin.
I'd like to welcome Moon Settler to the stage, one of our favorite speakers. Thanks for coming back. Please chime in in the conversation, Moon Settler.
Hi, guys. I can't stay for long, but I would like to have a question to Gabriel. What do you think about implementing drivechain rules explicitly with this RSK like both peg mechanism?
So basically, you would have these HSM signers that follow, implement inside the trusted enclave these drivechain rules basically for the escrow and approximate and prove the concept of drivechains that way without a fork.
I'm not sure if I understood the question. I don't know if someone can explain it a bit better. I'm a bit confused.
So the idea is that you don't have an anyone can spend script like in the drivechains proper, but you have, say, a multisig or a single sig. It doesn't matter much for the concept.
And basically, you would have a similar construct like now in RSK that if the signers are disabled, then there is a fallback mechanism that can even fall back to a legal layer.
So the coins probably don't get lost forever. But in normal operation, you basically have a sign that can only sign withdrawals if the BIP300 rule set is being followed.
So like I said, instead of an anyone can spend, it's a signature, but you implement a HSM device similar to RSK both peg where it only signs if the required amount of miners included in the OP_RETURN, the proper way that withdrawal hash basically.
The idea to present to Sergio to discuss is I think this is the kind of ideas that we need. So we start testing and proving concepts.
We could also implement the drivechain on other forks of Bitcoin in the same way that Litecoin implemented SegWit before we had it in Bitcoin.
I kind of understand the logic of Bitcoin Core, where you need to prove the value before getting the subject discussing in depth.
And I think these kind of forums are extremely useful so we can experiment with drivechain. But I think we need to experiment on a code that we believe is simple enough to be able to be approved and implemented in Bitcoin eventually in the future.
And as far as I understand, I think there is a compelling argument that the BIP300 and 301 are too complex. So even if everyone loves it, the amount of years of peer review and the potential bugs and liabilities that could arise from such a long and complex code make it impossible to be implemented.
So I think if we put a lot of effort and we push to implement that or experiment that on a controlled environment, we'll probably be wasting our time because then what could be implemented to Bitcoin will be completely different.
So I think less is more sometimes and I think this might be one of those cases.
I've read over the last year everything I could find in criticism of drivechain and I've never heard that criticism.
The criticisms that I hear and read are always economic in nature and they generally take one of two forms.
One is an argument that the drivechains will never be large because the miners will always steal from them.
And the other criticism is that the drivechains could be very large, but that they will result in an unacceptable centralizing effect on miners.
Those are the two criticisms.
I've never heard someone say that the code is too long and I heard one expert tell me recently that it would take about one year from today if the community were very motivated to adopt drivechain as soon as possible.
It would take about one year to review the code in full and engage in rebasing and vetting to tune it up to implement it.
Not many years.
And also I think one of the strengths of drivechain that's pretty much undisputed is that the sophistication mathematically, the complexity of the overall design is relatively low compared to, for example, roll ups.
So drivechain is a seven year old idea that uses technology that is not extraordinarily complicated in nature.
So I feel like it's really the opposite of what you're saying as far as I can tell from the discourse in the community.
Yeah. So just one final comment is maybe the reason why we are having these concerns is because we already bought on drivechain.
So the first criticisms that you hear is when people are against drivechains.
We are fooled for drivechains.
So we believe in the value that it would bring to Bitcoin.
We want Bitcoin to be the base cornerstone of the whole financial system of the future.
So all of the what the others are criticizing are those who haven't understood for me the value that drivechains will bring to Bitcoin.
Now, when you pass that threshold and you get into the code and you get pragmatic into how to get this implemented in Bitcoin, I think that's when you start having these kind of concerns.
I hope you agree that, let's say, the drivechain, the BIP300 has 6,000 lines of code.
If it could have 500, it would be much better.
Right. So simplicity is better.
And I think we need to understand the drivechain as a concept and not as a VIP.
The conversation is finished in terms of what's the best code to get the drivechain functionality working.
And in that sense, I really like Sergio, but I don't care whether he's VIP or you're VIP or whoever's VIP gets implemented.
I think. And I invite everyone to check the R11 code, because I think it's an interesting new approach to make this work in a minimalistic way and simplified version.
But if it is 300, I'm happy.
Gabriel, I think we're losing your audio a little bit.
Yeah, sorry. I got a problem with my internet. It's not working very well.
But what I'm saying is if 300 works, I'm happy to support it.
If something more simple and easier to discuss and present to the community, it's available.
More than happy to see that as well.
Yes. Well said. I agree. You make a very good point.
And I appreciate the way you explained it.
Thank you so much, guys. And we should keep having these conversations more often.
Oh, yeah, absolutely.
Please come back every time if you'd like. We welcome you to return every time.
We have these conversations.
So we're here to stay. And we believe in drivechain.
We believe that sidechains are a very important part of Bitcoin's future for multiple reasons.
In terms of increasing Bitcoin's market cap and value and increasing the return to holders.
And then also increasing the flow of fees to the miners to secure the network.
So there are multiple ways to understand the value proposition of drivechain.
And even if drivechain is adopted and then not used a whole lot, there still would be a need for it.
There are multiple ways to understand the value proposition of drivechain.
And even if drivechain is adopted and then not used a whole lot, there still would be a narrative gain,
a psychological gain to Bitcoin and its community, where the idea of building on Bitcoin will be stronger.
And I think that is an important part of understanding the value proposition of drivechain.
It's not simply a technology, it's also a narrative that people can build trustless sidechains on Bitcoin.
That blockchains other than Bitcoin can be attached to Bitcoin and strengthen Bitcoin's narratives.
So in this hypothetical that I'm exploring, imagine if drivechain is adopted and there are only a few drivechains
that become significant and they are of a market cap that's only maybe $100 million.
For example, suppose we get HiveMind, which is an Oracle network, and it has a market cap of $100 million.
Well, it would be a very interesting feature that is attached to Bitcoin and that would strengthen Bitcoin's narratives.
That there is a high tech, innovative project, a permissionless prediction market attached to Bitcoin.
Even though $100 million isn't an extraordinary effect on Bitcoin's market cap
and the fees wouldn't have an extraordinary effect on Bitcoin's fees,
still that little interesting project attached to Bitcoin would increase Bitcoin's narrative.
And that way people wouldn't be able to say anymore that there's nothing interesting and different and high tech going on in the Bitcoin space.
So I think it's great if Bitcoin can have these cool projects attached to it inside chains, even if they don't become large.
But I do think they will become large. But in that pessimistic case that they're small, still it would be like an interesting thing.
The analogy I enjoy is it's like a car company. A car company might sell millions of cars that are boring and only a few cars that are supercars.
Like Ford. Ford makes ordinary cars like the Taurus, but they also sell the GT40, which is a supercar that costs a lot of money.
It costs like half a million dollars or something.
So they sell this very cool car and that improves the whole brand, even though most people aren't buying that very cool car.
The existence of the cool car makes the brand sexier.
So, for example, if Bitcoin had a sidechain like Hivemind, that would make the entire Bitcoin project sexier and more interesting.
Even though the ordinary user might just use Bitcoin Layer 1 and Lightning, still the existence of this very interesting sidechain.
Even though it's economically small, it could have a very large psychological impact that's positive.
So that's one way of understanding drivechain.
You had previously compared complexity or maybe the considered complexity versus, say, a roll-up scheme.
Do you have thoughts in regards to John Light and Dugan and Abdel's research on that stuff?
I'm not trying to derail the 300-301 space, but I'm just curious if you have any thoughts on it.
Yeah, we've had John Light here two times in these spaces, and his contributions have been excellent.
So John Light is an employee of Sovereign, which is built on Rootstock, as I understand.
And he is also the author of BitcoinRollups.com, and he also is the recipient of a grant of Bitcoin to do research.
And that grant was funded by the Human Rights Foundation and Starkware, the company that is currently most famous in the Ethereum community for funding academic research on zero-knowledge proofs, roll-ups, and related technology.
So John said in these spaces a few weeks ago to me, when asked about his thoughts on the comparative merits of drivechain and roll-ups, he said that he would like to see both come to Bitcoin and that probably it makes sense to do drivechain first.
And I can find the tweet and put it in the nest where he said that just to give you his exact words, and also that tweet would include a link to the audio so you can hear the full context of the conversation.
But I think I'm giving a fair summary of it that he said, you know, it probably makes sense to do drivechain first because it's lower technology.
And also because drivechain can, in theory, accelerate other technologies coming to Bitcoin Layer 1 because drivechain would enable them to be tested on a drivechain.
So there could be a roll-ups drivechain, and then if that roll-ups drivechain becomes very large and successful, that would expedite the community's interest in bringing roll-ups down to Layer 1 where they would have the most potential to improve Bitcoin's value proposition.
But it's amazing how drivechain is actually like an incubation laboratory for excellent ideas.
And if they grow large and prove to be stable and valuable to their users, then that is a signal to the Bitcoin community that, hey, so many Bitcoiners love using this sidechain.
Maybe we should make this sidechain technology come down to Layer 1.
And so, in fact, Paul Sztorc has said that Taproot might have come faster to Bitcoin if it had been first tested in a drivechain.
So instead of taking five years, that upgrade might have taken less time.
So the same could be true of roll-ups.
People who love roll-ups might do well to support drivechain because right now it might take maybe a decade for roll-ups to come to Bitcoin.
And if we get drivechain, then it could be much faster if the sidechain that uses roll-ups is very successful in terms of having a lot of value and being stable in operation.
I haven't heard that perspective from John.
That's interesting.
It definitely seems like an argument John would make, for sure.
And in a lot of ways, it makes sense.
But one of the things that is very appealing to me about the scope for the idea of a validity roll-up is that the capacity exists for the L1 to very strictly guide the extensibility or the functionality that exists within the roll-up.
So very pragmatic limitations can be placed.
You could say, okay, we're just going to do a P2PKH roll-up.
And that's the only thing you can do in the roll-up is P2PKH.
All we want to do is we just want to scale P2PKH and we just want to see how that goes.
And then you can, over time, extend the tolerance from the L1 on what goes on there.
And I think that there's a lot of value to that that follows the same vein of logic in my mind.
You want to test everything first, right?
I kind of miss the public when it was more generally considered that, quote-unquote, everything is a Bitcoin testnet.
I think that that was a healthy view.
And I think that John's argument, as you describe it there, is very reminiscent of that same idea.
And I like that to that end.
But I also like the notion of this workflow where you say, okay, we're going to do roll-ups.
And we're going to do very, very limited functionality in the roll-ups.
And then over time, we're going to extend them.
And I honestly have had this sort of, what probably would have sounded a year, year and a half ago,
is a bit of a harebrained conspiracy theory about a projected coordinated development track, if you want to call it that way,
that lands in validity roll-ups.
And I think that a lot of what we're seeing right now is part of that.
And to be honest with you, every day that passes, I'm like, yep, you were right about that.
Your harebrained conspiracy theory was right.
You know, like Eric Wall, who is a board member for Starkware, he posted today,
noting that after sharding and constant state in the L1, that the recursive proofs for Starks
aren't even really considered a scaling upgrade for Ethereum.
And I was kind of joking with him.
And I was like, does this mean that they liked your presentation on Blobspace?
Because he, I guess fairly recently, gave a presentation to the Stark guys.
Basically, his argument to them was, you know, Starkware relies on this concept of Blobspace in Ethereum.
And it's like the same Blobspace exists in Bitcoin.
And it's like one-eighth the cost to write to it.
And he was just kind of like trying to encourage developers in that ecosystem
to like take the idea of exploring options within Bitcoin very seriously.
And he responded back and his answer was literally like, you will see soon.
So I think we're going to see a lot of acceleration on that conversation.
I think we are already seeing the acceleration on the conversation.
Like this is a non-technical kind of opinionated or observational take.
But I think that Inscriptions is really like this head-turner event
that sort of like whiplashes everybody into paying attention to grandpa again.
And then there's a very clear path to a very well-constructed sort of rollout
of feature sets that I anticipate to see.
And it sort of culminates in validity roll-ups.
So I think that's sort of imminent.
Do you mean a validity roll-up soft fork on Bitcoin?
That's what you're saying would be the culmination of this movement?
It's going to be a culmination into a very real debate
about the bit that would be necessary for it. Correct.
So you said you were interested to see the John Light tweet.
I put it in the nest. Do you see that tweet?
Where it's my tweet. I transcribed what he wrote.
But there's an audio link there. You can go hear it.
So he said that I think it would make sense to do drivechains first
rather than wait until validity roll-ups are ready.
So I think he would be I think he was probably in that conversation.
We also talked about the idea that drivechain could accelerate roll-ups
by enabling live testing rather than just some validity roll-ups test net.
Like right now for drivechain, there's a test net.
People can go in there who are interested in test nets.
It's kind of a technical topic.
Most Bitcoiners aren't dabbling in test nets.
But if there were a live venue to really experience with real money
a sidechain that has drivechains, that would be neat.
I agree.
So if we get drivechains, then we get that live testing ground for roll-ups.
The roll-up sidechain maybe would be so successful
it would really accelerate because people respect the market signals.
So help me walk through the pragmatic differences here.
So if we go the route of saying like,
all right, we've got Dugan's Capri and it's doing P2PKH validations.
And we just want to do a validity roll-up.
Like we'll slap it straight into the L1.
We'll do these very strict definitions for the roll-up.
And really all it's going to do is it's going to scale
very like vanilla peer-to-peer payments.
And that's sort of all we want it to do.
That gives me this sort of like, I don't know,
maybe it's an ideological comfort,
but I think it is also a technical sense of comfort and confidence
that you can define this protocol very strictly and expand it over time.
Help me walk through the pragmatic differences there.
If we do this, the same idea, but we instead,
we sort of like open free range for the validity roll-ups
in the context of a drivechain.
To me, like intuitively there's not any limitation
for what the roll-up might or might not do in the drivechain.
So what would be the ideal way to target in that workflow,
in that context, how do we target the feature sets
that we want to focus on and prioritize them
without necessarily going the route of,
I'm going to call it whims of the market.
I mean, we're developing financial products,
so it's always the whims of the market.
It's like hard to deny that stuff,
but it's also hard to deny that the whims of the market
sometimes leads you down pretty dangerous rabbit holes.
Like I'll use Ethereum's current validator assignment regime
as like an example to that.
So yeah, help me walk through that.
So that question was pretty sophisticated
and I don't have an answer for it at your level.
But if you want to see what Paul Sztorc thinks about roll-ups generally,
you can go to drivechain.info forward slash FAQ.
That's drivechain.info forward slash FAQ.
If you scroll halfway down the page, it's a pretty long FAQ.
If you scroll halfway down a little bit further than that,
you get to a section called
What About Zero-Knowledge Validity Roll-Ups?
And he writes a compare and contrast short essay there
on the differences between roll-ups and drivechain.
So I think that would interest you.
That's the best I can do on that topic.
I wish I had a better answer.
That's all I got.
Oh, you mentioned Eric Wall.
So I just wanted to mention in case you or others are interested to know,
he's a fan of drivechain.
So I can tell you a tweet to go to.
I'm going to share it in the nest in case anyone's interested.
So here's what Eric Wall tweeted a few months ago in November.
He wrote,
It has been seven years since Truthcoin wrote the original drivechain blog post.
If you went back in time and told me that seven years later,
no effort has been made towards merge mine sidechains,
but that the same people who opposed them were upset Ethereum existed,
I'd laugh in your face.
So there he is in classic form being a little bit jocular.
His point, in my view, is that drivechain was proposed.
The Bitcoin community didn't fully embrace it.
And then the people who are opposed to drivechain today
are complaining about Ethereum being large
and bad in their view.
But what drivechain was trying to do
was bring all those users and community and technology
and development over to Bitcoin
rather than it growing in this competitive dynamic
where it's on an altcoin that competes for,
existentially competes with Bitcoin for monetary premium.
That's why there's so much adversarial rhetoric
between Bitcoin and altcoins,
people calling altcoins shitcoin,
altcoiners calling Bitcoin, you know,
orange coin and whatnot.
So that's why there's this adversarial rhetoric
that's so unproductive.
It's because protocols compete for monetary premium.
And if we had done drivechain seven years ago,
as Eric Wall was saying,
then perhaps there would be much more development on Bitcoin
and people wouldn't have to spend their time
complaining about the growth of altcoins.
So that's his view on that.
I think he completely understands
what drivechain is all about and likes it.
Yeah, one of the things that,
like the very first time I ever saw
like sort of an example of Paul ranting about drivechains,
one of the immediate things that he and I definitely agree on
is that, well, so one, I'll say as an aside,
even beyond protocols competing for fee markets,
also, I think, you know, we're, as humans,
we're just sort of suckers for tribalism.
And I think that that plays like a really,
really substantial role in it.
But Paul and I like so very deeply agree
on this idea that like Bitcoin
is already effectively securing the entire industry
as the largest market cap network.
It is sort of, it would be trivial
if somebody, if like a nation state actor
were to actively attack Ethereum,
it would be like this very, very,
not even half step to doing anything about the industry.
And I've actually, I've got quite,
I've got quite a passionate sort of turbo-doomer rant
that I could go on about how the idea
of Ethereum flipping Bitcoin
is like one of the most dangerous things
that could possibly happen to this industry right now,
because Ethereum's exposure to the US jurisdiction
is really, really significant.
And if Ethereum were to flip Bitcoin
and then it were to be forced
into a user-activated soft fork,
the general interpretation of like,
quote unquote, crypto dead
would be a lot more easy to rationalize.
And I don't like that outcome.
But if Bitcoin is already, by default,
securing the entire industry,
like shouldn't they get paid for it, right?
And so that's really like the nugget
that I really do love about drivechains.
And I think the element that really shifts me
to like a net positive interpretation
of 300301 is this idea of,
all right, let's get grandpa paid
for doing the job that it's already doing.
I understand what you're saying.
You're talking about security,
on the one hand, technologically involving fees.
And on the other hand,
you're talking about the narrative
and how Bitcoin secures the whole community,
the whole crypto community,
in a narrative sense.
And you're saying there's some linkage there.
I see what you're saying.
I followed your reasoning about
if Ethereum were to flip Bitcoin
and then be attacked by regulators,
it would have an interesting,
potentially bad effect on the whole space.
However, I do think that the cypherpunk attitude
is not what you just said.
Because, you know,
I think some Bitcoiners,
perhaps rightly so,
will say that doesn't have any
necessary effect on Bitcoin.
These are people who don't care so much
about Bitcoin's number going up.
They want Bitcoin to be developed
in a way which is true to its roots,
you know, and simplicity, anonymity,
things like that.
So they're not so interested
in these narratives about what's going on
on the altcoins.
But I would agree with you.
Not everyone thinks exactly like that.
And the worst case scenario could be bad.
I think, yeah,
to clarify,
I do think that
the most passionately emboldened
amongst us
would stick around even if the shit
went to near zero.
I think there's enough
philosophical or ideological love
for the intentions
that you would see continued work
no matter what.
But we are very
far past the point where,
in the context of the larger market,
the cypherpunks are at the wheel.
There are a lot of great
sort of cyberpunk-minded people
in Ethereum, a lot of people that,
you know,
would be excellent people
to have conversations about
the same sort of
maybe philosophical notions
of the most hardcore
cypherpunk Bitcoiners you can find.
And they're just wildly
out of control.
They can't get the reins back.
Ethereum onboarded
too many market participants
too quickly and too few network
participants in general.
And the ratio is just outrageous now.
It's not that crypto
would actually die.
It's that the general notion
from the market perspective
that crypto is dead
would be much easier to rationalize.
You don't see it turning into
like a 20-year winner kind of thing.
Could you explain again
what we're just saying about a ratio
in Ethereum?
What was the ratio between?
It's this.
So there is some,
we'll say we don't know exactly
what it is,
but there is some ratio
of market participants
to network participants
that you really need to maintain
to have like
a robust network.
And it's,
you know,
you probably can tolerate
a really rapid expansion
of market participants
without necessarily seeing
a rapid expansion
of network participants.
But whatever that sort of
optimal threshold is,
Ethereum blew right past it
this last cycle.
Are you talking about
the ratio between
people who have a full node
and people who don't?
the block somewhere?
Yeah, that's where I would define it, but even perhaps more than that, even perhaps
less constrictive than that, people that engage with the network rather than just
like, you know, trade some stuff on a centralized exchange.
Like the number of people that are actually engaging with the protocol, even from a
light
client versus the number of who have financial exposure to the asset.
It's insane.
Ethereum also has a crisis of infrastructure for sure.
the US Treasury banned Iran, Infuro was compelled by law.
like they have to operate in legal ways.
So they were compelled by law to block Iranian IPs and like, you know, two and a half
million Iranian kids lost access to Ethereum.
And it took, you know, independent sort of quote unquote road node operators going off
to Hungary or whatever and setting up nodes and then literally like foot soldiering
Iran and being like, yo, use this
RPC to get people back on board.
took months.
Those are problems.
Like, those are very real problems.
When you were talking about, you know, what if Ethereum got large and then and then was
attacked by regulators and how that could lead to a crypto winter for a long time.
I think another way of saying that idea
is to say that it would be great if the entire crypto community were in Bitcoin.
Because then the number of people who support Bitcoin politically would be very large.
And to the extent that there are cypherpunk people in Ethereum, if they were in Bitcoin
instead,
then the community of those cypherpunk people, along with all of the users who aren't
so ideological but still support Bitcoin because they're using it to some extent,
everyone would be aligned.
The whole crypto community with its values of liberty
and property and
Those values that are shared, to some extent, largely throughout the crypto community, that would be, everyone would be working in the same political party, as it were. This analogy to political parties is something Paul sometimes makes, where, you know, imagine how powerful a political party would be if everyone combines rather than being in different factions.
Like one thing that puzzles me, when I'm learning about like the history of Bitcoin, is how the large blockers split up at one point between Bitcoin Cash and BSV. So it's like, it's like people not getting along with their cousins. It's unproductive, because if you want to get something done, it's very valuable to have a large network of people helping you.
So if a group splits in half, then the notion that either part of that group will be successful is much lower. And that's one of the inspirations for Drivechain, is that it is fundamentally and originally inspired to lower the rate of these harmful forks within the Bitcoin community by enabling differences of opinion and development to express themselves in the creation of sidechains, instead of in the completion of the chain.
It's a complete separation of the community into the original blockchain and a new altcoin that competes with the blockchain for monetary premium, competes with the original one. So it's not good when Bitcoin splits. It wasn't good to have the hard fork. Some people like it, though. And I think they're mistaken, but they say, oh, these forks are great.
It gets rid of the people who don't have the right ideas. But that's not productive when you're trying to win politically. It's great to have a very large community that is unified rather than split up.
I agree with you. I would like to phrase it as like you can undermine the human psyche sense of tribalism by unifying the networks.
However, I think that the pragmatic reality is that Ethereum would have a very substantial identity crisis if it were really linked to the proof of work mechanism that is Bitcoin.
I think they've held themselves so far deep into anti-proof of work that I don't know if there's a pragmatic undoing of that without some sort of very significant event that compels them to make some other argument for themselves.
Let's talk about the difference between proof of work and proof of stake, since that is a topic closely related to drivechain, because it was Paul Sztorc who wrote an important essay on the difference between proof of work and proof of stake.
Are you familiar with that? His essay called Nothing is Cheaper Than Proof of Work, which was written in 2015 on Truthcoin.com?
I am, and I actually would really love to go down this rabbit hole. I am going to have to shelve that, and I want to circle back with you on that. I'll come back, and I'll hang out again.
I've got a code review that I have to do for some of the LiteClient software that's coming out, so I'm going to bounce. I'm going to go do that. This has been lovely, though. This conversation has been excellent, and I'll come back.
Thank you, Post. Thank you for being here. See you again soon.
Yeah, absolutely. Thanks, guys.
What I was going to talk about in terms of proof of work and proof of stake in brief is Paul Sztorc's view, which was an essay in 2015 on Truthcoin.info titled Nothing is Cheaper Than Proof of Work.
In that essay, he says that the value consumed in proof of work in the form of electricity and other inputs to miners is equal to the value consumed in proof of stake in the form of liquidity being consumed.
Therefore, economically, for a system to be proof of stake isn't cheaper to the participants as a collective than the cost of doing proof of work.
In other words, if society's monetary system is proof of work, there is a cost that society is paying for that monetary system, and that is all of the revenue to the miners.
That's the cost that society collectively is paying to have that institution in society, the proof of work monetary system.
If there's a shift to proof of stake, the proof of stakers back in 2015 were thinking, oh, this is going to be much cheaper because we get a monetary system.
That's a blockchain, but it doesn't have all this electricity being burned up, so it's actually cheaper for us.
Therefore, it's more efficient, and therefore, it'll be better.
But actually, it's not cheaper.
There is a cost, and the value of that cost is identical to the value of the cost in proof of work.
The difference is that the form of the cost is different.
In proof of work, the cost takes the form of energy and machines and the labor involved in running them, but primarily energy.
That's the thing being consumed in proof of work.
In proof of stake, liquidity is the thing being consumed.
This is a complex proposition that takes people sometimes a long time to wrap their heads around, but the essence of this argument is an argument against shifting to proof of stake.
The reason why it's not good to shift to proof of stake is that it's not any cheaper.
The main reason people were arguing for proof of stake at the time was that it's cheaper.
It's economically superior.
Now that that argument has been shown to not be true, the argument that's mainly relied on is the environmental one, that society is better off burning less energy, which I don't find compelling.
But there you go. That's the argument.
I encourage others to read it.
You can go find it at truthcoin.info, which is the blog of Paul Sztorc, one of the two authors of the drivechain Bips.
It's a great blog.
It's a blog that is primarily on economics of blockchain.
The comments on these posts are great.
For the post on nothing is cheaper than proof of work, Vitalik Buterin and other leading thinkers in Ethereum commented on that post at the time.
You can read the comments and watch them become convinced and then admit that the argument is correct.
It's quite extraordinary.
Vitalik wrote a lengthy blog post in response to that blog post.
After Paul wrote nothing is cheaper than proof of work, Vitalik commented and they went back and forth in the comments.
Then Vitalik wrote a whole post called why proof of stake?
Then Paul responds to that post.
They're going back and forth in blog posts.
Paul's response goes line by line showing how Vitalik's blog post includes some errors that are important.
If you're really interested in the crypto economic discussion on proof of stake versus proof of work, then these blog posts I've mentioned are essential reading.
Well, we've reached 11 o'clock Pacific time.
We've been going for an hour and a half.
We can continue for a while, though.
If anyone has any questions or comments, you can raise your hand and come up to the stage.
We are doing Drivechain Twitter spaces here at LayerTwo Labs every Monday and Thursday.
I'm your host, Henry.
I'm an employee of LayerTwo Labs, and the purpose of these conversations is to promote education on the topic of Drivechain so that the Bitcoin community can make a very informed decision about whether it would be great to have Drivechains.
Some of the people who think Drivechains are cool include Dr. Adam Back of Blockstream, Fiatjaf, the creator of Nostr, and many other people who have very technical backgrounds, as well as some of the most well-known Bitcoin investors and a lot of other people.
So it's interesting if you want to see Bitcoin's number go up.
That's one reason to be interested in Drivechain.
If you want to see Bitcoin have a bunch of very cool protocols attached to it, that's another reason to do Drivechain.
And if you want to have the world see less altcoin creation, that's another reason to do Drivechain.
Because every time a project moves to a Drivechain from an altcoin, then there's less altcoins out there.
So if a person doesn't like the proliferation of speculative tokens that have been created outside of the Bitcoin blockchain, then Drivechain should be of interest.
Because, of course, Drivechain would not eliminate entirely all speculative tokens, right?
There's always going to be speculation in life, and some of that speculation will occur in the context of blockchain-based assets.
However, if Drivechain is adopted, then no altcoin founder will be able to rationalize the creation of an altcoin by citing a limited extensibility of Bitcoin.
In other words, when you read the Ethereum white paper, one of the things that they wrote there at the very beginning on the first page was they did a long multi-paragraph essay on the limits of trying to build on Bitcoin and how it's hard or impossible to build on Bitcoin.
But if Drivechain were adopted, no longer would altcoin founders be able to make that argument as well.
They wouldn't be able to say it's hard or impossible to build a protocol on Bitcoin because people will be able to build Drivechains, which are advanced sidechains.
So there will be fewer altcoins, I believe, if Drivechain is adopted because the founders won't be able to say credibly that it is difficult or impossible to build on Bitcoin.
Well, since we have no questions or comments remaining, I guess we'll wrap and we'll circle back on Monday.
Please, if you've enjoyed this, follow LayerTwo Labs.
Please bring your questions and comments.
Everyone who listens to these is encouraged to speak and participate in these spaces.
And it's been really great.
We had a lot of great speakers today.
And I look forward to the next one.
So on Monday, you know, feel free to come with your questions and comments.
The places you can go to learn more about Drivechain include YouTube.
There is the LayerTwo Labs YouTube channel.
And there's also Paul Sztorc's YouTube channel.
And there is also the Drivechain Talk Telegram group, where 700 Bitcoiners hang out and talk about Drivechain.
At least that's how many members the group has.
And there is also the Drivechain Project GitHub, where you can see the code, which was discussed today.
And there is also other websites, like if you go to John Light, his website, I recommend it.
He has a blog called Lightcoin.
And he has two posts on Drivechain.
And they're both favorable towards Drivechain.
The posts deal with the question of whether miners will steal from the Drivechain.
And he argues in those posts that it is unlikely that the miners will steal from the Drivechain.
And he cites the fact that miners or validators haven't been stealing in a roughly equivalent situation on Ethereum.
So that's a very informed and interesting read.
Another great read is fiatjaf.com, where the creator of Nostr has written an essay on Drivechain.
I recommend it. It's a great place to start.
If you're interested in just starting to learn about Drivechain, go to fiatjaf.com, F-I-A-T-J-A-F.com.
And then click on Bitcoin and then click on Drivechain.
Read his essay. It only takes five minutes.
And then you will be up to speed on what the creator of Nostr thinks about Drivechain.
Well, that's all we have for today, folks. Thanks for being here.
And I'll catch you on Monday. Ciao.