1 00:00:00,000 --> 00:00:07,000 Hey guys, good to be back with another episode of Truthcoin Talk, I'm your host, Paul Sztorc, 2 00:00:30,000 --> 00:00:37,760 it's been a long break, probably too long, I kind of had a stretch where I needed to 3 00:00:37,760 --> 00:00:42,400 just kind of unplug from the podcast world for a little bit, I've still been doing my 4 00:00:42,400 --> 00:00:49,480 Twitter spaces, but just kind of got to the point where I wanted to figure out what I 5 00:00:49,480 --> 00:00:54,400 wanted to do differently with this, and I don't know, it's good to be back, I'm excited 6 00:00:54,400 --> 00:00:59,600 to start creating some content again, and I think this episode is a great start, I went 7 00:00:59,600 --> 00:01:04,360 to the Litecoin Summit, and got to meet Paul, who we're going to interview here, Paul Sztorc, 8 00:01:04,360 --> 00:01:15,600 who created, or wrote the BIP300/301, and he's an interesting character, he 9 00:01:15,600 --> 00:01:20,640 has a lot to say, and that's always nice when you're hosting something, it's harder when 10 00:01:20,640 --> 00:01:27,360 someone doesn't want to talk, but this is something that's interesting to Litecoiners 11 00:01:27,360 --> 00:01:33,720 right now, the Foundation's mentioned it, Paul's been trying to get this added to Bitcoin 12 00:01:33,720 --> 00:01:43,960 for probably 9 years, 8 or 9 years, and he's just not had a lot of luck, and the first 13 00:01:43,960 --> 00:01:51,960 thing I want to really do with this is, how do we as Litecoiners go about understanding 14 00:01:51,960 --> 00:01:59,600 it first, and then maybe in the future, we get some pushback as to why somebody might 15 00:01:59,600 --> 00:02:06,120 not like it, why somebody thinks it's dangerous, I have kind of an opinion on it that Animal 16 00:02:06,120 --> 00:02:10,480 and I will talk about a little bit at the end of the show after Paul leaves, oh yes, 17 00:02:10,480 --> 00:02:16,040 by the way, if you're wondering who Animal is, if you listen to my Twitter spaces, you'll 18 00:02:16,040 --> 00:02:20,920 recognize his voice, I got to meet him at the Summit, and we clicked really well in 19 00:02:20,920 --> 00:02:28,120 person just like we do on spaces, and so it was great, we hung out for basically the 20 00:02:28,120 --> 00:02:36,360 whole two days, if you want to go follow him on Twitter, he's at Animal underscore Litecoin, 21 00:02:36,360 --> 00:02:40,920 I don't know, he didn't intend to be Animal, but he's just become Animal, so that's who 22 00:02:40,920 --> 00:02:45,200 he is, if you hear me refer to him. 23 00:02:45,200 --> 00:02:50,420 So yeah, this will be an interesting episode, I hope you learn a lot from it, we tried to 24 00:02:50,420 --> 00:02:56,100 take it as slowly as we could because what Drivechains could enable is really, in my 25 00:02:56,100 --> 00:03:03,180 opinion, pretty amazing, well the upside is, and I think my hope is that we get some excitement 26 00:03:03,180 --> 00:03:10,820 around it and give it a thorough vetting, and if it's something that seems worthwhile, 27 00:03:10,820 --> 00:03:17,300 it'd be exciting to see it happen, so, alright, I don't want to ramble too much, I have a, 28 00:03:17,300 --> 00:03:21,780 like I said, I went to the Summit, I think I'll do a separate episode about the Litecoin 29 00:03:21,780 --> 00:03:26,420 Summit, it was a really great experience, got to meet a lot of really great people, 30 00:03:26,420 --> 00:03:32,460 but we'll talk about that some other time, enjoy the show. 31 00:03:32,460 --> 00:03:37,700 Well Paul, I know I listened to you on the Peter McCormick episode this last week while 32 00:03:37,700 --> 00:03:41,740 I was driving, and you're not a big fan of doing introductions, so I won't bother you 33 00:03:41,740 --> 00:03:45,340 with it, I'll do it in some sort of separate intro. 34 00:03:45,340 --> 00:03:53,500 But briefly, we have Paul Sztorc, I learned how to pronounce that at the Summit, who created 35 00:03:53,500 --> 00:04:03,960 VIPS 300 and 301, or wrote them, and is the CEO of LayerTwo Labs, which, is that the entirety 36 00:04:03,960 --> 00:04:08,660 of what LayerTwo Labs is up to, is getting Drivechains implemented? 37 00:04:08,660 --> 00:04:14,620 I would say mostly it is about building the L2s, VIPS 300 and 301 are on the L1, so they 38 00:04:14,620 --> 00:04:23,140 would be on Litecoin, Bitcoin Core, or Litecoin Core, or whatever, but that's only a tiny 39 00:04:23,140 --> 00:04:32,820 percent of the actual total process, most of, 99% of the actual software, like, calculations 40 00:04:32,820 --> 00:04:38,180 is on the L2, so we build some L2s that we think are good, so if we cloned Ethereum, 41 00:04:38,180 --> 00:04:46,460 we cloned Zcash, we have a large block sidechain that is high performance and high throughput, 42 00:04:46,460 --> 00:04:54,580 so we want to make these L2s, I do some other things with LayerTwo Labs, but that's the main, 43 00:04:54,580 --> 00:05:02,380 the main idea is to try to make Bitcoin a success and get it used by 8 billion people, 44 00:05:02,940 --> 00:05:08,780 but if Bitcoin is not going to do that, then anyone can just take the L2s and do that instead, 45 00:05:08,780 --> 00:05:11,820 because it's all open source software. 46 00:05:11,820 --> 00:05:18,780 So you're planning on the future where this is somewhere, whether it's Bitcoin or Litecoin? 47 00:05:18,780 --> 00:05:24,660 I do think it's inevitable, I think it actually will be more like BIP39, like the 12 words, 48 00:05:24,660 --> 00:05:29,780 where every chain, there will be a phase where every single chain has these Drivechains, 49 00:05:29,780 --> 00:05:36,580 because they give you immediate global planetary scale, and they give you immediate Zcash level privacy, 50 00:05:36,580 --> 00:05:42,420 so that's just reason enough, and then on top of that they give you everything else 51 00:05:42,420 --> 00:05:48,380 that you might want, including the ability to flee the current dev team to a different 52 00:05:48,380 --> 00:05:54,860 dev team without needing to fork the project, which is what killed many other things, 53 00:05:54,860 --> 00:06:01,300 did it by the fork, died by the fork, so even Litecoin, when Litecoin first came out, 54 00:06:01,300 --> 00:06:05,620 it then splintered into Feathercoin and Dustcoin and stuff like that, you saw funny things 55 00:06:05,620 --> 00:06:12,580 like that, and Bitcoin Cash, of course, was immediately split by Bitcoin SV, and even 56 00:06:12,580 --> 00:06:18,860 Amrisa Sheh wanted, then it was split again, because Amrisa Sheh, lead BCH developer, he 57 00:06:18,860 --> 00:06:26,140 wanted dev techs for himself, or he wanted some kind of support, so then it split again, 58 00:06:26,140 --> 00:06:33,340 which is Bitcoin ABC, I think, although, yeah, there's like Zcash now, right, remember there's 59 00:06:33,340 --> 00:06:39,740 Bitcoin Diamond and Bitcoin Gold, of course, yeah, Unlimited, there's like a POS one, I 60 00:06:39,740 --> 00:06:46,620 think, there's been all sorts of them, but yeah, okay, well, so actually one of the things 61 00:06:46,620 --> 00:06:50,300 we wanted to do right at the beginning, and this might even be like we're going to use 62 00:06:50,300 --> 00:06:55,180 you as a glossary a little bit, is getting some clear definitions, because that was one 63 00:06:55,180 --> 00:06:58,780 thing I noticed listening to your other interview, is that you've always wanted to call them 64 00:06:58,780 --> 00:07:07,740 sidechains, but you feel like Liquid has called themselves a sidechain, that kind of muddies 65 00:07:07,740 --> 00:07:13,540 the water a little bit, and so, I guess, sidechain can just mean anything, it can just mean multi-sig 66 00:07:13,540 --> 00:07:18,660 address with you and your friends, which is exactly what like Mt. Gox was, and that's 67 00:07:18,660 --> 00:07:23,620 exactly what like all these Ethereum L2s that everyone says are fake, this is the stuff 68 00:07:23,620 --> 00:07:28,580 that we would make fun of if we were Bitcoiners critiquing an altcoin, but now, like, that's 69 00:07:28,580 --> 00:07:34,020 what Liquid is. Luckily, people finally come around, and they're finally making fun of 70 00:07:34,020 --> 00:07:38,980 Liquid, and I think, I don't know, well, I'll let you ask the questions. 71 00:07:39,300 --> 00:07:45,700 Yeah, that's okay. So, is it fair to say that a Drivechain is a type of sidechain that 72 00:07:46,340 --> 00:07:51,380 has a different security, like, it's different to a peg, different bridge, or whatever, 73 00:07:51,380 --> 00:07:56,740 yeah, I would say, yeah. So, the permissions are like, the administrators of them are 74 00:07:56,740 --> 00:08:00,740 different, where sidechain today really could mean anything, it could mean. 75 00:08:00,740 --> 00:08:05,060 Yeah, but the Drivechain is administrated by the mining process. 76 00:08:06,020 --> 00:08:06,260 Okay. 77 00:08:06,260 --> 00:08:09,780 So, that's a pretty big difference, because that's a big, that's the same as the difference 78 00:08:09,780 --> 00:08:15,300 between eGold and Liberty Reserve, which failed completely, and Bitcoin, which was a huge 79 00:08:15,300 --> 00:08:18,340 success. So, it's a pretty big difference, I think. 80 00:08:18,340 --> 00:08:23,060 In my mind, like, a Drivechain is what, like, when I finally understood what you were trying 81 00:08:23,060 --> 00:08:29,060 to accomplish, it is what I had envisioned sidechains to be like, right, miner controlled, 82 00:08:29,060 --> 00:08:29,780 miner run. 83 00:08:30,660 --> 00:08:34,500 Miners get the money, it's kind of, like, automatic, as long as they just do nothing, 84 00:08:34,500 --> 00:08:41,540 it just works, and there's no, like, there's no person who can just take all the coins, 85 00:08:41,540 --> 00:08:47,380 and unilaterally, you have to, like, you have to just either kill the whole idea for everyone 86 00:08:47,380 --> 00:08:54,500 permanently, in which case you lose all the fees, and you lose all the any value add to 87 00:08:55,460 --> 00:09:00,580 the exchange rate, or you just do nothing, and it all continues to work, and now everyone 88 00:09:00,580 --> 00:09:06,980 can just send, they can just turn their Bitcoin, you know, move it from any piece of software 89 00:09:06,980 --> 00:09:08,260 to any other piece of software. 90 00:09:08,260 --> 00:09:15,220 So, that's, I think, a pretty big deal, because it restores competition to the software world. 91 00:09:15,220 --> 00:09:21,780 Right now, if you want to use BTC, the coin, you have to run a Bitcoin core node, 92 00:09:22,020 --> 00:09:27,140 and then, you know, you can then escape to any number of different Lightning L2s, 93 00:09:27,780 --> 00:09:32,660 but Lightning doesn't work, so Lightning is a failed project, so that doesn't really help. 94 00:09:34,740 --> 00:09:37,860 We need, the other thing is, Lightning is too cozy with L1. 95 00:09:37,860 --> 00:09:43,220 We need, my vision is more of different developer groups that all hate each other 96 00:09:44,180 --> 00:09:49,060 advancing their own vision, so, like, in my vision, we'd have, like, the 97 00:09:49,540 --> 00:09:51,460 large blockers and the small blockers. 98 00:09:51,460 --> 00:09:53,380 The fact that they hate each other is a good thing. 99 00:09:53,380 --> 00:09:58,740 That will motivate them to work hard every day to get users, so the large block people 100 00:09:58,740 --> 00:10:03,060 will launch their large block sidechain, and then from, they know exactly what their plan 101 00:10:03,060 --> 00:10:06,340 is, you know, in my fictional world, that didn't exist. 102 00:10:06,340 --> 00:10:10,740 Instead, they did their own thing, and I think they screwed up completely, and, you know, 103 00:10:10,740 --> 00:10:12,340 I think we can go into that, if you want. 104 00:10:12,340 --> 00:10:16,820 No, that's become a big part of, yeah, that would work. 105 00:10:17,220 --> 00:10:21,060 But we want, they launched their L2 version. 106 00:10:21,060 --> 00:10:23,620 They say, you know what, we have a different vision than Bitcoin Core. 107 00:10:23,620 --> 00:10:24,660 We hate Bitcoin Core. 108 00:10:24,660 --> 00:10:28,580 We want, we just, if we would like them to all get on a bus and drive it off a cliff, 109 00:10:28,580 --> 00:10:36,260 but we can't accomplish that, so we make our own L2, and then here's, and we present it 110 00:10:36,260 --> 00:10:41,700 to the world, and then we say, here's why you should send your coins from L1 to this 111 00:10:41,700 --> 00:10:44,180 L2, and here's why you should only transact. 112 00:10:44,180 --> 00:10:46,820 You should only really accept coins on the L2. 113 00:10:46,820 --> 00:10:48,180 Here's our L2 wallet. 114 00:10:48,180 --> 00:10:49,540 You should be a user of L2. 115 00:10:50,340 --> 00:10:55,060 Don't use the L1, and that's kind of like my vision. 116 00:10:56,340 --> 00:11:01,220 Unfortunately, coins have to go, L2 starts with zero coins, but someone, a rich person 117 00:11:01,220 --> 00:11:06,340 like Roger Ver with a single transaction, they might, they could send like 100,000 in 118 00:11:06,340 --> 00:11:12,500 theory, 100,000 BTC from L1 to L2, and then over there, they could start onboarding people, 119 00:11:12,500 --> 00:11:14,100 and those people would never see L1. 120 00:11:15,620 --> 00:11:19,860 Yeah, so you could even, you can spin up wallets, because it's a totally, this is 121 00:11:19,860 --> 00:11:21,620 something I was trying to grasp last night. 122 00:11:21,620 --> 00:11:27,140 Every single sidechain, or Drivechain, sorry, is going to have its own note, its own like 123 00:11:27,140 --> 00:11:28,260 core software. 124 00:11:28,260 --> 00:11:31,060 The sidechains are very similar to altcoins, really. 125 00:11:31,620 --> 00:11:33,940 Other than that, they have the same underlying coin. 126 00:11:33,940 --> 00:11:37,860 That's like really the only thread that connects, and the merge mining piece. 127 00:11:38,420 --> 00:11:40,420 So block times can be different. 128 00:11:40,420 --> 00:11:41,220 Yes. 129 00:11:41,220 --> 00:11:42,100 Signet, or like. 130 00:11:42,740 --> 00:11:44,180 Yeah, it could be written in a different program. 131 00:11:44,180 --> 00:11:46,260 Your address formats will be wildly different. 132 00:11:46,260 --> 00:11:49,380 Address format could be anything, or they could be the same, but that would actually 133 00:11:49,380 --> 00:11:50,020 be misleading. 134 00:11:50,020 --> 00:11:56,020 So we've actually changed it slightly so that, in our software, we have sometimes, 135 00:11:56,020 --> 00:12:00,660 because we don't want people getting confused, we put like a little prefix in front of like 136 00:12:00,660 --> 00:12:04,820 which chain you're on, and we even relabeled them, you know, instead of calling them all 137 00:12:04,820 --> 00:12:12,340 BTC, I did call them BTC, and then SC0, SC1, SC2, SC3. 138 00:12:12,340 --> 00:12:17,380 I call them different coins, even though they are all the same coin, because you just want, 139 00:12:17,380 --> 00:12:22,340 it's just kind of confusing in the user interface to say, oh, give me five coins on sidechain 140 00:12:22,340 --> 00:12:26,260 five in return for 4.9 coins on sidechain one. 141 00:12:26,260 --> 00:12:31,140 It's like you just have to say, okay, I'll give you 4.9 BTC if you give me whatever, 142 00:12:31,140 --> 00:12:32,180 SC3. 143 00:12:32,900 --> 00:12:34,260 But they are the same thing. 144 00:12:36,260 --> 00:12:38,100 They're one-to-one exchangeable. 145 00:12:38,100 --> 00:12:39,620 So no matter what happens. 146 00:12:41,140 --> 00:12:45,300 Before we get into this too much, I just want to go through, what are the differences? 147 00:12:45,300 --> 00:12:47,060 What does BIP300 enable? 148 00:12:47,060 --> 00:12:48,260 What is BIP301? 149 00:12:48,820 --> 00:12:51,140 BIP301 is just a different type of merged mining. 150 00:12:51,140 --> 00:12:53,220 Merged mining was invented by Satoshi. 151 00:12:53,220 --> 00:12:55,940 I think the fact that it's possible at all is kind of amazing. 152 00:12:56,580 --> 00:12:59,140 Bitcoin is really several different inventions rolled into one. 153 00:12:59,620 --> 00:13:02,900 But some of them you can extend slightly. 154 00:13:02,900 --> 00:13:06,500 So like the blockchain comes with it. 155 00:13:07,140 --> 00:13:13,220 If you add these things, the anyone could spend outputs, you get the soft fork, which 156 00:13:13,220 --> 00:13:15,620 is its own unbelievable invention. 157 00:13:15,620 --> 00:13:25,300 And then similarly, if you take Satoshi's blockchain and then you add, you create a 158 00:13:25,620 --> 00:13:33,780 new blockchain such that every chain of that second thing contains within it a valid L1 159 00:13:34,580 --> 00:13:35,220 chain. 160 00:13:35,220 --> 00:13:36,660 This is maybe confusing. 161 00:13:36,660 --> 00:13:37,140 Yeah, sorry. 162 00:13:38,420 --> 00:13:41,780 All I'm saying is that merged mining is like you mine two blockchains at once. 163 00:13:43,460 --> 00:13:51,300 What I want to stress is that BIP301 is not that interesting because all it does is a 164 00:13:51,300 --> 00:13:52,660 different type of merged mining. 165 00:13:52,660 --> 00:13:54,020 Merged mining is already possible. 166 00:13:54,020 --> 00:13:55,460 And in fact, it's unpreventable. 167 00:13:55,460 --> 00:13:57,060 So there's no way of preventing. 168 00:13:57,620 --> 00:13:57,860 Okay. 169 00:13:58,900 --> 00:13:59,780 What's different about it? 170 00:13:59,780 --> 00:14:01,460 Is it the blind merged mining? 171 00:14:01,460 --> 00:14:02,180 Yes. 172 00:14:02,180 --> 00:14:02,900 So what does that mean? 173 00:14:02,900 --> 00:14:03,460 What is that? 174 00:14:03,460 --> 00:14:06,260 Because right today, obviously, we were just talking about before you came on. 175 00:14:08,260 --> 00:14:08,580 Well, hang on. 176 00:14:08,580 --> 00:14:11,620 Dogecoin merge mines with Litecoin today. 177 00:14:11,620 --> 00:14:12,820 Again, it's unpreventable. 178 00:14:12,820 --> 00:14:14,580 I think we've talked about this in our spaces a lot. 179 00:14:14,580 --> 00:14:16,580 Like 100 chains can choose to do it. 180 00:14:16,580 --> 00:14:20,740 It's more about market demand that's going to dictate are those even worthwhile. 181 00:14:20,820 --> 00:14:22,740 And Bell's coin is... 182 00:14:22,740 --> 00:14:24,980 I don't know if you know about Bell's chain or Bell's coin. 183 00:14:24,980 --> 00:14:28,980 If you've heard a lot about it, it's this other proof of work chain that 184 00:14:28,980 --> 00:14:33,300 Billy Marcus from Dogecoin created before he created Dogecoin. 185 00:14:34,020 --> 00:14:38,580 And so obviously, some Dogecoiners have latched onto this and they've started mining it again. 186 00:14:39,220 --> 00:14:42,660 And they're going to change their code to merge mine with Litecoin 187 00:14:42,660 --> 00:14:45,700 in the next, I think, like in the next month or so. 188 00:14:45,700 --> 00:14:46,260 It's happening. 189 00:14:46,900 --> 00:14:48,340 It may have already happened, honestly. 190 00:14:48,340 --> 00:14:51,540 Block height, 144,000. 191 00:14:51,540 --> 00:14:55,060 And so that's meant to happen by the end of the month, by the end of August. 192 00:14:55,060 --> 00:14:59,620 So today, obviously, I guess I'm assuming today is not blind, 193 00:14:59,620 --> 00:15:01,460 meaning these miners know what they're doing. 194 00:15:02,020 --> 00:15:04,500 What is it about Blind Merged Mining? 195 00:15:04,500 --> 00:15:09,380 How is that different than what we know of today in Litecoin and Dogecoin? 196 00:15:09,380 --> 00:15:11,140 Well, there are two tiny improvements. 197 00:15:11,140 --> 00:15:16,020 But in the grand scheme of things, it's really not that big of a deal. 198 00:15:16,020 --> 00:15:22,580 But basically, traditional merge mining, the miners must run the second node. 199 00:15:22,580 --> 00:15:26,820 So they must run the node of Dogecoin. 200 00:15:26,820 --> 00:15:27,620 Right, exactly. 201 00:15:27,620 --> 00:15:30,980 And then when they mine, they mine both blocks at once. 202 00:15:30,980 --> 00:15:34,980 No additional hashing is required, but they run the two nodes. 203 00:15:34,980 --> 00:15:36,660 They mine both blocks. 204 00:15:36,660 --> 00:15:42,980 They get a Litecoin block full of Litecoin and they get the Doge block full of Dogecoin. 205 00:15:46,100 --> 00:15:48,100 And so they get paid in Dogecoin. 206 00:15:48,100 --> 00:15:54,580 But in Blind Merged Mining, it's simplified slightly so that what happens instead is 207 00:15:55,860 --> 00:16:02,820 the miners do not need to run a node of Litecoin, excuse me, of Dogecoin. 208 00:16:02,820 --> 00:16:04,020 No, I said the wrong thing there. 209 00:16:04,020 --> 00:16:04,580 I don't know. 210 00:16:04,580 --> 00:16:09,940 Whatever this Drivechain is in this world, they don't have to run that software. 211 00:16:09,940 --> 00:16:10,180 Okay. 212 00:16:10,980 --> 00:16:11,860 They don't run that. 213 00:16:11,860 --> 00:16:14,660 And then they would get paid in Litecoin LTC. 214 00:16:15,620 --> 00:16:15,860 Okay. 215 00:16:16,740 --> 00:16:18,740 This is when kickouts happen, right? 216 00:16:18,740 --> 00:16:21,620 No, this is unfortunately pretty confusing for people. 217 00:16:21,620 --> 00:16:25,300 I would say if I could do it all over, I would never invent Blind Merged Mining. 218 00:16:25,300 --> 00:16:32,020 Or I would invent it and publish it to the world after BIP300 was accepted by people. 219 00:16:32,020 --> 00:16:37,300 Or I would have kept it as a theoretical thing because the two are completely interchangeable. 220 00:16:37,860 --> 00:16:40,980 You can have BIP300 without 301 and vice versa. 221 00:16:40,980 --> 00:16:43,060 And they are independent. 222 00:16:43,060 --> 00:16:48,420 And merge mining, you cannot force people to merge mine a certain way or prevent people 223 00:16:48,420 --> 00:16:49,940 from merge mining a certain way. 224 00:16:49,940 --> 00:16:50,980 So they're completely different. 225 00:16:50,980 --> 00:16:52,500 And I do think it has confused people. 226 00:16:52,500 --> 00:16:57,060 But 300 is the deposits and withdrawals, the peg in, the peg out. 227 00:16:57,060 --> 00:17:00,180 301 is every 10 minutes, the merge mining. 228 00:17:01,460 --> 00:17:05,700 But there is a sense in which there is an automatic withdrawal, but it's indirect. 229 00:17:05,700 --> 00:17:10,020 So what basically happens in 301 is someone who's on the L2, 230 00:17:10,900 --> 00:17:12,660 but who has L1 coins. 231 00:17:13,540 --> 00:17:15,780 Because everyone who's on the L2 also has L1 coins. 232 00:17:15,780 --> 00:17:17,700 It's all the coins started on L1. 233 00:17:17,700 --> 00:17:18,260 So I don't know. 234 00:17:18,260 --> 00:17:19,700 Stop me if it's too confusing. 235 00:17:19,700 --> 00:17:21,700 But basically, you have- 236 00:17:21,700 --> 00:17:26,340 They're on the L2, but there is an L1 coin. 237 00:17:26,340 --> 00:17:27,460 Wallet that they have. 238 00:17:27,460 --> 00:17:28,260 It's the same. 239 00:17:28,260 --> 00:17:32,180 See, what I'm saying is this is possible because it's the same person. 240 00:17:33,060 --> 00:17:36,740 So there's a person on L1 and L2 who acts as a kind of bridge, a conduit. 241 00:17:37,620 --> 00:17:42,500 And what they do is their software, their node software, which is not mining. 242 00:17:42,500 --> 00:17:43,780 They are not doing any hashing. 243 00:17:43,780 --> 00:17:45,380 They don't care about proof of work. 244 00:17:45,380 --> 00:17:47,540 They don't care about electricity costs. 245 00:17:47,540 --> 00:17:49,060 They build the L2- 246 00:17:49,060 --> 00:17:51,700 For simplicity's sake, for simplicity's sake, let's call- 247 00:17:53,620 --> 00:17:54,580 It's really not that important. 248 00:17:55,540 --> 00:17:56,820 Let's call the Drivechain just... 249 00:17:59,380 --> 00:18:01,460 Yeah, I guess we'll just call it like DC1, right? 250 00:18:01,460 --> 00:18:03,700 So DC1 coin. 251 00:18:03,700 --> 00:18:06,180 Yeah, LTC and then DC1. 252 00:18:06,180 --> 00:18:10,900 Yeah, so DC1 only got there because I pegged into a- 253 00:18:14,020 --> 00:18:15,380 Yeah, you have like a thousand- 254 00:18:17,140 --> 00:18:20,020 You have a thousand Litecoin and you click in the software. 255 00:18:20,020 --> 00:18:22,980 You say, I move seven Litecoin over to DC1. 256 00:18:23,540 --> 00:18:26,020 And now I have DC1, the coin, seven of those. 257 00:18:26,020 --> 00:18:28,500 Or 6.999 or what have you. 258 00:18:28,500 --> 00:18:31,620 On the main chain, are those represented in a- 259 00:18:32,500 --> 00:18:34,260 Those are locked in this BIP300. 260 00:18:34,260 --> 00:18:35,780 This is a BIP300 script part. 261 00:18:36,340 --> 00:18:36,820 Okay. 262 00:18:36,820 --> 00:18:37,860 It's got its own address. 263 00:18:38,820 --> 00:18:39,860 Yeah, basically. 264 00:18:42,420 --> 00:18:44,020 It basically has its own address. 265 00:18:44,020 --> 00:18:46,180 Although the addresses are not- 266 00:18:46,180 --> 00:18:48,020 This is like a silly- 267 00:18:52,020 --> 00:18:54,900 The biggest difference I see from an economic standpoint 268 00:18:54,900 --> 00:18:57,620 is that a merged mine coin like Dogecoin or Bells 269 00:18:57,620 --> 00:19:00,100 kind of are inflationary to Litecoin. 270 00:19:00,740 --> 00:19:05,140 And the miners, they'll remove some tangible value 271 00:19:05,140 --> 00:19:10,740 from Litecoin and Dogecoin if we say we're to add Bells. 272 00:19:10,740 --> 00:19:15,380 Whereas if you add a sidechain, a Drivechain to Litecoin, 273 00:19:16,020 --> 00:19:17,700 it's a deflationary type of- 274 00:19:17,700 --> 00:19:18,900 Yeah, it's exactly the opposite. 275 00:19:18,900 --> 00:19:23,380 It's this new feature, but it's the same 84 million LTC. 276 00:19:24,900 --> 00:19:27,060 So you're increasing the value of the Litecoin, 277 00:19:27,060 --> 00:19:30,980 of each Litecoin by sanctioning it to a certain Drivechain. 278 00:19:31,700 --> 00:19:35,300 Which is appealing because at some point, 279 00:19:35,300 --> 00:19:37,220 you can keep merge mining as many coins as you want. 280 00:19:37,220 --> 00:19:40,340 And it kind of begs the question, 281 00:19:40,340 --> 00:19:42,660 like, where does the value actually lie? 282 00:19:43,300 --> 00:19:45,140 If you can just spin up another blockchain. 283 00:19:45,940 --> 00:19:50,100 Yeah, I always thought altcoins would all go to zero. 284 00:19:50,100 --> 00:19:51,540 I was definitely wrong about that. 285 00:19:51,540 --> 00:19:55,380 And I thought, like, because I thought it's all open source. 286 00:19:55,380 --> 00:19:57,220 So eventually everyone will just do everything 287 00:19:57,220 --> 00:19:58,980 with this type of thing. 288 00:19:59,060 --> 00:20:04,740 The big opportunity for Litecoin is that many other coins 289 00:20:04,740 --> 00:20:08,260 instead of BTC have accumulated like this cultural damage. 290 00:20:08,260 --> 00:20:12,020 Although I think just based on what I've observed 291 00:20:12,020 --> 00:20:16,500 in my like being 24 seven in this industry 292 00:20:16,500 --> 00:20:19,540 for like more than 10 years, I think it must, 293 00:20:19,540 --> 00:20:21,540 I'm not very familiar with the Litecoin community, 294 00:20:21,540 --> 00:20:23,780 but there must also be people in the Litecoin community 295 00:20:23,780 --> 00:20:25,860 who have, because it seems universal 296 00:20:26,100 --> 00:20:28,740 that people accumulate. 297 00:20:29,460 --> 00:20:30,660 And there's even books about this 298 00:20:30,660 --> 00:20:32,420 called like the innovators dilemma and stuff 299 00:20:32,420 --> 00:20:35,700 about how there's a certain way of doing things 300 00:20:35,700 --> 00:20:40,420 that just accumulates a kind of inertia, 301 00:20:40,420 --> 00:20:41,460 like a status quo. 302 00:20:41,460 --> 00:20:45,380 And there's high status people who are difficult to dislodge. 303 00:20:45,380 --> 00:20:49,220 And so everyone has, no one has made this jump 304 00:20:49,220 --> 00:20:51,540 to the sidechain universality. 305 00:20:51,540 --> 00:20:55,060 So I think if like Litecoin were to do it, 306 00:20:55,060 --> 00:20:56,500 Bitcoin would still just be like, 307 00:20:56,500 --> 00:20:58,580 okay, maybe we'll keep thinking about it 308 00:20:58,580 --> 00:20:59,700 for like months, so. 309 00:20:59,700 --> 00:21:02,660 I was telling Grant yesterday about this, 310 00:21:02,660 --> 00:21:04,900 but like, so I work in IT, right? 311 00:21:04,900 --> 00:21:06,980 And we have a couple of rules, 312 00:21:06,980 --> 00:21:08,580 you never deploy on Friday. 313 00:21:08,580 --> 00:21:10,820 Fridays are like documentation days type of thing. 314 00:21:11,780 --> 00:21:15,060 People are very hesitant to test in prod, right? 315 00:21:15,060 --> 00:21:16,660 There's no testing in prod, it's a joke. 316 00:21:16,660 --> 00:21:18,020 Sometimes there's some teams that do it, 317 00:21:18,020 --> 00:21:20,100 but it's kind of like these guys are cowboys, right? 318 00:21:21,460 --> 00:21:24,100 Or the product isn't that critical to the company. 319 00:21:24,100 --> 00:21:26,980 But so with Bitcoin, let's say that's prod, okay? 320 00:21:28,020 --> 00:21:29,620 And now you have Litecoin, 321 00:21:29,620 --> 00:21:32,900 which still has a market cap of like 5 billion or something. 322 00:21:34,660 --> 00:21:37,300 It used to be a test, like the test environment, 323 00:21:37,300 --> 00:21:40,420 but now it's seen more as its own prod environment. 324 00:21:42,420 --> 00:21:45,060 And so people are like hesitant to even like, 325 00:21:45,060 --> 00:21:47,460 I wouldn't be surprised, David Burkett, Charlie Lee, 326 00:21:47,460 --> 00:21:49,300 like I don't think they're super keen 327 00:21:49,300 --> 00:21:51,700 on adding new features to something 328 00:21:52,020 --> 00:21:53,220 that's worth $5 billion. 329 00:21:53,220 --> 00:21:56,260 They would not want to put that market cap at risk, right? 330 00:21:57,300 --> 00:22:01,220 I agree with this, but I do think that this is, 331 00:22:01,220 --> 00:22:03,460 I think this is a little bit misconceived 332 00:22:03,460 --> 00:22:06,420 because when people say the 5 billion is at risk, 333 00:22:06,420 --> 00:22:11,620 I mean, it's like that meme with Feodin and Aragorn, right? 334 00:22:11,620 --> 00:22:15,540 Where Feodin's like, I will not risk a war or whatever. 335 00:22:15,540 --> 00:22:17,700 And Aragorn's like, well, war is upon you, 336 00:22:17,700 --> 00:22:18,980 whether you would risk it or not. 337 00:22:19,220 --> 00:22:23,540 And then you just delete war and you put like the other text. 338 00:22:23,540 --> 00:22:26,020 So it's kind of like the 5 billion is at risk 339 00:22:26,020 --> 00:22:32,820 of any day new coins could appear and take market share. 340 00:22:33,700 --> 00:22:36,420 Not doing anything is I think a pretty big risk 341 00:22:36,420 --> 00:22:38,100 because it's a market effect, 342 00:22:38,100 --> 00:22:40,820 you know, it's a network effect market. 343 00:22:41,860 --> 00:22:43,860 So, but there's another thing, 344 00:22:43,860 --> 00:22:45,140 there's another piece of this puzzle, 345 00:22:45,140 --> 00:22:47,380 which is I've invented this other thing 346 00:22:47,540 --> 00:22:51,780 that I called CUSF, C-U-S-F, the Core Untouched Soft Fork, 347 00:22:51,780 --> 00:22:53,860 which is kind of like a way of doing the soft fork 348 00:22:53,860 --> 00:22:59,140 that is very, very easy to just reverse and abandon by, 349 00:22:59,140 --> 00:23:02,900 so there's no change to the software, 350 00:23:02,900 --> 00:23:05,700 the, you know, like the Litecoin core software. 351 00:23:05,700 --> 00:23:09,940 Instead, you run a second little software demon 352 00:23:09,940 --> 00:23:12,100 that activates the soft fork. 353 00:23:12,100 --> 00:23:14,260 And if you just stop running that, then it deactivates. 354 00:23:14,420 --> 00:23:18,340 So that was in part also because Bitcoin has the same problem 355 00:23:18,340 --> 00:23:21,940 where in order to do a pull request to the Bitcoin core, 356 00:23:22,500 --> 00:23:25,860 you have a whole slew of irrationalities 357 00:23:25,860 --> 00:23:27,780 that you have to defeat. 358 00:23:27,780 --> 00:23:31,220 And even they have like bizarre stuff like style guides 359 00:23:31,220 --> 00:23:33,300 and things that they are inconsistently enforced. 360 00:23:33,300 --> 00:23:37,300 And you never know if this is just like all big hazing ritual 361 00:23:37,300 --> 00:23:38,500 or the whole thing is fake. 362 00:23:39,060 --> 00:23:45,060 So this, I also have like a way of doing BIP300 363 00:23:45,060 --> 00:23:48,820 that is much easier to, you know, it's a sort of lower risk, 364 00:23:48,820 --> 00:23:52,260 I think, because it's pretty low risk 365 00:23:52,260 --> 00:23:56,580 because people who aren't, who haven't run the activator, 366 00:23:56,580 --> 00:23:58,580 they don't even realize that anything has happened. 367 00:23:58,580 --> 00:24:00,660 So the risk has got to be pretty low 368 00:24:00,660 --> 00:24:03,460 and there's no perceptible. 369 00:24:03,780 --> 00:24:06,660 The risk part of it, like on a technical level, 370 00:24:06,660 --> 00:24:12,020 I think is what, it doesn't seem that there's a lot of pushback 371 00:24:12,980 --> 00:24:14,740 from the detractors you've had of like 372 00:24:14,740 --> 00:24:16,660 that there's something functionally wrong with it 373 00:24:16,660 --> 00:24:18,820 or that'll do anything to impact the L1. 374 00:24:18,820 --> 00:24:21,300 And so could you just have it there? 375 00:24:21,300 --> 00:24:23,140 And then eventually people just abandon it 376 00:24:23,140 --> 00:24:24,180 and nobody cares about it. 377 00:24:24,180 --> 00:24:28,100 And right, like no harm, no foul kind of thing. 378 00:24:28,100 --> 00:24:29,780 Or maybe a couple of wallets get locked up, 379 00:24:29,780 --> 00:24:33,700 someone created a sidechain and it didn't work as intended. 380 00:24:34,340 --> 00:24:35,860 It feels like for the most part, 381 00:24:35,860 --> 00:24:39,940 the criticism comes down to what is this game theory thing, 382 00:24:39,940 --> 00:24:41,380 right, the incentive structure. 383 00:24:42,340 --> 00:24:47,140 And do the miners, in my mind, 384 00:24:47,140 --> 00:24:48,820 the miners have a vested interest 385 00:24:48,820 --> 00:24:51,700 in mining chains that are popular, right? 386 00:24:51,700 --> 00:24:55,140 They want, if I've deployed all this capital, 387 00:24:55,140 --> 00:24:57,700 if I've deployed all this capital. 388 00:24:57,901 --> 00:25:02,341 If I've deployed all this capital, I'm investing not only my time, I'm buying a lot of times land 389 00:25:02,341 --> 00:25:09,861 and buildings and all this. And for me to have an asset that isn't keeping up with the times is 390 00:25:10,821 --> 00:25:16,901 a scary thing. I mean, we know how quickly things change. And so the idea that like, 391 00:25:16,901 --> 00:25:22,421 take the whole NFT craze, you know, most part Bitcoin and Litecoin missed out on that 392 00:25:22,421 --> 00:25:29,541 because these weren't capable at the time back in 2021. So the idea that someone could just create 393 00:25:31,141 --> 00:25:37,141 Polygon or whatever, or Aave as a sidechain, and there's no, you know, there's no commitment to an 394 00:25:37,141 --> 00:25:42,661 average Litecoin or even get involved with it at all. It just feels like that makes a lot of 395 00:25:42,661 --> 00:25:50,021 sense because you've got an asset that's already available everywhere and no one has to go find it. 396 00:25:50,021 --> 00:25:53,141 You know, we were just talking about Bell's coin. I'm like, where do you buy Bell's coin? 397 00:25:53,141 --> 00:25:58,261 Like it's just not even available, right? There's just no exchanges with it. It's unproven as far 398 00:25:58,261 --> 00:26:03,941 as software. And, you know, so I feel like that end of things makes a ton of sense, 399 00:26:03,941 --> 00:26:11,701 giving it these capabilities. And so the question is, what's the potential scary part of it? 400 00:26:12,581 --> 00:26:16,181 Because I do feel like if this thing were implemented, it's not like it's not going to be 401 00:26:16,181 --> 00:26:21,941 put through its paces. You know, obviously you're going to need people to give the green light in 402 00:26:21,941 --> 00:26:26,421 the Litecoin community, which is, I think it's a positive and a negative that we have. 403 00:26:27,061 --> 00:26:32,981 You know, Charlie is kind of this green, he's got to give the green light for the most part 404 00:26:34,101 --> 00:26:37,701 for something to happen. I don't think it's a definite, but I think it helps a lot. Right. 405 00:26:37,701 --> 00:26:42,821 So if the community is like, hey, this is cool. We like it. And there's no red flags technically. 406 00:26:43,541 --> 00:26:47,301 And he doesn't say, well, hey, I think this is a horrible idea. It's going to ruin minor 407 00:26:47,301 --> 00:26:51,301 incentives or something. And I think he's trying to stay out of things as much as possible. 408 00:26:51,861 --> 00:26:58,101 Then I think you could get this going. But yeah, people just need to reach that comfort level 409 00:26:58,101 --> 00:27:05,381 because it's a fairly new idea to us, at least in Litecoin. And I know you're probably pretty 410 00:27:05,381 --> 00:27:10,901 exhausted trying to explain this to a bunch of different people. I've explained it many times. 411 00:27:10,981 --> 00:27:14,181 And I do think that... Are you getting frustrated with it? 412 00:27:14,181 --> 00:27:21,701 Well, there's two ways of looking at it. One way is maybe I'm like a complete crank and I'm totally 413 00:27:21,701 --> 00:27:25,221 wrong and I'm completely wasting my time here, which is, you know, that you could look at it 414 00:27:25,221 --> 00:27:33,861 that way. I feel like that a lot sometimes. Not about Paul. Not about Paul. The other way you 415 00:27:33,861 --> 00:27:40,021 could look at it is just like, for whatever reason, I have like the right weird combination 416 00:27:40,021 --> 00:27:46,261 of like background or good luck or something. And so I'm just like way early on this somehow. 417 00:27:46,981 --> 00:27:56,981 And so like, isn't that a blessing? The reason why I'm very, very, very confident that I'm on 418 00:27:56,981 --> 00:28:01,301 the right track here is just because I know so much about all the other stuff that people are 419 00:28:01,301 --> 00:28:07,141 working on in Bitcoin. I know so much about the Lightning Network. And just like, it's completely 420 00:28:07,141 --> 00:28:14,261 terrible and a hopeless idea. It's hopeless in a very different way. But like, 421 00:28:16,021 --> 00:28:21,781 I know a lot about many of the other altcoins that are in contention. And 422 00:28:22,821 --> 00:28:29,461 this is a real problem that people have where a regular person will show up and they'll say, 423 00:28:29,461 --> 00:28:33,621 how do I know which crypto to buy? You know what I mean? They'll say something like that. 424 00:28:33,621 --> 00:28:38,181 Oh, yeah. And so, but with the sidechains, you have an answer to ask, right? You have 425 00:28:38,901 --> 00:28:41,701 kind of an answer with the sidechain. You say, well, now it doesn't matter because 426 00:28:42,421 --> 00:28:48,901 they're all the same. If you buy Bitcoin, you can just transform it into BitTron or whatever, 427 00:28:48,901 --> 00:28:58,341 or BitMonero. Or if you buy Litecoin, you can transform it into Lite, LTC, Ethereum or something. 428 00:28:58,501 --> 00:29:03,941 So, yeah, I just think where who's got something as good as that is still in Bitcoin. There's no, 429 00:29:03,941 --> 00:29:09,301 there's now no plan to scale Bitcoin other than like extremely, I've seen this story many times 430 00:29:09,301 --> 00:29:16,421 where, you know, people are not ready, ready to live to give up on Litecoin. They're dragged, 431 00:29:16,421 --> 00:29:21,381 kicking and screaming, basically. But still, oh, my God, sorry. I knew I was going to do that. 432 00:29:21,381 --> 00:29:25,541 I told him before we started, I'm going to screw up Lite, Lightning and Litecoin, which is a shame 433 00:29:25,941 --> 00:29:37,381 because they're pretty different now. Lightning, people, it wasn't until the criticisms became 434 00:29:37,381 --> 00:29:43,701 so clear and so simple and just like ordinals where it disturbed the fee environment. This 435 00:29:43,701 --> 00:29:48,821 is just one, this Litecoin has like 10 things that will just kill it. But one is, oh, my God, 436 00:29:48,821 --> 00:29:54,021 damn it, I did it again. This is because my brain's trying to load the next, you know, 437 00:29:54,021 --> 00:30:04,981 the next sentences. Oh, my gosh. So when the fees, when, if you have a channel with someone 438 00:30:04,981 --> 00:30:09,301 and you just disagree on what the fee is, first of all, the fee can get too high and it's 439 00:30:09,301 --> 00:30:12,981 uncooperative close. But then if you just disagree on what the fee is, it's uncooperative close. 440 00:30:13,541 --> 00:30:18,581 And this has basically caused the Lightning channel to fail. One person gets their funds 441 00:30:18,581 --> 00:30:22,261 frozen for two weeks. The other person pays a huge fee, or maybe they both pay a huge fee, 442 00:30:22,261 --> 00:30:30,661 depending on how you've configured it. So when ordinals phenomenon caused some fee spikes, 443 00:30:31,221 --> 00:30:35,461 they just caused the Lightning network to just explode, which is already, this is, again, 444 00:30:35,461 --> 00:30:40,261 I'm just talking like this is one reason out of 10. The big reason for me that the Lightning 445 00:30:40,261 --> 00:30:47,221 network cannot work is that every single person who joins needs an L1. So it did not have that 446 00:30:47,221 --> 00:30:52,341 property I mentioned before, where Roger Ver can move a ton of coins over and then 447 00:30:52,341 --> 00:30:59,061 onboard people over there. Instead, everyone who joins the Lightning network, they must 448 00:30:59,061 --> 00:31:04,181 themselves purchase L1 coins and then open the channel on L1. So it means you can never onboard 449 00:31:04,181 --> 00:31:08,661 many people. The best you can do is help that everybody. Yeah. In a self-custodial manner. 450 00:31:08,661 --> 00:31:13,461 Yeah. The other problem with Lightning, this is an almost bigger problem with, with Lightning 451 00:31:13,461 --> 00:31:20,181 is that people have caused this dichotomy between custodial and non-custodial Lightning. 452 00:31:20,181 --> 00:31:25,541 The custodial Lightning is not, does not actually use the Lightning network. Every single paper, 453 00:31:26,661 --> 00:31:32,181 every single word in the Lightning network white paper is irrelevant to custodial Lightning. And 454 00:31:32,181 --> 00:31:38,821 in fact, there's no Bitcoin there either. It's just like an app with a number in it. And then 455 00:31:38,821 --> 00:31:44,101 maybe they'll give you your Bitcoin back in some other format. But so the fact that people are so 456 00:31:44,901 --> 00:31:49,941 committed to this lie, this, this phrase of custodial Lightning, which is like a fraudulent 457 00:31:49,941 --> 00:31:55,461 phrase that, that also shows you though, how bad it is, you know, when people start lying 458 00:31:55,461 --> 00:31:59,941 to themselves, you know, that the ship is going to go down. Yeah. So let me ask you something, 459 00:31:59,941 --> 00:32:05,221 Paul, maybe this is something that is that I talked to Grant about earlier and I heard 460 00:32:05,221 --> 00:32:12,181 rumors about it being discussed, but the potential of creating Lightning on MWeb, 461 00:32:12,181 --> 00:32:17,861 like on the Litecoin MWeb extension block. If I were you guys, I would avoid the Lightning 462 00:32:17,861 --> 00:32:24,661 network. I think it is actually not additive. It has many things in Bitcoin have been changed 463 00:32:24,661 --> 00:32:30,021 to help support Lightning. So this, we are talking about SegWit obviously, but also 464 00:32:30,981 --> 00:32:37,061 Taproot is partly about the cooperative close being slightly smaller. So there's this weird 465 00:32:37,061 --> 00:32:42,501 Taproot and other descriptor wallets. I think all this is actually, this is like, so you're, 466 00:32:44,421 --> 00:32:48,661 we were talking about IT before and like deploying to production and things like that. 467 00:32:48,661 --> 00:32:56,181 There's the, like the, the code rot or the software maintenance, or just the diffusion of focus 468 00:32:56,421 --> 00:33:02,421 because of Lightning, I think is now going to be the, is the number one, most likely way that 469 00:33:02,421 --> 00:33:07,861 Bitcoin will fail and be replaced by something else like, like Lightning, like fucking Litecoin. 470 00:33:07,861 --> 00:33:12,981 God damn it. Well, you know, it's funny, the interesting part, like you just mentioned is like, 471 00:33:12,981 --> 00:33:19,221 I think that there are developers, again, I'm not, I'm not a developer at all, but I have to imagine 472 00:33:19,861 --> 00:33:24,981 there's people that like you, at some point you go, this just doesn't work. Like how many times 473 00:33:24,981 --> 00:33:29,541 are we going to try this and fail and, and you're in this. The user experience is never going to be 474 00:33:29,541 --> 00:33:34,181 there. Yeah. It's like, you can't, you can't have transactions fail. Like if you imagine you use 475 00:33:34,181 --> 00:33:42,581 Visa and use, you know, MasterCard, but every one out of every hundred times you use MasterCard, 476 00:33:42,581 --> 00:33:47,541 it just doesn't, it just doesn't work. It like fails and it's awkward and it's, you know, 477 00:33:47,541 --> 00:33:53,221 it like fails and it's awkward and you have to, the, the waiter or waitress comes over and says, 478 00:33:54,021 --> 00:34:00,101 should we run it again? And then you say, yes, no one will be the 0%. The regular public will 479 00:34:00,101 --> 00:34:06,341 always use Visa in that case. The reliability has to be so high. The fees all have to be lower 480 00:34:06,341 --> 00:34:11,621 for the payment rail. It's just, it's completely, it's never going to happen. 481 00:34:11,621 --> 00:34:15,701 You know, rebalancing your Lightning channels, routing, all that stuff. It's, it's work and 482 00:34:15,701 --> 00:34:21,061 technical stuff. And you've got to, you've got to apply these, these rules, these constraints 483 00:34:21,061 --> 00:34:28,101 that your outbound peers or inbound peers impose on you. You know, it's to, to do it properly. 484 00:34:28,101 --> 00:34:32,661 I think you need something like 2 million Satoshis, right. To run a proper Lightning node. 485 00:34:34,821 --> 00:34:37,941 Plus someone working full time managing the thing, right. 486 00:34:37,941 --> 00:34:42,101 Yeah. The liquidity management is what would be one of the 10 reasons. I actually, I'm not pulling 487 00:34:42,101 --> 00:34:46,021 this 10 number out of nowhere. I did write a tweet at one point where I had listed a bunch. 488 00:34:46,021 --> 00:34:47,861 We're not here to kill it. We've already killed it. 489 00:34:49,141 --> 00:34:54,421 And I just think it's just, yeah, you have to be online to receive funds. You have to sign. So you 490 00:34:54,421 --> 00:34:59,061 need your private key. You have to sign in order to receive funds where, so I would just not, 491 00:34:59,061 --> 00:35:00,101 I wouldn't put Lightning on. 492 00:35:00,101 --> 00:35:02,341 Let's not get too caught up on Lightning. 493 00:35:04,741 --> 00:35:07,861 I do have a couple other questions because when we were going through definitions, 494 00:35:08,501 --> 00:35:13,141 so what's the difference between a Drivechain and like, we have extension blocks, 495 00:35:13,141 --> 00:35:17,141 Mimblewimble extension block on Litecoin. How are those similar? 496 00:35:17,141 --> 00:35:18,341 They're very similar. 497 00:35:18,341 --> 00:35:22,261 Well, how can Litecoiners take that and say, okay, I understand how MWeb works. 498 00:35:22,821 --> 00:35:26,261 Are they basically the same concept because you're just- 499 00:35:26,261 --> 00:35:30,261 They're very, very similar. The extension block was invented first by, I think, 500 00:35:31,221 --> 00:35:37,221 Lau or maybe Adam Back in December, 2014, as a possible resolution to the block size war. 501 00:35:39,221 --> 00:35:40,741 Adam Back said something like, 502 00:35:42,741 --> 00:35:47,141 well, we can have, if some people want eight megabytes, some people want one megabyte. 503 00:35:47,141 --> 00:35:50,741 This is how, what a genius Adam Back was before he let those other people 504 00:35:50,741 --> 00:35:55,141 at Blockstream corrupt his mind, unfortunately, is my interpretation of kind of what happened. 505 00:35:55,861 --> 00:36:02,661 He said, old users can just run the one megabyte software, new users can upgrade, 506 00:36:03,301 --> 00:36:09,861 and they'll have one megabyte L1 plus there'll be eight megabyte second block. 507 00:36:09,861 --> 00:36:13,381 And we'll just put the hash of that in the L1 block. 508 00:36:13,381 --> 00:36:18,501 And then as long as the miners do that, then you can always go one way. 509 00:36:18,501 --> 00:36:22,581 So you can move coins from L1 to L2, but you cannot move them back. 510 00:36:23,221 --> 00:36:26,661 But Adam Back was just kind of saying, this was just a mailing list idea. 511 00:36:26,661 --> 00:36:28,741 It wasn't like a giant paper or anything. 512 00:36:28,741 --> 00:36:34,741 He was just like, well, that would kind of solve the problem, right? 513 00:36:34,741 --> 00:36:37,941 Because then Roger Ver and the large blockers can just go over 514 00:36:40,261 --> 00:36:44,741 to this extension block, live over there. 515 00:36:44,741 --> 00:36:54,341 And then, so what Drivechain adds to that is you can go forwards and back, 516 00:36:54,341 --> 00:36:58,901 but when you go back, you go back in a way that has filtered out. 517 00:37:00,261 --> 00:37:02,261 Okay, let me try to explain this the right way. 518 00:37:02,261 --> 00:37:07,541 Because with Drivechain, the priority is ignoring what is going on in the block. 519 00:37:07,541 --> 00:37:08,661 So does that make any sense? 520 00:37:08,661 --> 00:37:13,621 The priority is we want, because we want to maximize people's freedom 521 00:37:13,621 --> 00:37:16,181 when they create these L2s. 522 00:37:16,181 --> 00:37:20,741 So we want to say anyone could create a new L2 blockchain whenever they want. 523 00:37:20,741 --> 00:37:22,261 We don't care. 524 00:37:22,261 --> 00:37:23,141 We're not going to look at it. 525 00:37:24,501 --> 00:37:29,301 So what Drivechain does is it says, instead of us being responsible 526 00:37:30,421 --> 00:37:32,741 for knowing what's happening in there, 527 00:37:32,741 --> 00:37:37,621 there's just this really slow three-month compression thing 528 00:37:37,621 --> 00:37:40,341 that just compresses all of the activity into this one hash. 529 00:37:41,061 --> 00:37:43,941 So I'm going to, I know that I'm not happy with how that sounded. 530 00:37:43,941 --> 00:37:45,061 So I'm going to try one more time. 531 00:37:47,061 --> 00:37:49,861 Everything related a little bit to MWeb, 532 00:37:49,861 --> 00:37:54,581 because from my understanding, again, I'm a noob on a lot of this stuff. 533 00:37:54,581 --> 00:37:56,581 But you know what David Burkett had said is there's, 534 00:37:57,381 --> 00:37:59,861 what you're trying to do when that block comes back in, 535 00:37:59,861 --> 00:38:02,421 because every two and a half minutes, there's a block that goes out. 536 00:38:02,421 --> 00:38:04,261 There's a peg out block and a peg in block. 537 00:38:04,981 --> 00:38:08,981 And that peg in block that comes back is just trying to summarize 538 00:38:08,981 --> 00:38:10,981 what happened in the last two and a half minutes 539 00:38:11,701 --> 00:38:16,101 and give a final state of the addresses that exist 540 00:38:17,861 --> 00:38:20,581 in MWeb or that are coming out. 541 00:38:20,581 --> 00:38:24,981 So it's just kind of to prove that what happened in MWeb actually happened 542 00:38:24,981 --> 00:38:27,941 and that these are the new balances that are accurate. 543 00:38:31,381 --> 00:38:32,501 Is that what you'd understand? 544 00:38:32,501 --> 00:38:32,981 You're muted. 545 00:38:32,981 --> 00:38:33,621 Yes. 546 00:38:34,741 --> 00:38:37,861 No, I thought you were going to say a little bit more after that. 547 00:38:37,941 --> 00:38:43,221 Well, the Drivechain, what you're trying to do is get that where, 548 00:38:43,221 --> 00:38:46,901 when that info comes back from the Drivechain, 549 00:38:46,901 --> 00:38:50,661 that it's accurate as to the state of what's gone on, 550 00:38:50,661 --> 00:38:52,341 but it doesn't care how it happened. 551 00:38:52,341 --> 00:38:54,981 It's just saying, yes, we have an accurate... 552 00:38:54,981 --> 00:39:02,341 These things, yeah, the reason as to why you would think it's accurate is different. 553 00:39:02,341 --> 00:39:04,661 So I got one thing that I have to throw in here, 554 00:39:04,661 --> 00:39:06,181 which I think will maybe clarify it, 555 00:39:06,421 --> 00:39:10,421 this is the so-called data availability problem that you may have heard of, 556 00:39:11,141 --> 00:39:13,541 but it's very important to understand this 557 00:39:13,541 --> 00:39:16,501 because it's actually at the heart of all many different matters, 558 00:39:16,501 --> 00:39:19,541 including block size war and everything else. 559 00:39:19,541 --> 00:39:23,461 So basically, when you run a full node... 560 00:39:24,261 --> 00:39:27,461 So what is Satoshi's blockchain? 561 00:39:27,461 --> 00:39:31,221 It is a set of blocks, it's a set of all this data, 562 00:39:31,221 --> 00:39:34,021 and we have agreed to be responsible for it. 563 00:39:34,021 --> 00:39:35,941 So this is what the block size war was about. 564 00:39:36,421 --> 00:39:40,181 Because it was like, everything in the blockchain has to be served back. 565 00:39:44,021 --> 00:39:46,101 Okay, I promise this is going to pay off, though. 566 00:39:46,101 --> 00:39:48,021 I'm just trying to make it the best explanation possible. 567 00:39:48,661 --> 00:39:49,381 Have you seen this? 568 00:39:49,381 --> 00:39:52,261 Someone has a little sticker that was going around recently that said, 569 00:39:53,941 --> 00:39:56,341 there is no cloud, it's just someone else's computer. 570 00:39:57,701 --> 00:39:59,221 Yeah, vaguely, yeah. 571 00:39:59,221 --> 00:39:59,941 Yeah. 572 00:39:59,941 --> 00:40:03,301 So when people say something is on the blockchain, 573 00:40:04,261 --> 00:40:07,221 they think like, oh, that means I'll always be able to download it. 574 00:40:07,861 --> 00:40:10,661 But if you download it, then someone else has got to be uploading it, right? 575 00:40:13,221 --> 00:40:14,101 No, absolutely. 576 00:40:14,101 --> 00:40:16,021 This is making some sense, though. 577 00:40:16,021 --> 00:40:18,581 You mean the miners are the ones doing the uploading? 578 00:40:18,581 --> 00:40:19,941 No, that's not what I mean. 579 00:40:19,941 --> 00:40:24,181 What I'm trying to say is, this is what the block size war was about, 580 00:40:24,181 --> 00:40:27,381 which is, what is the size of our commitment to upload? 581 00:40:29,621 --> 00:40:32,181 Because for everything that someone out there 582 00:40:32,981 --> 00:40:35,861 is going to be able to download, someone else has to upload. 583 00:40:36,501 --> 00:40:42,981 Okay, so running that note that there is an accurate representation 584 00:40:42,981 --> 00:40:45,621 of where the blockchain is today, 585 00:40:45,621 --> 00:40:48,501 somebody's got to be maintaining that in order for me to connect to them. 586 00:40:52,181 --> 00:40:54,101 So I'm going to go over this a couple of times, 587 00:40:54,101 --> 00:40:55,541 because this is really, really important. 588 00:40:55,541 --> 00:40:59,461 And I think anyone who understands this will have a much better understanding of Bitcoin 589 00:40:59,461 --> 00:41:02,421 than even most of the senior Bitcoin core developers 590 00:41:02,421 --> 00:41:05,781 who have, I think, a very confused understanding of it. 591 00:41:05,781 --> 00:41:06,501 Listen to that. 592 00:41:06,501 --> 00:41:08,101 On the Litecoin Underground podcast, 593 00:41:08,101 --> 00:41:10,341 you're going to be better than a Bitcoin developer. 594 00:41:11,941 --> 00:41:15,701 Definitely the people who want ZK roll-ups and stuff, I think, don't understand this. 595 00:41:18,501 --> 00:41:22,821 And maybe, hopefully, there will be maybe, dare I say, a homework problem. 596 00:41:22,821 --> 00:41:26,821 Someone could take out a blank sheet of paper and try to figure out maybe why I would say that. 597 00:41:26,821 --> 00:41:33,381 But I'm going to re-emphasize that what is the blockchain? 598 00:41:33,381 --> 00:41:38,421 You know, it's a bunch of one megabyte blocks in the case of BTC until SegWit came out, 599 00:41:38,421 --> 00:41:41,141 in which case they could be four megabytes. 600 00:41:42,101 --> 00:41:44,181 But it's a bunch of one megabyte blocks. 601 00:41:44,181 --> 00:41:49,461 Everyone must be able to download and verify the whole chain history, right? 602 00:41:50,021 --> 00:41:55,941 So you can't validate what happened in block 403 unless you download it from somewhere. 603 00:41:57,221 --> 00:42:00,501 And I promise this is going to get tied back to this whole extension block Drivechain. 604 00:42:00,501 --> 00:42:02,341 I think if you understand this, it will make a lot of sense. 605 00:42:03,301 --> 00:42:05,541 So this is what I call it. 606 00:42:05,541 --> 00:42:08,901 You could call this data availability or you could call it data responsibility. 607 00:42:10,261 --> 00:42:12,821 I'm thinking about maybe writing an article about this. 608 00:42:12,821 --> 00:42:14,821 So get it here first or whatever. 609 00:42:14,821 --> 00:42:21,141 But it's like we are responsible for the X much, X amount of data. 610 00:42:21,861 --> 00:42:24,501 We, collectively, everyone who runs nodes. 611 00:42:24,501 --> 00:42:29,541 Now, that means that you can always download this because someone is always uploading it. 612 00:42:30,581 --> 00:42:33,781 This does create this exact tension that was the block size war. 613 00:42:33,781 --> 00:42:35,941 You see where the tension comes from now. 614 00:42:35,941 --> 00:42:39,381 Because if the blocks are larger, there's more uploading that everyone has to do. 615 00:42:40,101 --> 00:42:41,781 The full nodes are more expensive. 616 00:42:43,061 --> 00:42:47,461 But if the blocks are smaller, then it's a reverse. 617 00:42:47,461 --> 00:42:48,741 The full nodes are easier to run. 618 00:42:48,741 --> 00:42:53,141 The full nodes are easier to hide the physical location behind Tor. 619 00:42:53,141 --> 00:42:54,421 The full nodes are cheaper. 620 00:42:54,421 --> 00:42:55,781 The full nodes are easier. 621 00:42:55,781 --> 00:42:57,701 Everyone's responsible for less uploading. 622 00:42:58,261 --> 00:43:00,421 But we just have less block space to use. 623 00:43:00,421 --> 00:43:03,701 So the network cannot process the same number of transactions. 624 00:43:03,701 --> 00:43:05,221 So this is what the block size war is about. 625 00:43:05,861 --> 00:43:10,821 And now here's the tie-in, which is Atomback's extension blocks were considered, 626 00:43:11,861 --> 00:43:14,741 basically, a one-way mandatory object. 627 00:43:14,741 --> 00:43:20,581 So the miners, they would be mandatory, a permanent upgrade. 628 00:43:21,301 --> 00:43:23,941 But with Drivechain, they're supposed to be optional. 629 00:43:23,941 --> 00:43:27,781 And so the miners, everyone can run, mine things, 630 00:43:27,781 --> 00:43:31,461 deposit, withdraw, with letting the sidechain die out. 631 00:43:31,461 --> 00:43:34,501 So you are not, with the Drivechain, the people who are on L1, 632 00:43:36,101 --> 00:43:40,901 they are not responsible for the contents of the Drivechain. 633 00:43:40,901 --> 00:43:44,901 But with the extension block, they are. 634 00:43:47,141 --> 00:43:48,021 So that's the difference. 635 00:43:48,021 --> 00:43:49,781 But it's a very small difference, to be honest with you. 636 00:43:49,781 --> 00:43:50,821 I think it's not that big. 637 00:43:50,821 --> 00:43:53,781 But you can see how the attack would be 638 00:43:53,781 --> 00:43:55,781 that you just keep adding a million extension blocks. 639 00:43:55,781 --> 00:43:58,741 And then it becomes like Bitcoin SV or something. 640 00:43:58,741 --> 00:44:04,661 And then it's just like the idea of what a full Litecoin full node. 641 00:44:04,661 --> 00:44:09,221 Because what BIP300 does, I don't know if this is going too far into the weeds. 642 00:44:10,021 --> 00:44:16,101 But BIP300 says, we will not look at anything that happened inside the extension block. 643 00:44:16,101 --> 00:44:18,741 The extension block is itself responsible 644 00:44:18,741 --> 00:44:24,661 for creating this extremely small summary, like 40 bytes, 645 00:44:27,861 --> 00:44:31,621 of what happened and inserting it in Coinbase transaction on L1. 646 00:44:32,261 --> 00:44:34,901 So BIP300 is only looking at things that happen on L1 647 00:44:34,901 --> 00:44:36,341 to do the deposits and withdrawals. 648 00:44:36,341 --> 00:44:37,541 It does not look into that. 649 00:44:37,541 --> 00:44:41,381 And that is why you can ignore what happens on L2. 650 00:44:42,181 --> 00:44:43,861 And the reason why that is important 651 00:44:43,861 --> 00:44:46,181 is because now anyone can do any L2 that they want. 652 00:44:46,181 --> 00:44:47,941 Because you've safely walled it off. 653 00:44:48,661 --> 00:44:51,941 Because you've built a wall between you and your neighbor 654 00:44:51,941 --> 00:44:53,861 that's like 10,000 feet high. 655 00:44:53,861 --> 00:44:57,381 And it's made out of 15 feet of concrete. 656 00:44:57,381 --> 00:44:58,101 Now they can play. 657 00:44:58,101 --> 00:44:59,381 Everyone can play their music. 658 00:45:00,101 --> 00:45:00,581 Exactly. 659 00:45:01,221 --> 00:45:01,621 Yeah. 660 00:45:01,621 --> 00:45:04,181 I was wondering if you can apply this to an example, Paul. 661 00:45:05,941 --> 00:45:08,261 Are you familiar with the Torrens title system? 662 00:45:08,261 --> 00:45:13,781 Like a system used to, I guess, distribute titles as a database. 663 00:45:15,861 --> 00:45:18,981 Say, for example, every country has this, right? 664 00:45:18,981 --> 00:45:24,021 Say, for example, well, in the US you have a Drivechain 665 00:45:24,021 --> 00:45:28,261 that just keeps track, keeps a record of the title 666 00:45:28,261 --> 00:45:29,381 for everyone's property. 667 00:45:31,781 --> 00:45:33,061 Let's use a smaller country. 668 00:45:33,861 --> 00:45:35,461 I don't want to get political or whatever. 669 00:45:35,461 --> 00:45:42,101 But just like an Eastern European country that might be invaded, right? 670 00:45:42,101 --> 00:45:44,021 And they have their own Torrens title system. 671 00:45:44,821 --> 00:45:46,901 Everyone's got their property listed up there. 672 00:45:46,901 --> 00:45:49,781 And it's being managed by a Drivechain inside this country. 673 00:45:50,421 --> 00:45:51,701 And this country becomes invaded. 674 00:45:52,901 --> 00:45:57,061 And suddenly the invaders shut down the miners that are in that country. 675 00:45:57,061 --> 00:45:58,901 Or they take them over and shut down the nodes 676 00:45:58,901 --> 00:46:00,101 that are running those Drivechains. 677 00:46:02,021 --> 00:46:04,901 I guess one thing that sets Drivechains apart 678 00:46:04,901 --> 00:46:06,661 is that anyone could run a node. 679 00:46:06,661 --> 00:46:10,821 So a Canadian miner can run a Drivechain node 680 00:46:10,821 --> 00:46:13,781 for the American title system, right? 681 00:46:13,781 --> 00:46:15,861 So you can keep it decentralized in that sense. 682 00:46:18,341 --> 00:46:20,581 But yeah, I wonder if you could speak to some of the strengths 683 00:46:20,581 --> 00:46:21,781 in that scenario. 684 00:46:21,781 --> 00:46:25,781 Because I think that's kind of one of the things 685 00:46:25,781 --> 00:46:26,901 that sets it apart, right? 686 00:46:26,901 --> 00:46:31,781 Is being able to run nodes for Drivechains 687 00:46:31,781 --> 00:46:36,901 that really you don't have a real stake in yourself. 688 00:46:37,541 --> 00:46:39,541 Say you could do it from an altruistic perspective, 689 00:46:39,541 --> 00:46:42,261 keeping the Drivechains for each title system 690 00:46:43,621 --> 00:46:44,581 for every country, right? 691 00:46:44,581 --> 00:46:45,461 Just to keep a record. 692 00:46:45,461 --> 00:46:48,581 I have mentioned that in the context of scaling, 693 00:46:49,941 --> 00:46:51,461 it is not actually that hard. 694 00:46:52,581 --> 00:46:56,181 I have this post where I split the world into 13 or 14 regions. 695 00:46:56,901 --> 00:46:59,141 And they each have their own large block sidechain 696 00:46:59,141 --> 00:47:01,701 that deletes history that's older than six months. 697 00:47:01,781 --> 00:47:05,541 That's it. 698 00:47:05,541 --> 00:47:06,421 Or like MWeb. 699 00:47:06,421 --> 00:47:08,501 It's $2,000 a year. 700 00:47:09,381 --> 00:47:09,781 Anyone? 701 00:47:10,981 --> 00:47:12,261 You cut out for a second there. 702 00:47:12,261 --> 00:47:14,261 You cut out for a second there, Paul. 703 00:47:14,261 --> 00:47:18,661 You said it basically prunes as much data 704 00:47:18,661 --> 00:47:20,421 past six months or something. 705 00:47:20,421 --> 00:47:21,221 Yeah, and go on. 706 00:47:21,221 --> 00:47:21,721 Yes. 707 00:47:23,541 --> 00:47:29,141 And so basically what I mentioned in that post 708 00:47:29,141 --> 00:47:33,461 is that if someone wants to shut down, 709 00:47:34,741 --> 00:47:38,501 let's say, for example, the Russian government 710 00:47:38,501 --> 00:47:41,381 wants to shut down Ukrainian transaction processing. 711 00:47:42,821 --> 00:47:44,501 Anyone who's running the Ukraine full node, 712 00:47:44,501 --> 00:47:45,621 they don't have to be in Ukraine. 713 00:47:45,621 --> 00:47:47,061 They could be in the United States 714 00:47:47,061 --> 00:47:49,381 or they could be working at the Pentagon 715 00:47:49,381 --> 00:47:51,141 or they could just be in Hong Kong 716 00:47:51,141 --> 00:47:52,581 or they could be in Japan. 717 00:47:52,581 --> 00:47:55,381 So the people running the full node 718 00:47:55,381 --> 00:47:57,141 don't necessarily need to be the same people 719 00:47:57,141 --> 00:47:59,541 who are using the service. 720 00:47:59,541 --> 00:48:00,741 And these people don't necessarily 721 00:48:00,741 --> 00:48:01,861 need to be miners or whatever. 722 00:48:01,861 --> 00:48:05,861 You can just program the computer to divide the labor. 723 00:48:05,861 --> 00:48:10,501 And there's really no possibility 724 00:48:10,501 --> 00:48:11,701 of people defrauding each other, 725 00:48:11,701 --> 00:48:12,901 although there's a slight. 726 00:48:12,901 --> 00:48:15,061 But it's very, very, it's so small 727 00:48:15,061 --> 00:48:17,061 that it has to be negligible. 728 00:48:18,901 --> 00:48:22,661 And so that is something that I have written about. 729 00:48:22,661 --> 00:48:24,741 I don't know if that's what you're referring to specifically. 730 00:48:25,381 --> 00:48:31,621 I think that would also be true of the extension block thing. 731 00:48:31,621 --> 00:48:35,621 I do want to mention that in my opinion, 732 00:48:36,341 --> 00:48:38,101 which may be wrong or whatever, 733 00:48:38,101 --> 00:48:41,301 but when I zoom out, I think that actually Atomback 734 00:48:41,301 --> 00:48:46,821 and I think it was, I don't remember who it was, 735 00:48:46,821 --> 00:48:48,581 someone else right before him had proposed it, 736 00:48:49,461 --> 00:48:51,861 this extension block idea in December, 2014. 737 00:48:52,581 --> 00:48:58,181 I think really they were just small blockers 738 00:48:58,181 --> 00:48:59,141 who didn't want to lose. 739 00:48:59,141 --> 00:49:01,621 They knew that if I had this technique, 740 00:49:01,621 --> 00:49:04,101 you could continue to expand what data 741 00:49:04,101 --> 00:49:07,061 Bitcoiners were responsible for knowing forever. 742 00:49:08,021 --> 00:49:11,381 And they knew that this was this data responsibility thing. 743 00:49:11,381 --> 00:49:13,541 They didn't want to be responsible for the data. 744 00:49:13,541 --> 00:49:15,461 They knew that the extension blocks, 745 00:49:15,461 --> 00:49:17,221 it kind of chopped it into pieces. 746 00:49:17,221 --> 00:49:22,741 But in practice, the other pieces were really mandatory, 747 00:49:23,621 --> 00:49:25,141 whereas with Drivechain, they are not. 748 00:49:25,141 --> 00:49:27,541 But in my view, that doesn't really make much of a difference 749 00:49:27,541 --> 00:49:31,541 because you can, so I think that the, 750 00:49:31,541 --> 00:49:33,381 I'm not sure if this is making any sense 751 00:49:33,381 --> 00:49:34,661 or clarifying anything for anyone, 752 00:49:34,661 --> 00:49:39,621 but I do think that that was like most of the idea there, 753 00:49:39,621 --> 00:49:42,341 which is that we should just chop the data 754 00:49:42,341 --> 00:49:43,621 into different bins. 755 00:49:43,781 --> 00:49:47,221 Nonetheless, the Drivechain is an improvement over, 756 00:49:48,741 --> 00:49:51,541 on this, on the one key issue that is really, 757 00:49:53,381 --> 00:49:54,581 this is the issue. 758 00:49:57,618 --> 00:49:58,618 Storing the information. 759 00:49:58,618 --> 00:50:05,218 Drivechain, yeah, and you want it to be able to die off if it, if the chain becomes too heavy and it is not popular with users. 760 00:50:05,218 --> 00:50:08,338 So there's no, people aren't paying transaction fees. 761 00:50:08,938 --> 00:50:10,338 You want it to just like die off. 762 00:50:10,338 --> 00:50:12,178 Let me ask about that. Let me ask about the death of the sidechain. 763 00:50:12,178 --> 00:50:19,538 Cause like that to me is probably like, everybody is excited if they get to move their money and go get all these new capabilities. 764 00:50:19,538 --> 00:50:22,298 But the real question is, how do I get it back? 765 00:50:22,738 --> 00:50:23,738 It doesn't work out. 766 00:50:24,178 --> 00:50:27,538 So what is the mechanism? 767 00:50:27,698 --> 00:50:42,098 And this is one of the, one of the things I know I want you to take slowly and speak in simple terms because I know there's big numbers and long timeframes, but I'm on the Zcash Litecoin sidechain. 768 00:50:42,938 --> 00:50:44,618 I'm wanting to move my coins back. 769 00:50:45,378 --> 00:50:46,458 What's the mechanism? 770 00:50:46,458 --> 00:50:54,178 I just, I just basically in my wallet, I just make a request and then there's a timeframe and a lockup. 771 00:50:54,778 --> 00:50:56,658 How does that, how does that work? 772 00:50:58,218 --> 00:51:10,818 There are two tracks and my opinion is that most regular, almost all regular people will use a different track basically, which is like the fast track, fast and slow. 773 00:51:11,378 --> 00:51:15,098 So, however, this fast track only works if there is a slow track. 774 00:51:15,098 --> 00:51:16,378 So it kind of works like this. 775 00:51:16,378 --> 00:51:19,298 The fast track is trading, right? 776 00:51:20,498 --> 00:51:20,698 Yeah. 777 00:51:20,698 --> 00:51:26,698 The fast track is just, you find someone who has L1 coins, you do the swap and you immediately get out, but you have to pay a fee. 778 00:51:26,698 --> 00:51:27,098 Yeah. 779 00:51:27,458 --> 00:51:30,658 Cause how's the, cause it passes the buck to like, how's that person getting them out? 780 00:51:31,258 --> 00:51:31,538 Yeah. 781 00:51:31,538 --> 00:51:31,778 Yep. 782 00:51:31,778 --> 00:51:32,058 Yeah. 783 00:51:32,058 --> 00:51:32,498 I understand. 784 00:51:32,498 --> 00:51:33,138 You know, right. 785 00:51:33,138 --> 00:51:33,618 Exactly. 786 00:51:33,898 --> 00:51:41,098 It's like the lightning, you're sacrificing some of your ideals for speed, right? 787 00:51:41,098 --> 00:51:42,178 That's what you do with lightning. 788 00:51:42,738 --> 00:51:44,098 Um, it's a trade off. 789 00:51:44,698 --> 00:51:45,818 I don't want to get back into lightning. 790 00:51:45,818 --> 00:51:46,898 So this is a specialization thing? 791 00:51:48,418 --> 00:51:48,578 Yeah. 792 00:51:48,578 --> 00:51:58,058 So this is like the most, someone will be a specialist in, it's like you have two towns and, uh, they're connected by like a long three month tunnel or something. 793 00:51:59,338 --> 00:52:03,738 And you don't have, only one person actually has to go through the tunnel every three months. 794 00:52:04,178 --> 00:52:07,658 So they, they, they're like the scapegoat, the biblical scapegoat. 795 00:52:07,658 --> 00:52:11,098 They can be like going through the tunnel on behalf of everyone. 796 00:52:11,098 --> 00:52:12,578 They take everyone's coins through. 797 00:52:13,538 --> 00:52:15,098 Uh, so they swap the coin. 798 00:52:15,138 --> 00:52:17,018 Everyone can swap the coins instantly. 799 00:52:18,458 --> 00:52:19,978 The only question is how's that person getting out? 800 00:52:19,978 --> 00:52:25,258 So then how that person gets out is, uh, they, yeah, the, they, are you on the L2? 801 00:52:25,258 --> 00:52:26,978 You say, I want to withdraw these coins. 802 00:52:28,018 --> 00:52:39,538 Um, in, in this, in the realistic example, uh, you can imagine as if there's a train leaving L2 and going to L1, you know, that it takes three months, the voyage. 803 00:52:40,018 --> 00:52:42,378 And, and only one train can move forward at a time. 804 00:52:43,018 --> 00:52:50,138 So in this context, probably your coins are waiting at the train station because a train is already on route. 805 00:52:50,778 --> 00:52:52,778 So you have to wait for the next one to get on. 806 00:52:54,098 --> 00:52:56,978 And they only, so the train only leaves every three months. 807 00:52:57,378 --> 00:52:57,878 Right. 808 00:52:58,658 --> 00:53:00,058 Oh, it tends to be longer. 809 00:53:00,218 --> 00:53:00,718 Yeah. 810 00:53:01,498 --> 00:53:05,298 That's, that's if all the miners are in consensus, right? 811 00:53:05,978 --> 00:53:06,298 Yeah. 812 00:53:06,298 --> 00:53:10,178 If they all agree, if they're all going as fast as possible, it's three months. 813 00:53:10,178 --> 00:53:13,378 If you only have 51%, then it would take about six months. 814 00:53:14,018 --> 00:53:23,258 And if you just miss that train, then you will, uh, you will have to wait six months for the next train to appear at the platform. 815 00:53:23,258 --> 00:53:26,178 And then you have to ride it six months to the destination. 816 00:53:26,698 --> 00:53:31,018 But here's why that doesn't matter because you can swap with people on L1. 817 00:53:31,338 --> 00:53:37,658 So it's not going to, it's just going to be time value of money that the reason why it's so slow is because this enhances the security. 818 00:53:37,658 --> 00:53:47,218 As I was saying before, we ignore what's going on in the L2, but we can't ignore completely because then the funds will not be secure. 819 00:53:47,578 --> 00:53:52,018 So by having this really low frequency, it's basically this hash. 820 00:53:52,018 --> 00:53:56,498 And if the hashes doesn't match, then the withdrawal should fail. 821 00:53:56,778 --> 00:54:02,218 But if it does match, then that means absolutely 100% of everything being done on the sidechain was done perfectly. 822 00:54:02,818 --> 00:54:06,218 So it's like a very, very sensitive trigger. 823 00:54:06,218 --> 00:54:12,538 It says either everything was done perfectly or somewhere, someone did something wrong and we should just not allow the train. 824 00:54:12,698 --> 00:54:17,818 How are the miners, what's the process they go through to validate the accuracy? 825 00:54:18,658 --> 00:54:27,818 It's very easy if they wish this, um, okay, well, it's kind of interesting because I'd like to explain all the little different nuances of it. 826 00:54:27,818 --> 00:54:35,218 But basically what can happen is the best way for them to do it is to sync a full node themselves. 827 00:54:35,218 --> 00:54:43,138 But again, keep in mind, they only have to actually do this like once every six months and they can delete it if they want. 828 00:54:44,138 --> 00:54:47,218 So, but there's many layers to this cake here. 829 00:54:47,218 --> 00:54:56,858 This is like a, this is like an interesting little thing because in reality, it's going to be so difficult to lie since anyone who syncs the full node will get the right answer. 830 00:54:56,858 --> 00:54:57,898 And there's only one right answer. 831 00:54:57,898 --> 00:55:01,458 And the answer is only 32 bytes long, 64 characters. 832 00:55:01,858 --> 00:55:04,418 It's just very, very difficult to actually pull off the lie. 833 00:55:05,618 --> 00:55:12,098 So no, none of this is, will ever be necessary in practice, but another thing is intended that worse. 834 00:55:12,138 --> 00:55:15,738 It's kind of like when you're, you go to Coinbase and they want six confirmations. 835 00:55:16,058 --> 00:55:19,898 This is asking for so many confirmations that are extremely immutable. 836 00:55:20,178 --> 00:55:21,138 That's exactly right. 837 00:55:21,338 --> 00:55:31,738 And in fact, the more, the more difficult it is to get, it's kind of like if you, a prisoner is leaving a prison and they have to buzz you through all these different gates, you know, it's intentionally to slow it down. 838 00:55:32,658 --> 00:55:34,058 So they buzzed you through, you know what I mean? 839 00:55:34,058 --> 00:55:39,978 Like in law and order or whatever, and like go through, they got to shut the other door and then they knock on the window and then buzz next gate. 840 00:55:40,778 --> 00:55:43,418 This is like, like six months worth of gates. 841 00:55:44,058 --> 00:55:46,338 Now you see it's a deterrent. 842 00:55:46,458 --> 00:55:54,498 The more difficult it is to attack the system, the more likely it is that no one even tries in the first place. 843 00:55:54,498 --> 00:55:57,018 So the idea is just overwhelming force on this. 844 00:55:57,058 --> 00:56:01,218 This is the, you try to run a scam and wait a year to find out it didn't exactly. 845 00:56:01,218 --> 00:56:01,418 Yeah. 846 00:56:01,418 --> 00:56:09,698 Or you try to like, you grab, you go to the Apple store and you grab like a, an iPad off the shelf, but then you turn to run away and you immediately get slowed down. 847 00:56:09,698 --> 00:56:10,658 Like mine is a hundred. 848 00:56:10,938 --> 00:56:12,138 You're like very slow. 849 00:56:13,138 --> 00:56:14,818 And now they have plenty of time to call the police. 850 00:56:14,818 --> 00:56:17,058 The police can come like two weeks from now and arrest you. 851 00:56:17,058 --> 00:56:19,778 You know, you've only made it to like halfway halfway through the door. 852 00:56:20,138 --> 00:56:28,018 So the idea is this part will be so reliable that actually will always work. 853 00:56:28,218 --> 00:56:33,378 And since this part will always work, there will always be people willing to swap the coins instantly. 854 00:56:33,378 --> 00:56:39,218 And so then they'll charge, well, they'll charge half a percent or whatever it is, you know, whatever the market bearing percent is. 855 00:56:39,698 --> 00:56:46,858 The idea is it will just be anyone because about something like 20 or 30,000 people can fit on the train. 856 00:56:47,858 --> 00:56:50,858 So it, it, it passively aggregates. 857 00:56:50,858 --> 00:56:52,138 I'm not sure if this part will make sense. 858 00:56:52,138 --> 00:57:01,778 Like I can say, I'm going to, I'm getting on the train and I'm taking my 14 coins and then you can say, oh, I've got three coins on, on the L2. 859 00:57:02,658 --> 00:57:07,058 And I say, okay, you know what, listen, I have, I've got 2.9. 860 00:57:07,418 --> 00:57:13,178 I'll take those three coins off your hands and I'll put them in my, on my train, you know, in my, in my luggage. 861 00:57:13,498 --> 00:57:13,698 Yeah. 862 00:57:13,898 --> 00:57:16,098 Reducing the amount that you have to write to the L1, right? 863 00:57:16,618 --> 00:57:17,178 Exactly. 864 00:57:17,178 --> 00:57:18,018 The transaction space. 865 00:57:18,018 --> 00:57:18,218 Yeah. 866 00:57:18,298 --> 00:57:20,938 So on L2, a lot could be happening. 867 00:57:20,938 --> 00:57:27,818 Like he can be swapping to me, but all I'm doing is I'm, I'm incrementing my one little number from 14 to 17 to 21. 868 00:57:27,978 --> 00:57:29,578 I'm giving you L1 coin. 869 00:57:29,578 --> 00:57:35,418 You get the L1, my L1 coins in my completely different wallet today, but you pay a fee. 870 00:57:35,898 --> 00:57:41,058 And now I'm just, I'm just still only taking up one seat on the train, but the number is going up. 871 00:57:41,098 --> 00:57:44,618 It's going up 14, 21, 32, a hundred, whatever. 872 00:57:44,938 --> 00:57:50,378 So I can be one guy, just like one Roger Ver could seed the sidechain. 873 00:57:50,738 --> 00:57:54,418 One single guy can do all the withdrawals with one of the 20,000 seats. 874 00:57:54,458 --> 00:58:04,338 So the 20,000 seats is also like total overkill because you, uh, those seats are, by the way, allocated by the L1 fee they pay. 875 00:58:04,378 --> 00:58:09,458 So there's no possibility of someone taking up the all 21, all 20,000 seats. 876 00:58:10,298 --> 00:58:15,658 He just pays a slightly higher L1 fee and then they're, they get bumped and everyone else gets kicked off the train. 877 00:58:15,658 --> 00:58:21,538 So, so let's say a, a chain becomes, you know, it, it doesn't work well. 878 00:58:21,578 --> 00:58:24,218 It's whatever reason the software wasn't written properly. 879 00:58:24,218 --> 00:58:33,858 I've got my coins there and the train stations closing in a way, there's just not a lot of people who are even running the nodes to bother. 880 00:58:34,458 --> 00:58:40,938 Um, does the, do the miners have any obligation to wait until that is emptied? 881 00:58:40,938 --> 00:58:45,258 Can they do like a final closure and just say, yeah, we're gonna shut it down. 882 00:58:45,258 --> 00:58:47,978 Everyone's coins will be returned to their proper owner. 883 00:58:48,338 --> 00:58:53,058 In practice, I would, in practice, I would hope that they would do something like that. 884 00:58:53,058 --> 00:58:53,858 Of course, there's no guarantee. 885 00:58:53,898 --> 00:58:54,178 Oops. 886 00:58:54,178 --> 00:58:54,458 Sorry. 887 00:58:54,778 --> 00:58:56,058 I'm trying to make myself a little lunch here. 888 00:58:56,058 --> 00:58:56,658 I dropped something. 889 00:58:56,698 --> 00:58:56,938 Okay. 890 00:58:57,258 --> 00:59:01,898 Um, the, uh, what I would hope they would do would be something like. 891 00:59:02,778 --> 00:59:04,938 Uh, we're not collecting any fees from this chain. 892 00:59:04,938 --> 00:59:05,978 No one cares about this chain. 893 00:59:05,978 --> 00:59:14,338 So, so withdraw them because the next train is going to be the last train or maybe not, but we don't care. 894 00:59:14,578 --> 00:59:19,058 Like there's a certain point where you just say, I declare that I'm not going to care about this anymore. 895 00:59:19,418 --> 00:59:25,058 And now if people don't care, then no one knows if the withdrawal is being processed the right way or the wrong way. 896 00:59:25,098 --> 00:59:28,698 They're just now the miners can just loot the sidechain, take all the coins. 897 00:59:28,938 --> 00:59:29,738 It would be the fear. 898 00:59:30,378 --> 00:59:33,818 Well, the miners, like there would be a danger though. 899 00:59:33,818 --> 00:59:39,538 If, if, uh, someone who created this sidechain, um, made an error either, uh, 900 00:59:39,578 --> 00:59:45,578 intentionally unintentionally to lock some coins up in an address that they don't have access to. 901 00:59:46,338 --> 00:59:51,578 Like there's a possibility to, for people to lose funds in a improperly managed sidechain is what I'm saying. 902 00:59:51,618 --> 00:59:55,818 Uh, they would deposit the funds on L one to a BIP300 scripts. 903 00:59:55,818 --> 00:59:57,378 So that'd be my fault if it didn't work. 904 00:59:57,418 --> 01:00:03,378 But the, for all the sidechains, no matter how badly, but the sidechain could be very badly programmed in that. 905 01:00:03,498 --> 01:00:08,498 Um, no one knows like over there, it's very hard to tell. 906 01:00:08,498 --> 01:00:13,098 Like maybe there's an inflation bug on the sidechain and now there's like a trillion coins over there. 907 01:00:13,418 --> 01:00:17,178 And now over there, someone does a bunch of withdrawal. 908 01:00:17,218 --> 01:00:22,538 Like there's only only 7,000 coins on L one have been deposited to the sidechain. 909 01:00:23,178 --> 01:00:26,018 But however, over there, there's now like 50,000 coins. 910 01:00:26,418 --> 01:00:31,738 Someone's going to, whoever tries to withdraw 7,000 coins first is going to trigger the train to leave. 911 01:00:32,338 --> 01:00:36,578 And now like, now there's chaos over there. 912 01:00:37,978 --> 01:00:38,298 Yeah. 913 01:00:38,298 --> 01:00:43,458 But you see, this doesn't really affect L one and L one will eventually just pay out the 7,000 coins. 914 01:00:44,018 --> 01:00:47,258 And then everyone will just say, well, that was an experiment that didn't work. 915 01:00:47,698 --> 01:00:55,018 And this is, this is a good, this is a very good thing because just like, you know, when you go out and you go out to a 916 01:00:55,058 --> 01:00:59,418 restaurant, why is the food, why is the food good? 917 01:00:59,418 --> 01:01:01,498 And why is the food cheap? 918 01:01:02,298 --> 01:01:07,098 Because the restaurant knows that if they don't, if they aren't competitive, they will go out of business. 919 01:01:07,138 --> 01:01:12,298 And so actually the threat of collapse is partly what keeps people in line. 920 01:01:12,498 --> 01:01:13,778 This is a very different paradigm. 921 01:01:14,378 --> 01:01:17,698 There's no vested interest by anybody creating these sidechains. 922 01:01:17,698 --> 01:01:21,658 Is there like, I don't make any money by building a great sidechain. 923 01:01:22,418 --> 01:01:31,618 Yes, this is, I think this is another area where it's either genius or crank, but I think most people, so like Mark 924 01:01:31,618 --> 01:01:35,178 Andreessen from A16Z, he has this motto about monopolies. 925 01:01:35,178 --> 01:01:35,978 This is monopolies. 926 01:01:35,978 --> 01:01:40,218 The motto of every monopoly is we don't care because we don't have to. 927 01:01:41,538 --> 01:01:47,258 And I think this is the real thing about innovation is people actually desire it for its own sake. 928 01:01:47,578 --> 01:01:51,698 And many of the great projects is trying to be on Bitcoin first. 929 01:01:51,698 --> 01:01:52,938 And I have made a slight list of this. 930 01:01:52,938 --> 01:01:59,258 If you saw the, I don't know if you saw the misinformation page on drivechain.info, but I have one of the questions. 931 01:01:59,258 --> 01:02:08,058 I have a long list with citations of like Vitalik trying to create Ethereum on Bitcoin for many months, but being unable to. 932 01:02:09,938 --> 01:02:17,018 Roger Ver, obviously trying to get large blocks on Bitcoin, only creating Bitcoin cash as like a kind of like multi-year last resort. 933 01:02:17,458 --> 01:02:25,658 People from Namecoin, SIA, they wanted to do a Bitcoin project, but they could not. 934 01:02:26,618 --> 01:02:33,258 So my point of view is actually that the true innovation is more likely to be of this kind where people want to do it. 935 01:02:34,618 --> 01:02:40,058 They don't care about actually remuneration, they don't care about money, making money from the idea. 936 01:02:40,098 --> 01:02:41,818 They just want the idea to be an improvement. 937 01:02:42,818 --> 01:02:58,378 And actually, a lot of the other innovation is lower on the sort of food chain and it is not, it is like of an unsavory kind where it's just like pumping and dumping meme coins. 938 01:02:59,218 --> 01:03:07,538 So my view is that these chains that will be created will be ones where people actually want to solve a problem for the end user. 939 01:03:07,938 --> 01:03:17,618 And the miners will only activate or care about these merge mining these chains if they think it will increase their transaction fees or the exchange rate of the coin. 940 01:03:17,778 --> 01:03:20,018 So that's my thought on this. 941 01:03:20,938 --> 01:03:35,498 I think it's very, very difficult to, it's very difficult to like have a, what can we call it, like it's very difficult to have a situation where someone is paid to innovate. 942 01:03:36,498 --> 01:03:37,778 I don't think it works that way. 943 01:03:37,778 --> 01:03:43,378 I think the reverse is the case with like Bitcoin Core has this monopoly and now monopoly, the monopolies just don't care. 944 01:03:43,618 --> 01:03:46,498 Bitcoin Core doesn't actually care about doing real innovation. 945 01:03:47,018 --> 01:03:49,698 They don't, they just want to like maintain. 946 01:03:49,698 --> 01:03:54,298 I got a couple of questions actually, you know, beforehand, well, it's kind of sprung to me recently. 947 01:03:55,298 --> 01:04:22,978 So in your previous, when you were saying that it takes so long, people will just use, will just swap coins instead of bothering to off board and wait the year, you then become pretty reliant on exchanges, like you're, not that we're not today, but like your hope is that there would be some kind of marketplace that we could swap these things fairly easily. 948 01:04:22,978 --> 01:04:38,978 Do you kind of envision they would become just like any other asset is today and they would appear on your Coinbases or maybe even, would there be a sidechain that becomes a DeFi sidechain that basically allows these to work? 949 01:04:38,978 --> 01:04:40,978 Yes, that's exactly what I think. 950 01:04:40,978 --> 01:04:42,298 That's exactly what I think. 951 01:04:42,298 --> 01:04:47,538 So I think Coinbase, et cetera, would list them. 952 01:04:47,538 --> 01:04:57,178 But I also think it's very easy to program the site because every sidechain in the Drivechain world, every L2 is fully aware of what happens on L1. 953 01:04:57,738 --> 01:05:02,658 So every L2 knows exactly which transactions have happened on L1. 954 01:05:02,658 --> 01:05:08,658 So you can make an L2 where the L2 transaction only triggers if an L1 transaction is triggered. 955 01:05:09,098 --> 01:05:14,218 That's already possible with these HTLCs, but you can streamline it even more. 956 01:05:15,098 --> 01:05:19,738 You can streamline it even more with a Drivechain that does this. 957 01:05:20,338 --> 01:05:22,818 But even if you couldn't do that, you could just do the HTLCs. 958 01:05:23,298 --> 01:05:26,538 You do a hash time lock contract and you have two people with the same hash. 959 01:05:26,538 --> 01:05:39,858 So A pays B, the L2 coin, if only the hash is revealed, and B pays A, the L1 coin, if only the hash is revealed, it's the same hash. 960 01:05:39,858 --> 01:05:41,298 Either it's revealed or it's not. 961 01:05:41,698 --> 01:05:45,458 If it's not revealed, the thing is canceled after a certain time. 962 01:05:45,698 --> 01:05:48,098 If it is revealed, then both transactions go through. 963 01:05:48,498 --> 01:05:55,018 So I think that we would not be reliant on exchanges, but I do think that many people would use exchanges nonetheless. 964 01:05:55,458 --> 01:05:58,938 And the market price, it would not be like going all over the place. 965 01:05:58,938 --> 01:06:06,098 The market price would be going between like $0.99 to like $0.998 or $0.997 or something. 966 01:06:06,098 --> 01:06:08,098 You know, it would just be basically. 967 01:06:08,378 --> 01:06:22,978 And in particular, as the train approaches, as it leaves L2 and approaches L1, the fee, the implicit fee, should start to decrease because everyone will think, oh, no, the new train is going to be here soon. 968 01:06:23,058 --> 01:06:23,578 So I'm. 969 01:06:24,578 --> 01:06:31,338 And then once that train leaves the station, it should just skyrocket back up to a higher fee, because now it's like, oh, I got to wait a year instead of. 970 01:06:31,818 --> 01:06:32,418 I really want to. 971 01:06:33,258 --> 01:06:49,738 Yeah, because I'm kind of because one of the things I think is a fair critique of yours of lightning is that it it ultimately it takes those fees away from miners completely, where this this also would do a lot to reduce pressure on the blockchain. 972 01:06:50,618 --> 01:06:54,378 And it would keep fees on the main chain very, very low. 973 01:06:54,778 --> 01:06:59,018 And also the point that maybe people wouldn't even really use the main chain at all. 974 01:06:59,658 --> 01:07:11,058 And the vast majority of transactions are going to happen on, like, let's say there's a BCH sidechains, 32 megabyte blocks, and they're all doing every transaction for a tenth of a penny. 975 01:07:12,058 --> 01:07:20,938 Even all those transactions wouldn't really accumulate to be even worth a hand, you know, where Bitcoin is today, right? 976 01:07:20,938 --> 01:07:27,378 If the main chain's down to one set per V byte, that depresses everything dramatically. 977 01:07:28,138 --> 01:07:41,458 Do you feel like that even though some of the fees are coming back, it still reduces that overall fee income because it basically takes all that pressure off the main chain? 978 01:07:42,578 --> 01:07:43,338 No, I do not. 979 01:07:43,378 --> 01:07:47,978 I think people often confuse the fee rate and the total fee revenue. 980 01:07:48,018 --> 01:07:54,098 So like the fee rate would be like, if you're selling watermelons or something, you sell one watermelon for 10 cents. 981 01:07:55,658 --> 01:07:57,978 But you sell 40 million watermelons. 982 01:07:58,458 --> 01:08:06,858 So now that's $4 million in sales versus when you say, okay, we're only going to sell 25 watermelons today, but we're going to sell them for $100 each. 983 01:08:08,578 --> 01:08:10,778 Now that's a lot less than $4 million in revenue. 984 01:08:10,778 --> 01:08:15,618 So one is the height of the rectangle and the other is the area of the rectangle. 985 01:08:15,898 --> 01:08:25,618 And so I agree that if this idea is successful, since there's unlimited L2 block space, all of the fee rates will be low. 986 01:08:26,258 --> 01:08:31,618 Although L1 would probably still be much higher than L2, but it won't be that much. 987 01:08:31,658 --> 01:08:40,338 You know, the L1 would maybe be $5 for a transaction and the L2s would be like 10 cents a transaction or something like that on average, maybe some less, some more. 988 01:08:40,898 --> 01:08:50,658 So that's the future that I envision is like the L2s have like 10 cents ish per transaction and the L1s have like, like three, four or five dollars per transaction. 989 01:08:52,338 --> 01:08:56,738 And in my view, this maximizes the fee revenue given to the miners. 990 01:08:56,738 --> 01:09:04,098 So the miners, they, because the L2, you can just look at the quantity. 991 01:09:05,058 --> 01:09:16,978 There are many, many, like the total number of transactions on earth is an enormous number, which is about 8 billion people making multiple transactions a day, 365 days a year. 992 01:09:17,218 --> 01:09:22,898 So it's like on the order of, you know, 6, 10 trillion transactions per year. 993 01:09:23,138 --> 01:09:26,818 I'm not saying we'll get all those immediately, but I, what I am saying is you take 10 cents of that. 994 01:09:27,778 --> 01:09:30,418 That is hundreds of billions of dollars per year. 995 01:09:30,818 --> 01:09:33,218 It's like $700 billion per year. 996 01:09:34,258 --> 01:09:40,898 And that grows the number of transactions that people have been doing has been growing over time. 997 01:09:41,058 --> 01:09:44,258 Now, again, I'm not saying we immediately get 100% penetration into that. 998 01:09:44,578 --> 01:09:50,418 But what I am saying is if anything works at all, it will depress the L1 fee rate. 999 01:09:51,298 --> 01:09:57,698 So let's just say you have Bitcoin Core, the fees go up because of ordinals. 1000 01:09:57,698 --> 01:09:59,458 Everyone switches to custodial lightning. 1001 01:09:59,698 --> 01:10:00,738 The fees go back down. 1002 01:10:02,098 --> 01:10:03,298 Yeah, the L1 fees. 1003 01:10:03,298 --> 01:10:15,298 So you see, this is what you see time and time again with Bitcoin Core, which is the fees go up in these little episodic bursts, they go up in these big run ups, you know, but then they always go back down. 1004 01:10:15,778 --> 01:10:21,218 You can always find a period of time, like whenever the fees are high, it's always temporary. 1005 01:10:22,098 --> 01:10:26,978 And then it just goes back to being 10 cents or whatever a transaction. 1006 01:10:26,978 --> 01:10:31,538 So my view is that this is a long run, the so-called long run price elasticity of demand. 1007 01:10:32,098 --> 01:10:41,058 This is the term in economics for like, you know, my view is that in the long run, this is just going to be low no matter what, because there will always be some substitute. 1008 01:10:41,058 --> 01:10:47,138 You can always either defect out to custodial or you can just say, I'm not using Bitcoin anymore because the fees are too high. 1009 01:10:47,138 --> 01:10:48,898 I'm just going to go back to Visa or whatever. 1010 01:10:49,298 --> 01:10:51,138 So there was a thread recently. 1011 01:10:51,298 --> 01:11:07,778 I don't know if you were a part of it or this guy, you know, this fantasy where they're just like, well, in the future, when Bitcoin fees are $1,000 and I'm like, where, who the fuck is going to pay $1,000 of their money, 24 hours a day, 5,000 transactions every 10 minutes are going to pay $1,000. 1012 01:11:07,778 --> 01:11:08,738 Like, are you out of your mind? 1013 01:11:08,738 --> 01:11:10,658 Like, that just isn't, there's no fee. 1014 01:11:10,658 --> 01:11:12,898 There's no world where that even comes close to that. 1015 01:11:13,538 --> 01:11:14,098 You know? 1016 01:11:14,098 --> 01:11:15,138 Yeah, I agree. 1017 01:11:15,138 --> 01:11:16,178 I've tried to imagine it. 1018 01:11:16,178 --> 01:11:18,098 I have like a funny little story in my head. 1019 01:11:18,178 --> 01:11:26,578 Like, it's like when you throw the quinceanera for your child or you buy them their first car, you know, it's like we've saved up. 1020 01:11:26,578 --> 01:11:27,698 We've saved up. 1021 01:11:27,698 --> 01:11:44,418 Now it's time for you to have your first lightning channel, you know, and it's like buying a child and every 16, like every time the L1 blockchain is used around the world, that's like everyone turning 15 or 16 years old and their parents pay the $1,000 fee and they open. 1022 01:11:44,418 --> 01:11:45,858 That's the world that you have to live in. 1023 01:11:45,858 --> 01:11:56,658 You can see how that world is going to get crushed by a world where you just have Litecoin down the street has, you know, $5 L1 fees and 10 cent unlimited L2 transaction processing, right? 1024 01:11:56,658 --> 01:11:57,378 Yeah, but it's a shit coin. 1025 01:11:57,378 --> 01:11:57,938 You wouldn't pay. 1026 01:11:59,218 --> 01:12:00,098 Why would you? 1027 01:12:00,098 --> 01:12:04,018 Why would you save yourself $999.99 to use this shit? 1028 01:12:04,018 --> 01:12:10,338 See, but now you see the opportunity because you see how irrational BTC has become and that's the opening. 1029 01:12:10,338 --> 01:12:12,018 You know, that's the opening for Litecoin. 1030 01:12:12,018 --> 01:12:16,818 So who would have thought that would be, I would never have thought that it would become so irrational, but it really has. 1031 01:12:16,818 --> 01:12:25,058 So, so you see, this is the, the, the scenario I lay out is like $5 ish L1 fees. 1032 01:12:25,058 --> 01:12:31,378 This is the equilibrium long run and then unlimited like L2, which is like probably be like 10 cents ish or whatever. 1033 01:12:32,018 --> 01:12:37,858 And if you do that, the miners, the amount of fees collected by miners skyrocket enormously. 1034 01:12:37,858 --> 01:12:42,898 I mean, enormously from what it will make it up on volume. 1035 01:12:42,898 --> 01:12:46,258 You're enabling so many new capabilities. 1036 01:12:46,258 --> 01:12:50,178 I think that's, that's the, at the end of it all, that's the name of the game, right? 1037 01:12:50,178 --> 01:13:05,138 Is to bring this idea of this distributed ledger final settlement and expanding it to not just monetary transactions to whatever, whatever imagination people can come up with, whatever developers come up with. 1038 01:13:05,778 --> 01:13:09,298 And I actually think this works alongside altcoins. 1039 01:13:09,298 --> 01:13:12,658 I do think altcoins are just going to exist. 1040 01:13:12,658 --> 01:13:21,618 There's too much incentive for people to try new things and, and if you want to call it pump and dumps and token and shit tokens. 1041 01:13:21,618 --> 01:13:25,218 But there's actually a lot of good chains that have functions that you go, you know what? 1042 01:13:25,218 --> 01:13:30,338 That would be really useful if it were widely available to everybody. 1043 01:13:30,338 --> 01:13:44,738 So I think that that's, that's the tough part is getting the incentive for developers to create these things and to bring users over without the speculative thing, right? 1044 01:13:44,738 --> 01:13:53,538 That there's, they're going to build actual utility that people want to use and they want to remove the token. 1045 01:13:53,538 --> 01:13:55,138 Like removing the token is a benefit. 1046 01:14:00,658 --> 01:14:01,618 Hey, this is grant. 1047 01:14:01,618 --> 01:14:04,098 Just following up on the end of this episode. 1048 01:14:04,098 --> 01:14:09,778 I had to end up splitting these into a couple different episodes because of YouTube. 1049 01:14:09,778 --> 01:14:16,498 It will not allow me to upload anything over two hours and have it be an audio podcast on YouTube. 1050 01:14:16,498 --> 01:14:24,978 So it probably makes more sense and it's going to be more digestible for everyone just to get this over the course of two segments. 1051 01:14:24,978 --> 01:14:26,978 And actually there's a third one I'm adding. 1052 01:14:26,978 --> 01:14:28,178 You'll see up there as well. 1053 01:14:28,178 --> 01:14:33,698 That's kind of a follow-up conversation we had with Paul on Twitter spaces. 1054 01:14:33,698 --> 01:14:36,978 So yeah, anyway, I hope you enjoy it. 1055 01:14:36,978 --> 01:14:38,498 Oh, and I forgot to mention. 1056 01:14:38,498 --> 01:14:39,698 How could I forget? 1057 01:14:39,698 --> 01:14:45,218 Cake Wallet, the sponsor of our show, the greatest mobile wallet you can have. 1058 01:14:45,218 --> 01:14:52,898 You can buy, sell and trade Litecoin, Bitcoin, Monero, Ethereum, Bcash, Nano, Polygon. 1059 01:14:52,898 --> 01:14:57,378 All the assets that are listed in those protocols as well. 1060 01:14:57,378 --> 01:15:01,778 You can hold them as a custodial, your self-custody wallet. 1061 01:15:01,778 --> 01:15:03,138 You can trade in between them. 1062 01:15:03,138 --> 01:15:05,058 You can buy gift cards. 1063 01:15:05,058 --> 01:15:12,018 They're going to be adding privacy, special, I'm sorry, private payments. 1064 01:15:12,018 --> 01:15:12,738 What are they called? 1065 01:15:13,618 --> 01:15:16,898 Silent payments on Bitcoin is coming soon. 1066 01:15:16,898 --> 01:15:19,298 Mimblewimble is coming soon to Litecoin as well. 1067 01:15:19,298 --> 01:15:20,898 So they're always on the cutting edge. 1068 01:15:20,898 --> 01:15:25,218 And as I always say, man, the user interface, user experience is always top notch. 1069 01:15:25,858 --> 01:15:29,218 They're great customer service if you ever have an issue or a question. 1070 01:15:29,218 --> 01:15:30,898 So go check them out. 1071 01:15:30,898 --> 01:15:34,418 And yeah, keep stacking and have a good week. 1072 01:15:35,458 --> 01:15:36,338 Bye.