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Is that 10 minutes?

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That's 21 minutes. Oh, yeah. He likes the like button. He drew a like button. You
need to

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just get an Etch-a-Sketch, bro. You're having a hard time deleting things.

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Welcome again to Hashing It Out. I almost said the Bitcoin podcast there just from
like

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pure rote like memory or like what's the word I'm looking for? Like

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a habit for saying so many times. I'm Dr. Corey Petty. I'm your second host.

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Dee is not talking right now because his voice is basically gone. So he's writing
things if

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you're watching this video that he's the first host. Say something real quick so
they understand

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the Sling Blade action going on right now. Hey, everybody. I'm the host that talks
first.

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Dee's kid sneezed in his mouth when he was telling him a secret. So now he's sick
for a

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little while. Or maybe licked his eyeballs. Who knows what kids do? They do weird
things.

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And who's in the bottom? Who's this guy at the bottom? And I'm the third host, Jesse
Broke.

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Broke. Let's get into it. Yeah, let's get into it. What tagline is that from? Let's
get into it.

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That's from... I hear that a lot. I don't know where it comes from. I don't know.
I've heard

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a lot too. Like one of those content creators, that's their tagline. It's like,
let's get into

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it. Oh, it's the really popular one on YouTube. The guy who gets all the tech first.
Guy who's

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like the PewDiePie of tech. You know what I'm talking about? Black dude? Yeah. I
don't know if

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that's the one I'm referring to. There's somebody else I'm thinking about. Anyway,
doesn't matter.

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This episode was fun. Marques Brownlee. I think that's what he says, but I could be
really wrong.

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I've got some sweet hot takes for Roundtable after this, but I enjoyed this
interview. And I think

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it's interesting to see, like the last episode, if we air these chronologically with
how we

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actually record them, then last time we talked about Zero Sync and then BitVM. And

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it's kind of our resurgence into Bitcoin material, because there's stuff happening
in Bitcoin worth

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talking about, at least in my eyes. It's like the attempt to create a way to have
more functionality

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rooted into the Bitcoin blockchain, allowing for more innovation on top. Layer two
is the

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kind of canonical term for that. What does that say? Do you put it back?

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It says, BTC is in a time capsule, a phantom zone.

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Yeah, it is. We can talk about that a little bit. And I talk about that a lot of it,
I think,

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in the episode. He indicates why he thinks the time capsule was created and what
created it.

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And then I meant to... It's interesting now that you're seeing a resurgence and

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an attempt to use things, as I think people are seeing. I don't know. I don't know
if

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people are seeing... I personally think it's like a acknowledged threat of the

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rest of the ecosystem success, which we're seeing the adoption of other chains and
the... I don't

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know. There's no reason to use Bitcoin if you can do the same thing elsewhere and
users don't care.

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They do the same thing as kind of in quotations, because that's where usually the
argument is. It's

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like, it's not safer, it's not as safe, it's not as decentralized, it's ripe with
scams,

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whatever. It doesn't really matter. But if I can get my money in, do something with
that money,

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get my money out, it doesn't matter functionally. And so for a lot of people, that's
the case.

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They're able to use the thing for the time period they want to use it. And all of
the hedges that

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traditional ideology that started Bitcoin, mainly like self-sovereignty,

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interest resistance, be your own bank, defeat the traditional financial system,

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all that stuff is very, very long term and doomsday scenario situation,

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which doesn't account for most of the use in blockchains today. So they're seeing
that success

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and the associated fees and growth of the ecosystems and that success, and they need

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to do something in order to recapture some of it. They can only do that by allowing
for some

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level of innovation on top, namely what's called L2s. But they got to find a way to
make L2s

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work for a base layer that doesn't like changing.

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I think you captured the idea of not only this interview, but also the previous one
with

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Zerosync and the way that they want to extend what Bitcoin can do right now. And
they want

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Ethereum, ideally, and all the other Alt L1s and their associated L2s to effectively

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become spokes with Bitcoin being the hub. Just like every other Alt L1 wants to
develop an

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ecosystem of L2s with their own L3s, right? So everybody just wants business
capture.

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And that's it at the end of the day. It's really-

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Well, there is a difference there, which we talked about a little bit, and that is

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where the incentives pool, right? So in the eventual use of the system,

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where do the benefits go? Where do the fees go? Does the growth of one part

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help the growth of the entire ecosystem? Is there ability to exit? Are you somewhat
captured?

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That's kind of like- Captured is the- I think is the mantra of the one L1 to rule
them all.

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And the feeling is, though, that needs to be the case. And everything should be
built on top of

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one L1 and only L1. So they want that to be captured. That means that the only way
to do

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that is if it can scale and the associated fees of all use somehow benefit the base
layer.

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And the ability to exit is not worth it or not available. Whereas kind of a
multi-chain

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ecosystem and bridging is the alternative to that, where you kind of do whatever you
want,

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wherever you want, and then move your assets wherever you want them to go.

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You can't see that. There we go. BTC needs to learn hard, lean hard into BTC is gold
analogy,

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and for the strong use cases, hard asset value. And that's, I think, the equivalent
of gold,

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right? The technology equivalent of gold is like, this is where you park things.

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I think that's what they have done. And that's why it's become so ossified. And
that's why

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these guys are having such a hard time getting adoption for their ideas. I mean,
it's been-

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Yeah, but you can't leverage it very well, right? The ability to leverage that gold

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and then do derivative things on top of it from a technology standpoint is limited
in Bitcoin.

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And that's what they're trying to change now. And that's how L2s generally work,

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which we talk about in the show or the interview, is that you pool that digital
gold, that Bitcoin

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somewhere, somehow using the Bitcoin rule set, the Bitcoin protocol. And then based
on that pooling,

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you're able to do something somewhere else with strong guarantees that can't get
stolen,

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can't get taken away, whatever, right? That's all L1 and L2s work. That's how
they'll always work.

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And they're finding interesting ways to do that, which give different kinds of
guarantees.

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What I think is interesting about 300 is this long withdrawal process that I'm not
sure

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works on the timescale that people need it to. So I think I need to look more into
that.

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It's equivalent to optimism and a week-long exit time period such that if there is
malfeasance,

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it can be pointed out. But we can get into that after the show.

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So let me transition into the interview with Paul Schortz.

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All right. Welcome back to the show. Today, we have an interview with Paul Schortz.

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I would call you maybe a progenitor of Drivechains and BIP300. But why don't we do
the

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normal thing and you give us a quick introduction as to where you come from, what
you do, and

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what you work on today and kind of how you got here.

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Yeah, the most important thing is that I advanced the cause of this Drivechain
idea.

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Where did I come from? Well, I originally came from academia. I have a background in

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statistics and economics. And that got me interested in a lot of things like why,

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because we had the 2008 financial crisis. So it's kind of like, why is economics so
bad?

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Why is it so illogical in many ways? That kind of led me into Bitcoin. It also led
me into this

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idea with the prediction market, which I think could basically salvage economics
mostly,

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which is another neglected idea. And I actually designed a way of doing Bitcoin
prediction

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markets, but it is so bizarre that it requires sidechains in order to work. It
actually requires

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specific type of sidechains. It's that exotic. And so that led me to work on sidechains and

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sort of led me to pick up where Blockstream left off from my point of view. My point
of

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view is that they kind of just abandoned the idea and that I picked it up. So those
are some

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important things about me. I mean, in December 2014, Adam Back linked to a blog post
I wrote

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about, that was a precursor to one that was called Nothing is Cheaper Than Proof of
Work,

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which was the really famous one. But I wrote one that was almost the same where I
wrote about

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proof of work being like an auction, like auctioning off a briefcase full of cash.

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And he linked to that, and that was kind of like my big break, so to speak.

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Then it became much more popular after that. And then I spoke at scaling
conferences,

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and I speak at all kinds of Bitcoin conferences ever since. I publish technical
research. I have

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lots of ideas. One of those ideas became BIP300, and another one became BIP301.

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And collectively, those are known as Drivechain.

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Can you explain? I was just going to ask the question, because I dug a little bit
into BIP300.

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So I have an idea, but I didn't look into BIP301, which you just made a reference
to. Could you

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maybe give us the idea of Drivechains from BIP300 and then extend it to 301?

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301 is called Blind Merged Mining. And regular merge mining, that was invented by
Satoshi himself

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in 2010, and it has been in use ever since. It has the disadvantage that you get
paid on the,

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what would be called the L2 maybe, although there was no such terminology at the
time.

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And in fact, something like Namecoin could exist independently of BTC, whereas in
drive

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chain, that's not the case. None of the Drivechains on L, they all, they're like
lightning

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nodes, so they require L1 full node to exist in order for them to exist. But in
vanilla merge

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mining, you get paid on the other chain, and you also must run a node of the new
thing. You have

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to run like a Namecoin node. So in Blind Merged Mining, you don't need to run
anything other than

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the L1 node, and you don't need to do anything other than collect L1 transaction
fees, which is

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what already what the miners do. And as a result, they are, it's sort of like a
slightly better

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version of merge mining, but it's really not that interesting now, because even
though I think, I

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still think we should add it to Bitcoin, but there are many ways to emulate it
already. So Ruben

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Thompson invented a few ways that are sort of worse, but they already exist. And
SuperTestNet

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has also implemented a few of these that already exist. So this technique is already
made it into

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Bitcoin. It's only used in silly things like, I think, a space chain. I think that's
kind of a

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silly idea, but some people like it. And this has already been used, so it's kind of
like that one

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has already been pushed across the finish line. But we should still do the original
design,

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because it maximizes the actual byte efficiency of everything. It's really, it's
because we can

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already do it that we might as well do 301. It's just a different kind of merge
mining. merge mining

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is a very counterintuitive and bizarre thing that not a lot of people understand. So
we could go into

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that, or we could not. But the gist of that is that you can, a miner can find two
blocks, a block for

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different blockchains, all at the same time, with no additional work. A really de
minimis, like

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absolutely negligible amount of work that has no additional SHA-256 hashing, none of
that work.

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So that's a fascinating idea when it comes to sidechains, because it just solves,
the sidechain

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problem is this big problem, but it's something like merge mining cuts most of the
problem away.

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And it was invented by Satoshi, and it's been in continuous use. So 301 is not that
interesting.

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And I don't think, as far as I'm aware, there's no controversy over 301. There's
just various

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people who sometimes temporarily misunderstand what it means to have a fee spike, or
that fee

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spikes are bad, or that there's anything we can do about them. So people sometimes
run into those

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little snags, but then they usually escape from the snags all by themselves. So I
think 301 is not

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controversial, and it already exists, and it's, so it's not that big of a deal. But
that 301 governs

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how each sidechain's blocks are found. So block, block, block, block, block, where
are the blocks

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coming from? So BIP300 does the deposits and the withdrawals to and from the
sidechain L2.

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I see. So it seems to be, last week we spoke with Robin Linus from ZeroSync.

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Yeah, he's great.

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It seems to be the ecosystem development with respect to building on top of the
Bitcoin

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blockchain is different ways in which you can leverage or root into the Bitcoin
blockchain, and

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either the different technology used to do so, or the different kind of trade-offs
associated with

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it. I was reading through the DriveTrade peer review stuff, where you go over the
main criticisms

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and why you don't think they're legitimate. But can you talk about maybe the
differentiation from

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a method like ZeroSync, using like leveraging zero knowledge stuff to root into the
Bitcoin

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blockchain, and how Drivechains do that, and what the main, I guess, differences are
in your opinion?

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You mean ZeroSync, or do you mean BidVM?

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BidVM, ZeroSync. I see BidVM as a leveraging.

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Well, yeah, ZeroSync is Robin Linus's project to make it much easier to run a full
node and have

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it sync instantly. So instead of having everyone download everything and check
everything,

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and then serve everything to everyone else, you get this little item that comes with

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the snapshot of the state, and that proves that you reached the state the right way.

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And that has many advantages, and that's ZeroSync.

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Yeah, I see that as like his foot in the door to start people to leverage this
technology.

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A pretty big disadvantage of that is that we don't live in a world where people are
constantly

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being tricked into coming onto the wrong blockchain. So another disadvantage of it
is that

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we don't live, we must, someone must serve the data. But nonetheless, this is a
great idea, and we should

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do it, and it, you know, more, getting more research into Bitcoin is always good.
But we, someone must,

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you know, if someone asks you for the block, it doesn't solve data, what's called
data availability.

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So if someone asks for the block of like, what was block 300,014, if no one on earth
has that block,

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and this actually happened to Ripple or something, you know, there's a bunch of
blocks that went

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missing. But if no one has this block, we don't know when it is revealed. Someone
may reveal it,

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grind it into existence through trial and error or something. When it's revealed, we
don't know if

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it's going to be valid or invalid. So we have to assume that it's invalid, because
we don't know.

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And so we have to reorg it out. You see what I mean? If we assume it's invalid, and
we reorg it out,

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then it just never existed. But if we assume it's valid, and then we include it, and
then it later

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turns out it was invalid, then we're doomed, because we have like a multi-year
reorg, or more likely.

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And then if it's invalid, it could print like 100, it could have printed like 100
million coins,

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or broken any kind of rule. So that's an issue. The data availability is really the
big issue.

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And zero sync does not solve that, but that's great. Zero sync is still great. You
still have

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like a thing on a phone, like a full node on a phone. BitVM is also kind of cool.
BitVM is

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where people sit down to play a game. They fund this thing, you have this prover
verifier system,

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where if anyone ever does something wrong, if they wait too long to respond, or if
they make some

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kind of invalid action, their money can be slashed. And when you go into such a
state,

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you can make these interesting contracts, where you put yourself at danger or risk
of being slashed.

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And you could like, you know, play chess or whatever against someone for money. A
disadvantage

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of BitVM is that people cannot join it or leave it. Once it's set up, it's very hard
to get

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more people to join. Although I'm sure there must be possible ways with like trees
of people, like,

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but you still need like some new action to get people in. Whereas with BIP300, the
coins move

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over. It's the coins that move, they're not attached to an identity. The coins move
over,

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and then they can change hands on the L2. Now, I didn't realize when I first came up
with this idea,

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I thought that was kind of a footnote. But now I see that it's probably the thing
that will make

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this the winning L2 out of them all. Because everything else is too much of a

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handicap to be useful. And there's also various contradictions that arise

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in trying to always make it, for example, stuff like ARK or stuff like

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Lightning, ARK, whatever. They make it so that it's always possible to go from L2 to
L1.

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But this is a mistake, I think. Because think about it, 8 billion people can't use
L1.

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And so if 8 billion people are on L2, what does it matter if the system gives them
away

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to each? Because they can't fit on L1. So the ability to unilaterally go back is not
worth it.

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It's never going to, it doesn't actually achieve anything. And what you need is some
system where

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people on L2 can buy or sell the coins before, they can re-aggregate them before
going to L1.

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And the whole point, you can't have both at the same time. You can't have where
anyone can

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instantly go back down or where one where they have to change hands. Because that's
what the

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person is buying, who's going to self-aggregate them. So that was maybe a little
weird for me to

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say, but those are some of my thoughts about all those. Yeah, Robin is a huge
supporter of BIP300

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also. I'm definitely, I like the idea of this, I guess, proliferation of ideas of
how to scale.

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That's what we need. Yes, we need to do that. We must fight against the mistaken
view of that

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everything has already been fixed in Bitcoin and that lightning is perfect and is a
scaling messiah

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and has already saved us all. That idea will be the idea that actually kills
Bitcoin, unfortunately.

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Fortunately, this new thing revealed this week has further, it must be fixed with
this new

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opcode that causes an output to expire. And that will then show people that
lightning,

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this is going to be the seventh or eighth soft fork that is needed to support
lightning.

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And this, I think, will show people that, in fact, we should go further. We should
do covenants

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to do ARK, which is also like a leave lightning and go somewhere else. And we
should, in fact,

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do BIP300 so that we can just try all kinds of other different blockchain designs
also.

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And we must throw the door open to competition. So I think it's very,

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this new lightning news is good culturally because it will break up this colossal
mistake,

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which is the single biggest threat to Bitcoin, which is this idea that everything is
perfect

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with the Bitcoin tech stack and that no one needs to think about anything or do
anything.

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So even though it's a sort of bad short-term news, it's very good long-term news
because it

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speaks to the fact that people might finally wake up for the need to continue to
work on Bitcoin.

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The first seven years of Bitcoin's existence, we did something like 16 or 17
different soft forks.

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And then since then, we've only done SegWit and Taproot. And it took SegWit 20
months from when

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it was first proposed to when it was coded. And then it finally activated. It had a
long,

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contentious activation from October to August. So it took about a year to be made
and then a

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year to activate-ish. And then Taproot was proposed January of 2018, right after
SegWit was activated,

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but it wasn't until November, 2021, 46 months. So 20 months, 46. So we have to get
that number

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back down to what it was before, which is six months to the previous average.

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I was just going to say, so what's the driving force behind Drivechains, pun
intended?

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I just think that, honestly, at first I thought, okay, I came up with the idea
because I was

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interested in prediction markets, as I said, and I came up with this convoluted
prediction market

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thing, which would have been very disrespectful to bolt on. This is like my weird
pet project.

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It's very experimental and bizarre. So I knew that Bitcoin would not trend. That
would be

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like kind of like changing Bitcoin into something like Monero or something, changing
it to Mimble

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Wimble or something. So I kind of knew that wouldn't happen, but I had asked around
about,

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well, what do we do? What if someone wants a completely different design?

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So I was aware of the sidechain idea. This was back in like 2013, 2014. And I said,
well, this

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would be a sidechain of Bitcoin. So that's how I first got into sidechains. And then
I was

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researching the idea and people had, they were a little confused about the idea
because, and they

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still are. Many of the people still are. Some people like Peter Todd, and I think
even the

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likes of Greg Maxwell and et cetera. Many of them are still, they have stumbled over
this one thing

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that they can't recover from, which is to me, it's just a clear mistake, but I think
they just

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tripped over this root or something, and they just cannot get off of it, which is
they can't

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keep a bunch of things organized straight. The L1 costs versus the L2 costs versus
the, those are

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node costs. And then the mining costs, these are different things. And then pool
costs actually

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yet a third thing. If you keep them all straight, you see that they all work out in
their own little

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column. But if you accidentally lose track of which is which, you get confused as
unfortunately,

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I think they did. Because one of the things they said was they thought that it would
be no good to

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scale with sidechains. And so I investigated this claim in 2015 because this block
size debate had

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been heating up in 2015. And I thought, well, why can't we just have a large block
sidechain?

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And, you know, because then small block people get small blockchain, large block
people get large blockchain, to what extent are the small blocker people really kind
of like coerced by the backdoor to like, have what is de facto a block size
increase. So I was really interested in that. And what I discovered was in
Blockstream's design was like unfinished, and it was not really great. And they did
have some of these properties that they, you know, they were trying to get rid of.

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That they thought it, they feared it might have and also it didn't. Kind of a long
story. I could get into those weeds if you want. But basically, I was like, we could
do it a different way. It's much simpler.

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And I published Drivechain in November 2015. And one of the reasons, one of the
motivations for posting it was my own prediction markets idea. But another way was
just that, like Ethereum was getting big at this time.

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Ethereum had been proposed, like January 2014. But it didn't come out until like mid
2015. Really, it was like vaporware. And then you had stuff like, you know, you had
like bit shares, you had like all this stuff, whatever, NXT had like this weird
stuff that come out. Counterparty was kind of getting big at the time. Just they're
all slightly different from each other, of course. And but the big one was Gavin
Andreessen and Mike Hearn had put out Bitcoin XT, the hard, the eight megabyte hard
form.

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And so I was like, well, we can and everyone was, you know, the whole thing was
like, how do we keep the community together? How do we solve the problem of
maintaining decentralization? So previously, this is becoming a long run on story. I
hope it's not too boring. But that November 2015 was the Drivechain blog post. And
then before that, in September 2015, I had published an essay called measuring
decentralization.

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Because I was trying to figure out what, you know, each side wants something. So we
have the small blockers want something and the large blockers want, and I was trying
to think, well, how can we give both people what they want? And I was like, what is
it that the large blockers have a problem with? Okay, they want, they always want
there to be block space, they want the fees to be low, if they broadcast a
transaction, they want to get it into the next block.

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They don't want to wait for lightning network or some other new thing that hasn't
been fully invented yet.

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And so I was like, okay, fine. The small blockers, what do they want? And I was
like, well, what they want is the cost of running a full node to remain low.

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The thing is, even at the time, and to this date, like most people agree with me
about that. But not all some people really think that some other thing is also
important. But I think those people are wrong. They don't realize what they want,
unfortunately. I mean, which is a weird position for me to be in. But I carefully,
very carefully tried to figure out every single thing.

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I tried to read everything on the subject and talk to all those different people and
listen to their podcasts and whatnot. A lot of the other stuff that people think
they want, doesn't make sense. So I can give you one example, or more if you're
curious, but one is like, people want it to be easy to, to begin to mine. They said,
we want it, we don't want it to be difficult for us to start our own mining
operation. So they thought, if we have large blocks, it'll be too hard to let go.

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Like sink a full node into expensive, you know, that's literally that. But you see
how that, that kind of doesn't really make any sense. Because if you're worried
about how expensive it is to mine a block, it's a hash thing. That's not, it's a
hash thing. It's not a block thing. Exactly. Right. Like the, that's exactly it,
which is your full node is going to check whether or not each block meets the
difficulty requirement, but it doesn't matter what the difficulty requirement is.
It's just whether or not some number is less than some other number.

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So if you really want it to be easy to mine, then you want the difficulty to be
lower. But if you want the difficulty to be lower, then you're just removing proof
of work from Bitcoin. Like the difficulty, it is what it is.

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There's one, maybe small argument that the larger the block gets, the larger the
latency is, then like block saturation, once you find something, which gives people
with like lower network resources, a little bit of a detriment, but you already have
situations like that anyway.

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Yes, you have an excellent memory. That was indeed one of the things floating, one
of the other things floating around at that time. But by 2014, the block orphan,
this is what had exactly happened at around this time was, in 2014, the blocks had
naturally started to become big enough for this latency effect to take hold, where a
miner would download the block, they would see a new block, they would download it
and validate it.

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And this would take a little bit of time, 4, 5, 6, 7, 8, 9, 10, 12 seconds, you
know, just a little bit. But however, during that time, they would not be mining the
next block, they would be mining, they don't they don't switch blocks until they're
finished. So as a result, the you could see it is two charts, as the blocks became
fuller, the orphan rate started to go up, it went from basically zero to like, went
up.

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But by 2015, it had already crashed back down to zero, because the miners had
already set to work solving this problem. And what they had done speaks to the exact
heart of this issue. And exactly where still to this day, even the likes of people
like Peter Todd, and I think even Greg Maxwell became confused. Greg hasn't
commented on this issue in a very long time. So I don't know, maybe he I don't know
what he's up to. He's on vacation or something. But the heart of the matter is this.

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The miners started to cut corners and cheat, they use SPV and spy mining to just
switch to the next block without validating it at all. And what they had hit on was
the fact that miners, this is where I disagree with, out of all the things, people,
Satoshi had all these things, and people have their thing of Satoshi was a genius,
or they have Satoshi didn't get everything right. I think Satoshi got almost
everything right. But there's one thing he didn't quite get right. Which is that he
seemed to really think that every miner must run a node.

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But the miners are pursuing efficiency, their job is to hash as cheaply as possible.
And if the node starts to get in their way, then they cut the node, they can and
should and will and did, they cut the node. And now the miners don't run nodes. And
the question is, is this some kind of crisis?

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And to this day, I think it's, people have confused themselves a little bit about
this, because on one hand, we say we want everyone to run a node, and we want
everyone to be able to run a node. So we think, wait a minute, if miners aren't
running a node, this trips off, this sets off the immune system, and says, wait a
minute, that's bad. But actually, it's not. The key is your node, it protects you
from mistakes made by a miner who does something wrong. So it's because you run a
node that you don't care if the miners do or not.

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So I'm not sure this is like a very advanced point.

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I mean, the heart of the matter is that your full node is protecting you. And the
miners, they're going to cut corners if they can, if this five or six seconds,
because remember, of course, the interblock time is 600 seconds, 10 minutes on
average, 600 seconds. And so six seconds is already, you know, 1%. And it can
sometimes be longer.

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And it's 600 seconds on average, but you know, half the time, it is shorter than
that. And you know, something like 10% of the time, it's much shorter than that, you
know. So losing a few seconds actually is like a minus 20% loss of profit of revenue
efficiency. And so I mean, of course, profits are revenue minus costs. So the effect
on profits can be utterly enormous if everyone is doing this by mining and you're
not.

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Turns out those by mining and SPV mining have no negative consequences whatsoever.
Because they just let you switch over to block as soon as your competitor finds it,
what you do is you take a tiny amount of hash and you connect to if you're the pool
administrator, so your foundry or someone, you connect to the other pools, and you
see when do they switch their person to the next one, then you just switch yours,
that's by mining.

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Now, the question is, but that people always wondered is, is this going to ruin? Is
this going to destroy Bitcoin? Because if all the people, everyone in the mining
community is not running a node? Well, isn't it liable to just go off in a
different, a different direction. But that is the mistake. That is what people fail
to keep organized, in my view, because it can't, it can't derail. If you're running
a full node, it's because you are running a full node that it can't derail.

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If someone mines an invalid block or something, or there's a block that just doesn't
exist, your node will reject it. And so it's because you are running a node, it's
because it's cheap to run in a full node, it's because we encourage, paradoxically,
it's because we encourage people to run full nodes, that it doesn't matter if 100%
of the mining network does not run a full node.

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And so this is the key to unlocking it all, if you think I'm some kind of like crazy
crank, or a genius, or whatever, kind of hinges on this point, because the whole
idea of sidechains is the users run whichever sidechain node they want. So the users
are voluntarily stacking up full node costs for themselves.

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And then whether or not the miners feel an incentive to run these sidechain nodes or
not, literally doesn't make any difference. So it doesn't even matter if they feel
they must, or if they feel they don't need to, or if they feel like they want to get
certainty over the withdrawal status, or if they want to just get it from a friend,
or if they want to just guess a lot, or they want to just do what they think other
miners are doing.

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My whole point is that it doesn't, none of it makes any difference, because the
miners, they'll just do whatever the efficient thing is anyway. If the efficient
thing is to have one person on the planet Earth run all sidechain nodes, and then
the miners just call them on the phone and ask, it doesn't matter. Or if they all
feel, this is because I get it from, I get criticism from all sides.

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Or if it's the case where the miners, someone designed something where the miners
must run, and then it's a mandatory cost for miners. That doesn't matter either,
because so many things are mandatory costs with miners. Actually, a mandatory cost
will cause the difficulty to drop and actually reimburse the miners indirectly. But
that, you know, it doesn't matter because miners already spend, they already have a
mandatory cost, they already must purchase the latest ASIC hardware, they already
must do whatever the efficient cooling thing is.

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The market economy, the economies of scale come into play for mining operations at
this point.

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Huge economies of scale and diseconomies of scale. So there's some efficient scale
that is the most profitable. And every other scale is at some kind of disadvantage
or another. So the idea that one scale is not, that we should panic unless the scale
is like what we think it is, that's a completely dead idea.

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I got a few directions in the way I'd like to take this conversation. I'm trying to
think about which way I want to go. Because I'm interested in like what you just
said springboarded nicely into why Drivechains work is that users kind of keep
track of what they want, and then leverage the mining community to make sure that
things move forward as they're supposed to, however, they want to end up doing it.

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So like, how do you have that guarantee? How do you basically permissionlessly
innovate by having whatever Drivechain you want rooted into the Bitcoin blockchain
and let miners do their own thing? I know that's like part of the merge mining
process, but like the way I see any layer one, layer two scenario is you're pooling
funds via some contract on the main chain.

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And then based on the security of those pooled funds, you make an inference and move
them around in various ways on the layer two. And whenever someone wants to leave,
they can basically sign a message that says, I want to leave, this is how much money
I have, give it back to me on the main chain.

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How is that operating? How are you pooling funds on the layer one and then granting
those kind of security guarantees to the layer two via Drivechains?

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Yeah, I have what would be probably described conventionally as the weakest security
model of the L2s. And for a while, I fully agreed with that. But as time goes on, I
now actually my own idea is growing on me a little more. And I actually think it's
the others that will end up being insecure.

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Who knows, time will tell. But basically, in BIP300, all the coins sent to a certain
sidechain, they're all in one UTXO. So when you deposit, you thread the UTXOs and
you just keep, you have like an account. And then there's this one account that
maybe it has like 50,000 BTC in it.

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And over on the sidechain, there's 50,000 coins. Each deposit creates a coin over
there. And the coins over there are governed by their own piece of software. Now a
distinction between BIP300 and most other L2s is that as you sort of said, most L2s,
they'll give you something that where you can, at any time, take that L2 information
and put it on L1 and get your coins back.

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So like lightning does this the most obvious way. And so hence, people think that
lightning is the most secure. But and so would I have said that probably maybe even
like 18 months ago. But now I kind of think it's, it's actually not going to work
out in that direction great, really well. So I'll explain what I mean by that in a
second.

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But what I'm trying to get at is everything gives us unilateral withdrawals, like
ARK. It's always giving you this thing. So that if the ARK supernode gets hit by a
meteor, or if you're lightning channel parties, they'll go AWOL. You have something
that you can take on L1 and get your coins back. And you think, well, of course,
what's the alternative? You know, of course, we need that.

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But what BIP300 does instead is it says the whole withdrawal thing is just up in the
air. It's a wet concrete. It hasn't been decided yet. And it could theoretically
never be decided. And I what I say is instead, what's happening is the miners can
collect all these fees, which is an enormous amount of money. The fees, like for
example, Ethereum's daily fees are millions of dollars a day.

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On a random day when I did the math, there were 7.2 million. Of course, it varies
from time to time. You can go to a site like cryptofees.info to see what they are
today. Usually on the weekend, they are a little lower, I think.

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2 million.

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No.

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Average 2.3 million.

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2.3 for the last week. So millions per day. And, you know, millions per day that is
so it's basically like a it's a killing the goose that lays the golden egg type
situation where you say this goose is laying millions of dollars a day, if we keep
it on. Or we can, you know, kill the goose and take the money on the sidechain
because in BIP300, the miners can take all of the money.

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They are the ones who set the withdrawal location. And it's not so easy as they just
take it the next day. They have to wait a very long time. They have to fully endorse
this long, lengthy process where it's all governed by this one hash that is the same
on two locations. So it's very, very, very transparent. It's all very intentional.

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There's no sense in which something is like, oh, we made a mistake, or we got
confused. It's very, very, very slow. So a metaphor I often use is like the people
buzzing the person out of prison, where they have the two gates and they go and they
knock on the door and then they buzz and the next gate closes. And then they buzz
them again to get out with like a big plexiglass window. So it's kind of like that.

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So the miners can take this money and move it wherever they wish. And that's what a
lot of people think like, wow, that's insane. But, and I would kind of have agreed
in the past, but now I'll try to give you an idea of why I think actually, mine is
going to end up being the only sane one. And one, the two big reasons are 51%
hashrate can already interfere with every L2. Because they can interfere with every
L1.

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If you have a proof of work blockchain on L1, the 51% hashrate determines what the
blockchain's state is. It determines which blocks have been found. So that's already
the case that they can, for example, censor the lightning justice transaction and
prevent it from ever making it into the blockchain. So they can already empty
someone's channel.

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Is it even worth having arguments that are equivalent to 51% of tax? Because if you
don't have a network, if you have a 51% majority mining.

297
00:42:22,119 --> 00:42:47,119
evil or something like that. So, but I agree with you is this is partly what I'm
driving at is that they can hold any UTXO hostage or any transaction hostage. So
even something like a multi-sig or like liquid or whatever the miners if they really
hated for some reason, they can just interfere with it, disable it at the very least
and on almost all cases steal from it.

298
00:42:48,119 --> 00:42:58,119
So they can already do that. And the question is just, will they want to? And that
is where the second part comes in, which is the fees.

299
00:42:59,119 --> 00:43:17,119
In BIP300, it's an L2, but all the fees go to the L1 miners. So it's the vertically
integrated incentive. It's the same. Whereas in the other L2s, this just doesn't,
isn't the case. The lightning node operator is going to collect the fee, or the arc
super node is going to collect the fee.

300
00:43:18,119 --> 00:43:41,119
And now that some years have passed and I've gotten a clearer look of how this is
supposed to look, it's coming to focus a little bit more. I really think that
actually it's, it's, it's not going to be great if, for example, you have something
that's getting 2.3 million in fees is on the L2, but the miners are cut out from
that and they only get the L1 fees, which are usually like 400,000 a day or
something like that.

301
00:43:42,119 --> 00:43:43,119
You can check the site and see.

302
00:43:43,119 --> 00:43:44,119
522.

303
00:43:44,119 --> 00:44:01,119
522. So we can, so it's 10x more fees, but the miners are kind of thinking, well,
this is, all this is only possible because of us. We could, we could close this down
at any time. Now, and that's, of course, this is, again, this is only a tiny glimpse
of what the future will be like.

304
00:44:02,119 --> 00:44:16,119
And my guess is that the L1 fees on the future will stay at around 500,000, but the
L2, the total number of L2 transactions I think could glow, grow to a planetary
scale very, very quickly.

305
00:44:16,119 --> 00:44:33,119
And that if we're talking like Visa is a hundred million in revenue per day, at
least. And, and then that's before you count whatever WeChat pay or everything
that's in cash. So I think the, the L2 fees will grow and grow and grow and grow and
grow and grow on an exponential curve that just grows for a long time.

306
00:44:33,119 --> 00:44:49,119
And so there will eventually be some kind of conflict. If, if, if the L2 fees are
like 10,000 times higher than the L1 fees, the miners would then might be a little
bit like, wait a minute, like, should we, why don't we just make ourselves the L1?

307
00:44:49,119 --> 00:45:16,119
Right. Why don't we just make ourselves the L2? And then it kind of, or maybe they
say they have a little, they have some kind of euphemistic program because the
incentives aren't aligned. They say, well, use the Foundry lightning channel or
something. And then this kind of just becomes BIP300, but worse. Since BIP300 is
designed with it in mind that the miners can steal, we at least forced them to go
through this extremely slow, transparent, month long process.

308
00:45:16,119 --> 00:45:37,119
And so, cause it's designed for that. And so that's why I actually think it's, it
will end up doing pretty well. I was kind of ashamed of this part of it before, but
now I kind of think it was going to hold up because the economics is stronger than,
it's much stronger to have, to be in a situation where the miners want the L2 to do
well and where they want people to use it.

309
00:45:37,119 --> 00:46:06,119
And they, to the point where they would maybe hire developers and purchase
billboards and things, you know, purchase Superbowl ads, but they want it to work
where there's a will, there's a way. And whereas the lightning stuff is more
paranoid and it says everyone's out to get us, including the miners. And it makes,
much like most paranoid people, it makes too many trade-offs, which undercut the
purpose of what they're, you know, it's like you're building a bunker in your
backyard.

310
00:46:07,119 --> 00:46:25,119
It's just, it's not an efficient way. If you really thought that you needed a
bunker, then you should probably be doing something else. Try to get on Joe Rogan or
something and explain to other people, start some kind of political movement or
something, you know, like it's not really going to work. The odds that that's going
to be the decisive thing.

311
00:46:25,119 --> 00:46:44,119
So, so that's kind of a little bit of the lay of the land, as I see with the whole
L2 situation. The fees, it's this idea that 51, fighting the 51%, it's kind of not
going to work. And the, the fees are the key.

312
00:46:44,119 --> 00:47:04,119
So I think the fees are the, like the big difference. This, we would think would be
an irrelevant detail, but it ends up being pretty, pretty relevant, I think.
Otherwise you have to have some kind of situation where the lightning operators are
going to pay periodically, but you have like collective action problem. You have
stuff like that.

313
00:47:04,119 --> 00:47:32,119
Well, you end up with a larger economy of scale because efficient node operators
have to run both chains at the same time.

314
00:47:33,119 --> 00:47:51,119
If they don't, and they just want to guess, then they can. The idea that the full
node costs will be significant, this is a hangover from a block size war. That was
the whole dispute about large blocks versus small blocks, as I said, you know, a few
minutes ago.

315
00:47:51,119 --> 00:48:01,119
I said, small block people want to keep the cost of running a full node down.

316
00:48:01,119 --> 00:48:30,119
But this is a completely different situation from that. No one's forced to run any
of the new nodes at all. In fact, the, each, each sidechain node is its new option.
So it's kind of like a bunch of different hotels that you might visit.

317
00:48:31,119 --> 00:48:40,119
It's a voluntaryism type thing. If I want to see this, then I have to run it. If I
want the data, I need to run these things.

318
00:48:41,119 --> 00:48:59,119
How do I fit 8 billion people into my house? And we're like, okay, we'll build a
giant tower. And it's kind of like, well, you can see how if you already own the
house, it's, you're not, you're not in love with that idea. But if it's like, okay,
instead, we'll let you leave the house and visit these other places.

319
00:48:59,119 --> 00:49:16,119
Then the complaint doesn't work anymore because someone's saying, well, wait a
minute, I don't want there to be a tower. He said, but it doesn't matter because
there'll be all these different things. Maybe one will be a tower. It'll be the
Roger Ver tower, you know, but maybe one will just be like some kind of four seasons
or something, you know, and it'd be really nice and you will like it.

320
00:49:16,119 --> 00:49:33,119
So the idea that we have to care about the full node costs is again, missing
slightly the point. The point was in the block size war was that everyone was in the
same building. So it was like, do we want this to be a single family home? Or do we
want it to be a super tower? Or do we want it to be something else?

321
00:49:33,119 --> 00:49:56,119
And of course, this was, I think the big problem politically with the large
blockers, they had many problems. Both sides did, of course. But politically, they
had no actual alternatives, like they had, you can't beat something with nothing,
they say. And they just kind of said, we will hard fork to eight megabytes now, and
then we'll hard fork to something else later. And it was kind of like, what was kind
of like a big question mark, like what

322
00:49:56,119 --> 00:50:00,119
the if my memory serves me correctly, it was

323
00:50:00,965 --> 00:50:02,365
this isn't a network problem now, we'll deal with it when it is a network problem
later. So right,

324
00:50:02,365 --> 00:50:06,205
I'll let it artificially inflate until it becomes an issue. And then we'll deal with
it appropriately.

325
00:50:06,205 --> 00:50:11,485
It's like, we'll build, yeah, we'll bulldoze the house, and we'll keep adding
stories. And we're

326
00:50:11,485 --> 00:50:16,925
like, well, how do we know that we'll still be able to do that? And then like, well,
we'll figure it

327
00:50:16,925 --> 00:50:21,565
out later. So people don't want to really hear we'll figure it out later. But with
Bith 300,

328
00:50:21,565 --> 00:50:25,965
it actually is fixed permanently, because you just don't have to worry about it. You
don't have to

329
00:50:26,285 --> 00:50:30,605
fix permanently, because you just say, here's a single we everyone starts in a
single family home,

330
00:50:30,605 --> 00:50:36,285
all the coins start in a single family home, they can go somewhere else. So they
could go to some

331
00:50:36,285 --> 00:50:40,285
place that is a tower or is something that's medium sized, or something that's
really, really

332
00:50:40,285 --> 00:50:47,005
infinitely sized. And you can go come or go as you please. So now it's up to it's
the whole problem

333
00:50:47,005 --> 00:50:53,405
is kicked away to a different group of people, the L2 developers who compete against
each other to

334
00:50:53,405 --> 00:50:57,805
try to solve that problem. And they push the envelope as far as it wants to be
pushed. I mean,

335
00:50:57,805 --> 00:51:07,725
most of the transactions today are USDT on Tron. So apparently, that's enough for
that's enough

336
00:51:07,725 --> 00:51:13,005
decentralization for like a huge market segment. So that's the point is that this
actually is a

337
00:51:13,005 --> 00:51:18,445
final solution. Because the question was, what size house should there be? But with
this is

338
00:51:18,445 --> 00:51:24,285
just as we start in a small house, and then we go to any, we go to any house we want
anyone that

339
00:51:24,285 --> 00:51:29,165
anyone builds somewhere else of any size, and in the future, you can knock them down
and build

340
00:51:29,165 --> 00:51:36,045
new ones or do nothing. So that is a big difference. Yeah, it's probably
appropriately

341
00:51:36,045 --> 00:51:42,365
analogous to like real estate, right? Like you can you can take responsibility of a
bunch of

342
00:51:42,365 --> 00:51:48,045
different houses if you want to. But not everyone is forced to do so. So you can
make a business out

343
00:51:48,045 --> 00:51:52,845
of, you know, doing real estate, making money off that, off the scarcity of that
real estate,

344
00:51:52,845 --> 00:51:57,725
or just be happy with the one that you have. And then again, the the Drivechain
critics get

345
00:51:57,725 --> 00:52:03,405
something slightly wrong again, where they'll say, well, okay, there's no literal
requirement,

346
00:52:03,405 --> 00:52:09,245
but miners have to do, you know, if miners are making a bunch of money from these
sidechains,

347
00:52:09,245 --> 00:52:13,965
then it'll become a de facto requirement, just like it's a de facto requirement to
use ASICs,

348
00:52:14,605 --> 00:52:20,685
and not CPU mining or something like that. But again, what they don't get is that
that's true

349
00:52:20,685 --> 00:52:25,565
of every mining, everything that's ever been done in mining. So like, they're going
to go down the

350
00:52:25,565 --> 00:52:33,565
line and say, make sure we have to run immersion cooling by these people. There's a
prejudice

351
00:52:33,565 --> 00:52:38,445
against the Drivechain, because it is, is the only mining activity really that
takes the form

352
00:52:38,445 --> 00:52:45,325
of a piece of software. But there's all these other things like the ERCOT demand
curtailment

353
00:52:45,325 --> 00:52:53,325
credits. That's a situation where the government is paying miners not to mine.
That's only viable

354
00:52:53,325 --> 00:52:59,485
at certain scales, you know, like you have to be big enough scale to like, negotiate
this deal with

355
00:52:59,485 --> 00:53:03,645
I'm not sure exactly the details of that. But we can assume it would not have
existed at all,

356
00:53:03,645 --> 00:53:07,325
if mining was not at a certain scale. You know what I mean? Because the power
company has to

357
00:53:07,325 --> 00:53:11,405
find it in their interest to shut off enough electricity. So there's some scale to
that.

358
00:53:12,845 --> 00:53:17,165
There's some cost to that, and there's some benefit to that. So there's innumerable
things,

359
00:53:17,165 --> 00:53:23,405
you go down the line, there's hundreds of things that could affect mining, and have
different

360
00:53:23,405 --> 00:53:28,445
costs and benefits. And so why be prejudiced against this one? And then if you
investigate

361
00:53:28,445 --> 00:53:33,165
more, because of course, each thing that affects mining will affect what is the
equilibrium

362
00:53:33,165 --> 00:53:38,285
efficient miner look like. But this is the perfect thing for mine. This is the thing
that gives them

363
00:53:38,285 --> 00:53:45,485
enormous amounts of revenue from serving actual users of Bitcoin, people paying
Bitcoin transaction

364
00:53:45,485 --> 00:53:52,205
fees using the Bitcoin blockchain, the L2 blockchain. It must cost almost nothing,
because

365
00:53:52,205 --> 00:53:58,045
the miners don't need to run nodes, they can get a node, they can collaborate with
an existing

366
00:53:58,045 --> 00:54:04,845
sidechain full node. This is what 301 does. Even if they couldn't, the node costs
must be small,

367
00:54:04,845 --> 00:54:08,765
because in order for the network to have users, there must be some people running
sidechain full

368
00:54:08,765 --> 00:54:14,125
nodes. So there's no way this can cost as much as like, you know, an S19 or
something, you know.

369
00:54:14,125 --> 00:54:19,805
There's no full node, no matter how expensive, can cost as much as many mining,
small-scale mining

370
00:54:19,805 --> 00:54:26,365
operations cost. So this is something that costs basically nothing, produces huge
amount of revenue

371
00:54:26,365 --> 00:54:33,325
for miners. And it doesn't even, they don't even need to like, they can just use,
they can have a

372
00:54:33,325 --> 00:54:39,085
node that's like far away, you know, like an AWS node that they create, that they
like VPN into,

373
00:54:39,085 --> 00:54:45,805
you know, they don't even need to like physically put anything anywhere. It's just a
URL. So this is

374
00:54:45,805 --> 00:54:50,125
among the things that affect miners costs, this is one of the best, because the more

375
00:54:50,125 --> 00:54:55,565
miners earn from serving actual users and customers and transaction fees, the more
loyal they will be

376
00:54:55,565 --> 00:55:00,285
to the health of the Bitcoin network versus they'll be loyal to like, we don't
really want

377
00:55:00,285 --> 00:55:06,285
them to be loyal to the government of Texas and what they think, you know, how much

378
00:55:06,285 --> 00:55:11,805
they think people should be paid to not mine at all. And I don't have anything
against that

379
00:55:11,805 --> 00:55:17,565
program. I think that program is great. I'm just saying that with these people who
would complain

380
00:55:17,565 --> 00:55:23,805
about this topic of sidechain full nodes, to be logically consistent, they have to
complain

381
00:55:23,805 --> 00:55:28,365
about literally every single thing that miners would do since they all affect the
costs or

382
00:55:28,365 --> 00:55:29,725
revenues in some way or another.

383
00:55:32,445 --> 00:55:37,005
I want to ask you, so like two questions, they're kind of different. So you can
pick,

384
00:55:38,125 --> 00:55:42,925
how close do you feel your Drivechain idea is to being adopted by, you know,
Bitcoin Core?

385
00:55:42,925 --> 00:55:47,805
And then another question, why not go to Ethereum and then try out your prediction
markets idea?

386
00:55:47,805 --> 00:55:49,645
Because it seems like that's what you're trying to build to, right?

387
00:55:50,605 --> 00:55:56,925
Yes. Well, you know, I think actually the Ethereum is not great for prediction
markets or

388
00:55:56,925 --> 00:56:02,125
oracles, but it's kind of a technical reason that involves the oracles copying each
other's work

389
00:56:02,125 --> 00:56:08,125
and being unable to gain a premium for being honest, since someone can always copy
them.

390
00:56:09,245 --> 00:56:12,925
And that is why you need a certain type of sidechain, I think, to do the
peer-to-peer oracle.

391
00:56:12,925 --> 00:56:17,005
But I think the peer-to-peer oracle is very experimental. And I really hope that it
does

392
00:56:17,005 --> 00:56:23,565
work or that it pushes the envelope in oracle research to something that's much
better than

393
00:56:23,565 --> 00:56:29,485
what we usually get, which is just like multisig with like some arbiter, which I
really, really

394
00:56:29,485 --> 00:56:32,765
hate. And I think we have to go way past that if we're going to get any bigger.

395
00:56:32,765 --> 00:56:34,205
Bigger multisig seems to be the path.

396
00:56:34,925 --> 00:56:45,005
Yeah. Right. So that's kind of disappointing. So I think that's the goal. I think
what I've

397
00:56:45,005 --> 00:56:48,525
discovered, though, is that this idea is much more important for Bitcoin than I
would have

398
00:56:48,525 --> 00:56:52,365
thought. There's too much. The block size war is just one example of disagreement.

399
00:56:53,325 --> 00:56:56,445
And the fact that Ethereum exists at all is another example of disagreement. Of
course,

400
00:56:56,445 --> 00:57:00,845
Vitalik was a Bitcoiner, and he was co-founder of Bitcoin Magazine, and he used to
write

401
00:57:00,845 --> 00:57:05,645
Bitcoin Magazine articles. And he was a big Bitcoiner. And the whole reason that any
of

402
00:57:05,645 --> 00:57:09,085
these altcoins exist at all is because we don't have sidechains, I think.

403
00:57:09,085 --> 00:57:13,405
People would still launch coins, but they would be like very frivolous coins.

404
00:57:13,405 --> 00:57:17,725
They'd be like Fabricoin or something. They wouldn't be something real, something
that has

405
00:57:17,725 --> 00:57:22,765
more fees per day than BTC has. That would never have happened if we had sidechains.

406
00:57:23,485 --> 00:57:28,845
And we would have a more, you know, so the idea allows Bitcoin to have planetary
scale

407
00:57:29,805 --> 00:57:35,805
in some form, not the ideal form, but it lets us give 8 billion people some kind of
UTXO,

408
00:57:36,365 --> 00:57:42,285
and it gives us Zcash-level privacy, and it gives Ethereum-level flexibility,

409
00:57:42,285 --> 00:57:46,605
and it lets us do these other things. It creates competition for developers. So it's
an important

410
00:57:46,605 --> 00:57:54,845
idea. The question of how close it is adopted by Bitcoin Core, I think that the
policy of Bitcoin

411
00:57:54,845 --> 00:58:00,365
Core is not to touch anything if it's controversial. So as long as the controversy
lasts,

412
00:58:00,365 --> 00:58:05,965
there will be a sort of stalemate in Bitcoin Core. But I think that probably the
miners,

413
00:58:06,925 --> 00:58:12,445
the Bitcoin miners only very recently found out about this idea as of like July or
something,

414
00:58:12,445 --> 00:58:17,645
and I think that that is the more interesting direction to probably go, is to have
them

415
00:58:17,645 --> 00:58:26,045
activated unilaterally. But it's kind of intriguing that in Bitcoin's history,

416
00:58:26,045 --> 00:58:30,205
usually Bitcoin Core puts out software that miners activate, and so I don't know if

417
00:58:30,525 --> 00:58:39,645
miners feel guilty about SegWit2x and these other historical events, and so that
guilt may

418
00:58:39,645 --> 00:58:46,125
cause them to delay activating this idea. It's very hard to say, because the idea
has been around

419
00:58:46,125 --> 00:58:51,565
since 2015, and it had a little bit of coming in and out of interest, and now
there's

420
00:58:51,565 --> 00:58:57,085
more interest. I mean, there's certainly a ton more interest now than there was
three months ago, and

421
00:58:57,085 --> 00:59:03,005
there's a ton more interest three months ago than there was six months before today,
and so

422
00:59:04,685 --> 00:59:10,125
there's a lot more interest, and now with Lightning needing more soft forks

423
00:59:11,565 --> 00:59:15,885
in order to work, that will probably break a lot of the logjam of the soft fork.

424
00:59:16,925 --> 00:59:22,765
We have a situation where I don't think anyone, like something like APO, BIP-118,
any priv out,

425
00:59:22,765 --> 00:59:25,645
there's no real

426
00:59:29,245 --> 00:59:33,405
opposition to that, but it still doesn't activate because people don't want to go
through

427
00:59:34,045 --> 00:59:38,045
the soft fork activation process. So I think what needs to happen is either

428
00:59:38,685 --> 00:59:42,765
the miners need to realize that they need to take more responsibility for

429
00:59:42,765 --> 00:59:47,325
making money, like they need to take responsibility for the Bitcoin network and not
be passive,

430
00:59:48,285 --> 00:59:53,005
because they think that being passive is the way to placate

431
00:59:53,885 --> 00:59:58,445
developers and the users, but I think that if they looked into it more, they would
realize

432
00:59:58,445 --> 01:00:05,325
that that's a mistake. But I can see why they would think that now. So we either
need that, or

433
01:00:05,325 --> 01:00:12,205
we need people in Bitcoin Core to, the stigma around doing the soft fork should end,

434
01:00:12,205 --> 01:00:16,925
because it is irrational. The idea that we do all these different code changes,

435
01:00:19,645 --> 01:00:23,405
we do all these code changes all the time, but only if something is a soft fork is
it

436
01:00:23,405 --> 01:00:29,165
controversial, or it doesn't make any sense. I think how close, it's very hard to
say, but

437
01:00:29,165 --> 01:00:33,965
you could point to like 1.19, where that was popular, then unpopular, and then

438
01:00:35,005 --> 01:00:40,605
Jeremy Rubin tried to activate it, and everyone hated it, and now two years later,

439
01:00:40,605 --> 01:00:53,085
everyone sort of loves it again, or they want to switch to TxHash. So the big
barriers are,

440
01:00:53,085 --> 01:00:59,645
miners feel guilty, and they don't feel responsible for their own revenues, costs,

441
01:00:59,645 --> 01:01:03,965
and the fate of Bitcoin. They try to say that the developers are responsible for
that, and they just

442
01:01:03,965 --> 01:01:11,245
mine at the cheapest cost. So that is all because of guilt over SegWit2x,

443
01:01:14,285 --> 01:01:18,205
all because of like, whatever, Bitmain or something. So that's one thing that could

444
01:01:18,205 --> 01:01:23,725
change. And the second thing is, Bitcoin Core could admit that regular soft forks
are good, and

445
01:01:24,045 --> 01:01:31,085
and de-stigmatize them, which now must happen, basically, because of

446
01:01:33,005 --> 01:01:41,565
lightning issues. And then the third thing though, that's big, is that this new

447
01:01:41,565 --> 01:01:46,365
attitude, it's like Michael Saylor style attitude, that Bitcoin has already
succeeded, and that it's

448
01:01:46,365 --> 01:01:52,045
only a matter of time before hyper-Bitcoinization happens. That has led people to
think that

449
01:01:52,045 --> 01:01:57,245
we don't need to do soft fork, so that soft forks are a risk. Even though soft forks
are not a risk,

450
01:01:57,245 --> 01:02:01,565
because a soft fork does not change the protocol for anyone who's running a node. If
you run a

451
01:02:01,565 --> 01:02:06,685
node, your node still does everything it was doing before, and it doesn't do any new
thing.

452
01:02:07,645 --> 01:02:14,525
So the idea of soft fork being a change is not quite correct. It's always confused
me. It's like,

453
01:02:14,525 --> 01:02:19,405
people don't understand the difference between a hard fork and a soft fork. Hard
fork is a

454
01:02:19,405 --> 01:02:27,725
de facto expansion of the rule set, such that afterwards you have to, the previous
rule set

455
01:02:27,725 --> 01:02:31,885
you were using to validate things no longer works. You need to expand it. So you
need to do a hard

456
01:02:31,885 --> 01:02:37,005
fork, so that your node can understand this new introduction of a rule. Because a
soft fork is a

457
01:02:37,005 --> 01:02:43,005
further constrainment, whatever, adds further constraints to the rule set you were

458
01:02:43,005 --> 01:02:47,885
previously using, such that the one you were using is still valid. But if you want
to add the

459
01:02:47,885 --> 01:02:54,925
additional constraints, then something else works. And that seems to be lost on a
lot of people,

460
01:02:54,925 --> 01:03:00,685
so that arbitrary soft forks aren't that big of a deal. It's an opt-in scenario.

461
01:03:02,365 --> 01:03:06,925
Yeah, like every time a block is found, it's sort of a soft fork in a way.

462
01:03:07,645 --> 01:03:14,125
But I think the one thing that we should really emphasize is that many of the soft

463
01:03:14,125 --> 01:03:21,165
forks brought us a lot of these, or just regular BIPs, you could even say. We
wouldn't

464
01:03:21,165 --> 01:03:27,725
have HD wallets or BIP39 seed phrases without some kind of invention. But even with
the Lightning

465
01:03:27,725 --> 01:03:35,085
network, you needed multi-sig, check lock time verify, check sequence verify,
SegWit. So those

466
01:03:35,085 --> 01:03:41,405
are all things that helped Lightning. And the idea of doing the soft fork on L1 to
help L2,

467
01:03:42,285 --> 01:03:52,605
that idea should... I mean, that's how we got from 2009 to 2017.

468
01:03:52,605 --> 01:03:59,645
And that was Bitcoin's big success, in terms of price and adoption and culturally.

469
01:04:00,205 --> 01:04:05,245
And I think from 2017 to present, we've had a stagnation, which I think is...

470
01:04:05,565 --> 01:04:12,765
It is the technological stagnation, but it's mostly a cultural stagnation,

471
01:04:12,765 --> 01:04:17,005
where people have said, this is because of the scaling war also, where Bitcoin cash
increased

472
01:04:17,005 --> 01:04:28,445
the block size and BTC did not. So the lesson was sort of BTC was not lured into
making a hasty

473
01:04:28,445 --> 01:04:33,485
change. That was the lesson, like culturally. So we have to resist temptation.

474
01:04:35,085 --> 01:04:39,645
And that was the lesson, but it's not correct. Really what happened was Bitcoin

475
01:04:39,645 --> 01:04:45,085
cash had a terrible idea. And by creating Bitcoin cash and having Bitcoin cash
failed,

476
01:04:46,445 --> 01:04:52,765
or having it fail, that, I think, misled the whole community into deciding on what

477
01:04:52,765 --> 01:04:58,285
a success looked like. Because after the SegWit blockade, it looked like, distrust
the miners,

478
01:04:59,325 --> 01:05:04,765
don't change anything ever. Don't criticize lightning, because lightning is perfect,

479
01:05:04,765 --> 01:05:09,405
and it's a scaling messiah. So all of the biggest problems in Bitcoin were actually
created as a

480
01:05:09,405 --> 01:05:15,485
result of our victory in the block size war. The victory is a pathway to many
defeats.

481
01:05:16,445 --> 01:05:23,485
When I think of trying to, in my mind, mentally anthropomorphize Bitcoin, I think of
him

482
01:05:24,205 --> 01:05:31,245
as a really old conservative grandpa. And I think of all the other ecosystems as,
I'm not afraid to

483
01:05:33,085 --> 01:05:39,085
high risk, high reward experiments. Yeah, exactly. And it's just, yeah, it's like,

484
01:05:39,085 --> 01:05:42,685
I see you as trying to explain to your grandpa, this is good, grandpa.

485
01:05:42,925 --> 01:05:50,045
Like, you can still be old. Well, the L1 will still be the same. I think that it is,

486
01:05:53,405 --> 01:05:58,045
like, part of the problem is, as you say, 99% of the alternatives are terrible.

487
01:05:58,925 --> 01:06:05,325
So the altcoins, most of them are legit, actual scams. Like, they're not even just
bad ideas or

488
01:06:05,325 --> 01:06:10,285
fringe ideas. They're just actual scams. And so if you advocate for sidechains, it
looks like you

489
01:06:10,285 --> 01:06:15,965
want all these scams, but that's not the point at all. Let me just jump in and then
ask you,

490
01:06:15,965 --> 01:06:21,565
what sort of interesting applications do you want to exist on these L2 sidechains,

491
01:06:21,565 --> 01:06:27,085
like if Drivechains were to exist? Yeah, but isn't it enough to have planet, there's
many,

492
01:06:27,085 --> 01:06:31,245
I can give you a long list, but isn't it enough to have planetary scale, like the
next day,

493
01:06:31,885 --> 01:06:37,165
and Zcash level privacy? That would already make it- How do you get the Zcash level
privacy?

494
01:06:37,165 --> 01:06:40,765
We just copied the Zcash altcoin. We have copied layers, we have it already.

495
01:06:41,325 --> 01:06:45,725
As you send your coins over there, and then- That becomes the shielded pool.

496
01:06:45,725 --> 01:06:51,005
Yeah, you have a shielded pool. And then you have a reusable Z address. So you have
a reusable Z

497
01:06:51,005 --> 01:06:54,605
address. So just the fact that you have a reusable address, that itself is the
biggest UX

498
01:06:55,405 --> 01:06:58,845
improvement. That would be the biggest UX improvement. That was the hope of Taproot

499
01:06:58,845 --> 01:07:05,565
in some way, shape, or form was leveraging mass to add privacy to the option given
the transaction.

500
01:07:05,565 --> 01:07:10,525
But that only works if you are interacting with someone, you have a smart contract,

501
01:07:10,525 --> 01:07:14,925
and then you have a cooperative close or whatever. That's not the same as this,

502
01:07:14,925 --> 01:07:20,365
where any new people, if a bunch of people are depositing, every new person adds to
the anonymity

503
01:07:20,365 --> 01:07:24,925
set. And so every single user is in this, like a coin join, you only join with four
other people

504
01:07:24,925 --> 01:07:30,125
at a time. But with this, you join with everyone who's using it, and you can join or
leave at

505
01:07:30,125 --> 01:07:36,525
any time. And then of course, coin join, it's a fixed amount. You have to have a
certain amount,

506
01:07:37,165 --> 01:07:43,565
but not with the Zcash. And with Zcash, only if you use it as a mixer. If you just
actually pay

507
01:07:43,565 --> 01:07:49,005
people within this shielded pool, you have the sender and the receiver, and the
amount are all

508
01:07:49,005 --> 01:07:55,485
private. And with respect to scale, the idea is not just a huge large block sidechain. The idea

509
01:07:55,485 --> 01:08:04,125
is you have 10 or 12 regional sidechains. You have Western Europe, and you have
Southeast Asia,

510
01:08:04,125 --> 01:08:08,445
and then you have maybe you have North America, and then you have the rest of the
world.

511
01:08:08,445 --> 01:08:10,205
You have six boundaries you want to make.

512
01:08:10,205 --> 01:08:14,365
Yeah, you start with four, because most of the trade is, of course, internal to each
region.

513
01:08:16,205 --> 01:08:20,605
So then you have that, and then it's only when I switch my dollars for euros or
something.

514
01:08:21,165 --> 01:08:26,525
And then again, there's a night and day difference between an optional L2,

515
01:08:28,365 --> 01:08:35,005
large block, and a mandatory L1. Because first of all, people are very different,

516
01:08:35,005 --> 01:08:37,725
and many people are already going to be using Venmo, and they're already going to be
using

517
01:08:37,725 --> 01:08:48,045
whatever, WeChat Pay. You have these people who, like even within a person, the use
case

518
01:08:48,045 --> 01:08:53,005
is different. So like a Ross Albright, he could be like buying coffee, and then he
goes home,

519
01:08:53,005 --> 01:08:57,965
and then he's Dread Pirate Roberts on Silk Road. But when he's buying coffee, he
doesn't need it

520
01:08:57,965 --> 01:09:05,325
to be fully decentralized L1 whatever thing. But when he's on Silk Road, he can use
L1 for

521
01:09:05,325 --> 01:09:09,965
decentralization and security, or he can use Zcash sidechain for privacy. So people
are very, very

522
01:09:09,965 --> 01:09:15,485
different. People are very different in how much can they afford a full node. For
certain people

523
01:09:15,565 --> 01:09:21,565
like a Roger Ver, it's very easy, very, very easy for him to afford a full node that
is two or three

524
01:09:21,565 --> 01:09:29,805
thousand dollars a year versus a couple hundred dollars up front, and then $25 a
month or something.

525
01:09:29,805 --> 01:09:35,645
So you have all these things. Who's willing to pay fees? Who's willing to pay for a
node?

526
01:09:35,645 --> 01:09:40,365
Who wants which feature? Who wants privacy? Who wants decentralization? These are
all big

527
01:09:40,365 --> 01:09:45,885
distributions where people are very different. So those two alone are a lot, but I
think honestly

528
01:09:45,885 --> 01:09:52,125
Namecoin and prediction markets, those will be huge. In the future, you will own

529
01:09:52,845 --> 01:09:58,685
one name, and that will be your screen name everywhere. You won't be like,

530
01:09:58,685 --> 01:10:01,885
oh, I'm this on Telegram, I'm this on Twitter. You'll just own the thing.

531
01:10:03,005 --> 01:10:07,405
And on the blockchain, you'll always be able to communicate with the person with
on-chain

532
01:10:07,965 --> 01:10:11,965
paymail, which hides the physical location of everyone since everyone downloads the
blockchain

533
01:10:11,965 --> 01:10:17,805
and receives it. You'll be able to send a message to Edward Snowden.

534
01:10:18,845 --> 01:10:22,445
You'll be able to send money to Edward Snowden, and he'll be able to send a message
to his lawyer.

535
01:10:22,445 --> 01:10:27,325
And now, the message on-chain will just be the intro. So I don't want to be confused
for a Bitcoin

536
01:10:27,325 --> 01:10:32,285
SV type person, because I'm not, and we don't care about putting everything on the
chain.

537
01:10:33,245 --> 01:10:37,165
But the idea is, I would be able to send Edward Snowden a little message,

538
01:10:37,805 --> 01:10:43,165
where he'll put up a sign that says, I'm Edward Snowden, it costs $200 to message
me.

539
01:10:44,285 --> 01:10:48,125
But there'll be a big... Namecoin is going to be like a giant phone book on the
internet,

540
01:10:48,125 --> 01:10:52,445
with everyone's name in it. And you can click on their name, and they'll decode.

541
01:10:53,245 --> 01:10:57,325
People have a little spot, a little bit of a welcome sign or something that says,

542
01:10:57,325 --> 01:11:05,245
I'm Edward Snowden, it costs $200 to message me, my telegram is this,

543
01:11:06,525 --> 01:11:10,285
my whatever is this, my PGP key is this, whatever. You have a little spot for that.

544
01:11:11,165 --> 01:11:16,445
And then, you'll be able to introduce yourself on-chain, if you can't reach them
through the

545
01:11:16,445 --> 01:11:23,245
normal way. You pay on-chain to the name, you get this message. And the message will
say,

546
01:11:23,245 --> 01:11:27,645
hi, Edward Snowden, we'll use these two burner emails or something. And the software
will just

547
01:11:27,645 --> 01:11:33,565
do it all eventually. So, you pay to introduce, and then you have encrypted
messaging back and

548
01:11:33,565 --> 01:11:38,365
forth, and you can send money back and forth. So, the Canadian truckers is a perfect
example of us

549
01:11:38,365 --> 01:11:44,365
dropping the ball completely. After what Canada tried to do, everyone in Canada
should be a

550
01:11:44,365 --> 01:11:49,405
Bitcoin user by now. But instead, we screwed everything up. We showed Canada that
Bitcoin

551
01:11:49,405 --> 01:12:00,045
doesn't work. Because we tried to, they had tried to organize this protest, and we
tried to give

552
01:12:00,045 --> 01:12:03,885
them money, but it was very difficult. And then ended up, the Canadian government
ended up

553
01:12:03,885 --> 01:12:10,285
confiscating the Bitcoin anyway. So, they failed completely. Instead, in the
Namecoin paradigm,

554
01:12:10,285 --> 01:12:13,805
there's just going to be a Canadian truckers protest, will just be a name. It'll be
like

555
01:12:13,805 --> 01:12:20,205
google.com. You own the name, and then they'll start putting out messages and tweets
with that,

556
01:12:20,205 --> 01:12:24,845
with that hashtag or whatever you want to call it. And they'll have QR codes, and
they'll just get

557
01:12:24,845 --> 01:12:30,925
out there, all organized. And then eventually, word will get out. We'll figure out,
okay,

558
01:12:31,565 --> 01:12:36,845
this is the account responsible for this. And people will try to do phishing and
stuff,

559
01:12:36,845 --> 01:12:42,125
but then they'll say that it's too asymmetric to have the whole group meet. And
they'll say,

560
01:12:42,605 --> 01:12:46,765
don't send to this account. This is a phishing account. That's why it has to be a
human readable

561
01:12:46,765 --> 01:12:51,885
name. So, I think that'll be big. And you even see, I predicted this two or three
years ago,

562
01:12:51,885 --> 01:12:58,765
maybe three years ago. I predicted that the darknet markets, since all they do is
introduce

563
01:12:58,765 --> 01:13:02,925
the buyer and seller to each other, and afterwards, they can just communicate with
each other,

564
01:13:03,725 --> 01:13:07,645
that what will happen will be it will decentralize further. There will just be
people who give,

565
01:13:07,645 --> 01:13:11,565
who do lists. They make introductions to be like a middleman guy. It would be like,

566
01:13:12,205 --> 01:13:16,205
Silk Road would just be middleman, and they'll do maybe keep track of the ratings.

567
01:13:18,525 --> 01:13:24,205
And everyone else will just be, it'll just be like on Telegram or something, which
is now,

568
01:13:24,205 --> 01:13:28,765
I looked into it a few weeks ago, and that has happened. There's no, it's all just
Telegram bots

569
01:13:28,765 --> 01:13:37,405
now. Telegram bots. Yeah. You should take a look at the privacy polls stuff that

570
01:13:37,805 --> 01:13:41,645
Amin Soleimani is doing. We did an interview with him, I think a couple of
interviews ago.

571
01:13:41,645 --> 01:13:43,485
Oh, yeah, I mean, yeah. It's not released yet.

572
01:13:43,485 --> 01:13:48,125
Yeah. And then in addition to, oh, it hasn't been released yet. Okay. But he has
some, I mean,

573
01:13:48,125 --> 01:13:53,485
his privacy papers, or sorry, his privacy polls demo came out seven months ago, and
the paper

574
01:13:53,485 --> 01:13:58,445
came out like last month. But that'd be cool for you to look into, as well as the
experiments that

575
01:13:58,445 --> 01:14:03,645
they're doing from ZK Hack, in terms of some of the winners, in terms of interacting
with other

576
01:14:03,645 --> 01:14:11,325
people through some form of obfuscated identity, but then aligning, essentially,
similar interests,

577
01:14:11,325 --> 01:14:15,965
and then you being able to bridge communication channels with them. So not
disclosing who each

578
01:14:15,965 --> 01:14:20,525
other are. Yeah. Okay. Let me wrap up my, this is a long answer, but it's an
important question.

579
01:14:20,525 --> 01:14:25,165
What's this for? Because, so we have scale privacy, and then I think there's other
things,

580
01:14:25,165 --> 01:14:29,805
like you should go to Namecoin, and then bitcoinhivemind.com is where the Prediction

581
01:14:29,805 --> 01:14:34,445
Markets Project lives now. So you can watch my little 20-minute video on why I think
that's

582
01:14:34,445 --> 01:14:39,165
important. You can bet on the future, or you can bet on what would happen if we
lived in certain

583
01:14:39,165 --> 01:14:44,365
futures. So you can say, like, if we bet on, if we elected this party, or what
happened to the country,

584
01:14:44,365 --> 01:14:48,285
or if we fired the CEO, what would happen to this company, or the share price, or
something like

585
01:14:48,285 --> 01:14:54,045
that. So that's all very cool. But the bigger, much bigger picture is that by
introducing

586
01:14:54,045 --> 01:14:56,125
competition among developers,

587
01:14:58,363 --> 01:15:17,363
that's the more important thing than any individual idea. We have the ability for
any new idea to compete and make it out there. So that, that's the really big thing.
You know, it's like if someone launches YouTube, and someone, someone such as
yourself asks, well, what do you want to see people put on YouTube? But you see,
that's really not the point.

588
01:15:17,363 --> 01:15:22,363
Yeah.

589
01:15:47,363 --> 01:16:13,363
I would not send money to immediately to like whatever, like Netanyahu, or Zelensky
or whatever, you know what I mean, like, just, or Putin or Hamas, honestly, I'm not,
you know, I wouldn't want people to do that. But, but they, the point is, it's, this
is supposed to be like a decentralized bank. And that's, I mean, does it work or
not, is the question.

590
01:16:14,363 --> 01:16:40,363
We, it was bad for Bitcoin, because that was teed up for us. It was perfect. You
know, it was like, perfectly teed up for us. They were doing the absolute wrong
thing for really no reason. And they were going way overboard with the whole banning
the bank account of anyone who donated to the protests. It was like a completely
nonviolent protest. It was, it was like, it was pretty wild.

591
01:16:41,363 --> 01:16:44,363
And what we did is we just showed everyone that it didn't, that it didn't work.

592
01:16:45,363 --> 01:17:07,363
I definitely agree with the sentiment and, and the effort to try and enable that
permissionless innovation on top of Bitcoin. So I'm very excited to see where this
goes and what ends up winning out. But we have a few more kind of trademark
questions we have that are quick to wrap up with. I'll start with, in 10 words or
less, can you describe Drivechains?

593
01:17:08,363 --> 01:17:09,363
Hmm.

594
01:17:13,363 --> 01:17:16,363
I don't know. When devs compete, users win.

595
01:17:18,363 --> 01:17:24,363
Hmm. Fees align miners incentives. That's nine words. That's something.

596
01:17:25,363 --> 01:17:26,363
Jesse?

597
01:17:27,363 --> 01:17:33,363
So my, my question is typically, is what you do actually difficult? And you can
interpret that however you want.

598
01:17:33,363 --> 01:17:45,363
I don't think so. But apparently it is because it's, this idea is very easily
misunderstood. I don't think it's that. It's not really, you know, under the hood,
the Drivechain idea is just a counter that counts to 13,000.

599
01:17:46,363 --> 01:18:02,363
I think, I think one thing that is, that I do very differently is, you know, most of
my friends and family don't have, I don't like have a lot of like Bitcoin friends
and family. I mean, I do have many Bitcoin friends and family, but I don't like, I'm
very independent.

600
01:18:02,363 --> 01:18:17,363
And, and I don't like, I don't like to like join the, it's very easy to have the
cult mentality take over. And the Bitcoin tribe and people get like, you know, a
Bitcoin tattoo and it's a big part of your life.

601
01:18:18,363 --> 01:18:19,363
And the echo chamber.

602
01:18:19,363 --> 01:18:40,363
And yeah, and there's too much echo chamber. So I think that's the really difficult
thing to do. Or the really different thing to do. But certain types of people won't
make it in an echo chamber. Like I find the echo chamber so annoying. And so, so
that's one thing that I kind of worked really hard to, to not be too popular, almost
on purpose.

603
01:18:41,363 --> 01:18:55,363
Christopher Hitchens said he wouldn't have dinner with someone if he knew he had to
write about them later that day. So, so, so I kind of feel the same way. I'm like, I
don't know if I want to be too friendly with these people, even though I'm like all
in on Bitcoin.

604
01:18:55,363 --> 01:19:12,363
But I, but be part of being all in on something is, you know, thinking about it with
all of your IQ points, you don't want to leave any behind. And that's just what
people do is they meet someone and then they, they like them and then their judgment
is affected.

605
01:19:12,363 --> 01:19:23,363
And yeah, the, so you see, that's kind of what I, what I do today. I push, I push to
say it could, it would be very easy to just say Bitcoin is perfect, right? TikTok
next block and just say, and just put up like tweets.

606
01:19:24,363 --> 01:19:48,363
Oh yeah, people say it. And they say, and you just go on mid journey and just make a
Bitcoin, Jesus, Bitcoin or something or whatever, heaven, Bitcoin, Citadel. And so I
think that's the key is to try to try and try to be unpopular is the key in some
sense.

607
01:19:49,363 --> 01:19:58,363
Well, cool. I wish you a lot of luck in your journey to continue to be unpopular. I
certainly like the ideas you're pushing forward.

608
01:19:58,363 --> 01:19:59,363
That's such a weird wish.

609
01:19:59,363 --> 01:20:03,363
So yeah, thanks again for coming on the show. I certainly appreciate it.

610
01:20:04,363 --> 01:20:13,363
All right. Welcome to the post interview. And I'm waiting for D to finish writing
what he's going to write. And we're back.

611
01:20:13,363 --> 01:20:14,363
There it is.

612
01:20:14,363 --> 01:20:19,363
Welcome to the post interview where we discuss what just happened when our interview
with Paul.

613
01:20:21,363 --> 01:20:22,363
Yeah. What are your thoughts?

614
01:20:23,363 --> 01:20:37,363
Yeah, I think, I think just, you know, him being the second person who I've heard
talk about L2s on Bitcoin, which I didn't even really look into in any technical
depth or care about because Bitcoin is so expensive.

615
01:20:37,363 --> 01:21:02,363
Yeah, I think, I think just, you know, him being the second person who I've heard
talk about L2s on Bitcoin, which I didn't even really look into in any technical
depth or care about because Bitcoin in my mind has already been ossified to the
extent that all the research that's being done in the Ethereum ecosystem or even
other alt L1 ecosystems is going so much faster.

616
01:21:02,363 --> 01:21:28,363
And in terms of like implementation than anything that they're going to be able to
do. Also, you know, I think, yeah, there's, there's so many different things that
like, like a UTXO based transactions from the privacy polls interview was clearly
something that even Vitalik was reconsidering with extended UTXO models for
transactions.

617
01:21:29,363 --> 01:21:39,363
So like, you know, Bitcoin, again, Bitcoin in my mind is like that old grandpa who's
like gold, like he's a gold bug. And I get it. And I think that's exactly what it
should be.

618
01:21:40,363 --> 01:22:07,363
I don't think that it should try to, in fear of it not maintaining relevance or
wanting to be something more, try to bolt on the similar L2 solutions that Ethereum
is trying to do, which are causing it to potentially lose a bit on decentralization
in terms of the scale that it's achieving.

619
01:22:07,363 --> 01:22:24,363
And when it comes to like data availability, you know, that's something that Paul
kind of touched upon lately. That's something that now has to be a concern when
you're scaling, you know, mainnet with L2s, you know, where are the blocks that are
happening in the L2s going to go long term?

620
01:22:24,363 --> 01:22:38,363
Because, you know, those L2s operate so cheaply, and with such high, like
performance requirements of the underlying blockchain themselves, that no normal
person is going to be able to run that.

621
01:22:39,363 --> 01:23:04,363
So being a data janitor of the whole Ethereum ecosystem as something that can
provide like, you know, data persistence for, you know, reconstruction of these, you
know, state commitments, like that's going to be a very important job. And all these
projects like Celestia and the other data availability solutions, they don't
actually solve it, right? They just extend the ephemeral data window.

622
01:23:04,363 --> 01:23:06,363
So you still need some part of it.

623
01:23:06,363 --> 01:23:18,363
The aggregation and proofing systems of what you're embedding in the chain is more
often than not what people are working on, but the ability to serve that data and
hold on to it for long periods of time, no one else.

624
01:23:18,363 --> 01:23:19,363
Exactly.

625
01:23:19,363 --> 01:23:33,363
What you just said, I think that if there's a technical possibility for there to be
permissionless innovation on Bitcoin, then it should exist.

626
01:23:34,363 --> 01:23:51,363
So like, I want these things, because like, Bitcoin is fundamentally a different
blockchain than all of the other blockchains period, because of the history of proof
of work, and it's like, general catch up of the networks.

627
01:23:51,363 --> 01:23:57,363
Like, when you talk about crypto to anyone, they understand Bitcoin, nothing, not
anything else, kind of, really.

628
01:23:57,363 --> 01:24:03,363
They'll at least hear the word Bitcoin more often than not than anything else in the
ecosystem.

629
01:24:03,363 --> 01:24:10,363
After all the crazy stuff that's happened, not as much the case, but still, Bitcoin
is still a thing.

630
01:24:10,363 --> 01:24:22,363
And so like, if you're able to at least enable experimentation on top of it without
changing the underlying protocol, which is what most of these things are trying to
do, because they can't change the underlying protocol, that's good.

631
01:24:22,363 --> 01:24:30,363
Because then we have a new area of experimentation to see if this works in what is
potentially the most secure blockchain in existence.

632
01:24:30,363 --> 01:24:34,363
Whether or not you're able to do it, who knows.

633
01:24:35,363 --> 01:24:37,363
I'll read what Dean wrote.

634
01:24:37,363 --> 01:24:42,363
As devs, are either of you interested in playing with Drivechains?

635
01:24:42,363 --> 01:24:44,363
Well, they don't exist.

636
01:24:44,363 --> 01:24:46,363
Playing with?

637
01:24:46,363 --> 01:24:48,363
Are you talking about the idea?

638
01:24:48,363 --> 01:24:50,363
In the eventuality that they might exist.

639
01:24:50,363 --> 01:24:52,363
No, Zerosync and BitVM are more interesting to me.

640
01:24:52,363 --> 01:24:58,363
I don't know, I need to understand the differences better.

641
01:24:58,363 --> 01:25:03,363
I tend to lean towards zero-knowledge cryptography.

642
01:25:03,363 --> 01:25:09,363
As a solution to pushing the innovation boundary much, much harder.

643
01:25:09,363 --> 01:25:23,363
But the exit scenario, which is mainly what the differences are for most of these
things, is like, how are funds pooled and how you get your money out in the event
that you want to, is mostly different.

644
01:25:23,363 --> 01:25:25,363
So understanding those differences.

645
01:25:25,363 --> 01:25:28,363
And how do you make a new one?

646
01:25:29,363 --> 01:25:34,363
So like, if I want to spin up a Drivechain, what does that require me to do?

647
01:25:34,363 --> 01:25:36,363
What does it require others to do?

648
01:25:36,363 --> 01:25:43,363
And that amount of missionlessness and the impact it has on the rest of the
ecosystem makes a big difference.

649
01:25:43,363 --> 01:25:47,363
So like, yeah, I probably, I want to understand them.

650
01:25:47,363 --> 01:25:58,363
But like, I don't see it making a big difference in where I'm spending my time as a
developer, or like, I guess, funder of development.

651
01:25:58,363 --> 01:26:03,363
Anytime soon, because mostly what I'm focused on is privacy.

652
01:26:06,363 --> 01:26:09,363
At a lower, lower, lower level.

653
01:26:09,363 --> 01:26:12,363
Like, at the network level, things like that.

654
01:26:12,363 --> 01:26:16,363
So like, I don't know, it's interesting to me.

655
01:26:16,363 --> 01:26:17,363
And I want to see it grow.

656
01:26:17,363 --> 01:26:21,363
Because one, it gives people more opportunity to build in different places.

657
01:26:21,363 --> 01:26:27,363
And for people to fund that building because they think that development should
happen in Bitcoin.

658
01:26:27,363 --> 01:26:33,363
So it's like, if this exists in Bitcoin, then there's more people in Bitcoin
throwing their Bitcoin at people to build things on Bitcoin.

659
01:26:33,363 --> 01:26:39,363
That's just more development and more experimentation than there previously was.

660
01:26:39,363 --> 01:26:42,363
I don't see it as like this massive exodus from Ethereum.

661
01:26:42,363 --> 01:26:43,363
It's just more.

662
01:26:43,363 --> 01:26:44,363
Yeah.

663
01:26:44,363 --> 01:26:45,363
But that's the thing.

664
01:26:45,363 --> 01:26:50,363
That's what, like, if I was listening to a bunch of the older podcasts that Paul
did.

665
01:26:50,363 --> 01:26:56,363
And really, you know, when I was asking him, what drives you to, you know, build
Drivechains or to make this idea happen?

666
01:26:56,363 --> 01:27:06,363
I mean, he really wants to capture all of the, ideally, transaction fees that are
happening in Ethereum and then move it to Bitcoin.

667
01:27:06,363 --> 01:27:09,363
That's what he really wants to have happen.

668
01:27:09,363 --> 01:27:11,363
And that's not going to happen.

669
01:27:11,363 --> 01:27:14,363
Even if Drivechains do exist, I don't see that happening.

670
01:27:14,363 --> 01:27:21,363
Just like, you know, we see all these Alt L1 spin up, you know, Avalanche or
Polkadot or whatever, what have you.

671
01:27:21,363 --> 01:27:24,363
They create their own little ecosystem.

672
01:27:24,363 --> 01:27:28,363
But at the end of the day, you know, most of the activity comes back to Ethereum.

673
01:27:29,363 --> 01:27:30,363
We'll see.

674
01:27:30,363 --> 01:27:33,363
There's this dynamic over time.

675
01:27:33,363 --> 01:27:39,363
I personally don't see a world where, like, it's all under one chain in any chain
whatsoever.

676
01:27:39,363 --> 01:27:40,363
Yeah.

677
01:27:40,363 --> 01:27:43,363
I think they all have a time period of relevance.

678
01:27:43,363 --> 01:27:44,363
Yeah.

679
01:27:44,363 --> 01:27:50,363
The only value that any of these coins have at all is because there's a group of
people that designate that value.

680
01:27:51,363 --> 01:28:02,363
And since people are so different, there's always going to be different pools of
value because people always agree on difference, like on what they think is valuable
or like how they want to do stuff.

681
01:28:02,363 --> 01:28:10,363
There's never going to be a situation where everyone agrees on the same thing in
terms of the base layer level value system.

682
01:28:10,363 --> 01:28:15,363
I mean, if you think about it this way, like all these L1s are essentially like
different countries.

683
01:28:15,363 --> 01:28:18,363
He's trying to unify all the countries to use one global currency.

684
01:28:18,363 --> 01:28:19,363
That's never going to happen.

685
01:28:20,363 --> 01:28:21,363
Maybe it does.

686
01:28:24,363 --> 01:28:26,363
I mean, if you have a stick, maybe.

687
01:28:27,363 --> 01:28:28,363
Well, yeah.

688
01:28:29,363 --> 01:28:30,363
I don't think so.

689
01:28:30,363 --> 01:28:31,363
Yeah. Big stick.

690
01:28:31,363 --> 01:28:32,363
Yeah. Big stick wins.

691
01:28:32,363 --> 01:28:34,363
I got a big stick somewhere.