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Yo, what's up, everybody?

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Good morning.

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Chris, how's it going, man?

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Adam, good morning.

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Oh, bro, you've got your other account on, bro.

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Are you on your phone right now, man?

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Oh, there we go.

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Oh, little hiccup, guys.

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Yeah, dude, did you join the spaces on your computer, bro?

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Yeah.

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Yeah, what'd you do, man?

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What we've done, guys, Jake's on vacation, or not, well, Jake's in Asia, kind of on
a

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business vacation trip, and so we're trying a new setup here.

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Chris and I are, Chris has come on screen, rocking the on screen.

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Chris, maybe just join through the actual thing, because yeah, you've joined the
spaces

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in the spaces, bro.

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You're doing the double sound, bro.

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Yeah, we should be good now.

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So that should help.

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How are we doing?

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Yeah, man.

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Welcome, brother.

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You're here, bro.

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Let's go.

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You're on stage, man.

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Let's go.

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Good to be here, man.

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This is an exciting one.

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So yeah, some minor technical difficulties, but pretty excited for this show.

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Yeah, and welcome on stage, Paul.

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Paul, great to have you, man.

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Thanks for joining us.

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I really appreciate your time, and really excited to dive into DriveChange.

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You're like the father of DriveChange, so love to just actually just jump right in,

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and kind of, can you give us the-

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Let's do it.

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The quick recap of how DriveChange came into your mind, and how you've become this,

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the kind of Drivechain advocate.

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Give us the TLDR on the history of them.

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Well, okay.

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It's going to be a really L, so if it gets too L, then let me know.

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Oh, come on.

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You can wrap this up.

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I'll do a short-

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I can do a short-

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I was interested in a specific type of smart contract, which is the prediction
market originally,

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and Blockstream coined this term in 2014 for a different blockchain that you can do
whatever you want over there.

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You send Bitcoin over there, you do whatever you want, and then people can send it
back.

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So basically, it's like an altcoin, but there's no coin.

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There's only Bitcoin.

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All the advantages of having a completely different-

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So this is around the time when people were trying new things.

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Ethereum had been proposed.

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What would become BitShares, stuff like that had been proposed.

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NXT, these are like old, but I think anyone around at the time kind of remembers
them.

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Of course, many of them went negative 99%, but Ethereum went on to become number
two.

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So that was the kind of thing people were experimenting with, this and that.

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The sidechain was a way of doing that all on Bitcoin, built on top of Bitcoin.

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And then I got more interested during the scaling war because it was my belief-

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I disagreed with Blockstream.

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Blockstream thought sidechains wouldn't help with scaling at all, but I completely
disagreed.

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I was working on the code myself, and I thought, actually, this is the only thing
that will fix scaling

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because it lets the large blockers and small blockers both get exactly what they
want.

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And so it's actually the only thing that will be a permanent solution to the block
size dispute.

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And in fact, it's the only thing that will be a permanent solution to really the
idea of governance

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or really any dispute where you have different people want to use the blockchain for
different things.

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We live in a world where there's so many altcoins.

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This is sort of intimidating and frustrating to new people.

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They think, oh, you know which coins are good.

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Then people develop philosophies like Bitcoin maximalism and say, like, only one of
them is legit,

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and et cetera, et cetera.

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But the sidechain just cuts through all of this by saying you can swap the software
whenever you want.

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21 million coins, infinite blockchains just traveling among the chain.

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So that's the short arc of the story.

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I first got into it, Blockstream coined this term, and then I was working on actual
code.

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They never shipped.

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They shipped this thing, Liquid, which is just sort of like a multi-sig thing that
doesn't have any.

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There's no actual technology on L1.

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It's just a multi-sig output on L1.

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They never actually shipped their skip list idea, but I was working on the code.

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And then the scaling more, I thought this is going to be really big.

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The objections to it were all really terrible, so I just wasn't really persuaded by
those.

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I thought this idea will be big.

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And then now with the failure of Lightning, mostly, it's finally that's kind of
entering the Overton window.

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So people are looking for something else, and they have rediscovered this.

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Well, it's interesting.

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Which they should because it works, yeah.

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Well, I mean, well, there's so much to kind of dive into.

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I mean, we could get into kind of what you think of Blockstream and the way they've
done it, what you think of like Rootstock.

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What do you think of those kind of early efforts to do something, I guess?

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Well, you know, it's very complicated, and I'd hate for anything to be like, you
know, whatever, quoted out of context or something like that.

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But basically, you know, I do think that everyone really meant very well.

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You know, Blockstream, they – I think they meant when – definitely when they were
raising money and when they were talking to Reid Hoffman,

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had this famous post, Why Invested in Blockstream.

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If you read that, it all sounds great.

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And I think that they wanted to work on this idea.

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I think that the psychology of the Blockstream – excuse me – of the block size war,
I think it really messed up both Roger Ver and the Blockstream.

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The large blockers and the small blockers got a little polarized, and it became like
a –

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Yeah, maybe a little more –

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Fox News.

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Yeah.

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It became like a Fox News versus MSNBC-like thing where the quality of the dialogue
and the quality of the thoughts, I think, actually really plummeted.

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So I think they were hung up on this idea that, you know, the large blockers can't
get what they want, and so the sidechain can never be –

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it can never even contain a block size increase, even as an optional L2.

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To this day, I don't know why some of them had that view in the first place, let
alone kept it for so long.

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Although now, I think people have abandoned it.

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It would be very interesting to get some of these people back, people who have just
sort of vanished into the mists, Greg Maxwell, et cetera, and see if they still
weirdly think that.

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But then the thing to say about Blockstream that would be critical would be that
they raised an enormous amount of money.

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I mean, $210 million a few years ago, $55 million a year before that.

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Long ago, they raised $21 million, which was the biggest raise I think anyone had
done in the Bitcoin industry.

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This was like 2014 or something.

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I don't know exactly what the state of Coinbase was or these companies that have
become super valuable later.

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But they raised all this money and kept a lot of it in Bitcoin.

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And so this would be like whatever – we're talking like $10 billion.

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And they had like these superstar founders, Greg Maxwell, Adam Back, the inventor of
SSL.

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They had like all these people.

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They had 40 engineers at one point.

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You can still go on the archive, the Wayback Machine, and look at the team page and
count up all the technical people.

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Forty engineers, a huge amount of money.

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And the weird thing is that they have sucked all the air out of the room on this
sidechain idea.

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They have named Liquid a sidechain when it clearly is not.

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Liquid is the kind of thing that Bitcoiners would make fun of.

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Fake like Ethereum L2s that are like multi-sig.

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You're not a huge fan of federated sidechains or whatever they call it?

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I am not.

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I'm the champion of basically the exact opposite.

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Although I don't think it's like the end of the world, but I find it annoying that
they use all the same terminology.

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It is under the hood.

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It is just multi-sig.

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So you are giving a group of people your money.

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If you just swap the federation for one person, you see how bad that would be.

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You know what I mean?

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So it's just like I give all my Bitcoin to some guy and I hope that he gives it
back.

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Well, you know, like that is purely custodial.

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That is totally anti.

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The whole point of Bitcoin is to get away from meeting a trusted third party as an
intermediary.

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So then what they say is, well, instead of giving it to one guy, you're giving it to
a bunch of keys like more than one person.

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But it's really like that's not the same thing as trusting a decentralized process
that has the miners can enter and exit at any time.

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They're in a scheme that incentivizes them to be honest.

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They're only paid in Bitcoin themselves.

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And there's Bitcoin are locked for 100 blocks.

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So they they can't be like completely screwing over the chain.

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They need to they need the chain to make it another 100 blocks before they even get
paid anything.

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So that's a very, very different thing than just give the money to someone else.

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And then, of course, in the case of Liquid, they say that they will refuse to
explain who has the 15 keys or how the key ceremony was done.

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And they say this is like for security reasons or something.

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But basically, you have no idea. You have no way of knowing.

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We call trust me, bro. In the crypto industry.

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Yeah. Kind of saying like, how do you know it's not just all one guy who made 15
keys?

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And they say we don't say we refuse to answer that question.

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They'll say at first, you know, like it rests on the reputation of the 15 people.

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But then they won't even say who those people are.

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So that's that was one of the biggest, like, kind of eye openers for me.

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I was like, OK, I don't know if even talking about this is a good use of time
because this is so out to lunch.

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They open by saying like, oh, we have 15 people.

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They're geographically distributed. They're reputable people.

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And they say, who are they? Where, you know, what countries are they in?

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They say they don't want us because, you know, they say they don't want people to
like.

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Sure. You know, hunt these people down and whatever.

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But that's part that's just part of why the federated model and the multisig model
is a bad model, because it has that issue.

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So so I think the Blockstream, it's just very is a tremendous amount of of
disappointment.

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Low productivity, you could say, like because nothing has been produced.

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A huge these superstar inputs went in all the money, time, whatever you could
possibly want.

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Huge amount of money, 40 engineers for many, many years.

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They've been operating for, you know, 10 years now.

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And, you know, what has come out of it?

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I mean, literally, they have liquid is very little use.

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I don't know. Like Green Wallet was something they acquired.

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The Blockstream satellite is they they rent someone else's satellite TV channel.

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And on one of the unused channels, they broadcast the blockchain, which is which is
a cool idea.

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But it is not. You know, I mean, like it is not.

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They didn't like actually really, you know, they didn't really create anything
there.

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They're renting a satellite channel. Yeah, but it's a cool idea.

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But it's a great idea. But it's not like these are.

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They did not invent that. They did not produce what they said they would produce.

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This is the side change is very important.

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Sidechain being a solution to the problem of the Altcoin says over here we have Zcash and it has Z addresses and it hides the center of the receiver and the amount.

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OK, could we have that on Bitcoin like that's the problem of the sidechain.

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But they just kind of keep saying that it's all about liquid.

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It's all about blocks, you know, elements or whatever these things.

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So that's my Blockstream story. The RSK guys is a similar story where I think the
RSK people,

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they're always been very friendly to me and super, super Sergio is the first person.

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00:13:04,000 --> 00:13:08,000
Rootstock, is that what you say? Yes, yes, yes.

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The Rootstock people, they have always been great and I think I always love talking
to them.

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And I think that but they also raised a lot of money like back in like 2015.

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And they were going to be like the answer to Ethereum.

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They were like, we are going to put. Whatever, everything Ethereum can do on BTC.

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But that was again, that was back in 2015.

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And I don't know what they've been doing the whole time, but just like for fun, like
after we came out with the Drivechain like prototype a few years ago.

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We created this thing, ETH side that you can download today if you want.

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We have to create like a front end for it because Ethereum doesn't have a front end.

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00:13:46,000 --> 00:13:56,000
So so we made all this, which is just a clone of the latest version of an Ethereum
node, just as, you know, Bitcoin L2 using Drivechain.

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So like I did that again, like I kind of feel like that was what Rootstock was
supposed to do.

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00:14:01,000 --> 00:14:07,000
And that I that was only one that's only one small, tiny part of what.

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00:14:07,000 --> 00:14:13,000
We do a LayerTwo Labs like that, I put like one guy on that for like two weeks to
do that.

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And then we made the front end and then we put it like we did some other things on
it.

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00:14:18,000 --> 00:14:32,000
And it's certainly not. It's just like that's all it is, is just a version of the
latest Ethereum full node as a Bitcoin L2 on our test network, which is like Bitcoin
core.

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00:14:32,000 --> 00:14:37,000
But so I'm kind of just thinking, I don't know, like what are they doing down there
at our at our Rootstock?

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What are they doing over there? Blockstream? I don't know.

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00:14:41,000 --> 00:14:53,000
We actually had the Rootstock guys, a couple of or one of the co-founders and a
couple of, you know, team members, community members on a few weeks ago just to dive
in kind of like what we're doing with you.

201
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And nice guys, just as you were just saying, seem completely legit to, you know, try
and move stuff forward.

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But when I kind of like pressed about like, hey, but what's the what's kind of a
killer app on Rootstock?

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And basically they were like, well, we have a we have a really good stable coin, you
know, and I mean, stable coins have value, but not really if somebody is not if
people aren't using it.

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00:15:19,000 --> 00:15:26,000
Right. If people aren't using the stable coin, what's the point of the stable coin
was kind of where we landed on that.

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And yeah, I think I think it's a perfectly fair question.

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And I think, like, you know, many people that have done the USDT has been done on
many networks.

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So it's not like that. It's like that has to be invented. You know what I mean? Like
the ordinals and all the stuff.

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So if you want to issue an asset counterparty or I'm not saying that that.

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Is that it's not a good thing, but. It's not a lot of novelty, I guess, maybe I
might say.

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So I guess one question here is, you know, both these two of these teams raise
significant funds to try and bring their vision to light.

211
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Right. They actually have brought their vision to light. It's just not a very bright
vision.

212
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Right. It's just kind of both of them are almost dead in the water. Right.

213
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So looking back, would you have done something differently or would you have tried
to raise funds back then to actually try to bring yours to light?

214
00:16:20,000 --> 00:16:25,000
I absolutely would have done a lot of things differently. But, you know, this is the
folly of regret.

215
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That's a phrase. Right. That people have. And I don't know if you've ever seen.

216
00:16:28,000 --> 00:16:36,000
I'm not a huge Star Trek guy at all, but I have seen only three episodes and one of
them is called Tapestry.

217
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And he goes back in time. It's kind of like it's a wonderful life or whatever.

218
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He goes back in time and he regrets a decision. He goes back and changes it.

219
00:16:44,000 --> 00:16:52,000
And then he finds that he goes back to the future and the future is even worse, way
worse.

220
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So I do think, you know, you've got to do whatever you don't know, like what would
have happened if.

221
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And you don't know, like if you could. But to just go with the spirit of the
question, I would say that there was a moment in 2016 when the block size war was
very, very heated.

222
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And actually, so I don't want to, like, dox too many people, but let's just say
extremely, extremely high status, small blocker people actually emailed extremely
high status, large blocker people.

223
00:17:30,000 --> 00:17:43,000
It was like 15 people cc'd and including me. And they said, instead of doing the
stuff that you're doing, like extension block or SegWit2x, you should instead do
Paul's Drivechain idea.

224
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That will get you what you want. And yeah, I was kind of just like, oh, they will
figure this out, that this is a good idea.

225
00:17:51,000 --> 00:18:07,000
But if I could go back in time, I would have like seized on this a little bit more
and been like making PowerPoint slides and trying to like make some kind of like
proposal and like been right on top of it with like to just kind of like
aggressively show the idea.

226
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But I just kind of thought, I don't know, I didn't really realize like what was
about to happen, like that the communities would like split forever and that they
would like never reunite and that the small block BTC world would become extremely
complacent and say, we don't want any new technology on BTC.

227
00:18:25,000 --> 00:18:51,000
This is an attitude that persists to today where people say we don't need Bitcoin to
be used as money. It doesn't matter what mining transaction fees are. You know, it
doesn't matter that they're low from lack of usage. It doesn't matter that, you
know, these other chains, Ethereum, Solana, are going to push the boundary on what
levels of centralization are acceptable.

228
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So that was certainly like a more of a critical time where I was like kind of just a
little bit more passive and was like, oh, yeah, I have this blog post. But although
that may not have helped because, you know, blog post is a blog post and then you
write code and then who knows if it.

229
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But I do definitely believe if people had agreed that both sides were unbelievably
overconfident at that time, they both the large block people thought absolutely they
thought SegWit2x was guaranteed to win.

230
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So we signed all these companies to sign the 83 percent of the hash rate to sign.
And so I tried to convince them. I spent a little bit more time when after SegWit2x
came out, I did call a few people and I was like, this is a terrible idea. You
shouldn't do this. You're not going to win.

231
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And they were like, 83 percent of the miners are already running the SegWit2x
software. And I was like, that doesn't make any difference. We have no way of
knowing that it's completely the same software until the date, the split date in
November.

232
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And so I don't know, like and then when they split off, they just thought BCH would
win. They were absolutely so both sides were. So, yeah, I guess that's one thing
would be to. I think in retrospect, I kind of think it may be the whole thing was
inevitable, though, because of just how strong everyone's feelings were.

233
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Yeah, that there was no need to compromise.

234
00:20:20,000 --> 00:20:34,000
It's really interesting, the idea of it's I mean, it's come up this past week
because, you know, Cardano, we might laugh at it and stuff, but, you know, they got
their governance kind of, I guess, protocol pass or whatever.

235
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And Bitcoin's been like this. Bitcoin's been the lead in like, how do you govern
this thing? Right. With distinctly warring factions. And, you know, I guess the kind
of method has been to fork and to have these really, really vicious, really vicious
tribes, which I mean, I guess in the reality, the small blockers won.

236
00:21:04,000 --> 00:21:21,000
If the goal was number go up, that's the kind of way I currently look at it is
number go up. They clearly won. Bitcoin's number has gone up. So they were right in
that way. But we did lose in the process the idea of, you know, peer to peer digital
cash, I guess we lost.

237
00:21:21,000 --> 00:21:36,000
And somebody else kind of has to take up that moniker or some people say, oh, no,
no, Bitcoin still is, you know, peer to peer digital cash. I'm just like, OK,
wherever you used it last. Right. And so it's all it's crazy, that history.

238
00:21:36,000 --> 00:21:55,000
But one thing is like for me, like obviously you've seen this whole history. You had
this idea way back then and you've kind of still stuck with it, which is kind of
incredible to me, because, you know, if it hadn't really been implemented already or
really kind of people had taken it on, a lot of people would have just, you know,
dropped it.

239
00:21:55,000 --> 00:22:24,000
Well, it's actually, you know, I completely agree with you in a world where it is
just a popularity contest. You wouldn't drop it. But it's actually the reason I
stick with it is because the facts, the facts are with it. No one else has proposed
anything that is remotely likely to work at all.

240
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Let alone as good as this. And considering the simplicity and the risk reward and
everything, it's just the best idea. It's like a million times better than
lightning. It's better than having unlimited one blocks.

241
00:22:38,000 --> 00:22:55,000
It is better than covenants. It is just better. All these people, people are such
phonies is one thing that I have learned. And I don't you know, I one thing that is
disappointing is how many people will take the look at something that someone
clearly spent something like CTV.

242
00:22:55,000 --> 00:23:11,000
Jeremy Rubin was spent month clearly spent like at least three months working on CTV
before he produced like a short document, you know, and a short write up of what it
is. And yeah, lots of people are really comfortable just taking a glance at the
document.

243
00:23:12,000 --> 00:23:31,000
Won't even spend five minutes thinking about it before they write the tweet that
says, oh, you know, this idea sucks or whatever. Plenty of people are clearly, you
know, plenty of Peter Todd clearly does this many times where he'll just imagine
what he thinks Jeremy Rubin will have come up with, for example.

244
00:23:32,000 --> 00:23:47,000
And so it's just he imagines a version of it in his own head without even looking at
what the real idea is, you know, and then he's just as Jeremy Rubin is the type of
guy who would trick himself into thinking that this would be a good idea, even
though it's a bad idea.

245
00:23:48,000 --> 00:24:05,000
And so then he'll write the tweet, having spent zero time actually reading the
actual idea. So this is like, and many, many of these people, the more, the more
respected they are, the more like, the more they are actual phonies. So

246
00:24:06,000 --> 00:24:12,000
Well, you've realized the current state of social media and the current state of
blockchain technology in a way.

247
00:24:13,000 --> 00:24:24,000
I bet it's probably the same in every industry. I'm not sure, but I bet if you go
high enough in like chemistry, there's other people who are like, oh yeah, this is
all fake or whatever.

248
00:24:24,000 --> 00:24:25,000
For sure.

249
00:24:25,000 --> 00:24:37,000
Is my guess. I mean, I knew, so I talked to some one guy I knew who did like
renovated houses and he, that's all he'll talk about. He's like, oh, most people are
frauds. Most people do it the wrong way. Most people are lying about everything,
etc, etc. So

250
00:24:37,000 --> 00:24:56,000
I go to the more positive on that, which is, and especially we see it hyper in
crypto, which is bag protection. People are doing what they think is necessary to
protect their bags, whatever that may be. And everybody's got their own kind of
unique bag bias. Right. And

251
00:24:58,028 --> 00:25:19,028
are automatically kind of, without even thinking about it, working in ways to, in
theory, protect that bag bias, even though they may be wrong about things. Right.
They may think, whatever, big block, small block, oh, big block bag, bad. Right. And
it's simply a, you know, bag bias or protection mechanism that humans do. So I give
it a softer view, but

252
00:25:19,028 --> 00:25:39,028
it's interesting that you say that. I mean, it's certainly completely plausible and
definitely does happen. Although when the, when the blockchain forked into BTC and
BCH, everyone's an equal bag, bag holder in theory. Although there's a lot to say
about that, too, because in practice that was bad.

253
00:25:39,028 --> 00:25:53,028
It splits the network, right. And it splits the network effect. And, you know, that
weakens that network effect, which is definitely a negative, no doubt. Loses
momentum. Both sides.

254
00:25:53,028 --> 00:26:05,028
Yeah, I'm all about the network effect. I mean, you asked me, though, about like,
why do I stick with the idea? And I'm just wondering, like, is, are there any ideas
that you, you are particularly excited about and you think are super great?

255
00:26:05,028 --> 00:26:07,028
In blockchain?

256
00:26:07,028 --> 00:26:09,028
Yeah.

257
00:26:09,028 --> 00:26:11,028
Bro.

258
00:26:11,028 --> 00:26:13,028
Yeah, I think.

259
00:26:13,028 --> 00:26:17,028
I mean, because this is kind of my point that. All right, we'll go on. Yes.

260
00:26:18,028 --> 00:26:46,028
Well, I mean, at the core, the core of crypto has always been, to me, peer-to-peer
digital cash. That is the one that, you know, attracted me originally. Secondarily,
the thing that really attracted me was smart contracts. I thought that was
incredible. That's the thing that really got me into crypto, like in, as far as like
getting a wallet, getting some Ethereum, playing around with it. Like, that was the
thing that actually got me really excited.

261
00:26:47,028 --> 00:26:48,028
But peer-to-peer.

262
00:26:48,028 --> 00:27:05,028
So for peer-to-peer digital cash, like what specifically, like, what's the, what's
the actual, like, the game plan, you know, like switch to Bitcoin cash or campaign
for hard fork to larger block size and BTC or, you know, what's the specific idea?

263
00:27:05,028 --> 00:27:20,028
So for me, I mean, I'm just talking personally, and this is just my own skewed bag
bias craziness. No, I think Bitcoin is a lost cause for peer-to-peer digital cash. I
don't think it's going to happen on Bitcoin. I think the incentives are too strong
in the other way.

264
00:27:20,028 --> 00:27:41,028
And actually what we've seen is, you know, those kind of currencies, which were
cryptos that have worked for digital cash. They don't have number go up technology
in them. The number go up technology of Bitcoin is so strong that it doesn't matter
the peer-to-peer digital cash.

265
00:27:42,028 --> 00:27:58,028
So my thought process is, and you know, you see this with Litecoiners, and I think
it's a mistake from the Litecoiner perspective. They keep talking about, oh, how the
price of Litecoin is going to go up when we have mainstream adoption or we have
Litecoin available, you know, at every merchant on earth, right?

266
00:27:58,028 --> 00:28:13,028
That's the wrong strategy from my narrative perspective, which it shouldn't be that.
It shouldn't be number go up. It should just be, look, this is a great plate. This
is where you can buy and sell and use peer-to-peer digital cash. It's not about
number go up.

267
00:28:13,028 --> 00:28:38,028
Unfortunately, all of crypto has been kind of corrupted by this idea of number go
up. And in my mind, the way I frame it for myself, and when I talk to Bitcoiners, I
ask this question, which is, hey, if Bitcoin was stuck at, you know, $10,000 per
Bitcoin forever, would you exchange that for peer-to-peer digital cash that takes
money out of the hands of government, puts it in an individual's hands?

268
00:28:39,028 --> 00:29:01,028
And to a man, when I talk to hardcore Bitcoiners, like the Bitcoin maxis, they
immediately go into, well, that's not the way it works. It's going to, of course, go
to a trillion dollars of Bitcoin. I'm like, but that's not the question. The
question is a thought process of would you give up your vast wealth to have a
peer-to-peer digital cash system that impacts the entire world and takes money out
of the hands of government?

269
00:29:02,028 --> 00:29:06,028
And the maxis, it turns out, they don't care about that. They want to be…

270
00:29:07,028 --> 00:29:22,028
Yeah, but I'm just curious about, yeah, I completely understand what you're saying.
I'm just curious about, you think, you know, the way to go is to encourage people to
use Litecoin in everyday transactions?

271
00:29:23,028 --> 00:29:46,028
I'm not particularly concerned about Litecoin being the coin. My brain actually goes
to something much more down the line that's maybe hard to see right now, which is we
have hundreds, dozens, thousands, maybe an infinite number of coins, and people use
what they want to use.

272
00:29:47,028 --> 00:29:48,028
I look at it as…

273
00:29:48,028 --> 00:29:49,028
Yes, of course.

274
00:29:49,028 --> 00:29:50,028
I look at it as…

275
00:29:50,028 --> 00:30:04,028
Of course. But the only reason I ask is because the Drivechain vision is very
similar to that. It says we have maybe 100,000 different pieces of software, or more
likely, probably like maybe 30 or so.

276
00:30:05,028 --> 00:30:10,028
But the point is, you have the option to introduce a new piece of software at any
time.

277
00:30:10,028 --> 00:30:11,028
Yep.

278
00:30:12,028 --> 00:30:19,028
However, it's all just one currency unit that those all share.

279
00:30:20,028 --> 00:30:36,028
So this has an advantage over, you know, because this is what was sometimes called
altcoin pluralism, like Eric Voorhees was big into this back in the day that, you
know, competition is good, Friedrich Hayek, you know, currency competition, the
currencies will compete.

280
00:30:37,028 --> 00:30:47,028
And, you know, I was very critical of him at the time, but the evidence so far has
crushed my point of view compared to his so far.

281
00:30:48,028 --> 00:30:55,028
Because, you know, it's true that I always thought like, oh, sidechains will just be
this thing and we won't really need altcoins.

282
00:30:55,028 --> 00:31:09,028
But the reality, the dark reality is that the sidechain technology has been slow to
come into existence and be adopted and even be understood or accepted by anyone.

283
00:31:10,028 --> 00:31:13,028
And meanwhile, it's so easy to launch an altcoin.

284
00:31:13,028 --> 00:31:16,028
This, of course, made many, many scams.

285
00:31:16,028 --> 00:31:22,028
But it also meant that, you know, you could just launch, you know, whatever, Monero
or something.

286
00:31:22,028 --> 00:31:24,028
And so it would actually be there.

287
00:31:24,028 --> 00:31:34,028
So that's that's a very this is a lot of points scored by by the altcoin pluralist,
such as Eric and yourself, presumably, because it just means you have you have all
this stuff.

288
00:31:34,028 --> 00:31:38,028
Otherwise, it would have been nothing if we were to have if we had all just said,
oh, we're just going to wait.

289
00:31:38,028 --> 00:31:45,028
We're just going to carefully wait until for sidechains on Bitcoin, which is like
what I thought everyone would do and should do this in 2014.

290
00:31:45,028 --> 00:31:50,028
That was like what I thought. But I was completely wrong about that, I think.

291
00:31:52,028 --> 00:31:55,028
But it would have been better if more people were interested in.

292
00:31:56,028 --> 00:32:07,028
I think it would have been better for everyone, large blockers and small blockers,
if instead of splitting, they had cooperated on like a win win thing, but they both
didn't want to do that.

293
00:32:07,028 --> 00:32:12,028
That's my. That's my little story, but that's why I asked you about like, what do
you like?

294
00:32:12,028 --> 00:32:16,028
Because so because people say, why do you stick with the Drivechain idea, which is
what you had asked me.

295
00:32:17,028 --> 00:32:26,028
And I was like, well, actually, the Drivechain still sounds much better to me than
altcoin pluralism, because with altcoin pluralism, we have all these people
releasing new coins.

296
00:32:26,028 --> 00:32:39,028
Many of the coins will be scams and many of the the projects that have an enormous
amount of inconvenience due to the exchange rate fluctuations, none of which you
have with.

297
00:32:39,028 --> 00:32:50,028
You know, it's like you go to an ATM and you put you take twenty dollars out of your
checking account and you get a twenty dollar bill or you go to the you go to the
laundromat or whatever and you put in a five dollar bill.

298
00:32:50,028 --> 00:32:54,028
So you get five dollars worth of quarters out of the change machine.

299
00:32:54,028 --> 00:33:03,028
You know what I mean? So the altcoin pluralism is like you go to the ATM and you,
you know, you withdraw twenty dollars from your checking account and you get like
maybe some different amount of money.

300
00:33:03,028 --> 00:33:10,028
Like seventeen dollars and eighty three cents or you get twenty five dollars or
something, you know, like that's the that's the problem with altcoin pluralism.

301
00:33:10,028 --> 00:33:17,028
Well, I think this is where where the idea of, you know, meme coins actually comes
in, which is this.

302
00:33:17,028 --> 00:33:20,028
It's ridiculous now. And I admit it's ridiculous.

303
00:33:21,028 --> 00:33:34,028
But what people can actually judge with new, say, a meme coin is, is this in some
way fair? Was this in some way fairly launched? Is there a big team allocation?
Right.

304
00:33:34,028 --> 00:33:36,028
Was it pre-mined by a bunch of people? Right.

305
00:33:37,028 --> 00:33:50,028
And so in a way, you know, the user, the end user can has a much better idea of, am
I going to get behind this coin because it's fair or not fair or whatever?

306
00:33:50,028 --> 00:33:53,028
And we've gone through literally thousands of these now.

307
00:33:53,028 --> 00:33:59,028
And, you know, our small group of crypto enthusiasts have gotten better at sniffing
it out.

308
00:33:59,028 --> 00:34:10,028
Not perfect, but better. And I actually feel like as a community and as then as a
globe later, we're moving into this idea of a multi currency future where currencies
have to compete.

309
00:34:10,028 --> 00:34:20,028
And that competition by competition's nature will bring out winners and losers like
what the what people actually want.

310
00:34:20,028 --> 00:34:30,028
And maybe they want a dog token, you know, maybe they want Doge or maybe they want
hard money of Bitcoin or maybe they don't want hard money of Bitcoin because they
don't like that Satoshi has a million coins.

311
00:34:30,028 --> 00:34:31,028
Right. It's like, yeah.

312
00:34:31,028 --> 00:34:33,028
Or balls or neither. Right. Or some mix.

313
00:34:33,028 --> 00:34:34,028
Exactly.

314
00:34:34,028 --> 00:34:39,028
I'm glad that you brought that up. The competition point. That is definitely a
regret of mine.

315
00:34:40,028 --> 00:34:47,028
If I look back, I would have say if I could tell my younger self like something, I
would just say competition.

316
00:34:47,028 --> 00:34:55,028
Put all your chips on competition because competition is like it's kind of like
error correction across people and across time.

317
00:34:55,028 --> 00:35:02,028
So it's like if anything, everyone's doing the wrong thing, the competitor will do
the right thing and they won't be outcompeted.

318
00:35:03,028 --> 00:35:17,028
It's you get evolution that way. So in the context of Bitcoin, the the fact that
Bitcoin had this big lead and it had network effects that insulated it from some
competition,

319
00:35:17,028 --> 00:35:25,028
which had some unhealthy effects of this complacency and overconfidence and just
saying Bitcoin is already going to win.

320
00:35:25,028 --> 00:35:35,028
And the idea of, you know, the old coins were terrible and I really never owned an
old coin and never believed in any old coins.

321
00:35:35,028 --> 00:35:40,028
But I would be a much worse place if there were not.

322
00:35:40,028 --> 00:35:45,028
You know, these old coins are actually good because they do.

323
00:35:45,028 --> 00:35:56,028
They let people have exactly as you said, they let people have their however they
like, whatever your slice of pie is or whatever the phrase.

324
00:35:57,028 --> 00:36:15,028
So this this attribute that we need to have the ability to launch a new coin to mop
up any errors and at least learn, learn things about what the technology can do is
very, very important.

325
00:36:15,028 --> 00:36:30,028
And I think that that there's a regret that I think like in particular, the my view
is that the competition will ultimately produce a situation where only one coin will
survive, which is kind of a paradox.

326
00:36:30,028 --> 00:36:39,028
But it's because the competitive environment will make it so that we will have an
optimal coin.

327
00:36:39,028 --> 00:36:45,028
At some point, there'll be like an optimal tech stack, like how people today, they
just download to start like a Web server.

328
00:36:45,028 --> 00:36:54,028
They know that they can go on whatever it is, you know, Linode or whatever and get
Ubuntu, this Apache server or whatever.

329
00:36:54,028 --> 00:37:00,028
There's just like the, you know, the lamp stack or whatever you just it would be
like the stack.

330
00:37:00,028 --> 00:37:18,028
And we'll reach a point eventually, you know, probably in three to five years where
anyone on their laptop can just launch something that not only does it have a small
block size and easy to run nodes, but it scales to the entire planet Earth.

331
00:37:19,028 --> 00:37:28,028
And it has unbreakable privacy and it has the ability to issue assets, stocks and
bonds, whatever.

332
00:37:28,028 --> 00:37:31,028
So without competition, we would never reach that point.

333
00:37:31,028 --> 00:37:39,028
And because of competition, whenever we do reach that point, the network effects
will be all that remain and one coin will obliterate the others.

334
00:37:40,028 --> 00:37:41,028
And this is a bizarre question there.

335
00:37:41,028 --> 00:37:42,028
Why do you think that, though?

336
00:37:42,028 --> 00:37:46,028
I mean, I understand coming from a kind of U.S.

337
00:37:46,028 --> 00:37:48,028
Because it would be a finished project.

338
00:37:48,028 --> 00:37:49,028
Yeah.

339
00:37:49,028 --> 00:37:52,028
That's why the competition will reach the perfected state.

340
00:37:52,028 --> 00:37:59,028
I mean, it won't be literally perfect, of course, but it's like what I was trying to
say about how people like the Apache server, you know what I mean?

341
00:38:00,028 --> 00:38:03,028
Like, OK, they're there.

342
00:38:05,028 --> 00:38:12,028
I'm kind of glossing over a lot of the details, but I'm trying to say, like, it's
like, you know, like the QWERTY keyboard.

343
00:38:12,028 --> 00:38:13,028
Yeah.

344
00:38:13,028 --> 00:38:18,028
It's it's not like it's like the QWERTY keyboard you get on Amazon for like twelve
dollars.

345
00:38:18,028 --> 00:38:20,028
It's like it's literally perfect.

346
00:38:20,028 --> 00:38:21,028
You know what I mean?

347
00:38:21,028 --> 00:38:22,028
It's not like the platonic ideal.

348
00:38:22,028 --> 00:38:24,028
It's literally the exact opposite.

349
00:38:24,028 --> 00:38:27,028
It's literally the worst keyboard you could possibly get.

350
00:38:27,028 --> 00:38:28,028
That's a fact.

351
00:38:28,028 --> 00:38:29,028
I've gone down that rabbit hole.

352
00:38:29,028 --> 00:38:31,028
Trust me, I've gone down that rabbit hole.

353
00:38:31,028 --> 00:38:33,028
It's whenever somebody says.

354
00:38:33,028 --> 00:38:40,028
I'm familiar with this story because it's they did people were typing too quickly
and it was jamming the keys.

355
00:38:40,028 --> 00:38:47,028
So they put commonly used keys further away, which meant the home row on the
keyboard as, you know, the semicolon and all this nonsense.

356
00:38:47,028 --> 00:38:49,028
And, you know, it shouldn't be there.

357
00:38:49,028 --> 00:38:52,028
The vowels are all weirdly separated.

358
00:38:52,028 --> 00:38:58,028
So so but the point is, there's no need to innovate.

359
00:38:58,028 --> 00:39:04,028
People have, of course, there's the keyboard that is split into two things for your
hand, you know, and there's the touch screen keyboard was new.

360
00:39:04,028 --> 00:39:14,028
So it won't literally be the end of innovation, but there will reach a point where
the network effects because you see that you agree with me that the QWERTY keyboard
has enormous network effects.

361
00:39:14,028 --> 00:39:16,028
A million percent.

362
00:39:16,028 --> 00:39:19,028
Your kids, if you're raising kids, they have to learn the QWERTY keyboard.

363
00:39:20,028 --> 00:39:21,028
It's my perfect.

364
00:39:21,028 --> 00:39:26,028
I use it all the time because it's one of these where when somebody like, oh, I
don't know, whatever.

365
00:39:26,028 --> 00:39:28,028
Cardano is going to win because Cardano's got the best tech.

366
00:39:28,028 --> 00:39:30,028
I'm like, bro, best tech.

367
00:39:30,028 --> 00:39:31,028
It doesn't matter.

368
00:39:31,028 --> 00:39:40,028
Look down right now, bro, because you're really using the worst tech like that tech
is 150 year old tech that is bad.

369
00:39:40,028 --> 00:39:45,028
There are ones that are literally twice as efficient and you don't use it because
you don't even know that it exists.

370
00:39:45,028 --> 00:39:46,028
Right.

371
00:39:46,028 --> 00:39:51,028
And so, yeah, it's it's one of the perfect examples of network effects winning.

372
00:39:51,028 --> 00:39:52,028
Right.

373
00:39:52,028 --> 00:39:55,028
It's literally the best example.

374
00:39:55,028 --> 00:39:56,028
Super.

375
00:39:56,028 --> 00:39:57,028
So I'm saying network effects are very strong.

376
00:39:57,028 --> 00:40:07,028
And with money, they're very strong, because if you are on the wrong monetary thing,
you have your wealth stored in something that may go to zero.

377
00:40:07,028 --> 00:40:08,028
So it has a risk.

378
00:40:08,028 --> 00:40:18,028
So you you divest slightly and then the risk becomes a self-fulfilling prophecy,
geometrically increasing likelihood that the coin will fail.

379
00:40:18,028 --> 00:40:19,028
Yeah.

380
00:40:19,028 --> 00:40:24,028
So so there's so that will happen to like the smallest to be iterated deletion of
the smallest coin.

381
00:40:24,028 --> 00:40:25,028
You know what I mean?

382
00:40:25,028 --> 00:40:29,028
So you start eventually a perfect tech stack.

383
00:40:29,028 --> 00:40:37,028
Well, all these coins and among all the perfect ones or the among all the let's call
them viable ones.

384
00:40:37,028 --> 00:40:46,028
These are the ones that have the right scalability and privacy and other features
that they're not.

385
00:40:46,028 --> 00:40:51,028
They are not imperiled by the fact that they lack a feature that some people want.

386
00:40:51,028 --> 00:40:58,028
So if there's some coins that are so this is Bitcoin is in this position now where
there are some coins that.

387
00:40:58,028 --> 00:41:04,028
Decline to improve or they decline to incline.

388
00:41:04,028 --> 00:41:11,028
They're not motivated to please the end user, which is a bizarre state of affairs.

389
00:41:12,028 --> 00:41:18,028
And so these people, I mean, these coins, these coins are kind of taking themselves
out of the running.

390
00:41:18,028 --> 00:41:21,028
But there will be many, many coins that.

391
00:41:21,028 --> 00:41:26,028
You know that they that want to win, they're going for the number one spot.

392
00:41:26,028 --> 00:41:29,028
They're very, very, very motivated to hit the number one spot.

393
00:41:29,028 --> 00:41:36,028
And well, I think Bitcoin actually hits the number one goal of the end user, which
is number go up.

394
00:41:36,028 --> 00:41:43,028
Number go up is the buzz that is more important than fast transactions or being a
big blog, any of that.

395
00:41:43,028 --> 00:41:47,028
Well, now we're going on so many different threads that we but don't let me forget
any threads.

396
00:41:47,028 --> 00:41:51,028
But we can talk about this if you like, because the number go up thing.

397
00:41:51,028 --> 00:41:56,028
And this is a multistage thing like the rockets reaching the moon.

398
00:41:56,028 --> 00:42:04,028
You know, that was like stage one and then has to separate like the Starship Elon
Musk's Starship.

399
00:42:04,028 --> 00:42:07,028
Like it goes up and then the booster separates.

400
00:42:07,028 --> 00:42:17,028
So there's stages. And to number go up early on, you can increase the price by just
convincing other people that the price will go up.

401
00:42:17,028 --> 00:42:24,028
So it can be purely speculative at first, even though it can be a lot of
knowledgeable people.

402
00:42:24,028 --> 00:42:28,028
Like in the early days, Bitcoin is very, very everyone involved was very
knowledgeable.

403
00:42:28,028 --> 00:42:32,028
The project, you know, the first user was Satoshi, the inventor.

404
00:42:32,028 --> 00:42:44,028
The second user was how Finney, another coin inventor, a coinsmith guy who is a tech
visionary and genius.

405
00:42:44,028 --> 00:42:55,028
So as time goes on, the many things change, though, there's more and more lay people
who are users who are buying the coin and you are buying it.

406
00:42:55,028 --> 00:42:57,028
You know, there's the speculative route and the usage route.

407
00:42:57,028 --> 00:43:06,028
So then you had people like, you know, the gentleman who bought the pizza, pizza in
northern Florida.

408
00:43:06,028 --> 00:43:14,028
So over time, the number is going up because mostly for a speculative reason.

409
00:43:14,028 --> 00:43:19,028
However, in the second to last stage.

410
00:43:19,028 --> 00:43:22,028
So I'm saying the stage, stage, stage, stage, stage, you're going to the moon.

411
00:43:22,028 --> 00:43:25,028
You're almost at the moon. You've separated a few times.

412
00:43:25,028 --> 00:43:30,028
You're orbiting the moon or whatever, you know, and you're at the very last stage.

413
00:43:30,028 --> 00:43:36,028
The last stage cannot be one of convincing other people that the price will go up.

414
00:43:36,028 --> 00:43:52,028
The only option for the final stage, the last link of the chain, the last, the final
chapter of the book must be that people adopted it to use it every day.

415
00:43:52,028 --> 00:43:58,028
And those people cannot get it because it's you basically have an implied
likelihood.

416
00:43:58,028 --> 00:44:03,028
You take the price, the hyper Bitcoinization price, you know, the price of just
taking over.

417
00:44:03,028 --> 00:44:09,028
You divide the current price into that, and that is basically the likelihood that it
will happen.

418
00:44:09,028 --> 00:44:14,028
So by the time it actually happens, there's no the number isn't going up anymore.

419
00:44:14,028 --> 00:44:22,028
And by definition, but when it's a million to one and it goes from being 100 million
to one to a million to one, it can go up 100x.

420
00:44:23,028 --> 00:44:36,028
So early on, your best bet is and think of the relative costs and benefits of these
things also, which are that it's very easy to just shill the coin and say this is
going to be great compared to build out the user experience and get real adoption
from real users.

421
00:44:36,028 --> 00:44:45,028
Then you have to deal with all these messy, messy details that are necessarily like
they're like part of the grimy physical world.

422
00:44:45,028 --> 00:44:53,028
They have all these what you might call like these real world details you have to
work out.

423
00:44:53,028 --> 00:44:57,028
Whereas the other thing is just from far away, you just say, oh, it's going to be
great.

424
00:44:57,028 --> 00:45:00,028
Everything's going to be perfect. No details.

425
00:45:01,028 --> 00:45:08,028
We're many times further away from use cases, our use, general use of Bitcoin.

426
00:45:08,028 --> 00:45:12,028
We were many times more used in 2015 than we are today.

427
00:45:12,028 --> 00:45:15,028
Right. I mean, it's like we've gone completely backwards.

428
00:45:16,028 --> 00:45:17,028
So I don't know anybody.

429
00:45:17,028 --> 00:45:20,028
Well, yes, I the cultural focus.

430
00:45:20,028 --> 00:45:23,028
I agree with you. But when I was trying, we have a hand up also.

431
00:45:23,028 --> 00:45:27,028
But I was just trying to say, you're saying it works for number go up.

432
00:45:27,028 --> 00:45:37,028
But I'm saying, actually, number go up is either a Ponzi scheme or it ends up
converting into actual usage.

433
00:45:37,028 --> 00:45:40,028
So if it's a Ponzi scheme, it will only go up for a little while.

434
00:45:40,028 --> 00:45:50,028
And then the more up it goes, the more at risk you are of being one of the people
who, you know, should have sold cash out.

435
00:45:50,028 --> 00:45:53,028
So actually, that whole situation is unstable.

436
00:45:53,028 --> 00:46:00,028
So. So it does work for now, but it will have those people, the people who are
buying it for number go up.

437
00:46:00,028 --> 00:46:10,028
They either believe it is a Ponzi scheme or they believe that it will become
something that is used by everyone.

438
00:46:10,028 --> 00:46:16,028
So, yeah, that makes sense. I don't think I don't see a third option for that.

439
00:46:16,028 --> 00:46:20,028
One question we have someone before we get to the hand.

440
00:46:20,028 --> 00:46:24,028
One one question. One final question for me is right now.

441
00:46:24,028 --> 00:46:28,028
So you were obviously speaking at the Litecoin conference.

442
00:46:28,028 --> 00:46:32,028
Is is your goal now? Is is your like your focus with Drivechains?

443
00:46:32,028 --> 00:46:38,028
Hey, let's try and experiment on a different chain to get some adoption.

444
00:46:38,028 --> 00:46:40,028
And then maybe we try and bring it to Bitcoin.

445
00:46:40,028 --> 00:46:45,028
And what's your current focus on on kind of bringing Drivechains forward?

446
00:46:45,028 --> 00:46:59,028
Sure. The current technology we have shipped is a fork of the old Bitcoin version
16.99 and 16.99 is very old.

447
00:46:59,028 --> 00:47:02,028
And we have a signet test net with that.

448
00:47:02,028 --> 00:47:07,028
You can you can all download now or LayerTwo Labs dot com slash download and just
check it out.

449
00:47:07,028 --> 00:47:18,028
There's no activation client. So even if people wanted to activate Drivechain, there
is no way for anyone to do so.

450
00:47:18,028 --> 00:47:21,028
And so there's a lot to talk about with that.

451
00:47:21,028 --> 00:47:30,028
But there is a new way of putting out an activation client that I call CUSF,
C-U-S-F.

452
00:47:30,028 --> 00:47:34,028
You go to BIP300CUSF.com and read about it.

453
00:47:34,028 --> 00:47:41,028
This is much, much better way of activating the soft fork where it's on standalone
piece of software.

454
00:47:41,028 --> 00:47:48,028
And it does not involve a pull request to Bitcoin core or any modification to the
Bitcoin core software at all.

455
00:47:48,028 --> 00:47:57,028
And another interesting thing about it is it should be very, very easy for something
like Litecoin or another coin, you know, whatever.

456
00:47:57,028 --> 00:48:04,028
Any other altcoin Namecoin, et cetera. It should be very easy for them to activate
it as well.

457
00:48:04,028 --> 00:48:14,028
And just because it's its own software project, it's also better with, like, you
know, maintenance, collaborating to fix bugs, et cetera.

458
00:48:14,028 --> 00:48:26,028
So, Mike, the current focus is to try to switch from the old test net, which, you
know, we created a while ago and we just reset periodically.

459
00:48:26,028 --> 00:48:34,028
But it's based on old Bitcoin core software from, like, I don't even know, like 2018
or something.

460
00:48:34,028 --> 00:48:38,028
And to switch it to this new thing is CUSF.

461
00:48:38,028 --> 00:48:45,028
And that will always work with the latest version of Bitcoin core without modifying
Bitcoin core at all.

462
00:48:45,028 --> 00:48:54,028
So in that way, that will be the first time that the 300 could be activated, because
with no activation client, there is nothing for people to use.

463
00:48:54,028 --> 00:48:59,028
Even though the idea is there, the sidechains are there. We have built many
sidechains already.

464
00:48:59,028 --> 00:49:13,028
So my focus is on that and that should make it easier for any coin, including
Bitcoin and Litecoin, to activate BIP300 for real and start using Drivechains.

465
00:49:13,028 --> 00:49:19,028
We have produced a lot of these L2 Drivechains already.

466
00:49:19,028 --> 00:49:28,028
You can go to, like, releases.drivechain.info or just get them from LayerTwoLabs.com
slash download because the launcher has them there.

467
00:49:28,028 --> 00:49:35,028
And so those already exist. The focus now is on this CUSF software.

468
00:49:35,028 --> 00:49:38,028
So that is what I'm focused on now.

469
00:49:38,028 --> 00:49:43,028
So what would be your ideal situation or ideal way forward?

470
00:49:43,028 --> 00:49:49,028
Would it be to get, whatever, Litecoin to accept this and Litecoin to give it?

471
00:49:50,117 --> 00:50:17,117
You know, the go-ahead, what would, obviously, I mean, I'm speaking out of turn,
because I don't know about Bitcoin, but, you know, I don't know, I'm pretty sure
Bitcoin's not moving forward with this, right? The core, Bitcoin core is probably,
well, I think another advantage of CUSF is that the miners can activate it
unilaterally and Bitcoin core cannot do anything to prevent software from activating
since it's in its own project.

472
00:50:17,117 --> 00:50:27,117
So that is another thing that may change the game completely because it will be
like, in the paper, I have a phrase like the ordinalization of soft forks.

473
00:50:27,117 --> 00:50:35,117
So that might be something that happens, although I don't know. I do have to support
the miners.

474
00:50:35,117 --> 00:50:41,117
Oh, you better get a good narrative going, bro, because that, I mean, you got to
convince the miners. I've been, you know, I don't know if you know, but I've been
working with Bell's Coin and stuff.

475
00:50:41,117 --> 00:50:47,117
And to convince miners to do stuff like requires tremendous amount of, first, you
got to have a really strong narrative.

476
00:50:47,117 --> 00:50:53,117
They have to know what you're doing and why, and they have to have a big financial
incentive to do it, right?

477
00:50:53,117 --> 00:50:59,117
So we got them to kind of accept this V3, which allowed merge mining.

478
00:50:59,117 --> 00:51:04,117
The reason they did that was because there's a huge financial incentive on the other
side, right?

479
00:51:05,117 --> 00:51:06,117
So what would be their incentive?

480
00:51:06,117 --> 00:51:09,117
Yeah, well, Drivechain is merge mining also.

481
00:51:09,117 --> 00:51:24,117
So that's, I do think that in the future, 99% plus of all mining revenues will come
from merge mining and in particular merge mined Drivechain.

482
00:51:24,117 --> 00:51:26,117
So I do think there is something in it for the miners.

483
00:51:26,117 --> 00:51:30,117
I agree with you, though, that the miners like are not technical.

484
00:51:30,117 --> 00:51:37,117
This is to their own detriment because I think they make less money than they would
make if they were more actively involved.

485
00:51:37,117 --> 00:51:46,117
I mean, one thing to point out is that, you know, scaling up the project means more
transaction fees.

486
00:51:46,117 --> 00:52:02,117
And so if you are in a situation where you can get a transaction, a situation where
you can collect all the transaction fees in the entire planet Earth, that is worth
like hundreds of billions of dollars per year because there's like 8 billion people
on planet Earth.

487
00:52:02,117 --> 00:52:06,117
And we make like a few transactions a day, 365 days a year.

488
00:52:06,117 --> 00:52:10,117
And so that's an enormous amount of money.

489
00:52:11,117 --> 00:52:19,117
So I think that is weird that miners don't. But of course, I think the miners are
very.

490
00:52:19,117 --> 00:52:29,117
Many of the Bitcoin miners are not technical at all, and they're just actually
business people, people who run the mining pools and they don't.

491
00:52:29,117 --> 00:52:36,117
They're like, you know, they don't know anything about software at all, let alone
Bitcoin development.

492
00:52:36,117 --> 00:52:47,117
So. That's one thing, but, yeah, I do think the ideal situation for me would
probably be like.

493
00:52:47,117 --> 00:52:54,117
We retool the demo so that there is the CUSF use of activation client.

494
00:52:54,117 --> 00:53:03,117
And so then finally something exists where there's this would be the first day that
action could possibly be taken.

495
00:53:03,117 --> 00:53:07,117
We redo the demo that we have with that.

496
00:53:07,117 --> 00:53:12,117
And people, the demo goes viral among miners or something.

497
00:53:12,117 --> 00:53:17,117
They say, why don't we do this? And Bitcoin, we could have Zcash privacy, we could
collect all these transaction fees.

498
00:53:17,117 --> 00:53:21,117
We have, you know, all this stuff.

499
00:53:21,117 --> 00:53:25,117
There's all these benefits for us. These. So we'll just why don't we just try it?

500
00:53:25,117 --> 00:53:30,117
And then they are supposed to just do it. And then it attracts users.

501
00:53:30,117 --> 00:53:34,117
And everyone looks back on, you know, no one I guess no one pays.

502
00:53:34,117 --> 00:53:39,117
The ideal thing would be if I suppose no one pays any attention to.

503
00:53:39,117 --> 00:53:47,117
The existing technical community, the existing developer community anymore, having
having basically misled everyone with.

504
00:53:47,117 --> 00:53:56,117
Lightning and even covenants and those other stuff that they are doing now, which is
like, in my view, a kind of make work program.

505
00:53:56,117 --> 00:54:01,117
Well, that's pretty scathing. Guys, we have on stage Inu or Smokes.

506
00:54:01,117 --> 00:54:06,117
If you guys have a question, just raise your hand or just open your mic and.

507
00:54:06,117 --> 00:54:09,117
And I don't really have questions. I'm just here to support.

508
00:54:09,117 --> 00:54:12,117
I love all the spaces that you that you host.

509
00:54:12,117 --> 00:54:23,117
And I think, you know, Bitcoin, usually people, Bitcoin holders, they tend to, you
know, stay within their community and stuff like that, not look at other
communities.

510
00:54:23,117 --> 00:54:30,117
But I've realized that, like, we have a lot of Bitcoin people within the Bell's
community, and it's almost like we're their little brother.

511
00:54:30,117 --> 00:54:36,117
And they see potential in us because we do a lot of the things that they're doing,
like OP_CAT and all that stuff.

512
00:54:36,117 --> 00:54:39,117
So, you know, I'm just excited we can work together.

513
00:54:39,117 --> 00:54:43,117
Appreciate that. Inu, what's up, man?

514
00:54:43,117 --> 00:54:54,117
Yeah, I came in like a bit, not like since the beginning, but I was just wondering,
like, why?

515
00:54:54,117 --> 00:55:06,117
Why do you think like lightning is shit? And like, yeah, I mean, and also like,
like, do you think lightning can ever.

516
00:55:06,117 --> 00:55:10,117
You know, actually be used to buy coffee.

517
00:55:10,117 --> 00:55:17,117
I mean, yeah. Well, OK, this is, of course, it's a completely fair question,
obviously.

518
00:55:17,117 --> 00:55:29,117
And this is definitely one of those cases where the word lightning, I think,
probably means something different to me than maybe it means something slightly
different.

519
00:55:29,117 --> 00:55:35,117
You know, for everyone, it's like free speech or something where some people just
always start talking about the First Amendment.

520
00:55:35,117 --> 00:55:43,117
But then other people will say this is a more general thing that applies, you know,
that whatever John Stuart Mill invented long before there was an America.

521
00:55:43,117 --> 00:55:49,117
So lightning, I have written a piece called the Ellen Black Pill.

522
00:55:49,117 --> 00:55:57,117
And if you search my blog, which is Truthcoin.info, just search on Google Truthcoin
Ellen Black Pill.

523
00:55:57,117 --> 00:56:02,117
And it's basically just a collection of quotes from people who work on the lightning
network.

524
00:56:02,117 --> 00:56:15,117
And I just think like anyone who reads this list will start to see like how it's
just there's just an enormous difference between the way what the layperson thinks,

525
00:56:15,117 --> 00:56:24,117
what someone would think if they went to like a Bitcoin conference or even a
technical Bitcoin conference that is of high repute, like a Capcom or something.

526
00:56:24,117 --> 00:56:27,117
You would go and you would see like there's a whole lightning day.

527
00:56:27,117 --> 00:56:33,117
If you go to like, I don't remember which website, one of Michael Saylor's websites,
there's like a whole Bitcoin section at the top.

528
00:56:33,117 --> 00:56:37,117
And then there's like a tab. There's like a whole light lightning section.

529
00:56:37,117 --> 00:56:41,117
It's like these are held up as though these are two comparable things.

530
00:56:41,117 --> 00:56:48,117
You know, Bitcoin first, first the Bitcoin era and then the lightning era, you know.

531
00:56:48,117 --> 00:56:54,117
And if you just read the quotes, the quotes are terrible.

532
00:56:54,117 --> 00:57:00,117
I've also written two years earlier, I had written a piece called Lightning
Limitations.

533
00:57:00,117 --> 00:57:04,117
Lightning limitations is where I just do some basic math.

534
00:57:04,117 --> 00:57:18,117
And I just explain how this idea is in the idea as explained in the, you know, the
lightning white paper and that as implemented in the non-custodial lightning wallets
basically cannot work.

535
00:57:18,117 --> 00:57:29,117
Now, when the people who are lightning engineers, when they use the word lightning,
they're thinking like, OK, sure, it doesn't work now, but we're going to have PTLCs
soon.

536
00:57:29,117 --> 00:57:38,117
Or we're going to have any perv out our CTV and then we'll we'll retool this stuff
so that little things like ARC is lightning or whatever.

537
00:57:38,117 --> 00:57:47,117
But if you talk to like Barack, creator of ARC, it'll be like right in moments into
the masterclass whiteboard explainer video.

538
00:57:47,117 --> 00:57:51,117
He's like, so, yeah, I think we all agree lightning doesn't work.

539
00:57:51,117 --> 00:57:54,117
And I tried to fix the problems with lightning and I just came up with a completely
different thing.

540
00:57:54,117 --> 00:57:58,117
You know, it's called ARC. He's a CTV. So.

541
00:57:58,117 --> 00:58:03,117
So to me, it's just become.

542
00:58:03,117 --> 00:58:13,117
This horrible thing, like it's become like a kind of like Theranos to me, where you
have all these smart people working there and raises more and more money.

543
00:58:13,117 --> 00:58:19,117
And on the outside, it looks better and better and better. But on the inside, it is
doesn't work.

544
00:58:19,117 --> 00:58:26,117
And so people are afraid they're just not willing to talk of it's the most one of
the biggest sacred cows of them all.

545
00:58:26,117 --> 00:58:31,117
Yeah. And you can't say anything bad about it, but I'll give you a little you asked,
why do I think it cannot work?

546
00:58:31,117 --> 00:58:36,117
Also, if you go to my Twitter highlights at some point, I put I make a list of 10
things.

547
00:58:36,117 --> 00:58:40,117
One would be enough, but I have 10 and and there are quite a few.

548
00:58:40,117 --> 00:58:47,117
I mean, one of the things on the list is that in order to join the lightning
network, you need first need a channel on L1.

549
00:58:47,117 --> 00:58:54,117
So it does nothing to help onboarding at all. So there's no way to onboarding a
billion people in the first place.

550
00:58:54,117 --> 00:59:01,117
So that alone makes it so it doesn't work. Another reason why it cannot work is it
does not work when the fees are high.

551
00:59:01,117 --> 00:59:06,117
It's the agencies don't work, which is the whole thing's keeping it secure.

552
00:59:06,117 --> 00:59:13,117
So either you live in a low fee world forever, in which case lightning is basically
not needed.

553
00:59:13,117 --> 00:59:17,117
Because the usage is low. This is just the demand curve.

554
00:59:17,117 --> 00:59:24,117
It's just a point on the demand curve. And or the fees are high, in which case it
doesn't work.

555
00:59:24,117 --> 00:59:33,117
Another thing is that, you know, it's like the lightning does not pass the fees down
to L1 Bitcoin miners.

556
00:59:33,117 --> 00:59:38,117
But the miners can steal from the lightning network at any time by censoring the
justice transactions.

557
00:59:38,117 --> 00:59:47,117
So the long run strategic equilibrium is like the miners will have no loyalty to the
other vertically integrate.

558
00:59:47,117 --> 00:59:57,117
And the miners will become these LSPs or like Foundry LSP, where Foundry will give
you your lightning channel.

559
00:59:57,117 --> 01:00:07,117
Or the there'll be some conflict between something that does pay the fees to
Foundry, such as merge mining, such as Drivechain.

560
01:00:07,117 --> 01:00:12,117
And the conflict between that and, you know, the LSPs.

561
01:00:12,117 --> 01:00:22,117
And then at that point, it will be a battle between the LSP and Foundry, except that
the LSP will have no bullets and cannot possibly win.

562
01:00:22,117 --> 01:00:29,117
They will be destroyed. So that and of course, the Foundry vertically integrates
with the LSP.

563
01:00:29,117 --> 01:00:37,117
Now, all of the stuff about the HTLCs and the channels, all of that is completely
superfluous and does nothing.

564
01:00:37,117 --> 01:00:40,117
So those are just three of the 10. You can look up the list if you want.

565
01:00:40,117 --> 01:00:47,117
But anyone, any one of these would kill the project. And it's like, you know, don't
know what to say.

566
01:00:47,117 --> 01:00:52,117
It doesn't work. Very good, comprehensive list. I'll have a read sometime.

567
01:00:52,117 --> 01:00:55,117
Would you consider it? Oh, go ahead.

568
01:00:55,117 --> 01:01:04,117
Oh, yeah. But I also want to ask, because I have a mate and we were looking at
lightning channels and whatnot together.

569
01:01:04,117 --> 01:01:17,117
And he's deeper in lightning than me. But he was telling me that one of the main
reasons why lightning doesn't really work is that people just fucking set fees.

570
01:01:17,117 --> 01:01:27,117
So like if everyone just actually hosts like their own lightning nodes for free
without taking fees, then and then that's the first thing.

571
01:01:27,117 --> 01:01:36,117
And then the second thing is like if people who didn't want to host like nodes would
just use what did they call it?

572
01:01:36,117 --> 01:01:48,117
It's like a little mini bank, not lighthouses, but like it's like these, you know,
like stuff like Moon and stuff like that, where it's like it's not there.

573
01:01:48,117 --> 01:01:54,117
Like you don't actually have to open a channel. You just actually like it's just
like a mini bank that they run.

574
01:01:54,117 --> 01:01:58,117
Then there's a higher level of like centralization to it.

575
01:01:59,117 --> 01:02:02,117
Yeah, you're basically giving your money to somebody else. I mean, right.

576
01:02:02,117 --> 01:02:10,117
The way that a lot of these things work is either the other person has all of your
money, in which case this is fine, but it's not lightning.

577
01:02:10,117 --> 01:02:22,117
You understand like this is it may work, but it has there's not a single idea, you
know, from lightning tech stack in a custodial wallet.

578
01:02:22,117 --> 01:02:36,117
It's not even Bitcoin, because it's just a thing where it just says, I mean, they
may receive the Bitcoin somehow and then they'll give you on your you contact their
server and they'll say you have 10, you have 10 coins, you have 10 credits or
whatever.

579
01:02:36,117 --> 01:02:41,117
But the custodial stuff is and it's the way a lot of this stuff also works.

580
01:02:41,117 --> 01:02:48,117
You know, the submarine swaps and whatever you make a lightning payment, it requires
an on chain payment in order to work.

581
01:02:49,117 --> 01:03:05,117
But everyone just kind of people are very quiet as to the extent of, you know, what
you might call very quiet on what you might call like the fraudulent nature of much
of this technology, which is why I compare it to Theranos, where it's like people
just look the other way.

582
01:03:05,117 --> 01:03:08,117
The money's coming in, you know, whatever.

583
01:03:08,117 --> 01:03:10,117
Lightning Labs raised 70 million dollars, which is great.

584
01:03:10,117 --> 01:03:11,117
Good for them, whatever.

585
01:03:11,117 --> 01:03:15,117
I don't you know, I'm not saying that that is wrong.

586
01:03:15,117 --> 01:03:17,117
And I do think we should.

587
01:03:18,117 --> 01:03:21,117
It's good to have people working on lightning network and trying it.

588
01:03:21,117 --> 01:03:22,117
We should try everything.

589
01:03:22,117 --> 01:03:23,117
I'm very pluralist.

590
01:03:24,117 --> 01:03:35,117
But people have been trained, you know, we're really no different than I worked at
one point for someone who was a Federal Reserve chairman.

591
01:03:35,117 --> 01:03:37,117
I have background in academic economics.

592
01:03:38,117 --> 01:04:02,117
A lot of the stuff that people criticize, they criticize like traditional academic
economics for they criticize the Fed for the Fed would do a lot of these things
where, you know, everyone knows Milton Friedman wrote many times about how the Fed
is biased towards doing complicated stuff about methodology, like they care a lot
about some complicated statistical regression or something.

593
01:04:02,117 --> 01:04:06,117
And they're not really interested in like big things that they could easily do.

594
01:04:06,117 --> 01:04:15,117
Like, should they set up futures markets on what nominal GDP will be, you know, and
will they hit their futures markets and will they hit their inflation target?

595
01:04:15,117 --> 01:04:16,117
That's a very simple idea.

596
01:04:16,117 --> 01:04:17,117
You can explain it like one day.

597
01:04:18,117 --> 01:04:29,117
But because it would put the 12 people, the 12 board members, like kind of out of a
job or it would render their decision making kind of pointless.

598
01:04:29,117 --> 01:04:37,117
It's like saying, we'll have this, we'll have, we've invented this thing that does,
you go into the CEO and you say, we've invented the optimal AI CEO.

599
01:04:37,117 --> 01:04:39,117
It does everything the CEO should do except perfect.

600
01:04:40,117 --> 01:04:50,117
And the CEO is like, you know, oh my God, you know, this person has stumbled upon
something that will, that will ruin us all or whatever, you know, so that they won't
do any like simple thing that will work.

601
01:04:50,117 --> 01:04:58,117
But then there's a cultural bias away from looking at things that everyone knows are
true.

602
01:04:58,117 --> 01:05:00,117
And that's why I assembled these quotes in the LN Black Belt.

603
01:05:00,117 --> 01:05:07,117
It's like people know that the idea is not viable, but they just kind of pretend
that it is.

604
01:05:08,117 --> 01:05:11,117
We get back to this bag bias or, or aligned.

605
01:05:11,117 --> 01:05:14,117
The ego is the heaviest bag of them all.

606
01:05:14,117 --> 01:05:17,117
Oh, you got Bing, Bing.

607
01:05:17,117 --> 01:05:18,117
What's up, smokes?

608
01:05:19,117 --> 01:05:24,117
Oh yeah, I was going to say, it's kind of like almost like a yin and yang, slack,
double edged sword.

609
01:05:24,117 --> 01:05:26,117
Cause like the way I think of it, right.

610
01:05:26,117 --> 01:05:29,117
Cause I used to like transact in Bitcoin.

611
01:05:29,117 --> 01:05:34,117
So if you do have very high fees, it's like kind of like people won't spend it.

612
01:05:34,117 --> 01:05:42,117
That could be a good or a bad thing because, you know, I guess people will hold that
as a store of value, but then you also won't have transactions.

613
01:05:42,117 --> 01:05:51,117
And, you know, it feels like Bitcoin, at least the community split in half between
half wanting it to be a store of value and half wanting it to be like regular money
and transactional.

614
01:05:52,117 --> 01:05:59,117
But then when you do move over to like, you know, uh, systems that make it possible
by lowering fees, such as like lightning.

615
01:05:59,117 --> 01:06:00,117
Right.

616
01:06:00,117 --> 01:06:04,117
Then it becomes centralized, which is the opposite of what you want crypto to be.

617
01:06:04,117 --> 01:06:05,117
Right.

618
01:06:05,117 --> 01:06:12,117
So you're like centralizing decentralized currency, but you're making it more
accessible, but you do have centralized issues.

619
01:06:12,117 --> 01:06:22,117
Like I was looking into it and like, I see it's easy for you to like, um, lose like
your channel and get like robbed by going offline or something like your channel
going offline.

620
01:06:22,117 --> 01:06:28,117
Um, it's like, it says fraudulent channel closure, which just sounds like scary.

621
01:06:28,117 --> 01:06:41,117
Um, and yeah, I don't think, I think the only way for people to use lightning would
be to like have a centralized government or company basically open the channels and
deal with that for people like they do in El Salvador.

622
01:06:41,117 --> 01:06:45,117
Like I know their, uh, Chivo wallet is, I think is what it's called.

623
01:06:45,117 --> 01:06:48,117
They use lightning, but it's like, it's done through.

624
01:06:48,117 --> 01:06:59,117
The Chivo wallet is, uh, you know, an excellent example of, I, so I'm not going to
second guess, uh, you know, uh, Mr. President, uh, uh, Bukele or I'm not sure how to
pronounce his name exactly.

625
01:06:59,117 --> 01:07:00,117
You don't want to question him.

626
01:07:01,117 --> 01:07:14,117
In particular, he is in a very difficult position of having to deal with a lot of
really, really poor people who are not very well educated and there's a lot of crime
and it's a very small nation where there's a lot of capital flight.

627
01:07:14,117 --> 01:07:22,117
There's a lot of brain drain and I, you know, he seems to be very popular and I'm,
uh, I wish him all the best, et cetera.

628
01:07:22,117 --> 01:07:25,117
Uh, that being said, now the other shoe has to fall.

629
01:07:25,117 --> 01:07:26,117
Right.

630
01:07:26,117 --> 01:07:34,117
So, um, the Chivo wallet is basically a CBDC where it is linked to their, their
version of the social security number.

631
01:07:34,117 --> 01:07:38,117
It is totally custodial where the government runs the whole thing.

632
01:07:38,117 --> 01:07:51,117
Now that being the case, the, you can, from the Chivo wallet, you could make a
payment to someone using the sovereign Bitcoin wallet.

633
01:07:52,117 --> 01:08:03,117
Uh, and my understanding is that it will work, although I have not tested it,
although I plan to go to El Salvador later sometime this year to check it out for
myself with some friends.

634
01:08:03,117 --> 01:08:06,117
We planned this trip, so I'm excited for that.

635
01:08:06,117 --> 01:08:18,117
But, um, the, the Chivo wallet is not, you know, it is not really a, um, when people
use that wallet, they are not using the Bitcoin network.

636
01:08:19,117 --> 01:08:22,117
But it is interoperable with the Bitcoin network.

637
01:08:22,117 --> 01:08:27,117
I think it's a thing that we talked about, Adam and I, the other day about JP Morgan
and these big banks.

638
01:08:27,117 --> 01:08:31,117
I think it's like one, take one number from here and put it on the other account.

639
01:08:31,117 --> 01:08:40,117
You're not actually doing any actual transactions within the system, which is like I
said, you're centralizing a decentralized platform, which is scary.

640
01:08:40,117 --> 01:08:58,117
I mean, literally when we think about it in, uh, in Bitcoin today with, you know,
runes or whatever, you know, the idea of, you know, uh, meme coins on top of, of
Bitcoin and the highest kind of achievement is getting their meme, meme coin on a
centralized exchange.

641
01:08:58,117 --> 01:09:02,117
And how silly that is, but that's the reality of it today.

642
01:09:02,117 --> 01:09:03,117
Right.

643
01:09:03,117 --> 01:09:07,117
Um, yeah, that's what we want with Bells, which is like kind of ironic.

644
01:09:07,117 --> 01:09:14,117
It's completely ironic and it goes, you know, against kind of the crypto ethos, but
that's where, you know, crypto is right now.

645
01:09:14,117 --> 01:09:15,117
Um, go ahead.

646
01:09:17,117 --> 01:09:36,117
So I, I somehow assume that with this perspective, you probably don't like Michael
Saylor, but, um, but these wallets and like the centralized exchanges and like the
fully custodial quote unquote non blockchain type of, uh, you know, transactions.

647
01:09:37,117 --> 01:09:50,117
Gateways, he kind of describes it as like a layer three or like layer two might be
like more centralized slash hybrid on chain ish type of stuff.

648
01:09:50,117 --> 01:10:04,117
And then layer three is just like, you know, highly performant databases where, you
know, you're just kind of not really interacting with the blockchain, but you're
sort of using the blockchains currency and having someone else like handle it for
you.

649
01:10:04,117 --> 01:10:14,117
Like, do you view this as like a viable type of future scaling or is this just kind
of against crypto?

650
01:10:14,117 --> 01:10:15,117
Absolutely.

651
01:10:15,117 --> 01:10:23,117
This will have this, this will happen and it will be not only like necessary, but
inevitable and sort of imperative also.

652
01:10:23,117 --> 01:10:29,117
So that will happen, but that it will only, it only matters if layer one layers like
one and two work.

653
01:10:30,117 --> 01:10:34,117
So, uh, we may not even get to that point with Bitcoin.

654
01:10:34,117 --> 01:10:45,117
Like if it's not popular enough, so everyone does this to some extent, even like you
go to the bar and you have like a bar tab that is like a, you know, that's a layer
above the credit card layer.

655
01:10:45,117 --> 01:10:48,117
You, he doesn't charge the credit card until the end.

656
01:10:48,117 --> 01:10:52,117
So everyone agrees scaling in layers is very good.

657
01:10:52,117 --> 01:10:54,117
It's a credit card channel.

658
01:10:54,117 --> 01:10:55,117
Yeah, sure.

659
01:10:55,117 --> 01:10:57,117
A bartender channel.

660
01:10:57,117 --> 01:11:06,117
Um, now, you know, so Michael Saylor, you know, he's just smart enough to count from
layer one to layer two to layer three.

661
01:11:06,117 --> 01:11:11,117
You know, he can come up with a great meme or a great buzzword, uh, which is great.

662
01:11:11,117 --> 01:11:12,117
Good for him.

663
01:11:12,117 --> 01:11:15,117
That's what he wants to do with his Bitcoin career or something.

664
01:11:15,117 --> 01:11:23,117
But the, you know, like there's two areas at least where, I mean, he's, he's
mistaken about a lot of things in my opinion.

665
01:11:23,117 --> 01:11:27,117
One is he does not care enough about privacy.

666
01:11:27,117 --> 01:11:30,117
And number two, he does not care enough about the long run.

667
01:11:30,117 --> 01:11:33,117
Like mining transaction fees.

668
01:11:33,117 --> 01:11:42,117
Um, so without, he, he has this story about how Bitcoin is like owning a part of
Manhattan or something.

669
01:11:43,117 --> 01:11:48,117
And, uh, you only own, you only own it if no one can take it away from you.

670
01:11:48,117 --> 01:11:52,117
But without the privacy, it becomes much easier for people to take it.

671
01:11:52,117 --> 01:11:58,117
You know, you have like a Kamala Harris proposing the unrealized capital gains.

672
01:11:58,117 --> 01:12:02,117
And now they're taking your, you know, they're taking a break.

673
01:12:03,117 --> 01:12:04,117
Inflate.

674
01:12:04,117 --> 01:12:11,117
So that, you know, capital gains tax plus inflation equals, you know, plus the lack
of privacy.

675
01:12:11,117 --> 01:12:17,117
Those are the three ingredients that equals your wealth being confiscated.

676
01:12:17,117 --> 01:12:22,117
So it's not, you're not owning real estate at all unless there's privacy.

677
01:12:22,117 --> 01:12:34,117
Uh, I think one thing that Michael Saylor should reflect on is that there was
another city, which was the wealthiest city in the entire world in 1960, I believe.

678
01:12:34,117 --> 01:12:37,117
Uh, and do you know what that city was?

679
01:12:37,117 --> 01:12:38,117
Caracas, Venezuela?

680
01:12:38,117 --> 01:12:39,117
I don't know.

681
01:12:39,117 --> 01:12:41,117
No, it was in the United States.

682
01:12:41,117 --> 01:12:43,117
Oh, in the U.S.

683
01:12:43,117 --> 01:12:46,117
It was, it was Detroit, Michigan.

684
01:12:46,117 --> 01:12:47,117
Okay.

685
01:12:47,117 --> 01:12:48,117
Yeah.

686
01:12:48,117 --> 01:12:49,117
The wealthiest city in the world.

687
01:12:50,117 --> 01:12:57,117
Uh, and, you know, Cleveland and all the rest, there was millionaires row, uh,
Rockefeller, I think is buried in Cleveland or something.

688
01:12:57,117 --> 01:13:08,117
So in this time period of like the fifties and sixties, um, the rust belt, that was
the wealthiest Buffalo, New York, you know, these were the wealthiest cities in the
entire world.

689
01:13:08,117 --> 01:13:11,117
Niagara falls because of the generator.

690
01:13:11,117 --> 01:13:14,117
That was the first place to have like electrified lights.

691
01:13:15,117 --> 01:13:22,117
So these are cities, you know, now Detroit is, you know, among one of the poorest
cities in the entire world.

692
01:13:22,117 --> 01:13:31,117
So, uh, if Michael Saylor, it might, it can start as Detroit, it can start as owning
part of Detroit, and then it can end as part of owning part of Detroit, you know?

693
01:13:31,117 --> 01:13:35,117
Um, and so the privacy is important.

694
01:13:35,117 --> 01:13:39,117
And also, you know, I think he's just one of these people that has not thought
through the whole security budget thing.

695
01:13:39,117 --> 01:13:50,117
And they just think the security budget people, they never, what they never do is
they never write down what they exactly with numbers, exactly what they expect will
happen.

696
01:13:50,117 --> 01:13:53,117
Like there will be this number of transactions on L1.

697
01:13:53,117 --> 01:13:56,117
There'll be this number of transactions and they will pay this fee.

698
01:13:56,117 --> 01:13:58,117
And this will be multiplied out.

699
01:13:59,117 --> 01:14:07,117
They always have like a complicated thing going on in their head where they just
think, oh, the fees, the miners will make a ton of money because every transaction
fee will be $5,000.

700
01:14:07,117 --> 01:14:14,117
And everyone will be happy to pay $5,000 per transaction fee because when you open a
channel, lightning channel, you can make a billion transactions.

701
01:14:14,117 --> 01:14:22,117
And like when it's very unclear even what they mean, because it's so confused,
because they haven't, they haven't figured it out for themselves.

702
01:14:22,117 --> 01:14:26,117
They haven't gone into like a quiet room with a pen and a piece of paper and figured
it out.

703
01:14:26,117 --> 01:14:34,117
I mean, I obviously understand what you're saying, but do you think that's the type
of thing that just solves itself when it becomes like a real problem?

704
01:14:34,117 --> 01:14:38,117
Like you need a kind of a crisis to solve.

705
01:14:38,117 --> 01:14:42,117
Like a lot of people believe that blockchain issues really get solved when there's
crisis.

706
01:14:42,117 --> 01:14:45,117
Right. So when you have a crisis, that's when, that's when.

707
01:14:45,117 --> 01:14:57,117
Definitely when there's any issue affecting a lot of people that are trapped in a
bureaucracy, the inability to solve the problem will create a crisis and that will
stimulate the creative.

708
01:14:57,477 --> 01:15:23,477
Search for solutions. I think that would discredit. This is related to a friend of
mine, Alex Kay, creator of a Google autocomplete or whatever. He has the patent for
it or something, but he, he believes he has this extremely complex, well, it's not
that complicated, but he has kind of a funny theory about there will be the
feepocalypse where the L1 fees will rise very high. And this will interfere with,
you know, the non-financial side of things, but it's not going to be that simple.

709
01:15:23,477 --> 01:15:44,477
You know, the non-custodial regular lightning will stop working also because it
doesn't work when the fees are high or even when they're just volatile. And so the
regular transactions won't work. Lightning won't work. Nothing will work. And this
will discredit the high priests of BTC and the users will no longer have any kind of
loyalty to them.

710
01:15:44,477 --> 01:16:07,477
And then as a result, there will be like a kind of a turnover to more, all the old,
all the old mistaken ideas will be discredited. So that's kind of like what you're
saying. I think he may be, he may be right about that. There is a book, Hirschman,
this guy wrote this book, famous.

711
01:16:07,477 --> 01:16:25,477
This guy was a great sociologist and he did write a book that a lot of people found
to be very good called Exit Voice and Loyalty, which is about the relative costs of
different ways of solving an organization's problems.

712
01:16:25,477 --> 01:16:50,477
So in, if you own, if you own shares of a corporation, it's very easy for you to
just sell the shares and just buy. If you own Tesla and you say, I'm not, you know,
I don't really like what Tesla is doing anymore. I think they've taken us this far,
but it's not going anywhere from here. I think that such and such, I don't know,
Ford, I'm just making this up, you know, Ford, they're there. Everyone's sleep.

713
01:16:51,477 --> 01:16:52,477
Did we just lose him?

714
01:16:53,477 --> 01:16:54,477
I think so.

715
01:16:54,477 --> 01:16:55,477
Yeah, we might.

716
01:16:55,477 --> 01:16:56,477
I think we just lost.

717
01:16:56,477 --> 01:17:13,477
I can, I can babble on a little bit. I actually have a point. I agree with the thing
that you guys were talking about where, like, if a major issues happen, like it will
take us down like a black hole almost, but then, you know, a solution will come up.

718
01:17:13,477 --> 01:17:15,477
This does happen often for me.

719
01:17:15,477 --> 01:17:17,477
Yeah, you're back. You're back, Paul.

720
01:17:17,477 --> 01:17:19,477
Okay, what did anyone hear what I said?

721
01:17:20,477 --> 01:17:24,477
We heard the, and Smokes was just saying like, yeah, he was agreeing this kind of.

722
01:17:25,477 --> 01:17:38,477
Yeah, I was going to say, I think if we do have the unrealized gains issue, which I
think is just all political talk because, you know, there's big donors that will
never let it happen on either side.

723
01:17:39,477 --> 01:17:51,477
But if that does happen, I feel like it will create more cryptocurrency than bad
because I feel like most people will remove their stuff from exchanges and say, you
know, access deck, we're not paying that.

724
01:17:51,477 --> 01:17:53,477
And, you know, they'll go off the grid.

725
01:17:54,477 --> 01:18:08,477
Yeah, I think this is unrelated to what I was saying before, but I think that if in
many ways, Bitcoin and other cryptocurrencies would benefit enormously from
disastrous economic policy.

726
01:18:08,477 --> 01:18:18,477
You know, if they said we're going to print $10 trillion every year and if they said
we're going to tax everyone at 99 percent, everything, the regular world would
crash.

727
01:18:18,477 --> 01:18:25,477
You know, Berkshire Hathaway would crash, but Bitcoin would probably rally and go up
as a result of that.

728
01:18:25,477 --> 01:18:35,477
So because everyone would realize, oh, the Bitcoiners aren't, they're not going to
be paying the unrealized capital gains tax or any other taxes for that matter.

729
01:18:35,477 --> 01:18:37,477
So that I think that's a real possibility.

730
01:18:38,477 --> 01:18:39,477
They can arrest us, fuck it.

731
01:18:40,477 --> 01:18:45,477
Let's jump to Dogfather real quick and wrap it up here because I know Paul, Paul, I
appreciate you staying on longer for us here.

732
01:18:45,477 --> 01:18:46,477
Dogfather, go ahead.

733
01:18:48,477 --> 01:18:50,477
Yeah, really great discussion.

734
01:18:50,477 --> 01:18:57,477
I mean, Paul, I like your takes very deep, even though I think this takes way longer
than three to five years.

735
01:18:58,477 --> 01:19:05,477
We always kind of like envision that everything is clear, we understand everything
and the rest will also follow suit.

736
01:19:05,477 --> 01:19:12,477
But I mean, it just takes generations maybe until we have these types of, you know,
new equilibrium.

737
01:19:12,477 --> 01:19:17,477
I just felt a bit triggered because Adam was mentioning, you know, runes and
centralized exchanges.

738
01:19:17,477 --> 01:19:21,477
I mean, you can make the same jokes about ETFs and Bitcoin, right?

739
01:19:21,477 --> 01:19:23,477
Now everyone is celebrating.

740
01:19:23,477 --> 01:19:25,477
Wow, ETFs and BlackRock.

741
01:19:25,477 --> 01:19:26,477
These are not our friends.

742
01:19:26,477 --> 01:19:28,477
No, typically they are not.

743
01:19:28,477 --> 01:19:30,477
It's the same centralization issue.

744
01:19:30,477 --> 01:19:33,477
But, you know, it was good for the price.

745
01:19:33,477 --> 01:19:34,477
So people are celebrating that.

746
01:19:34,477 --> 01:19:37,477
And I think I have a more balanced view.

747
01:19:38,477 --> 01:19:49,477
I think if you want to onboard people to crypto in a hardcore way, like you do self
custody with your cold storage, then we keep the same number of people.

748
01:19:49,477 --> 01:19:52,477
Like, I don't know, 10,000, 100,000.

749
01:19:52,477 --> 01:19:55,477
But the normies will never do that.

750
01:19:55,477 --> 01:19:57,477
I mean, you know, they don't have the time.

751
01:19:57,477 --> 01:19:58,477
They don't have the expertise.

752
01:19:58,477 --> 01:20:03,477
They don't have, you know, they just don't like both of these things.

753
01:20:03,477 --> 01:20:05,477
It's the same like in the stock market.

754
01:20:05,477 --> 01:20:09,477
People don't actively trade stocks in big numbers.

755
01:20:09,477 --> 01:20:13,477
They just give away a mandate to the BlackRocks and the like.

756
01:20:13,477 --> 01:20:15,477
And it is the same in crypto, right?

757
01:20:15,477 --> 01:20:18,477
So you hand over your money to an ETF.

758
01:20:18,477 --> 01:20:22,477
If you want to have fun with meme coins, either you go on Solana.

759
01:20:22,477 --> 01:20:25,477
And if you want to be on Bitcoin, it's quite a hassle right now.

760
01:20:25,477 --> 01:20:29,477
But if it's on OKEx and Binance, you can play around with some pocket money.

761
01:20:29,477 --> 01:20:32,477
That's where the millions are, right?

762
01:20:32,477 --> 01:20:37,477
If you really want to onboard many people to crypto, it needs to be super easy.

763
01:20:37,477 --> 01:20:42,477
And for these amounts of money, they don't care whether it's on their hardware
wallet

764
01:20:42,477 --> 01:20:44,477
or whether they lose 100 bucks or so.

765
01:20:44,477 --> 01:20:47,477
It's just like gambling in Vegas.

766
01:20:47,477 --> 01:20:52,477
I mean, it's not like what we do with our BTC stack, right?

767
01:20:52,477 --> 01:20:58,477
So we need to be like a bit more humble that, let's say, regular people don't have

768
01:20:58,477 --> 01:21:04,477
the same high standards in terms of decentralization and taking power away from the
state

769
01:21:04,477 --> 01:21:08,477
and having competition on the currency level and stuff like that.

770
01:21:08,477 --> 01:21:13,477
This is like 1% of the population max discussion.

771
01:21:13,477 --> 01:21:19,477
If you want to have a broader impact on society, we need to be a bit more like,

772
01:21:19,477 --> 01:21:25,477
OK, maybe if people trade on the regulated exchange, which is kind of not as shady

773
01:21:25,477 --> 01:21:30,477
like being on the Bahamas and trading with the customer's money.

774
01:21:30,477 --> 01:21:35,477
For example, we have some exchanges here in Europe, which are highly regulated

775
01:21:35,477 --> 01:21:38,477
and that are pretty safe.

776
01:21:38,477 --> 01:21:45,477
I would say that for most people, those exchanges are fine if they don't invest too
much money.

777
01:21:45,477 --> 01:21:48,477
That's just my two cents here.

778
01:21:48,477 --> 01:21:55,477
I definitely agree that not everyone wants to hear about monetary policy or
whatever,

779
01:21:55,477 --> 01:21:58,477
but I think we go back to the QWERTY keyboard.

780
01:21:58,477 --> 01:22:02,477
I mean, most people don't want to hear about monetary policy, but most people do use

781
01:22:02,477 --> 01:22:05,477
whatever money is nearby.

782
01:22:05,477 --> 01:22:08,477
So if you live in Japan, you use yen.

783
01:22:08,477 --> 01:22:14,477
And if you live in Europe, you use the euro, mostly, unless you're in Switzerland or
whatever.

784
01:22:15,477 --> 01:22:19,477
But the point is, the money has these strong network effects.

785
01:22:19,477 --> 01:22:26,477
So actually, it's not necessary for everyone to understand everything that's going
on for it

786
01:22:26,477 --> 01:22:30,477
to potentially flip everyone.

787
01:22:30,477 --> 01:22:33,477
Certainly, that's not going to happen overnight, though.

788
01:22:33,477 --> 01:22:36,477
We're almost above in a day, right?

789
01:22:36,477 --> 01:22:40,477
Yeah, it's really interesting. Great point, Dogfather, there.

790
01:22:40,477 --> 01:22:47,477
I mean, I'm definitely of that same kind of mindset and belief that we're at the
early stages here.

791
01:22:47,477 --> 01:22:56,477
Most people are just simply not in a position, not prepared to even consider holding
crypto

792
01:22:56,477 --> 01:22:58,477
in any meaningful way.

793
01:22:58,477 --> 01:23:01,477
I do think we're at the kind of beginning stages in that way.

794
01:23:01,477 --> 01:23:06,477
And in that way, too, like, Paul, with what you're doing, it may even feel like,

795
01:23:06,477 --> 01:23:11,477
oh, my God, we missed the boat or, you know, all these guys did stuff before

796
01:23:11,477 --> 01:23:14,477
and, you know, Drivechains kind of missed that opportunity.

797
01:23:14,477 --> 01:23:18,477
And in that sort of longer view, I think maybe you haven't missed anything.

798
01:23:18,477 --> 01:23:26,477
Maybe it's still early days and you still have a real opportunity to kind of bring
your vision to life.

799
01:23:26,477 --> 01:23:28,477
And maybe it will be on Bitcoin.

800
01:23:28,477 --> 01:23:34,477
Maybe it needs to happen first on Litecoin or Bell's coin or some other coin that
kind of has a more open community to it.

801
01:23:35,477 --> 01:23:40,477
I do think like, you know, BIP39, it's a much simpler idea, of course,

802
01:23:40,477 --> 01:23:45,477
but that is an idea that is still not adopted on Bitcoin Core.

803
01:23:45,477 --> 01:23:53,477
The Bitcoin Core wallet does not have BIP39, even though like BDK and almost every
other,

804
01:23:53,477 --> 01:23:57,477
even stuff like Electrum, which doesn't like BIP39, still supports it.

805
01:23:58,477 --> 01:24:08,477
So I actually do think it's possible that BIP300 could be just on many, many
altcoins,

806
01:24:08,477 --> 01:24:13,477
like more than 200 or 300 altcoins before it's on BTC.

807
01:24:13,477 --> 01:24:22,477
Although it is a very curious BIP where it is sort of the purpose of the BIP is to
make the other coins obsolete.

808
01:24:23,477 --> 01:24:27,477
But that's not necessarily that you can still have 300 altcoins do it just for fun.

809
01:24:28,477 --> 01:24:35,477
It depends completely on if the transaction fee volume would support a healthy
Drivechain.

810
01:24:36,477 --> 01:24:38,477
Well, Paul, I really appreciate your time today.

811
01:24:39,477 --> 01:24:40,477
Learned a lot.

812
01:24:40,477 --> 01:24:42,477
I followed you and got a lot of info.

813
01:24:42,477 --> 01:24:49,477
I watched a few of the videos you've put out there and I appreciated seeing you in
Nashville.

814
01:24:50,477 --> 01:24:51,477
And we'll definitely follow along.

815
01:24:51,477 --> 01:24:52,477
Everybody follow Paul.

816
01:24:52,477 --> 01:24:53,477
Give him a follow.

817
01:24:54,477 --> 01:24:58,477
Really excited to see what can happen with Drivechains coming up in the future.

818
01:24:58,477 --> 01:24:59,477
I've pinned our space tomorrow.

819
01:24:59,477 --> 01:25:01,477
We're going to be talking some privacy tomorrow.

820
01:25:02,477 --> 01:25:03,477
Everybody go set your reminder.

821
01:25:04,477 --> 01:25:05,477
1130 a.m. Eastern tomorrow.

822
01:25:05,477 --> 01:25:10,477
We're going to talk and dive into privacy with a privacy OG expert.

823
01:25:11,477 --> 01:25:12,477
So really excited about that.

824
01:25:13,477 --> 01:25:17,477
And until then, guys, we will see you next time.

825
01:25:18,477 --> 01:25:19,477
Take care, guys.

826
01:25:20,477 --> 01:25:21,477
Take it easy.

827
01:25:21,477 --> 01:25:22,477
Thanks, Paul.

828
01:25:23,477 --> 01:25:24,477
Thanks for having me.

829
01:25:30,477 --> 01:25:31,477
Yeah.

830
01:25:32,477 --> 01:25:33,477
I don't think space is on yet.

831
01:25:35,477 --> 01:25:36,477
Paul, if.