1
00:00:01,348 --> 00:00:04,968
I see that I may have been muted for a period there.

2
00:00:05,088 --> 00:00:06,068
There may have been a glitch.

3
00:00:07,068 --> 00:00:10,368
I'm not sure how much everyone heard.

4
00:00:10,528 --> 00:00:13,728
Could I get a thumbs up if you've been hearing me speak for a long time?

5
00:00:18,483 --> 00:00:20,383
And... a thumbs down if you haven't.

6
00:00:21,183 --> 00:00:22,523
I think there may have been a glitch there.

7
00:00:22,583 --> 00:00:24,303
Okay, great. So it was just momentary.

8
00:00:24,683 --> 00:00:27,123
Somehow the mic got muted on my end.

9
00:00:27,823 --> 00:00:33,563
So what I was saying there is that there are two objections

10
00:00:33,563 --> 00:00:36,403
to Drivechain that...

11
00:00:36,403 --> 00:00:36,583
Alright.

12
00:00:40,458 --> 00:00:43,538
I'm getting some interesting indications from the audience.

13
00:00:44,718 --> 00:00:50,698
you have been hearing me speak for a number of minutes and only recently had it go on

14
00:00:50,698 --> 00:00:52,838
mute, could I get a thumbs up?

15
00:00:58,053 --> 00:01:00,053
Alright, no thumbs up.

16
00:01:01,673 --> 00:01:07,253
I wonder if the entire introduction that I gave was missed.

17
00:01:08,993 --> 00:01:10,213
Okay, so it was.

18
00:01:10,753 --> 00:01:11,793
The whole thing was missed.

19
00:01:12,953 --> 00:01:14,113
Ah, I see.

20
00:01:15,773 --> 00:01:16,608
Alright, let's just

21
00:01:16,608 --> 00:01:17,548
start over from the beginning.

22
00:01:20,948 --> 00:01:25,008
I did this whole introduction and it was missed.

23
00:01:25,588 --> 00:01:29,468
why don't one of you come on up and...

24
00:01:31,288 --> 00:01:33,048
thanks Ryan and others for commenting.

25
00:01:33,508 --> 00:01:34,228
So let's start over.

26
00:01:34,328 --> 00:01:35,628
It gives me a chance to start over.

27
00:01:35,708 --> 00:01:36,408
know, in life it's

28
00:01:36,443 --> 00:01:41,783
very good sometimes to have a second chance to do things, because you can do them

29
00:01:41,783 --> 00:01:42,063
better.

30
00:01:43,263 --> 00:01:44,303
So let me be succinct.

31
00:01:44,583 --> 00:01:49,123
I have thrown up in the nest a bunch of quotes that I think are interesting.

32
00:01:49,563 --> 00:01:50,643
You can scroll through them.

33
00:01:50,703 --> 00:01:52,323
There are four or five of them there.

34
00:01:53,283 --> 00:01:56,143
One of them is my own essay on what

35
00:01:56,278 --> 00:01:59,138
Drivechain's about, and you can read it.

36
00:01:59,478 --> 00:02:00,778
There's a link to it.

37
00:02:01,338 --> 00:02:06,158
And the other tweets are from some great accounts that have mentioned Drivechain.

38
00:02:10,858 --> 00:02:14,238
Everyone in the audience is welcome to come on up and share a thought or comment.

39
00:02:14,618 --> 00:02:16,078
Please do not hesitate to

40
00:02:16,173 --> 00:02:19,513
raise your and ask to come up to stage.

41
00:02:20,513 --> 00:02:26,193
will bring you up and chat with you and hear your question or comment

42
00:02:26,193 --> 00:02:27,133
about Drivechain.

43
00:02:29,693 --> 00:02:34,093
I encourage people who are critical or skeptical of Drivechain to come to this space

44
00:02:34,093 --> 00:02:35,733
and share their thoughts,

45
00:02:36,048 --> 00:02:41,128
well as those who are fans and would like to express how Drivechain interests you.

46
00:02:44,068 --> 00:02:49,308
There are some interesting intellectual adventures that you can have when contemplating

47
00:02:49,308 --> 00:02:54,248
and learning about the objections that some people have raised to Drivechain.

48
00:02:55,068 --> 00:02:55,783
Some people think

49
00:02:55,903 --> 00:03:00,663
that the drivechains won't accrue much value because the miners,

50
00:03:00,843 --> 00:03:05,723
these skeptics think, may steal from the hash rate escrow.

51
00:03:07,743 --> 00:03:11,583
Other people are skeptical about drivechain because they think that the drivechains

52
00:03:11,583 --> 00:03:15,618
will become so large that the fee revenue to the miners

53
00:03:15,618 --> 00:03:20,998
will result in undue

54
00:03:20,998 --> 00:03:23,078
centralization of Bitcoin miners.

55
00:03:26,298 --> 00:03:29,338
These concerns are mutually exclusive.

56
00:03:30,338 --> 00:03:35,453
A person can't simultaneously think that the miners will rob from the hashrate

57
00:03:35,453 --> 00:03:41,193
escrow and that the fee revenue from merged mined

58
00:03:41,193 --> 00:03:47,113
sidechains will be so large as to negatively distort Bitcoin mining.

59
00:03:49,753 --> 00:03:55,173
So it's important to recognize that the two leading concerns about Drivechain are

60
00:03:55,288 --> 00:03:56,768
mutually exclusive.

61
00:04:01,548 --> 00:04:06,548
think that one of the concerns is especially poor.

62
00:04:07,908 --> 00:04:12,968
It's the first one I mentioned, which is probably the larger, the more popular concern.

63
00:04:14,508 --> 00:04:15,123
This

64
00:04:15,123 --> 00:04:19,123
This concern says that the miners will steal from the hashrate escrow.

65
00:04:21,623 --> 00:04:26,703
unfortunately, it is always better to give consumers the choice than to make the

66
00:04:26,703 --> 00:04:27,523
decision for them.

67
00:04:27,523 --> 00:04:33,303
So even if one person thinks that the miners will steal from the hash rate escrow,

68
00:04:34,343 --> 00:04:34,903
it

69
00:04:34,958 --> 00:04:40,078
is still certainly the case that Bitcoiners are better off if they have the option to

70
00:04:40,078 --> 00:04:44,298
experiment by using the hashrate escrow.

71
00:04:44,998 --> 00:04:48,578
Because in the event that this concern is shown to be unfounded,

72
00:04:50,178 --> 00:04:54,793
if the optimists are vindicated and the hashrate eskros are not

73
00:04:54,813 --> 00:04:57,773
stolen from and are never stolen from.

74
00:04:59,833 --> 00:05:05,753
Then the cause of experimentation will have been serviced.

75
00:05:09,073 --> 00:05:14,628
The principle of giving consumers choice, like Milton Friedman used to often

76
00:05:14,628 --> 00:05:17,628
say that will have been served, that principle.

77
00:05:17,968 --> 00:05:23,568
it's good if Bitcoin is designed in a way that gives the Bitcoin user the option to use

78
00:05:23,568 --> 00:05:25,748
Drivechain sidechains.

79
00:05:29,848 --> 00:05:34,368
So with that in mind, I think we can dispense with the notion that

80
00:05:34,463 --> 00:05:39,543
the concern about stealing from hashrate escrow is valid.

81
00:05:40,943 --> 00:05:46,623
even if it's a valid, even if it's a compelling concern, we should still allow for the

82
00:05:46,623 --> 00:05:50,203
possibility that it could be wrong and therefore we should give users the option to

83
00:05:50,203 --> 00:05:53,903
experiment. And of course, I do not believe it's likely that they will be stolen from.

84
00:05:53,903 --> 00:05:54,298
Instead,

85
00:05:54,498 --> 00:06:00,418
Instead, think the evidence shows, because of the experimentation on other

86
00:06:00,418 --> 00:06:06,338
blockchains has already shown, the Drivechain design and designs like

87
00:06:06,338 --> 00:06:08,298
it have been successful so far.

88
00:06:08,918 --> 00:06:14,098
And there has not been widespread problems of the kind that these critics are

89
00:06:14,133 --> 00:06:19,273
The other concern about Drivechain is this concern that

90
00:06:19,273 --> 00:06:23,993
increase in merged mining that Drivechain would foster

91
00:06:23,993 --> 00:06:29,613
will lead to undue centralization in the mining

92
00:06:29,613 --> 00:06:30,273
network.

93
00:06:32,193 --> 00:06:33,733
This is

94
00:06:33,968 --> 00:06:35,648
also not a compelling concern.

95
00:06:36,808 --> 00:06:42,588
It is a more sophisticated concern, however, and therefore it is the resort of

96
00:06:42,588 --> 00:06:47,648
some Drivechain critics who know that it is unwise to merely

97
00:06:47,648 --> 00:06:52,568
claim that the Drivechain hashrate escrow will be stolen from.

98
00:06:52,568 --> 00:06:53,588
So these more

99
00:06:53,803 --> 00:06:59,363
sophisticated thinkers know in my view this is just me assuming or

100
00:06:59,363 --> 00:07:04,443
presuming I think some sophisticated people know that if they say well the hash rate

101
00:07:04,443 --> 00:07:09,363
escrowers may be stolen from by the miners they know that this will quickly this will

102
00:07:09,363 --> 00:07:13,403
quickly lead to drivechain advocates saying well you should give,

103
00:07:13,718 --> 00:07:16,498
you should want to give the Bitcoin users the option.

104
00:07:17,938 --> 00:07:21,058
In other words, if you think it's insecure, don't use it.

105
00:07:21,458 --> 00:07:25,798
But give others the option rather than having them feel that they have to go to

106
00:07:25,798 --> 00:07:29,158
altcoins to get this kind of extensibility.

107
00:07:30,538 --> 00:07:33,473
So these more sophisticated critics don't

108
00:07:33,473 --> 00:07:35,453
say that the hashrate escrow is insecure.

109
00:07:36,093 --> 00:07:41,833
In fact, some of them say, I can think of one person in particular who says that

110
00:07:41,833 --> 00:07:47,673
perhaps the sidechains will grow extremely large if Drivechain is adopted.

111
00:07:47,913 --> 00:07:52,993
So this person is conceding that Drivechain would be very successful by that measure.

112
00:07:52,993 --> 00:07:53,307
But

113
00:07:53,307 --> 00:07:59,007
but this critic then says, all that merged mining will result in

114
00:07:59,007 --> 00:08:02,327
undue centralization of the mining network.

115
00:08:05,047 --> 00:08:10,427
Meaning I assume this person would say, this means that only larger miners and

116
00:08:10,427 --> 00:08:13,142
therefore fewer miners would be involved

117
00:08:13,182 --> 00:08:14,342
in Bitcoin mining.

118
00:08:15,722 --> 00:08:20,882
as a result, Bitcoin would be less secure because the so -called

119
00:08:20,882 --> 00:08:26,702
decentralization of the miners would have decreased as a result of this

120
00:08:26,702 --> 00:08:27,202
activity.

121
00:08:28,662 --> 00:08:32,977
So I think this is completely wrong, but it is a

122
00:08:32,977 --> 00:08:34,397
a more complex topic.

123
00:08:35,677 --> 00:08:38,177
It's a conversation that takes longer to have.

124
00:08:38,577 --> 00:08:43,277
And therefore, some critics who are sophisticated and clever at debate prefer it

125
00:08:43,277 --> 00:08:46,917
because they know that it's a complicated conversation.

126
00:08:48,697 --> 00:08:49,297
Basically,

127
00:08:50,637 --> 00:08:52,317
what these critics are doing though,

128
00:08:53,512 --> 00:08:59,092
when they say that there would undue centralization as a result

129
00:08:59,092 --> 00:09:02,732
of increased merge mining, these critics, when they say that,

130
00:09:05,532 --> 00:09:11,352
they also say, to their credit, to be consistent, also say that merge mining is in

131
00:09:11,352 --> 00:09:12,647
general bad. and

132
00:09:12,727 --> 00:09:18,087
And they don't like any kind of merge mining, whether it's BIP301 merge mining or the

133
00:09:18,087 --> 00:09:19,807
ordinary merge mining we have today.

134
00:09:24,387 --> 00:09:29,687
In fact, these critics, know that Drivechain advocates

135
00:09:30,177 --> 00:09:32,482
or just advocates for merge mining in general can point

136
00:09:32,562 --> 00:09:38,282
to the fact that Satoshi himself discovered merge mining and recommended it.

137
00:09:38,462 --> 00:09:44,042
He countenanced it, meaning he spoke about it favorably and acknowledged it

138
00:09:44,042 --> 00:09:49,622
as a positive thing in the bit DNS thread of August 2010

139
00:09:49,622 --> 00:09:52,317
on the forum where he spoke publicly in

140
00:10:00,537 --> 00:10:05,557
So, what these critics of merge mining say is that Drivechain would facilitate more

141
00:10:05,557 --> 00:10:10,877
merged mining and therefore Drivechain is no good because they don't like merged mining

142
00:10:10,877 --> 00:10:12,152
at all. And

143
00:10:12,252 --> 00:10:17,592
as I've described these critics know that they have to confront the fact that Satoshi

144
00:10:17,592 --> 00:10:22,372
himself liked it so then these critics say well Satoshi wasn't right about everything

145
00:10:22,372 --> 00:10:28,332
and one of the things one of the things he was wrong about these critics say is that

146
00:10:28,332 --> 00:10:31,987
he shouldn't have expressed approval for merged mining

147
00:10:35,147 --> 00:10:40,147
of course I would not say that Satoshi was necessarily right on everything,

148
00:10:42,027 --> 00:10:47,347
and therefore I would not appeal to his authority as a means of

149
00:10:47,347 --> 00:10:51,727
defending merge mining, although I certainly think it's a notable

150
00:10:51,822 --> 00:10:57,382
historical fact that he was in favor of it, and not in favor of for just any old

151
00:10:57,382 --> 00:11:02,782
reason, precisely because merge mining increases miner revenue,

152
00:11:03,702 --> 00:11:09,242
it increases on -chain miner revenue for for -profit

153
00:11:09,242 --> 00:11:11,657
miners, and

154
00:11:11,657 --> 00:11:17,237
thus increases the network strength of Bitcoin, and helps avoid the need for inflation.

155
00:11:18,457 --> 00:11:22,417
There is increasing talk of tail emission or inflation for Bitcoin,

156
00:11:24,117 --> 00:11:29,717
and Drivechain is one of the ways that potentially we can completely avoid that

157
00:11:29,717 --> 00:11:30,237
problem.

158
00:11:32,312 --> 00:11:37,452
Whether it's a problem or not, the community has yet to

159
00:11:37,452 --> 00:11:41,032
reach an unambiguous decision on.

160
00:11:41,112 --> 00:11:45,152
I would say most Bitcoiners will tell you there will never be more than 21 million

161
00:11:45,152 --> 00:11:49,612
Bitcoin. I certainly hope so, that there will never be more.

162
00:11:50,912 --> 00:11:51,327
But

163
00:11:51,707 --> 00:11:54,927
in the event that fees stay low forever,

164
00:11:56,547 --> 00:12:01,447
think a lot of optimists will realize that they were wrong in their expectations about

165
00:12:01,447 --> 00:12:03,887
the fee market growing.

166
00:12:05,687 --> 00:12:10,247
I feel that over time, one of the ways we can see greater interest in Drivechain is

167
00:12:10,247 --> 00:12:11,162
through greater interest

168
00:12:11,262 --> 00:12:12,042
in merge mining.

169
00:12:12,562 --> 00:12:14,762
great. have someone requesting to speak.

170
00:12:15,602 --> 00:12:16,742
Welcome to the stage.

171
00:12:17,942 --> 00:12:20,282
Mr. Eon BTC.

172
00:12:21,462 --> 00:12:22,682
Thanks for joining.

173
00:12:24,322 --> 00:12:26,642
Go ahead with your comment or question.

174
00:12:31,977 --> 00:12:34,857
Aeon, BTC, you're welcome to speak if you'd like to.

175
00:12:35,077 --> 00:12:36,237
Oh, sorry I was on mute.

176
00:12:37,517 --> 00:12:41,277
I'll start over in good fashion.

177
00:12:42,297 --> 00:12:43,617
Yeah, thanks for inviting me.

178
00:12:43,677 --> 00:12:44,597
It's a good overview.

179
00:12:44,757 --> 00:12:49,837
I'm still learning about Drivechains, but for what I've heard so far, I'm definitely

180
00:12:49,837 --> 00:12:50,832
interested and intrigued.

181
00:12:52,912 --> 00:12:57,812
I wanted to jump in about the comment on fees and the subsidy.

182
00:12:58,852 --> 00:13:03,172
think you're saying some people think that adding

183
00:13:03,172 --> 00:13:07,472
a daily mission subsidy to Bitcoin is a good idea.

184
00:13:08,152 --> 00:13:10,667
a few people have pointed out

185
00:13:10,667 --> 00:13:16,127
out that subsidy actually does not add to the security of Bitcoin in an

186
00:13:16,127 --> 00:13:21,827
adversarial sense because in a 51 % attack, the

187
00:13:21,827 --> 00:13:27,367
subsidy is pretty much free launch for the attacker who's either censoring the chain or

188
00:13:27,367 --> 00:13:28,407
orphaning blocks or whatever.

189
00:13:29,507 --> 00:13:30,502
The determining factor

190
00:13:30,622 --> 00:13:31,662
is actually the fees.

191
00:13:32,622 --> 00:13:38,542
people willing to pay fees on transactions that are trying to be censored by presumably

192
00:13:38,542 --> 00:13:43,422
the state because the state is really the only entity that logically

193
00:13:43,422 --> 00:13:49,342
can carry out, can economically carry out an attack on Bitcoin.

194
00:13:49,342 --> 00:13:50,337
But the

195
00:13:50,497 --> 00:13:55,277
subsidy does not add any security because to the attacker they get the subsidy So it's

196
00:13:55,277 --> 00:13:57,877
not that doesn't add to the security at all.

197
00:13:57,877 --> 00:13:59,517
So I don't know why people think it does

198
00:14:03,357 --> 00:14:06,497
Thanks for sharing those ideas, I think you're mistaken if

199
00:14:08,457 --> 00:14:10,172
a party wishes to to

200
00:14:10,472 --> 00:14:14,832
deploy 51 % of Bitcoin's hashrate tomorrow,

201
00:14:17,392 --> 00:14:21,052
order to censor all transactions,

202
00:14:23,532 --> 00:14:29,352
in order to try to reestablish fiat money and stop the use of

203
00:14:29,352 --> 00:14:29,752
Bitcoin,

204
00:14:32,327 --> 00:14:38,307
that party would have to assemble billions of dollars worth

205
00:14:38,307 --> 00:14:44,027
of or seize them in order to

206
00:14:44,027 --> 00:14:48,827
deploy 51 % of hashrate to that end.

207
00:14:50,682 --> 00:14:55,182
And the reason why it would be expensive is that

208
00:14:55,182 --> 00:15:01,082
there is 50 times more value received by

209
00:15:01,082 --> 00:15:06,662
the miners right now from the Coinbase

210
00:15:06,662 --> 00:15:08,162
than from the fees.

211
00:15:10,517 --> 00:15:15,097
if your analysis were right, cost to control 51

212
00:15:15,097 --> 00:15:19,697
% of the hashrate would be about 2

213
00:15:19,697 --> 00:15:22,357
% of what it actually is.

214
00:15:22,937 --> 00:15:28,697
In other words, what you said, if I heard you correctly, and please jump in to rephrase

215
00:15:28,697 --> 00:15:29,497
if you'd like, but

216
00:15:29,512 --> 00:15:36,512
but if I heard you correctly, you think that all of transaction finality,

217
00:15:36,512 --> 00:15:49,512
all of economic security, all of hostile mining prevention arises from the fees and not the Coinbase at all.

218
00:15:49,512 --> 00:15:57,512
This is in direct conflict with what Satoshi wrote and with my own understanding, separate entirely from what Satoshi wrote.

219
00:15:58,512 --> 00:16:03,512
Why do you think he included the Coinbase at all?

220
00:16:03,512 --> 00:16:08,512
Do you believe it was only for purposes of distribution and not security?

221
00:16:08,512 --> 00:16:15,512
Because I think since the beginning of Bitcoin, people have correctly understood it to have a dual purpose.

222
00:16:15,512 --> 00:16:24,512
It was not merely to distribute Bitcoin into the hands of people from the protocol,

223
00:16:24,512 --> 00:16:35,512
but instead was also to create an economic incentive to secure the network by mining.

224
00:16:35,512 --> 00:16:42,512
Does that make sense or do you see how that's in conflict with what you've said or do you want to elaborate?

225
00:16:42,512 --> 00:16:51,512
No, I agree. I think it definitely was a mechanism to distribute and also a mechanism to incentivize new participants to mine.

226
00:16:51,512 --> 00:17:03,512
But the point I'm trying to make is that in the event of a 51% attack, that majority miner is still going to get the subsidy.

227
00:17:03,512 --> 00:17:12,512
They're going to get the majority of the subsidy because they're doing the most work and therefore to push out that 51% attacker,

228
00:17:13,512 --> 00:17:24,512
the fee pressure on fees that are being censored is what incentivizes the, let's call them rational miners, to overtake the censor.

229
00:17:24,512 --> 00:17:31,512
I like to call them white market and black market miners because the threat model really is the state.

230
00:17:31,512 --> 00:17:43,512
The state is the only one that has the resources to, one, legislate or regulate or license miners in their jurisdiction to enforce a certain blacklist.

231
00:17:43,512 --> 00:17:53,512
So I don't see them censoring all transactions. I see them censoring transactions that they deem illegal or terrorist financing or whatever.

232
00:17:54,512 --> 00:18:06,512
And so I don't see them amassing a bunch of money. I see them essentially co-opting the mega farms that are already in the United States and Canada and parts of Europe.

233
00:18:06,512 --> 00:18:20,512
And in that scenario, the mechanism to push out that majority hasher who's censoring is the fee market because the fees have to incentivize the rational miners,

234
00:18:20,512 --> 00:18:28,512
the white black market miners who mine, who disobey the regulations and aren't enforcing blacklist to push out that censor. Does that make sense?

235
00:18:29,512 --> 00:18:31,512
I understand what you're saying.

236
00:18:31,512 --> 00:18:57,512
Would it be all right with you if we speak first about the highest class of attacker, which is precisely one that controls a majority of hash rate and intends to make impossible all transactions by other users?

237
00:18:58,512 --> 00:19:03,512
Of the network for the purpose of trying to devalue all Bitcoin.

238
00:19:04,512 --> 00:19:12,512
So to be clear, I'm not talking about a miner as you have, which is censoring some users.

239
00:19:12,512 --> 00:19:20,512
I'm talking about someone who wants to halt the ability for anyone to use Bitcoin.

240
00:19:20,512 --> 00:19:29,512
And the way that this party is trying to halt the ability for anyone to use Bitcoin is by reorging at every opportunity.

241
00:19:29,512 --> 00:19:41,512
Thus blocking everyone from transacting, which in the long run would devalue all Bitcoin to zero.

242
00:19:42,512 --> 00:19:52,512
So are you OK with us discussing only that and then only later talking about the lesser class of a hostile attacker?

243
00:19:52,512 --> 00:19:56,512
Because when I say hostile attacker, I'm talking about.

244
00:19:57,512 --> 00:20:03,512
The most hostile kind of attacker, and I think it's totally reasonable to.

245
00:20:05,512 --> 00:20:16,512
Speak about this because historical experience shows us that the last time there was free market money, it became prohibited and confiscated.

246
00:20:17,512 --> 00:20:22,512
So they weren't just saying that some people couldn't transact with gold.

247
00:20:22,512 --> 00:20:27,512
They were saying no one could use gold as money in America.

248
00:20:27,512 --> 00:20:31,512
And that lasted for decades, I think.

249
00:20:31,512 --> 00:20:38,512
So I mean, they were still using banks, were still using money and countries were still using it.

250
00:20:38,512 --> 00:20:40,512
It was just the general public was banned.

251
00:20:40,512 --> 00:20:49,512
But I'm fine with that scenario because I think the solution is still the fee pressure, even if they're censoring all transactions.

252
00:20:50,512 --> 00:20:54,512
How does the subsidy incentivize miners to overtake?

253
00:20:56,512 --> 00:20:58,512
You know, that attacker.

254
00:21:00,512 --> 00:21:05,512
Well, I do believe with one part of what you just said, which is you said the solution is fee pressure.

255
00:21:05,512 --> 00:21:21,512
I mean, I completely agree that in the long run, higher fees are very important and necessary for maintaining a high security spending for Bitcoin, meaning a high rate of miner on-chain income for for-profit miners.

256
00:21:21,512 --> 00:21:23,512
So we agree that fees are important.

257
00:21:23,512 --> 00:21:28,512
That's one thing you and I have in common is we think that fee pressure is important.

258
00:21:29,512 --> 00:21:34,512
Another way of saying that is making the block space more valuable is important.

259
00:21:36,512 --> 00:21:44,512
So the block space value is equal to the transaction fee rate, the total transaction fee rate.

260
00:21:45,512 --> 00:21:47,512
It's kind of like a person's salary.

261
00:21:48,512 --> 00:21:55,512
Like the more you get paid in total per unit of time, that is your total salary rate.

262
00:21:55,512 --> 00:21:59,512
Similarly, for Bitcoin miners, the fee rate varies.

263
00:21:59,512 --> 00:22:10,512
But over any reasonable stretch of time, like a day or a month, we can speak of their total transaction fee rate and speak of that as being the value of the block space.

264
00:22:11,512 --> 00:22:18,512
So we agree that that's important because the Coinbase goes down over time algorithmically towards zero over the next hundred years.

265
00:22:19,512 --> 00:22:28,512
But it sounds like we speak a little bit differently about whether or not the value of the Coinbase, which is almost all of miner income right now.

266
00:22:29,512 --> 00:22:46,512
You and I speak differently about whether the value of the Coinbase is material in an understanding of whether it is expensive or not to become a 51 percent hostile miner, hostile meaning trying to block all transactions.

267
00:22:48,512 --> 00:22:49,512
Censor everyone.

268
00:22:50,512 --> 00:22:56,512
So in your view, if I understand right, you think that the Coinbase doesn't matter.

269
00:22:57,512 --> 00:23:04,512
It doesn't matter because the miner is going to get the Coinbase.

270
00:23:05,512 --> 00:23:16,512
So the fact that he has to assemble billions of dollars of mining equipment because of the Coinbase, because that's why the mining industry is large right now, it's because of the Coinbase.

271
00:23:16,512 --> 00:23:18,512
Right. You know that. I know that.

272
00:23:19,512 --> 00:23:24,512
That of like ninety nine percent some days of the miner income is the subsidy.

273
00:23:25,512 --> 00:23:31,512
Right. It's like nine hundred bitcoin a day from the subsidy or the I like to say Coinbase.

274
00:23:32,512 --> 00:23:33,512
It's less triggering to some people.

275
00:23:34,512 --> 00:23:36,512
It's nine hundred. They're synonyms.

276
00:23:37,512 --> 00:23:38,512
Right. Coinbase, subsidy and inflation.

277
00:23:39,512 --> 00:23:40,512
They're all synonyms in Bitcoin.

278
00:23:40,512 --> 00:23:44,512
They mean the same thing. So nine hundred bitcoin a day from from Coinbase.

279
00:23:45,512 --> 00:23:51,512
And about half a million dollars a day in Bitcoin from fees.

280
00:23:52,512 --> 00:23:55,512
So the vast majority is from Coinbase.

281
00:23:55,512 --> 00:24:02,512
In your view that your view is that, well, the Coinbase doesn't matter because the attacker gets the Coinbase.

282
00:24:03,512 --> 00:24:15,512
But you're you're missing the fact that it's very important that there be a high barrier to becoming that 51 percent attacker.

283
00:24:16,512 --> 00:24:27,512
Let's say hypothetically that at present the income to the miners was extraordinarily high.

284
00:24:28,512 --> 00:24:32,512
Let's just say that the hash rate were much higher than it is today, hypothetically.

285
00:24:32,512 --> 00:24:39,512
And let's say hypothetically that instead of being thirty five billion dollars.

286
00:24:41,512 --> 00:24:50,512
Instead of the cost to attack Bitcoin being thirty five billion dollars, according to that Web site that shows these numbers, let's say it costs 10 trillion.

287
00:24:51,512 --> 00:25:02,512
Do you not agree that in that extreme hypothetical, your point that, oh, well, it doesn't, you know, your view is that, well, it doesn't.

288
00:25:03,512 --> 00:25:08,512
And correct me if I'm wrong, but your view seems to be that, well, it wouldn't matter that it's 10 trillion dollars of cost.

289
00:25:09,512 --> 00:25:19,512
Because once you get that money together and you buy all the mining machines necessary or you seize them, then you would receive the on chain income of the Coinbase.

290
00:25:20,512 --> 00:25:25,512
Or you would be paid back for all that expense of electricity and machines.

291
00:25:26,512 --> 00:25:30,512
You see, like you're ignoring, in my view, respectfully, let me know if you see it differently.

292
00:25:31,512 --> 00:25:38,512
But you're ignoring the fact that there is an enormously high barrier to becoming the majority of hash rate.

293
00:25:39,512 --> 00:25:49,512
And the reason for that economic barrier is that the Coinbase is present today in Bitcoin and it enormously augments the miner income.

294
00:25:50,512 --> 00:25:53,512
And the higher the miner income, the larger the mining industry grows.

295
00:25:54,512 --> 00:26:01,512
And the larger it grows, the more hash rate comes online and the more expensive it becomes to be that 51 percent attacker.

296
00:26:05,512 --> 00:26:06,512
I see where you're coming from.

297
00:26:06,512 --> 00:26:15,512
I think my nuance is that I pretty much always consider the attacker the state.

298
00:26:16,512 --> 00:26:27,512
So the state has the ability to use force to, I mean, there's already around 50 percent mining in Western countries, United States, Canada, Europe.

299
00:26:27,512 --> 00:26:37,512
And they already work together with treaties and financial crimes and all that and money laundering and terror trying to prevent all those financial crimes.

300
00:26:38,512 --> 00:26:47,512
And so in my hypothetical, the state does not need to garner $10 billion or $10 trillion to buy mining equipment.

301
00:26:48,512 --> 00:26:58,512
They simply go to the miners and say, you need to enforce this blacklist or we're seizing your equipment for terrorist financing and money laundering.

302
00:26:59,512 --> 00:27:04,512
Are the mega mines going to refuse or are they going to say, OK?

303
00:27:05,512 --> 00:27:10,512
And then the government says, yeah, you can mine these transactions that are waitlisted in KYC.

304
00:27:11,512 --> 00:27:14,512
You can still get the subsidy, but you need to blacklist these transactions.

305
00:27:15,512 --> 00:27:31,512
And so that's how I see the scenario most likely to play out, because I don't think the state, you know, the central banking, the legacy monetary system will necessarily try to destroy all of Bitcoin or censor all transactions.

306
00:27:32,512 --> 00:27:44,512
I think censoring all transactions is actually better because that creates even more fee pressure, because then whoever is trying to censor all the transactions is not getting any fees.

307
00:27:45,512 --> 00:27:46,512
They're getting zero fees. They're only getting the subsidy.

308
00:27:47,512 --> 00:27:50,512
Meanwhile, black market miners would say, all right, there's a subsidy.

309
00:27:51,512 --> 00:27:55,512
Plus there's 100 Bitcoin or whatever in fees that are just sitting there.

310
00:27:56,512 --> 00:28:04,512
And so the scenario where you're saying every transaction being censored, I think is a more desirable scenario because there's even more fee pressure.

311
00:28:05,512 --> 00:28:19,512
But the idea about the Coinbase, I don't see how that, I mean, any attacker is still going to get the Coinbase and anyone trying to push out the attacker is going to get the Coinbase.

312
00:28:20,512 --> 00:28:23,512
And so what I see is where the rubber meets the road is the fee.

313
00:28:24,512 --> 00:28:33,512
That's what it's the delta between the fees on the transactions that are being censored and the fees that are not being or transactions that are not being censored.

314
00:28:34,512 --> 00:28:37,512
I understand what you're saying, which is, although I don't agree.

315
00:28:38,512 --> 00:28:52,512
Ultimately, I understand what you're saying, which is that you're I think you're correct when you talk about there being a different set of incentives with respect to the on-chain income from fees than from Coinbase.

316
00:28:53,512 --> 00:29:13,512
Where the attacker who in our hypothetical is censoring all transactions by re-orging, by re-orging at every opportunity, that attacker is not accepting and is not pursuing the transaction fees from the honest transactors, the honest users.

317
00:29:15,512 --> 00:29:19,512
Because he's trying to make impossible their transactions.

318
00:29:20,512 --> 00:29:27,512
So you're right that there would be an accrual of those transaction fees and this would grow over time.

319
00:29:28,512 --> 00:29:48,512
So you're thinking that there would be a kind of like incentives based kind of rebalancing of incentives on Bitcoin to help promote the incentives for honest miners to behave correctly and not to participate in the attack.

320
00:29:49,512 --> 00:29:57,512
Your hypothetical, however, simultaneously speaks about miners being coerced by the government.

321
00:29:58,512 --> 00:30:01,512
And you spoke about how easy that would be in your view.

322
00:30:02,512 --> 00:30:09,512
And then you also are speaking about honest miners behaving honestly for profit.

323
00:30:10,512 --> 00:30:19,512
So your thought experiment involves at once the government controlling mining and then as a solution, the government not controlling mining.

324
00:30:20,512 --> 00:30:24,512
Well, it would be a difference between the mining.

325
00:30:25,512 --> 00:30:31,512
Just to make sure we try to make progress in our discussion, which I'm enjoying very much.

326
00:30:31,512 --> 00:30:53,512
I want to see if you can unambiguously confirm that in our prior discussion just now, you agreed that if the barrier to become a 51 percent hostile miner is higher, that is a material component of Bitcoin's defense against such an attack.

327
00:30:54,512 --> 00:31:13,512
In other words, if the cost to be a 51 percent attacker means that one must control 10 trillion dollars of hashing power, of hashing equipment and resources, that is very different than if one has to only control 100 dollars of such resources.

328
00:31:14,512 --> 00:31:24,512
You do agree, right, that let's just say hypothetically the Coinbase is worth an enormous amount of money and the fees are very small.

329
00:31:25,512 --> 00:31:31,512
Let's just assume today there's an extraordinary value to the Coinbase and there's a very small amount of fees.

330
00:31:32,512 --> 00:31:43,512
You have been saying, if I've heard you correctly, you've been saying, well, the only part of that situation that is important in terms of preventing a hostile attack is the fees, not the Coinbase.

331
00:31:44,512 --> 00:31:45,512
And I'm telling you, no, you're wrong.

332
00:31:46,512 --> 00:31:52,512
The reason why Bitcoin does in fact have high security today is because the Coinbase is substantial.

333
00:31:53,512 --> 00:31:54,512
I see what you're saying.

334
00:31:55,512 --> 00:32:03,512
You're saying that the Coinbase has incentivized miners to the point that it has pushed hash rates so high that it makes it more expensive.

335
00:32:04,512 --> 00:32:11,512
Yeah, I'm saying that right now on-chain income is very substantial because of the Coinbase and that's good and that's fine.

336
00:32:12,512 --> 00:32:13,512
I agree.

337
00:32:13,512 --> 00:32:32,512
My argument comes in regarding who the miners are and where the miners are located and their threat model and their risk assessment because a lot of miners are centralizing and becoming mega miners in regulated jurisdictions.

338
00:32:33,512 --> 00:32:58,512
And the really only thing that protects that hash power, I made a point once where I said white market mining is a security risk because white market miners are regulated, they're incorporated, they have CEOs, they have addresses, they have ability to be located by the state very easily.

339
00:32:59,512 --> 00:33:08,512
And so in that sense, they're not going to disobey the state because they get imprisoned for money laundering and terrorist financing.

340
00:33:09,512 --> 00:33:19,512
So they're likely to opt into censoring whatever blacklist they have and saying this is to protect the children, this is for terrorist financing.

341
00:33:20,512 --> 00:33:32,512
You can mine all these transactions and you can get the subsidy, but if you mine these transactions or build on these blocks that have those transactions, we're going to seize your equipment and put you in jail for so-and-so-and-so.

342
00:33:33,512 --> 00:33:54,512
And so I see white market mining and black market mining as really dividing line where I agree that the hash rate being high sets a barrier to entry, but if that barrier to entry is all white market mining that's easily located and easily co-opted, it doesn't provide much challenge for the state to get a hold of it.

343
00:33:56,512 --> 00:33:57,512
Understood.

344
00:33:58,512 --> 00:34:17,512
Yeah, I think that with respect to that whole part of your view, we're probably in agreement that the jurisdiction where a miner operates and whether the miner is registered and having to hold licenses or not, those are important factors.

345
00:34:18,512 --> 00:34:33,512
But the whole first part of our conversation, I feel that we've now kind of reached like an agreement point because what we discussed in tweets a day or two ago, I'm looking at it now, I feel like we've kind of improved our understanding.

346
00:34:34,512 --> 00:34:44,512
It sounds like you no longer believe what you wrote, which was that in response to Peter Todd's tweet, you wrote, in an adversarial environment, subsidy does nothing for security.

347
00:34:45,512 --> 00:34:50,512
To a 51% attacker, subsidy is a free lunch for censoring the chain.

348
00:34:51,512 --> 00:34:53,512
So you no longer believe that and you now understand…

349
00:34:54,512 --> 00:34:55,512
No, I still believe that.

350
00:34:56,512 --> 00:35:06,512
Yeah, but what we understood though is that if the cost to become a 51% attacker is prohibitively high…

351
00:35:07,512 --> 00:35:10,512
But the cost is dependent on where the hash rate is and how…

352
00:35:12,094 --> 00:35:26,094
the attacker can access that hash rate. If it's just some random attacker who's trying to put in a short on Bitcoin and crash the price and short sell it, I don't think that's viable.

353
00:35:26,094 --> 00:35:31,094
I don't think that's economically viable for anyone but the state to mount an attack against Bitcoin.

354
00:35:32,094 --> 00:35:44,094
In all my scenarios, the state is always the attacker because that's the only one that could get free tax money and also use force to coerce miners.

355
00:35:45,094 --> 00:35:58,094
Okay, so it sounds like in your view, you actually don't appreciate any discussion of economic security because in your view, the attacker has unlimited resources.

356
00:35:58,094 --> 00:36:10,094
And therefore, if it does cost $10 trillion to have the resources necessary, then it's really, in your view, entirely a question of legal matters.

357
00:36:10,094 --> 00:36:21,094
So the state would merely confiscate the energy and machines needed to be the attacker. So you're mainly interested in those other factors.

358
00:36:22,094 --> 00:36:33,094
It's more like they wouldn't need to confiscate it. They would approach the mining, the white market miners who are already registered and possibly licensed and say,

359
00:36:33,094 --> 00:36:44,094
you need to start enforcing this or we're going to seize your equipment. And they'll likely say, okay, we'll enforce this and stay in business.

360
00:36:44,094 --> 00:36:56,094
And the only people that will not obey that is our black market miners who are idealistic about the function of Bitcoin and the censorship resistance of it.

361
00:36:57,094 --> 00:37:06,094
And so to really defend against that, we need a larger portion of the mine to be decentralized in the hands of people that are willing to break the law.

362
00:37:06,094 --> 00:37:23,094
If it becomes a problem where the government puts out some regulation that says that even if you're a home miner, you need to abide by this regulation or else you're financing terrorists and all this other fear mongering they'll put on it.

363
00:37:23,094 --> 00:37:30,094
I see. So I think that what we have is just a view, which is like we don't really have as much of a disagreement.

364
00:37:30,094 --> 00:37:36,094
I don't think we have as much of a disagreement as the fact that you're someone who thinks that it's very important.

365
00:37:36,094 --> 00:37:49,094
And I think I probably agree with you that it's very important that there be widespread education throughout humanity about the importance of having a free market in transactions and a principle of volunteerism,

366
00:37:49,094 --> 00:38:05,094
where if people want to transact freely, they should be able to. And therefore, that is what's going to prevent us from devolving into a situation where there's lots of censorship on how to transact.

367
00:38:05,094 --> 00:38:13,094
So I felt like when you originally responded to Peter Todd, you were responding in a way that was wrong.

368
00:38:13,094 --> 00:38:29,094
But I feel that now I see that what you're really trying to say or what I should have read you to have been saying was that you just aren't very focused on this economics of, you know, as the subs, as the coinbase declines, the fees must rise.

369
00:38:29,094 --> 00:38:41,094
Like that's that's Peter's view in my in my understanding when he wrote his tweet on February 19 yesterday, the one beginning with more evidence that we can't rely on fees, dot, dot, dot.

370
00:38:41,094 --> 00:38:53,094
So he's he's tweeting there that as the coinbase is halved every four years and the fees are not apparently rising at a high rate.

371
00:38:53,094 --> 00:39:09,094
In his view, this fosters a reasonable question about whether it would it might be good to consider so-called tail emission hard fork, meaning like higher inflation forever for Bitcoin.

372
00:39:10,094 --> 00:39:11,094
So, yeah.

373
00:39:11,094 --> 00:39:22,094
I still don't think that it's useful because the tail, the emission is is always included in the block.

374
00:39:22,094 --> 00:39:28,094
The thing that is not guaranteed are the fees because you're an entity trying to censor.

375
00:39:28,094 --> 00:39:34,094
So you're the state trying to censor your only guaranteed fees of whitelisted transactions.

376
00:39:35,094 --> 00:39:36,094
The subsidy you're always going to get.

377
00:39:36,094 --> 00:39:51,094
And so having more subsidy is great for them, because if the network relied only on fees, then it creates even a higher fee pressure because I can go out and get one of my UTXOs blacklisted by sending it to a mixer.

378
00:39:51,094 --> 00:39:58,094
And then I could participate in raising the fee and increasing fee pressure by using RBF or child base for a parent.

379
00:39:58,094 --> 00:40:07,094
And so every user has the ability to increase that fee pressure against the censor and to incentivize black market miners.

380
00:40:07,094 --> 00:40:17,094
Meanwhile, the subsidy is not doing anything to incentivize or it's it's rewarding the censor even for censoring essentially.

381
00:40:18,094 --> 00:40:20,094
Yeah, I understand what you're saying now.

382
00:40:20,094 --> 00:40:25,094
Another thing that threw me off in your tweets was when you wrote the following.

383
00:40:25,094 --> 00:40:35,094
You wrote the only viable attack on Bitcoin is a state sponsored one that aims to censor transactions it deems illegal.

384
00:40:35,094 --> 00:40:40,094
And you had you finished that sentence with and to orphan blocks that attempt to include said transactions.

385
00:40:41,094 --> 00:40:48,094
But that was quite a strong statement, which implies that you don't think it's viable that the state would censor all transactions.

386
00:40:50,094 --> 00:40:57,094
No, because I think they just want to control economic activity.

387
00:40:59,094 --> 00:41:09,094
Why do you think it's not viable or not reasonably possible that the state would want to censor all transactions?

388
00:41:09,094 --> 00:41:11,094
It's definitely possible. It's definitely a route.

389
00:41:11,094 --> 00:41:17,094
I think if they took that route, it'd be good for us because then it creates even more fee pressure on our part.

390
00:41:17,094 --> 00:41:21,094
And so I would see that scenario as actually a plus, but it's definitely possible.

391
00:41:21,094 --> 00:41:23,094
I don't want to say that it's not possible.

392
00:41:23,094 --> 00:41:27,094
Right. I mean, they confiscated gold from all citizens, right?

393
00:41:28,094 --> 00:41:33,094
Why wouldn't they just get Bitcoin completely in a worst case scenario?

394
00:41:34,094 --> 00:41:38,094
They confiscated it from people who are willing to follow the law, essentially.

395
00:41:38,094 --> 00:41:43,094
And so Bitcoiners that weren't going to follow the law are still going to try and participate.

396
00:41:43,094 --> 00:41:52,094
And if all the transactions are being censored, the power that a Bitcoiner, a non-miner has is to apply fee pressure.

397
00:41:53,094 --> 00:42:13,094
And so each individual has power at their home to incentivize miners somewhere in the world to set up some kind of operation to overtake that censor who's orphaning any block with a transaction in it to overcome them and then mine those fees and get those fees.

398
00:42:13,094 --> 00:42:16,094
And that's why I see the fees as more important.

399
00:42:17,094 --> 00:42:20,094
Yeah, I think we're on the same page then.

400
00:42:21,094 --> 00:42:22,094
So you.

401
00:42:24,094 --> 00:42:32,094
I mean, in my view, we're on the same page, I think where we disagree is maybe nuance in the style of attack or the threat model, but.

402
00:42:33,094 --> 00:42:40,094
Well, your view, your view is that the economics are distinct from the legal considerations.

403
00:42:41,094 --> 00:42:46,094
In my view, they're somewhat like those things are somewhat linked to those dimensions of the attack.

404
00:42:46,094 --> 00:42:58,094
Like if the government has to seize one trillion dollars worth of Bitcoin mining hardware, that is a lot different than if the government only has to seize five hundred dollars worth of such hardware.

405
00:42:59,094 --> 00:43:14,094
So if the government has to seize a lot of valuable things and then, you know, then it's more costly for the government in a sense of political cost, like the political risks.

406
00:43:14,094 --> 00:43:23,094
So in my view, if the Bitcoin market, as we kind of originally agreed to some extent, you seem to agree to some extent that if.

407
00:43:23,094 --> 00:43:33,094
If the value of the Coinbase is so large that the Bitcoin mining industry is enormous, then the amount of coordinated political confiscation and.

408
00:43:34,094 --> 00:43:44,094
Intervention required by state or or states across the world to become a 51 percent consortium of censors is larger.

409
00:43:44,094 --> 00:43:56,094
It requires more effort. So the Coinbase has an important role, not just in distributing coins, but in incentivizing the transaction finality, the economic security of Bitcoin.

410
00:43:57,094 --> 00:44:07,094
But I understand what you're saying, which is that because the censor doesn't receive the transaction fees paid by the users who are trying to transact.

411
00:44:08,094 --> 00:44:10,094
There is a.

412
00:44:12,094 --> 00:44:20,094
There's a, quote unquote, free lunch that the attacker still gets the Coinbase as you view it, so therefore it doesn't matter if the Coinbase is valuable or not.

413
00:44:20,094 --> 00:44:25,094
I understand what you're saying. I think I don't agree because my view is that.

414
00:44:26,094 --> 00:44:30,094
The the the fact that the right now it's 900 Bitcoin per day, that's.

415
00:44:31,094 --> 00:44:35,094
That's like 900 times wherever Bitcoin is now.

416
00:44:35,094 --> 00:44:46,094
Twenty thousand dollars of coin comes out to many millions of dollars and the net present value of that of that future cash flow of all of the Coinbase is in the future.

417
00:44:47,094 --> 00:44:48,094
Discounted to the present.

418
00:44:49,094 --> 00:44:51,094
That's why the mining industry is so large.

419
00:44:52,094 --> 00:45:05,094
The current present Bitcoin mining industry globally is equal to the net present value of all future revenues they will receive, which is the on chain Coinbase, the on chain transaction fees.

420
00:45:06,094 --> 00:45:21,094
And then thirdly, any ideological mining that's going on, that's also boosting hash rates slightly, as well as the non financial rewards other than ideology, such as mining purely for non KYC Bitcoin.

421
00:45:22,094 --> 00:45:36,094
And then fourthly or fifthly, there's the category of non or off chain revenue from relationships with energy producers and other kinds of off chain income.

422
00:45:36,094 --> 00:45:46,094
Like if the mining company has a merchandise store and sells T-shirts there, let's say Henry's Mining Company on it and people pay a high rate for those.

423
00:45:46,094 --> 00:45:51,094
Then the mining company gets those to all those things contribute to the hash rate.

424
00:45:51,094 --> 00:45:57,094
So the higher the hash rate goes, the more expensive it would be for someone to be a 51 percent attacker.

425
00:45:57,094 --> 00:46:07,094
Now, your response on if I understood it correctly, is that, well, talking about things in a purely economic sense is wrong because the attacker is going to be a state.

426
00:46:08,094 --> 00:46:21,094
For whom the economics isn't so simple, the state can just seize things so it doesn't have to expend money in the marketplace because it isn't the market, the government, they can just take.

427
00:46:21,094 --> 00:46:35,094
And therefore, if they need half a trillion dollars worth of machinery, instead of having to go out and buy it with taxpayer money, they can just seize it and therefore it's cheap for them.

428
00:46:36,094 --> 00:46:45,094
So to some extent, you're kind of like dismissing the economic view, which is probably smart because the government isn't purely economic.

429
00:46:45,094 --> 00:46:51,094
It can seize things, which is not an economic act so much as a act of politics.

430
00:46:51,094 --> 00:47:03,094
And so I think we agree that it's complicated and we certainly agree that the transaction fees aren't received by the attacker censoring all transactions.

431
00:47:03,094 --> 00:47:08,094
So I think we're on the same page. I was just thrown by some of the things you wrote.

432
00:47:08,094 --> 00:47:15,094
Like it seemed like you were saying that there couldn't possibly be an attack on all transactions, only some transactions.

433
00:47:15,094 --> 00:47:21,094
I think that's kind of like something that's too strong a claim. So things like that threw me in your written tweets.

434
00:47:22,094 --> 00:47:35,094
Yeah, it was a bit of an absolute. But I think, like I was saying, it's more viable and beneficial on our part if they do try and censor all transactions because, again, there's more fee pressure.

435
00:47:35,094 --> 00:47:43,094
But let's do another hypothetical real quick. Let's fast forward, pretend we're at the point where there's no more Bitcoin subsidy.

436
00:47:43,094 --> 00:47:50,094
The subsidy is all gone. It's all fees. And a 51 percent attack happens.

437
00:47:50,094 --> 00:47:59,094
There's someone who's censoring transactions and orphaning blocks. And Peter Todd comes along and says, let's add the subsidy.

438
00:47:59,094 --> 00:48:09,094
What does adding that subsidy do to incentivize? I mean, to the attacker, it's like, oh, all right, that's great. I'll just get more revenue now.

439
00:48:10,094 --> 00:48:21,094
And to black market miners, yeah, they have a little more incentive and revenue, but ultimately it's the fees that are building up on those censored transactions.

440
00:48:21,094 --> 00:48:36,094
I shouldn't say the subsidy is nothing, but the subsidy is a very minuscule part in the scenario where there is no more subsidy, essentially, and it's all fees.

441
00:48:37,094 --> 00:48:43,094
Were you saying that in that hypothetical, were you saying that the attacker was censoring all transactions?

442
00:48:46,094 --> 00:48:52,094
No, my theory is that it's more likely that they'll censor some transactions and not all of them.

443
00:48:52,094 --> 00:49:05,094
OK, I wasn't sure if I heard you right, because if the attacker is censoring all transactions, then the subsidy is of no value because the subsidy is not being spent ever.

444
00:49:05,094 --> 00:49:09,094
So let's return again to what I.

445
00:49:09,094 --> 00:49:10,094
That's a good point.

446
00:49:10,094 --> 00:49:15,094
Let's return. Thanks. I mean, you've made many good points, so I appreciate this conversation.

447
00:49:16,094 --> 00:49:21,094
The the let's return again to my claim and let's see if you disagree with it.

448
00:49:21,094 --> 00:49:30,094
My claim originally is that the highest class of attacker is a perpetual hostile attacker censoring all transactions forever.

449
00:49:31,094 --> 00:49:32,094
Do you agree with that?

450
00:49:35,094 --> 00:49:37,094
Do I agree that that's the highest form of attack?

451
00:49:38,094 --> 00:49:40,094
The highest class of attack.

452
00:49:40,094 --> 00:49:56,094
Yeah. The most devastating attack when we're talking about hostile mining is a perpetual hostile miner that has a majority of hash rate and reorgs at every opportunity to make to block the transactions of all others.

453
00:49:57,094 --> 00:50:04,094
I agree that it's the most damaging attack to the network, but I don't agree that it's the most economically rational.

454
00:50:04,094 --> 00:50:21,094
I think it's the most economically irrational thing to censor all transactions, and it's far more likely that the state would censor some, which would keep white market miners being able to get fees from white market transactions.

455
00:50:21,094 --> 00:50:22,094
Why?

456
00:50:22,094 --> 00:50:27,094
I agree that it's centering all transactions is the most damaging to the network.

457
00:50:28,094 --> 00:50:34,094
So I'm curious about your claim that it would be it would be economically not rational to do that.

458
00:50:34,094 --> 00:50:40,094
I do think that the most valuable and profitable thing in the universe is to print money.

459
00:50:41,094 --> 00:50:54,094
So if the government has the power to turn off Bitcoin in order to try to reestablish the supremacy of fiat money, then the government would have…

460
00:50:55,094 --> 00:51:10,094
Let me restate. It would be rational for the state, economically rational for the state for those reasons you just said, but economically irrational for any market participant. Put it that way.

461
00:51:10,094 --> 00:51:28,094
Okay, so we're agreeing that the best game in town is money printing and that Bitcoin, whether it's being used in a unfettered manner or whether it's being used in a censored manner, but only partially censored, means that people are opting out of the fiat system.

462
00:51:28,094 --> 00:51:40,094
So if the government wants to try to stifle use of Bitcoin in order to encourage use of the fiat money, then the government would perhaps try to censor all transactions.

463
00:51:40,094 --> 00:51:50,094
Yeah, because that's the most rational thing for them to do if they're trying to retain that monopoly on senior agent money printing.

464
00:51:50,094 --> 00:52:03,094
Yeah. I mean, I get your view. Your view is that, if I understand it correctly, you think that it's unlikely the government will censor everything. They'll probably just censor what they think are the criminals.

465
00:52:03,094 --> 00:52:24,094
And that way, if they're the 51% majority and they're reorging only to block the criminals, then the addresses they think are criminal, then the result is the government gets the subsidy, the coinbase, and the government can spend it.

466
00:52:25,094 --> 00:52:44,094
So therefore, they're not mining for nothing. Because, of course, the party that would mine for nothing, to censor everybody, they would probably short it in the market first, to be clever. So they'd short in the derivatives market, and then they would start hashing as a hostile perpetual miner.

467
00:52:44,094 --> 00:53:10,094
And I feel like we've gone pretty far down this road. It's been pretty great. I feel like we've arrived at a good sort of agreement about, you're very interested in the jurisdiction of the miners, and the ideology in society of supporting mining. I'm sympathetic to that. I'm a radical liberal parent.

468
00:53:10,094 --> 00:53:26,094
I definitely am sympathetic to those notions. I mean, I was telling you about how the government might be pretty hostile to Bitcoin in the future, perhaps, with, I mentioned, 1933, 1971. So I think that Bitcoin, here's where we could move the conversation forward.

469
00:53:26,094 --> 00:53:49,094
Some people think Bitcoin shouldn't grow quickly. They think it's sort of too frighteningly disruptive, too much winning, if Bitcoin grows too fast, because things can get out of hand. I believe that Fiatjaf is right. Fiatjaf, the creator of Nostr, wrote in a tweet not long ago, maybe just a week or two ago, he wrote that he would like to see Bitcoin grow as fast as possible.

470
00:53:50,094 --> 00:54:12,094
And I'm not quoting verbatim, so I hope I don't paraphrase inaccurately. But he said that he would like to see Bitcoin growing as fast as possible, so that adoption of Bitcoin grows faster than the growth of the regulations that over time could stifle Bitcoin and hinder its full development.

471
00:54:13,094 --> 00:54:26,094
So I think it's important how fast Bitcoin grows, and that's why I like Drivechain. I think that Drivechain is something that potentially could greatly enhance the speed of Bitcoin adoption.

472
00:54:26,094 --> 00:54:55,094
Right now we have a whole lot of developers working on other blockchains, and I think it'd be great if all those ideas and development were in Bitcoin instead. So if it were possible to create other blockchains that were attached to Bitcoin through hashrate escrow and blind merged mining, then many altcoins might instead be existing as Bitcoin sidechains.

473
00:54:56,094 --> 00:55:02,094
So right now, all Bitcoin sidechains are federated. All of them.

474
00:55:02,094 --> 00:55:03,094
Yeah, that's horrible.

475
00:55:03,094 --> 00:55:13,094
Yeah, that's by necessity, in the sense that there's no better option available. It's either a federated sidechain or you...

476
00:55:13,302 --> 00:55:20,822
go to an altcoin. Now, there are probably some in the audience way more sophisticated than me. I'm just a lawyer

477
00:55:20,822 --> 00:55:27,622
who can tell me about how there's other ways of doing things that are arguably very interesting and worthwhile to understand.

478
00:55:27,622 --> 00:55:38,101
But in my understanding, just reading Bitcoin magazine articles, like I read Shinobi's excellent five-part essay on sidechains from last year,

479
00:55:38,342 --> 00:55:47,941
and he wrote there that all Bitcoin sidechains are federated. And that struck me because I agreed with it and I thought it was well put.

480
00:55:47,941 --> 00:55:56,662
So if we had drivechain, then there could be a different kind of sidechain that I think the market would correctly find to be superior

481
00:55:56,662 --> 00:56:04,581
and would be adopted in broad usage. So let's say hypothetically, instead of Monero and Zcash being altcoin communities,

482
00:56:04,581 --> 00:56:12,101
they could instead be Bitcoin sidechain communities. And the native token of their drivechain would be a synthetic Bitcoin,

483
00:56:12,101 --> 00:56:22,261
meaning that the token they're moving around using their privacy software, a token only created when people lock up Bitcoin in the

484
00:56:22,261 --> 00:56:31,622
hash rate escrow of the sidechain. And this mechanism, this arrangement basically means that when people are demanding the synthetic

485
00:56:31,622 --> 00:56:40,821
Bitcoin on the sidechain, they're creating indirectly demand for Bitcoin. So this boosts Bitcoin's value, which is great.

486
00:56:40,821 --> 00:56:49,382
Like right now, there's $4 billion of value in wrapped Bitcoin. It's my understanding that this is managed by BitGo using a federated

487
00:56:49,382 --> 00:56:56,901
multi-sig at a company. So it's the same thing as using Coinbase. Now, I'm sure someone from BitGo might come up from the audience and

488
00:56:56,901 --> 00:57:05,541
tell me that I'm totally wrong, and they have a very elaborate and impressive way of managing this situation. But still.

489
00:57:05,541 --> 00:57:07,622
Yeah, I think it's just a multi-sig.

490
00:57:07,622 --> 00:57:17,141
Yeah, they probably have like a 100-page document explaining how impressive that multi-sig is. And maybe they do. I'm sure they're trying

491
00:57:17,141 --> 00:57:22,182
very hard to do it right. I mean, $4 billion, right? You're not going to want to have that just lost in an oopsie-daisy.

492
00:57:22,581 --> 00:57:25,462
Someone dropped their keys in a drain they can't get out.

493
00:57:28,102 --> 00:57:30,501
Can I ask a quick question about drivechains?

494
00:57:30,501 --> 00:57:31,462
Please, go ahead.

495
00:57:32,262 --> 00:57:41,302
So the incentive for miners, are they getting fees on the drivechain? And that incentivizes them to merge mine it? And they're also

496
00:57:41,302 --> 00:57:42,581
participating in Bitcoin?

497
00:57:43,701 --> 00:57:44,201
Yes.

498
00:57:45,162 --> 00:57:58,522
Okay. And then, so the drivechain is pretty much producing blocks like Bitcoin. And is it producing it, can the blocks be faster or

499
00:57:58,522 --> 00:58:04,042
slower at the same rate of Bitcoin? Or is it just dependent on the chain that is made?

500
00:58:06,441 --> 00:58:13,242
I think we would expect that the blocks would be the same rate as Bitcoin. There might be a highly technical answer that is

501
00:58:13,242 --> 00:58:19,882
different than the one I'm giving. But I think you're going to see the rates at the same rate always. Because the way that these

502
00:58:19,882 --> 00:58:29,561
drivechains will be designed will be based on what's best for the user. And there actually isn't, in the view of quite a few Bitcoin

503
00:58:29,561 --> 00:58:39,402
thinkers, any reason to make the block time faster or slower. That the altcoins that did that did it mainly as a marketing bullet

504
00:58:39,481 --> 00:58:48,441
point. And there isn't actually a benefit. Although I cannot, to be clear, I can't provide that argument, you know, any more

505
00:58:48,441 --> 00:58:56,201
comprehensively than I am. So it's, it's like, something that I want to learn more about. But also, I want to clarify one thing I just

506
00:58:56,201 --> 00:59:04,522
said earlier, where you asked if the, let me just rephrase, you asked if the security budget of the, let me rephrase it, if you

507
00:59:04,522 --> 00:59:12,081
asked effectively, if the security budget of the drivechain is the fees, and that's correct, there's no sub, there's no coinbase on

508
00:59:12,081 --> 00:59:20,762
the drivechain, it would be the fees alone, which is important in terms of transaction finality. And there is extensive writing

509
00:59:20,802 --> 00:59:30,161
about how this is going to be a incentive compatible and sustainable system on drivechain.info and other websites. There's also

510
00:59:30,161 --> 00:59:36,722
videos about these about the details. So anyone who's interested in like the details of this and whether it would be viable, can read all

511
00:59:36,722 --> 00:59:43,921
about it and learn all about it. There's videos and writings that are very interesting. And the other thing you asked is whether there

512
00:59:43,921 --> 00:59:53,282
would be an incentive for the miners to, to merge mine the sidechain. Let me just clarify because I said yes to your question. But the

513
00:59:53,282 --> 01:00:03,442
way you phrased it suggested that the miners might be able to opt out. Well, if Bitcoin upgrades to BIP301, then Bitcoin miners are

514
01:00:03,601 --> 01:00:16,842
getting the transaction fees from all of the drivechains without doing anything new. So if you have a miner at home, like me, you have your

515
01:00:16,842 --> 01:00:27,842
ASIC, if you run your own node, and you're directly operating on the Bitcoin network as an independent network node miner, you would, if you

516
01:00:27,962 --> 01:00:38,802
upgrade your software to the latest version of Bitcoin Core, if drivechain is adopted in the future, then you will receive the fee income from

517
01:00:39,081 --> 01:00:50,522
the drivechain sidechains without running this, the node of any of those sidechains. So that's what blind merge mining means, with respect to

518
01:00:51,002 --> 01:01:03,161
blind, blind, because you don't have to, you can, you can and some miners might, especially if the sidechain happens to be like a defy sidechain, like

519
01:01:03,161 --> 01:01:13,161
Ethereum, where you can make a little bit more money, if you're running the node. So you can do fancy games with the flashbots and the nev, you can make some

520
01:01:13,161 --> 01:01:13,921
extra money.

521
01:01:16,282 --> 01:01:27,122
Sorry, are the fees paid in Bitcoin? Or are they paid in the coin that in the in the blind mining scenario? Are the miners getting paid in fees in

522
01:01:27,122 --> 01:01:31,002
Bitcoin or the merge mine coin or the synthetic I should say?

523
01:01:31,481 --> 01:01:31,921
Bitcoin?

524
01:01:32,562 --> 01:01:43,802
That is a great, great question. In ordinary merge mining today, the Bitcoin miners receive the altcoin that's used on the sidechain. In blind merge

525
01:01:43,802 --> 01:01:56,522
mining, the Bitcoin miners receive layer one Bitcoin. So pretty much the pay in pay out fees. It's a pretty cool upgrade, isn't it? Because there's

526
01:01:56,522 --> 01:01:58,842
Yeah, that sounds, let's, let's, let's do it.

527
01:01:58,962 --> 01:02:09,361
Yeah, I know. I know. Like, when I heard that, I was like, damn, like, whoever designed that is pretty fucking smart. Like, how did they work that

528
01:02:09,361 --> 01:02:17,802
out? How did they make it so that the Bitcoin layer one miners don't have to run the node of the sidechain. And they get the fees from the

529
01:02:17,802 --> 01:02:27,282
sidechain in Bitcoin, not in the altcoin. Like that is pretty cool. Yeah, drivechain is pretty cool.

530
01:02:27,282 --> 01:02:30,641
Yeah, that would have to be it. Because that's the only way I feel like,

531
01:02:31,002 --> 01:02:40,802
like, I, I got into drivechain, not really understanding who else was interested in it. I got interested in it all by myself. And only after I got

532
01:02:40,802 --> 01:02:48,361
quite interested, did I discover that Adam Back thinks it's cool. He's actually used to

533
01:02:48,361 --> 01:02:52,161
Yeah, I just saw that tweet that you posted of his. Yeah, I didn't realize that he was

534
01:02:52,321 --> 01:03:01,361
I didn't, I had no idea who else was into it. I heard Paul Sztorc talk about drivechain. A year ago on Nick Carter's podcast, I didn't know that

535
01:03:01,361 --> 01:03:09,761
Adam Back was into it. And I discovered he was into it. I was like, Whoa, this has like, some serious people. And then I more recently

536
01:03:09,761 --> 01:03:19,002
discovered that Fiatjaf, the creator of Nostr is into it. He's into it, like, heavy duty. Like he writes, like, if we don't do drivechain,

537
01:03:19,002 --> 01:03:30,242
everything will be lost, like, it'll be the end of the world. So, um, yeah, like, a lot of people who are very sophisticated, think this is a cool

538
01:03:30,242 --> 01:03:39,641
idea. It has, I think we're at the cusp right now, where drivechain is going to in the next few months, I believe, just maybe, maybe I'm just like

539
01:03:39,641 --> 01:03:50,202
dreaming. But I believe we might see in just the next few months, a very significant increase in the level of acknowledgement and understanding of this

540
01:03:50,202 --> 01:04:00,481
idea. Like, we've got Adam Back tweeting about it. Like every now and then he tweets about it, like favorably, without without exception, it's always like

541
01:04:00,481 --> 01:04:06,041
drivechains pretty cool. Or most recently, he wrote, we probably will need it. Like, you know,

542
01:04:06,041 --> 01:04:17,002
yeah, he's realizing that sidechains like liquid are just a non starter. Like, people don't realize people say I'll use liquid and I go on and I paste the

543
01:04:17,002 --> 01:04:26,601
section from their document from their knowledge base. And it says, unless you're a federated member, in order to peg out of lightning, you need a third

544
01:04:26,601 --> 01:04:35,562
party, a trusted third party. I'm like, what is this? It's pointless. It's a non starter. So what the idea of a sidechain that requires a trusted third

545
01:04:35,562 --> 01:04:39,442
party shouldn't even be called sidechain to get in and out, you know,

546
01:04:39,921 --> 01:04:49,281
that that's something that some of the drivechain, you know, designers and thinkers agree with you on completely that the word sidechain in the

547
01:04:49,281 --> 01:04:57,802
future, once if drivechain is adopted, people will not say the word sidechain, unless they're referring to a drivechain. Because if you're saying the word

548
01:04:57,802 --> 01:05:08,401
sidechain, but really, the security model is identical to that of Coinbase. Is it really a sidechain? Like it's kind of having said that, I want to be totally

549
01:05:08,401 --> 01:05:19,481
clear that I think the people who work on Blockstream's liquid are outstanding. They have some of the smartest people in the world at Blockstream, and really cool, smart

550
01:05:19,481 --> 01:05:31,802
people. I think that it's those kinds of people who have devoted their careers to Bitcoin, who will benefit on a personal level greatly, if drivechain is adopted and is

551
01:05:31,802 --> 01:05:43,921
successful, because it will cause Bitcoin focused career professionals, like the people at Blockstream, and other companies, many other companies in the Bitcoin

552
01:05:43,921 --> 01:05:56,642
space to be elevated, because the project that they have spent a whole decade or really 13 years on, will will survive and prosper and remain the number one chain. So what

553
01:05:56,642 --> 01:06:05,361
drivechain is all about for anyone who's not too familiar with it in the audience, you know, it's about returning Bitcoin to 100% dominance, or at least trying to

554
01:06:05,361 --> 01:06:15,481
increase it, at least trying to get Bitcoin back up to where it's the dominant player in the whole space, because in a protocol wars, you want to be the bigger one, you

555
01:06:15,481 --> 01:06:24,642
want to have the biggest blockchain, you want to have the most users with the most value, with the most economic security, you want to be the biggest, because when

556
01:06:24,642 --> 01:06:35,721
you have competing protocols, network effects is very important. Money, especially, is a network effect dominated market. In money. If you're not the biggest

557
01:06:35,721 --> 01:06:46,521
game, you know, you're, you're fighting an uphill battle. So now, yeah, so Bitcoin, of course, has attributes that make it distinct from other monies like the

558
01:06:46,521 --> 01:06:57,961
dollar, even though the dollar is much bigger. So of course, Bitcoin is better, and therefore can overcome its, its relatively smaller network effect, you know, momentum.

559
01:06:58,682 --> 01:07:10,041
But I mean, even, even the recent inscriptions and ordinal things shows that there's demand for, you know, more use cases for Bitcoin. And drivechains just fills that

560
01:07:10,041 --> 01:07:24,322
demand. I mean, people know that Bitcoin is the most secure and most decentralized. And that's why there was a huge, and still demand to, you know, do inscriptions and all this stuff on it. But the

561
01:07:24,322 --> 01:07:43,841
drivechains thing is just like a, like an open field of people to build on and create incentive and for people to build value and bring in new users. So what are the major contentions with people

562
01:07:43,841 --> 01:07:46,361
who are against BIP301?

563
01:07:46,361 --> 01:07:50,682
BIP301 specifically, or BIP301?

564
01:07:50,682 --> 01:08:04,802
Or just drivechains in general? I mean, I pretty much sold on 301. I don't think BIP300 is, would be as useful as 301. But just drivechains in general, what is people's argument or contention?

565
01:08:05,802 --> 01:08:27,202
Sure. So regarding drivechains generally, the criticisms, I've been spending months, you know, learning about them. They're interesting. And I'm, I think I'm familiar, without a doubt with what I would describe as the top two, top, top two criticisms. The first is people who say that the miners will steal from the

566
01:08:27,202 --> 01:08:56,721
hashrate escrow. So this is a view that drivechain will be not successful, because miners, instead of allowing the hashrate escrows to exist in an honest manner, the miners will see them growing and then take the Bitcoin from them, robbing the sidechain users. And this would, of course, cause there to be an overwhelming chilling effect on the use of the hashrate escrow. It's like, why

567
01:08:56,721 --> 01:09:26,041
would you, why would you, you know, buy a house in a neighborhood where there's a high crime rate, right? Like, you wouldn't want to go there. So why would you use a sidechain when the miners are controlling it, and they can steal the money out of it. So that's the view of some people, they think that drivechain won't work. Because Bitcoin miners can't be trusted. So this is a, a mentality that is perhaps partly a result of the historical experience, and the

568
01:09:26,041 --> 01:09:38,041
interpretation of experience, which some people have, regarding Bitcoin and the role of the miners, that they don't always do the right thing, that they're greedy, yada, yada, yada.

569
01:09:38,082 --> 01:09:44,721
Would it have to be a 51% type scenario for them to steal the pegged funds?

570
01:09:44,882 --> 01:09:49,601
Yes, it would have to be a majority of the hashrate deployed for months. And

571
01:09:49,721 --> 01:09:52,161
isn't there like a 2000 block or

572
01:09:52,161 --> 01:09:55,281
yeah, the 20,000 block collusion?

573
01:09:55,481 --> 01:10:18,401
Right at the very beginning, the moment that the Malthusian mining were to begin, that moment, it would be publicly known that it is going on. So it's like a bank robbery that takes half a year to happen. And it's happening in slow motion for six months. So I think that it would never occur ever. And that these critics are

574
01:10:18,401 --> 01:10:39,762
mistaken. So what's really interesting is that the other criticism of drivechain isn't that the miners will steal, it's actually the opposite criticism, which is that drivechain will be so successful, that it'll become so large, that it will have distorting effects on Bitcoin layer

575
01:10:39,762 --> 01:11:09,361
one. In other words, that so the first criticism is that drivechain won't work because the miners will take the money from the users when they when the miners aren't supposed to. In other words, people are arguing in the first in the first criticism, that the miners will act in their short run interest and rob the hashrate escrow rather than their long run economic interest, which is to allow drivechains, a multitude of drivechains, a multitude of these BIP300 and 301 side

576
01:11:09,361 --> 01:11:33,002
chains to grow very large so that Bitcoin fees can flow forever to the miners. It's like, it's like saying that a restaurateur will perhaps rob all of his patrons, even though they'll never come back, just because in that one off robbery, he gets all their money in their pockets. I don't think that's going to happen. Like what restaurant ever does that?

577
01:11:33,601 --> 01:11:44,642
So once people see that miners are colluding to steal this nice drive train, are people still able to withdraw from that drivechain before that 20,000 block limit?

578
01:11:46,802 --> 01:11:48,481
I think the answer to that is no.

579
01:11:49,041 --> 01:11:52,961
Okay, I think it'd be kind of like frozen. Yeah, that long.

580
01:11:53,521 --> 01:12:16,161
Right. Yeah, I think that I think that they wouldn't be able to get their money out to avoid the malfeasance miner. However, there is actually a reason why drivechain was created this way. It is actually a good thing in some situations for the miners to have control over the hashrate escrow.

581
01:12:17,161 --> 01:12:38,362
If, for example, there is a problematic drivechain, that is a sidechain that uses the drivechain tech, which is causing a problem for other drivechains, or for layer one Bitcoin, such as a drivechain that is somehow so despicable that it's lowering the value of Bitcoin.

582
01:12:39,362 --> 01:12:52,602
Then it is good that the community of Bitcoin users has an ability to express their will through the miners to discontinue that specific drivechain.

583
01:12:53,602 --> 01:13:13,161
So the idea that the miners will rob any drivechain they can, that's the allegation, but what it ignores is that the miners having the ability to terminate one or more drivechains could be the act of the community expressing its will through the miners.

584
01:13:13,641 --> 01:13:20,962
So it's actually good, arguably, that the miners have the power that they do in drivechain.

585
01:13:21,962 --> 01:13:31,602
The whole purpose of drivechain is to enable peer-to-peer peg of a sidechain instead of a federated peg.

586
01:13:31,602 --> 01:13:35,602
That's the critical dichotomy, is peer-to-peer versus federated.

587
01:13:35,602 --> 01:13:40,921
So in peer-to-peer, you have the Bitcoin arrangement of everything being peer-to-peer.

588
01:13:40,921 --> 01:13:42,281
That was the beginning of the white paper.

589
01:13:42,281 --> 01:13:48,001
The very first words in the entire white paper in the title are a peer-to-peer electronic cash system.

590
01:13:48,401 --> 01:13:56,362
So the fact that drivechain uses peer-to-peer technology, I like to think of it this way.

591
01:13:56,921 --> 01:14:01,401
Bitcoin is peer-to-peer, therefore, Bitcoin mining is peer-to-peer.

592
01:14:01,921 --> 01:14:07,521
Therefore, a miner-controlled peg of Bitcoin for a sidechain is peer-to-peer.

593
01:14:07,962 --> 01:14:10,241
And in that sense, it's peer-to-peer.

594
01:14:10,241 --> 01:14:19,842
And if you read Adam Back's tweets on drivechain, you see that he refers to them as peer-to-peer sidechains, which is cool, because that's exactly right.

595
01:14:20,401 --> 01:14:23,521
Some people refer to them as trustless sidechains.

596
01:14:23,602 --> 01:14:30,521
I try to stay away from the word trustless, because it's triggering to some people who might even rightly say that Bitcoin itself isn't trustless.

597
01:14:30,802 --> 01:14:34,001
There could always be a 51% hostile miner or something like that.

598
01:14:34,001 --> 01:14:35,921
Trust is minimized, I like to use.

599
01:14:36,322 --> 01:14:36,842
Yes.

600
01:14:38,082 --> 01:14:38,482
Yeah.

601
01:14:38,482 --> 01:14:46,041
So just to wrap up, like the two, I mean, my answer, and then please ask more if you'd like, and other people are welcome to join the stage, raise your hand and come on up.

602
01:14:46,082 --> 01:14:47,281
This is an open discussion.

603
01:14:47,482 --> 01:14:50,641
We run these every Monday and Thursday, forever.

604
01:14:51,241 --> 01:14:52,881
This is LayerTwo Labs.

605
01:14:53,722 --> 01:14:56,322
Until it's, you know, merged into Bitcoin.

606
01:14:57,521 --> 01:14:57,962
Right.

607
01:14:58,322 --> 01:14:59,722
Yeah, exactly.

608
01:14:59,761 --> 01:15:00,962
We're not going to give up.

609
01:15:01,362 --> 01:15:02,442
We'll just keep on going.

610
01:15:02,921 --> 01:15:05,602
You know, I was doing this before I even worked for Layer 2.

611
01:15:05,602 --> 01:15:08,161
I would just host my own drivechain Twitter spaces.

612
01:15:08,602 --> 01:15:10,881
Sometimes I would call them the Paul Sztorc fan club.

613
01:15:10,921 --> 01:15:12,921
People would join and just chat.

614
01:15:13,504 --> 01:15:18,144
So no matter what happens, I'll just keep on going forever, because I know I'm right.

615
01:15:18,144 --> 01:15:24,384
Like, either drivechain gets adopted and then it'll do well. And then all the drivechain fans

616
01:15:24,384 --> 01:15:31,584
and Bitcoiners who like drivechain, they're all vindicated. Or in the worst case, unfortunately,

617
01:15:31,584 --> 01:15:38,384
sadly, it is my sincere belief that without drivechain, there is a chance that's, in my

618
01:15:38,384 --> 01:15:46,304
personal opinion, for what it's worth, a really real chance, a really serious chance that without

619
01:15:46,304 --> 01:15:55,344
drivechain, Bitcoin is significantly less viable in the long run. So less viable to maintain,

620
01:15:55,984 --> 01:16:02,863
you know, the market cap crown that it currently has, less viable to maintain sufficient on-chain

621
01:16:02,863 --> 01:16:10,624
income, to foster sufficient economic security such that value accrual continues to the network.

622
01:16:13,984 --> 01:16:19,503
It's been 14 years and the mempool still is usually empty outside of bull markets.

623
01:16:19,503 --> 01:16:21,183
And that's right. That's right.

624
01:16:23,024 --> 01:16:29,984
There's no backstop. And at this point, there should be. And it's crazy that it's been that

625
01:16:29,984 --> 01:16:35,424
long and there's still no sidechain that works peer-to-peer, like you're saying.

626
01:16:36,304 --> 01:16:36,624
Yeah.

627
01:16:36,624 --> 01:16:41,903
Any sidechain on Bitcoin requires some federated peg or some, you know, federated member to peg

628
01:16:41,903 --> 01:16:47,103
out for you or some trusted third party. And, you know, Ethereum has sidechains where you just,

629
01:16:47,103 --> 01:16:53,344
it's just, there's no trusted third party. It's just a contract. And, you know, you swap in and

630
01:16:53,344 --> 01:16:59,024
out. And so the fact that Bitcoin doesn't have that is really a travesty, you know.

631
01:17:00,064 --> 01:17:05,503
So given your level of sophistication, which is probably higher than mine on a lot of these

632
01:17:05,503 --> 01:17:10,143
technical points, I want to point out a few caveats just in case we have anyone listening

633
01:17:10,143 --> 01:17:15,344
who is like taking notes on the things that I say that are wrong. I just want to make sure we

634
01:17:15,344 --> 01:17:21,663
clarify because one of my goals in these spaces is to be completely like accurate and honest,

635
01:17:21,663 --> 01:17:29,183
of course. So when we say like a few of the things you just said, like there aren't peer-to-peer

636
01:17:29,183 --> 01:17:35,103
sidechains, I want to make sure that we acknowledge that the problem is not a lack of

637
01:17:35,103 --> 01:17:41,663
peer-to-peer sidechains in every sense, because some people would say, well, there are one-way

638
01:17:41,663 --> 01:17:48,543
peg sidechains that are peer-to-peer. Meaning you could have, I think you could have like a

639
01:17:48,543 --> 01:17:55,903
merged mind sidechain where there's no way to ever get your Bitcoin back and it's burned forever

640
01:17:55,903 --> 01:18:02,704
when you enter the sidechain. But then with the sidechain token, you know, which could fluctuate

641
01:18:02,704 --> 01:18:08,784
in value way below the value of Bitcoin because there's no peg out mechanism, like you can do

642
01:18:08,784 --> 01:18:14,144
stuff and that might be, I'm not sure if it's called a soft chain or a space chain or a spook

643
01:18:14,144 --> 01:18:20,064
chain. Those are all different ideas by Reuben Thompson, Jeremy Rubin, and other very smart people.

644
01:18:20,784 --> 01:18:27,424
But those might be, in some cases, those might be peer-to-peer technically, but I would, I think what

645
01:18:27,424 --> 01:18:31,984
you meant and also what I would agree with, of course, is that when we're talking about sidechains,

646
01:18:31,984 --> 01:18:36,543
what we mean is a two-way peg sidechain because otherwise you're not dealing with a Bitcoin

647
01:18:36,543 --> 01:18:41,023
unit of account, you're dealing with some other thing that's fluctuating in value, possibly

648
01:18:41,984 --> 01:18:47,504
far below the value of Bitcoin all the time or lots of the time. So yeah, it's like we want a

649
01:18:47,504 --> 01:18:53,504
peer-to-peer, two-way peg sidechain. That's the full sentence that we want to have.

650
01:18:54,463 --> 01:18:59,743
Yeah, I mean, Liquid has the one-way peg. You can peg into Liquid with just a Bitcoin full node and a

651
01:18:59,743 --> 01:19:03,584
Liquid node, but there's no way out. You know, it's Hotel California.

652
01:19:04,144 --> 01:19:06,224
Pay it out. Exactly.

653
01:19:07,103 --> 01:19:13,504
That's really, you know, it doesn't fulfill. And like you said, that creates a fluctuation

654
01:19:14,144 --> 01:19:19,424
in whatever that, you know, LBTC or whatever the asset is on that sidechain.

655
01:19:19,424 --> 01:19:25,344
And then what I hear from the opponents of drivechain is this very disappointing rhetoric

656
01:19:25,344 --> 01:19:30,063
that I wonder, is it really genuine? They say things, some of them, like,

657
01:19:30,063 --> 01:19:35,904
hey, if you want to do something you can't do on Bitcoin, just do an altcoin. But then those

658
01:19:35,904 --> 01:19:42,704
same people, most of them, I hear them saying things like altcoins are shitcoins, altcoins are

659
01:19:42,704 --> 01:19:49,904
scams. So it doesn't make sense. Which is it? Should Bitcoiners who want to do software that's

660
01:19:49,904 --> 01:19:55,024
not available on Bitcoin go to altcoins? Or should we say that altcoins are worthless and going to

661
01:19:55,024 --> 01:19:59,663
zero? Because you can't have your cake and eat it too. You can't have both arguments at the same

662
01:19:59,663 --> 01:20:07,343
time. So what we want is drivechain so that we can have all of those protocols that have value,

663
01:20:07,343 --> 01:20:14,304
that are currently altcoins, to be copied into drivechains. And a person might ask, well,

664
01:20:14,304 --> 01:20:19,584
what are these technologies that aren't Bitcoin but have value as blockchains?

665
01:20:20,144 --> 01:20:26,464
Well, they include large block versions of Bitcoin. So the whole, like, you know,

666
01:20:26,464 --> 01:20:31,663
large block community that left Bitcoin. Now people could say, well, those don't have much

667
01:20:31,663 --> 01:20:37,184
value today. Between Bitcoin Cash and BSV, we're only talking about, what, one or two or three

668
01:20:37,184 --> 01:20:43,424
billion dollars of value. So what's the point? Well, it's still a lot of people. And also,

669
01:20:43,984 --> 01:20:49,024
a lot of those same people probably are now in Ethereum. So we shouldn't look at

670
01:20:49,584 --> 01:20:55,744
the market values of specific altcoins as, well, I'm just saying it's complicated.

671
01:20:55,744 --> 01:21:01,904
But basically, one technology is large blocks. Another valid technology is privacy technology,

672
01:21:01,904 --> 01:21:09,503
like ring signatures available on Monero and Liquid. And another technology is Oracle networks,

673
01:21:09,503 --> 01:21:19,584
such as Chainlink, or even better, far better, Hivemind, which is the peer-to-peer Oracle network

674
01:21:20,304 --> 01:21:29,663
designed by drivechain BIP co-author Paul Sztorc. So the drivechain co-author has a specific

675
01:21:30,464 --> 01:21:35,184
sidechain he would like to implement as a drivechain and has been waiting seven years to do

676
01:21:35,184 --> 01:21:41,264
so. So that's one of the ones. So in addition to large blocks and privacy networks, there's also

677
01:21:41,823 --> 01:21:47,904
Oracle networks. And then there's other ones like a sidechain devoted exclusively to DNS,

678
01:21:47,904 --> 01:21:56,223
which is Satoshi's altcoin. So Satoshi himself countenanced one altcoin, which is BitDNS.

679
01:21:56,864 --> 01:22:03,904
And he wrote in favor of merged mining, he wrote in August 2010 on the forum that every network

680
01:22:03,904 --> 01:22:11,823
in the world would be merge-mined with Bitcoin. So Satoshi was saying things very harmonious with

681
01:22:11,823 --> 01:22:17,823
drivechain, harmonious with the notion that every blockchain would be a merged-mined

682
01:22:18,783 --> 01:22:23,503
blockchain of Bitcoin. So he thought there'd be a whole multitude of blockchains out there,

683
01:22:23,503 --> 01:22:27,584
a whole multitude of protocols, because every sidechain is a protocol, every blockchain is a

684
01:22:27,584 --> 01:22:34,783
protocol. Please jump in, Aeon, what were you going to say? I had a question about pegging into

685
01:22:34,783 --> 01:22:43,264
drivechains. Are you able to tell by looking at the network or just blockchain what sidechain I'm

686
01:22:43,264 --> 01:22:50,144
pegging into? So let's say I'm paying into the Monero drivechain. Can that be identified

687
01:22:50,943 --> 01:22:57,424
through the blockchain that I'm paying into that from Bitcoin, or is it obfuscated in some way?

688
01:23:03,184 --> 01:23:10,144
Well, we have one very sophisticated listener in the audience, among others, CryptAxe. Maybe he can

689
01:23:10,623 --> 01:23:20,464
give a thumbs up to indicate if he expects that the drivechain users would be observable

690
01:23:22,144 --> 01:23:28,704
in terms of like, if a person is pegging into a specific drivechain, maybe give us a thumbs up if

691
01:23:28,704 --> 01:23:34,704
that would be, yeah. So he gave a thumbs up. So yeah, when you're on Bitcoin layer one, there

692
01:23:34,704 --> 01:23:41,024
isn't absolute privacy, as you know, Aeon BTC. So if you send your Bitcoin to Liquid, or you send

693
01:23:41,024 --> 01:23:45,584
your Bitcoin to Rootstock, or you send your Bitcoin to a drivechain, that is something which

694
01:23:46,224 --> 01:23:51,743
might be observable unless you conduct your activities on Bitcoin in a completely anonymous

695
01:23:51,743 --> 01:23:57,183
manner. Now, of course, there could be upgrades to layer one in the distant future that could

696
01:23:57,823 --> 01:24:01,823
mix everything together, like cross-input signature aggregation or something else,

697
01:24:02,383 --> 01:24:10,623
possibly. One of the cool things about drivechain is that it possibly is like a laboratory where

698
01:24:10,623 --> 01:24:16,544
it could accelerate the best ideas coming down to layer one Bitcoin because they would first

699
01:24:16,544 --> 01:24:26,224
be used in a sidechain. And if that sidechain were to grow very large, then it would be a signal

700
01:24:26,224 --> 01:24:34,383
to the market that Bitcoin users really like, really like that specific drivechain. And then

701
01:24:34,383 --> 01:24:39,823
there could be a movement to bring that software down to layer one. I'm not saying that's something

702
01:24:39,823 --> 01:24:46,063
that should happen or would happen, but it is theoretically possible, like in 50 years from now,

703
01:24:46,063 --> 01:24:54,303
let's say one drivechain is enormously huge. Maybe after like a decade of decades of flawless

704
01:24:54,303 --> 01:24:59,584
operation, they could just make that like the layer one. So there's this cool way of like

705
01:24:59,584 --> 01:25:05,344
improving layer one privacy where we can first test it on the drivechain. I think I heard Paul

706
01:25:05,344 --> 01:25:12,383
Sztorc say in a podcast or Twitter spaces that Taproot could have come faster to Bitcoin, perhaps,

707
01:25:13,024 --> 01:25:20,784
if it wouldn't have taken a whole five years if we had first done it on a drivechain. So that's

708
01:25:20,784 --> 01:25:28,623
one cool thing about drivechain is it allows Bitcoin development to to have more competition

709
01:25:28,623 --> 01:25:33,584
instead of just the liberation, meaning that we can like if people want if there's like five

710
01:25:33,584 --> 01:25:38,943
cool ideas to do on Bitcoin, well, we can do all five of them in drivechains and then see which

711
01:25:38,943 --> 01:25:45,104
ones work well rather than having to just think about it all in the abstract and then, you know,

712
01:25:45,104 --> 01:25:52,144
eventually just kind of choose one. So drivechain is a upgrade for Bitcoin that might enable

713
01:25:53,423 --> 01:26:01,264
ossification, meaning it might greatly increase the degree to which Bitcoin can be conservative,

714
01:26:01,823 --> 01:26:06,383
meaning if there's all these ideas people want to do, rather than saying, hey, we've got to

715
01:26:06,383 --> 01:26:10,863
change Bitcoin this way, we've got to change Bitcoin that way. Instead, people people can

716
01:26:10,863 --> 01:26:19,024
just do a drivechain and get everything they want in the drivechain. And therefore, layer one can be

717
01:26:19,024 --> 01:26:25,183
stable and permanent. So it's complicated to say it's kind of paradoxical, but it's a change for

718
01:26:25,183 --> 01:26:33,503
Bitcoin, which might be a way to not change Bitcoin after we do this change. So that's one

719
01:26:33,503 --> 01:26:40,144
of the interesting parts about drivechain. It's a change which opens the door to

720
01:26:41,584 --> 01:26:48,544
virtually unlimited changes on the second layer, enabling the base layer to become ossified. And

721
01:26:48,544 --> 01:26:53,823
if there were to be any more changes, the drivechain designers, I think, have a favorable

722
01:26:53,823 --> 01:27:00,464
view of shrinking the mainchain block size. So either before or after doing drivechain,

723
01:27:00,464 --> 01:27:05,743
doesn't matter which order you do it in. I think they're within the camp of thinkers that

724
01:27:05,743 --> 01:27:11,104
include others that have a favorable attitude regarding making layer one Bitcoin

725
01:27:12,464 --> 01:27:18,623
even more decentralized, smaller block, which means decentralized in the sense that it becomes

726
01:27:18,623 --> 01:27:24,863
cheaper for an ordinary person to validate the entire layer one blockchain if the blocks are

727
01:27:24,863 --> 01:27:30,383
very small, because then it means that you can have a node perhaps on your smartphone instead

728
01:27:30,383 --> 01:27:35,344
of on a laptop. So it's actually cheaper for some poor person to use Bitcoin that way.

729
01:27:36,464 --> 01:27:42,144
How much space do drivechains take up on the base layer blocks?

730
01:27:44,863 --> 01:27:53,423
Very little. It's near zero. The actual technical load created by the code

731
01:27:53,904 --> 01:28:01,344
and the data involved in running the drivechain is very small, because as you described initially

732
01:28:01,344 --> 01:28:09,503
in our conversation, there's a counting mechanism where the hash rate is counted per block for a

733
01:28:09,503 --> 01:28:15,743
long period of time, for months, and that counting software is not too complicated.

734
01:28:15,743 --> 01:28:18,704
So the actual burden on the nodes is small.

735
01:28:21,983 --> 01:28:30,544
The architecture of drivechain, its actual technical structure is not terribly burdensome

736
01:28:30,544 --> 01:28:39,104
at all. It's very lightweight compared to the enormous economic value accrual that could result

737
01:28:39,104 --> 01:28:47,024
from it. So this is something which we can contrast. We can contrast that architecture

738
01:28:47,743 --> 01:28:55,983
to rollups. So zero-knowledge rollups, like a very big topic in blockchain tech these days,

739
01:28:57,183 --> 01:29:03,024
they involve extremely sophisticated mathematics that are relatively new in nature,

740
01:29:03,983 --> 01:29:11,823
whereas drivechain is much more Bitcoin-y in that it involves things that aren't terribly

741
01:29:11,823 --> 01:29:18,383
esoteric. To understand how drivechain works doesn't require that you get a PhD in mathematics.

742
01:29:18,943 --> 01:29:24,063
So the number of people in the world who have a very strong understanding of how rollups work

743
01:29:24,063 --> 01:29:30,144
is quite small. I've got a friend who does that at a venture capital firm. They hired him

744
01:29:30,144 --> 01:29:36,623
to analyze their rollup-related investments, and he has a PhD in computer science focusing

745
01:29:36,623 --> 01:29:46,144
on complexity theory. It's very advanced stuff, whereas it's like working in a nuclear engineering

746
01:29:46,144 --> 01:29:53,264
plant. Whereas what drivechain involves, it's concepts like counting that aren't

747
01:29:53,264 --> 01:29:58,063
terribly complicated. So it's not like we need lots of software and lots of sophisticated

748
01:29:59,024 --> 01:30:07,104
analysis to understand how it all works. It's pretty basic and ingenious in its simplicity.

749
01:30:07,664 --> 01:30:12,943
So in that way, it's harmonious with the ethos of Bitcoin, which is to have a protocol that is

750
01:30:13,584 --> 01:30:21,264
comprehensible to ordinary advanced thinkers rather than a small elite of academics.

751
01:30:21,664 --> 01:30:26,784
Therefore, it's more reliable because it's not relying on complex mathematics. It's not something

752
01:30:26,784 --> 01:30:31,743
which can have a flaw that nobody would see. It's been around for seven years. It's been

753
01:30:31,743 --> 01:30:38,303
studied extensively. I remember hearing about it back in the day and just keep hearing about it.

754
01:30:38,303 --> 01:30:45,183
Finally, it seems like it's getting a lot more traction. A lot of the cognitive dissonance with

755
01:30:45,743 --> 01:30:52,144
Bitcoiners concerning Fedimint, and everyone's all hyped about Fedimint, and it's just another

756
01:30:52,144 --> 01:31:01,743
custodial, unauditable, essentially shitcoin. Fedimint is our shitcoin in my opinion.

757
01:31:01,743 --> 01:31:10,063
But it's weird that people are so resistant to drivechains after learning all this about it.

758
01:31:10,623 --> 01:31:16,303
Well, it's been great to chat. If anyone's interested in learning more about drivechain,

759
01:31:16,943 --> 01:31:27,024
the place to go, among others, is drivechain.info. That is the website of the drivechain authors,

760
01:31:27,823 --> 01:31:32,383
the BIP authors, and they have a lot of great content on there.

761
01:31:32,383 --> 01:31:39,743
You can also go to the YouTube channel of LayerTwo Labs, and you can also go to Reddit,

762
01:31:40,784 --> 01:31:45,983
the subreddit called drivechains. You can also go to the GitHub for drivechain,

763
01:31:46,943 --> 01:31:52,063
and there's a bunch of other cool places you can go. I'm not going to go through all of them,

764
01:31:52,063 --> 01:31:57,423
but there's a bunch of other cool places you can go to learn more about drivechains.

765
01:31:58,144 --> 01:32:09,503
I like fiatjaf.com, where you click on Bitcoin and then click on drivechain,

766
01:32:09,503 --> 01:32:17,343
and that's a great essay by the creator of Nostr, who loves drivechain. So fiatjaf.com.

767
01:32:22,304 --> 01:32:25,743
I hope I'm not shilling him too much. I hope it doesn't bother him

768
01:32:26,304 --> 01:32:27,503
that I talk about it all the time.

769
01:32:32,463 --> 01:32:37,264
If anyone has any questions, they're welcome to come up to the stage, or we can wrap for the

770
01:32:37,264 --> 01:32:46,144
night. So anybody in the audience, come on up. Don't be shy. If not, we'll call it a night,

771
01:32:46,144 --> 01:32:53,264
and we'll reconvene on Thursday. Hopefully, we'll be a few days closer to the drivechainization of

772
01:32:53,264 --> 01:33:01,664
Bitcoin. The overall goal here is to have all valuable altcoin technology on top of Bitcoin,

773
01:33:01,664 --> 01:33:08,064
so that the users and developers and investors can all be on Bitcoin instead of having to go

774
01:33:08,064 --> 01:33:15,983
to altcoins. So we have to dispense with the incorrect idea that all altcoin technology is

775
01:33:15,983 --> 01:33:25,743
worthless. The fact is, some altcoin technology is valuable, and therefore, it would be good

776
01:33:25,743 --> 01:33:40,064
if it could be cloned into peer-to-peer Bitcoin sidechains. So there is two dimensions of benefit

777
01:33:40,064 --> 01:33:47,103
from this drivechainization. One benefit is that the value of those altcoins would come to Bitcoin,

778
01:33:47,904 --> 01:33:52,544
potentially. The other dimension of benefit, though, is narratives.

779
01:33:53,664 --> 01:34:00,223
Bitcoin would no longer suffer. If drivechain is adopted, Bitcoin would no longer suffer

780
01:34:00,784 --> 01:34:08,463
from the narrative that altcoins currently enjoy. Altcoins, as we know from reading the Ethereum

781
01:34:08,463 --> 01:34:14,863
white paper, altcoins like to say that it is hard or impossible to build on Bitcoin.

782
01:34:16,304 --> 01:34:21,184
In the Ethereum white paper, it is written that it is hard or impossible to build on Bitcoin.

783
01:34:21,184 --> 01:34:26,064
Vitalik went on for like a page and a half about that. At the very beginning of the paper,

784
01:34:26,703 --> 01:34:34,064
that's the main thing he says. If drivechain had been adopted back then, if it had been around

785
01:34:34,064 --> 01:34:39,664
forever, then that wouldn't have been written that way. So drivechain enables Bitcoin to be

786
01:34:39,664 --> 01:34:46,544
stronger both economically, potentially, as well as in terms of narratives. The narrative that

787
01:34:46,544 --> 01:34:53,264
Bitcoin strengthens through drivechain is the narrative that people can build anything on

788
01:34:53,264 --> 01:35:00,383
Bitcoin. Building on Bitcoin is easy and unlimited when drivechain is adopted. That'll be the narrative,

789
01:35:00,383 --> 01:35:09,583
I believe. So Bitcoin will be seen as a technology platform, not just as a narrow monetary network.

790
01:35:14,162 --> 01:35:20,722
An economic project to have a strong narrative. Narratives are important. Humans operate in the

791
01:35:20,722 --> 01:35:30,721
realm of emotion. Emotion, fantasy, and belief, whether rational or irrational, are important

792
01:35:30,721 --> 01:35:36,881
factors in the psychological realm. For those reasons, it's critical that Bitcoin

793
01:35:37,682 --> 01:35:47,441
express a strong mystique of technological innovation. It's important that Bitcoin have

794
01:35:47,441 --> 01:35:55,281
cool projects on it. Like the way that Adam Back says the drivechain is cool, it would be valuable

795
01:35:55,281 --> 01:36:01,042
for Bitcoin to be cool. Now, of course, many Bitcoiners think it's very cool already. But in

796
01:36:01,682 --> 01:36:09,281
the eyes of the average person, it's valuable if there are extra cool things. For example,

797
01:36:10,562 --> 01:36:15,362
I spoke about this recently to some friends, or maybe it was the last Twitter spaces. Most car

798
01:36:15,362 --> 01:36:23,602
companies have a sports car that they sell to just a few people. Like the Ford GT40. It costs

799
01:36:23,602 --> 01:36:29,441
like a quarter million dollars, goes very fast. Very fancy car. Almost no one has one.

800
01:36:31,041 --> 01:36:38,401
There are probably 10,000 or 100,000 more people who have a Ford Taurus than a Ford GT40. But

801
01:36:39,842 --> 01:36:47,681
nevertheless, the Ford brand finds it valuable to sell that supercar because they know

802
01:36:49,602 --> 01:36:55,761
that when the ordinary guy goes to buy a Taurus, in his mind somewhere, he's thinking a little bit

803
01:36:56,642 --> 01:37:04,081
about the fact that the Ford brand is cool because of the existence of the GT40.

804
01:37:07,441 --> 01:37:14,642
So in a similar way, if Bitcoin had these very cool drivechains attached to it,

805
01:37:15,681 --> 01:37:23,602
even if the drivechains never become very large economically, they could add a lot of coolness

806
01:37:23,602 --> 01:37:29,281
to Bitcoin. Bitcoin would be seen as a place where cool projects are possible,

807
01:37:30,561 --> 01:37:37,921
rather than a layer one that has nothing else going on except lightning and fetiment.

808
01:37:41,042 --> 01:37:44,322
Now those are cool things. I'm not anti-lightning, I'm not anti-fetiment,

809
01:37:44,322 --> 01:37:50,322
but I do believe that sidechains are the future for Bitcoin. I think they should be and can be.

810
01:37:50,322 --> 01:37:54,242
It's only if the community embraces it. Everyone here can help with that.

811
01:38:00,322 --> 01:38:04,482
Well, Aeon, why don't you have the last word and then we'll wrap for the night.

812
01:38:08,721 --> 01:38:11,921
Well, I mean, I just want to thank you. You're great explaining it. You should

813
01:38:12,482 --> 01:38:23,281
be the spokesman, in my opinion. But yeah, a lot of the things you say make perfect sense because,

814
01:38:24,322 --> 01:38:28,482
unlike what we spoke about early on with the fee pressure, that's a hugely important thing.

815
01:38:29,441 --> 01:38:35,682
And likely people are not going to want to increase the supply and have a tail emission,

816
01:38:35,682 --> 01:38:41,762
even if it does help security or not. It's very unlikely that the majority of Bitcoiners would

817
01:38:41,762 --> 01:38:48,001
want that anyway. So whatever raises the fees, like I was for inscriptions and ordinals just

818
01:38:48,001 --> 01:38:54,081
because it creates fee pressure. And if people are paying the fee, it's fine. But

819
01:38:56,962 --> 01:39:01,281
fetiment, I mean, I'm not a fan of fetiment because it's not auditable. It's

820
01:39:01,522 --> 01:39:09,522
not very well substantiated in terms of its operations. And Drivechain seems like a great

821
01:39:09,522 --> 01:39:15,522
solution to just have a testing ground and also to create incentive and demand and for people to

822
01:39:15,522 --> 01:39:22,322
build value and people to find value in that. So thanks for your hard work. And I'll come by

823
01:39:22,322 --> 01:39:24,322
and I'll see you next time.

824
01:39:31,281 --> 01:39:38,322
I'll come by every once in a while and I'll definitely help spread the word now that I know a lot more about it.

825
01:39:47,922 --> 01:39:58,322
Cool. I put in the nest a tweet which lists a bunch of links. So everyone is free to

826
01:39:58,322 --> 01:40:05,362
check out these links. They're all pretty awesome. I like the videos link. Check out that videos link

827
01:40:06,162 --> 01:40:11,202
and there's a bunch of other essays and resources. I hope you find it useful.

828
01:40:14,482 --> 01:40:21,762
I guess with that, we will call it a night. Thanks for listening. This is a recorded space.

829
01:40:21,762 --> 01:40:26,561
You can listen on demand at your convenience afterwards and we'll be back every Monday and

830
01:40:26,561 --> 01:40:35,202
Thursday. In the meantime, be sure to follow LayerTwo Labs, your host, and also I recommend

831
01:40:35,202 --> 01:40:43,521
following the speaker of tonight, Mr. AeonBTC. For those listening, it is spelled A-E-O-N-B-T-C.

832
01:40:43,521 --> 01:40:52,001
Once again, A-E-O-N-B-T-C. Thanks for being a part of the conversation and please come back again.

833
01:40:52,642 --> 01:40:58,721
In the future, anyone who's been listening, please feel free to think of questions and you can DM

834
01:40:58,721 --> 01:41:04,082
them to me or just bring them to the next conversation. In the meantime, please feel

835
01:41:04,082 --> 01:41:13,441
free to join our Telegram group. We have over 700 Bitcoiners in the Drivechain Telegram group.

836
01:41:14,322 --> 01:41:20,561
The conversations there are going on all the time. They're lots of fun. You can easily find it by

837
01:41:20,561 --> 01:41:28,482
going to drivechain.info. That's drivechain.info and then click on Telegram on that website and

838
01:41:28,482 --> 01:41:37,602
you'll be taken to the Telegram group. The Drivechain BIP authors frequently are in the

839
01:41:37,602 --> 01:41:42,882
Telegram group chatting with people who have questions and people who just like to chat

840
01:41:43,841 --> 01:41:47,602
about Bitcoin. It's a great place to hang out and learn more about Bitcoin.

841
01:41:48,561 --> 01:41:54,482
There is Bitcoin orthodoxy and there is Bitcoin heterodoxy. The orthodoxy in Bitcoin

842
01:41:56,882 --> 01:42:00,401
is the movement of thinkers that are the establishment.

843
01:42:01,602 --> 01:42:07,121
However, among intellectuals, there is a greater presence of heterodox thinkers,

844
01:42:07,121 --> 01:42:11,281
that is thinkers with their own projects and their own personal perspective on Bitcoin,

845
01:42:11,922 --> 01:42:15,281
perspectives that do not fully align with the mainstream understanding.

846
01:42:16,241 --> 01:42:22,961
And over time, Bitcoin will evolve and it will evolve because of the heterodox thinkers,

847
01:42:22,961 --> 01:42:28,961
the innovators, the visionaries, the builders and creators. Those are the people who have new

848
01:42:28,961 --> 01:42:34,561
ideas and see things with an individualist mindset rather than just the echo chamber.

849
01:42:35,281 --> 01:42:41,441
So when we have conversations like these, in my view, we're participating in that heterodoxy,

850
01:42:42,241 --> 01:42:48,401
that original thinking mindset. And that's a view of a possible future. We could be wrong and the

851
01:42:48,401 --> 01:42:53,202
future could be different than what we envision. Although, as I said earlier, it's my personal

852
01:42:53,202 --> 01:42:59,602
outlook at this moment that either Bitcoin does drivechain and benefits from it or doesn't do

853
01:42:59,602 --> 01:43:07,841
drivechain and maybe that could be a consequential negative. So I'm very optimistic that the right

854
01:43:07,841 --> 01:43:14,802
thing will be done and we have growing support. So it's an exciting time. It's not too late.

855
01:43:15,521 --> 01:43:24,082
Bitcoin is still number one. So if we adopt drivechain now, then I think that the Bitcoiners will

856
01:43:24,082 --> 01:43:30,001
send their money, their Bitcoin into the drivechains. Maybe like 5% of all Bitcoin will go into

857
01:43:30,001 --> 01:43:42,642
the drivechains in the first year. That's billions of dollars right there. Like 5% of 400

858
01:43:42,642 --> 01:43:49,442
billion. It's a lot of money. So right there we have drivechains that would be larger

859
01:43:50,002 --> 01:43:55,682
than most altcoins. So those altcoins, let's say a privacy drivechain, just hypothetically,

860
01:43:55,682 --> 01:44:01,841
let's just run through an experiment real quick. Let's say Bitcoin launches a privacy drivechain

861
01:44:01,841 --> 01:44:09,201
that has the same security, sorry, the same privacy as Monero or Zcash. So in the Monero

862
01:44:09,201 --> 01:44:15,442
and Zcash privacy communities, those altcoins together have a market cap of something like,

863
01:44:15,841 --> 01:44:25,362
one or two or $3 billion. So let's say Bitcoin, let's just say Bitcoin has

864
01:44:27,761 --> 01:44:36,401
a privacy drivechain that 2% of Bitcoiners send their Bitcoin to. Well, 2% of Bitcoin is $8 billion.

865
01:44:37,201 --> 01:44:45,362
Right. So that means Bitcoin's privacy protocol has $8 billion. That is the drivechain has $8

866
01:44:45,362 --> 01:44:52,081
billion of market cap. Meanwhile, these altcoins, Monero and Zcash have $1 to $3 billion.

867
01:44:53,122 --> 01:44:58,961
So which do you think an ordinary privacy blockchain user is going to want to use?

868
01:45:00,641 --> 01:45:06,081
The $8 billion privacy blockchain or the $1 to $3 billion privacy blockchain?

869
01:45:06,641 --> 01:45:11,922
In other words, what I'm telling you is that Bitcoin is going to absorb the market cap and

870
01:45:11,922 --> 01:45:20,401
the fees of these altcoins. If it adopts drivechain, in the hypothetical I've described,

871
01:45:20,401 --> 01:45:28,081
the Bitcoin version of these softwares will be so much bigger and stronger, I believe, that

872
01:45:28,641 --> 01:45:35,922
all of the users will come over with the value. So the altcoins go to zero as a result because

873
01:45:35,922 --> 01:45:41,761
their software has been copied, which is fair game. It's all open source. Anything can be copied.

874
01:45:41,761 --> 01:45:48,802
So it's copied over and then the altcoin goes to zero. Bitcoin grows in value as a result of that

875
01:45:48,802 --> 01:45:54,081
because as we described earlier, demand for synthetic Bitcoin on the drivechains is demand

876
01:45:54,081 --> 01:46:00,881
for layer one Bitcoin indirectly. So Bitcoin gets higher value and higher dominance because the

877
01:46:00,881 --> 01:46:06,802
altcoins went down while Bitcoin went up. And there's a domino effect where one by one every

878
01:46:08,081 --> 01:46:13,841
altcoin with legit tech, that tech is cloned onto a drivechain and then the value comes

879
01:46:13,841 --> 01:46:21,521
over to Bitcoin, as do the users and developers and all those narratives. And then Bitcoin's

880
01:46:21,521 --> 01:46:26,961
dominance and value are higher. So Bitcoin is climbing back one by one with a domino effect,

881
01:46:27,922 --> 01:46:30,802
getting all the privacy users, the Oracle network users,

882
01:46:32,721 --> 01:46:39,122
the DNS, and then finally the scalability and also the smart contracting.

883
01:46:40,562 --> 01:46:44,881
All those blockchain applications will be on top of Bitcoin. It's pretty exciting.

884
01:46:46,482 --> 01:46:51,922
Maybe it'll even work out that way. Who knows? There's only one way to find out. So

885
01:46:52,321 --> 01:46:57,521
let's talk on Thursday and bring all of your questions and complaints.

886
01:46:58,081 --> 01:47:00,482
Catch you then everybody. Thanks again for joining.