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We discuss Bitcoin Improvement Proposal 300 and 301, a transformative update for Bitcoin
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Welcome to the audience, Mr. HuluVooBlueRSK, co-founder of Bedtime Labs.
Welcome, Mr. HuluVooBlueRSK.
This is Drivechain Twitter Spaces.
We meet every Monday and Thursday for questions and comments on Drivechain.
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can help Bitcoin foster innovation.
We have a request to speak.
Fantastic.
Hello, sir.
Welcome, Mr. BedtimeLabs.RSK.
The mic is yours.
Take it away.
Hey, how's it going, guys?
This is HuluVooBlue with Bedtime Labs.
I'm already building on RSK.
I just came into the spaces to get some updates on Drivechains.
I'm pretty excited about the whole Layer 2 stuff in general and happy to be here.
That is awesome.
We at LayerTwo Labs think RSK is awesome because RSK is the most significant infrastructure
on RSK. just came into the spaces to get some updates on Drivechains.
I'm pretty excited about the whole LayerTwo stuff in general.
Happy to be here.
That is awesome.
We at LayerTwo Labs think RSK is awesome because
is the most significant sidechain on Bitcoin that is
merged mine,
which is really cool.
It's my understanding, having chatted with Gabriel Kerman, the co -founder,
RSK
is generating three Bitcoin per month in transaction fees.
I think that's so great, like for the Bitcoin miners.
That's cool.
I wonder where I can find that data.
I would love to see, like, I
I would like to check that often.
I would like to check that often.
If you have any thoughts, you can let me know.
I know they just redid their website and they just did an overhaul to the RIF
website as well, which is the Rootstock Infrastructure Framework.
they actually have a like zk roll -up
of RSK, so I guess you could say it's Bitcoin Layer3, and they're going to using that
for super fast transactions and pay gas fees with whatever tokens you
have. it'll automatically swap it to Bitcoin, so it can go ahead and pay those gas
fees. I guess if you have Ethereum, you can
come over and kind of pay gas with the Ethereum it'll auto swap it just to help with
onboarding not ease of access to help get those Bitcoin miners more Bitcoin which is
the whole purpose staying with the security budget isn't it interesting how the
security budget is
not in the discourse right now because fees are high, but instead
there is discussion of the need to scale Bitcoin.
just like the security budget assists people in understanding the potential value of
sidechains because
it can be boosted through merged mining.
Scaling Bitcoin assists people in understanding the value of sidechains
because when fees are high on layer one we need to have layers.
it's a kind of a great catch
Totally.
Like a virtuous cycle.
Well, yeah, mean, whether fees are low or high, a compelling case can be made
for Drivechain, because we need scaling layers.
Now one of the
toughest parts about selling sidechains is people say, well, if sidechains were great,
why haven't the federated ones seen a ton of success on Bitcoin?
if we had - Because we don't have drivechains yet.
I know, but they wouldn't be - That's why.
But there are federated solutions that
have done well in Ethereum.
Like not everything in Ethereum is fully peer to peer and yet some of the stuff has
done well.
For example,
wrapped Bitcoin is a totally federated, like
single company federated multi -sig that has $4 billion of Bitcoin
involved. So people are willing to trust things
sometimes. why like rapid going is not peer to
peer. The company BitGo is like issuing it, right?
If I'm not mistaken.
So just one question people have about Drivechain is they say, why isn't Liquid and
RSK, why aren't they bigger?
Like, if sidechains were good, wouldn't, like, first generation sidechains be more
successful?
Yeah, honestly, I was really surprised they don't have more traction than they already
do.
seems like most of the cases, the Sovereign is the most popular thing on RSK.
Fantastic, I use it all the time.
yeah, there's not too many users on these things yet.
I feel like, you know, the maxi fud of, it's a federated thing, the miners can steal
your coins. well, RSK is like merge mining bitcoins.
you think the Bitcoin miners are going to steal your coins, then I mean, okay.
And like, we've been begging for Drivechain, and
the ones who say we shouldn't have it anyway.
And then they get ordinals and yeah, then they get mad.
So... Well said.
Well said.
Yeah, and then the whole
whole ordinals thing, well, I think it's kind of a non -issue.
There's no more security budget FUD pretty much ever.
might go away though.
Like the ordinals, the fees might subside and then there's low fees again.
Oh, I think they will.
But then we can always threaten to, oh, we're going to put a bunch of sub
can always
and
get high fees again.
I think if
the fees come and go this cycle, it'll teach a lot of people that these things can't
relied upon. Like we can't rely on high fees in the future unless they
appear to be sustainable.
If they just come in sporadic spikes, then that's not going to increase the security
budget.
Eric Wall had a good tweet on this.
The security budget is not a function of the past miner revenue.
It's a function of future expected miner revenue.
If the miners think that there will be a lot of fees in the future, then they will consume
more resources to hash.
That causes the cost of being a 51% miner to be high.
If there is an occasional spike in fees, the miners get a windfall, but if they don't expect
those fees to happen again and again, then it isn't actually going to increase the security
budget as much as you would think because you need to have predictably high fees in
order for the security budget to increase.
Because the security budget is a function of future expected income, not the future
actual income, but the future expected income.
Do you agree?
Yeah, no.
I completely agree.
I was more pointing to the fact of the idea that Bitcoin can never even get enough fees
to make a sustainable fee structure.
We saw blocks that had a higher fee.
I'm not saying that everything's fixed, we don't need to do anything.
We definitely need sidechains that are a merge mine that support the security budget in line
with it.
But you know what I'm saying, Ethereum folks and stuff who don't even like Bitcoin at all
saying that, hey, Bitcoin is already a non-starter because it can never survive because it can
never, for whatever reason, generate enough fees.
We know it's possible to get enough fees.
Now we just need to work on a way to sustain that and to harness that appetite.
And we see all these people building now.
And so I've never seen as much talk about sidechains on Bitcoin and roll-ups as we have
in the past four days now.
So there was a time in 2017 when the Coinbase was smaller than the fees in the block.
So we've had this situation where the fees were larger than the amount of value that
the miner received from the Coinbase.
So that has occurred before.
In December of 2017, the fees were very high and it was over $50 to send a Bitcoin transaction.
And that was when Greg Maxwell wrote that email publicly where he said he's breaking
out the champagne because we're seeing fees that are high enough to pay for security late
in the far future when the Coinbase has been halved to zero.
So the thing you're saying, we already knew that it was possible to see high fees and
I think that gave people a lot of false confidence and made people complacent.
People thought, okay, wow, the fees are really high.
This will happen again and again.
Surely there'll be high fees and Bitcoin again and again.
But then we had like five years where for a lot of the time the fee was not high.
So I think that it's possible that we'll see low fees in the future and the security
budget problem will be back.
This is confounding to a lot of people.
A lot of people think, well, if Bitcoin adoption is like the fastest growing thing in the history
of the world, surely the block space will become congested and fees will rise.
But I believe that the pro-drivechain view is that without a lot of merged mining going
on, it's very possible that we won't get enough fees.
It's especially likely that we'll have not enough fees if a lot of fees on blockchains
are being paid on blockchains that have nothing to do with Bitcoin.
So every time someone transacts in wrapped Bitcoin or Liquid or Ethereum, there are no
transaction fees paid to Bitcoin miners.
So we need more merged mining in order to fix this security budget.
That's like the pro-drivechain view.
I think, however, I think to make a comprehensive argument about that, though, would require
like a very advanced economic analysis for someone to somehow model the whole universe
and find out whether or not the transaction fees will be enough to fund security.
It's very complicated.
There's all kinds of assumptions in there about the value of Bitcoin and the innovations
that can be expected regarding people trying to transact inexpensively.
Yeah. And at what point in cost do people stop interacting on mainchain and just go
to one of those sidechains that doesn't merge mine?
And what are the implications?
And yeah, could there ever be a shock if we suddenly saw fees like quadruple
one day and then people just suddenly stop using it?
Like, would we see some kind of security shock where we saw the hash rate fluctuate
like greatly within one day or two or something?
I don't know. I don't really know enough about that side of things.
What is bedtime?
I guess Bitcoin ecosystem development.
We made a little drawings, little draw pictures on some NFTs on RSK.
Cool.
So using IPNS, which is like a protocol within IPFS where you can actually most people
think, OK, yeah, you make your NFT, you got your token URI there and it points to an
IPFS file, which is a content identified file.
If anything in that file changes one pixel, it's a completely different hash.
So it's a permanent thing.
However, IPNS is a protocol where basically just points to a different immutable file
and the user can actually change that.
So you can come on, mint a NFT canvas, draw a smiley face, send it to your friend and
your friend can draw a mustache and a funny hat on and kind of like an MVP for maybe
like a decentralized docusign one day.
You got to get encryption and a couple of other things added, but it's more of a fun
just little learning experience for me more than anything.
And built on RSK because, yeah, merge mining.
Cool. So you like Drivechain primarily because of the merge mining or for another
reason?
Yeah, 100 percent because of the merge mining.
Like when I was looking to build this project, I mean.
Probably would have had more users on Polygon or something, but I don't really like
those other things. And honestly, actually, in my research, I went to Vitalik's website
and I read about sold out tokens and I decided I didn't want to do anything to do with
Ethereum. I mean, yeah, sure, RSK is an EVM, but yeah, I didn't want anything to do
with that project or that side of this crypto space.
In case he might steal your soul?
Well, if you go to his website and read that, it's a little frightening, just the
assumptions that he seems to have about the future of where his technology might go.
Well, I read his whole book, Proof of Stake, which was a collection of his more
important essays.
I am familiar with his work.
I think that maybe if Drivechain's adopted, Ethereum will go all the way to zero.
However, I think it would require the Bitcoin community to really rally around this
idea and make it work in an exciting way.
For example, let's say the Bitcoin community adopts Drivechain and then many users
embrace these sidechains.
They send money to the sidechains and start using them for privacy, for DNS, for smart
contracts, for Thunder, large block, low fee transactions.
If we make use of all these different projects, then we can make a lot of money.
Then all of these planned Drivechains would have billions of dollars of value.
If just 1% of Bitcoiners were in each of them, each would have $4 billion.
So it would be very exciting to see Bitcoin have all these interesting sidechains
operating on top of it.
And it could be a very successful thing for Bitcoin, where Bitcoin would have this
narrative of innovation and experimentation and growth and creativity.
And it would be a very exciting time for Bitcoin.
And then the base chain could benefit from ossification.
So that would, yeah, Bitcoin would have very strong narratives.
And then I think all the narratives of Ethereum would be displaced.
So I think there could be a big change.
The Bitcoin community could really pivot in an exciting way, potentially, with
advanced sidechains.
Yeah, I agree.
And one of the other reasons why I like RSK so much, just kind of in my research,
both of my projects, I was researching IPFS, kind of its history, where it came
from, where it's going and all that stuff.
And one of the members of the Consensus Labs, which is a part of IPFS, Marko
Bukolic wrote this paper on the future of decentralized computing.
And he talks about how Filecoin and things like that need to be rooted and anchored
on Bitcoin rather than a proof of stake system.
And he goes into the technical arguments, why that's a necessity.
If you're going to have an actual decentralized system, it needs to be rooted
on a base layer that's actually decentralized.
He explains it extremely well thought out.
And that kind of really solidified my idea.
Stacks is cool and stuff like that, but it is a necessity for it to be merge mined.
Because otherwise, if it's not getting its security from Bitcoin, then it's just
faking it. It's just some remora chain being like, look, we put our hash on the
Bitcoin blockchain. We used to say that that hash is legit.
Yes.
I mean, it seems so obvious to me, but there's so many other people out there that
don't get it yet. But hey, man, I've been in since 2018, so I've only kind of, you
know, seen the light in the past, about, I don't know, 16 months.
It's a while to come around, I guess, for some of us.
Well, many people have taken a long time to figure everything out.
Actually, yeah, I guess BIP300 has probably been around longer than I've been in the
space.
Yeah.
Well,
this is drivechain Twitter spaces, we meet every day.
This is drivechain Twitter spaces, we meet every Monday and Thursday on Twitter
space to discuss drivechain. Bitcoin Improving Proposal 300 and 301.
Enabling Bitcoin to have sidechains that are, as Adam Back has said,
sidechains that are more peer-to-peer would be stronger and more resilient, and
more harmonious with Bitcoin than the sidechains we have today.
Sidechains that are more peer-to-peer means sidechains in which no one is
necessarily the only one.
And so,
instead, a sidechain that uses drivechain would rely on the dynamic, global
multitude of Bitcoin miners to play an important role in the security of the
world.
And so,
that's what we're going to be talking about today.
So,
I'm going to be talking about the sidechains that are more peer-to-peer, and
then I'm going to be talking about the sidechains that are more resilient, and
then I'm going to be talking about the sidechains that are more peer-to-peer.
And so,
I'm going to be talking about the sidechains that are more peer-to-peer, and
then I'm going to be talking about the sidechains that are more peer-to-peer.
And so,
I'm going to be talking about the sidechains that are more peer-to-peer, and
then I'm going to be talking about the sidechains that are more peer-to-peer.
And so,
I'm going to be talking about the sidechains that are more peer-to-peer, and
then I'm going to be talking about the sidechains that are more peer-to-peer.
And so,
accrues value because it's -to -peer in
native sidechain technology like
Drivechain would accrue more value probably than sidechains that Bitcoin
currently has. it's
a very exciting upgrade for Bitcoin.
And it could be coming this year, maybe.
Drivechain is really on track, a lot more interest and attention and discussion on
it than in the past.
This is a great time to be interested in Drivechain as many people are promoting it as
a scaling solution for Bitcoin.
And who knows if these fees
will stay high or go back down.
But that is not the rationale for Drivechain.
The security budget problem is exciting and interesting, but it is not the
fundamental case for Drivechain.
In fact, when Drag Chain
was initially conceived, people weren't talking about the security budget.
Drivechain was designed originally in 2015,
our common contemporary understanding of the security budget arose in 2018,
when Jordan McKinney wrote
his three -part essay on the security budget on his blog, which Paul
links to in Paul's initial security budget essay written in 2019.
Jordan coins the term security budget in that blog post that he wrote.
he also coins the term security factor.
The security budget is the amount of value received by the miners on -chain.
Their fees plus the Coinbase.
But the security factor is the ratio between the security budget and the market cap of
Bitcoin.
A lot of people think it would be fine if fees rise just enough to offset the
diminution of the subsidy.
But in fact, that would cause the security budget to be constant.
And if the market cap of Bitcoin is rising over time, then
we would have a falling security factor.
So,
Lyn Alden understands this same dynamic.
She doesn't use the term security budget or security factor, but in her essay of March
2021 on Bitcoin fee modeling, Lyn Alden correctly describes
this, and she suggests that total security spending of about 1.5
% might be best for Bitcoin in the long run.
So if Bitcoin achieves a value of $1 trillion of market cap, then every
year the total miner income ideally would be about one and a half
trillion per year?
In other words, Bitcoin should spend around 1 % or more of its total value every year
on security,
the maintenance of the monetary system.
Seems
reasonable.
the fundamental case for Drivechain wasn't originally about security budget, and when
fees are high, an equally profound case can be made in the name of scaling as opposed
to security budget.
enabling more throughput, more peer -to -peer onboarding, more non -custodial onboarding
for Bitcoiners is necessary when fees are high.
So security budget is
not the major, not the most fundamental case that you can make for Drivechain.
A more fundamental case has to do with the fact that Drivechain enables greater
innovation.
This is the way that Mike Tidwell and Adam Back talk about Drivechain.
It's not about the security budget.
To them, it's mainly about
innovation,
Bitcoin to be a platform for creativity, experimentation, and innovation.
scientific laboratory of in economics and software.
So Mr. Bedtime, that is the case for Drivechain.
It's about innovation first and foremost.
another way of looking at it, another dimension with which to understand drivechain is
the way that Paul would say, is it's about handling disagreements
in the Bitcoin community in a way that doesn't.
lead to fracturing of the community.
people have disagreements over what the blockchain should be.
Drivechain allows people to experiment and develop and create value
for themselves and others on sidechains rather than arguing over what the main chain
should look like.
It's about handling and resolving disagreements while keeping people
together. It solves, as the economists would say, solves a coordination problem.
So, it's not just about the security
budget. The security budget is a subset or a symptom of
the more fundamental issue, which is about disagreements and innovation.
People want to create new things, but they don't want to have to get approval from the
whole community all the time.
And the blockchain can't be two
different things at once.
can't have large blocks and small blocks at the same time.
The solution, of course, is Drivechain, where the large blockers and the small blockers
can get along because they're using different blockchains with a common unit of
account.
So that is what Drivechain is all about.
You have the sidechain
and the mainchain, so two separate blockchains,
but a single set of 21 million.
What do you think?
Are you convinced?
You said it was mainly about the security budget for you.
I used to think the same thing, but now I see
that there's a deeper argument.
Well, mean,
I kind of thought it was a given in our conversation about like the innovation and
stuff. I'm
on RSK because I need expressive smart contracts.
yeah, 100%. Also I want a privacy layer on Bitcoin.
That's one thing I always tell people who are critical of Drivechain when they first
hear about it.
It's just like, yeah, you like Monero and Ring signature?
We could have
a Bitcoin version of that a drivechain so it could be actual Bitcoin you could trust
it because you know you could you know get back to the main chain and then they kind of
start thinking about it because you know as Bitcoin maxes everyone just kind of need
jerk reaction dismisses any innovation at all on Bitcoin
Well said.
Well,
What kind of numbers of people are involved in the RSK community?
Can you give me a sense of what you're aware of?
I can speak more.
I there's 600 plus active members of the sovereign community.
and I mean
that's where I'm most active on RSK but there
are there's guy Stan the Great is building an
NFT marketplace
on RSK that's also going to have ordinals and stuff.
that's exciting to see.
And I believe he was actually one of OG sovereign guys.
Started building some other projects, left for a while, and is bringing another
project back to RSK so that's exciting to see especially for me because I've got like
an NFT fun little thing on there and there's nowhere to buy them or trade them
or stuff and honestly right now you can't even see them in the block explorer because
you can't verify a contract on there but that's all
changing very shortly.
There's lots of upgrades coming to the usability, the UI,
UX, for different apps and stuff on RSK.
excited to see that.
Cool.
Well...
Usually, run the chain Twitter Spaces in the morning.
Today, we're having an evening, late night drivechain Twitter Space.
Is that why you joined?
it's bedtime?
Yeah!
Yeah, I'm not up in the morning.
Yeah, I get like a whole different crowd.
This late night Twitter space, it's a whole different vibe.
So Drivechain is probably going to come around on Bitcoin for one of the following
reasons.
So one
reason is love of innovation.
People might just start loving innovation.
And then they'll just want to have Drivechain.
Another reason is that there could be the fees are too high.
People want to scale Bitcoin.
Another reason is
the fees are too low and they want to get more security budget from merge mining.
then another reason is the so -called flippening, which is where Ethereum's market
cap surpasses Bitcoins,
causing fear and
loathing within the Bitcoin community and people want to something to stop
that and reverse it.
they'll embrace Drivechain for that reason.
So those are four reasons why Drivechain might be adopted.
Another one is the consensus upgrade ossification problem
where people want to do changes to Bitcoin to improve it, but they also want to have
ossification for purposes of stability and and
So they want to stop making changes, but they want to keep on developing.
So that's like the fifth reason they might do Drivechain, is if everyone realizes that
ossification would be good, but also development and creativity are good.
However, that fifth reason is probably the most complex of all five.
So it's unlikely that'll be the reason.
Now all of these reasons are good reasons
to adopt Drivechain.
However, I do believe that...
Well, let's say...
I guess the last one, the consensus upgrade ossification problem, that reason I think
would be like the Paul Sztorc reason.
Because when he says people
disagree about what the blockchain should be, that's what Drivechain is designed
to ameliorate or alleviate is this disagreement, this friction within
the community. I think what he means there is the same thing as what we mean when we
say the consensus
slash upgrade slash ossification problem.
I guess reason number five would be his favorite reason.
But I feel that love of innovation, the Adam Back, Mike Tidwell innovation idea.
I just say it's I refer to them because I have all these different
tweets I've collected from what people have said about Drivechain and
those two people talk about innovation in a nice way.
Other people have other reasons why they like it.
Like you like it because of the fees and security budget.
There's a few people who also think the same thing in my list.
My list, by the way,
at drivechain.info forward slash friends.
That's drivechain.info forward slash friends.
It's a Google document that has this list I made.
So
which of those things do you think will ultimately cause Drivechain to be adopted?
Will it be love of innovation,
fees being too high,
fees being too low,
or the consensus
upgrade, ossification problem, or is it flippening?
Which of those five?
Consensus upgrade, ossification due to fear of
AI.
for you.
Because in the future, we're gonna see chains come up that have like fully AI
optimized like base languages that are gonna make no sense
to you or I or any other thing that's ever been.
It's gonna be why.
AI was
not one of my five things.
Fear of just super hyper accelerated innovation driven by
AI and so they're going to need to ossify the Bitcoin main layer, have some thin layers
that these crazy AI things.
if AI were making blockchains, would have Drivechain already.
we'll get ready for the year of is going to be good.
is not very smart because I asked the AI if Bitcoin should do
Drivechain, and it was very unsure.
I don't think AI has yet to like really take the time to read Paul's blog.
mean, anyone who reads it will be immediately converted into Drivechainization support,
but many people don't.
And that AI might be no exception.
Well, we've covered a lot today.
This has been a fascinating conversation.
It has been a pleasure to talk with you, Mr.
Bedtime.
You as well.
Oh, I didn't catch that last thing you said.
Oh, just you as well.
This is hula vu blue with .rsk, the other guy, listening.
I just have this on my phone.
wait, this is a fascinating revelation.
You're saying you're not Mr.
Bedtime, you're actually hula vu?
cool
Yeah, Hoolavoo Blue is me, but Bedtime Labs is my little...
my project company name.
Oh, so you actually have...
You actually have two identities.
Two? Two men.
Yeah, two men in the same...
Yeah. No, I just have the
bedtime labs going on my phone so I could actually talk on the microphone.
thought you pulled up on my computer on my account.
I see. So I thought there were four people here.
There's actually only three.
Yes. see.
is like overstating the number of people.
is like when Twitter had all those users and it turned out they were all bots and then
Elon tried to back out of the deal yes
indeed well how do you know I'm not training in AI with one of these fans right now I
mean you trained in AI using me that wouldn't be a
good idea.
I would find someone else to train the AI on.
Well, this has been a nice conversation.
Thank you for joining.
Thank you for your questions.
I hope to see you again soon.
This has been Drivechain Twitter Spaces.
We meet
every Monday and Thursday to discuss Bitcoin Improvement Proposal 300 and 301,
a potentially transformative upgrade to bring advanced sidechains to Bitcoin, advanced
sidechains for scaling, privacy, DNS, smart contracts, and
many other fascinating
I'll catch you all next time, specifically on Monday.
Have a good evening.