Richard actually has me doing two things, so I got a cool presentation on my prediction

markets work and my goals for that, but then he wanted me to do a Drivechain Q&A or sidechains

Q&A, and so that's kind of what, this is one, right, it's the earlier one, so I hope there

are some good questions, but otherwise I can kind of just give the same talk that I gave

at Breaking on Bitcoin yesterday.

What would you prefer, because I can just kick off with a couple of questions, so let's just start.

How many here know about what sidechains are and how to change them?

So it might be nice just to start with a brief introduction on what they are, and then anyone who

else has questions can jump in.

Yeah, that's good, that was a great first question.

So the sidechains are very similar to altcoins, where you use a completely different piece of independent

software, although the trick is that sometimes you would not want it to be totally independent, but the

point is you have the freedom to make something that's completely different and make all of the

mistakes that you want and wreck everything, or come up with something really cool.

So it's a kind of freedom, that's the shtick for it, that it's like permissionless innovation, and if you

want larger blocks, or you want these weird, terry-complete smart contracts or something, or any other

crazy idea that you have, you can do that, but these, unlike altcoins, they respect the 21 million coin

limit in Bitcoin, so they all share the same 21 million coins, the coins are mined on Bitcoin,

whatever the mainchain is, but in this case, in this framework, it would be Bitcoin Core,

and the coins are mined there, and then you send them over to this new piece of software that receives them,

and then over there you can play around with them and give them to new owners, spend them on weird

transactions, do crazy stuff, prediction market stuff, or rent hard drive space, or something like that,

and then the new owners can, whenever they want, they can send them back, and there's a lot of details

on making that work without it being too insecure, or without the whole thing immediately regressing

to just being a giant hard fork of Bitcoin or these other things, there's a lot of nuances to that,

but basically it's altcoins that don't have an independent coin, they just have the same 21 million

coins, and so they're a kind of response to interest in altcoins, they have a long history,

first of all, which is kind of interesting, so maybe we'll talk about it if people are interested,

but the idea of the sidechain is really a response to the idea of the altcoin, and just say,

well, we can do exactly what that thing does, but just on Bitcoin, and then you can go off,

people have disagreements over what to do, they can have their own piece of software,

so that's kind of the very short version, and a clever thing you can do is have the sidechains

be merge-mined the way Namecoin was, so that even though there's no coins being minted over there,

they still get all of the hash rate of Bitcoin, so the goal is to have it be something

that just completely replaces altcoins, kind of, although I'm not sure, they wouldn't replace

like a community, or different set of owners, or things like that, but it's a kind of,

it tries to do a lot of things at once, so it tries to do permissionless innovation,

but it also tries to protect the integrity of Bitcoin by not making it too vulnerable

to these kind of, to caring about what other people think it should be, because they just say,

well, right now, if you want to change Bitcoin, you have to change it for everyone,

it's this consensus system, everyone needs consensus down to the last byte,

but with this, you could just say, well, if you want to do something different,

you just do it on your own sidechain, and it's no different from installing apps on your phone,

and the apps almost never affect each other, and so that is the goal for sidechains as well,

that you would not have any weird sidechains that broke the sidechain system,

but that you would have this ecosystem of sort of a freedom, basically,

where anyone could create a piece of software, or use a piece of software,

so it's pretty important, it adds a kind of universality to Bitcoin, which is pretty ideal,

also, yes, oh yeah, do you have a question, real question, let's do it.

I wonder, is Drivechain fundamentally different from sidechain, or is it your implementation of sidechain?

Yeah, I usually explain it as being my implementation of sidechains,

but I suppose there are, for a long time, Blockstream wrote a paper in 2014,

and then they did some work on sidechains, but then they kind of really stopped working on them for a while,

and then I published the design for Drivechain in 2015, and then in late 2015, like November,

and then in 2016, I kind of worked on it to make it real,

and so then, for a long time, I was introducing it as the implementation of sidechains,

but now Blockstream has sort of caught up a little bit,

and they kind of have done a little bit more on making their original thing real,

and their thing is, their design is a little different,

but I think they're very similar, actually, but I think mine is actually a lot better,

and for a couple of reasons that I could go through, but they're a little dry,

but one thing about theirs is that it's a relatively simple point,

and it's that it only works for sidechains that have very similar block format,

transaction format, and hashing functions, whereas mine just works for anything.

In fact, I think it would be totally impossible to get theirs to work for something like MimbleWimble,

but I'm not sure about that.

It might be possible, but with mine, it wouldn't be possible.

More questions?

Anyone?

Yeah?

It's a sidechain, more like a sandbox, where you make use of the link of blockchain,

but you can still experiment with it like a sandbox.

Yes, so yeah, the question is like, is it sort of like a sandbox?

Yeah, I think the answer is yes.

I mean, someone might ask, like, why don't we already have a sandbox,

which is just make your own altcoin or something,

but the people who use that argument, I think that there's something that's wrong about that

that's very difficult to articulate, but I think I have a decent way,

which is that it's kind of as if you were going out to dinner with a bunch of friends,

and then you would say, even though there's nothing,

like no one's holding a gun to your head and forcing you to go to anywhere,

you don't want to go, one person, one friend can't like unilaterally defect

and just say, well, I want to try going to this place,

because the important thing is that you get to the same restaurant as everyone else.

That's like a key second.

You want to go to a good restaurant that you like,

but you really want to go to the same restaurant that everyone else is going to.

And in that sense, the altcoins are, you know, they're a non-starter.

They're totally useless.

You're starting this thing up completely alone,

and then you're going to get a lot of people who are not in it for the long haul.

You get the wrong type of early adopter in many cases.

And so the altcoins are really not a true sandbox,

but this would be, because this would be real Bitcoin on the line,

and if anyone steals them, or if something is wrong with your node,

or something happens, you know, they would then be,

you'd be able to exchange them for actual real Bitcoin.

So you would inherit, it's kind of more like going to like a food court

or something where everyone can go to their own place,

but you're still all in the same,

you can still sit at the same table or something like that.

So yeah, that, it adds a sandbox dimension that is not,

is really not there right now.

Yes.

Just a quick follow-on on that.

If you're not a Bitcoin maximalist and you just really like altcoins,

what would be the advantage for you to actually do right in this?

Yeah.

Is it, just a side question on that,

is it, since you're an economist,

is it that Bitcoin could provide certain security

and be a reserve?

Is there a real advantage to that?

Well, people use the word security in many, many different ways.

Sometimes we talk about hash rates,

sometimes we talk about whatever,

not getting your funds stolen, or something like that.

But I think one reason is actually,

it's kind of a strange,

it's horrible to forecast the death of the altcoins,

because you're just wrong every year,

and every year you just look crazier and crazier.

But I think that one reason would really just be self-defense,

because if some blockchain makes the jump to universality first,

you would think, why wouldn't it instantly replace

all of the other blockchains?

Now you can imagine a couple of reasons why

it wouldn't happen very quickly,

and that it may not happen at all,

and there may still be a place

for lots of different competing projects.

But on the other hand,

there are strong network effects when you use money,

and there are these people,

it's a little easier for me,

because I grew up learning English,

and even though I travel all around the world,

a lot of people speak English,

just because it's just so convenient to have,

having one common language is just so helpful.

In fact, I saw on this trip that I was in,

there was someone who was clearly German,

and someone who was clearly Portuguese,

and they were having a business meeting,

and they were speaking English, of course.

Everyone uses basically the same QWERTY keyboard,

even if they use Dvorak or something

to change the key layout,

and we just have these things,

these standardizations are just very efficient.

So you think over time,

it would be drawn towards just one thing,

and you would not want to be in a position

where since investing is involved,

people would be looking to the future,

and they'd be thinking,

would I rather have all this Dogecoin or something,

or would I rather have a new car or something like that?

I can sell this digital currency that I have

and get something real.

And the only reason you wouldn't would be

if you really thought that it had a pretty good,

either a future of appreciation

or just kind of being useful as money.

And so self-defense, I think, is a reason,

is that if you like your altcoin project,

and there are other reasons as well,

like if you just want to plug into the Bitcoin community

and try to get more users,

try to get better, more honest feedback

about the things that you're doing right,

because the altcoin world is beset

by crazy marketing

and just generally a very confusing media ecology,

to phrase it in some way.

It's very hard to figure out,

do people really like this project?

Are they just pumping the project?

What is going on?

So there are a couple reasons.

If you've got a really good project

that's underappreciated,

this is your chance to prove

that you really do care about it

and not the speculative return.

So there are a couple reasons like that,

but I think self-defense is really the main one,

is that, well, if you don't,

then someone will just copy this project

and then it'll be tough.

You'll be the guy who's,

you'll be the last guy who doesn't speak English

just trying to hold out against everyone else.

I don't, maybe, I don't know.

That might work, but maybe not.

Yes?

About one year ago,

I was trying to understand

the details of sidechains or Drivechains,

and I couldn't

because I found a lot of descriptions

but without every detail

that helped me understand

if there is no any detail

that prevents to do the same,

because, you know,

sometimes one detail can make it not a good solution.

So do you have some description

without the detail?

Yeah, I think if you're interested in that,

we do have,

now we have,

so we've tried to make it better and better.

It's very interesting

because, you know,

sometimes people complain,

like, oh, this is too long.

I get that complaint all the time.

So people complain,

not enough detail,

too much detail, whatever.

But I understand what you're saying.

And now we have,

if you go to drivechain.info,

we actually have the diff.

So we have all the code changes

to the latest release of Bitcoin Core

in one place.

So that would be the optimal amount

of just all the literal details

are exactly there.

I don't know

if that's not necessarily

a kind of an explanation,

but we also have the,

I also have a BIP

that you can see

if you go to the,

if you go to drivechain.info

and you go to GitHub

and then you will be able

to find it in docs section

where I have pull requested

into the BIPs repository

for Bitcoin Core.

And so that has much more detail.

And I don't remember exactly

when did I write that.

It was probably January of this year.

So if you tried last year,

then that wasn't there.

But now both of those things

are there now.

So maybe that will help you.

I don't know.

Are you more interested in,

because we have every line

of code changed

or altered or deleted

or whatever.

So that's one thing

you could find

if you scroll down

on the main page.

And then also the BIP

is like the explanation

for Bitcoin programmers.

And then I also recorded a video

that's also on drivechain.info

about the misconceptions

that I think

and about the kind of,

has more of an explanation feel.

So those are all kind of advanced.

And that video is two hours long.

It has like 200 slides in it

or something.

So those have a lot of detail.

And one of those

might be helpful for you,

I think.

Maybe.

So right now

you see that probably

there is no any detail

that can make

this project fail.

I mean,

you don't see such things.

Well, I wouldn't say that.

But I think you're kind of

getting at the idea

that you don't,

it's not really until

you release,

go through

and write everything

that you actually

check and see

that you've actually

thought everything through.

But yeah,

I think there's been,

this has actually been

in a kind of peer review state

for a very long time

despite how it may appear.

But people have been

kind of talking about this

for a while.

And I don't,

you know,

we have a code

and we have a unit test.

And I really wanted to,

before this trip,

I really wanted to release

an actual test net

that has a GUI,

has a cool little GUI

that someone made.

And it's a,

so we have kind of,

we have kind of done

the whole thing

as far as like

minimum viable product

or whatever phrase

you would like to use.

So I don't think

there's any,

you know,

sidechains are definitely,

sidechains are definitely different.

And so I don't know

if everyone would want

to use them.

And absolutely,

it's in a very similar situation

to the lightning network

where only a very special type

of person should be

using them first.

You know,

but there's like a ramp

up here where

if people use them

and then better

and better

user interface,

make sure that

there's no bugs,

stuff like that.

Because this is described

as a low level trust.

It's not described

as something trustless.

I mean,

to send the coins

to sidechain and back,

right?

There is,

I think,

you can recast it

because I would like,

I actually would like

certain sidechains

never to exist

and I would want them

to not be

in the ecosystem at all.

And so,

you can recast it

as saying that

miners will care enough,

as long as it's

very easy,

psychologically,

they will care enough

to send the coins

to sidechain

and back.

So,

it's very easy,

psychologically,

for them to figure out

what's going on,

which is a very big

kind of,

that's a big thing,

although I have,

you know,

design elements

to address that.

But I realize

that's kind of a vague thing

to just kind of say

in the middle

of an explanation.

So,

we can come back to that

if you want.

But,

as long as miners

can kind of

psychologically process

what this sidechain

is supposed to be doing

and see,

check to see

if it's doing that thing,

then I'm curating

the list

of which sidechains

are on

and which are off.

And,

when you

recast it that way,

I'm just assuming

that they will want

the ones that make

the exchange rate

go up

and stay up

to be on

than the ones

that make

the exchange rate

go down

because they're harmful

to the Bitcoin network,

actually.

You'd want them

to shut those off.

And so,

if you recast it

in those terms,

it's no longer

a question of

trusting the miners.

It's just,

do you believe

the,

you know,

the security model

that

a majority of

hash rate

is not trying

to make the network

any worse.

And so,

I think it actually rests

on the exact same

axiom

that regular Bitcoin

rests on.

Although,

again,

it is slightly,

I mean,

it's very difficult

to explain

because,

like,

Lightning Network

also has all these

weird quirks and things

you know,

you're trusting that

these other,

you have these outsourced

channel monitoring

and you have,

you know,

if your computer

has a glitch

and it accidentally

broadcasts the wrong

thing,

you lose your entire

channel balance.

So,

you know,

and I like the Lightning Network

a lot.

I'm not trying to

criticize the Lightning Network.

I'm just saying that

these things

that have different

security models,

it's sort of like,

what exactly,

you know,

what kind of answer

are you,

but,

yeah,

the security model

is different

but I think it really

rests on the exact

same security

assumptions,

I would say.

That's what I would say.

I don't know.

Does that help?

Yeah,

that's good.

So,

the last question.

So,

do you think it makes

sense to combine

sidechains with

Lightning Network?

Absolutely,

yeah.

Which is cross,

can be cross-chain

so that you can

control the flow

and stuff.

Okay,

so,

I'm not familiar

with cross-chain

atomic swaps

but I think

that stuff

is very exciting.

You can have

a situation

where someone,

because I would

imagine that,

well,

first of all,

withdrawing your

money from the

sidechain to the

mainchain

is intentionally

very slow

to make it

more secure

and so I'm

relying on

regular users

to never do that

anymore than

we would,

like,

some people

care about.

So instead,

they should be

using atomic swaps

and Lightning Network

transactions to

move back and forth

between the chains

but the other

interesting thing is that

if you make a sidechain

that has a cool

feature,

it might not be

enough coins

over there

because who would

want to leave their

coins on this

other new thing

when it said

you could just

do nothing

and stay

where your

coins are?

People like to

do nothing.

The advantage

of combining

the two is that

oh,

someone now has

an incentive to

just put some

coins over there,

start up a new

Lightning Channel

thing,

connect it to a

big node,

and remember the

nodes on the

Lightning Network

are independent

of any chain.

They could be

on any,

well,

that's kind of

speaking a little

loosely but

you could have

like a big,

if everything

on Bitcoin Network

is connected to

a big node,

everything connected

on a big hub

and then

you have the

guy administering

that hub

has a different

one on the

sidechain,

you connect

over there,

then you can

have these

payments go right

through.

So what I'm

getting at

is that

there's an

incentive to

move the

bitcoins over

to the

sidechain

and then

charge higher

fees on your

Lightning Channel

even if they

don't have any

coins on the

sidechain.

So if you're

paying for

some really

strange thing

like,

I don't know,

a digital identity

lookup or

something,

you just pay

and somehow

the Lightning

Network routes

it to this

other person

and it happens

on the

sidechain

and then

they ship

some piece

of data

back to you.

That's kind

of complicated

So we use

the sidechain

concept

for saying

we take this

one chain's

consensus

mechanism which

has some

feature we

don't like

and we're

extending this

chain's

consensus

feature with

a whole new

chain.

It's like

subjecting this

consensus

mechanism to

this one

chain.

In sidechains

actually you're

tying together

a different

consensus

mechanism.

So

why don't

we swap

one

coin for

the other?

Why

don't

we move

the coins

themselves

across?

Well

I think

in atomic

swaps it's

because it's

impossible

because you

would have

to have

one

network

be aware

of each

other

and so

they'd

have to

be

assigned to

me

or something

and so

I make

some

secret

R

random

number

and then

I compute

H

and then

I say

okay

I'll give

you one

bitcoin

if

the R

is revealed

for this

H

I have

the lock

which is

one

transaction

and the bitcoin

network only sees

the one part

and the litecoin

network only sees

the other part

and then I say

R

and it unlocks

both of them

at the same time.

For example

if you transfer

any other

coin

towards

bitcoin

the way

we express

it is

we take

the whole

coins

and we

put them

as a

Satoshi

and

there is a

currency

by which we

do consensus

by which we

do priority

in the network

and other

currencies

we just

keep them

as data

so you can

move around

this data

which is

like a litecoin

throughout

the bitcoin

network

and then

you know

you can

move it

never back

to the

litecoin

network

if you can do

that sort of

move between

chains

I feel like

the difference

between a sidechain

and another

chain

all together

disappears

this function

well I think

the

well

it's kind of

a strange

example

but I think

you

the point

of the sidechain

is that

you want

to use

bitcoin

for

something

that

is

like

betting

or

identity

or

that looks

up

the

dns

for something

or

these other

things

messaging

or

whatever

so

you'd

want to

use

it

or just

larger

blocks

or something

like that

to send

bitcoin

to someone

else

or to

the

miners

or whatever

you do

your

counterparty

wants to

get

bitcoin

back

that's

kind of

what's

going on

with sidechains

I think

your

example

where you

turn litecoin

into

satoshis

of

course

of course

there

are

other

coins

of course

there are

yes

if you

can reserve

the total

amount of

litecoin

yes

it doesn't

matter

how we

conference

like

the banks

using

bitcoin

as a

reserve

another

chain

can use

bitcoin

something

that was very

very

unlike

bitcoin

in many ways

where you

could just

say well

in this

sidechain

everything has

to be signed

by some

government

authority or

you know

federal bank

employee or

something

so

no but

that's what

i'm trying to

explain is

that with

the sidechain

you you're

working with

the sidechain so

the the

when you have a

family of

sidechains

everyone's using

the same

everyone's using

the same

using the

same money

and so you're

in you're

plugged into

the same

economic network

you know it's

like it's

sort of like

using like

euros versus

something else

if you

preserve values

across chains

you preserve

the economic

network

but once for

example

my bank is

able to hold

bitcoin i'll just

transfer bitcoin to

my bank and

then I'll use my

credit card or

whatever and

I'll be

transacting

bitcoin instead

of euros

it's this concept

of preserving

the coin

distribution

across different

technological

solutions and

sidechains are

a way to

take another

technical solution

and attach it

to your current

one so that

I feel like

atomic swaps

and being able

to swap the

currency onto

other chains

brings the

same economic

perspective

yes yeah okay

I think I

understand what you're

saying yeah I

agree and

there is some

differences yes

that my sidechain if my

sidechain is

okay but the

main chain is

fucked then my

sidechain is

also fucked

yes that's

true yes so

there are some

differences well

yeah so I

think one of

the things I

think is

interesting is

the fact that

you can't

even use

the reason

that why

atomic swaps

never caught

on is a

weird anecdote

is that

one person

has the

r, the

lock.

So you

try to

swap one

bitcoin for

four lite

coin and

one person

can just

wait and

see if it

moves against

the

other

coin.

It's

a mess.

But

lightning

network is

even

better because

it's much

faster.

You

could say

my alt

coin.

Okay.

I kind of

agree with

you in

general but

I think

in this

case I

do mean

the

lightning

network

because

I'm saying

what you're

saying is

someone will

pay lite

coin or

they pay

something weird

coin or

I think maybe

you're saying

it the other

way like

someone could

pay bitcoin

and they

could buy

a service on

the other

thing.

But

whatever it

means you

mean you're

across two

different

chains at

once.

That's

true.

It

even

tolerates the

exchange rate

fluctuations as

long as the

transaction is

fast enough.

So you're

right that you

can completely

get all the

same benefits

but the one

thing that you

can't get is

any guarantee

that the alt

coin will

actually

survive because

there will

be I

think I

really do

think there

will be a

kind of

like a theory

so this is a

conjecture of

mine but

it's like

this will

happen in

everyone's mind

I think very

quickly.

So there will

be 200

terrible and

then people

will sell number

200.

They'll realize

that number

200 can't

they'll realize that number 200 can't possibly compete because one of the 199 will be just copying these features with sidechains and so it's it's doomed as an investment as a as a kind of you know a store of value to use the phrase and then number 199 will be like wait you know this is a mistake we are not going to win this battle and then it would just kind of I don't really see why anyone will want why would anyone want to hold like even the second or the third largest

you'd always be wondering oh you know is this gonna be a big mistake am I gonna lose everything here maybe I should put a couple percentage points into the biggest one and the biggest one will be a kind of attractor I think and so but yeah you are right that you don't need if you have this market for if altcoins stick around which you know it's weird it's a very weird thought kind of theoretically and analytically but just empirically they do better and better all the time but yeah if they if they stick around you can do this thing where you don't

actually need sidechains at all but I think that's why I bring up the self-defense argument which is that if one blockchain has this universality it would probably tend to just replace all the other blockchains but that all that is a that is a lot of conjecture so I don't know if that will be represented in in reality but

yeah yeah I think so I think what you're saying is that right now there's been no weird collapsing of the altcoins but it's you know so they kind of are still around but I that's I that's exactly what I think too which is that if nothing it's safe to do nothing now the other thing is that there's no easy way although I think there will be very soon because I'm working on it myself

but there's no easy way to like short an altcoin right now it's very difficult but as if it's easy and especially if it's easy to buy like put options so you buy a little bit of money and you get trustless put option no counterparty risk yeah and yeah but the

if you pay more fee you can exit earlier yeah I feel like that's probably the biggest advantage of Bitcoin Core is if I'm a huge whale I can buy a shit ton of Bitcoin Core and always pay the highest fee to get out first and sell on the market when the price is still the highest so as long as I get enough whales to spread that wealth across enough accounts so if a whale is like accumulating in one account he's breaking this like informal rule that makes the deal work so

well you know there's a lot of efficient markets hypothesis kind of stuff wrapped up in that

it's so neat to have a coin where everyone goes in and if you try to do a back run big spayer gets up first

you'll go you'll go rich if the altcoin goes down in value you know sometime in the next five years or something like that it's a long-term put option you buy it today with a little bit of Bitcoin then you gain a lot of Bitcoin if the altcoin price goes down sometime in the next you know by the end of the five-year period

yeah so if you do that then I don't really see why lots of people wouldn't research all these coins and figure out like which because just the act of buying a put option does trigger selling because there's a difference in the implied price of this derivative world in the real world and you can always buy low and sell high so

anyway long story short the put options would drive the price down I think you would get self-fulfilling prophecies on many of these people would figure out very easily and then you would extract the entire market cap so if the market cap is like 300 million dollars then someone that golden sacks will figure out how to

maybe I'm high-teching the subject right now

no that's fine

you were talking a while ago about oracles

oh yeah yes I did yeah I was in last year I was in

can you give a summary of what you talked about

an understandable hash if you want

okay yeah I'll give it a try so I gave a talk at QCon in London last March about attempts to solve the oracle problem and it is recorded and you can find it on bitcoinheimland.com presentations where I will I'll be talking about that later but yeah that talk was about a history of attempts to solve the oracle problem which is a problem of getting the blockchain to figure out what something that may have happened in the real world

and it's very difficult because the primary difficulty is this opportunity cost of honesty so you have something some financial anything that is tied to the real world performance of something so an example that people often use is elections so they say okay this thing is worth one whatever one euro one bitcoin let's say one euro

towards one euro if Donald Trump is elected and it's worth one euro if Hillary Clinton is elected in the United States you know I just assume that you guys are aware of what happened over there but the point is it's worth one it's worth something or it's worth nothing but the trick is that it's you want the challenge is that you want to tie you want to build something that does that so you want to tie this payment to something that happened in the real world

and it's very difficult because once that information is learnable so Donald Trump wins Hillary Clinton loses now if everything is working as planned if everything is working as planned and you're doing a good job best case scenario then this all the Donald Trump shares or coupons whatever you want to call them they should be trading for basically one euro and the other one the Hillary Clinton and whatever Gary Johnson ones they should be trading for zero

but since that you have the information has to exist first and then you have to use the Oracle to report on it and then you have to pay people out so the things happen to have they must happen in that sequence so then you have a problem with step number two which is that someone knowing that Donald Trump has won would have an incentive to lie and say that he actually lost because they can go up and buy all the stuff for basically zero these useless Hillary Clinton shares and then lie

and thereby they can extract the entire delta of the market position at all so it's really no different than running an exchange being the Oracle is basically the same as running an exchange where you buy and sell this thing everyone has deposited with you and they trust that you will put the right outcome out but if you just put the wrong outcome out you can steal everything

so there's a major challenge there and I go through in the talk a kind of a historical journey that people have taken where they start with multi-sig and then now people are really not interested in that and then people moved on to this kind of we'll have these different arbiters compete we'll have these different marketplace of judges but I describe why I really don't think that that can work it's just multi-sig with like more competition but it's not good enough because the

why I describe three factors in the talk that the judges may suddenly they have no reason not to exit scam I guess this is a really short version of that but the judges incentives are triggered by three factors which are all very unreliable one is how much money they can make if they steal so then someone might have sort of like a super popular contract where they just set it up with their friends but then suddenly a hundred million dollars goes out and you don't know if that's going to happen when you set it up

so someone might bet and then they're like oh no I didn't realize that everyone would start betting and now ten million dollars would be on the line and of course this judge is going to lie and take ten million dollars for himself and he's gone and so it's like you're hoping it stays small and the thefts pay out but then also there's this other thing the stream of little transaction fees that he might earn that also could go down as the marketplace of judges becomes more competitive and why wouldn't it if it were doing really well

and then how much the judge cares about the future relative to the present you know the judge could get brain cancer or could just decide to exit scam for any other reason and so all three of those are unreliable so I described them what I did

I can repeat it if you're saying it could be even worse than a Chinese-Russian exchange well yeah I think so because a lot of the benefit to this type of thing would be that you want like trustlessness you want like no identities I mean at least if there's an exchange like people knew who like Mark Carpellis was right

and they could like find him and harass him or something you know like you got something you have some recourse but with this it's really kind of the goal is to make it kind of blind I mean that's the ideal the platonic ideal for all this stuff is that you just you sit on your computer and you just want to buy some Hillary Clinton defeat shares or something and you just hit enter and it just happens and then you don't need to have any figure out like oh is this a reputable exchange or let me do all my due diligence on this

in particular I have the last very short question before dinner is there one more question okay this is the last one then we're going to have dinner

just a quick question so can you merge sidechains into the core of the chain?

oh okay well that's an interesting question so you don't mean a code merge you mean like the

if you make a sidechain

you could make them mandatory yeah

could you make like consensus and make it mandatory

yeah well that's what you but I think the funny thing is I actually see when you use the word merge it reminds me of github where it's like you know fork and merge and I kind of feel that sidechains are allow it's kind of weird because those are abstract terms but what I feel is that the sidechains are the merge operation because it's like if you want to leave and go to the altcoin community like you can never come back but if you want to leave and go to the sidechains community then you can move your money back and so you kind of sidechains are kind of like

they're kind of like are the merge but yeah the part I think early on people thought that such excuse me people thought that sidechains would be used mostly for testing experimental features that would then be merged into Bitcoin core but I don't think that anymore now that we see the conservatism of core but also the interest in crazy altcoins and just the profound difference in vision that I think was probably foreseeable and inevitable as we get to just a bigger

and bigger community now it will be just for people who want to do different things will just that will just stay there so I don't think necessarily you would end up merging them back but it is possible in fact it's it kind of happens almost naturally because as more and more people use a set becomes much more difficult to imagine anyone getting away with an attack on one or the other without both of the communities

like refusing to put up with that we're taking very easily there's a huge asymmetry in Bitcoin and inside chains that the users have a lot of leverage in any you know UASFs or other things that they might want to do

so what about a round of applause for Paul and Q&A

you