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If you prefer large block Bitcoin, and you switch to Bitcoin Cash or Bitcoin SV, you
got the feature,

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but you lose whatever 90% of your plus percent of your wealth against BTC. Sidechain
prevents that

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from happening. It says you will never be harmed as a result of trying the new
software. And that's

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how you have lots of different systems work without having the exchange rate
appreciation

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or depreciation, which people just don't like. They don't like volatility as it is,
so you don't

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want to add more. Bitcoin, the first cryptocurrency, sits at about 47% of the entire
cryptocurrency

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market, under half. And as far as usage that people are actually willing to pay for,
it's

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less than 10% of what Ethereum is. It's a fair point to say that virtually all the
cryptocurrency

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market exists because it does things that Bitcoin could not or decided not to do. A
lot of Bitcoin's

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hopes and dreams have been pinned on second layer solutions such as the Lightning
Network,

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but so far that hasn't really taken off in a really meaningful way, and even then
doesn't

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really do a lot of the things that other cryptocurrencies do so well. So is Bitcoin

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going to be a shrinking part of the entire cryptocurrency ecosystem over time? Maybe
not.

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Drivechains are an interesting technology that basically lets you build any kind of
cryptocurrency

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type chain on top of Bitcoin as a layer 2 and easily swap in and out between the
main layer

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and other ones. Basically, the value proposition would be to take all the cryptos
out there,

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do literally the same thing that they would do, tie the unit of account to Bitcoin
so you don't

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have to be speculating on a whole bunch of different assets, combine their security
with

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that of the main Bitcoin chain, and basically make it one big ecosystem. It allows
Bitcoin to

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become the only cryptocurrency anyone really needs, but at the same time allows
Bitcoin to do all the

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things that anyone else wants to do while people like me are using other
cryptocurrencies. The idea

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of Drivechains has been around for many years, but it recently got a resurgence in
attention

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thanks to Paul Sztorc, who I have the pleasure of speaking with right now, to go
into a deep

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dive of what are Drivechains, how do they work, why use them, etc. Hey, everyone. I
have the

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fantastic pleasure of speaking with the one and only Paul Sztorc. How's it going,
man?

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Hello. Hey, thanks for having me. Yeah, thanks for being on. I definitely saw your
name pop up a lot

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in the whole Drivechain discussion, and that's one of those new things that have
popped up.

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I wouldn't say it's not necessarily new, but the attention is definitely growing and
is new

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around it. People have finally come around. Let's really hope so. Maybe. I don't
know. Yeah,

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I think so. I just wanted to get really deep into the subject,

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maybe not super deep technically, but the whole value proposition and everything,

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and also the feasibility. Before we dive into all that stuff, do you want to just
really quick say

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who you are, what you do, etc.? Well, yes. I'm Paul Sztorc. I am the founder and CEO
of LayerTwo Labs,

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which is focused on building the Bitcoin Layer 2 that is actually a real Layer 2,

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which is a sidechain. We can talk a little bit about what exactly that means.

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I've been in Bitcoin for a long time, and I published a lot of research on my blog,

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Truthcoin.info, and one of the first things I published was a peer-to-peer
prediction markets

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idea for Bitcoin, but it's so exotic and weird that it could only be attached to
Bitcoin by a

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sidechain, and that is what got me into all this. Then I learned a lot about
sidechains.

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Since I had to actually work with the code and with the idea to make my own idea
work,

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I learned a lot about what most of what people say when they use that word is either
false

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or just irrelevant or misleading, and then I learned the true state of affairs was
terrible,

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but I also, I think, sort of fixed it back in 2015, November 2015, and I published
this idea

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and kind of been quietly advocating for it ever since, and now, just like I always
predicted it

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would, I thought it's only a matter of time before the idea makes it back because it
just, it hits,

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it solves a very real problem for people. It's actually solved several at once, so I
just knew

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it's only a matter of time before one of these problems just catches up with
reality, and then

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the idea is revived, and so that's sort of now what is happening. Yeah, for sure. So
before we

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dive into Drivechains specifically, in the, especially the Ethereum world, but also
a

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little bit the Bitcoin world and other worlds, there's a lot of kind of confusion
over what is

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an L2 and what is a sidechain and stuff. Right. So what do you, what would you
consider to be an L2?

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This could be an hour long just on this, so just for brevity, what would you
consider to be an L2,

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and what do you think is a sidechain? It's another case where I think,
unfortunately, the word,

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you know, has been ruined, so it's, because it puts me in a difficult position when
I try to

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explain it, where if I explain it, it may give a definition that's in conflict with
what most other

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people say, and then it's a kind of a, it's kind of a little bit of an ethical
puzzle for me. Do I

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tell you what I really believe, or do I try to speak the language that most people
speak,

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and how do I square this circle, so to speak? But I think the L2 is, what I would do
is paint a

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picture of the real world that you already live in first, where you have a checking
account at a

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bank, I mean, maybe not you personally, because you try to live off Bitcoin, which
is the most admirable

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thing, one of the most admirable things that you could do, but most people, they
have a checking

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account, or their business has a checking account, or their employer pays them with

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something, like they pay them through, like, you know, direct deposit, so you have a
checking

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account, and your bank, they have an account themselves at the Fed in the United
States,

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and the Fed has an account at the Bank of International Settlements, so this is
pyramid,

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and then you're, if you have a credit card, the credit card has a, they have a
checking account

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at whatever, Chase Manhattan or something, you know, they have one, they have a, you
have a Bank

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of America checking account, so it's kind of like, but this, my definition that I'm
giving

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you is so different from what most people would say, so again, it puts me in kind of
a tight spot,

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but I think, like, you, the layer two is, like, there's the existing L1 network,

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and then if you have, like, you have, like, an account on L1, you can make, like, a
sub-network,

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it's its own different thing, but what's up for grabs is all the money in that
account,

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so let's say I have four Bitcoin on BTC layer one, I have four Bitcoin and some
UTXO,

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I can split in the Lightning Network, a context of the Lightning Network, I make a
new sub-network

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that has only four Bitcoin in it, and in the Lightning Network, it's a channel
that's divided

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between me and you, me and someone else, two people, and that four Bitcoin is split,
so the

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way the Lightning Network works is that I take four of my Bitcoin, you take six of
your Bitcoin,

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and we make a ten, two of two multisig output, so there's ten Bitcoin in the
Lightning Channel,

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and it's split four six, but there we can, it's our own network, so we can update it
however we like,

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and that's what I think an L2 is. L2 is, like, you take some of the 21 million
Bitcoin,

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it's in a sub-network that can do its own thing, and the lamest, most, the lamest L2
is the

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custodial L2, which is, like, you just have your money at Coinbase, yeah, or you
have your money at

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Striker or Swan, exactly, yes, right, or any custodial Lightning Wallet, they just
have the

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money there, and it's kind of like the sub-network is just one guy tells you, you
know, one guy just

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decides what happens there, and not much better than that is something like the
Liquid Network,

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where it's just 11 or 15 keys just decide what happens, and similarly in Ethereum
L2,

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many of these L2s, they have admin keys, they have, like, it's just a multi-sig
where the people

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can just change everything, absolutely everything on a whim or steal all the money,
and in that

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sense they are just as bad as the Liquid Network is on BTC, of course, of course,
most people don't

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see any of it that way, I have a very heterodox view, yeah, I mean, that is a very,
I guess,

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reality-based way of looking at it, not to try to pat you on the back or anything,
but it is true as

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long as you have that, but so one thing, the reason why the side, what is a sidechain question

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comes about is because some people say that, for example, something like Polygon on
Ethereum is

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an L2, and there's a lot of argument that it might be a sidechain, or rather it
might just be a

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completely separate cryptocurrency altogether, and so I guess what separates a,
like, something

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like Litecoin, is Litecoin a sidechain, or is it its own? I say no, because to me,
the sidechain,

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to me, this term was, it came about when Bitcoin was, like, there was no Ethereum
even existed when

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this term first came about, and to me, the sidechain is a problem, is a solution to
the problem

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of altcoins, so it's all problem-centric, so it's kind of like a question, like, if
I asked you

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something, like, what is a fire extinguisher, and you said, well, it's, you know,
it's to put out fires,

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well, you could do a lot of other things with a fire extinguisher, like you prop
open a door

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or something, but you know what I mean, you could hit someone over the head with it,

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and that's been done in movies, right, and so, but if you were to try to explain a
fire

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extinguisher without referring to putting out a fire, I mean, it's right there in
the name, you know,

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it's like smoke detector, it's right there in the name, it's a solution to a
problem, of course,

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you know, like, your house is on fire while you're asleep, and you need to wake up,
or you're,

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soon the carbon monoxide or whatever will kill you, and you'll be dead, like, you
need to wake

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up, like, you need to know about something, so, like, if you, just imagine trying to
explain

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what a fire extinguisher was without referring to fires or putting out fire, and so
that, I think,

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the sidechain, to me, is Bitcoin was invented, but then people started to say,
well, what about

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these other things, what about this other stuff, what about the zk-snarks, what
about ring signatures,

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what about, you know, like, all these people had all these intriguing ideas, most of
which were bad,

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but some of which were pretty interesting, it was a very creative place back then,
as you may

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remember, like, 2014, 2013, 2012, it was, like, a lot of stuff coming out, some of
it bad,

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but it was creative, there was a lot of growth, and so the sidechain allows you to
just send

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your coins to a completely new piece of software that has its own blockchain, so
it's altcoins

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without the coin, so it's just like you say, Monero, but with Bitcoin, or Ethereum,
but with

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Bitcoin, so you have the EVM, you have everything you have on Ethereum, but there's
no ETH,

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there's no ETH, there's only BTC, and that's what it is to me, is this universal
altcoin simulator

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for Bitcoin, but, I don't know, then the term has now been ruined by everyone else.
Of course,

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well, I mean, that seems like a fair enough definition, and I guess the difference
between a,

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say, Bitcoin sidechain, in theory, and something like Litecoin, is that, first off,
your units that

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you're playing with, the units of money, are denominated in Bitcoin, so that if you
care about

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the scarcity and value and stuff of Bitcoin, you don't have to give that up,
necessarily,

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and then the other might be, you can always redeem them for actual Bitcoin on the
main Bitcoin

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blockchain, and I guess with those, do you think that would be an accurate way of,
kind of,

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the two main things that would separate a sidechain from a completely different

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chain, as far as the value proposition? Yeah, like, with a sidechain, you introduce
a new

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dimension of competition, so the sidechains are rivalrous, none can exist while the
other lives,

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you know, so they're in conflict, they're fighting a war against each other, and so

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that's bad, and it also, it doesn't really help you get the new feature, so, for
example,

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you, if you preferred large block Bitcoin, and you switch to Bitcoin Cash or Bitcoin
SV,

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you got the feature, but you lose, whatever, 90% of your, plus percent of your
wealth against BTC,

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so the sidechain, it prevents that from happening, it says you will never be harmed

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as a result of trying the new software, because it's a one-to-one exchange,

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one-to-one exchange there and back, so no one will ever be harmed, the only real way
to make,

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the only real way to make sure that no one is harmed when you interoperate is to
make sure that

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no one gains either, you know what I mean, you can't have, like, a one-to-one peg in
one direction

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and a ten-to-one in the other direction, it has to be just one-to-one, it's
symmetric,

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and this is just you saying that four quarters equals a dollar, and a dollar equals
a hundred

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pennies, you say, yeah, I can always interoperate these different media, you know,
you go to the

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ATM, you withdraw $20, your checking account bounce goes down by $20, you get one
$20 bill,

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you put the $20 bill in, so it all adds up, it's all kept, it's all exchanges at
par,

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one-to-one, and that's how you have lots of different systems work without having
the exchange

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rate appreciation or depreciation, which is, which people just don't like, they
don't like

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volatility as it is, so you don't add more, yeah, you want the competition to be on
the feature only,

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you don't want it to be a function of other things, like when the exchange rate is a
function

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of many things, just as such as like recognizability, or just association, like the

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network effect, you want someone to say, okay, even though this is a tiny network,
that's not that

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popular, that no one has heard of, you can still use it for the feature, and you are
left no worse

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off than you were before, so it sort of sterilizes the competition, yeah, it's like,

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you know, you have a USB port, ports on your computer, and you buy USB

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appliance, like, you know, webcam or something, you don't want it to compete on the
port,

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you only want it to compete on what you want to compete on, if you have to switch
too many things,

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it stops being viable, like if you have, what if you have a car that has four
wheels, and it

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runs on the road, but it needs a different kind of fuel than exists in America,
well,

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then you have to build a whole new fuel network, so Elon Musk kind of did this with
the supercharger

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network, but it's very difficult to do this kind of thing, like this is a big job,
you got to pay,

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you got to build a car and the supercharger network, and the only way it was viable
was because

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he sold like luxury cars in a few places first, you have to slowly build this new
network up,

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the network means that you're affected by what other people do, and so if you go
somewhere,

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and you know, you go to the laundromat, it only takes quarters,

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and you have a hundred dollar bill, then you don't have any money,

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and so you want to be able to switch back, and switching back and forth just means
that

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you, it kind of like means that it's still Bitcoin everywhere, even though it takes
a different form,

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and that's Bitcoin, just like 25 cents to one dollar.

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Yeah, so we're talking about Drivechains, so what exactly is a Drivechain, and kind
of how does it

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work? Well, it's a piece of software, it's kind of a lot like an altcoin, but it has
a couple

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modifications, so there's no, it doesn't release, it doesn't mint any coins, it's a
merge mined with

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Bitcoin, just like Namecoin is, and merge mining was invented by Satoshi, we can get
into that, it's

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kind of an interesting topic all by itself, and then when you, it has a feature
where it looks,

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this software looks to Bitcoin core, it looks around for Bitcoin core full node, so
every side

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chain full node is a Bitcoin core full node, but not the reverse, you can run
Bitcoin core without

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running the sidechain, and it's the sidechain software, it looks to Bitcoin core,
and it

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notices when coins have been deposited into it, so when that happens, it credits you
on the sidechain,

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so if you have five L1 coins, you deposit them into the sidechain on L1, then the
sidechain

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will notice, and it will print the five coins, so to speak, it's really just moving
them across, but it

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conjures the five new sidechain coins over there, if you want to move them out of
the L1

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scripts, where they're essentially, you know, they're essentially dead coins,

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it's as if they're taken out of the game, because no, they can only be spent, if
they are spent,

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then they are removed from that, so you're going to move them back from sidechain
to main chain, you

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destroy the sidechain coins in a special way, and then pays out on L1,

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and then, so this is the coin is moving across networks, literally under the hood,
it is like

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going into like a lock box, and then kind of coming out, or being whatever, but that
doesn't

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really matter, because while the coin is in the L1 script, it cannot be given to
anyone else

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without destroying it on the sidechain coin, so it has literally moved across, the
same way that

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you still have a dollar, when you have four quarters versus one dollar bill, it's

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it's still one bitcoin. Yeah, and it's kind of like, it's almost like minting

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an IOU, or a balance, or something. Well, in a way, it's true that, it is true that
the side

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chain coins will not necessarily, there's some risk, always in using any system,
including the

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lightning network, including whatever, including cash, like you may, it depends on
which way you

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think about it, as upside down, or right side up, but it's sort of like, you might
always be able

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to go, it could always be the case that you think you can go to the ATM and get cash
out,

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but then you can't. This would be the failure of the peg, but if the peg is working,
then that the

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idea is that the dollar has literally moved from cash into a checking account, or
has literally

196
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moved from a checking account into a brokerage account, or a money market account,
or something,

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the dollar is literally moving around. Yeah, I put, you will say, I put, I put $20
into my

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checking account. Yeah, and so, when you do that, you take $20, like a paper piece
of $20,

199
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and you give it to the bank, it's still there, but then the bank mints digital
tokens representing

200
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$20, and if you close your account, they destroy some of your checking account,

201
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and then they give you back the cash. Yeah, and so, we're talking about nodes and
things like

202
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that, as far as block producing and running the actual, the actual network. So, is
it a,

203
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this is where it gets a little, like, I guess, nuanced, right? So, if it's merged
mined, right,

204
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it's mined together with Bitcoin. Yes. Not necessarily every Bitcoin, so every
Bitcoin

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miner contributes to its security, I would suppose, but as far as being a block
producer,

206
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and collecting fees for transactions, and all that, what entity does that?

207
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Well, it's, it's kind of like, it's really the same as with regular Bitcoin, where
the,

208
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but there's this thing, the way merge mining works is, it has incentives to reach
this sort

209
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of equilibrium, and I have this other idea called Blind Merged Mining, which just
kind of

210
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keeps everything nice and tidy in that equilibrium state, and it's just better for
everyone. So,

211
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it's where the miners don't pay any of the node costs. So, I'm not sure really how
to

212
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answer your question, but the, it's, it's like the sidechain network runs its own
nodes. So,

213
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anyone who wants a wallet, or a full node wallet, you know, like that is a fully
validating wallet,

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they would need a node, the same way on Bitcoin. And so, they, they have a mempool,

215
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they collect new transactions, and they know where, you know, if those are going to
fall

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into the next block or not. And then, in a Blind Merged Mining, what happens is,

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the node will kind of work with the, it will connect to a layer one miner, and it
will say,

218
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I have this block, the sidechain block, it's worth like $50 or something, I'll pay
you $49 on L1,

219
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but just merge mine this block with me, and I'll get the $50 on L2.

220
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In broad strokes, that is how it works. Yeah. And that's because the miners don't
want to pay,

221
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miners will minimize their costs always. So, they will eventually, if there's a
bunch of

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people running nodes, and they don't want to, I mean, it's completely plausible that
miners,

223
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while the full node costs are low, or even forever, the miners may just run all the
nodes,

224
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in which case it'll be exactly the same as it is with Namecoin. Yeah, so, miners
don't necessarily

225
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have to run nodes, but that would be a logical conclusion if this is successful.
They want

226
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the merge mining revenues from the sidechains, then Blind Merged Mining lets them get
those without

227
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doing any of the node work. And they don't need to, because there's already a bunch
of people

228
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running nodes for their own reasons. But that's, I don't know if people will get
lost on that.

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That's not actually, see, Blind Merged Mining is not required for a sidechain, or I
guess

230
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Drivechain is sort of defined as having it, but I think the, I don't think, merge
mining, I think,

231
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is difficult to explain, and people don't really understand it. But the work done
when people mine

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in Bitcoin, like the SHA256D, the hashing, like all the electricity, and all the
ASICs,

233
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none of that has anything to do with the construction of the block or its validity.

234
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Yeah, it's all an anti-sybil mechanism. Yeah, it's all about meeting the difficulty
requirement,

235
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which is like a completely different thing. And so, all of that has nothing to do
with,

236
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like the merge mining, it's easy for miners to mine many, many different blockchains
at once.

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They just take this little block template or this little block header, which is 80
bytes or 200

238
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bytes. It's a tiny, tiny piece of information. It's your full node that does all the
work of

239
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downloading every block and validating it, and validating the proof of work.

240
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But the proof of work is, it's upside down. They don't actually, it doesn't cost
miners anything

241
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to mine many blockchains at once, which is very counterintuitive for people, but it
is the case.

242
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Yeah, and so, now that you, that's like the security mechanism. Who collects fees
for,

243
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how does the fee mechanism work for these transactions?

244
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Layer 1 miners should get all the fees. So, it's really exactly the same as just
regular mining,

245
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where you pay on L2. Either the miner mines the block, mines both blocks at once,
and they just

246
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collect all the fees on L1 and all the fees on L2. That's how it works with Namecoin
right now.

247
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Or, with Blind Merged Mining, someone else, it's a specialization of labor,

248
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someone else builds the sidechain block and pays themselves all the fees. But in
order to make sure

249
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that that block is mined, they go to the L1 miners and they say, put this little
code in.

250
00:25:00,160 --> 00:25:18,600
to the L1 block. And so, they kind of bid that up. And since it's very competitive,
as long as at least two people bid, it should be like 99%. You know, 99% of the fees
should be going to the Layer 1 miner.

251
00:25:19,560 --> 00:25:39,800
Yeah, so what's the process for L2 fees going to L1 miners? So like, if I, let's say
I get one Bitcoin on a Drivechain, and I send it a bunch of times, and then that
Bitcoin is slightly diminished because I pay fees when I send it around.

252
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Yes.

253
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And those are L2 fees. But so, how does that end up on L1 in the miners pocket?

254
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The total, if you look at the whole L2 block, which is look at one block at a time,
then maybe that block is paid, let's call it, let's just call it three Bitcoin in
total fees. There's 10,000 transactions in that block or something. There's 100,000
transactions each paid. Three one hundred thousandths of a BTC.

255
00:26:12,800 --> 00:26:19,720
And so, the whole block is paying in its own Coinbase, three Bitcoin in fees.

256
00:26:19,720 --> 00:26:45,040
So that's, that's just the next block is what it is. Now, what would happen is
there'd be many different sidechain nodes, it's called A, B, C, D, E, F, or
whatever. Each of them builds the block, paying themselves, the three Bitcoin. So A1
says, A is Coinbase says, pay three Bitcoin to A, and then include all these other
transactions worth three.

257
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And same for B, B says, pay the three Bitcoin to B, B is public key, and then
include all this. So the all these blocks are all candidates for the next block, and
they'll have different hash because they have a different Merkle root, because they
have a different Coinbase. And they also may have slightly different details. But
the point is, these are all blocks that contain the three Bitcoins worth of
transaction.

258
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Fees, and then they're each paying to A, paying to B, paying to C. So it's like the
blockchain is that it reached its end, but then it has a bunch of options A, B, C,
D, E, F, whatever. This is how it will continue. In Blind Merged Mining, the way a
sidechain block meets the difficulty requirement is by having a special code in the
parallel L1 block.

259
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Okay,

260
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there's a sidechain, like block hash, basically.

261
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Mm hmm.

262
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block and it has a little code in there, you have found a new sidechain block that
meets the the difficulty requirement. But you still have to download that block and
check to make sure it could be invalid, in which case you would say, not even a real
sidechain block, you'd orphan that off, you'd go back, you'd say, instead of
referring this block, it's not a real block that you refer to the previous block,
and you would, you would orphan that block out.

263
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And so it's not until that happens that it's not until you download the sidechain
block that it becomes fully validated block and the blockchain advances to that
state. If that makes any sense.

264
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Yeah, it does.

265
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So as long as you understand all that, then you should be able to understand that
the sidechain block is worth three on L2. So if you look at it from a point of view,
A, B, C, D, A would really prefer to have theirs be the code in L1, because they're
going to get three Bitcoin if it is, if it's B's instead, then A gets nothing.

266
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They built the block, but it doesn't, they built the block, but their software is
just keeping track of the mempool. It's doing normal full node things, you know,
yeah, it's not really doing anything interesting. So it, so it kind of builds this
block the same way that every full node does a full node tracks the mempool, and it
keeps track of what what the next block will probably be.

267
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There's stuff like, there's like bloom filters and things, you know, like, was that
like Xthin and things. So like, to try and make it so you don't have to download the
whole block. So it's already doing all this anyway. But it's saying, listen, I would
really prefer it to be my block, I get three Bitcoin if it's mine. And B is thinking
that and C is also thinking that and D is thinking, I don't want it to be A, B, or
C, I want it to be my block.

268
00:30:30,240 --> 00:30:54,240
So the idea is these people go to L1, and they just start bidding to the miners,
they say, listen, there's a special type of transaction in BIP301, my other BIP.
And this transaction has the property that it's a lot like a bid, where the only the
only one can be included in a block like per sidechain slot or whatever. So the
logically the miners would only take the one that pays the bid that pays them the
most money.

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They're free to take whichever one they want. It can only take one. Once they take
one, it, it banishes, it excludes all the others. Yeah. So this encourages you to
submit bids all the time, submit many bids, submit as many bids as you want bid 2.8,
2.9, 2.99, 2.991, 2.992. You bid up, because only one of these is making it in. And
then they take the one that pays the most. And that is how the miners get the coins
on L1 without even running the sidechain node, if they would.

270
00:31:24,240 --> 00:31:49,240
And so let's just imagine only one Bitcoin goes into this sidechain. So that one
Bitcoin is locked up. And then the one Bitcoin worth of sidechain representation is
minted. And say that those transactions on the Drivechain go back and forth and
spend 10% of the of the entire one Bitcoin in fees over a certain period of time.

271
00:31:49,240 --> 00:31:59,240
Now, would that mean that the locked up one Bitcoin on L1 that's representing this,
does that mean that some of those get siphoned out to the miners in fees?

272
00:31:59,240 --> 00:32:22,240
No, it does not. But that's a good question. Because what's happening is different
L1 coins are in Blind Merged Mining. Because remember, the L2 coins are not traveling
back to L1 in Blind Merged Mining. It's D, A, B, C, or D or E or something. They
build the block and A has a public key over on L2.

273
00:32:23,240 --> 00:32:33,240
And that is collecting the the the bona fide transaction fees of that block. So you
see nothing is actually moving from L2 to L1 yet.

274
00:32:33,240 --> 00:32:36,240
Yeah, it just it's earmarked.

275
00:33:04,240 --> 00:33:19,240
That's people on L2 losing that money and then that money goes on L2 to like
whatever A's public key on L2. So this is just a rearrangement of coins on L2.

276
00:33:20,240 --> 00:33:37,240
So the whatever the same no coins have been withdrawn or deposited. But someone A
was paid on L2. And then a different this is the whole point that it works is that
the same A, it's the same person, the same individual, but not the same blockchain
system.

277
00:33:38,240 --> 00:33:46,240
This is actually how blind. This is the actual design principle of like the why does
Blind Merged Mining work or why might it work?

278
00:33:47,240 --> 00:34:04,240
It's the same A. A is running the L2 node and A is also running the L1 node and they
also have L1 coins. So since it's the same person, it bridges the gap between the
two networks because it's the same person.

279
00:34:04,240 --> 00:34:14,240
They say, I will pay on L1 as long as I am paid on L2. So they are the magic bridge
that communicates all this info.

280
00:34:15,240 --> 00:34:28,240
Yeah. And so obviously Bitcoin has a 10 minute block interval. Every 10 minutes
roughly blocks come through. Does that is that forcibly applied to all Drivechains?

281
00:34:28,240 --> 00:34:40,240
By default, yes, but you can modify it if you are absolutely determined. But I don't
know if I think the people who want that are just kind of a little confused about
what they want.

282
00:34:40,240 --> 00:35:00,240
But there's no denying that some people prefer the faster block times of Ethereum or
even other networks. But I really just don't think like there's many situations
where there's situations where like, well, what am I trying to say?

283
00:35:00,240 --> 00:35:15,240
Like, it's like if you buy in many situations where it doesn't matter, like if you
buy coffee, they have your face on the security camera. If you buy on Amazon, they
will just cancel the order if it's so it's very rare that people.

284
00:35:15,240 --> 00:35:37,240
You really want it to be instant or like even like if you pay 12 seconds is too
long, like whatever Ethereum type thing. If you're paying in line at like a grocery
store, 12 seconds is too long. So you either want to go instant or you want to go or
it doesn't really matter.

285
00:35:37,240 --> 00:35:56,240
So I don't think the block time is a solution. Some people say, oh, 10 minutes, it's
inconvenient. But I don't know. I don't really see it that way. I think because you
think about it like credit card is reversible for 30 days or 90 days even.

286
00:35:56,240 --> 00:35:58,240
Yeah, it's pretty insane to think about.

287
00:35:59,240 --> 00:36:07,240
It is. And so I think the 10 minute block time was chosen for a very good reason.

288
00:36:08,240 --> 00:36:28,240
Yeah. And so that's kind of like the basics of how the whole merge mining system
works or sorry, the whole Drivechain basic system works. So then basically you can
create a different Bitcoin and like a different Bitcoin on top of Bitcoin with
different characteristics.

289
00:36:29,240 --> 00:36:54,240
So like the most simple one might be let's have a significantly larger block size so
we can send lots of little trans lots of small cheap payments. And so the only it
would otherwise be basically the Drivechain would be almost a copy of original
Bitcoin, except now the Drivechain blocks would then be much smaller. I'm sorry,
much larger.

290
00:36:55,240 --> 00:37:05,240
Well, this is important because it highlights what why we would have sidechains or
even alt coins at all, which is because there's a dispute over what the blockchain
should contain.

291
00:37:06,240 --> 00:37:27,240
And we want everyone to be we want everyone to be invited to our party. But we also
don't want anyone to just be able to change the properties of the blockchain. So
it's like, what do we do? This is the first like both historically was the first
dispute, of course, the first big dispute in Bitcoin, like the block size war.

292
00:37:28,240 --> 00:37:48,240
So the question is, what should we do? Should we, you know, do we change Bitcoin's
block size from the one megabyte to something else? Or was that a change to make it
from what it was to one megabyte? And the question is, what do we do? Some people
prefer one way, other people prefer it another way. sidechains, let's have it both
ways. That's the idea.

293
00:37:48,240 --> 00:38:17,240
Yeah. And so basically, some people don't trust the, I guess, the centralization
issues that are perceived or real of having a small of a large block, then they
don't have to use the second layer at all. They can just use the main layer. But if
people are kind of more comfortable with kind of fewer entities managing the
Drivechain, then they can use that. Is that kind of how that breaks down?

294
00:38:19,240 --> 00:38:23,240
Well, what did you mean if fewer entities? What does that mean?

295
00:38:24,240 --> 00:38:37,240
Well, the whole block size argument thing, though, I mean, obviously, it's gone in a
million different directions. But the biggest argument is bigger blocks will mean
fewer entities can run nodes. Therefore, less centralization.

296
00:38:38,240 --> 00:38:39,240
Yeah, more expensive to run a node.

297
00:38:40,240 --> 00:38:47,240
Yeah. And so I suppose that would be fewer nodes for the Drivechain specifically.

298
00:38:48,240 --> 00:38:59,240
Yes. In fact, again, every sidechain node, it must also be an L1 node. So it's
impossible for there to be more L2 nodes than L1 nodes, no matter how cheap it is to
run the L2 node.

299
00:39:00,240 --> 00:39:13,240
Yeah. And so if you want to, if you basically, let's say there's 10,000 Bitcoin
nodes, let's just throw that number out there. If there's 10,000 L1 nodes, and
anyone can run one on a Raspberry Pi, everyone's happy with that.

300
00:39:14,240 --> 00:39:30,240
But then if someone, if there's, let's say, only like 300 of a certain high scaling
Drivechain, there's only 300 of those nodes, some people might be comfortable with
that and just say, I'm going to use that Drivechain because it's fast and cheap.

301
00:39:31,240 --> 00:39:41,240
And others might say, no, that's too centralized. I'm just going to stick with L1.
Is that kind of the way the split kind of shakes out maybe in terms of what people
want?

302
00:39:42,240 --> 00:39:58,240
Yes, I think it's not only, people are very different, you know, they have very
different circumstances. So like some people have faster internet, you know, some
people have slower internet, some people are more, some people, it's easier for them
to pay transaction fees. Other people, it's not.

303
00:39:58,240 --> 00:40:14,240
Some people have to combine many inputs when they make a Bitcoin transaction and
other people don't. And so there is like, people are very different and transactions
are very different as well. Like not every transaction requires a large degree of
centralization.

304
00:40:15,240 --> 00:40:27,240
Some people, like if you're just buying coffee, then it doesn't really matter. But
if you are trying, if you're on the run and you're fleeing North Korea or something,
then it matters.

305
00:40:28,240 --> 00:40:52,240
So the privacy also matters differently. If you're on the darknet market doing
something shady, then the privacy matters a lot. Or if you're donating to like some
kind of politically subversive cause, privacy matters a lot. But if you're just
buying coffee, then it doesn't. Privacy is already foobar, so it doesn't matter. And
it doesn't make any difference. So there's, people are very different types of
people.

306
00:40:53,240 --> 00:40:59,240
And just having different, these kinds of solutions let people choose one or choose
the other possibly.

307
00:41:00,240 --> 00:41:05,240
Yeah, well, like, of course, as the case may be, some may be better than others.

308
00:41:06,240 --> 00:41:16,240
Like, you know, you have cash in your wallet for spending purposes, or, you know,
you have a credit card, you use a wire transfer for some different things. So you
use different things.

309
00:41:17,240 --> 00:41:34,240
As the case may be, you don't always pay for everything with the one system,
although maybe that will change with stuff like WeChat Pay and CBDC or something.
I'm sure they're just trying to get all that to be universally standardized.

310
00:41:35,240 --> 00:41:57,240
Yeah, now, one of the drawbacks of most, I guess, Layer 2 type solutions or the
Layer 2 scaling approach, I guess, is that it becomes more difficult to sort of
maintain the same security level and sustainability level on L1 if he's safe, if
he's off.

311
00:41:58,240 --> 00:42:07,240
Obviously, if Drivechains pay all that money to L1, then that's not necessarily a
problem anymore, but it's kind of sustainable all around.

312
00:42:07,240 --> 00:42:23,240
Now, when people have very specific, I guess, objections to using something like a
Drivechain, they say they don't, and they run their nodes that are just Bitcoin
nodes and not a Drivechain node, etc.

313
00:42:23,240 --> 00:42:37,240
Is there ever a point where, completely ignoring the existence of Drivechains and
trying to be in the L1 Bitcoin maxi world, is there ever a point where those kind of
worlds necessarily collide in a way that some people might not want them to?

314
00:42:38,240 --> 00:42:44,240
Like, if Drivechains are on Bitcoin, can Drivechain haters ignore them forever?

315
00:42:45,240 --> 00:42:46,240
Well, I think so.

316
00:42:46,240 --> 00:42:53,240
I think the question of ignore, of course, you have to be very precise about this
definition, because, you know what I mean?

317
00:42:53,240 --> 00:42:57,240
Like, can you ignore Michael Jackson forever or something or J.K. Rowling or
something?

318
00:42:57,240 --> 00:42:58,240
You know what I mean?

319
00:42:58,240 --> 00:42:59,240
Like, in some sense, no.

320
00:42:59,240 --> 00:43:00,240
Yeah.

321
00:43:01,240 --> 00:43:02,240
In other sense, yes.

322
00:43:02,240 --> 00:43:06,240
Like, Michael Jackson's not going to affect your life.

323
00:43:06,240 --> 00:43:16,240
But it's kind of like, you have to narrowly take the task of running a fully
validating L1 node, because that was the whole dispute of the block size.

324
00:43:16,240 --> 00:43:18,240
It said, we don't want that to get more difficult.

325
00:43:19,240 --> 00:43:32,240
And that thing does not require any sidechain software be run ever to be fully
validating on L1 deposits and withdrawals.

326
00:43:32,240 --> 00:43:37,240
It does the deposits and the withdrawals without looking at the sidechain software.

327
00:43:37,240 --> 00:43:43,240
So the layer one full node is completely ignorant of.

328
00:43:43,240 --> 00:43:44,240
And that's the whole point.

329
00:43:45,240 --> 00:43:53,240
Now, it's kind of like, will individual people be like, what if you make a sidechain
that's so popular that everyone in the entire world has heard of it and they all
love it so much?

330
00:43:53,240 --> 00:43:57,240
It's kind of like, I don't know.

331
00:43:57,240 --> 00:44:02,240
Like, there's many other senses in which you could use English words like affected.

332
00:44:02,240 --> 00:44:07,240
You know, affected by whatever.

333
00:44:07,240 --> 00:44:08,240
Like, I don't care.

334
00:44:08,240 --> 00:44:13,240
Because the point is running an L1 node is unharmed.

335
00:44:13,240 --> 00:44:17,240
It does not become more expensive as a result of anything any sidechain does.

336
00:44:19,240 --> 00:44:21,240
So that is the whole point.

337
00:44:21,240 --> 00:44:27,240
And everything else is, unfortunately, very distracting and misleading.

338
00:44:27,240 --> 00:44:33,240
Because people say like, oh, what about the miners will make a lot of money from
these sidechains?

339
00:44:33,240 --> 00:44:38,240
Or what about like, it doesn't matter.

340
00:44:38,240 --> 00:44:39,240
None of that matters.

341
00:44:39,240 --> 00:44:40,240
merge mining is mining.

342
00:44:41,240 --> 00:44:43,240
It's just collecting money from people.

343
00:44:43,240 --> 00:44:46,240
They already merged mine altcoins, already merged mine Namecoin.

344
00:44:49,240 --> 00:44:51,240
It's good for miners to get more money.

345
00:44:51,240 --> 00:44:58,240
Layer one nodes will reject a block, an L1 block, if it is mined and it doesn't
follow the L1 rules.

346
00:44:58,240 --> 00:45:02,240
So again, we're just staying very narrowly focused on the L1 protocol.

347
00:45:02,240 --> 00:45:07,240
The L1 protocol is not affected by anything that a sidechain does.

348
00:45:07,240 --> 00:45:13,240
It's theoretically possible that the protocol will be so good that all Bitcoin will
be deposited on L1 into this sidechain.

349
00:45:13,240 --> 00:45:15,240
But that's still following all the L1 rules.

350
00:45:17,240 --> 00:45:18,240
Yeah.

351
00:45:18,240 --> 00:45:27,240
And in that hypothetical situation, in a purely technical sense, it is still an L2.

352
00:45:27,240 --> 00:45:31,240
But in a practical sense, it's almost like Bitcoin is just this now.

353
00:45:31,240 --> 00:45:32,240
Become the new thing.

354
00:45:33,240 --> 00:45:42,240
And of course, if that were the case, then luckily for everyone that I set things up
this way,

355
00:45:42,240 --> 00:45:49,240
because the only other way that something else could be that popular would imply
that it, you know,

356
00:45:51,240 --> 00:45:59,240
imagine if it were an altcoin that were so popular that Bitcoin has voluntarily
abandoned the BTC protocol for this altcoin protocol.

357
00:46:00,240 --> 00:46:04,240
In that scenario, BTC has collapsed and goes to zero and the L1 is dead.

358
00:46:04,240 --> 00:46:08,240
Whereas in my scenario, you can always go back to the L1 whenever you want.

359
00:46:10,240 --> 00:46:13,240
And so the L1 is always safe and immortal.

360
00:46:15,240 --> 00:46:16,240
Yeah, for sure.

361
00:46:16,240 --> 00:46:23,240
Now, one of the biggest challenges, I guess, of using multiple cryptocurrencies,

362
00:46:23,240 --> 00:46:28,240
as well as an inherent, I guess, drawback of multiple layer scaling,

363
00:46:28,240 --> 00:46:32,240
is the kind of user experience bifurcation,

364
00:46:32,240 --> 00:46:39,240
where right now I can spend Bitcoin at any place that takes Bitcoin,

365
00:46:39,240 --> 00:46:43,240
but I can't use Lightning in all those places because many of them are not set up
for that.

366
00:46:43,240 --> 00:46:48,240
Or I can use Bitcoin, I can use Dash, I can use Zcash, I can use Monero.

367
00:46:48,240 --> 00:46:53,240
I can use a bunch at a few merchants, but then other ones are just like Bitcoin and
Litecoin, say.

368
00:46:53,240 --> 00:46:57,240
And so the overwhelming network effects of Bitcoin,

369
00:46:57,240 --> 00:47:03,240
if you create a sidechain or a layer 2 or Lightning or whatever,

370
00:47:03,240 --> 00:47:09,240
instantly it kind of splits the network effect a little bit and kind of does that.

371
00:47:09,240 --> 00:47:14,240
Rather than if you just upgraded all of Bitcoin, for example, to have these
properties,

372
00:47:14,240 --> 00:47:20,240
then you wouldn't really have to start from zero with adoption necessarily.

373
00:47:20,240 --> 00:47:26,240
I wouldn't say zero, but give a fresh adoption start for the Drivechain.

374
00:47:26,240 --> 00:47:30,240
So do you think that that could be a barrier of adoption if, let's say,

375
00:47:30,240 --> 00:47:35,240
there's fast, cheap and private Bitcoin on a Drivechain,

376
00:47:35,240 --> 00:47:40,240
but then you can't use it anywhere because everywhere you want to use it only
accepts L1 Bitcoin.

377
00:47:40,240 --> 00:47:42,240
You have to plead with all these exchanges.

378
00:47:42,240 --> 00:47:44,240
Please, can you just let me deposit this one?

379
00:47:44,240 --> 00:47:48,240
Or go to this merchant and say, please, can you add this?

380
00:47:48,240 --> 00:47:53,240
Well, yes, but I think the whole point of sidechains is to reduce that problem,
basically.

381
00:47:53,240 --> 00:47:54,240
Because think about it.

382
00:47:54,240 --> 00:47:57,240
It's a little bit like when you go to a merchant.

383
00:47:57,240 --> 00:48:00,240
Do they take Visa? Do they take MasterCard?

384
00:48:00,240 --> 00:48:05,240
Or even in an extreme case, you're pleading with the laundromat and you say,

385
00:48:05,240 --> 00:48:09,240
I don't have any quarters, but I have a $20 bill or something.

386
00:48:09,240 --> 00:48:10,240
You know what I mean?

387
00:48:10,240 --> 00:48:17,240
So the merchant has an incentive to be open to all methods of payment that are kind
of reasonable.

388
00:48:17,240 --> 00:48:26,240
That doesn't necessarily mean they'll accept Bitcoin, Lightning, anything else
quickly.

389
00:48:26,240 --> 00:48:31,240
But my guess is the one-to-one peg makes it easier.

390
00:48:31,240 --> 00:48:41,240
So I think basically there'll be something like BitPay where you just go and they'll
just do everything.

391
00:48:41,240 --> 00:48:45,240
It'll accept Lightning, L2, whatever.

392
00:48:45,240 --> 00:48:51,240
And it will just figure it out behind the scenes and give the merchant cash the next
day.

393
00:48:51,240 --> 00:48:56,240
The exchanges, you don't really need to beg the exchanges because you can buy the
thing.

394
00:48:56,240 --> 00:49:03,240
You buy the L1 and then using the software, you just convert it from L1 to L2 or
back.

395
00:49:03,240 --> 00:49:06,240
And so you always have a way.

396
00:49:06,240 --> 00:49:10,240
You always have like infinite liquidity since you yourself can.

397
00:49:10,240 --> 00:49:16,240
You don't need to find someone who will swap 14 L1 BTC to 14 L2 BTC.

398
00:49:16,240 --> 00:49:20,240
You can do that all by yourself without anyone's help.

399
00:49:20,240 --> 00:49:23,240
So I agree that the user experience.

400
00:49:23,240 --> 00:49:29,240
Yeah, users obviously get more annoyed often when there are more choices.

401
00:49:29,240 --> 00:49:33,240
This is partially why I think probably like Fetament probably won't work.

402
00:49:33,240 --> 00:49:39,240
Because when you turn it on, you have to pick your group of people that can all
steal from you.

403
00:49:39,240 --> 00:49:42,240
People are just like, I don't want to pick anything.

404
00:49:42,240 --> 00:49:44,240
Or just close the application.

405
00:49:44,240 --> 00:49:49,240
So I think that people don't like choice.

406
00:49:49,240 --> 00:49:54,240
And my guess is that it will be slightly annoying at first.

407
00:49:54,240 --> 00:49:59,240
But probably for that reason, it will standardize around the payments chain or
something.

408
00:49:59,240 --> 00:50:00,240
You know what I mean?

409
00:50:00,240 --> 00:50:04,240
Like they probably won't be paid in the Zcash sidechain, the merchants, because it
just looks weird.

410
00:50:04,643 --> 00:50:10,643
The Zcash sidechain, so many people use that privacy of their own homes, maybe on
that market or something like that.

411
00:50:10,643 --> 00:50:20,643
So I think you're right. But that is also why we won't just have like 7000
sidechains. We'll just only have like, whatever, 10 or 12 or something.

412
00:50:20,643 --> 00:50:29,643
Yeah. Yeah. So what is the process like from, I guess, not from a technical
perspective necessarily, but from a user experience perspective?

413
00:50:29,643 --> 00:50:42,643
Of bridging to and off of a Drivechain. So like, let's just say I get paid in just
regular old L1 Bitcoin, but I spend it. I need to live off of the stuff.

414
00:50:42,643 --> 00:50:52,643
I need to buy my coffee with it. And so I can't be spending $2 per transaction on a
$2 coffee. So I want to bridge to the Drivechain.

415
00:50:53,643 --> 00:50:55,643
So I assume I push a button.

416
00:50:55,643 --> 00:50:57,643
Yeah, you click a button.

417
00:50:57,643 --> 00:51:01,643
And then how long until I have those coins and then can use them?

418
00:51:01,643 --> 00:51:07,643
That should be more or less instant, but it does take like one confirmation to like
sort of move over.

419
00:51:07,643 --> 00:51:20,643
But you see that every sidechain with merged mining, it's like the sidechain is
connected to the sidechain blocks are connected in that one way to the main chain.

420
00:51:20,643 --> 00:51:25,643
So it's kind of like if a main chain reorgs, you don't need to wait for like six
confirmations.

421
00:51:25,643 --> 00:51:33,643
I mean, like you could, but it's like if the main chain reorgs, the sidechain will
also reorg.

422
00:51:33,643 --> 00:51:38,643
So it's just like as if it never, it's just canceling. No one's really going to get
their money stolen from you.

423
00:51:38,643 --> 00:51:43,643
You're sending your money to yourself. It's as if you send the Bitcoin transaction
to yourself and then there was a reorg.

424
00:51:44,643 --> 00:51:47,643
But you know, it doesn't, it doesn't matter.

425
00:51:47,643 --> 00:51:51,643
So you don't really need to wait six confirmations or any amount of confirmations.

426
00:51:51,643 --> 00:51:58,643
The software will kind of only display it after like, I think like one or two
confirmations total to just kind of like make it.

427
00:51:58,643 --> 00:52:01,643
But the deposits are instant and they always work.

428
00:52:01,643 --> 00:52:11,643
The withdrawals are not, are very, very slow, outrageously slow to discourage
regular people from even using this system because only specialists should really do
it.

429
00:52:12,643 --> 00:52:16,643
But the withdrawals are very weird.

430
00:52:16,643 --> 00:52:25,643
They are, you basically the only, they're all batched in like a little container,
little bundle.

431
00:52:26,643 --> 00:52:31,643
And only one bundle can make it every three to six months.

432
00:52:31,643 --> 00:52:34,643
And that is very slow process.

433
00:52:34,643 --> 00:52:42,643
And that is, so L1 synchronizes the state with L2, but L1 is never running a
sidechain node.

434
00:52:42,643 --> 00:52:43,643
So it doesn't know what's happening over there.

435
00:52:43,643 --> 00:52:51,643
So we have to shrink this problem from a huge problem of all kinds of chaos, chaotic
stuff is happening to just one.

436
00:52:52,643 --> 00:52:55,643
We shrink all that to one hash and then the hash is miners.

437
00:52:55,643 --> 00:52:58,643
It's a similar thing as Blind Merged Mining, where it's the same miner.

438
00:52:59,643 --> 00:53:05,643
A miner is an individual on L1 and they look over at L2.

439
00:53:05,643 --> 00:53:08,643
A human being looks over, not the software.

440
00:53:08,643 --> 00:53:15,643
A human being looks over there and it says, the next hash for the next three months
is this.

441
00:53:15,643 --> 00:53:18,643
And they put it in L1 and then it synchronizes.

442
00:53:19,643 --> 00:53:22,643
It slowly synchronizes up.

443
00:53:22,643 --> 00:53:31,643
And then once it hits enough, three months of being identical hashes, more or less,
that's skipping a detail or two.

444
00:53:31,643 --> 00:53:35,643
But once it does that, then the giant withdrawal bundle pays everyone out.

445
00:53:36,643 --> 00:53:43,643
The withdrawal bundle is, that is slow, but it's important to keep in mind that that
is just the settlement.

446
00:53:43,643 --> 00:53:51,643
So anyone on L1, if I have five L1 coins and you have five L2 coins, we can just do
a little swap.

447
00:53:51,643 --> 00:53:52,643
We do HTLC.

448
00:53:53,643 --> 00:53:54,643
We do a little swap.

449
00:53:55,643 --> 00:53:57,643
We do classic HTLC.

450
00:53:57,643 --> 00:54:00,643
Or we just use something like a ShapeShift or Coinbase or whatever.

451
00:54:00,643 --> 00:54:08,643
But we can also do a cryptographic swap where we say, I have five L1 coins.

452
00:54:08,643 --> 00:54:10,643
I pay them to myself after two days.

453
00:54:10,643 --> 00:54:16,643
I pay them to you if the hash is revealed, R is revealed, such as R hashes to H.

454
00:54:17,643 --> 00:54:20,643
And then once I've done that, you do the same thing to me.

455
00:54:20,643 --> 00:54:23,643
You pick the same R and the same H.

456
00:54:23,643 --> 00:54:25,643
You don't know R, but you pick the same H.

457
00:54:26,643 --> 00:54:28,643
You say, okay, I've got five L2 coins.

458
00:54:28,643 --> 00:54:30,643
I pay them back to myself after two days.

459
00:54:31,643 --> 00:54:37,643
I pay them to Paul if R is revealed, such as R hashes to H.

460
00:54:38,643 --> 00:54:39,643
It's the same H.

461
00:54:40,643 --> 00:54:43,643
So I reveal R and I claim your coins.

462
00:54:43,643 --> 00:54:46,643
And then now you know R, you claim my coins.

463
00:54:46,643 --> 00:54:49,643
So we do a cryptographic swap of the coins.

464
00:54:50,643 --> 00:54:53,643
That's instant also, and that's also trustless.

465
00:54:53,643 --> 00:55:00,643
So in that case, the L1 person would charge a fee because it's instant to go one way
and you can do it yourself.

466
00:55:00,643 --> 00:55:02,643
But you can't go back without someone's help.

467
00:55:02,643 --> 00:55:07,643
So it's kind of like a revolving door on a subway.

468
00:55:07,643 --> 00:55:11,643
It only turns one way and you can only move in the one direction easily.

469
00:55:11,643 --> 00:55:14,643
To get out, you have to do the turnstile.

470
00:55:14,643 --> 00:55:24,643
So what would happen in practice, I think, is that some rich people would extract a
small yield by paying people out constantly.

471
00:55:24,643 --> 00:55:25,643
They'd offer a service.

472
00:55:25,643 --> 00:55:27,643
They'd be paying people out on L1.

473
00:55:27,643 --> 00:55:28,643
They'd charge a little fee.

474
00:55:29,643 --> 00:55:31,643
They'd pay people out constantly on L1.

475
00:55:31,643 --> 00:55:34,643
They accumulate all kinds of L2 coins.

476
00:55:35,643 --> 00:55:40,643
Right before the next withdrawal bundle, they would merge all these different
outputs.

477
00:55:40,643 --> 00:55:42,643
It could be like whatever.

478
00:55:43,643 --> 00:55:46,643
2,000 coins maybe, probably not.

479
00:55:46,643 --> 00:55:50,643
But 2,000 coins, they merge them all into one withdrawal.

480
00:55:51,643 --> 00:55:59,643
When the withdrawal is processed, eventually, three months later, 2,000 coins are
paid to one UTXO consolidated.

481
00:55:59,643 --> 00:56:04,643
So it can consolidate the UTXOs on L2 and then pay that out on L1.

482
00:56:05,643 --> 00:56:08,643
So they can actually withdraw an unlimited number of coins.

483
00:56:08,643 --> 00:56:10,643
And it can do that.

484
00:56:11,643 --> 00:56:14,643
This is why it's so slow because we really get to have our cake and eat it too.

485
00:56:14,643 --> 00:56:16,643
It really doesn't matter how slow it is.

486
00:56:16,643 --> 00:56:19,643
Everyone's going to use a parallel system that's instantaneous.

487
00:56:20,643 --> 00:56:23,643
And so the slowness is great because it's free.

488
00:56:24,643 --> 00:56:25,643
It's essentially free.

489
00:56:25,643 --> 00:56:26,643
It involves other steps.

490
00:56:26,643 --> 00:56:38,643
And the slower it is, it just makes it much easier for the sidechain to be policed
without L1 having to do the effort of actually downloading every sidechain block and
checking every sidechain message.

491
00:56:38,643 --> 00:56:43,643
Because the whole thing is reduced to these rare check-ins, this rare state, which
is a hash.

492
00:56:44,643 --> 00:56:46,643
And then that's sorted on L1.

493
00:56:47,643 --> 00:56:48,643
That's the idea.

494
00:56:48,643 --> 00:56:52,643
So this idea may not work, but I certainly think we should try it.

495
00:56:53,643 --> 00:56:59,643
It has many advantages because, of course, the sidechain vision is there shouldn't
be any altcoins.

496
00:57:00,643 --> 00:57:02,643
There shouldn't be any governance on L1.

497
00:57:02,643 --> 00:57:04,643
Anyone who wants to just release a new piece of...

498
00:57:04,643 --> 00:57:06,643
It shouldn't be any kind of block-sized debate.

499
00:57:07,643 --> 00:57:10,643
Someone should just make a large block version.

500
00:57:11,643 --> 00:57:12,643
And no talking.

501
00:57:12,643 --> 00:57:13,643
You know what I mean?

502
00:57:13,643 --> 00:57:14,643
Just make it.

503
00:57:14,643 --> 00:57:16,643
If you get people to use it, right.

504
00:57:16,643 --> 00:57:19,643
Miners should collect transaction fees from every chain.

505
00:57:19,643 --> 00:57:22,643
So the miners should be pro-growth.

506
00:57:23,643 --> 00:57:25,643
They shouldn't just be minimizing their costs and hashing.

507
00:57:25,643 --> 00:57:28,643
They should also be trying to maximize usage of Bitcoin.

508
00:57:28,643 --> 00:57:30,643
It should be like Roger Veering it.

509
00:57:30,643 --> 00:57:31,643
It should be like going around.

510
00:57:31,643 --> 00:57:33,643
They should vertically integrate with BitPay.

511
00:57:34,643 --> 00:57:38,643
Try to get Amazon to take Bitcoin because it will increase their revenues.

512
00:57:39,643 --> 00:57:40,643
So we want that.

513
00:57:40,643 --> 00:57:42,643
We want instant global scale.

514
00:57:42,643 --> 00:57:43,643
We want instant Zcash privacy.

515
00:57:43,643 --> 00:57:48,643
We want all these weird experiments like storage, Filecoin, whatever, Ethereum.

516
00:57:49,643 --> 00:57:51,643
We want all that to just be on Bitcoin.

517
00:57:51,643 --> 00:57:52,643
So that's a division.

518
00:57:52,643 --> 00:57:54,643
And so I think it's...

519
00:57:54,643 --> 00:57:58,643
And there's also no real risk because you can just try this idea.

520
00:57:58,643 --> 00:58:03,643
And then if it doesn't work for some reason, it can just be shut off easily.

521
00:58:04,643 --> 00:58:07,643
So there's a huge upside and low risk.

522
00:58:08,643 --> 00:58:15,643
But what I didn't count on was the tribalism and how far the toxicity and whatever
had spread.

523
00:58:15,643 --> 00:58:19,643
Which is that people think anything that allows an altcoiner to get what they want,
it must be bad.

524
00:58:19,643 --> 00:58:20,643
Yeah, of course.

525
00:58:20,643 --> 00:58:25,643
Anything that suggests that Bitcoin Core is imperfect, it must be bad.

526
00:58:25,643 --> 00:58:28,643
It must be saboteur from the large blocker world or something.

527
00:58:29,643 --> 00:58:31,643
So that was the main flaw.

528
00:58:31,643 --> 00:58:33,643
So hopefully this makes some sense.

529
00:58:33,643 --> 00:58:34,643
Yeah, well that's the main...

530
00:58:34,643 --> 00:58:37,643
I guess the main point is it's almost like riding around a governance problem.

531
00:58:38,643 --> 00:58:46,643
But I guess before we get into that aspect, what is the process for implementing
this on Bitcoin?

532
00:58:46,643 --> 00:58:48,643
Let's just say I'm sold.

533
00:58:48,643 --> 00:58:52,643
I want my fast, easy, not terrible lightning network type thing.

534
00:58:52,643 --> 00:58:54,643
I want that on Bitcoin today.

535
00:58:54,643 --> 00:58:56,643
And how do we get it done?

536
00:58:56,643 --> 00:59:00,643
And what's the process for implementing a Drivechain?

537
00:59:00,643 --> 00:59:03,643
And what are the roadblocks to actually implementing it?

538
00:59:04,643 --> 00:59:09,643
Well, BIP300 is a soft fork and those used to be done frequently.

539
00:59:10,643 --> 00:59:12,643
It used to be hard fork can never be done.

540
00:59:12,643 --> 00:59:14,643
Soft fork can be done though.

541
00:59:14,643 --> 00:59:23,643
And in fact, when I wrote this in November 2015, the next month, December 2015, we
did like three soft forks in that one month.

542
00:59:24,643 --> 00:59:26,643
And so that used to be...

543
00:59:26,643 --> 00:59:28,643
Now with the cases, hard fork is impossible.

544
00:59:28,643 --> 00:59:32,643
Soft fork is also impossible.

545
00:59:33,643 --> 00:59:34,643
Basically.

546
00:59:34,643 --> 00:59:38,643
But it's ironic because the soft fork is actually very easy.

547
00:59:38,643 --> 00:59:47,643
And soft fork only requires 51% of miners and some users to enforce.

548
00:59:49,643 --> 00:59:57,643
The ideal thing would be, of course, to have the Bitcoin community like widely
support this and also popularize it and tell everyone about it.

549
00:59:58,643 --> 00:59:59,643
Stuff like that.

550
00:59:59,643 --> 01:00:02,643
So that would be ideal.

551
01:00:02,643 --> 01:00:08,643
The minimum amount would be to just have a bunch of miners, 51% of miners.

552
01:00:08,643 --> 01:00:15,643
Get enough pools to switch to the software that enforces the rule.

553
01:00:17,643 --> 01:00:18,643
Activate.

554
01:00:18,643 --> 01:00:20,643
And then that would be the bare minimum.

555
01:00:20,643 --> 01:00:21,643
Yeah.

556
01:00:21,643 --> 01:00:28,643
So let's just say you can get 55% of the hash rate, let's just say, to agree to
implement this.

557
01:00:29,643 --> 01:00:35,643
Let's say the other 45% isn't just not in favor of this.

558
01:00:35,643 --> 01:00:37,643
They're very much not.

559
01:00:37,643 --> 01:00:39,643
Militantly against.

560
01:00:39,643 --> 01:00:40,643
They don't want to see anyone.

561
01:00:40,643 --> 01:00:44,643
It's kind of like a gay marriage situation where it's kind of like...

562
01:00:44,643 --> 01:00:45,643
Yeah, of course.

563
01:00:45,643 --> 01:00:48,643
They're not getting gay married and they don't want to see any of them either.

564
01:00:48,643 --> 01:00:49,643
It's kind of like...

565
01:00:49,643 --> 01:00:52,643
It starts across the line of liberalism at some point.

566
01:00:52,643 --> 01:00:53,643
Of course.

567
01:00:53,643 --> 01:00:54,643
But we'll get into that.

568
01:00:55,643 --> 01:01:00,643
It's like if op5 is used for the op5 thing.

569
01:01:00,643 --> 01:01:05,643
They could run something that just says op5 can never be used in a transaction.

570
01:01:05,643 --> 01:01:14,643
So what they would do is they'd say any block, any L1 block that has any Drivechain
shaped message in it at all.

571
01:01:14,643 --> 01:01:17,643
That just invalidates the block.

572
01:01:18,643 --> 01:01:20,643
Weirdly, this is a lot like...

573
01:01:20,643 --> 01:01:22,643
This is exactly like...

574
01:01:25,643 --> 01:01:31,643
See, because the way the software normally works is you take something that's unused
and you shrink it to the size that you want.

575
01:01:32,643 --> 01:01:35,643
And that way only rule breaking is banned.

576
01:01:35,643 --> 01:01:39,643
On the new people who have opted into the new op code or something.

577
01:01:40,643 --> 01:01:47,643
But what the resistors would do is they would say anyone who uses this thing, that's
banned.

578
01:01:47,643 --> 01:01:51,643
And in so doing, they would put themselves on a different network.

579
01:01:51,643 --> 01:01:57,643
Which ironically, even though this would be a soft fork from the tightening the
rules perspective.

580
01:01:57,643 --> 01:02:05,643
It's actually a hard fork from the older definition of only the people who have
upgraded are on your network.

581
01:02:05,643 --> 01:02:06,643
So this is quite...

582
01:02:06,643 --> 01:02:07,643
This has blown...

583
01:02:07,643 --> 01:02:09,643
I think Twitter doesn't know what to make of this.

584
01:02:09,643 --> 01:02:17,643
Because the whole language around soft and hard forks was never actually
standardized in a good way.

585
01:02:17,643 --> 01:02:21,643
So if you like, I can go into this philosophical topic.

586
01:02:21,643 --> 01:02:25,643
Or if you just want to ask more practical questions, I can try to answer those as
well.

587
01:02:25,643 --> 01:02:31,643
But the soft fork and hard fork has two definitions that are mostly the same.

588
01:02:31,643 --> 01:02:34,643
But are in this case, actually the exact opposite.

589
01:02:35,643 --> 01:02:38,643
Yeah, well, before I guess hitting in that thing.

590
01:02:38,643 --> 01:02:45,643
So it seems like that does seem reminiscent of the whole user activated soft fork
thing from back in the day, right?

591
01:02:45,643 --> 01:02:46,643
But it's quite different though.

592
01:02:46,643 --> 01:02:56,643
Because in that case, if you did nothing, you were on the UASF chain by default.

593
01:02:56,643 --> 01:02:59,643
Because your software was interoperable.

594
01:03:00,643 --> 01:03:06,643
The only thing UASF would reject would be if miners refused to signal.

595
01:03:06,643 --> 01:03:16,643
Now, if the miners refused to signal and activate SegWit, if that happened, you
would see that...

596
01:03:16,643 --> 01:03:22,643
So what I'm saying is if you ran UASF and no miners ran the UASF.

597
01:03:23,643 --> 01:03:34,643
And 51% not only didn't run the UASF, but they also broke the SegWit.

598
01:03:34,643 --> 01:03:37,643
They decided not to enforce the SegWit rules.

599
01:03:41,643 --> 01:03:47,643
So all the people who have never upgraded, all the people running old versions, all
the people who are indifferent, all the people who have taken no action.

600
01:03:47,643 --> 01:03:51,643
They will end up on the miner chain, since the miner chain is indifferent.

601
01:03:51,643 --> 01:03:54,643
Everyone who's not running the UASF is indifferent between the two.

602
01:03:55,643 --> 01:04:03,643
And everyone who's indifferent between the SegWit rules will still follow the
longest chain.

603
01:04:03,643 --> 01:04:05,643
So they're with the miners.

604
01:04:06,643 --> 01:04:14,643
So the UASF, everyone can be on either chain if you don't run it.

605
01:04:14,643 --> 01:04:16,643
Maybe I'm not doing a very good job of explaining this.

606
01:04:16,643 --> 01:04:19,643
I'm sure people are probably going to be real confused by this, unfortunately.

607
01:04:19,643 --> 01:04:30,643
But the point of the UASF was that you are saying you want to force the miners to
adopt SegWit.

608
01:04:31,643 --> 01:04:34,643
And you will forge your own...

609
01:04:34,643 --> 01:04:41,643
The UASF was honestly like... there was a hard fork by the old definition also.

610
01:04:42,643 --> 01:04:44,643
So it's kind of hard to say.

611
01:04:44,643 --> 01:04:52,643
Because what I'm getting at is the only situation when the UASF means anything is
when the miners disagree with the users.

612
01:04:53,643 --> 01:05:00,643
And in that case, only the people who have upgraded to the UASF are on that network.

613
01:05:00,643 --> 01:05:02,643
So it's a lot like Bitcoin Cash in that way.

614
01:05:03,643 --> 01:05:04,643
Very bizarre.

615
01:05:04,643 --> 01:05:08,643
But I don't know if I'm doing a good job of explaining why that is.

616
01:05:09,643 --> 01:05:15,643
Well, so the point that I guess I delayed a little bit in asking about how it's
activated is...

617
01:05:16,643 --> 01:05:25,643
It seems like it's kind of a governance route more than anything, the dry-chain
approach.

618
01:05:25,643 --> 01:05:30,643
Because to a certain extent, again, maybe I'm oversimplifying parts of it.

619
01:05:30,643 --> 01:05:39,643
But it seems like the big thing is what should Bitcoin do and people can't
necessarily agree or they don't want to change.

620
01:05:39,643 --> 01:05:41,643
Or enough people don't want to change it.

621
01:05:41,643 --> 01:05:45,643
And this kind of lets Bitcoin not change but still change at the same time.

622
01:05:45,643 --> 01:05:49,643
It kind of routes around having to do the governance question.

623
01:05:50,643 --> 01:05:51,643
Right.

624
01:05:51,643 --> 01:05:52,643
In a way...

625
01:05:53,643 --> 01:05:57,643
Well, let me just interrupt you because I think you're on the right track,
absolutely.

626
01:05:57,643 --> 01:06:02,643
Where it's kind of like we're stuck in prison on Bitcoin Core and we cannot leave.

627
01:06:03,643 --> 01:06:08,643
And I'm saying I have tunneled a way out of this prison for everyone.

628
01:06:08,643 --> 01:06:12,643
Anyone who wishes to leave and then come back at any time can now do so.

629
01:06:13,643 --> 01:06:16,643
Now, if you think about it, it's the prison metaphor.

630
01:06:16,643 --> 01:06:23,643
It's kind of like the last people that you should go to for permission to use the
tunnel would be like the prison warden.

631
01:06:24,643 --> 01:06:25,643
Of course.

632
01:06:25,643 --> 01:06:26,643
Right, exactly.

633
01:06:26,643 --> 01:06:34,643
So there's a sense in which BIP300 should not activate using any existing Bitcoin
thing.

634
01:06:36,643 --> 01:06:40,643
Because it subverts the original paradigm.

635
01:06:41,643 --> 01:06:46,643
Because I'm saying people aren't happy with this software.

636
01:06:46,643 --> 01:06:48,643
We're going to different software.

637
01:06:48,643 --> 01:06:52,643
So it's kind of like in that way, it is like why would...

638
01:06:52,643 --> 01:06:57,643
Of course, the people running this software will be offended or misunderstand or
whatever.

639
01:06:57,643 --> 01:06:59,643
Because they'll just think, why would anyone want to leave?

640
01:06:59,643 --> 01:07:00,643
Isn't it perfect here?

641
01:07:00,643 --> 01:07:01,643
Yeah.

642
01:07:01,643 --> 01:07:02,643
So that's the issue.

643
01:07:03,643 --> 01:07:04,643
Yeah.

644
01:07:05,643 --> 01:07:12,643
Obviously, there's a clear, to some people's minds, at least.

645
01:07:12,643 --> 01:07:18,643
I would say the world's, the enlightened world's minds, there's a clear kind of a
pressure going on.

646
01:07:18,643 --> 01:07:25,643
Where Bitcoin, there's changes that need to happen around Bitcoin.

647
01:07:25,643 --> 01:07:31,643
And I guess the wrong way, one wrong way could be is by using other cryptocurrencies
entirely.

648
01:07:31,643 --> 01:07:32,643
From the Bitcoiner's standpoint.

649
01:07:32,643 --> 01:07:33,643
Right.

650
01:07:33,643 --> 01:07:35,643
That's not the right way of doing that.

651
01:07:35,643 --> 01:07:37,643
From the maximalist, let's say, standpoint.

652
01:07:37,643 --> 01:07:42,643
And then the other wrong way of doing things is by changing Bitcoin itself.

653
01:07:42,643 --> 01:07:45,643
And that's viewed as also wrong.

654
01:07:45,643 --> 01:07:52,643
And so this is a way that allows, that acknowledges that there are things that need
to change.

655
01:07:52,643 --> 01:07:56,643
But we can do that without moving from Bitcoin to something else.

656
01:07:56,643 --> 01:07:58,643
Without moving on from Bitcoin completely.

657
01:07:58,643 --> 01:08:02,643
And also without actually changing Bitcoin at its core.

658
01:08:02,643 --> 01:08:13,643
And so it seems like, I guess, the most diplomatic solution, it seems like the win,
win, win, win, win solution for a Bitcoin maximalist.

659
01:08:13,643 --> 01:08:19,643
Except for the acknowledgement that something needs to be different than it is
today.

660
01:08:19,643 --> 01:08:21,643
And that seems to be the point of contention.

661
01:08:21,643 --> 01:08:25,643
It's basically, the irony is that it's not even really that, I think.

662
01:08:25,643 --> 01:08:28,643
Because you could run the old version, since it is a soft fork.

663
01:08:28,643 --> 01:08:31,643
You could run the old version and not even enforce BIP300.

664
01:08:31,643 --> 01:08:33,643
And then you wouldn't even notice.

665
01:08:33,643 --> 01:08:38,643
As far as everyone knows, I activated BIP300 with the miners like six months ago.

666
01:08:38,643 --> 01:08:43,643
And because it's impossible for you to notice whether or not it has been activated.

667
01:08:43,643 --> 01:08:46,643
That proves that you aren't a victim.

668
01:08:46,643 --> 01:08:47,643
Of course.

669
01:08:47,643 --> 01:08:50,643
Because you have no, there's no empirical.

670
01:08:50,643 --> 01:08:54,643
It's like, someone says, I don't want a robot making my hamburger.

671
01:08:54,643 --> 01:08:56,643
And you have two kitchens.

672
01:08:56,643 --> 01:08:58,643
One with a robot and one with a human.

673
01:08:58,643 --> 01:09:01,643
And then the trays come out and you switch the trays.

674
01:09:01,643 --> 01:09:03,643
And then you switch them back.

675
01:09:03,643 --> 01:09:05,643
And then you say, well, I switched the trays.

676
01:09:05,643 --> 01:09:06,643
Actually, a robot made this.

677
01:09:06,643 --> 01:09:10,643
It's like, did you know that that was, they added women to orchestras.

678
01:09:10,643 --> 01:09:12,643
They had them audition behind.

679
01:09:12,643 --> 01:09:16,643
And they were like, did you know that was a gasp?

680
01:09:16,643 --> 01:09:18,643
A woman playing the violin or something.

681
01:09:18,643 --> 01:09:20,643
And they're like, oh my God, I can't believe it.

682
01:09:20,643 --> 01:09:21,643
Or whatever.

683
01:09:21,643 --> 01:09:22,643
Would you believe that?

684
01:09:22,643 --> 01:09:23,643
Whatever.

685
01:09:23,643 --> 01:09:26,643
Like a black man could be a car mechanic or something.

686
01:09:26,643 --> 01:09:29,643
So it's like, it doesn't, if you can't tell,

687
01:09:29,643 --> 01:09:32,643
then nothing bad is happening to you.

688
01:09:32,643 --> 01:09:33,643
Of course.

689
01:09:33,643 --> 01:09:37,643
So, but it's kind of like, I think more of what it is,

690
01:09:37,643 --> 01:09:40,643
is that the people have been trained to think of Bitcoin Core

691
01:09:40,643 --> 01:09:45,643
as the best software and everything else is a scam.

692
01:09:45,643 --> 01:09:48,643
Because, of course, most of it is, most of the other stuff is a scam.

693
01:09:48,643 --> 01:09:53,643
But it's, for a bad reason, is because of scaling war and stuff,

694
01:09:53,643 --> 01:09:58,643
people have been trained to say that you just stay here.

695
01:09:58,643 --> 01:10:01,643
You stay in Bitcoin Core.

696
01:10:01,643 --> 01:10:04,643
You don't ask too many questions.

697
01:10:04,643 --> 01:10:07,643
So now even in a case where to get all that other stuff,

698
01:10:07,643 --> 01:10:09,643
nothing is happening to the L1 node.

699
01:10:09,643 --> 01:10:11,643
Nothing is happening to the L1 protocol.

700
01:10:11,643 --> 01:10:14,643
Like literally nothing.

701
01:10:14,643 --> 01:10:18,643
Still people feel as though, like the way,

702
01:10:18,643 --> 01:10:22,643
how do you rise on the totem pole in the Bitcoin culture?

703
01:10:22,643 --> 01:10:24,643
It's by hating on everything.

704
01:10:24,643 --> 01:10:25,643
Exactly.

705
01:10:25,643 --> 01:10:28,643
It's like, it's no longer by getting merchant adoption.

706
01:10:28,643 --> 01:10:31,643
It's no longer by even inventing something cool.

707
01:10:31,643 --> 01:10:33,643
You can invent something cool and that is not a guarantee.

708
01:10:33,643 --> 01:10:36,643
Like Jeremy Rubin did 1.19.

709
01:10:36,643 --> 01:10:39,643
It's not, it doesn't really work like that anymore.

710
01:10:39,643 --> 01:10:42,643
You get it cool, but you stay humble stacks hats.

711
01:10:42,643 --> 01:10:43,643
That's one way.

712
01:10:43,643 --> 01:10:44,643
If you just buy Bitcoin.

713
01:10:44,643 --> 01:10:47,643
So that's, or you just say that you have.

714
01:10:47,643 --> 01:10:50,643
You don't really, no one, who knows if you even have or not.

715
01:10:50,643 --> 01:10:52,643
But you say that you have,

716
01:10:52,643 --> 01:10:55,643
or you don't say that you are mysterious about it for,

717
01:10:55,643 --> 01:10:57,643
so you don't get doxxed.

718
01:10:57,643 --> 01:11:00,643
It's kind of like, so it's like that.

719
01:11:00,643 --> 01:11:02,643
And then it's like, yeah, you're the toxicity.

720
01:11:02,643 --> 01:11:06,643
And you just, you just be mean to everyone on Twitter.

721
01:11:06,643 --> 01:11:10,643
So that, that is the whole culture has evolved towards that.

722
01:11:10,643 --> 01:11:12,643
And you know, it's whatever it's safety and amuse,

723
01:11:12,643 --> 01:11:14,643
it's Samson Mao.

724
01:11:14,643 --> 01:11:19,643
Like neither safety nor Samson or a whole list of other people

725
01:11:19,643 --> 01:11:20,643
we could name.

726
01:11:20,643 --> 01:11:23,643
They, you know, they can't code.

727
01:11:23,643 --> 01:11:25,643
They can't, they can't build anything.

728
01:11:25,643 --> 01:11:30,643
They, but they do, they do some kind of cultural purpose.

729
01:11:30,643 --> 01:11:33,643
They, they are around, they just,

730
01:11:33,643 --> 01:11:36,643
they like enforce the root, the cultural rules of Bitcoin.

731
01:11:36,643 --> 01:11:42,643
And they, they are kind of, they're kind of,

732
01:11:42,643 --> 01:11:48,643
they're kind of meme or kind of, they're like,

733
01:11:48,643 --> 01:11:53,643
they, they, they represent what should be imitated.

734
01:11:53,643 --> 01:11:54,643
Yeah.

735
01:11:54,643 --> 01:11:56,643
The, the, the cultural leaders more or less.

736
01:11:56,643 --> 01:11:58,643
Right.

737
01:11:58,643 --> 01:12:00,643
So how big,

738
01:12:00,643 --> 01:12:06,643
where's that conversation at these days surrounding Drivechains?

739
01:12:06,643 --> 01:12:07,643
I mean, obviously, first off,

740
01:12:07,643 --> 01:12:09,643
how long has this conversation been going?

741
01:12:09,643 --> 01:12:10,643
How many years?

742
01:12:10,643 --> 01:12:13,643
And where is it today do you think?

743
01:12:13,643 --> 01:12:17,643
Well, I think like in 2015 people liked it a lot more.

744
01:12:17,643 --> 01:12:18,643
People really loved it.

745
01:12:18,643 --> 01:12:20,643
And then some weird stuff happened.

746
01:12:20,643 --> 01:12:21,643
So like,

747
01:12:21,643 --> 01:12:25,643
it's 2015 November was right in between the two scaling conferences and it's

748
01:12:25,643 --> 01:12:29,643
scaling to everyone wanted to do SegWit because it was a compromised block

749
01:12:29,643 --> 01:12:30,643
size increase.

750
01:12:30,643 --> 01:12:32,643
It was a mandatory block size increase.

751
01:12:32,643 --> 01:12:36,643
So that was like,

752
01:12:36,643 --> 01:12:38,643
this has all been like erased from history now,

753
01:12:38,643 --> 01:12:42,643
but one of the pros of SegWit was that it met large blockers halfway.

754
01:12:42,643 --> 01:12:44,643
There was this idea of we should compromise,

755
01:12:45,643 --> 01:12:46,643
which was like,

756
01:12:46,643 --> 01:12:48,643
that has been erased of course,

757
01:12:48,643 --> 01:12:52,643
from history for better or for worse.

758
01:12:52,643 --> 01:12:53,643
I think probably for worse,

759
01:12:53,643 --> 01:12:56,643
we should at least tell the truth about what happened,

760
01:12:56,643 --> 01:12:58,643
but it would also,

761
01:12:58,643 --> 01:12:59,643
that was going to enable lightning.

762
01:12:59,643 --> 01:13:01,643
And that was also supposedly that was going to be written.

763
01:13:01,643 --> 01:13:02,643
Someone threw out a date,

764
01:13:02,643 --> 01:13:03,643
like April 1st,

765
01:13:03,643 --> 01:13:04,643
that'll be ready.

766
01:13:04,643 --> 01:13:05,643
SegWit,

767
01:13:05,643 --> 01:13:06,643
April 1st,

768
01:13:06,643 --> 01:13:07,643
2016.

769
01:13:07,643 --> 01:13:08,643
Then that didn't happen.

770
01:13:08,643 --> 01:13:10,643
And then there was a lot of contention.

771
01:13:10,643 --> 01:13:11,643
Ethereum was getting big.

772
01:13:11,643 --> 01:13:15,643
So then now this puts people in,

773
01:13:15,643 --> 01:13:18,643
this is my armchair psychology story,

774
01:13:18,643 --> 01:13:21,643
which is that Ethereum starts to get big.

775
01:13:21,643 --> 01:13:25,643
Now the sidechain narrative is in trouble because the sidechain narrative says

776
01:13:25,643 --> 01:13:28,643
something like all these other chains,

777
01:13:28,643 --> 01:13:32,643
all this other software is really cool and we're going to copy it and bring it

778
01:13:32,643 --> 01:13:33,643
to Bitcoin.

779
01:13:33,643 --> 01:13:39,643
But what people don't want to do is they don't want to admit that Ethereum is

780
01:13:39,643 --> 01:13:40,643
cool because if you admit that,

781
01:13:40,643 --> 01:13:44,643
then there might be a runaway snowball effect.

782
01:13:44,643 --> 01:13:45,643
And then,

783
01:13:45,643 --> 01:13:49,643
and then Ethereum will flip in BTC and then we'll have killed BTC.

784
01:13:49,643 --> 01:13:55,643
So people want to stay far away from admitting that the other chain has value.

785
01:13:55,643 --> 01:13:57,643
So that was bad for the sidechain narrative.

786
01:13:57,643 --> 01:13:59,643
And then another terrible thing happened,

787
01:13:59,643 --> 01:14:04,643
which was the blockade of SegWit created this miners versus,

788
01:14:04,643 --> 01:14:07,643
this was late 2016 into 2017,

789
01:14:07,643 --> 01:14:10,643
miners versus developers type of a thing.

790
01:14:10,643 --> 01:14:11,643
So everyone,

791
01:14:11,643 --> 01:14:14,643
everyone hated the miners in the BTC world.

792
01:14:14,643 --> 01:14:17,643
So that was also terrible,

793
01:14:17,643 --> 01:14:21,643
like not good because the BIP300 is like mining process based and it just says,

794
01:14:21,643 --> 01:14:22,643
well,

795
01:14:22,643 --> 01:14:26,643
miners will make all this money so they'll just keep this system on.

796
01:14:26,643 --> 01:14:28,643
And then yet another bad thing happened,

797
01:14:28,643 --> 01:14:32,643
which was in 2017 of course the community split.

798
01:14:32,643 --> 01:14:34,643
And so again,

799
01:14:34,643 --> 01:14:39,643
the sidechain idea is kind of like everyone can be happy.

800
01:14:39,643 --> 01:14:40,643
Everyone can be happy.

801
01:14:40,643 --> 01:14:46,643
Small blockers and large blockers can work together.

802
01:14:46,643 --> 01:14:48,643
And so,

803
01:14:48,643 --> 01:14:49,643
but then once they split,

804
01:14:49,643 --> 01:14:50,643
it was kind of like,

805
01:14:50,643 --> 01:14:52,643
first of all,

806
01:14:52,643 --> 01:14:53,643
the small blockers are like,

807
01:14:53,643 --> 01:14:55,643
why do we need to make large blockers happy?

808
01:14:55,643 --> 01:14:57,643
They're gone now.

809
01:14:57,643 --> 01:14:58,643
And the large blockers are like,

810
01:14:58,643 --> 01:15:00,643
why do we need to make small blockers happy?

811
01:15:00,643 --> 01:15:01,643
We forked.

812
01:15:01,643 --> 01:15:04,643
So the fork made it so that.

813
01:15:04,815 --> 01:15:16,975
So the fork made it so that a compromise was no longer, you know, like needed or
whatever, it was no longer, there's no market for that now. Because everyone thinks
I'm going to fight and we're going to win.

814
01:15:19,495 --> 01:15:25,655
And, you know, I would say like it certainly, you look at the market cap.

815
01:15:26,655 --> 01:15:45,655
They did fight and the BTC side defeated the BCH side for a variety of reasons that
we could get into some of which many of most, I would say most of which have nothing
to do with the block size concept itself, even though I think they also lost on that
concept.

816
01:15:45,655 --> 01:15:51,655
I think that was also a bad idea because you can have optional large blocks on top
of small L1 blocks, but you cannot do the reverse.

817
01:15:51,975 --> 01:15:58,575
So it's an irrational thing to want when you could just get everything that you
wanted without inconveniencing other people.

818
01:15:58,575 --> 01:16:11,815
But so I think that's a long story, but I'm trying to paint a picture of like, this
idea competed with SegWit, which was teed up as the right idea in December 2015.

819
01:16:12,775 --> 01:16:14,015
And I only published this late.

820
01:16:14,015 --> 01:16:15,655
It was like after Thanksgiving, I think.

821
01:16:15,695 --> 01:16:17,055
So it was late November.

822
01:16:17,295 --> 01:16:19,015
It was like right before Scaling 2.

823
01:16:20,015 --> 01:16:25,775
So people were into SegWit, including me, because compromised block size increased,
supercharges lightning.

824
01:16:26,175 --> 01:16:40,295
So then it was sidechains to admit that we want sidechains validates other altcoins,
namely Ethereum, which had gone from being like 1% of Bitcoin to like 30% of
Bitcoin.

825
01:16:40,295 --> 01:16:47,415
So it was like it like visually on coin market cap, like expanded or something,
something like that.

826
01:16:48,215 --> 01:16:57,175
2016, then this idea was harmed by the fact that it was like miner centric and
people hated miners in 2017.

827
01:16:57,895 --> 01:17:10,695
And then the split, again, it forces Bitcoiners to acknowledge the split made it
look like those people didn't really care about what was best for the Bitcoin
community or something.

828
01:17:10,695 --> 01:17:11,935
They're like in it for themselves.

829
01:17:11,935 --> 01:17:13,055
They made these coins.

830
01:17:13,055 --> 01:17:16,135
They're lying about they're reusing the name Bitcoin or something like that.

831
01:17:16,535 --> 01:17:18,815
Everyone just thought those other people are bad guys.

832
01:17:18,855 --> 01:17:24,895
So we don't we'd actually don't it poisoned everything associated with each of the
ideas.

833
01:17:24,895 --> 01:17:27,655
Everyone was like, the last thing I want to do is make those people happy.

834
01:17:27,775 --> 01:17:28,535
Yeah, of course.

835
01:17:28,535 --> 01:17:30,575
It's so acrimonious, the split.

836
01:17:31,895 --> 01:17:38,375
And then I think like after that, like Blockstream started to market like Liquid as
like a real sidechain, even though it basically was not.

837
01:17:38,495 --> 01:17:44,215
And so it was like now this idea is going to go up against Blockstream.

838
01:17:44,215 --> 01:17:46,495
It's also going up against Lightning in a way.

839
01:17:46,535 --> 01:17:47,495
Lightning is very big.

840
01:17:47,895 --> 01:17:51,055
So it's had it's had horrendous luck, this idea.

841
01:17:52,015 --> 01:18:01,015
It's and like each of those things was such a huge problem that I actually I'm not
even sure that there would have been anything that I could possibly have done.

842
01:18:01,415 --> 01:18:05,695
Yeah, of course, to beat that like stuff culturally.

843
01:18:06,615 --> 01:18:13,975
So are you getting much support for this idea today as opposed to other points in
the past?

844
01:18:14,535 --> 01:18:17,455
Well, yeah, I think there was when it first came out, people really liked it.

845
01:18:17,455 --> 01:18:21,375
And there was in fact, it was stickied on our Bitcoin from time to time.

846
01:18:21,375 --> 01:18:24,455
It actually it lasted until the BCH split.

847
01:18:24,455 --> 01:18:28,095
I think people were saying, like, we can actually have both.

848
01:18:28,095 --> 01:18:32,175
And without we have a small block L1, a large block L2.

849
01:18:32,895 --> 01:18:45,695
And then I think after the split, it was kind of like anyone to even push for a
large block L2 in a safe way was would have just was too associated with like trying
to get large blocks.

850
01:18:45,695 --> 01:18:47,615
Like it's like, oh, why do you want large blocks so much?

851
01:18:47,615 --> 01:18:48,735
What are you, one of them or something?

852
01:18:49,015 --> 01:18:54,695
Yeah. So I think then it like it kind of fell into obscurity.

853
01:18:55,695 --> 01:19:02,695
And then and then now over the last 12 months, it has come come back.

854
01:19:03,695 --> 01:19:19,935
Yeah, it's so one thing is for sure, right, the culture of Bitcoin, as we mentioned,
has the maximalist culture that seems to drive a lot of what happens and doesn't
happen and the end of the day seems to be resistant to this for the time being.

855
01:19:19,935 --> 01:19:29,935
Now, that being said, it's undeniable that other projects have eaten up bigger and
bigger market share to a certain extent.

856
01:19:29,935 --> 01:19:39,935
The adoption metrics that I look at is, for example, actual usage and the one of the
best ways of finding that is through total fees generated.

857
01:19:39,935 --> 01:19:45,935
And basically people are paying 10 times as much to use Ethereum than they are
Bitcoin right now.

858
01:19:46,935 --> 01:19:56,935
And so and then you're starting to see Ethereum things float into Bitcoin, whether
it's the ordinals and things like that and BRC 20 tokens and things.

859
01:19:56,935 --> 01:20:00,935
And obviously, I understand there might have been a little bit of a troll element to
some of those things.

860
01:20:00,935 --> 01:20:03,935
But still, those ideas pick up this way.

861
01:20:03,935 --> 01:20:08,935
And over time, there's more and more pressure from the outside to come in.

862
01:20:08,935 --> 01:20:23,935
And so at some point, if Bitcoin start to lose money or relatively lose money
compared to other things, that's when all the maxi posturing starts to maybe crack a
little bit.

863
01:20:23,935 --> 01:20:40,935
Yeah, well, I mean, if, of course, like if Ethereum became close to hypothetically,
if Ethereum went close to flippening BTC, I think this would people would hit the
like, they would hit the eject, they would dump all of the old philosophy
immediately.

864
01:20:40,935 --> 01:20:44,935
And they would stimulate like a creative search for new ideas.

865
01:20:45,935 --> 01:20:48,935
I think there's more the ordinals thing is a troll.

866
01:20:48,935 --> 01:21:00,935
But there is also a fundamental connection, which is that, first of all, people
actually like they actually do like the the idea of having digital assets and so did
plenty of other people such as how Finney and etc.

867
01:21:00,935 --> 01:21:03,935
Digital create baseball cards and stuff.

868
01:21:03,935 --> 01:21:05,935
Yeah, so people have liked this idea.

869
01:21:05,935 --> 01:21:06,935
And they've been trying it forever.

870
01:21:06,935 --> 01:21:10,935
They tried it on Bitcoin, colored coins, counterparty, whatever, Omnico, whatever.

871
01:21:10,935 --> 01:21:11,935
So yeah.

872
01:21:11,935 --> 01:21:15,935
So the idea is very old and people like the idea and it's not going away.

873
01:21:16,935 --> 01:21:22,935
But I think the deeper connection is actually that Ethereum likes to do new stuff
and likes to experiment with things.

874
01:21:22,935 --> 01:21:24,935
And it's just kind of like lets people do whatever.

875
01:21:24,935 --> 01:21:25,935
It's not very judgmental.

876
01:21:26,935 --> 01:21:31,935
And I think Bitcoin, of course, does sort of the opposite, where it tries to be very
conservative.

877
01:21:32,935 --> 01:21:37,935
But it Bitcoin could go too long without something new happening.

878
01:21:41,935 --> 01:21:51,935
And people like, you know, they think of it as maybe it needs to it needs to
continue to have like cultural relevance.

879
01:21:51,935 --> 01:21:56,935
You know, it needs to be out there because it needs to be recognized as money in
order to work.

880
01:21:57,935 --> 01:21:58,935
So it needs to have like a culture.

881
01:21:59,935 --> 01:22:04,935
And as a result, it has to have all this stuff, like all these podcasts, all this
Twitter addiction.

882
01:22:05,935 --> 01:22:10,935
You know, it needs to have all this stuff because you have to make sure you're when
you're a Bitcoiner, you're like a paranoid.

883
01:22:11,935 --> 01:22:13,935
You're paranoid of like Bitcoin being like ignored.

884
01:22:14,935 --> 01:22:15,935
More attention it gets, the better.

885
01:22:16,935 --> 01:22:26,935
And so it's it creates this huge attention economy, this huge attention food chain
in Bitcoin.

886
01:22:27,935 --> 01:22:29,935
And it just means that it just gets stuff gets old.

887
01:22:29,935 --> 01:22:30,935
You know, it just gets old.

888
01:22:30,935 --> 01:22:31,935
Nothing new has happened in a while.

889
01:22:31,935 --> 01:22:33,935
So Ordinal is something new.

890
01:22:33,935 --> 01:22:35,935
So it's a new drama.

891
01:22:35,935 --> 01:22:36,935
Yeah.

892
01:22:36,935 --> 01:22:37,935
Yeah.

893
01:22:37,935 --> 01:22:51,935
So basically, it seems like something else I also did a show on before was the
Bitcoin sustainability problem where you have halvening.

894
01:22:51,935 --> 01:22:56,935
So inflation is going down and fee revenue is not going up.

895
01:22:56,935 --> 01:23:00,935
And it seems to be there's a cap of how much people will pay for a single on-chain
transaction.

896
01:23:01,935 --> 01:23:09,935
And so basically, there needs to be some kind of a solution that makes it so that
Bitcoin security ticking time bomb gets solved.

897
01:23:09,935 --> 01:23:15,935
And so I guess it seems to be right now, things are OK.

898
01:23:16,935 --> 01:23:17,935
Depends on who you're asking.

899
01:23:17,935 --> 01:23:18,935
Right.

900
01:23:18,935 --> 01:23:19,935
Right.

901
01:23:19,935 --> 01:23:20,935
Yeah, for now.

902
01:23:20,935 --> 01:23:21,935
OK.

903
01:23:21,935 --> 01:23:30,935
But in a couple of years, there's the being overtaken by other projects or just
losing security budget and actually diminishing.

904
01:23:30,935 --> 01:23:32,935
Those two things are looming on the horizon.

905
01:23:33,935 --> 01:23:42,935
And so at that point, when those become a real problem, like a present problem, then
it seems like there will have to be a choice.

906
01:23:42,935 --> 01:24:02,935
Either people will have to just abandon Bitcoin and go on to other projects
completely, or they will have to make Bitcoin be able to absorb the usefulness of
some of these other projects and become sustainable in its own tokenomics and stuff,
in its own security model.

907
01:24:02,935 --> 01:24:15,935
So it seems like if I were to break this down simply, it's like Bitcoin has a couple
more years before it has to decide to either die or go with Drivechains or something
more controversial.

908
01:24:15,935 --> 01:24:20,935
But Drivechain seems to be the least controversial way of getting all these things
done.

909
01:24:22,935 --> 01:24:23,935
Yeah, I think so.

910
01:24:23,935 --> 01:24:29,935
I think that people are really in denial about the security budget situation.

911
01:24:29,935 --> 01:24:31,935
They don't seem to understand it at all.

912
01:24:31,935 --> 01:24:33,935
In fact, it's already happening.

913
01:24:33,935 --> 01:24:49,935
Like if I went to mining disrupt and miners were saying like, I don't think the
Satoshi's design, I don't think it actually planned at all to have minor revenues be
cut in half every four years.

914
01:24:52,935 --> 01:24:56,935
What I mean by that is he thought the fee revenues would be going up the whole time.

915
01:24:57,935 --> 01:24:58,935
He thought the mining.

916
01:24:58,935 --> 01:25:01,935
So he just kind of thought it would kind of like it would be.

917
01:25:01,935 --> 01:25:03,935
I think he thought it would be noisy.

918
01:25:06,935 --> 01:25:09,935
But as you say, we have fixed L1 block size.

919
01:25:11,935 --> 01:25:16,935
merge mining is not encouraged the way it should be, to say the least.

920
01:25:17,935 --> 01:25:24,935
And people are willing to pay only so much for L1 transaction.

921
01:25:25,935 --> 01:25:31,935
So this means that the fee picture is frozen at a tiny value.

922
01:25:32,935 --> 01:25:35,935
It's very small in U.S. dollar terms.

923
01:25:36,935 --> 01:25:40,935
So it's frozen at whatever it is, you know, like maybe like a million dollars a day
or something.

924
01:25:40,935 --> 01:25:47,935
But it's whatever it is, it's very small in comparison to the block subsidy, the new
coins that are created.

925
01:25:48,935 --> 01:25:56,935
And yeah, I think Satoshi had in mind one would be growing geometrically and noisily
a lot.

926
01:25:57,935 --> 01:25:59,935
And the other is having every four years.

927
01:26:00,935 --> 01:26:02,935
And he thought like it goes up, it goes down.

928
01:26:03,935 --> 01:26:09,935
But I don't think that he had in mind like just falling off a cliff.

929
01:26:10,935 --> 01:26:17,935
And so anyway, like a lot of miners say that eventually they will be forced to or
that they will push for.

930
01:26:17,935 --> 01:26:26,935
He said there'll eventually be a split in the Bitcoin community where the miners
will want to stop the having from taking place.

931
01:26:26,935 --> 01:26:31,935
Eventually, they'll freeze it at some lower value, like maybe in eight years or so.

932
01:26:31,935 --> 01:26:34,935
They'll just hard fork and they'll say it's not having again.

933
01:26:34,935 --> 01:26:36,935
This is perpetual tail emission.

934
01:26:37,935 --> 01:26:39,935
And even people like Peter Todd support this.

935
01:26:39,935 --> 01:26:41,935
He would think it would be a fringe idea.

936
01:26:41,935 --> 01:26:44,935
So he's doing that.

937
01:26:51,935 --> 01:26:56,935
Yeah, I mean, it's either something radical like that, like changing the magical 21
million.

938
01:26:56,935 --> 01:27:01,935
Or it's simply allowing for other things to be built.

939
01:27:02,935 --> 01:27:04,935
Yeah, and there's really no reason not to do this.

940
01:27:04,935 --> 01:27:09,935
Like people think that there is, they think this is, you know, whatever, a risk.

941
01:27:11,935 --> 01:27:15,935
This is again, just like, you know, this is just prejudice.

942
01:27:15,935 --> 01:27:17,935
People don't, they don't understand the idea.

943
01:27:17,935 --> 01:27:18,935
There really is no risk.

944
01:27:19,935 --> 01:27:23,935
It's not, you know, it's just an integer counting to 13,000 under the hood.

945
01:27:24,935 --> 01:27:25,935
merge mining has already been done.

946
01:27:26,935 --> 01:27:28,935
It's been done for 10 years, 10, 12 years.

947
01:27:29,935 --> 01:27:36,935
Yeah, we'll tend to really quick before we wrap up Steel Man, the critics on this.

948
01:27:36,935 --> 01:27:37,935
What's the biggest critic?

949
01:27:38,935 --> 01:27:39,935
What's the biggest criticism?

950
01:27:39,935 --> 01:27:42,935
The critics say the big criticisms are false.

951
01:27:43,935 --> 01:27:44,935
But I can give you them anyway.

952
01:27:44,935 --> 01:27:45,935
And then there's the Steel Man.

953
01:27:45,935 --> 01:27:47,935
My Steel Man would be like something different.

954
01:27:47,935 --> 01:27:48,935
It would be like a different thing.

955
01:27:49,935 --> 01:27:53,935
I don't want to say some things that are actually true.

956
01:27:54,935 --> 01:27:58,935
But the biggest one is that it affects mining incentives.

957
01:27:59,935 --> 01:28:06,935
But what people mean by this is if you actually ask, they are hopelessly confused
and they don't know what they're talking about.

958
01:28:07,935 --> 01:28:12,935
But the only way to salvage some meaning from it, which is again, they don't even
know this.

959
01:28:12,935 --> 01:28:17,935
But what they're referring to is they're saying we don't want minor revenues to go
up.

960
01:28:17,935 --> 01:28:22,935
But that's just like saying they want the security budget problem to be unsolved
forever.

961
01:28:23,935 --> 01:28:44,935
So if you could really truly Steel Man it somehow or something, I would say
something like it changes the optimal minor from someone who only cares about
hashing and minimizing their dollar per hash cost, minimizing their electricity
cost.

962
01:28:45,935 --> 01:29:07,935
It changes a minor from that and someone who only chooses the pool based on the pool
charging low fees, the pool not doing 51% of tax, the pool doing what they want the
pool to do, signaling for soft work they want to do.

963
01:29:08,935 --> 01:29:09,935
So they do all this stuff.

964
01:29:09,935 --> 01:29:10,935
They minimize their hash costs.

965
01:29:10,935 --> 01:29:11,935
They do cooling.

966
01:29:11,935 --> 01:29:13,935
They have to worry about security.

967
01:29:13,935 --> 01:29:16,935
Sometimes they have to worry about regulation or mining.

968
01:29:16,935 --> 01:29:19,935
Remember when mining was banned in China and then whatever.

969
01:29:19,935 --> 01:29:26,935
So miners have this long list of things that they worry about, including they choose
which pool to mine.

970
01:29:26,935 --> 01:29:31,935
And that pool may do altcoin merge mining as slush pool did.

971
01:29:31,935 --> 01:29:34,935
There's brains, as it is now called the oldest pool in existence.

972
01:29:36,935 --> 01:29:38,935
We do altcoin merge mining.

973
01:29:38,935 --> 01:29:48,935
It changes the optimal minor from that to someone who is that plus they care about
which sidechains are active and that type of thing.

974
01:29:49,935 --> 01:30:03,935
But that's not really a change because the list of things a minor has to care about
has grown and shrunk and changed shape many times throughout the years and it will
continue to do so.

975
01:30:03,935 --> 01:30:05,935
So there's really no basis for.

976
01:30:06,935 --> 01:30:11,935
In fact, merge mining is great because merge mining is effectively tons of new
revenue for free.

977
01:30:12,935 --> 01:30:15,935
So merge mining relatively helps the little guys.

978
01:30:15,935 --> 01:30:17,935
It actually helps decentralized mining.

979
01:30:18,935 --> 01:30:19,935
Of course.

980
01:30:19,935 --> 01:30:20,935
Yeah.

981
01:30:20,935 --> 01:30:21,935
So that's one.

982
01:30:21,935 --> 01:30:24,935
And then the other one is that miners can steal all the coins in the sidechain.

983
01:30:24,935 --> 01:30:29,935
But of course, that only impacts people who chosen to deposit coins on the sidechain.

984
01:30:29,935 --> 01:30:31,935
And there's lots of the large blockers.

985
01:30:32,935 --> 01:30:33,935
They were pro miner.

986
01:30:33,935 --> 01:30:35,935
They were pro SPV mode at the time.

987
01:30:35,935 --> 01:30:47,935
And this mode is one hash every three months level SPV, which is way more reliable
than what large blockers were willingly signing up, signing up for 2015.

988
01:30:47,935 --> 01:30:50,935
And not to mention all the other new features that people might get.

989
01:30:51,935 --> 01:30:55,935
So but that only one that only affects people who have deposited coins.

990
01:30:56,935 --> 01:31:00,935
People say all kinds of other stuff about like, oh, it gives miners more influence.

991
01:31:00,935 --> 01:31:01,935
But that's not true.

992
01:31:01,935 --> 01:31:09,935
Because if you don't deposit coins to the 300 script and you're just not using the
feature, you're just not getting the gay marriage or whatever.

993
01:31:09,935 --> 01:31:12,935
So it just doesn't affect you at all.

994
01:31:13,935 --> 01:31:25,935
But I think like I'm trying to think of the other steel man like what I would just
that's what's been that's what's said, but it's really not.

995
01:31:25,935 --> 01:31:27,935
It's kind of nonsensical.

996
01:31:28,935 --> 01:31:35,935
So I can give you like what I what I would worry about is blockchains with no that
only rely on fees.

997
01:31:35,935 --> 01:31:37,935
Maybe those don't work at all.

998
01:31:38,935 --> 01:31:39,935
In which case this idea won't work.

999
01:31:39,935 --> 01:31:47,935
And in which case Bitcoin also eventually when the fee when the having is so small,
they will also stop working.

1000
01:31:47,935 --> 01:31:49,935
So we might as well learn it now.

1001
01:31:49,935 --> 01:31:53,935
We might as well learn about that flaw now.

1002
01:31:54,935 --> 01:31:59,935
Because so far there haven't been transaction fee only blockchains.

1003
01:32:01,935 --> 01:32:02,935
So maybe they just don't really work.

1004
01:32:02,935 --> 01:32:03,935
They could work.

1005
01:32:03,935 --> 01:32:04,935
Maybe they don't.

1006
01:32:04,935 --> 01:32:16,935
As a funny, there's one I know of, which is there's a cryptocurrency called the Maya
protocol, which is a fork of Thor chain, which is a cross chain exchange mechanism.

1007
01:32:16,935 --> 01:32:26,935
In Maya launch, it has zero emission is only fees right now, which it is a very
interesting dynamic of making the team hustle behind getting this used.

1008
01:32:27,935 --> 01:32:28,935
Yes, right.

1009
01:32:28,935 --> 01:32:31,935
That's what I that's what that's the hope for sidechains.

1010
01:32:31,935 --> 01:32:35,935
Is that no one makes a stupid scam pump and dump altcoin.

1011
01:32:35,935 --> 01:32:41,935
They only make a sidechain that they think people would actually generate usage and
miners only activate once.

1012
01:32:41,935 --> 01:32:43,935
So I should really look into that.

1013
01:32:43,935 --> 01:32:45,935
That's I will write that down.

1014
01:32:45,935 --> 01:32:47,935
I'll check into that.

1015
01:32:47,935 --> 01:32:49,935
So, yeah, fees may not work.

1016
01:32:49,935 --> 01:32:56,935
Maybe the whole idea would just be so unpopular that I'll have taken up people's
attention kind of for no reason.

1017
01:32:56,935 --> 01:32:59,935
Although there's plenty of evidence to suggest that's not true.

1018
01:32:59,935 --> 01:33:02,935
Like you see wrapped Bitcoin is like four or five billion dollars.

1019
01:33:02,935 --> 01:33:05,935
But wrapped Bitcoin is basically the same idea, just in reverse.

1020
01:33:05,935 --> 01:33:07,935
It's like Bitcoin on Ethereum.

1021
01:33:07,935 --> 01:33:08,935
Yeah.

1022
01:33:08,935 --> 01:33:11,935
So I'm going to take Bitcoin and make it more expensive to use.

1023
01:33:12,935 --> 01:33:13,935
Yeah.

1024
01:33:13,935 --> 01:33:15,935
So and then you have stuff like it's like wrapped.

1025
01:33:15,935 --> 01:33:18,935
Bitcoin is like 40, 50 times the size of the lightning network.

1026
01:33:18,935 --> 01:33:23,935
You have problems with the lightning network.

1027
01:33:23,935 --> 01:33:25,935
You have more.

1028
01:33:25,935 --> 01:33:29,935
You know, you look at CoinMarketCap.

1029
01:33:29,935 --> 01:33:31,935
You see all these other projects that aren't Bitcoin.

1030
01:33:31,935 --> 01:33:33,935
You look at the crypto fees.

1031
01:33:33,935 --> 01:33:36,935
More fees are paid on Ethereum than Bitcoin.

1032
01:33:38,935 --> 01:33:45,935
So there's a lot of like, you know, you look at the people who wanted large blocks
or wanted privacy or something.

1033
01:33:45,935 --> 01:33:50,935
Almost all those people were Bitcoiners first and they tried to get the idea on
Bitcoin.

1034
01:33:50,935 --> 01:33:53,935
But they just they thought it not to be possible.

1035
01:33:54,935 --> 01:33:58,935
So you look at all that and you think, well, it doesn't really add up to me.

1036
01:33:58,935 --> 01:34:03,935
I think it would be slightly popular if it were just if the education were there.

1037
01:34:03,935 --> 01:34:05,935
I think it would be popular.

1038
01:34:06,935 --> 01:34:07,935
Yeah.

1039
01:34:07,935 --> 01:34:15,935
So basically the argument might be it's not as good of a scaling solution as other
ones out there.

1040
01:34:15,935 --> 01:34:20,935
And what you're doing is you're taking away attention and capital from things like
lightning.

1041
01:34:21,935 --> 01:34:27,935
Yeah, but I think the interesting thing about that is I actually think it is better
scaling.

1042
01:34:27,935 --> 01:34:33,935
And it's some people have like, you know, they have like stock options and companies
that are related.

1043
01:34:33,935 --> 01:34:37,935
And I think that's actually the real headwind is that there's some nefariousness.

1044
01:34:37,935 --> 01:34:42,935
Some people's reputation will take a hit if this idea succeeds.

1045
01:34:42,935 --> 01:34:48,935
And I think that is actually part of why it's gone a little slow.

1046
01:34:49,935 --> 01:34:55,935
I don't think that like I think that lightning is very good.

1047
01:34:55,935 --> 01:35:00,935
But I think lightning will have a very weird niche that is smaller than this.

1048
01:35:00,935 --> 01:35:05,935
I think if this works the way I expect, it would be bigger.

1049
01:35:05,935 --> 01:35:08,935
It would be a bigger L2 than lightning.

1050
01:35:08,935 --> 01:35:10,935
Lightning is very small, of course.

1051
01:35:10,935 --> 01:35:11,935
It's only we could look it up.

1052
01:35:11,935 --> 01:35:17,935
But I think it's 0.025% of the coins in Bitcoin are in the lightning network or
something.

1053
01:35:17,935 --> 01:35:20,935
So it's less than one tenth of a percent.

1054
01:35:20,935 --> 01:35:21,935
If I remember correctly.

1055
01:35:21,935 --> 01:35:22,935
We can look it up.

1056
01:35:22,935 --> 01:35:23,935
Let's look it up.

1057
01:35:23,935 --> 01:35:24,935
Look it up right now.

1058
01:35:24,935 --> 01:35:27,935
Yeah, I mean, it's definitely had some constraints.

1059
01:35:28,935 --> 01:35:40,935
I think one of the reasons why people like lightning is because it's relatively
little removed from the main chain.

1060
01:35:40,935 --> 01:35:42,935
And that it's just a multi-sig.

1061
01:35:42,935 --> 01:35:46,935
You're in a multi-sig and then everything else happens.

1062
01:35:46,935 --> 01:35:51,935
Yeah, it's like it's hands off and it doesn't touch any other Bitcoin participant
necessarily.

1063
01:35:51,935 --> 01:35:54,935
Although, of course, that's not precisely the case either.

1064
01:35:54,935 --> 01:35:55,935
Because.

1065
01:35:58,935 --> 01:36:01,935
Yeah, it's a 0.0247%.

1066
01:36:01,935 --> 01:36:12,935
So it's very small, but that's not quite the case either, because people like it has
no active participation.

1067
01:36:12,935 --> 01:36:20,935
Whereas Drivechain has active participation of the L1 miners to authorize the
withdrawal.

1068
01:36:20,935 --> 01:36:22,935
So I guess it's slightly different like that.

1069
01:36:22,935 --> 01:36:25,935
But I mean, like the L1 miners also.

1070
01:36:25,935 --> 01:36:34,935
The L1 miners are like in direct participation with Bitcoin itself in a very
profound way, which is that they'll all go bankrupt if Bitcoin doesn't succeed.

1071
01:36:34,935 --> 01:36:37,935
And they'll make a huge amount of money if Bitcoin does succeed.

1072
01:36:37,935 --> 01:36:38,935
So they are already like.

1073
01:36:39,935 --> 01:36:40,935
It's not like they're.

1074
01:36:42,935 --> 01:36:44,935
People want like different things, right?

1075
01:36:45,935 --> 01:36:54,935
The ideal thing for them would be if the miners just quietly sat in the corner
mining one block every 10 minutes.

1076
01:36:56,935 --> 01:36:59,935
But from the miners point of view, they have a gun pointed at their head.

1077
01:36:59,935 --> 01:37:00,935
They're like.

1078
01:37:00,935 --> 01:37:03,935
And that gun is crazy Bitcoiners.

1079
01:37:03,935 --> 01:37:12,935
Crazy Bitcoin Twitter and crazy Bitcoin developers who are like weird monks who
don't care about profits.

1080
01:37:13,935 --> 01:37:14,935
Somehow.

1081
01:37:14,935 --> 01:37:20,935
So that is always sort of intention.

1082
01:37:22,935 --> 01:37:23,935
Yeah.

1083
01:37:23,935 --> 01:37:26,935
Well, it's been quite the fascinating discussion.

1084
01:37:26,935 --> 01:37:29,935
Hopefully it gets a lot more people thinking about this stuff.

1085
01:37:29,935 --> 01:37:37,935
Where do you want me to direct people to hear more about what you do as well as
Drivechain, etc.?

1086
01:37:37,935 --> 01:37:38,935
It's chill o'clock.

1087
01:37:39,935 --> 01:37:45,935
We have a site, LayerTwoLabs.com, which has some cool stuff.

1088
01:37:45,935 --> 01:37:46,935
It has videos.

1089
01:37:46,935 --> 01:37:47,935
It has infographics.

1090
01:37:48,935 --> 01:37:49,935
It has some stuff.

1091
01:37:49,935 --> 01:37:51,935
It has recordings of the spaces.

1092
01:37:51,935 --> 01:37:52,935
Other stuff that I do.

1093
01:37:54,935 --> 01:37:56,935
And then there's drivechain.info.

1094
01:37:56,935 --> 01:37:58,935
That's a site I made myself.

1095
01:37:58,935 --> 01:38:00,935
And it's kind of like a gray matter site.

1096
01:38:00,935 --> 01:38:01,935
It's got all this stuff.

1097
01:38:01,935 --> 01:38:06,935
It's got all this research, diagrams, FAQ, that kind of thing.

1098
01:38:08,935 --> 01:38:09,935
So those are pretty good.

1099
01:38:09,935 --> 01:38:10,935
And then you can follow me on Twitter.

1100
01:38:10,935 --> 01:38:12,935
I'm Truthcoin on Twitter.

1101
01:38:12,935 --> 01:38:15,935
Or I have LayerTwo Labs on Twitter.

1102
01:38:15,935 --> 01:38:20,935
And I think you'd learn a lot if you just started with all that.

1103
01:38:20,935 --> 01:38:21,935
You'd get into enough trouble.

1104
01:38:21,935 --> 01:38:28,935
drivechain.info has a link to like a YouTube playlist that's like 30-something hours
of stuff.

1105
01:38:30,935 --> 01:38:32,935
We have the software.

1106
01:38:32,935 --> 01:38:34,935
The best way to learn is to actually run the software.

1107
01:38:35,935 --> 01:38:37,935
Running the software is key.

1108
01:38:38,935 --> 01:38:49,935
Yeah, like most people on Twitter will confidently say things that are untrue just
because that's the way Twitter is.

1109
01:38:49,935 --> 01:38:53,935
So I would just say take anything you hear on Twitter with a grain of salt.

1110
01:38:58,935 --> 01:39:01,935
I mean, when has Twitter ever been wrong about anything, right?

1111
01:39:02,935 --> 01:39:11,935
So I would say, yeah, if you read yourself and it is in conflict with something you
heard on Twitter, what it was on Twitter is probably wrong.

1112
01:39:11,935 --> 01:39:12,935
Yeah, of course.

1113
01:39:12,935 --> 01:39:14,935
Don't trust verify is what they say.

1114
01:39:14,935 --> 01:39:15,935
Right.

1115
01:39:15,935 --> 01:39:16,935
Yeah.

1116
01:39:16,935 --> 01:39:17,935
Well, fantastic.

1117
01:39:17,935 --> 01:39:18,935
Thanks for joining us.

1118
01:39:18,935 --> 01:39:20,935
And I hope you have a good one.

1119
01:39:20,935 --> 01:39:21,935
And yeah, thanks for the discussion.

1120
01:39:22,935 --> 01:39:23,935
Hey, thanks for having me.

1121
01:39:31,935 --> 01:39:32,935
Transcription by CastingWords