All right

Let's get ready to rumble

Getting joined by John Carvalho from synonym and Paul Sztorc Bitcoin developer to talk about Drivechains scaling

Pass forward for scaling Bitcoin. I'll sit right here you to sit there

Are they on

So I think we start with you Paul. I think it's for people in the audience and people watching the live stream

It makes sense to start with the history of Drivechains. What is a Drivechain?

And how that's what this whole thing is about. They prepared a lot for this

No, we did well because the preparation was so thorough drive was independently

Made little notes of like things we agree and disagree about. Yeah, so

But this is probably one of them. I mean, I don't know. This is an idea

I had a long time ago to solve everyone's problems and

The everyone included the large blockers and the small blockers and so both of the groups were like

How can you side with them?

And they they sort of didn't like the idea

But it now it's the idea is so good that its merits are slowly being seen by everyone

Seven years after I wrote about it in November 2015

John do you agree that they're being seen by everybody?

No, I

Guess I'll be

Dramatic and say I think pretty much all the narratives of Drivechain are false

All right. All right. Let's do it then. All right, let's do it. We're rumbling

So do you want me to just say a narrative or something? Sure. Like what do you think is the you know?

the the biggest problem that Drivechain solve I

Would say well, that's all quite a few but I'd say that the core problem is that people will never agree completely on

What the blocks change should contain so you can't have the blocks be both large and small

So no matter what you have someone has to go away

Empty-handed and that is one of the problems. That's why I would a sidechain handle that problem better than a shit coin

Because the with the shit coin you have a completely different investment. You have like a rival investment that has its own

fate whereas this is just like kind of like converting cash to

Money in a checking account or something they exchange at par

That's the whole but I still have to convert my asset into the paradigm of a new blockchain, right?

the yeah, it depends on exactly like there's like the details of what happens under the hood and then there's like what really so

But yes, you you have two pieces of software

They both can be blockchain software one has a large

Larger block size for example, and when it's a smaller block size, for example

And one of the things that we could do with this is shrink the layer one block size and then ossify

But that's going on a slight tangent

But the point is you have two completely different pieces of software and

then you have

You that you'd on the layer one you'd send coins you take coins that you own there and you'd send them into

Layer two the the other piece of software, but the value

I want to one right the value won't be one-to-one because the rules will be different on the separate blockchain

The they exchange one-to-one in the software in the BIP300 rules when they go across

so if you have four BTC and you

send them across you end up with four coins and the other network and

Then if you go through the long withdrawal process that is not intended for lay people to use

But anyone can use it because it takes so long

It's not intended for regular people to use

But you can and if you do that and you have you still have 3.2 coins or something

You will get 3.2 back on but on layer one

so even whatever the market rate may be instantaneous, which may be different because of the delay the

The BIP300 lets you send them at exactly a par

but my

my sidechain my side coin is

Most likely going to have a different market value than Bitcoin, right?

Well, it could be like point it could be like ninety nine point nine nine cents on the dollar or something

Well wouldn't it could be anything totally different. And so how do you deal with it?

What can never be above one right you can see why Robert you would move them in

Yeah, there would be a delay on the arbitrage and there's more risk to using but moving them inside from layer one to layer two

Is basically instantaneous. It's like it's like a ten minutes. There's one block or whatever

So moving that out is 90 days moving them out is takes a very long time

but so the question is there are certain situations where the

Market value may not be like 99 cents on the dollar which include the sidechain developers

Tried a terrible idea and the entire software has crashed and no one can figure out who the rightful owner of the coins is at all

It's not possible to figure out all blockchains terrible ideas

It's not a joke, it's not a joke including Bitcoin

But Bitcoin is like Bitcoin and then blockchain is like pretending you can do other things in Bitcoin

I think this may be another disagreement between the two of us

Where do you really think is that hyperbole or do you really think that like every really like you don't see any value in like?

the Zcash

Technology even just as a mixer on bit even you stripped away of the the dev tax you stripped away the

Weird weird stuff that Zuko does

Each use case I could probably mention a specific reason

But I think all of them have a reason where they are faulty designs ultimately and you think that's gonna be true

Forever like no one will ever come up with a good idea. I think it's possible

But I think that require kind of omniscience on your I don't think you need Drivechains to for that possibility

Can I break in here?

So you think these other ideas have faulty ideas what in your mind is like a good idea a secure idea in terms of?

In other words, why what if somebody presented a blockchain that was like interesting

What would it look like or why do you see Bitcoin being the only?

valuable because like a

blockchain has a specific purpose and solved like a specific problem and a lot of people want to attach this narrative that

There are actually other things this format solves

But they all root in the same thing that Bitcoin does and so ultimately a better Bitcoin would be like a simpler or you know

More streamlined simpler Bitcoin and no all coins are really attempting to do that

So they're all block chaining is just adding complexity to Bitcoin and adding attack area adding

Centralization adding censorship in order to make a claim that a blockchain can do something that it can't actually do

Bringing this back to Drivechain specifically. I think that's the biggest knock that I've heard historically on Drivechains is

expanding this attack vector and

Basically creating this incentive to bring insecurity to the chain via yeah

I think that's just people who haven't really I mean, that's very forgivable that people say that but they just I don't think they really

Understand what's happening, which is just on layer one

There's just money like going into a box and then if enough hash rate accumulates on it

You can take money out of the box to certain destination

And so if you're relying on an external source of income, and I don't think either of those things are actually true

I think they're actually both negatives where I think that one if there aren't enough fees for people to run Bitcoin

It's because nobody's using Bitcoin and Bitcoin is dying

It's not because we failed to add more features to Bitcoin. It's because people don't need any blockchain for anything and

That's really unlikely. It is not the trend

we have seen evidence in the past where you know, the blocks will get full eventually and the fees will be fine and

Addressing whether or not there's enough fees for minors is mostly just you know

How many blocks you want to wait to have a confirmation if there's not enough or mine yourself?

But didn't you read the long article I wrote on exactly this topic which addressed both of those issues you have any short articles?

No

There's long, you know, it's like the too many notes from Amadeus. It's like there's long or short as I require

So I wrote a long post about this though

But it's like this is the and I wrote I made a long presentation on sidechain risks in 2016. So it's like

we can get we'll get to something later maybe if we have time, but the

The number of confirmations is not really relevant because the if the security budget is too low

The attack is an endless campaign of 51% attacks. So that does that doesn't make any difference at all

so the fees the second part so comes in the the issue the first part about

The

Fees can only be really really low if Bitcoin is failing for some reason

First of all, I could be failing for some reason

But second of all as I say in the post

there's plenty of things that people really like that the market clearing price is very low for and so I give examples like a

paywalled

News article or music you can just go on YouTube and type music

Whatever music you like into YouTube and you get it for free. So the market clearing price is very very very low

But people love music, you know, people really like music just because and people really like water

I have water in the article like people love water, but water is cheap because the supply is abundant

So and this so this is a situation where just because something is really really any of this has to do with Bitcoin

You can like something and the market clearing price will be low

Factors the supply and demand

Responsible for all the things that you like. It is just there to be an abstraction for value

No, this is nothing to do with what bitcoins responsible for. I'm just telling you that so the other thing

I took in the post is I do the empirical and theoretical case for the slow the low fees

Which is that the empirical case is very dire

The the fees will go up sometimes when there's a big bull market and the blocks get congested temporarily

But then the bull market goes away

And even if the price goes up by a factor of 50 and stays up the the fees will go back down

To less than $1 per transaction. And so they they stay very low that people are not willing to pay the fees

I think you're trying to predict the future and but the case for sidechains is not built on on this in particular

This was just because people started talking about this issue and I did the math and I realized how horrible the situation was

So I thought I would write about it since everyone has such vast misunderstandings about this issue which include that more confirmations

Make any difference at all, which they do not

I could just a saint change the assumption to say that the demand for block space is infinite and the only reason it doesn't that's

Not apparent is that there are actual costs to using it

And so I think the demand will eventually hit you could you could say but it depends on what?

What the audience will buy if they really buy that the demand for block space is infinite

I think what they should buy either of us

are quite a few more other things to be explained like why you can buy an entire block these days for

Call it

$1,500 or something then

It's not infinite. So

Instead of a bike shedding this further like in the end

I think the audience should just say neither of us can actually predict the future and so but all of this is theoretical

But the second half of what I mentioned is also important

Which is you portray the idea that miners relying on sidechains for incomes to some degree as good

I actually think it's bad because like for example

what if you take what if a sidechain becomes more valuable than Bitcoin or what it and what if

Becomes the majority of coin becomes more valuable than Bitcoin, you know

Do you think that would be an existential threat? Do you think all coins compete with Bitcoin or they help Bitcoin?

Do I think all coins I think every rival investment

Anything you could put your money in is a rival investment to Bitcoin. So I think they're particularly abstracted monies, right?

Yes, there's no differentiation. It's the same the competing to do the same thing. They're kind of all flavors of money

Yes, I agree. So you want to put a bunch of competing monies on Bitcoin?

No, the sidechain is not a competitor because they exchange a par

Why would they exchange a par if they had different quality their software exchanges them at par

If they do it, but why would I why would I value a bit like why it's saying?

Why would you put $20 bill into an ATM and you say why did I get $20 into my checking because the risk of the

Designs are going to be much higher

So the values are going to be lower like if I go to Z kept bit Zcash

Then there's gonna be a whole different design to how that blockchain works. Yes, right

But that affects only the people who opt in to that. Why would I think that is lower?

Lower sorry, why would I opt in if the value is lower?

know that

The value may be lower than by a trivial amount that reflects the the inconvenience of coming back slowly

So but if you but yeah

The sidechain situation is designed for something where there's a feature that people want it has to be a popular feature

So if there's no reason but you would use the Zcash sidechain because it's a vastly superior mixer than everything that exists today

It's vastly superior than all coin join or whatever requires a trusted setup still right?

Sorry Zcash requires a trusted setup, right?

No

But we the Zcash sidechain that we built is just a carbon copy of the so we copied the same set

But actually they changed the upgraded from four to five and I may be wrong, but I think

Zcash five

Doesn't have the trusted setup, although I'm not a Zcash expert

But I do know that we upgraded the sidechain after they spent a year and a half going from Zcash

4 to Zcash 5 in about a weekend. We moved the sidechain from I

Don't know copying Zcash 4 to Zcash 5. Yeah, so I think they got rid of the trusted setup

I'll say I don't know who is a cash, but I'll mention like I it doesn't matter though

There's no we there's no way that everyone can keep track of all these ideas

Because everyone has all these ideas some will be good and some will be bad and it's up to you

The you the customer should have them all at your fingertips and there's no way that we can keep track of all these ideas

I'm worried about that suppose that a large amount of Bitcoin ends up in a sidechain and that sidechain becomes a majority of

The Bitcoin to me this case is analogous to something else becoming more popular than Bitcoin

So in that case the Bitcoin faces an existential threat and may be destroyed

I think right, but if you put it on at least it's the sidechains are always

subordinate to

The sidechains are always subordinate to to Bitcoin they can't if you run the sidechain software that we have

They're subordinate to miners

No, if you run the sidechain software that we have if it cannot find a layer one node to connect to it just won't do anything

So it cannot exist without layer one so they're very subordinate

Right, but what like isn't this sort of like a way to hard fork Bitcoin like if I put all the Bitcoin in a sidechain

No, it's because the sidechains are optional and ignorable that it's not a hard fork

But it gives you all the freedom of the hard fork with just this tiny assumption that one TXID

That's acted by the miners every six three six months will be accurate

And even if that doesn't work it only affects the people who put money over there

Yeah, I don't think it can only affect the people in the sidechain because miners also mine Bitcoin

And once you change the incentives for miners caring about external supplemental income

Let me ask you this, what should they care about instead?

What's that?

So like I have a little graph with a little triangle and the article that you didn't read about the security budget at the bottom

I'm sure I read it and forgot it years ago

The fees are persistently low then you know because we have Peter Todd has said that he advocates this tail emission concept

So violating the 21 million coin limit

I don't know

You don't agree with that right?

So the triangle has 21 million coin limit or enormous block size increases or greater than 51% of the revenues come from merge mining

And you know that we've been doing merge mining already for many years like Satoshi invented merge mining

This is not like a BIP300 idea

BIP300 has nothing to do with merge mining

It was invented by Satoshi in 2010

We've been doing it with Namecoin for a long time

Let me ask you this, do you think Namecoin is a good idea?

Also invented by Satoshi

So you think it's just not a good idea?

You don't need a blockchain for that at all

Really?

Oh because you have Synonym I forgot about this

He's doing this

But I don't think that Synonym is

I don't want to turn this

I don't want to go completely off topic

But with Synonym you have to like pick like who you think is going to be the name provider or something

Get a whole list

You can't like own google.com in Synonym right?

So as like a dynamic primitive

Names are mutual

They're not assigned

And so in other words we both have to agree on what a name is when we're pointing to something

Yeah I can't just own google.com and say

Nobody actually owns google.com

I have a property right on google.com and whatever you think about it I don't

No one cares

So I think that

I think people would prefer the property right personally

And that's what I think Satoshi thought as well

When he invented Namecoin

Co-invented Namecoin in 2010

But putting a domain name on Namecoin

Doesn't prevent somebody else from having that domain name in another index

Yeah I agree but it's a question of

Does it solve a problem for the actual user?

I think people

Only if that user

The dark net market

Onion link

And they get phishing and stuff

That's one of the actual problems in the real world

That Namecoin would solve

And that other things would solve

Even if you just stamped out the so called horizontal scaling

Just stamped out copies of Bitcoin core

You just don't need a blockchain to establish a list of domains

That only attribute to certain endpoints

And your reaction to the idea that

So like Ethereum

The transaction fees

To me those represent paying customers

And so when it goes from one one thousandth

Of Bitcoin's value in 2015

To over a hundred times

And basically a straight line on a log chart

To you that doesn't mean anything at all

So can I just use the transaction fees of Visa to compare to Bitcoin?

I'm saying that those are paying users

They're paying to use a blockchain

People pay for Visa too

What's the difference between Visa and Ethereum?

Well in this case

In this particular context of my question

There is no difference

Because I'm just saying this is a customer that wants something

But I'm saying that the Ethereum wants

If a customer wants something that's not Bitcoin

Let's not talk over each other gentlemen

Ethereum is a blockchain in this case

And more directly a competitor to Bitcoin than Visa is I would say

Wouldn't you?

My point is that Ethereum

It requires the assumption of a censorable centralized blockchain

In order to have an Ethereum

You need to be censorable and centralized

And so what's the difference between that and MasterCard or Visa?

I don't think it's black and white

You think it's exactly the same like MasterCard and Ethereum

As far as how easy it is to just like call them up on the phone

And say take this person's money?

I think

You have private keys

At the same scale yeah

Ethereum you have key pairs right?

You have addresses

So I think there's much more of a spectrum than you might think

I think the closer Ethereum gets to the size or scale

And amount of customers as MasterCard

They will be one to one that censorable

I mean I don't know about that

Because you don't have your own key pair with MasterCard you know

There's no customer service

Maybe there will be a customer service number for ETH in the future

That would be funny

That would be something

This is my whole thing about blockchains

Is they all require accepting the prerequisite

Of a censorable blockchain

A broken blockchain at scale

But that doesn't apply to Bitcoin at all or something

Like what if the Zcash sidechain had a very small block size

So that's even easier to run the Zcash node than the Bitcoin node

That's the hang up for you or what?

I don't know that

If there's something that's worth doing on Bitcoin

It's worth doing on Bitcoin

And if it requires some sort of other blockchain to do it

It's just probably not worth doing

Well I think this brings me to this other idea

That I wanted to try to mention

Which is that I think that we

We do disagree on something else

Which is that the freedom to ignore good ideas

Which is that you

I think you claim it in every case

You say I don't have to pay attention to this idea if I want

No one should change Bitcoin

Unless they can prove to me that this idea is good

And I can just choose to ignore it

And I say if you try to claim that always

Then you actually have to allow people to shitcoin I think

Think of like a Ricardo Monero situation

Where he has this ring signature idea back in the day

As you know, a long time ago

And then it was kind of like what was he supposed to do instead?

Like just nothing?

And then he created Monero

So I think only when we have sidechains

And there's no need to shitcoin

Can you go back to ignoring

Say I'm just going to ignore all these ideas

Otherwise you have to pick one of the three

You either have to say I'm going to research every single idea that exists

And have a fully informed opinion on it

Which I think is impossible

Or you have to say we'll let people shitcoin

Or you have to say

I don't quite look at it that way

I'm not saying that somebody can't come up with a good idea

I'm saying that

Nobody has shown me a good idea

So that's a pretty good way to justify my general disinterest

And disinterest in accepting risk on Bitcoin to enable this

Well let me ask you this though

You think an idea isn't good

This is why I brought up the Ethereum fees

Because maybe you say that you don't think an idea is good

But shouldn't it be up to each individual user

To decide what they think is a good idea

They're allowed to sell their Bitcoin for fiat

They're allowed to sell their Bitcoin for goods and services

They can buy Solana if they want

So shouldn't they decide, not you, what ideas are good?

Like I said, I don't think Bitcoin is responsible for all things

So if you think something else serves as a use case for you

Use something else

Gentlemen, our time is up

Okay, flew by

I do want to commend you

I think it is important to make the point

This is a very civil discussion

Obviously you guys agree and disagree on some stuff

But I like this format, Max

And I think it's good to have cordial, civil conversations like this

So I want to thank you

I like Paul, for the record

I also like John

He introduced us so well

But I was going to sit down and say

We meet again

Or something very ominous

But I never got to say it

Alright, well gentlemen, thank you

It was a fascinating discussion

Thank you, thanks Paul

Guys, we've got Matthew Mazincus coming up next

I saw the presentation, it's really good

I would stick around

Alright, thank you gents

That was a fascinating discussion

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He is the host and founder of Porcopolis Economics