1
00:00:01,315 --> 00:00:03,315
But we use it anyway.

2
00:00:09,315 --> 00:00:10,315
Okay.

3
00:00:11,315 --> 00:00:13,315
Well, here we are.

4
00:00:13,315 --> 00:00:16,315
What I thought was, I had a thought, like,

5
00:00:17,315 --> 00:00:19,315
should we discuss the recent lightning news?

6
00:00:19,315 --> 00:00:21,315
And then I thought, you know what?

7
00:00:21,315 --> 00:00:23,315
We still haven't done this.

8
00:00:23,315 --> 00:00:25,315
Peter Title wrote up this big thing, and it's,

9
00:00:25,315 --> 00:00:27,315
it's just really quite terrible.

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00:00:27,315 --> 00:00:29,315
And, like, every single paragraph,

11
00:00:29,315 --> 00:00:32,315
every single sentence in it is just not good at all.

12
00:00:32,315 --> 00:00:35,315
But he really does seem to hate this drivechain idea.

13
00:00:36,315 --> 00:00:42,315
And so I thought we could go through it

14
00:00:42,315 --> 00:00:46,315
and explain why, in detail, why all of this is wrong.

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00:00:46,315 --> 00:00:49,315
But then I had the idea that it would actually be much better

16
00:00:49,315 --> 00:00:51,315
to do that with, like, video,

17
00:00:51,315 --> 00:00:55,315
so that we could just scroll along and see all the text.

18
00:00:55,315 --> 00:00:56,315
So now, all of a sudden,

19
00:00:56,315 --> 00:00:58,315
I have some sort of second thoughts about that,

20
00:00:58,315 --> 00:01:00,315
because it's a little too late to change the format

21
00:01:00,315 --> 00:01:04,315
from a Twitter space into a YouTube video.

22
00:01:04,315 --> 00:01:06,315
So, I don't know, maybe we could just do it twice.

23
00:01:06,315 --> 00:01:08,315
Like, maybe I could do the dry run here.

24
00:01:11,315 --> 00:01:13,315
We do the dry run and then do a video.

25
00:01:13,315 --> 00:01:15,315
I don't know if anyone would,

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I don't know if anyone will care.

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But, so, I don't know, I guess.

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00:01:24,315 --> 00:01:26,315
But the most important thing is that we give the audience

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something that they want.

30
00:01:27,315 --> 00:01:30,315
Yeah, we could link, we link the, we can link the post,

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and then maybe people can read through it at their leisure.

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00:01:36,315 --> 00:01:37,315
Kind of the cool thing would be,

33
00:01:37,315 --> 00:01:39,315
if someone would volunteer to read,

34
00:01:40,315 --> 00:01:43,315
we can read the Peter Todd part, maybe,

35
00:01:43,315 --> 00:01:47,315
so that it's clear when I'm replying versus just quoting him.

36
00:01:48,315 --> 00:01:50,315
Or this will just be really boring and not,

37
00:01:50,315 --> 00:01:52,315
but this should, this must be done.

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00:01:52,315 --> 00:01:54,315
I have to go through his article.

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00:01:54,315 --> 00:01:55,315
To be honest with you,

40
00:01:55,315 --> 00:01:57,315
I went through it like the day he published it

41
00:01:57,315 --> 00:01:59,315
and I wrote some Twitter response.

42
00:01:59,315 --> 00:02:03,315
And I just, I just think it's just, it's not very good,

43
00:02:03,315 --> 00:02:04,315
is the real reason why.

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00:02:04,315 --> 00:02:05,315
If it was actually really good,

45
00:02:05,315 --> 00:02:08,315
I would probably have been more into, like,

46
00:02:10,315 --> 00:02:14,315
engaging with it more seriously, but it's, it's not good.

47
00:02:14,315 --> 00:02:16,315
It's full of mistakes.

48
00:02:16,315 --> 00:02:20,315
It is sort of rude in many parts, which is fine,

49
00:02:20,315 --> 00:02:23,315
but just kind of like, it's not taking it very seriously.

50
00:02:25,315 --> 00:02:27,315
So I don't know, but I think,

51
00:02:30,315 --> 00:02:33,315
unless someone wants to pop up as a speaker

52
00:02:33,315 --> 00:02:35,315
and demand that something else be done,

53
00:02:36,315 --> 00:02:38,315
I guess we'll just do that for now.

54
00:02:38,315 --> 00:02:40,315
And then I guess I'll just repeat myself

55
00:02:40,315 --> 00:02:42,315
completely in video format, which,

56
00:02:44,315 --> 00:02:45,315
it's kind of disappointing

57
00:02:45,315 --> 00:02:47,315
because I don't really want to repeat myself ever.

58
00:02:48,315 --> 00:02:49,315
I think that's kind of,

59
00:02:50,315 --> 00:02:52,315
you're not really giving people your money's worth.

60
00:02:54,315 --> 00:02:56,315
But nonetheless, what can I say?

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00:02:56,315 --> 00:02:59,315
Peter Todd, you know, he has this, he has this thing.

62
00:03:00,315 --> 00:03:02,315
I took the liberty of printing it out and stapling it.

63
00:03:05,315 --> 00:03:06,315
So,

64
00:03:11,315 --> 00:03:12,315
yes.

65
00:03:13,315 --> 00:03:14,315
The, so,

66
00:03:16,315 --> 00:03:17,315
I guess we'll just do that then.

67
00:03:18,315 --> 00:03:19,315
Let's do it.

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00:03:19,315 --> 00:03:20,315
Without further ado,

69
00:03:21,315 --> 00:03:23,315
unless anyone really, really, okay.

70
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We've got some people who are happy.

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Thumbs up.

72
00:03:25,315 --> 00:03:26,315
We've got some faces.

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00:03:26,315 --> 00:03:27,315
We've got a cool fist.

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So, all right, we'll do it.

75
00:03:30,315 --> 00:03:31,315
And then we'll have the recording.

76
00:03:32,315 --> 00:03:35,315
So, okay, this is Peter Todd's thing.

77
00:03:35,315 --> 00:03:36,315
It's linked up.

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00:03:36,315 --> 00:03:38,315
Drivechain's a detail analysis.

79
00:03:38,315 --> 00:03:41,315
He has this paragraph where he says what it is.

80
00:03:41,315 --> 00:03:42,315
And then his second paragraph,

81
00:03:42,315 --> 00:03:44,315
credit goes to Matthew Haywood.

82
00:03:44,315 --> 00:03:46,315
Now, I don't know who this Matthew Haywood person is,

83
00:03:46,315 --> 00:03:48,315
but they work for Blockstream, I think.

84
00:03:49,315 --> 00:03:51,315
And they published on the same day, October 13th,

85
00:03:52,315 --> 00:03:55,315
their own thing that I didn't even really realize.

86
00:03:55,315 --> 00:03:58,315
I didn't even actually realize that there was a second one

87
00:03:58,315 --> 00:04:03,315
until like, honestly, like a few days ago.

88
00:04:04,315 --> 00:04:05,315
I knew that he just had linked it,

89
00:04:05,315 --> 00:04:07,315
so what I kind of think is funny about this is that

90
00:04:07,315 --> 00:04:10,315
I think what actually happened was Peter Todd is so lazy

91
00:04:10,315 --> 00:04:13,315
that he didn't actually do really any work on this.

92
00:04:13,315 --> 00:04:17,315
And he just kind of copied the ideas of this other person

93
00:04:18,315 --> 00:04:20,315
who wrote his own thing that maybe we can go through.

94
00:04:21,315 --> 00:04:22,315
But I just thought it'd be funny.

95
00:04:22,315 --> 00:04:23,315
Then there's a table of contents,

96
00:04:23,315 --> 00:04:24,315
then number one, backstory.

97
00:04:24,315 --> 00:04:25,315
The backstory is itself.

98
00:04:25,315 --> 00:04:27,315
You'd think, how bad could this be?

99
00:04:27,315 --> 00:04:29,315
But we're just going to go through it in order.

100
00:04:29,315 --> 00:04:30,315
And he says,

101
00:04:30,315 --> 00:04:33,315
I have been a critic of Drivetion's idea since it was published

102
00:04:33,315 --> 00:04:35,315
in many ways before the idea was published,

103
00:04:35,315 --> 00:04:37,315
since I was also a critic of Blockstream's

104
00:04:37,315 --> 00:04:39,315
since abandoned idea of merge mining.

105
00:04:39,315 --> 00:04:40,315
That's true.

106
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That's the problem.

107
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And so then he says,

108
00:04:43,315 --> 00:04:45,315
Paul Sztorc seems to be of the idea

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00:04:45,315 --> 00:04:49,315
that paying me to write this blog post will change my mind,

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which is sort of true because I think that paying me

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00:04:53,315 --> 00:04:56,315
to write this blog post will change my mind.

112
00:04:56,315 --> 00:04:59,315
Which is sort of true because I think that paying him

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00:04:59,315 --> 00:05:00,315
to actually investigate the idea,

114
00:05:00,315 --> 00:05:03,315
I think he's been too lazy to actually look into the idea.

115
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And I think I was right.

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00:05:05,315 --> 00:05:08,315
And I think if you actually investigate it,

117
00:05:08,315 --> 00:05:10,315
but then he quotes me as saying this,

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00:05:10,315 --> 00:05:11,315
this is him quoting me.

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00:05:12,315 --> 00:05:13,315
He says,

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00:05:14,315 --> 00:05:16,315
thus it is a waste of time to talk to those three

121
00:05:16,315 --> 00:05:18,315
since after Peter Todd admits he was mistaken,

122
00:05:18,315 --> 00:05:21,315
those three will either cave or become irrelevant, blah, blah, blah.

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00:05:21,315 --> 00:05:23,315
Then Peter Todd says,

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00:05:23,315 --> 00:05:25,315
I can assure you the only thing he bought was my time.

125
00:05:25,315 --> 00:05:28,315
So what he's trying to imply there

126
00:05:29,315 --> 00:05:32,315
is that I'm sort of bribing him to change his mind.

127
00:05:33,315 --> 00:05:34,315
But no,

128
00:05:34,315 --> 00:05:36,315
I'm actually paying him to actually look into the idea

129
00:05:36,315 --> 00:05:39,315
because then he'll either have to admit that he was wrong

130
00:05:39,315 --> 00:05:42,315
or he'll have to publish something that's so bad

131
00:05:42,315 --> 00:05:44,315
that no one wants to be associated with it.

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And so that was what I was going.

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And unfortunately,

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00:05:47,315 --> 00:05:49,315
it looks like that's the road we are going to be taking.

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00:05:50,315 --> 00:05:51,315
If anyone ever wants to just jump up

136
00:05:51,315 --> 00:05:54,315
and just start having fun up here,

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00:05:54,315 --> 00:05:55,315
then just join as a speaker.

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00:05:55,315 --> 00:05:56,315
That's fine.

139
00:05:56,315 --> 00:05:57,315
So then scope,

140
00:05:58,315 --> 00:06:00,315
he has section part two scope

141
00:06:00,315 --> 00:06:01,315
and there's nothing interesting in it.

142
00:06:01,315 --> 00:06:02,315
It just says,

143
00:06:03,315 --> 00:06:04,315
he just put the interesting.

144
00:06:04,315 --> 00:06:06,315
It's funny because even the parts that have no relevance

145
00:06:06,315 --> 00:06:08,315
to anything are bad where the scope,

146
00:06:08,315 --> 00:06:10,315
he just says in two,

147
00:06:10,315 --> 00:06:13,315
he just says that he's trying to build a trap door for himself

148
00:06:13,315 --> 00:06:16,315
by saying it doesn't contain all his critiques

149
00:06:16,315 --> 00:06:17,315
because that wouldn't take,

150
00:06:17,315 --> 00:06:20,315
that would have taken too much time.

151
00:06:21,315 --> 00:06:22,315
And he says,

152
00:06:22,315 --> 00:06:25,315
they declined to pay me for the time it would take

153
00:06:25,315 --> 00:06:26,315
to do that analysis,

154
00:06:26,315 --> 00:06:27,315
which is not true at all.

155
00:06:27,315 --> 00:06:30,315
I would have paid him almost any amount of money

156
00:06:30,315 --> 00:06:32,315
to get all of them out in one piece.

157
00:06:32,315 --> 00:06:33,315
But I asked him,

158
00:06:33,315 --> 00:06:35,315
wait, will you write a post

159
00:06:35,315 --> 00:06:38,315
just explaining why you don't like this idea once and for all?

160
00:06:39,315 --> 00:06:40,315
And he said yes.

161
00:06:40,315 --> 00:06:44,315
And then he charged me $2,500.

162
00:06:44,315 --> 00:06:45,315
So it's,

163
00:06:45,315 --> 00:06:48,315
so even these parts that I have no relevance to anything

164
00:06:48,315 --> 00:06:49,315
are full of what is it?

165
00:06:49,315 --> 00:06:52,315
What amounts to basically lies or misrepresentations,

166
00:06:52,315 --> 00:06:53,315
which is,

167
00:06:53,315 --> 00:06:54,315
you know,

168
00:06:54,315 --> 00:06:55,315
it's not too big of a deal,

169
00:06:55,315 --> 00:06:57,315
but it's just kind of like,

170
00:06:57,315 --> 00:06:59,315
even in the scope section,

171
00:06:59,315 --> 00:07:02,315
he wants to say that we didn't pay him enough.

172
00:07:02,315 --> 00:07:03,315
So he's still got a bunch of critiques.

173
00:07:03,315 --> 00:07:05,315
Even if I answer everything in this post,

174
00:07:05,315 --> 00:07:06,315
he's still got whatever,

175
00:07:06,315 --> 00:07:11,315
like a giant kitchen cabinet full of nonsense.

176
00:07:11,315 --> 00:07:12,315
So,

177
00:07:12,315 --> 00:07:13,315
great.

178
00:07:13,315 --> 00:07:14,315
Okay.

179
00:07:14,315 --> 00:07:15,315
Three,

180
00:07:15,315 --> 00:07:17,315
background to understand drivechains to start with the motivation.

181
00:07:17,315 --> 00:07:18,315
This is the only part that's actually good.

182
00:07:18,315 --> 00:07:24,315
He understands that it's in part to create a new chain that has exotic rules,

183
00:07:24,315 --> 00:07:27,315
including my Bitcoin hive mind project.

184
00:07:27,315 --> 00:07:28,315
Fine.

185
00:07:28,315 --> 00:07:29,315
He talks about liquid,

186
00:07:29,315 --> 00:07:30,315
liquids,

187
00:07:30,315 --> 00:07:33,315
federated multisig is a compromise.

188
00:07:33,315 --> 00:07:35,315
For reasons we will now analyze.

189
00:07:35,315 --> 00:07:38,315
This is the last sentence of part three.

190
00:07:38,315 --> 00:07:40,315
Blockstream gave up on the idea.

191
00:07:40,315 --> 00:07:45,315
So it's nice to at least have people admit that liquid is giving up on the original idea,

192
00:07:45,315 --> 00:07:48,315
which for some reason you have people like Samson now and whatever would still fight that.

193
00:07:48,315 --> 00:07:49,315
It's like,

194
00:07:49,315 --> 00:07:51,315
honestly,

195
00:07:51,315 --> 00:07:55,315
it's such a chore to deal with some of this stuff as you will now experience.

196
00:07:55,315 --> 00:07:56,315
So here we go.

197
00:07:56,315 --> 00:07:57,315
For section four,

198
00:07:57,315 --> 00:08:00,315
hash rate S grows.

199
00:08:00,315 --> 00:08:05,315
There's a paragraph about how script pub keys work.

200
00:08:05,315 --> 00:08:11,315
And then there's a second paragraph that says no amount of Bitcoin hash power can fake a digital signature,

201
00:08:11,315 --> 00:08:13,315
which is something that no one has ever disputed.

202
00:08:13,315 --> 00:08:20,315
But the sentence right before that says this miners cannot simply steal coins from the perspective of a fully validating node.

203
00:08:20,315 --> 00:08:21,315
After all,

204
00:08:21,315 --> 00:08:25,315
no amount of Bitcoin hash power can fake a digital signature.

205
00:08:25,315 --> 00:08:26,315
So,

206
00:08:26,315 --> 00:08:28,315
but this is logically invalid,

207
00:08:28,315 --> 00:08:29,315
though,

208
00:08:29,315 --> 00:08:30,315
because it's possible,

209
00:08:30,315 --> 00:08:31,315
as everyone knows,

210
00:08:31,315 --> 00:08:34,315
it's possible to steal coins without faking a digital signature.

211
00:08:34,315 --> 00:08:35,315
So,

212
00:08:35,315 --> 00:08:36,315
again,

213
00:08:36,315 --> 00:08:37,315
I mean,

214
00:08:37,315 --> 00:08:38,315
I'm just going through the article in order.

215
00:08:38,315 --> 00:08:40,315
I'm not going on to the most important thing,

216
00:08:40,315 --> 00:08:42,315
I'm going to pick every single nit because,

217
00:08:42,315 --> 00:08:43,315
you know,

218
00:08:43,315 --> 00:08:53,315
it's like kind of amazing how every single sentence managed to contain some kind of lack of logic or just a mistake or just some kind of something that's kind of a misrepresentation is,

219
00:08:53,315 --> 00:08:54,315
as we all know,

220
00:08:54,315 --> 00:08:57,315
you can just double spend with if you have,

221
00:08:57,315 --> 00:08:58,315
if you have any amount of hashing power,

222
00:08:58,315 --> 00:08:59,315
like 100%,

223
00:08:59,315 --> 00:09:03,315
you can steal coins by double spending by reorg,

224
00:09:03,315 --> 00:09:06,315
by doing all kinds of other things.

225
00:09:06,315 --> 00:09:07,315
So you don't need to.

226
00:09:07,315 --> 00:09:08,315
But nonetheless,

227
00:09:08,315 --> 00:09:14,315
I think he's just trying to set up the idea that what's going on in a sidechain is hash power makes the transaction valid,

228
00:09:14,315 --> 00:09:15,315
which is completely fine.

229
00:09:17,315 --> 00:09:19,315
Since the script is referring to,

230
00:09:19,315 --> 00:09:21,315
then he goes into anyone can spend.

231
00:09:21,315 --> 00:09:26,315
I think the theme of this essay is that Peter Todd used to know a lot about Bitcoin,

232
00:09:26,315 --> 00:09:30,315
like in 2015 and earlier,

233
00:09:30,315 --> 00:09:32,315
and having lived through SegWit,

234
00:09:32,315 --> 00:09:33,315
anyone can spend,

235
00:09:33,315 --> 00:09:35,315
there was like a fake drama about that.

236
00:09:35,315 --> 00:09:40,315
So I think he's trying to get that out of the way that anyone can spend.

237
00:09:40,315 --> 00:09:41,315
So we use software upgrades.

238
00:09:42,315 --> 00:09:43,315
Now,

239
00:09:43,315 --> 00:09:45,315
this is where it starts to go off the rails,

240
00:09:45,315 --> 00:09:46,315
which is why he says,

241
00:09:47,315 --> 00:09:49,315
if an output can be spent on any mine,

242
00:09:49,315 --> 00:09:50,315
surely it can just be stolen,

243
00:09:50,315 --> 00:09:54,315
right? Blockstream proposed to fix this problem with two main mitigations.

244
00:09:56,315 --> 00:09:57,315
Number one is multi-sig.

245
00:09:57,315 --> 00:10:01,315
Multiple blocks would have to approve a span of hash rate escrowed funds.

246
00:10:02,315 --> 00:10:04,315
Blockstream suggests one to two days worth.

247
00:10:06,315 --> 00:10:07,315
this is the important one,

248
00:10:07,315 --> 00:10:08,315
fraud proofs.

249
00:10:08,315 --> 00:10:10,315
Once the spend was approved,

250
00:10:10,315 --> 00:10:13,315
there would be an additional one to two day waiting period where proofs of

251
00:10:13,315 --> 00:10:16,315
fraudulent transfer could be published on the Bitcoin chain,

252
00:10:17,315 --> 00:10:19,315
potentially canceling the span before it actually happens.

253
00:10:19,315 --> 00:10:20,315
Now,

254
00:10:20,315 --> 00:10:22,315
this is where it's starting to go way off the rails.

255
00:10:22,315 --> 00:10:23,315
Watch.

256
00:10:23,315 --> 00:10:26,315
This idea is similar in spirit to lightning's justice transactions,

257
00:10:26,315 --> 00:10:27,315
comma,

258
00:10:27,315 --> 00:10:29,315
but the very important difference,

259
00:10:29,315 --> 00:10:30,315
not just important,

260
00:10:30,315 --> 00:10:33,315
very important difference that lightning's justice transactions are actually

261
00:10:33,315 --> 00:10:37,315
implemented and have been proven to work in the wild.

262
00:10:39,315 --> 00:10:41,315
Now why do I say this is going off the rails?

263
00:10:42,315 --> 00:10:45,315
it's because it's either an empirical question or it's not.

264
00:10:45,315 --> 00:10:46,315
it's not an empirical question,

265
00:10:46,315 --> 00:10:47,315
but either way,

266
00:10:47,315 --> 00:10:48,315
it wouldn't make any sense.

267
00:10:48,315 --> 00:10:54,315
So the lightning justice transactions have the property that 51% of miners

268
00:10:54,315 --> 00:10:55,315
could censor them.

269
00:10:57,315 --> 00:10:58,315
And in that way,

270
00:10:58,315 --> 00:10:59,315
the,

271
00:10:59,315 --> 00:11:01,315
they could also censor fraud proofs.

272
00:11:01,315 --> 00:11:05,315
And so the whole basis of the fraud proof idea of using a fraud proof against

273
00:11:05,315 --> 00:11:06,315
a miner is impossible.

274
00:11:08,315 --> 00:11:11,315
So it's interesting that he says it's similar in spirit to lightning's justice

275
00:11:11,315 --> 00:11:12,315
transaction.

276
00:11:14,315 --> 00:11:18,315
It doesn't matter that lightning's have been implemented because anything

277
00:11:18,315 --> 00:11:19,315
could,

278
00:11:19,315 --> 00:11:21,315
anything that's not implemented could be implemented.

279
00:11:21,315 --> 00:11:22,315
So that's irrelevant.

280
00:11:23,315 --> 00:11:24,315
And the idea that they've,

281
00:11:24,315 --> 00:11:27,315
they've been proven quotes proven to work in the wild.

282
00:11:27,315 --> 00:11:31,315
That also doesn't matter because that just turns it into an empirical question

283
00:11:32,315 --> 00:11:33,315
of,

284
00:11:33,315 --> 00:11:35,315
they could stop working in the wild at any day.

285
00:11:35,315 --> 00:11:37,315
And we could try the drivechain

286
00:11:39,315 --> 00:11:43,315
model and we could try that in the wild and then it could be proven to work.

287
00:11:43,315 --> 00:11:44,315
And then,

288
00:11:44,315 --> 00:11:46,315
so this whole basis that any of this is any,

289
00:11:46,315 --> 00:11:48,315
any different between lightning on chain,

290
00:11:50,315 --> 00:11:53,315
sidechain with a fraud proof or drivechain,

291
00:11:53,315 --> 00:11:55,315
the whole basis that any of this is any different.

292
00:11:57,315 --> 00:11:58,315
Is not true.

293
00:11:59,315 --> 00:12:01,315
So he's trying to tee this thing up,

294
00:12:01,315 --> 00:12:02,315
but it's not going to work.

295
00:12:04,315 --> 00:12:05,315
That was probably a little confusing,

296
00:12:05,315 --> 00:12:06,315
but trust me,

297
00:12:06,315 --> 00:12:08,315
I'm going to re-explain it after this next paragraph.

298
00:12:08,315 --> 00:12:11,315
So he says in his discussions with some of the authors of the peg side

299
00:12:11,315 --> 00:12:12,315
chains paper,

300
00:12:12,315 --> 00:12:15,315
I've been told that one of the main things in their view that halted the

301
00:12:15,315 --> 00:12:16,315
peg sidechains project.

302
00:12:17,315 --> 00:12:18,315
Again,

303
00:12:18,315 --> 00:12:22,315
I have to just pause here to say how reassuring it is that people are

304
00:12:22,315 --> 00:12:26,315
finally admitting out loud what they would only whisper before,

305
00:12:27,315 --> 00:12:29,315
the whole original sidechains project was,

306
00:12:30,315 --> 00:12:31,315
the plug was pulled.

307
00:12:32,315 --> 00:12:33,315
Now,

308
00:12:33,315 --> 00:12:34,315
why was it pulled?

309
00:12:34,315 --> 00:12:37,315
They halted the peg sidechains project was that actually implementing fraud

310
00:12:37,315 --> 00:12:40,315
proofs turns out to be much more difficult than they had hoped.

311
00:12:41,315 --> 00:12:45,315
The reason why this sentence is important is the same reason as the lightning

312
00:12:45,315 --> 00:12:46,315
justice transaction concept,

313
00:12:46,315 --> 00:12:49,315
which is that it is more difficult than they had proved.

314
00:12:49,315 --> 00:12:51,315
It's impossible from first principles.

315
00:12:51,315 --> 00:12:53,315
It should be very obvious that it's impossible.

316
00:12:54,315 --> 00:12:59,315
If there comes a time when you're proving fraud against the L1 miners,

317
00:13:03,315 --> 00:13:04,315
if that,

318
00:13:04,315 --> 00:13:05,315
if you're coming to that point,

319
00:13:06,315 --> 00:13:08,315
they can just block whatever that message is.

320
00:13:08,315 --> 00:13:09,315
They can just say,

321
00:13:09,315 --> 00:13:12,315
we never got that message and they censor it from the blockchain.

322
00:13:13,315 --> 00:13:17,315
So from just without any kind of real analysis or really even thinking about

323
00:13:17,315 --> 00:13:18,315
it too hard,

324
00:13:18,315 --> 00:13:21,315
we can see that that entire task is not possible at all.

325
00:13:21,315 --> 00:13:23,315
It should be obvious that it's not possible at all.

326
00:13:24,315 --> 00:13:27,315
And so it should be obvious that that's not going to be a criterion for

327
00:13:27,315 --> 00:13:28,315
anything.

328
00:13:29,315 --> 00:13:30,315
So if the,

329
00:13:30,315 --> 00:13:33,315
what they're saying is we will never be able to beat.

330
00:13:34,315 --> 00:13:35,315
Weirdly,

331
00:13:35,315 --> 00:13:38,315
I agree with Peter that the reason why the original sidechains authors

332
00:13:38,315 --> 00:13:40,315
abandoned the idea was because they didn't understand it.

333
00:13:41,315 --> 00:13:44,315
The idea is to win the L1 miners over and,

334
00:13:44,315 --> 00:13:47,315
and bribe them with huge amounts of money,

335
00:13:47,315 --> 00:13:48,315
the fees,

336
00:13:48,315 --> 00:13:52,315
the fees and the ability to increase the value of the BTC coin.

337
00:13:55,315 --> 00:13:57,315
And you bribe them and then you get them on your side.

338
00:13:57,315 --> 00:13:58,315
And then they don't,

339
00:13:58,315 --> 00:14:00,315
the last thing they would want is to do,

340
00:14:00,315 --> 00:14:01,315
do fraud.

341
00:14:02,315 --> 00:14:04,315
So that's just the idea is the way I understand it.

342
00:14:04,315 --> 00:14:08,315
I'm not saying that I have the absolute best idea in the universe,

343
00:14:08,315 --> 00:14:11,315
but what I am saying is that this,

344
00:14:11,315 --> 00:14:14,315
it should have been obvious that this like implementing,

345
00:14:14,315 --> 00:14:15,315
like they investigate,

346
00:14:15,315 --> 00:14:17,315
they went into a laboratory and they were like,

347
00:14:17,315 --> 00:14:18,315
Oh,

348
00:14:18,315 --> 00:14:19,315
it ended up being more difficult than we had thought.

349
00:14:19,315 --> 00:14:20,315
That's like,

350
00:14:20,315 --> 00:14:21,315
you know,

351
00:14:21,315 --> 00:14:24,315
that would be like Walter White going into his chemistry laboratory and

352
00:14:24,315 --> 00:14:28,315
trying to produce like something with a negative weight or something and

353
00:14:28,315 --> 00:14:29,315
being like,

354
00:14:29,315 --> 00:14:30,315
well,

355
00:14:30,315 --> 00:14:31,315
it ended up being hard.

356
00:14:31,315 --> 00:14:32,315
Like you don't really have to go into the laboratory to figure it out.

357
00:14:33,315 --> 00:14:34,315
Okay.

358
00:14:34,315 --> 00:14:35,315
Now we're going to go into the details.

359
00:14:36,315 --> 00:14:37,315
4.1,

360
00:14:38,315 --> 00:14:39,315
5300 drivechain,

361
00:14:39,315 --> 00:14:40,315
take on hash rate escrows.

362
00:14:42,315 --> 00:14:46,315
He gives a two paragraphs that say what the idea is.

363
00:14:48,315 --> 00:14:49,315
This is where though,

364
00:14:49,315 --> 00:14:50,315
this gets absurd.

365
00:14:50,315 --> 00:14:51,315
The next paragraph,

366
00:14:51,315 --> 00:14:52,315
unlike Blockstream's proposal,

367
00:14:52,315 --> 00:14:55,315
BIP300 does not have any concept of fraud proofs.

368
00:14:56,315 --> 00:14:58,315
As the BIP300 introduction suggests,

369
00:14:58,315 --> 00:15:02,315
BIP300 is a strict hash rate escrow where the miners unilaterally decide if

370
00:15:02,315 --> 00:15:04,315
and how to spend the escrowed coins,

371
00:15:04,315 --> 00:15:07,315
regardless of what rules the associated drivechain is meant to enforce.

372
00:15:07,315 --> 00:15:11,315
This includes spending coins in ways that some people might characterize as

373
00:15:11,315 --> 00:15:12,315
theft.

374
00:15:13,315 --> 00:15:16,315
Now this paragraph is just terrible because as I've already explained,

375
00:15:16,315 --> 00:15:18,315
it's obvious why the fraud proofs thing is dead.

376
00:15:18,315 --> 00:15:20,315
You don't have to think about it for that long.

377
00:15:20,315 --> 00:15:22,315
And so why would he,

378
00:15:22,315 --> 00:15:26,315
why would he write a whole paragraph even pointing this out?

379
00:15:27,315 --> 00:15:28,315
It's a very strange,

380
00:15:30,315 --> 00:15:31,315
but whatever.

381
00:15:31,315 --> 00:15:32,315
Okay.

382
00:15:32,315 --> 00:15:33,315
Next paragraph,

383
00:15:33,315 --> 00:15:36,315
while Blockstream proposed relatively short one to two day voting and fraud

384
00:15:36,315 --> 00:15:37,315
proof periods,

385
00:15:37,315 --> 00:15:41,315
BIP300 proposes much longer timescales of approximately three to six months

386
00:15:42,315 --> 00:15:46,315
concretely to withdraw coins from the BIP300 hash rate escrow.

387
00:15:47,315 --> 00:15:50,315
A miner must propose the hash of what is supposed to be a bundle of

388
00:15:50,315 --> 00:15:51,315
transact blah,

389
00:15:51,315 --> 00:15:52,315
blah.

390
00:15:52,315 --> 00:15:53,315
So that's,

391
00:15:53,315 --> 00:15:54,315
if you already understand BIP300,

392
00:15:54,315 --> 00:15:55,315
you know that part.

393
00:15:58,315 --> 00:16:00,315
There's some more details in the BIP itself.

394
00:16:00,315 --> 00:16:03,315
that the specific drive must be first proposed by super majority of hashing

395
00:16:03,315 --> 00:16:04,315
power.

396
00:16:04,315 --> 00:16:06,315
The exact details aren't particularly important to this critique.

397
00:16:06,315 --> 00:16:07,315
That's right.

398
00:16:07,315 --> 00:16:11,315
What is important is to understand that miners vote to decide what to do with

399
00:16:11,315 --> 00:16:12,315
the escrowed coins.

400
00:16:12,315 --> 00:16:15,315
The vote happens over a long period and that there is no mechanism to

401
00:16:15,315 --> 00:16:18,315
challenge the vote with the proof of fraud theft.

402
00:16:20,315 --> 00:16:22,315
But it just doesn't make any sense that he would say this because there's no

403
00:16:22,315 --> 00:16:24,315
literal fraud proof,

404
00:16:24,315 --> 00:16:25,315
which is impossible,

405
00:16:25,315 --> 00:16:29,315
but there is a mechanism to learn about whether or not the,

406
00:16:30,315 --> 00:16:31,315
there is a,

407
00:16:31,315 --> 00:16:32,315
he says,

408
00:16:32,315 --> 00:16:34,315
there's no mechanism to challenge a vote,

409
00:16:35,315 --> 00:16:36,315
but that's not,

410
00:16:36,315 --> 00:16:37,315
you know,

411
00:16:37,315 --> 00:16:40,315
that implies that nothing is stopping the vote from being wrong,

412
00:16:40,315 --> 00:16:42,315
which is completely missing the point.

413
00:16:45,315 --> 00:16:46,315
Then we have this,

414
00:16:46,315 --> 00:16:49,315
you have the section 4.11 other unimportant BIP300 criticism,

415
00:16:50,315 --> 00:16:53,315
but even the unimportant things just reveal basically how lazy Peter has

416
00:16:53,315 --> 00:16:56,315
become and how terrible the,

417
00:16:56,315 --> 00:16:59,315
how little effort he's put into this and how badly he misunderstands it all.

418
00:17:00,315 --> 00:17:01,315
So he says,

419
00:17:01,315 --> 00:17:04,315
this is an unimportant criticism in the overall context of what we just

420
00:17:04,315 --> 00:17:05,315
discussed.

421
00:17:06,315 --> 00:17:07,315
I mean,

422
00:17:07,315 --> 00:17:08,315
but what we just discussed was basically nothing.

423
00:17:09,315 --> 00:17:11,315
So I don't even know what that means.

424
00:17:11,315 --> 00:17:12,315
I'll also,

425
00:17:12,315 --> 00:17:13,315
he says,

426
00:17:13,315 --> 00:17:15,315
I'll also point out that the inclusion of human readable names,

427
00:17:15,315 --> 00:17:16,315
description,

428
00:17:16,315 --> 00:17:17,315
tarball hashes,

429
00:17:17,315 --> 00:17:18,315
get commit,

430
00:17:18,315 --> 00:17:19,315
et cetera,

431
00:17:19,315 --> 00:17:22,315
in the BIP300 specification is a very silly amateur mistake.

432
00:17:23,315 --> 00:17:24,315
He says,

433
00:17:24,315 --> 00:17:27,315
obviously any real use of a drivechain would not start with non-consensus

434
00:17:27,315 --> 00:17:29,315
enforced information obtained on a blockchain.

435
00:17:30,315 --> 00:17:34,315
The inclusion of such fields merely serves to aid in fraudulent attempts at

436
00:17:34,315 --> 00:17:35,315
confusing users.

437
00:17:37,315 --> 00:17:38,315
Now,

438
00:17:38,315 --> 00:17:41,315
like he completely misunderstands what the point of this is.

439
00:17:42,315 --> 00:17:43,315
There's no sense.

440
00:17:43,315 --> 00:17:45,315
The whole point of those is to not confuse users.

441
00:17:46,315 --> 00:17:49,315
So what he's saying is we have a section when you activate the sidechain,

442
00:17:50,315 --> 00:17:51,315
or you can label it,

443
00:17:51,315 --> 00:17:52,315
you can say Zcash sidechain,

444
00:17:53,315 --> 00:17:56,315
and you can also put stuff in there like the tarball hash,

445
00:17:56,315 --> 00:17:57,315
the get commit hash,

446
00:17:57,315 --> 00:17:58,315
et cetera.

447
00:17:59,315 --> 00:18:00,315
That is,

448
00:18:00,315 --> 00:18:05,315
that solves an extremely relevant and obvious problem that would otherwise

449
00:18:05,315 --> 00:18:06,315
kill the whole idea.

450
00:18:07,315 --> 00:18:11,315
And which is with the inclusion of these fields is easily solved,

451
00:18:11,315 --> 00:18:13,315
which is that you don't want people to say something like,

452
00:18:14,315 --> 00:18:15,315
well,

453
00:18:15,315 --> 00:18:17,315
what is the Zcash sidechain?

454
00:18:17,315 --> 00:18:18,315
And we have sidechain slot number four.

455
00:18:19,315 --> 00:18:21,315
What is the Zcash sidechain?

456
00:18:21,315 --> 00:18:24,315
And then you have exactly like the block size where you have people dispute

457
00:18:24,315 --> 00:18:27,315
over exactly what you mean.

458
00:18:28,315 --> 00:18:33,315
I think what Peter Todd is confused about is he thinks that like these

459
00:18:33,315 --> 00:18:38,315
numbers are like relied on for either the sidechain or the main chain

460
00:18:41,315 --> 00:18:42,315
consensus.

461
00:18:42,315 --> 00:18:46,315
But the there it's really just a human thing was that everyone can agree on

462
00:18:46,315 --> 00:18:49,315
what exactly the Zcash sidechain software is.

463
00:18:51,315 --> 00:18:53,315
And all that's fixed perfectly.

464
00:18:53,315 --> 00:18:57,315
If you just have like the one tarball hash and you just say,

465
00:18:58,315 --> 00:19:01,315
this is what defines version 0.1 of the software.

466
00:19:02,315 --> 00:19:03,315
So that way you'll always be able to find it.

467
00:19:04,315 --> 00:19:07,315
So there's no sense in which is a very silly amateur mistake.

468
00:19:08,315 --> 00:19:13,315
It costs basically nothing and it solves a huge problem.

469
00:19:14,315 --> 00:19:15,315
If I had to guess,

470
00:19:15,315 --> 00:19:20,315
I would say that Peter doesn't realize that that data is not in consensus.

471
00:19:21,315 --> 00:19:25,315
Like nothing later depends on it literally from L1 consensus,

472
00:19:25,315 --> 00:19:28,315
but it is required that there be only one.

473
00:19:29,315 --> 00:19:34,315
It is required that there'd be only one like tarball hash per sidechain slot.

474
00:19:37,315 --> 00:19:40,315
So the fact that there's only one of those in the L1 blockchain,

475
00:19:40,315 --> 00:19:41,315
that does help people.

476
00:19:43,315 --> 00:19:46,315
Bitcode, hello. Welcome to the stage. Do you have any thoughts?

477
00:19:46,315 --> 00:19:49,315
Do you think this is, is this fun or is this just rambling nonsense?

478
00:19:49,315 --> 00:19:50,315
There's a bunch of texts.

479
00:19:54,315 --> 00:19:58,315
Yeah, I have my thoughts and I'm.

480
00:19:59,729 --> 00:20:29,729
I'm thinking like, and I'm asking myself a question, why we, why in Bitcoin development we need to rely on some people, you know, individuals that, I don't know if you agree with me, but these people are like, you know, very, very coding focused, you know, I don't see in that article anywhere that he's saying something about, you know, drivechain will harm the decentralization.

481
00:20:29,729 --> 00:20:48,729
And stuff like that. And, you know, the self sovereignty, which, which, you know, the, the, the Bitcoin properties are the most important to, to see if, if they are kind of, you know, damaged by something that new comes on top of Bitcoin or not.

482
00:20:48,729 --> 00:21:06,729
So, like, I don't know that, I mean, that article for me is total nonsense because, you know, like it's, it doesn't, doesn't give you any, any crucial evidence of, you know, okay, he's right here, you know, this can happen.

483
00:21:06,729 --> 00:21:29,729
And, and actually also, we can write anything, you know, we, people are biased. So, like, I want, I want to see when somebody criticize to, to prove that by practical means, you know, like, to show us, yeah, here is, you know, you, this will break something, you know.

484
00:21:30,729 --> 00:21:54,729
And by the way, when drivechain is very simple to, to understand and when you, when you say one transaction is sent as a hash to the, to the L1 and included in the block, I don't see how the transaction can, can damage anything because everything is happening on drivechain.

485
00:21:54,729 --> 00:22:11,729
And plus, like, when we see the sidechains, for me, drivechain is only way to have more decentralized kind of environment around Bitcoin because I have experience.

486
00:22:11,729 --> 00:22:23,729
I know, I follow other kind of, you know, in, they say they are L2s on Bitcoin, but actually they have no connection at all to Bitcoin.

487
00:22:23,729 --> 00:22:51,729
And it's like, you know, I don't know, I think, I think, I don't know if you agree with me, but Bitcoin community and at all like Bitcoin blockchain and everything around should develop some, some, you know, system that is kind of, you know, for new development coming on Bitcoin to be non-biased, to be kind of on decentralized way, you know.

488
00:22:52,729 --> 00:23:00,729
Through maybe not voting, but some kind of consensus for, for bips and stuff like that.

489
00:23:01,729 --> 00:23:02,729
What do you think about that?

490
00:23:03,729 --> 00:23:09,729
Well, I think that actually the sidechain idea is what will free everyone from the prison.

491
00:23:09,729 --> 00:23:22,729
And I think that's actually why on some, on some level, that's why a lot of the people such as Peter don't like it because they are the, like the safety officer right now.

492
00:23:22,729 --> 00:23:26,729
And then no one will need that job.

493
00:23:27,729 --> 00:23:28,729
Yeah.

494
00:23:28,729 --> 00:23:29,729
So, yeah, I just, I don't get it either.

495
00:23:29,729 --> 00:23:34,729
I mean, one thing you said is about like, he should be able to write an article that just shows what the problem is.

496
00:23:34,729 --> 00:23:42,729
Like the problem with naive L1 large blocks was very, very easy to just articulate.

497
00:23:42,729 --> 00:23:49,729
You could say, well, listen, the bigger the block size, it means harder to run a full node, you know, more bandwidth needed.

498
00:23:49,729 --> 00:23:53,729
Someone's got to download and store and serve all of that.

499
00:23:53,729 --> 00:23:59,729
So, and the question was, if the block size limit is not going to be one megabyte, then what will it be?

500
00:24:00,729 --> 00:24:01,729
It could be any amount.

501
00:24:01,729 --> 00:24:03,729
And then, so these are all like, these are pretty easy.

502
00:24:05,729 --> 00:24:07,729
That was at least pretty easy to articulate.

503
00:24:07,729 --> 00:24:15,729
You could just say, well, the disadvantage of having large blocks on L1 was that the blockchain became more expensive.

504
00:24:15,729 --> 00:24:19,729
But with this, there is not going to be any like one thing.

505
00:24:24,729 --> 00:24:25,729
Yeah.

506
00:24:25,729 --> 00:24:31,729
What do you think, Paul, about what Satoshi planned to do with the block size?

507
00:24:33,729 --> 00:24:39,729
About incrementally increasing the size by the month, coming the month?

508
00:24:40,729 --> 00:24:45,729
Well, I think he had changed his mind.

509
00:24:45,729 --> 00:24:49,729
I think Satoshi started as a large blocker, and then he changed his mind to being a small blocker.

510
00:24:49,729 --> 00:24:54,729
And then he, I think he left the project with a small block.

511
00:24:54,729 --> 00:24:56,729
So, but it's very hard to say.

512
00:24:57,729 --> 00:24:59,729
Anyway, do you think I should go back to reading this?

513
00:25:01,729 --> 00:25:02,729
Yeah.

514
00:25:02,729 --> 00:25:03,729
Okay.

515
00:25:06,729 --> 00:25:10,729
So, so, yeah, he has this pointless 4.11.

516
00:25:12,729 --> 00:25:18,729
It doesn't make any sense at all for him to say it includes, you know, so we'll just move on.

517
00:25:20,729 --> 00:25:24,729
Part five, which is, he talks about blind merge mining.

518
00:25:24,729 --> 00:25:28,729
Now, an important thing to keep in mind about part five.

519
00:25:29,729 --> 00:25:42,729
It's true that we wanted to hear all about his problems with drivechain, but it kind of doesn't make any sense for anyone to criticize 301 because blind merge mining, blind merge mining already exists.

520
00:25:42,729 --> 00:25:47,729
And Ruben Somsen and Super Testnet and other people have implemented various ways of emulating it.

521
00:25:47,729 --> 00:25:49,729
And they, they've already implemented those.

522
00:25:49,729 --> 00:25:51,729
They already play around with those.

523
00:25:51,729 --> 00:25:54,729
We already have even more ways of emulating it.

524
00:25:54,729 --> 00:26:00,729
So the BIP301 train has left the station and the whole thing is kind of so it's true.

525
00:26:00,729 --> 00:26:03,729
It's fair for him to comment on it, but it's very pointless.

526
00:26:03,729 --> 00:26:06,729
You would think, why would he focus on any energy on this?

527
00:26:06,729 --> 00:26:07,729
Because it already exists.

528
00:26:08,729 --> 00:26:14,729
Regular vanilla, vanilla merge mining has been in existence for a long time.

529
00:26:14,729 --> 00:26:18,729
It was when used by Satoshi, blah, blah, blah.

530
00:26:18,729 --> 00:26:23,729
So, so he has two paragraphs kind of introducing the idea.

531
00:26:24,729 --> 00:26:29,729
Then he says he has a remarkable paragraph, which again, I like, I just don't understand.

532
00:26:29,729 --> 00:26:33,729
Like, I don't understand anyone who's persuaded by this.

533
00:26:33,729 --> 00:26:34,729
I just think it's so funny.

534
00:26:34,729 --> 00:26:35,729
It's so funny.

535
00:26:35,729 --> 00:26:37,729
Actually, some of the parts of it are funny.

536
00:26:37,729 --> 00:26:38,729
Okay.

537
00:26:38,729 --> 00:26:39,729
This is what it says.

538
00:26:39,729 --> 00:26:45,729
BIP301 doesn't actually specify in detail how a blind mind chain is meant to actually form a consensus.

539
00:26:46,729 --> 00:26:47,729
Okay.

540
00:26:47,729 --> 00:26:48,729
I'm going to stop right there after that.

541
00:26:48,729 --> 00:26:49,729
What first sentence?

542
00:26:50,729 --> 00:26:52,729
Because it makes no sense at all.

543
00:26:53,729 --> 00:26:56,729
Like he doesn't understand the basics of the idea at all.

544
00:26:56,729 --> 00:27:00,729
Like how the blind mind changes to actually the form of consensus.

545
00:27:00,729 --> 00:27:15,729
The sidechains can be written by anyone and they can do whatever the person wants, including never find a consensus or, or just do exactly what vanilla merge mining would have done in that scenario or do something else.

546
00:27:15,729 --> 00:27:21,729
We have no ability to police what people do with the sidechain.

547
00:27:21,729 --> 00:27:23,729
So I don't, it doesn't even know like what he's referring to there.

548
00:27:23,729 --> 00:27:30,729
The sidechains, you know, block size limit of the sidechain or whether or not it has ZK proofs.

549
00:27:30,729 --> 00:27:36,729
Like, it's a very bizarre that he would think that the sidechains consensus on L2.

550
00:27:36,729 --> 00:27:42,729
Why would that be in the BIP301 specification, which is something that only happens on an L1.

551
00:27:42,729 --> 00:27:44,729
Like, it's just very bizarre.

552
00:27:44,729 --> 00:27:46,729
To me, it's kind of rudimentary.

553
00:27:46,729 --> 00:27:48,729
But anyway, that's sentence number one.

554
00:27:49,729 --> 00:27:53,729
The specific rules would be part of the blind mind chains consensus, not Bitcoin itself.

555
00:27:53,729 --> 00:27:54,729
True.

556
00:27:54,729 --> 00:28:02,729
Now, but then he says, however, it's notable that for the most obvious and efficient way, he's going to use this word obvious a lot.

557
00:28:02,729 --> 00:28:09,729
But the most obvious and efficient way of implementing those rules, we have 301 has a serious cryptographic flaw, which we will discuss separately.

558
00:28:10,729 --> 00:28:17,729
So what he means is that he's going to invent a way that he's going to say is the obvious and efficient way, which is not the way that we use.

559
00:28:17,729 --> 00:28:19,729
It's not the way that we use in our code.

560
00:28:19,729 --> 00:28:25,729
And it's also a complete misunderstanding of the difference between blind merge mining and vanilla merge mining.

561
00:28:25,729 --> 00:28:31,729
But Peter is going to invent a fake way that only he has come up with.

562
00:28:32,729 --> 00:28:39,729
Because, basically, Peter comes from, he remembers something that happened in Namecoin like 10 years ago.

563
00:28:39,729 --> 00:28:42,729
And he's too lazy to look into any of this stuff himself.

564
00:28:42,729 --> 00:28:50,729
So he is going to use what he remembered happening in Namecoin, even though that was vanilla merge mining, not blind merge mining.

565
00:28:50,729 --> 00:28:52,729
He's going to invent his own fake way.

566
00:28:52,729 --> 00:28:54,729
He's going to label it the most obvious.

567
00:28:54,729 --> 00:28:56,729
He's going to invent a fake way.

568
00:28:57,729 --> 00:29:03,729
And then he's going to say it's the most obvious and efficient way, which is why he brings it up.

569
00:29:03,729 --> 00:29:09,729
So he's about to invent, in 5.1, he invents a fake way that's not what we do.

570
00:29:09,729 --> 00:29:11,729
And he says it has a serious cryptographic flaw.

571
00:29:11,729 --> 00:29:14,729
But it's his flaw, not mine.

572
00:29:14,729 --> 00:29:15,729
So whatever.

573
00:29:15,729 --> 00:29:17,729
So we'll get to that in two paragraphs from now.

574
00:29:17,729 --> 00:29:26,729
But then he says, with respect to Bitcoin, you can think of BIP301 as a mechanism where mining a special transaction requires a miner to also add an upper return, blah, blah, blah.

575
00:29:26,729 --> 00:29:29,729
Since only one can be included, it's an auction.

576
00:29:29,729 --> 00:29:30,729
So then he gets in.

577
00:29:30,729 --> 00:29:33,729
Now he's going to get into this equivocation attack.

578
00:29:33,729 --> 00:29:36,729
As per BIP301, he has a description of 301.

579
00:29:36,729 --> 00:29:45,729
And then he says, this is the obvious problem with this design is that it's subject to equivocation attacks.

580
00:29:45,729 --> 00:29:56,729
The obvious and efficient implementation of a merge mine chain is to use an SPV proof to the Coinbase transaction to prove that a block has been blind merge mined.

581
00:29:56,729 --> 00:30:04,729
Now, the only thing that's obvious, though, is that Peter doesn't understand the difference between merge mining vanilla and L2.

582
00:30:04,729 --> 00:30:13,729
Because since every L2 requires an L1 just to exist, there's no need to have an SPV proof.

583
00:30:13,729 --> 00:30:16,729
You have the entire L1 chain.

584
00:30:16,729 --> 00:30:22,729
So it's funny, again, that he says something's obvious when in reality he's just mixing up.

585
00:30:22,729 --> 00:30:27,729
I don't know if this is easy for people in the audience to understand, but I find it kind of funny.

586
00:30:27,729 --> 00:30:39,729
Anyway, he says, since the upper return format doesn't commit to which chain is being blind merge mined, a miner could in fact include multiple conflicting OP_RETURN transactions at the same block height.

587
00:30:39,729 --> 00:30:43,729
This is similar to the double proof problem that Namecoin solved back in 2011.

588
00:30:43,729 --> 00:30:48,729
So, again, what's happening here is Peter remembers something from 2011.

589
00:30:48,729 --> 00:30:54,729
He rubs his hand together and he thinks, oh, this is going to be great.

590
00:30:54,729 --> 00:30:55,729
I'm going to bring this up.

591
00:30:55,729 --> 00:30:58,729
He has absolutely no idea that it doesn't apply at all.

592
00:30:58,729 --> 00:31:07,729
And he's going to try to say, oh, as if we're not aware of a solution that is so old that it dates back to 2011.

593
00:31:08,729 --> 00:31:10,729
And it's embarrassing, honestly.

594
00:31:10,729 --> 00:31:15,729
I'm embarrassed on his behalf, because the idea – okay, let me reread the sentence.

595
00:31:15,729 --> 00:31:27,729
Since the upper return format doesn't commit to which chain is being blind merge mined – yeah, but the sidechain itself knows which chain it is.

596
00:31:27,729 --> 00:31:31,729
See, it's like so obvious it can barely even be described, honestly.

597
00:31:31,729 --> 00:31:38,729
The sidechain already knows which sidechain it is, and it already needs – it's going to need its block to be a block that follows all the block validity rules.

598
00:31:38,729 --> 00:31:50,729
So I think the only way of explaining this in a way that anyone else has a chance of understanding would be to try to explain this whole Namecoin thing slightly, which is Namecoin has the ability to exist.

599
00:31:50,729 --> 00:31:57,729
It was possible in Namecoin to have an L1 Bitcoin block that contained multiple Namecoin headers.

600
00:31:58,729 --> 00:32:15,729
And so what Peter is saying, if that's possible, then someone can – on L2, they could draw a little bit of line, a connecting thread to 1, 2, 3, 4, 5, 6, multiple of these.

601
00:32:15,729 --> 00:32:19,729
And then they could find multiple L2 blocks for every L1 block.

602
00:32:19,729 --> 00:32:23,729
But the whole thing is just so completely absurd.

603
00:32:23,729 --> 00:32:31,729
First of all, in 3.01, the blocks are found at the same time. An L1 and L2 block are always found at the same time.

604
00:32:31,729 --> 00:32:34,729
And there's no way of finding an L2 block any other way.

605
00:32:34,729 --> 00:32:37,729
And the L2 always has a fully validating L1 node.

606
00:32:37,729 --> 00:32:44,729
So the L1 node can always just use the first one it sees or something else.

607
00:32:44,729 --> 00:32:50,729
But the bigger problem is it doesn't make any difference because the sidechain can only collect its fees.

608
00:32:50,729 --> 00:32:53,729
And so there's no point in finding multiple blocks.

609
00:32:53,729 --> 00:32:56,729
It's the same 10-minute period for each thing.

610
00:32:56,729 --> 00:32:58,729
So it's terrible.

611
00:32:58,729 --> 00:33:01,729
But I'm not sure if it's easy for people in the audience to understand.

612
00:33:01,729 --> 00:33:04,729
But trust me, it doesn't make any sense.

613
00:33:04,729 --> 00:33:12,729
There's no sense in which a miner could include multiple conflicting upper-term transactions at the same block height.

614
00:33:13,729 --> 00:33:17,729
But that doesn't have any effect on anything.

615
00:33:17,729 --> 00:33:20,729
It just wastes L1 block space. It does nothing.

616
00:33:20,729 --> 00:33:27,729
There's no sense in which the L2 can be tricked into not seeing something on L1 because the L2 sees everything on L1.

617
00:33:27,729 --> 00:33:38,729
The fact that Peter doesn't know that is shocking because the difference between L1 and L2 is completely prerequisite for understanding this idea.

618
00:33:39,729 --> 00:33:44,729
And then he says, okay, an obvious solution would be to tag the upper-term with some kind of merge mine chain identifier.

619
00:33:44,729 --> 00:33:46,729
We call that nsidechain.

620
00:33:46,729 --> 00:33:49,729
And we do that later where it is important.

621
00:33:49,729 --> 00:33:52,729
But we don't do that here because it's not important.

622
00:33:52,729 --> 00:33:57,729
And then he says a strict consensus rule in the blind merge chain with the first matching tag wins.

623
00:33:57,729 --> 00:33:58,729
But you see, that's the whole point.

624
00:33:58,729 --> 00:34:03,729
The L2 already knows what sidechain number it is, and it's already only going to do that.

625
00:34:04,729 --> 00:34:05,729
So I don't understand.

626
00:34:05,729 --> 00:34:17,729
Why would Peter invent this fake thing that's not real, then criticize it and say it's a serious cryptographic flaw, then at the end say, well, it could be easily fixed?

627
00:34:17,729 --> 00:34:20,729
I mean, it's a farce.

628
00:34:20,729 --> 00:34:25,729
We already have code that works that does it.

629
00:34:25,729 --> 00:34:27,729
So it's ridiculous.

630
00:34:27,729 --> 00:34:29,729
I mean, if he's saying it's…

631
00:34:29,729 --> 00:34:30,729
I don't know who he even knows.

632
00:34:30,729 --> 00:34:32,729
It's not worth it to continue to talk about it.

633
00:34:32,729 --> 00:34:36,729
Reorgs and validating coins.

634
00:34:36,729 --> 00:34:38,729
5.2.

635
00:34:38,729 --> 00:34:39,729
The blind merge mile.

636
00:34:39,729 --> 00:34:40,729
We have a zero up on the stage.

637
00:34:40,729 --> 00:34:41,729
Hello.

638
00:34:41,729 --> 00:34:42,729
Welcome to the stage.

639
00:34:42,729 --> 00:34:43,729
Feel free to just shout out.

640
00:34:43,729 --> 00:34:47,729
I think it might be a little too boring if I just keep rambling.

641
00:34:47,729 --> 00:34:48,729
Is this any good?

642
00:34:48,729 --> 00:34:54,729
Do you like this or no?

643
00:34:54,729 --> 00:34:55,729
All right.

644
00:34:55,729 --> 00:35:00,729
The strong silent type.

645
00:35:00,729 --> 00:35:02,729
We'll get back to him later.

646
00:35:02,729 --> 00:35:04,729
5.2.

647
00:35:04,729 --> 00:35:07,729
The blind merge mine request is the following format, blah, blah, blah.

648
00:35:07,729 --> 00:35:10,729
See, the inside chain is there.

649
00:35:10,729 --> 00:35:18,729
The last field is designed to commit to the previous block header, ensuring that a blind merge mine request transaction is only valid in a specific block.

650
00:35:18,729 --> 00:35:19,729
Correct.

651
00:35:19,729 --> 00:35:23,729
This directly conflicts with an important principle of Bitcoin consensus design.

652
00:35:23,729 --> 00:35:27,729
Reorgs should not invalidate transactions.

653
00:35:28,729 --> 00:35:38,729
For example, this is why Coinbase outputs are only spendable after 100 blocks and why we have not and will not implement consensus level transaction expiry.

654
00:35:39,729 --> 00:36:00,729
Now, the irony with this is that moments after this post was made, we are now literally encountered a lightning bug that has caused people to basically admit that an op code with the literal name op expire is not only going to be done, but is crucial to the survival of the lightning network.

655
00:36:00,729 --> 00:36:03,729
So that's just one irony.

656
00:36:03,729 --> 00:36:06,729
But it's true that it may be a principle.

657
00:36:07,729 --> 00:36:14,729
It's sort of a desirable thing because it makes lots of different caching easier, but there's no sense in which this is a requirement.

658
00:36:14,729 --> 00:36:20,729
So the idea is, again, I'll remind you, reorgs should not invalidate transactions.

659
00:36:20,729 --> 00:36:37,729
But it should be quite obvious to anyone with intermediate level understanding that a reorg could lead to a double spend and a double spend would lead to the invalidation of every transaction that depended on the double spend, whichever side got kicked out.

660
00:36:37,729 --> 00:36:44,729
So it's absolutely possible that reorgs can and do invalidate transactions.

661
00:36:45,729 --> 00:36:53,729
It's true that it's frustrating for the software when this happens, and we built a special cache.

662
00:36:53,729 --> 00:36:59,729
It did take a little bit of engineering to build a special cache to track these particular transactions.

663
00:36:59,729 --> 00:37:05,729
But these are special transactions anyway because only one – it's not just reorgs invalidating coins.

664
00:37:05,729 --> 00:37:10,729
This is a case where these are all bids, and only one bid is valid.

665
00:37:10,729 --> 00:37:13,729
So everyone's broadcasting a transaction on L1.

666
00:37:13,729 --> 00:37:16,729
They broadcast 200 transactions or 2,000.

667
00:37:16,729 --> 00:37:24,729
Only one of those is going to be valid, and the rest will have to be invalidated and then purged and then abandoned.

668
00:37:24,729 --> 00:37:32,729
There's this concept of abandoning a transaction in a wallet, which you may be familiar with if you have more advanced Bitcoin knowledge.

669
00:37:32,729 --> 00:37:36,729
So that was already a tricky thing to deal with.

670
00:37:37,729 --> 00:37:42,729
They're already only valid for exactly one block, so they're fill or kill.

671
00:37:42,729 --> 00:37:54,729
But it's true that that is kind of a little bit of a careful thing, but it's absolutely 100% false to say that reorgs can never invalidate transactions.

672
00:37:54,729 --> 00:37:56,729
Of course, any double spend would do.

673
00:37:57,729 --> 00:38:05,729
It's just the idea that it would be relevant enough to even be a critique of the idea.

674
00:38:05,729 --> 00:38:15,729
It just says, basically, this is an unusual type of thing, but it's very easy to solve with just a little cache.

675
00:38:17,729 --> 00:38:25,729
So it's certainly not anything where it would be like, oh, an unsolvable problem because, again, reorgs already invalidate transactions.

676
00:38:26,729 --> 00:38:28,729
And then he has, again, a way to fix it.

677
00:38:28,729 --> 00:38:30,729
He says this is a way to fix it.

678
00:38:30,729 --> 00:38:44,729
I think he knows for a while that his way of fixing it would require a weird prep transaction, and there would be no change output in the Blind Merge Mine request.

679
00:38:44,729 --> 00:38:46,729
People could do this, or they could not do it.

680
00:38:46,729 --> 00:38:48,729
It doesn't really make any difference.

681
00:38:48,729 --> 00:38:52,729
I think that it makes no difference.

682
00:38:52,729 --> 00:38:53,729
That's the point.

683
00:38:53,729 --> 00:38:55,729
That's his point at the end of this.

684
00:38:55,729 --> 00:38:57,729
He says, oh, here's this problem, but also it doesn't matter.

685
00:38:57,729 --> 00:39:00,729
So, I mean, I don't know.

686
00:39:00,729 --> 00:39:15,729
I guess one of those two was the serious cryptographic flaw, even though neither are flawed and they're just things that it's just not true that there's a flaw at all.

687
00:39:16,729 --> 00:39:18,729
Then his part six.

688
00:39:18,729 --> 00:39:21,729
I don't know why this part is in here, but here it is.

689
00:39:21,729 --> 00:39:24,729
The lack of BIP301 and BIP300 interaction.

690
00:39:24,729 --> 00:39:30,729
A notable omission in 301 is that BIP301 does not interact with BIP300.

691
00:39:30,729 --> 00:39:31,729
I know.

692
00:39:31,729 --> 00:39:33,729
That's why I separated them to make it easier to read, since they are independent.

693
00:39:33,729 --> 00:39:38,729
There is no mechanism to pay miners to act or knack a specific thing.

694
00:39:38,729 --> 00:39:43,729
The only way that coins could be withdrawn is by the direct participation, blah, blah, blah.

695
00:39:44,729 --> 00:39:56,729
BIP301 clearly states in the motivation section that is intended to fix drawbacks of traditional merge mining, including the fact that in traditional merge mining, miners must run a full node of the other chain, thus they must run non-Bitcoin software, which may be buggy.

696
00:39:56,729 --> 00:40:04,729
Then he says, but this obviously conflicts with the requirement that miners either run drivechain nodes or trust others to run them for them.

697
00:40:06,189 --> 00:40:08,989
See, but, or to safely allow withdrawals to happen.

698
00:40:08,989 --> 00:40:11,789
If miners are not doing that, either coins become stuck

699
00:40:11,789 --> 00:40:14,629
or they become subject to theft.

700
00:40:14,629 --> 00:40:16,869
So again, Peter throws this obvious word around,

701
00:40:16,869 --> 00:40:21,549
even though it was, let's revisit the sentence.

702
00:40:21,549 --> 00:40:24,109
He says, but this obviously conflicts with the requirement

703
00:40:24,109 --> 00:40:26,328
that miners either run drivechain full nodes,

704
00:40:26,328 --> 00:40:28,908
which is not a requirement, so that's why it doesn't,

705
00:40:28,908 --> 00:40:32,068
it doesn't conflict, or trust others to run them for them.

706
00:40:32,988 --> 00:40:37,109
So now you see that he has actually contradicted himself,

707
00:40:38,148 --> 00:40:41,749
because what I'm saying is BIP301 allows miners

708
00:40:41,749 --> 00:40:44,788
to shirk running a node, and he's saying,

709
00:40:44,788 --> 00:40:47,209
well, this obviously conflicts with blank,

710
00:40:47,209 --> 00:40:49,189
that's not important, or that they trust others

711
00:40:49,189 --> 00:40:51,889
to run a node for them, but there is no such thing.

712
00:40:54,069 --> 00:40:56,988
There is no, the requirement that miners trust others

713
00:40:56,988 --> 00:40:59,429
to run a node has nothing to do with BIP301.

714
00:40:59,429 --> 00:41:00,828
I don't know if that's clear or not.

715
00:41:00,828 --> 00:41:01,669
Hopefully it is.

716
00:41:02,389 --> 00:41:03,468
He wants it both ways.

717
00:41:03,468 --> 00:41:06,988
He says, BIP301, Paul, I'm saying, I, Paul,

718
00:41:06,988 --> 00:41:09,869
I'm saying BIP301 means miners don't need

719
00:41:09,869 --> 00:41:11,849
to run a sidechain node.

720
00:41:11,849 --> 00:41:13,108
Then Peter is saying, hey, listen,

721
00:41:13,108 --> 00:41:14,909
they either have to run a node or trust someone else

722
00:41:14,909 --> 00:41:17,248
to run them for them, but if they trust someone else

723
00:41:17,248 --> 00:41:19,949
to run a node for them, then they aren't running them.

724
00:41:20,949 --> 00:41:24,748
So Peter just says, Peter is basically saying

725
00:41:24,748 --> 00:41:27,309
one person on planet Earth somewhere,

726
00:41:27,309 --> 00:41:29,629
at least one person is running a full node,

727
00:41:29,629 --> 00:41:33,549
therefore it contradicts what Paul is saying in 301

728
00:41:33,549 --> 00:41:36,229
that miners don't need to run a full node

729
00:41:36,229 --> 00:41:38,549
if they don't want to, because somewhere,

730
00:41:38,549 --> 00:41:40,828
someone is running a node, which is absurd.

731
00:41:40,828 --> 00:41:43,009
Someone who is either a miner or a miner's friend

732
00:41:43,009 --> 00:41:46,028
or someone else is running a node.

733
00:41:46,028 --> 00:41:51,028
Now he says, frankly, the really crazy thing is,

734
00:41:51,189 --> 00:41:53,428
he says, because I just printed this out

735
00:41:53,428 --> 00:41:55,828
and re-read it before this space, he says,

736
00:41:55,828 --> 00:41:57,788
now, frankly, when I first learned about drivechains,

737
00:41:57,788 --> 00:41:59,949
I had assumed that the blind merge mine mechanism

738
00:41:59,949 --> 00:42:02,828
also allowed for blind withdrawal proposals of some kind,

739
00:42:02,828 --> 00:42:04,869
given the decentralization claims around drivechains.

740
00:42:04,869 --> 00:42:06,629
I was shocked, he said, this is him,

741
00:42:06,629 --> 00:42:09,229
I was shocked when I learned otherwise,

742
00:42:09,229 --> 00:42:12,428
the proposal simply punts on this obvious issue

743
00:42:12,428 --> 00:42:13,588
with no solution.

744
00:42:14,468 --> 00:42:16,388
Now I got to skip, I know I'm doing it in order,

745
00:42:16,388 --> 00:42:18,588
but I want to just skip ahead slightly,

746
00:42:18,588 --> 00:42:23,588
because at some point he says, okay, right before 7.3,

747
00:42:24,509 --> 00:42:26,189
I'll go right back to where I was before,

748
00:42:26,349 --> 00:42:30,909
he says, then he's completely contradicts himself again,

749
00:42:30,909 --> 00:42:33,709
saying, okay, he's shocked that there's no thing

750
00:42:33,709 --> 00:42:36,069
and the proposal punts on this obvious problem.

751
00:42:37,789 --> 00:42:39,468
First of all, there is no problem

752
00:42:39,468 --> 00:42:42,668
because BIP300 works and BIP301 works,

753
00:42:42,668 --> 00:42:44,108
so they each work separately.

754
00:42:44,108 --> 00:42:45,909
And whether they're combined or not

755
00:42:45,909 --> 00:42:47,468
makes absolutely no difference.

756
00:42:48,468 --> 00:42:51,569
And there's no way, there's no possible way

757
00:42:51,569 --> 00:42:56,569
of forcing a sidechain to use 301 or not,

758
00:42:56,569 --> 00:42:58,929
since we don't know what it's doing.

759
00:42:58,929 --> 00:43:01,448
So the whole thing is a huge misunderstanding again,

760
00:43:01,448 --> 00:43:03,209
if he just doesn't understand like,

761
00:43:04,968 --> 00:43:08,328
really like anything behind the philosophy of the idea,

762
00:43:08,328 --> 00:43:10,608
because there's no way that you could force someone

763
00:43:10,608 --> 00:43:12,248
to use 301.

764
00:43:14,028 --> 00:43:17,448
But anyway, he says this, and he says he is shocked

765
00:43:17,448 --> 00:43:20,929
that there's no way of using the blind mechanism

766
00:43:20,929 --> 00:43:22,728
to do the withdrawals.

767
00:43:22,728 --> 00:43:25,929
But then later on, he's gonna say,

768
00:43:25,929 --> 00:43:28,289
I suspect the reason for this omission

769
00:43:29,748 --> 00:43:31,209
is that the authors of drivechains

770
00:43:31,209 --> 00:43:35,769
attempted to make blind withdrawal voting, not true,

771
00:43:35,769 --> 00:43:37,569
and failed due to it being incompatible

772
00:43:37,569 --> 00:43:39,489
with rational game theory.

773
00:43:39,489 --> 00:43:41,209
If you can pay money to steal coins,

774
00:43:41,209 --> 00:43:43,248
obviously someone will do exactly that,

775
00:43:43,248 --> 00:43:45,009
requiring a majority of hash power to vote

776
00:43:45,009 --> 00:43:47,509
in favor of coin withdrawal obscures this problem.

777
00:43:48,509 --> 00:43:51,828
So it's just kind of funny because he says,

778
00:43:51,828 --> 00:43:53,709
he's shocked that there's no way of combining them.

779
00:43:53,709 --> 00:43:56,149
And then later on, later on at a different section,

780
00:43:56,149 --> 00:44:00,308
he says, well, obviously it's a conflicts

781
00:44:00,308 --> 00:44:02,868
with rational game theory,

782
00:44:02,868 --> 00:44:05,228
that they could never be combined.

783
00:44:05,228 --> 00:44:07,468
So he seems to be shocked by both and,

784
00:44:07,468 --> 00:44:09,868
but you know, it doesn't really make any difference.

785
00:44:09,868 --> 00:44:11,388
This is the whole section seven

786
00:44:11,388 --> 00:44:15,549
is really the only important part per se,

787
00:44:15,549 --> 00:44:17,228
because this says analysis,

788
00:44:17,228 --> 00:44:19,028
how can drivechains affect Bitcoin?

789
00:44:21,669 --> 00:44:26,669
The rest of it, you know, is meaningless mostly,

790
00:44:26,889 --> 00:44:31,389
but so section seven, as we're about to understand,

791
00:44:32,428 --> 00:44:34,428
there is absolutely nothing whatsoever

792
00:44:34,428 --> 00:44:35,748
in all of section seven

793
00:44:35,748 --> 00:44:38,868
about anything other than Bitcoin mining.

794
00:44:38,868 --> 00:44:41,548
So you could retitle it and say analysis,

795
00:44:41,548 --> 00:44:44,308
how can drivechains affect Bitcoin mining?

796
00:44:44,349 --> 00:44:46,468
He actually admits,

797
00:44:46,468 --> 00:44:49,148
I don't know if he admits it like explicitly,

798
00:44:49,148 --> 00:44:52,229
but he admits that the drivechain idea

799
00:44:52,229 --> 00:44:54,428
does not affect your full node at all,

800
00:44:54,428 --> 00:44:58,129
nor how expensive it is for you to run a full node,

801
00:44:58,129 --> 00:45:02,748
nor like what your full node won't like start

802
00:45:02,748 --> 00:45:05,868
doing new things and it won't stop doing old things.

803
00:45:05,868 --> 00:45:08,949
And just as your full node is independent

804
00:45:08,949 --> 00:45:12,968
of what the network difficulty is at any time,

805
00:45:14,548 --> 00:45:15,389
it's still work.

806
00:45:15,389 --> 00:45:16,389
Your full node works no matter

807
00:45:16,389 --> 00:45:18,229
what the network difficulty is.

808
00:45:18,229 --> 00:45:20,428
Your full node also work no matter how many,

809
00:45:21,389 --> 00:45:22,268
that will work the same no matter

810
00:45:22,268 --> 00:45:24,069
how many L2 drivechains there are.

811
00:45:26,028 --> 00:45:28,069
So to me, that's like the entire thing.

812
00:45:28,069 --> 00:45:29,308
So he kind of admits that,

813
00:45:29,308 --> 00:45:31,669
and he just focuses on how can drivechains

814
00:45:31,669 --> 00:45:33,268
affect Bitcoin mining, which is fine

815
00:45:33,268 --> 00:45:35,868
because we Bitcoiners, we all share the same,

816
00:45:37,148 --> 00:45:39,789
we all share as Francis Puyo said to me once,

817
00:45:39,789 --> 00:45:41,069
we all share the same brand

818
00:45:41,109 --> 00:45:46,109
and we all share the same miners or mining process.

819
00:45:49,109 --> 00:45:50,909
So that's something, I suppose.

820
00:45:52,229 --> 00:45:53,708
Anyway, I'll go back to reading it now.

821
00:45:53,708 --> 00:45:56,789
This is the only important part, section seven anyway.

822
00:45:56,789 --> 00:45:58,868
Now that we've covered how the drivechain proposal works

823
00:45:58,868 --> 00:46:00,588
along with some more obvious flaws,

824
00:46:00,588 --> 00:46:02,308
again, what he considers to be obvious flaws

825
00:46:02,308 --> 00:46:03,629
are just mistakes that he has made

826
00:46:03,629 --> 00:46:05,308
or things where he, and or,

827
00:46:05,308 --> 00:46:07,389
things where he contradicts himself later,

828
00:46:07,389 --> 00:46:11,308
but we can analyze how drivechains affect Bitcoin.

829
00:46:11,308 --> 00:46:12,789
Let's start with our goals.

830
00:46:13,988 --> 00:46:15,909
I even thought this sentence was funny, honestly,

831
00:46:15,909 --> 00:46:17,748
that our goals, like, you know that,

832
00:46:17,748 --> 00:46:19,789
remember that meme where there's like Bugs Bunny

833
00:46:19,789 --> 00:46:22,229
and there's like a communist flag behind him.

834
00:46:22,229 --> 00:46:26,949
And it's like, it's like your girlfriend asked you

835
00:46:26,949 --> 00:46:28,949
if you want a sandwich or something,

836
00:46:28,949 --> 00:46:30,829
and then you ask her if she wants a sandwich,

837
00:46:30,829 --> 00:46:33,069
she says no, and then you buy the sandwich.

838
00:46:33,069 --> 00:46:36,588
And then it's like our sandwich, you know?

839
00:46:36,588 --> 00:46:41,028
So let's start with our goals, communist goal meme.

840
00:46:42,028 --> 00:46:46,909
And then he says, we want Bitcoin to be useful,

841
00:46:46,909 --> 00:46:48,708
blah, blah, blah, secure,

842
00:46:48,708 --> 00:46:51,069
Bitcoin must be useful and decentralized.

843
00:46:51,069 --> 00:46:52,789
We do not want any single group entity

844
00:46:52,789 --> 00:46:53,949
or group of entities.

845
00:46:55,148 --> 00:46:58,069
Okay, so this is very revealing for Peter Todd,

846
00:46:58,069 --> 00:47:01,468
because again, he misses the entire point of sidechains.

847
00:47:02,308 --> 00:47:04,548
The whole point is that each of these three things,

848
00:47:04,548 --> 00:47:06,349
useful, secure, decentralized,

849
00:47:07,588 --> 00:47:12,268
cannot be one size fits all.

850
00:47:12,268 --> 00:47:13,789
That is really basic.

851
00:47:15,189 --> 00:47:17,349
So he says, we want Bitcoin to be useful,

852
00:47:17,349 --> 00:47:19,708
secure, decentralized, but you know,

853
00:47:19,708 --> 00:47:22,428
some people find Monero to be more useful than Bitcoin,

854
00:47:22,428 --> 00:47:23,588
because they find ring signatures

855
00:47:23,588 --> 00:47:25,428
to be more private than Bitcoin.

856
00:47:25,428 --> 00:47:28,548
And then as for secure, some people find Bitcoin,

857
00:47:28,548 --> 00:47:31,028
you know, many people find BTC to be more secure

858
00:47:31,028 --> 00:47:34,509
than Bitcoin SV, or they find BTC to be more secure

859
00:47:35,468 --> 00:47:37,708
than whatever, Feathercoin or something.

860
00:47:38,548 --> 00:47:40,949
Some people find SPV security to be enough.

861
00:47:40,949 --> 00:47:42,949
Some people use a custodial wallet.

862
00:47:42,949 --> 00:47:44,868
Some people use Breeze.

863
00:47:44,868 --> 00:47:46,509
Some people use custodial Lightning,

864
00:47:46,509 --> 00:47:47,669
use wallet of Satoshi.

865
00:47:48,548 --> 00:47:50,588
So useful, secure, decentralized,

866
00:47:50,588 --> 00:47:52,629
you just got to think of these like volume knobs

867
00:47:52,629 --> 00:47:54,308
or something where individual people

868
00:47:54,308 --> 00:47:57,069
are going to be turning them to different settings.

869
00:47:57,069 --> 00:47:58,468
Useful, secure, decentralized.

870
00:47:58,468 --> 00:48:01,509
So the whole problem of sidechains is

871
00:48:01,509 --> 00:48:05,028
how do we let each person change the volume knob

872
00:48:05,028 --> 00:48:07,028
to whatever they want it to be?

873
00:48:07,028 --> 00:48:09,028
They choose how useful, secure, decentralized

874
00:48:09,028 --> 00:48:12,349
they want to be, and someone else picks something different.

875
00:48:12,349 --> 00:48:14,988
So just by framing it this way,

876
00:48:15,868 --> 00:48:18,189
he misses the point completely.

877
00:48:18,189 --> 00:48:20,708
Because he's saying it should be a certain amount useful,

878
00:48:20,708 --> 00:48:23,349
a certain amount secure, a certain amount decentralized.

879
00:48:25,349 --> 00:48:27,389
But it can't, not for everyone,

880
00:48:27,389 --> 00:48:28,349
because people will disagree.

881
00:48:28,349 --> 00:48:30,148
But he kind of goes from bad to worse

882
00:48:30,148 --> 00:48:31,588
when he says decentralized, he says,

883
00:48:31,588 --> 00:48:32,789
in achieving goal number two,

884
00:48:32,789 --> 00:48:36,509
we do not trust any single entity or group of entities.

885
00:48:36,509 --> 00:48:38,509
We assume any single entity or group of entities

886
00:48:38,509 --> 00:48:39,868
may attack Bitcoin.

887
00:48:39,868 --> 00:48:42,189
So his metric for decentralization

888
00:48:42,189 --> 00:48:45,988
is how many people we need to trust,

889
00:48:45,988 --> 00:48:49,469
like a quantity of people, a quantity of entities.

890
00:48:49,469 --> 00:48:53,108
And I just think it's amazing how bad this definition is.

891
00:48:53,108 --> 00:48:55,709
The decentralization means that,

892
00:48:57,149 --> 00:48:58,228
I guess you could rephrase,

893
00:48:58,228 --> 00:49:01,548
if you weren't trying to salvage his definition,

894
00:49:01,548 --> 00:49:04,108
the key to understanding Bitcoin and decentralization

895
00:49:04,108 --> 00:49:07,189
is to imagine the Liberty Reserve

896
00:49:08,389 --> 00:49:11,548
e-gold collapse scenario,

897
00:49:11,548 --> 00:49:14,868
where there was this bank, Liberty Reserve,

898
00:49:14,868 --> 00:49:18,348
that was like a private libertarian bank,

899
00:49:18,348 --> 00:49:21,108
but it had only the one server somewhere.

900
00:49:21,108 --> 00:49:22,548
And so it was seized by the government

901
00:49:22,548 --> 00:49:24,428
and closed down very easily.

902
00:49:24,428 --> 00:49:26,668
However, something like BitTorrent survives

903
00:49:26,668 --> 00:49:29,469
because there's no single point of failure.

904
00:49:30,788 --> 00:49:32,668
So I guess you could rewrite,

905
00:49:32,668 --> 00:49:35,069
you could try to salvage what he was saying.

906
00:49:35,069 --> 00:49:37,709
We do not trust any single entity.

907
00:49:37,709 --> 00:49:39,949
Instead, we think, right.

908
00:49:39,949 --> 00:49:42,709
So he's saying there's no single point of failure.

909
00:49:42,709 --> 00:49:45,069
That would be how to sort of salvage this.

910
00:49:45,069 --> 00:49:47,389
But it's not really about the quantity of entities.

911
00:49:47,389 --> 00:49:51,189
Decentralization is about how easily we recover

912
00:49:51,189 --> 00:49:55,308
from the failure of one node, basically.

913
00:49:55,308 --> 00:49:56,228
That's how I think.

914
00:49:57,509 --> 00:50:00,269
But so now he's gonna say the last goal,

915
00:50:00,269 --> 00:50:01,389
I'm gonna continue to quote him.

916
00:50:01,389 --> 00:50:03,389
The last goal is generating the bulk of the discussion

917
00:50:03,389 --> 00:50:04,228
on drivechains.

918
00:50:04,228 --> 00:50:06,589
Do they encourage centralization of Bitcoin mining?

919
00:50:08,029 --> 00:50:08,868
Now, again,

920
00:50:13,428 --> 00:50:16,668
centralization doesn't really apply to Bitcoin mining.

921
00:50:16,668 --> 00:50:17,988
We'll see actually what he means.

922
00:50:17,988 --> 00:50:20,348
I'll go on because it'll be clear

923
00:50:20,348 --> 00:50:25,228
that when I talk about centralization and decentralization,

924
00:50:25,228 --> 00:50:27,149
I'm talking about the cost of running a full node.

925
00:50:27,149 --> 00:50:29,149
And I have been able to convince most people

926
00:50:29,149 --> 00:50:31,868
that this is the appropriate definition.

927
00:50:31,868 --> 00:50:33,709
It's the cost of the cell dividing.

928
00:50:33,709 --> 00:50:36,428
You know, it's the cost of starting up a new node.

929
00:50:36,428 --> 00:50:38,269
The easier it is to start up nodes,

930
00:50:38,269 --> 00:50:39,908
the more nodes there will be.

931
00:50:39,908 --> 00:50:42,629
The easier, the less problematic it will be

932
00:50:42,629 --> 00:50:44,988
if 99% of the nodes go offline

933
00:50:44,988 --> 00:50:47,069
because we can just turn them back on.

934
00:50:47,069 --> 00:50:49,509
It'll be very easy for you to like flee the country,

935
00:50:49,509 --> 00:50:51,868
get a laptop, turn the node back on.

936
00:50:51,868 --> 00:50:53,228
So it's the cost of running the node

937
00:50:53,228 --> 00:50:54,548
that that's the key thing.

938
00:50:55,709 --> 00:50:57,509
Mining centralization,

939
00:50:58,509 --> 00:51:01,108
it seems as though he's now gonna contradict himself again

940
00:51:01,108 --> 00:51:02,589
because he was talking about entities.

941
00:51:02,589 --> 00:51:05,348
He was saying there can't be one mining entity.

942
00:51:05,348 --> 00:51:06,668
But of course the mining process

943
00:51:06,668 --> 00:51:09,069
doesn't have entities at all.

944
00:51:09,069 --> 00:51:11,149
There is no signature or anything with mining.

945
00:51:11,149 --> 00:51:12,788
Anyone can join or leave at any time.

946
00:51:12,788 --> 00:51:14,029
You have no idea if everyone

947
00:51:14,029 --> 00:51:15,788
is actually the same person or not.

948
00:51:16,988 --> 00:51:20,629
It's possible for 100% of the current mining stock

949
00:51:20,629 --> 00:51:23,428
to, you know, get hit by a meteor

950
00:51:23,428 --> 00:51:25,589
and then new people can mine.

951
00:51:25,589 --> 00:51:26,829
And then you could later be revealed

952
00:51:26,829 --> 00:51:28,548
that those people are actually the same person.

953
00:51:28,548 --> 00:51:31,069
And then, so there is no sense

954
00:51:31,069 --> 00:51:32,988
in which this whole group of entities thing

955
00:51:32,988 --> 00:51:34,829
doesn't apply to mining at all.

956
00:51:34,829 --> 00:51:39,308
But now we'll get into what does Peter actually mean?

957
00:51:39,308 --> 00:51:41,868
And we're gonna read these two paragraphs to you,

958
00:51:41,868 --> 00:51:43,428
but it's clear that he's referring to something

959
00:51:43,428 --> 00:51:46,908
like geographic, geometric decentralization.

960
00:51:46,908 --> 00:51:49,389
He literally cares about the physical distance

961
00:51:49,389 --> 00:51:51,348
the miners are from each other,

962
00:51:51,348 --> 00:51:53,629
which I think is just completely absurd.

963
00:51:54,629 --> 00:51:56,029
But we'll read it now.

964
00:51:56,029 --> 00:51:57,829
Bitcoin mining comprises of both hashing

965
00:51:57,829 --> 00:51:59,788
and block verification and production.

966
00:52:00,908 --> 00:52:02,509
The economics of Bitcoin mining

967
00:52:02,509 --> 00:52:04,829
have both economies and diseconomies of scale.

968
00:52:04,829 --> 00:52:07,348
These economies and diseconomies of scale

969
00:52:07,348 --> 00:52:10,269
act as centralizing and decentralizing pressures.

970
00:52:11,788 --> 00:52:14,228
So I'm sorry, it's actually the next paragraph

971
00:52:14,228 --> 00:52:18,308
where he gets into this geographic thing.

972
00:52:18,348 --> 00:52:21,548
This first thing, he's talking about diseconomies of scale.

973
00:52:21,548 --> 00:52:23,748
So he's saying, like,

974
00:52:23,748 --> 00:52:25,348
it doesn't actually even make any sense

975
00:52:25,348 --> 00:52:29,469
because if in a world where

976
00:52:32,189 --> 00:52:34,548
you have high economies of scale,

977
00:52:34,548 --> 00:52:36,269
that can mean that many entities,

978
00:52:36,269 --> 00:52:39,389
like a corporation is something that has many entities,

979
00:52:39,389 --> 00:52:40,709
has many shareholders.

980
00:52:42,829 --> 00:52:44,908
It could have many widespread ownership,

981
00:52:45,868 --> 00:52:47,069
but it could have enormous,

982
00:52:47,108 --> 00:52:49,988
it could be like 100,000 people,

983
00:52:49,988 --> 00:52:53,868
each own one 100,000th of like a big power plant

984
00:52:55,589 --> 00:52:58,389
or something, or a big hydroelectric dam.

985
00:52:58,389 --> 00:53:00,709
Hydroelectric dam being in one place.

986
00:53:02,108 --> 00:53:06,469
And a hydroelectric dam has economies of scale,

987
00:53:06,469 --> 00:53:08,548
and then it has huge diseconomies of scale.

988
00:53:08,548 --> 00:53:09,389
You know what I mean?

989
00:53:09,389 --> 00:53:10,629
Like at first, it costs nothing

990
00:53:10,629 --> 00:53:12,308
to produce a little bit more electricity,

991
00:53:12,308 --> 00:53:16,029
but once you use 100% of the hydroelectric power,

992
00:53:16,029 --> 00:53:21,029
then the economies of scale, at that point, they flip.

993
00:53:22,389 --> 00:53:23,709
Now it's very, very difficult

994
00:53:23,709 --> 00:53:25,709
to get any more power out of that thing.

995
00:53:27,189 --> 00:53:30,668
So even in the context of one specific example,

996
00:53:30,668 --> 00:53:33,149
whether or not something has economies of scale

997
00:53:33,149 --> 00:53:36,748
or diseconomies of scale depends on the scale.

998
00:53:37,709 --> 00:53:39,228
This is basic of economies,

999
00:53:39,228 --> 00:53:42,589
this is a basic concept of economies of scale.

1000
00:53:42,589 --> 00:53:44,029
Anyway, let me read this next thing

1001
00:53:44,029 --> 00:53:45,228
because it'll get back to,

1002
00:53:45,228 --> 00:53:46,829
I think it will make more sense.

1003
00:53:46,829 --> 00:53:50,269
The primary diseconomy of scale, this is Peter Todd,

1004
00:53:50,269 --> 00:53:52,269
is the fact that Bitcoin hashing consumes energy

1005
00:53:52,269 --> 00:53:53,908
and produces heat.

1006
00:53:53,908 --> 00:53:55,428
So he's talking, this is where he's talking

1007
00:53:55,428 --> 00:53:57,348
about the geographic distribution.

1008
00:53:58,509 --> 00:54:00,668
So he's not talking about entities anymore

1009
00:54:00,668 --> 00:54:02,548
because he's saying heat dispersion

1010
00:54:02,548 --> 00:54:04,829
has like a physics quality where it's easier to do

1011
00:54:04,829 --> 00:54:06,308
if you're further away.

1012
00:54:06,308 --> 00:54:08,509
You're further away in Euclidean distance.

1013
00:54:09,868 --> 00:54:13,949
So you could have like five different hydroelectric plants

1014
00:54:13,949 --> 00:54:16,748
and they could all be owned by the same entity

1015
00:54:19,389 --> 00:54:21,029
but they could be geographically dispersed.

1016
00:54:21,029 --> 00:54:23,829
So it just shows, I think,

1017
00:54:23,829 --> 00:54:26,908
how extremely sloppy the thinking is.

1018
00:54:28,788 --> 00:54:29,988
It's just like so tiresome

1019
00:54:29,988 --> 00:54:31,829
because like imagine if you had,

1020
00:54:31,829 --> 00:54:33,509
if he's saying the heat is what's important,

1021
00:54:33,509 --> 00:54:35,108
you could have like a coal power plant

1022
00:54:35,108 --> 00:54:37,428
and then you would wanna build a coal plant

1023
00:54:37,428 --> 00:54:42,228
like 100 feet away so that it's not the warmth

1024
00:54:42,228 --> 00:54:44,149
of the first coal power plant is not interfering

1025
00:54:44,149 --> 00:54:45,149
with the second one.

1026
00:54:45,949 --> 00:54:50,029
Like, again, that's a sense in which moving it away

1027
00:54:50,029 --> 00:54:52,908
by 50 feet makes a big difference

1028
00:54:52,908 --> 00:54:55,868
but then whether or not it's 100 feet or 200 feet

1029
00:54:55,868 --> 00:54:57,509
stops making any difference.

1030
00:54:57,509 --> 00:55:00,389
And if every single thing is inside of like,

1031
00:55:00,389 --> 00:55:04,029
if it's all in the state of Kansas, right?

1032
00:55:04,029 --> 00:55:06,069
And it's surrounded by the US military,

1033
00:55:07,269 --> 00:55:08,589
it's controlled by one entity

1034
00:55:08,589 --> 00:55:11,949
even though it's geographically distributed within Kansas.

1035
00:55:12,629 --> 00:55:14,589
So does he mean that literally mining decentralization

1036
00:55:14,589 --> 00:55:17,668
would increase if we built a power plant

1037
00:55:17,668 --> 00:55:19,668
like in the middle of the Pacific Ocean?

1038
00:55:20,748 --> 00:55:23,348
Or does he mean that it matters

1039
00:55:23,348 --> 00:55:25,709
how many entities control each miner?

1040
00:55:25,709 --> 00:55:26,629
In which case it would,

1041
00:55:26,629 --> 00:55:28,629
if something switched from being a sole enterprise

1042
00:55:28,629 --> 00:55:31,308
to a partnership or a corporation,

1043
00:55:31,308 --> 00:55:32,668
it would start changing again.

1044
00:55:32,668 --> 00:55:35,709
In reality, none of these things make any difference at all

1045
00:55:35,709 --> 00:55:36,868
but I'm just trying to give you an idea

1046
00:55:36,868 --> 00:55:38,469
of what Peter thinks is important.

1047
00:55:38,469 --> 00:55:41,348
None of these things make any difference in the slightest.

1048
00:55:42,108 --> 00:55:43,389
So it doesn't matter the economies

1049
00:55:43,389 --> 00:55:45,788
and diseconomies of scale don't matter.

1050
00:55:45,788 --> 00:55:46,949
They can't matter in fact,

1051
00:55:46,949 --> 00:55:51,469
because the only thing that matters is the scale

1052
00:55:51,469 --> 00:55:53,788
that maximizes efficiency.

1053
00:55:53,788 --> 00:55:55,108
That is what will be done.

1054
00:55:56,908 --> 00:55:57,829
That is what will be done

1055
00:55:57,829 --> 00:56:00,228
and it's certainly not gonna be

1056
00:56:00,228 --> 00:56:01,868
something with zero fixed costs.

1057
00:56:01,868 --> 00:56:03,988
So the fixed costs are always gonna be somewhere.

1058
00:56:03,988 --> 00:56:04,829
You know what I mean?

1059
00:56:04,829 --> 00:56:06,189
If you're a miner, you're gonna pay a certain amount

1060
00:56:06,189 --> 00:56:08,788
up front and then a certain amount every month.

1061
00:56:08,788 --> 00:56:11,069
There's no planet in which you're gonna get zero

1062
00:56:11,069 --> 00:56:12,228
for that fixed costs.

1063
00:56:14,788 --> 00:56:15,629
It's absurd.

1064
00:56:15,629 --> 00:56:17,108
Same if you wanna start a pool.

1065
00:56:17,108 --> 00:56:18,868
It's just, I don't know.

1066
00:56:18,868 --> 00:56:20,629
I just wonder if you're in the audience

1067
00:56:20,629 --> 00:56:22,308
and you really read Peter's thing

1068
00:56:22,308 --> 00:56:24,348
and you think, oh, this is good.

1069
00:56:24,348 --> 00:56:26,668
Please come up and just say,

1070
00:56:26,668 --> 00:56:28,748
what about it did you think was good?

1071
00:56:28,748 --> 00:56:29,908
So I'm gonna keep reading.

1072
00:56:29,908 --> 00:56:31,548
It says, for example, flare gas

1073
00:56:31,548 --> 00:56:33,348
and stranded surplus renewable energy

1074
00:56:33,348 --> 00:56:36,649
are some of the cheapest sources of energy available.

1075
00:56:36,649 --> 00:56:40,108
Obviously opportunities to collect flare gas

1076
00:56:40,108 --> 00:56:42,269
and renewable energy are inherently spread

1077
00:56:42,269 --> 00:56:44,269
across the globe.

1078
00:56:44,269 --> 00:56:46,029
So again, he's talking about the globe.

1079
00:56:46,029 --> 00:56:47,908
This is really important to him.

1080
00:56:47,908 --> 00:56:49,149
This is a diseconomy of scale

1081
00:56:49,149 --> 00:56:50,829
because the maximum size of these operations

1082
00:56:50,829 --> 00:56:54,428
is limited by the available energy in any one location.

1083
00:56:54,428 --> 00:56:56,228
So now by diseconomy of scale,

1084
00:56:56,228 --> 00:57:00,469
he's going full tilt into this geographic thing.

1085
00:57:00,469 --> 00:57:02,629
An oil well that generates 100 kilowatt

1086
00:57:02,629 --> 00:57:04,908
of free waste flare gas in a given location

1087
00:57:04,908 --> 00:57:08,149
simply can't generate more free waste gas

1088
00:57:08,149 --> 00:57:09,548
at any reasonable price.

1089
00:57:10,548 --> 00:57:12,229
Similarly, some hashing operations

1090
00:57:12,229 --> 00:57:13,949
make use of their waste heat,

1091
00:57:13,949 --> 00:57:15,668
e.g. to heat buildings.

1092
00:57:15,668 --> 00:57:17,349
The amount of waste heat in any one location

1093
00:57:17,349 --> 00:57:19,648
can make use of is inherently limited.

1094
00:57:20,589 --> 00:57:22,869
Again, this acts as a diseconomy of scale.

1095
00:57:22,869 --> 00:57:24,508
A house that can be sufficiently heated

1096
00:57:24,508 --> 00:57:25,908
with 50 kilowatt hash power

1097
00:57:25,908 --> 00:57:29,308
simply has no more use for more hash power in that location.

1098
00:57:30,908 --> 00:57:33,528
Grid stabilization is another example.

1099
00:57:33,528 --> 00:57:35,109
So again, Peter's giving all these examples.

1100
00:57:35,109 --> 00:57:37,788
He's saying, look at me, I know all these great examples.

1101
00:57:38,628 --> 00:57:40,508
I'll just read it though

1102
00:57:40,508 --> 00:57:43,148
so that it seems like I'm not skipping anything.

1103
00:57:43,148 --> 00:57:44,829
Grid stabilization is another example

1104
00:57:44,829 --> 00:57:46,189
of a diseconomy of scale.

1105
00:57:46,189 --> 00:57:47,668
Some Bitcoin hashing operations

1106
00:57:47,668 --> 00:57:49,648
have been able to get credits on their electricity bills

1107
00:57:49,648 --> 00:57:51,469
for providing the ability to quickly reduce

1108
00:57:51,469 --> 00:57:52,648
their power usage.

1109
00:57:53,648 --> 00:57:55,788
Obviously the maximum amount of grid stabilization

1110
00:57:55,788 --> 00:57:58,028
needed in any one geographic area is limited,

1111
00:57:58,028 --> 00:57:59,749
creating a diseconomy of scale.

1112
00:58:01,729 --> 00:58:03,308
So he's got all his paragraphs about that.

1113
00:58:03,308 --> 00:58:05,388
And now he says the primary economies of scale

1114
00:58:05,388 --> 00:58:07,189
are in mining pools.

1115
00:58:07,189 --> 00:58:09,469
They exist because of variance.

1116
00:58:09,469 --> 00:58:10,589
With just 140...

1117
00:58:10,589 --> 00:58:12,349
Now notice he has immediately abandoned

1118
00:58:12,349 --> 00:58:14,648
his previous criterion of geographics.

1119
00:58:15,628 --> 00:58:17,869
Because the mining pool, it doesn't matter where it is.

1120
00:58:17,869 --> 00:58:20,028
If you VPN into it or you could connect to it

1121
00:58:20,028 --> 00:58:21,829
from far away, near, far,

1122
00:58:23,548 --> 00:58:27,508
just like that Titanic song, it doesn't matter.

1123
00:58:27,508 --> 00:58:30,428
But because the mining pool, like it doesn't have any...

1124
00:58:30,428 --> 00:58:32,749
So we'll just read the paragraph.

1125
00:58:32,749 --> 00:58:34,469
This is quite a tiresome paragraph,

1126
00:58:34,469 --> 00:58:35,308
but we're going to read it.

1127
00:58:35,308 --> 00:58:36,128
Here we go.

1128
00:58:37,128 --> 00:58:39,689
The primary economies of scale are in mining pools.

1129
00:58:39,689 --> 00:58:41,249
They exist because of variance.

1130
00:58:41,249 --> 00:58:43,788
With just 144 Bitcoin blocks generated per day,

1131
00:58:43,788 --> 00:58:45,969
the average Bitcoin hashing operation.

1132
00:58:45,969 --> 00:58:47,609
Solo mining, you would need to wait months

1133
00:58:47,609 --> 00:58:49,209
or even years between payments.

1134
00:58:49,209 --> 00:58:51,128
So he's 100% correct.

1135
00:58:51,128 --> 00:58:53,288
Secondly, the operating costs of a mining pool

1136
00:58:53,288 --> 00:58:54,308
are mostly fixed.

1137
00:58:55,308 --> 00:58:56,928
The bandwidth and compute power needed

1138
00:58:56,928 --> 00:58:59,109
per hashing operation is almost zero.

1139
00:59:00,609 --> 00:59:03,648
I don't really see it, but it doesn't matter.

1140
00:59:03,648 --> 00:59:05,268
If the overhead costs of operating

1141
00:59:05,268 --> 00:59:07,148
the necessary nodes is non-trivial,

1142
00:59:07,148 --> 00:59:09,928
there's significant savings for a large pool

1143
00:59:09,928 --> 00:59:12,268
compared to a small pool as that overhead

1144
00:59:12,268 --> 00:59:14,648
is spread over more clients.

1145
00:59:15,869 --> 00:59:17,469
Thus, we see that while Bitcoin hashing

1146
00:59:17,469 --> 00:59:19,548
is quite decentralized with a very large number

1147
00:59:19,548 --> 00:59:21,508
of individual hashing operations in existence,

1148
00:59:21,508 --> 00:59:24,048
the number of mining pools is much more limited.

1149
00:59:24,048 --> 00:59:26,148
As of the time of writing, a majority of hash power

1150
00:59:26,148 --> 00:59:28,148
spread over just two pools.

1151
00:59:28,148 --> 00:59:33,069
So now we see that he has split this problem in two

1152
00:59:33,069 --> 00:59:35,308
and he says, forget about hashing.

1153
00:59:35,308 --> 00:59:36,908
I know I wrote five or six paragraphs about it,

1154
00:59:36,908 --> 00:59:38,148
but just forget about it.

1155
00:59:38,148 --> 00:59:40,949
The important thing now is the quantity of pools.

1156
00:59:43,469 --> 00:59:45,069
And he says, while undesirable,

1157
00:59:45,069 --> 00:59:46,628
while he's talking, when he says undesirable,

1158
00:59:46,628 --> 00:59:50,349
he means the hash power is spread over just two pools.

1159
00:59:50,349 --> 00:59:54,268
So to him, it's the quantity of pools is the metric.

1160
00:59:54,547 --> 01:00:07,547
For this mining centralization, that direction is going to supposedly affect while undesirable, this situation isn't fatal, as in theory, bad behavior can cause hashing operators to quickly switch from one pool to another.

1161
01:00:07,547 --> 01:00:15,547
So now he's correctly admitting that it actually doesn't matter how many pools there are. What matters is how easy it is to switch from a pool that is making a mistake.

1162
01:00:15,547 --> 01:00:22,547
I see that Moon Settler is here and we discussed this topic in detail back when I was in Europe and the space is there.

1163
01:00:22,547 --> 01:00:27,547
So he's again, he fronts this criterion. There's only two pools. And then he says, actually, it doesn't matter.

1164
01:00:27,547 --> 01:00:32,547
Then he says, also, there's Stratum B2, P2 pool, Braid pool.

1165
01:00:32,547 --> 01:00:43,547
He says these decentralized block production, aka mining. So again, he's saying that it's the quantity of block producers. That is how decentralized mining is.

1166
01:00:43,547 --> 01:00:53,547
So what he's saying is if we have 10 million different people making blocks, even if they all make the same block, 10 million different people each making a block.

1167
01:00:53,547 --> 01:01:02,547
And then that number goes up from 10 million to 100 million. And then that number goes up from 100 million to 50 million.

1168
01:01:02,547 --> 01:01:12,547
Like in Monday, Tuesday, Wednesday. According to Peter, Bitcoin has become suddenly more decentralized and then suddenly collapsed and become less decentralized.

1169
01:01:12,547 --> 01:01:17,547
Even if all these millions of people are all making the exact same block.

1170
01:01:17,547 --> 01:01:29,547
Because no one has ever said that there'll be a dispute among these people over which block to make, since every single person will just be trying to include as many high fee paying transactions as possible.

1171
01:01:30,547 --> 01:01:35,547
So you can see that it's kind of an absurd criterion, but we can just roll with it if you want.

1172
01:01:35,547 --> 01:01:39,547
The quantity of block producers does not matter.

1173
01:01:39,547 --> 01:01:45,547
The only thing that matters is if transactions will be censored or blocks will be reorg.

1174
01:01:45,547 --> 01:01:52,547
It doesn't actually matter how many block producers there are or if they join a pool or not. None of that makes any difference.

1175
01:01:52,547 --> 01:01:55,547
None of that has ever mattered and it never will.

1176
01:01:55,547 --> 01:01:59,547
And as soon as the incident does start to matter, people will just abandon that pool.

1177
01:01:59,547 --> 01:02:03,547
So whatever. And he says, well, we don't have space to go into details.

1178
01:02:03,547 --> 01:02:12,547
And then he says, the important thing in the context of drivechains is that they, these technologies, I think he's talking about Stratum V2, P2Pool, BraidPool.

1179
01:02:12,547 --> 01:02:18,547
Stratum V2, P2Pool, and BraidPool, they all require hashing operations to produce blocks themselves.

1180
01:02:18,547 --> 01:02:25,547
I think he means hashing operators. But I think by hashing operations, I think he means a warehouse full of ASICs.

1181
01:02:25,547 --> 01:02:36,547
So it's kind of a hard sentence to parse, but it means something like, while we don't have space to go into Stratum V2, P2Pool,

1182
01:02:36,547 --> 01:02:47,547
those things require that the end miner, the person with the ASIC, run a full node.

1183
01:02:47,547 --> 01:02:51,547
So that's what he's saying.

1184
01:02:51,547 --> 01:03:02,547
Now, this is where we get into the meat of the philosophical disagreement maybe, which is 7.2, which is related to that last sentence.

1185
01:03:02,547 --> 01:03:08,547
Do miners need to run drivechain nodes? He says yes, and then he moves on to the next paragraph.

1186
01:03:08,547 --> 01:03:14,547
He is wrong about this, though, and it's a pretty big deal because this is like the whole dispute.

1187
01:03:14,547 --> 01:03:24,547
It actually doesn't matter if they need to run nodes or not, but his thinking behind it is the key to unraveling the dispute.

1188
01:03:24,547 --> 01:03:33,547
And since drivechain is probably the only way for us to scale to 8 billion people and obtain Zcash-level privacy in time before we get regulatory captured,

1189
01:03:33,547 --> 01:03:43,547
which is already happening, and have extensibility and have just new BIPs come out in less than five years,

1190
01:03:43,547 --> 01:03:51,547
it's kind of a big deal whether or not this dispute is resolved the right way.

1191
01:03:51,547 --> 01:03:57,547
Now, I guess what I should do is I'll read the next two paragraphs and then try to explain this.

1192
01:03:57,547 --> 01:04:00,547
So do miners need to run drivechain nodes? Yes. The reason why is simple.

1193
01:04:00,547 --> 01:04:03,547
If drivechains are to work correctly, coin withdrawal needs to work.

1194
01:04:03,547 --> 01:04:07,547
Drivechain requires that a majority of hash power directly vote on withdrawal proposals.

1195
01:04:07,547 --> 01:04:15,547
And the only way—this is not true, by the way—the only way to validate a withdrawal proposal for a given drivechain is to run a node for that drivechain.

1196
01:04:15,547 --> 01:04:20,547
That's not true. That would be the paranoid way that maximizes certainty, but it's not necessarily the efficient way,

1197
01:04:20,547 --> 01:04:23,547
which is the whole point, and I'll get back to that in a second.

1198
01:04:23,547 --> 01:04:28,547
Back to Peter Todd, though. Since there could be dozens or even hundreds of drivechains,

1199
01:04:28,547 --> 01:04:34,547
this is an obvious economy of scale that will significantly centralize mining.

1200
01:04:34,547 --> 01:04:44,547
Again, the Peter Todd view—I'll go back to his comments in a second—but the Peter Todd view is we need anyone to be able to run a new mining pool,

1201
01:04:44,547 --> 01:04:49,547
which I agree with, but he says we need something like a P2 pool.

1202
01:04:49,547 --> 01:04:59,547
Each individual hasher must run a full node, and if these costs rise, then the little guy will get pushed out.

1203
01:04:59,547 --> 01:05:03,547
As we're going to see, though, none of that is true.

1204
01:05:03,547 --> 01:05:08,547
But that's his point of view. I mean, as near as I can understand it, honestly, I think it's kind of confusing,

1205
01:05:08,547 --> 01:05:11,547
but I think that's what his point of view is.

1206
01:05:11,547 --> 01:05:14,547
So let me repeat now. Since there could be dozens or even hundreds of drivechains,

1207
01:05:14,547 --> 01:05:18,547
this is an obvious economy of scale that will significantly centralize mining.

1208
01:05:18,547 --> 01:05:23,547
Every one of these drivechains will have associated software that needs installation, maintenance, and upgrades.

1209
01:05:23,547 --> 01:05:27,547
Those drivechain nodes will require bandwidth, CPU time, and storage space.

1210
01:05:27,547 --> 01:05:34,547
Well, now we get to—so this is difficult for me because it's super, super obvious in my head,

1211
01:05:34,547 --> 01:05:37,547
and I'm not sure if I'm going to be able to convey it pretty easily.

1212
01:05:37,547 --> 01:05:44,547
But this is the misunderstanding that Peter has, and it's also a contradiction that he has.

1213
01:05:44,547 --> 01:05:49,547
So I'll lay out the contradiction first because maybe that's easier to understand.

1214
01:05:49,547 --> 01:05:55,547
Peter is saying that the miners must—miners are—there's a carrot and a stick.

1215
01:05:55,547 --> 01:06:02,547
Miners are greedily led to run the drivechains and collect their fees.

1216
01:06:02,547 --> 01:06:04,547
Because, of course, if that doesn't happen, then nothing has happened.

1217
01:06:04,547 --> 01:06:09,547
Everything is a moot point. So the drivechain—miners are being enticed.

1218
01:06:09,547 --> 01:06:14,547
They must chase the revenue of the fees.

1219
01:06:14,547 --> 01:06:17,547
But what Peter is saying, they also must pay the cost.

1220
01:06:17,547 --> 01:06:21,547
But no, that's not the case. What miners have to do is maximize their profits.

1221
01:06:21,547 --> 01:06:25,547
So they're going to shirk every cost. They're not going to pay any cost.

1222
01:06:25,547 --> 01:06:28,547
And they are going to chase every revenue.

1223
01:06:28,547 --> 01:06:30,547
So I'm just going to repeat this a couple times, and I don't know,

1224
01:06:30,547 --> 01:06:35,547
maybe shoot a very confused face in the audience or come up or something if you wish.

1225
01:06:35,547 --> 01:06:39,547
But come up on stage if it doesn't make any sense.

1226
01:06:39,547 --> 01:06:43,547
But every single user must run a full node.

1227
01:06:43,547 --> 01:06:46,547
We're going to define user that way.

1228
01:06:46,547 --> 01:06:49,547
So if you use the L2, you need an L2 node and an L1 node.

1229
01:06:49,547 --> 01:06:52,547
If you're only an L1 user, you need an L1 node.

1230
01:06:52,547 --> 01:06:59,547
However, miners do not need any node of any kind, of L1 or L2.

1231
01:06:59,547 --> 01:07:02,547
They can specialize and only do part of the process.

1232
01:07:02,547 --> 01:07:10,547
So just as it's the case that the person manufacturing the ASIC isn't necessarily running a full node either,

1233
01:07:10,547 --> 01:07:12,547
but they're part of the supply chain.

1234
01:07:12,547 --> 01:07:17,547
So the question is, what bad thing will happen to you if you don't run a full node?

1235
01:07:17,547 --> 01:07:23,547
And the answer is you lose certainty on the state of the blockchain.

1236
01:07:23,547 --> 01:07:25,547
But this is something that only affects you.

1237
01:07:25,547 --> 01:07:31,547
It's ironically Peter Todd was one of the first people to say back in the day that your full node only protects you.

1238
01:07:31,547 --> 01:07:33,547
It doesn't do anything else for anyone.

1239
01:07:33,547 --> 01:07:40,547
And that's not quite true, of course, because your full node can also seed a new full node for someone else.

1240
01:07:40,547 --> 01:07:44,547
But in general, what the full node is doing is it's protecting you.

1241
01:07:44,547 --> 01:07:46,547
The full node is like your armor.

1242
01:07:46,547 --> 01:07:53,547
And the miners are people who must ruthlessly maximize their profits.

1243
01:07:53,547 --> 01:08:01,547
So if running the full node, if wearing the armor is worth it, then they will do it all by themselves.

1244
01:08:01,547 --> 01:08:04,547
And if it's not worth it, then they won't do it.

1245
01:08:04,547 --> 01:08:08,547
But this is what Peter Todd is trying to tie all this to a block size increase logic,

1246
01:08:08,547 --> 01:08:13,547
because he doesn't understand that miners don't need to run a full node.

1247
01:08:13,547 --> 01:08:15,547
They can just partner with any other full node.

1248
01:08:15,547 --> 01:08:18,547
Someone out there needs to run it, but not the miners themselves.

1249
01:08:18,547 --> 01:08:26,547
Because, again, he knows that he's already surrendered all the important territory by saying that it doesn't affect the L1 protocol.

1250
01:08:26,547 --> 01:08:33,547
And so he just has to hope somehow it could affect something that someone on L1 might care about, which is the miners.

1251
01:08:33,547 --> 01:08:35,547
But he can't have it both ways.

1252
01:08:35,547 --> 01:08:43,547
It's either required that miners chase the fees, chase the fee revenue, or it's required that they pay the full node.

1253
01:08:44,547 --> 01:08:48,547
In that case, they must maximize profits, which is the case.

1254
01:08:48,547 --> 01:08:54,547
They must chase the revenue, and they also must not run, not pay any costs.

1255
01:08:58,547 --> 01:09:04,547
If it's the reverse, where the miners are free to do as they like, then it doesn't matter,

1256
01:09:04,547 --> 01:09:08,547
because they'll just do whichever of those two they feel like doing.

1257
01:09:09,547 --> 01:09:13,547
Maybe we could go into more detail on why each thing is false.

1258
01:09:13,547 --> 01:09:17,547
A drivechain requires that a majority of hash power directly vote on withdrawal proposals.

1259
01:09:17,547 --> 01:09:21,547
The only way to validate a withdrawal proposal is to run a node for that drivechain.

1260
01:09:21,547 --> 01:09:23,547
That's not true.

1261
01:09:25,547 --> 01:09:27,547
Let's try to get to the meat.

1262
01:09:28,547 --> 01:09:36,547
The idea behind it, though, is that I think the armor was maybe a decent metaphor,

1263
01:09:36,547 --> 01:09:42,547
where it's like the U.S. Army sends plenty of people into combat.

1264
01:09:42,547 --> 01:09:45,547
Some of them get body armor, and some don't.

1265
01:09:45,547 --> 01:09:50,547
I remember at one point when I was in school, a friend of mine's older brother was in the Army,

1266
01:09:51,547 --> 01:09:56,547
and he was very upset at—my friend was upset at John Kerry in the Senate

1267
01:09:56,547 --> 01:10:03,547
had voted against some kind of body armor, I don't know, act or something.

1268
01:10:03,547 --> 01:10:08,547
So they didn't get—the troops didn't get quite as much body armor as they had wanted,

1269
01:10:08,547 --> 01:10:11,547
or whatever, that someone thought that someone should want.

1270
01:10:11,547 --> 01:10:14,547
And so they were upset about that.

1271
01:10:15,547 --> 01:10:20,547
Which is, of course, distressing the situation to be in.

1272
01:10:20,547 --> 01:10:24,547
But the point is that there's an efficient amount—

1273
01:10:24,547 --> 01:10:28,547
there's the difference between the efficient thing and the paranoid thing.

1274
01:10:28,547 --> 01:10:32,547
The paranoid thing would be to be covered in armor and be like an Iron Man,

1275
01:10:32,547 --> 01:10:36,547
give everyone an Iron Man suit that costs $10 billion.

1276
01:10:37,547 --> 01:10:41,547
And the efficient way, you could—if you had a loaf of bread,

1277
01:10:41,547 --> 01:10:44,547
and you had to make sure it wasn't poisoned,

1278
01:10:44,547 --> 01:10:48,547
there's the efficient way that has tradeoffs,

1279
01:10:48,547 --> 01:10:52,547
and then there's the paranoid way, which is to obtain absolute certainty.

1280
01:10:52,547 --> 01:10:56,547
But the miners must take the efficient way.

1281
01:10:56,547 --> 01:10:59,547
They can never take the paranoid way.

1282
01:10:59,547 --> 01:11:05,547
In direct contrast to users, to be a user, by definition, you must run a full node.

1283
01:11:05,547 --> 01:11:08,547
Otherwise, you're not a real user.

1284
01:11:08,547 --> 01:11:12,547
You're asking a friend. You're adjacent.

1285
01:11:12,547 --> 01:11:16,547
But miners are not—miners don't have to be users.

1286
01:11:16,547 --> 01:11:18,547
Miners do the efficient thing.

1287
01:11:18,547 --> 01:11:22,547
So when you want a loaf of bread, you usually just go to the supermarket and you buy it.

1288
01:11:22,547 --> 01:11:25,547
And you just think, well, you know what?

1289
01:11:25,547 --> 01:11:28,547
There's no way that, you know, whatever.

1290
01:11:28,547 --> 01:11:32,547
The supermarket would go out of business if—

1291
01:11:32,547 --> 01:11:38,547
The supermarket would go out of business if they ever sold any poisoned bread to anyone.

1292
01:11:38,547 --> 01:11:41,547
And what are the odds that out of all the poisoned bread that there might be,

1293
01:11:41,547 --> 01:11:44,547
that the one I pick off the shelf is poisoned?

1294
01:11:44,547 --> 01:11:49,547
So in the real world, we do not obtain stuff.

1295
01:11:49,547 --> 01:11:53,547
And so again, if the cost is very, very low, it's a moot point.

1296
01:11:53,547 --> 01:11:56,547
It doesn't matter who's mining these blocks.

1297
01:11:56,547 --> 01:11:59,547
I mean, who's running these nodes. It doesn't matter because it's cheap.

1298
01:11:59,547 --> 01:12:02,547
So it's whether or not they must or not doesn't matter.

1299
01:12:02,547 --> 01:12:07,547
If it's expensive, then they will—they must shirk it because of the efficiency.

1300
01:12:07,547 --> 01:12:12,547
So as soon as it becomes expensive enough to matter—excuse me.

1301
01:12:12,547 --> 01:12:17,547
As soon as it becomes expensive enough to matter, miners will just stop doing it.

1302
01:12:17,547 --> 01:12:22,547
But the more important thing is that the entire premise is literally absurd.

1303
01:12:22,547 --> 01:12:25,547
So we'll get to that in a second, though, because I remember I took a little note on it.

1304
01:12:25,547 --> 01:12:29,547
I don't know when we'll get to it. Okay, it's near the end of this next part.

1305
01:12:29,547 --> 01:12:33,547
So I'm not sure, but this is the crucial disagreement.

1306
01:12:33,547 --> 01:12:37,547
So if anyone in the audience understands this, then they'll get it, which is that

1307
01:12:37,547 --> 01:12:42,547
the miners must do the efficient thing, and it doesn't matter.

1308
01:12:42,547 --> 01:12:48,547
You are not—if you run a node, then it doesn't matter to you if miners run a node or not.

1309
01:12:48,547 --> 01:12:51,547
And in fact, just if enough people run a node,

1310
01:12:51,547 --> 01:12:56,547
the whole network will survive invalid blocks produced by miners very, very easily.

1311
01:12:56,547 --> 01:12:59,547
It's because we don't trust the miners.

1312
01:12:59,547 --> 01:13:06,547
It's because Satoshi's design doesn't give the miners unlimited ability to create fake blocks.

1313
01:13:06,547 --> 01:13:12,547
It's because each block is checked by all the other nodes.

1314
01:13:12,547 --> 01:13:18,547
That is why it doesn't matter if the person who's mining a block today is running a node or not.

1315
01:13:18,547 --> 01:13:22,547
There's a pretty obvious difference between needing to run a node every single day.

1316
01:13:22,547 --> 01:13:24,547
I'm sorry that Peter doesn't understand this.

1317
01:13:24,547 --> 01:13:29,547
There's a pretty huge difference between needing to run the node 24-7 and have it be perfect uptime

1318
01:13:29,547 --> 01:13:32,547
and have it be do everything, which is what a normal full node would do,

1319
01:13:32,547 --> 01:13:39,547
and the sense in which the three- to six-month withdrawal process would require them to run a full node,

1320
01:13:39,547 --> 01:13:45,547
which is to say, one time, if there's ever a dispute, which could be never,

1321
01:13:45,547 --> 01:13:50,547
but if there's ever a dispute, you have three to six months to, at some point, turn the node on

1322
01:13:50,547 --> 01:13:55,547
and have it sync for like three days, look at the hash, and then shut it off.

1323
01:13:55,547 --> 01:14:01,547
So I'm sorry that Peter doesn't understand that there's like six orders of magnitude difference in those two things.

1324
01:14:01,547 --> 01:14:09,547
But even then, it ignores the more fundamental principle that the miners can obtain that hash any way they want,

1325
01:14:09,547 --> 01:14:13,547
and because it's so easy, the easier we make it to find that hash,

1326
01:14:13,547 --> 01:14:15,547
every single sidechain node knows it.

1327
01:14:15,547 --> 01:14:17,547
Every single sidechain SPV node knows it.

1328
01:14:17,547 --> 01:14:19,547
It's in the ribbon and the GUI.

1329
01:14:19,547 --> 01:14:21,547
It's in every sidechain block header.

1330
01:14:21,547 --> 01:14:24,547
It only changes once every three to six months.

1331
01:14:24,547 --> 01:14:28,547
Everyone knows what it is, and everyone has an interest in it being reported accurately.

1332
01:14:28,547 --> 01:14:30,547
No one can get away with lying about it.

1333
01:14:30,547 --> 01:14:37,547
So all of those factors combined mean that everyone will just know what this hash is,

1334
01:14:37,547 --> 01:14:39,547
whether they run the full node or not.

1335
01:14:40,547 --> 01:14:45,547
The fact that if they run a regular full node, they also know all this other information about every blocking,

1336
01:14:45,547 --> 01:14:47,547
valid, et cetera.

1337
01:14:47,547 --> 01:14:49,547
That's kind of not the point.

1338
01:14:49,547 --> 01:14:53,547
But even all this is missing an even bigger point, which I'll get to, I suppose.

1339
01:14:53,547 --> 01:14:59,547
So he says, this is where the fact that blind merge mining and coin withdrawal votes are unconnected is such a glaring omission.

1340
01:14:59,547 --> 01:15:02,547
He says, Roger's mining claims to fix the mining decentralization problem.

1341
01:15:02,547 --> 01:15:08,547
The fact that withdrawal votes require direct majority and blah, blah, blah negates this claim.

1342
01:15:08,547 --> 01:15:17,547
So, again, he really does not see how it's different that needing to run a node every day, 24-7, 365,

1343
01:15:17,547 --> 01:15:22,547
versus needing to run it in the event of a dispute that will never happen,

1344
01:15:22,547 --> 01:15:25,547
because it's so easy to find the real withdrawal hash,

1345
01:15:25,547 --> 01:15:31,547
but only in the event of a dispute, having three to six months to decide to maybe look into it,

1346
01:15:31,547 --> 01:15:37,547
maybe see if it just resolves itself, maybe see if everyone just folds it because it's such a deterrent.

1347
01:15:37,547 --> 01:15:40,547
This is his understanding of basic deterrence.

1348
01:15:40,547 --> 01:15:45,547
People will be deterred from lying about what the withdrawal hash is because it's so easy for everyone to know.

1349
01:15:45,547 --> 01:15:47,547
There will be so many people who know.

1350
01:15:47,547 --> 01:15:54,547
You'll just be destroying your own reputation, and anyone who reports it wrong will just be laughed at.

1351
01:15:54,547 --> 01:15:56,547
They won't be able to get away with it.

1352
01:15:56,547 --> 01:16:02,547
But even if that weren't the case, in the event of a dispute, you have three to six months to turn the node on and sync it.

1353
01:16:02,547 --> 01:16:08,547
It's not going to take three to six months to sync the node, so it's only going to take five days or whatever it is.

1354
01:16:08,547 --> 01:16:11,547
It all depends on parameters.

1355
01:16:11,547 --> 01:16:15,547
I just don't understand why he doesn't understand that this is an enormous difference.

1356
01:16:15,547 --> 01:16:17,547
It's the night and day difference.

1357
01:16:17,547 --> 01:16:26,547
He just thinks, oh, the fact, aha, someone somewhere felt a desire to run a node at some point in the last 20 years.

1358
01:16:26,547 --> 01:16:29,547
They ran a node once for five days.

1359
01:16:29,547 --> 01:16:32,547
Aha, that proves.

1360
01:16:32,547 --> 01:16:34,547
So to him, it must make no difference.

1361
01:16:34,547 --> 01:16:46,547
If over 10 years someone runs a node 0.0000001% of the time versus 100% of the time, to him there's no difference between those.

1362
01:16:46,547 --> 01:16:48,547
This doesn't make any sense.

1363
01:16:48,547 --> 01:16:50,547
Then there's the paragraph that I got to before.

1364
01:16:50,547 --> 01:16:52,547
Yes, hello.

1365
01:16:53,547 --> 01:16:59,547
Just to mention something about this, what you're talking and you're making a very good point.

1366
01:16:59,547 --> 01:17:14,547
Even if you don't run any node on sidechain, I mean, even on L1, but on sidechain, probably there will be an explorer where you can track, even if you don't run a node,

1367
01:17:14,547 --> 01:17:19,547
you can see by the length of the time and confirmations.

1368
01:17:19,547 --> 01:17:27,547
And if, you know, nobody argued or dispute anything about that withdrawal, you know, you have the information.

1369
01:17:27,547 --> 01:17:32,547
I mean, they don't even need to need to run to check even once.

1370
01:17:33,547 --> 01:17:43,547
So I think it will be much easier when in practical, like come, you know, in life.

1371
01:17:43,547 --> 01:17:45,547
Yeah, 100%.

1372
01:17:45,547 --> 01:17:54,547
There will be all kinds of like how a lot of people today, they focus, they get their news from like, some people are better sources of news than others.

1373
01:17:54,547 --> 01:17:58,547
And, you know, like Joe Rogan experience or whatever it is, you know, whatever your preferred thing is.

1374
01:17:59,547 --> 01:18:08,547
The problem with this is it looks like, it looks like I'm dodging the issue of whether or not people run full nodes, which is absolutely not the case.

1375
01:18:08,547 --> 01:18:11,547
I think running a full node is very, very important.

1376
01:18:11,547 --> 01:18:22,547
But each individual person decides whether the, we want the full node cost to be low, and they will be low, because individual, otherwise the network won't exist.

1377
01:18:22,547 --> 01:18:25,547
Each individual user is a 0% hasher.

1378
01:18:25,547 --> 01:18:31,547
So they must, there must, the whole node network must be cheap enough for at least some people.

1379
01:18:33,547 --> 01:18:36,547
But the running a node is very important.

1380
01:18:36,547 --> 01:18:39,547
We want to keep the full node cost down.

1381
01:18:39,547 --> 01:18:46,547
The whole point of sidechains is to differentially move it up so that certain people can order a la carte, like if they want more food.

1382
01:18:46,547 --> 01:18:49,547
You have a cheap option, you have like the soup.

1383
01:18:49,547 --> 01:18:54,547
Everyone gets the soup at the restaurant, and then people order a la carte.

1384
01:18:54,547 --> 01:18:55,547
So they're moving it up.

1385
01:18:55,547 --> 01:18:58,547
So someone is going to be paying this node cost.

1386
01:18:58,547 --> 01:19:00,547
And I'm saying it doesn't have to be the miners.

1387
01:19:00,547 --> 01:19:04,547
And Peter is admitting that it doesn't, none of this affects L1 at all.

1388
01:19:04,547 --> 01:19:19,547
And he just has this desperate, desperate, desperate stretch to say that, well, sometimes the miners might feel like they need to run these L2 networks because it costs like hard drive and CPU space, which is that is itself laughable.

1389
01:19:19,547 --> 01:19:24,547
That the idea that mining on any scale today, we'll get to that.

1390
01:19:27,547 --> 01:19:36,547
So he's saying that, and then he's just trying desperately to tie it into like a cost that would affect something, even though it does not.

1391
01:19:36,547 --> 01:19:45,547
So as soon as it does, the miner would just say, OK, no, listen, I want to collect the fees for this, but I don't want to run the full node.

1392
01:19:46,547 --> 01:19:50,547
It's extra bizarre because these things aren't actually costs.

1393
01:19:52,547 --> 01:19:53,547
They aren't costs at all.

1394
01:19:54,383 --> 01:20:03,383
So first of all, if they were costs, they would be very low because the full node cost must be low, and they aren't costs because miners don't need to run a full node.

1395
01:20:03,383 --> 01:20:12,383
But even if they did, let's just say the only way of getting the fees is to run your own full node.

1396
01:20:12,383 --> 01:20:22,383
Well, then if the node costs are higher than the expected fees, then you just do nothing and you just get zero.

1397
01:20:22,383 --> 01:20:25,383
You pay no costs, you get no fee revenues.

1398
01:20:25,383 --> 01:20:31,383
It's true that other miners will then have an advantage because they'll be getting revenue minus cost.

1399
01:20:31,383 --> 01:20:35,383
That is some positive thing. So they have an edge over you.

1400
01:20:35,383 --> 01:20:42,383
But again, I didn't say again, but you see, none of these things are actual costs at all.

1401
01:20:42,383 --> 01:20:48,383
That's a really bizarre thing. But if the other miners have an edge over you, then you have to go down the line and say,

1402
01:20:49,383 --> 01:20:55,383
where are all the things that could give one miner an edge over another miner?

1403
01:20:55,383 --> 01:21:03,383
But it just happens to be the case that this is something that literally does not cost anything because you don't need to run a full node at all.

1404
01:21:03,383 --> 01:21:07,383
And if the node was needed, they could outsource to a different node.

1405
01:21:07,383 --> 01:21:14,383
That's what 301 does, makes it trustless. So I don't know. It's just bizarre.

1406
01:21:14,383 --> 01:21:24,383
Anyway, now we're going to get this. The fact that miners need to run drivechain nodes is particularly problematic to the claims that drivechains will scale Bitcoin.

1407
01:21:24,383 --> 01:21:28,383
Obviously, if drivechains supporting hundreds of thousands of transactions per second catch on,

1408
01:21:28,383 --> 01:21:34,383
miners will need to invest in thousands or tens of thousands of dollars worth of computing hardware and bandwidth to mine.

1409
01:21:34,383 --> 01:21:41,383
This is completely incompatible with technologies that decentralize mining, such as the aforementioned Stratum V2 and P2Pool slash BraidPool.

1410
01:21:41,383 --> 01:21:51,383
OK, so this again, this is the key disagreement. So I suppose we had better spend an enormous amount of time on it.

1411
01:21:52,383 --> 01:22:17,383
First of all.

1412
01:22:17,383 --> 01:22:25,383
OK. So, again, Peter's point of view is that every single miner, no matter how small, must mine.

1413
01:22:25,383 --> 01:22:30,383
And that they cannot outsource this, even though 7.3 is this phone a friend thing.

1414
01:22:30,383 --> 01:22:37,383
So he rejects that, even though I don't. There's no reason to reject it.

1415
01:22:37,383 --> 01:22:44,383
It's funny, he contradicts himself again because in the phone a friend part, he says, but I'm trying to imagine what is the best way of explaining this.

1416
01:22:44,383 --> 01:22:51,383
But I think. I think one way would be to explain.

1417
01:22:51,383 --> 01:22:58,383
First of all, the phone a friend thing will work just fine, and that's why 301 was written anyway.

1418
01:22:58,383 --> 01:23:03,383
And even if there was no 301, people will do the phone a friend.

1419
01:23:03,383 --> 01:23:06,383
So maybe we should do that first, but I suppose not.

1420
01:23:06,383 --> 01:23:13,383
I mean, OK, he's saying miners will need to invest in thousands or tens of thousands of dollars worth of computing hardware and bandwidth to mine.

1421
01:23:13,383 --> 01:23:24,383
Now, we have to point out something here that if total revenues are going to go up by 10,000 X, because we're going to have huge amounts of fees coming in.

1422
01:23:24,383 --> 01:23:29,383
And we're going to have parts of Bitcoin is going to explode.

1423
01:23:29,383 --> 01:23:39,383
If total revenues are going to go up by 10,000 X, then total costs, total mining costs will also go up by 10,000 X.

1424
01:23:39,383 --> 01:23:43,383
So even if the same number of people are mining as before.

1425
01:23:43,383 --> 01:23:46,383
Same quantity of people.

1426
01:23:46,383 --> 01:23:55,383
If the revenues go up by 10,000 X, the total costs also go up by 10,000 X because the Bitcoin difficulty is going to adjust.

1427
01:23:55,383 --> 01:24:00,383
And. So this is just what it means.

1428
01:24:01,383 --> 01:24:07,383
This is just what it means to. If you participate in the economy.

1429
01:24:07,383 --> 01:24:11,383
Let's say you're an accountant or something.

1430
01:24:11,383 --> 01:24:14,383
You have to work hard. You have to work hard to stand still.

1431
01:24:14,383 --> 01:24:20,383
You know, you need to stay ahead. You need to be you need to know about the state of the art of accounting.

1432
01:24:20,383 --> 01:24:25,383
Every year you get a little bit better.

1433
01:24:25,383 --> 01:24:28,383
Every year, everyone gets better at a little bit of what they do.

1434
01:24:28,383 --> 01:24:33,383
You get a little bit better at. Golf or whatever it is you do. Video games.

1435
01:24:33,383 --> 01:24:41,383
So the difficult upward difficulty adjustments, those are what increase the workload required.

1436
01:24:41,383 --> 01:24:46,383
And if total revenues go up, then total costs will also go up. Difficulty will go up.

1437
01:24:46,383 --> 01:24:54,383
So this is why I have often said and it's probably cryptic and probably people don't really understand what I mean.

1438
01:24:54,383 --> 01:25:02,383
But I have often said on Twitter that all the arguments against drivechain are just arguments against L1 fees going up.

1439
01:25:02,383 --> 01:25:10,383
And I really believe that because at the end of the day, if the revenues go up, costs are going up.

1440
01:25:10,383 --> 01:25:18,383
So what he's complaining about here is, oh, boohoo, the small miner may.

1441
01:25:18,383 --> 01:25:22,383
It's kind of weird because it's wrong in so many different ways that you don't even know what to attack it on.

1442
01:25:22,383 --> 01:25:25,383
He's saying, boohoo, the small miner might have to pay more fixed costs.

1443
01:25:25,383 --> 01:25:28,383
So the fixed costs might rise.

1444
01:25:28,383 --> 01:25:32,383
But what I'm telling you is total costs are going to skyrocket.

1445
01:25:32,383 --> 01:25:35,383
Total costs across the entire mining network.

1446
01:25:35,383 --> 01:25:40,383
Now, maybe it'll be a lot of people with a tiny little miner that they use to heat their house.

1447
01:25:40,383 --> 01:25:43,383
This is where we get into this whole phone a friend thing.

1448
01:25:44,383 --> 01:25:46,383
Just imagine it in your mind.

1449
01:25:46,383 --> 01:25:56,383
It's not literally the case that the guy with the heater needs to run a full node of any sidechains or even of L1.

1450
01:25:56,383 --> 01:25:58,383
Just imagine it.

1451
01:25:58,383 --> 01:26:09,383
Imagine that you buy this machine and you take it home and you tell your wife, tell your girlfriend, this is our new heater.

1452
01:26:09,383 --> 01:26:11,383
It's a Bitcoin miner.

1453
01:26:11,383 --> 01:26:12,383
It's great.

1454
01:26:12,383 --> 01:26:14,383
It produces heat.

1455
01:26:14,383 --> 01:26:17,383
Like, it doesn't need to run.

1456
01:26:17,383 --> 01:26:20,383
It just literally does not need to run a full node.

1457
01:26:20,383 --> 01:26:28,383
It can use – one reason why is what you could do is you could buy two of these and you could connect them to a full node on your laptop.

1458
01:26:28,383 --> 01:26:34,383
Or you could buy 100 and connect them to a full node on your desktop.

1459
01:26:34,383 --> 01:26:38,383
Or you could buy 50,000 of these heat miners.

1460
01:26:39,383 --> 01:26:42,383
Put one in every – you own a huge apartment.

1461
01:26:42,383 --> 01:26:44,383
You own a hotel or an apartment complex.

1462
01:26:44,383 --> 01:26:52,383
You put them in each room, or you put them in the hallways or something, and then you proxy them all.

1463
01:26:52,383 --> 01:27:00,383
You have one server room that has one full node, and they all do the same thing.

1464
01:27:00,383 --> 01:27:07,383
And then what's the difference between doing that and just pointing them all at a pool where the pool is the one who runs the nodes?

1465
01:27:07,383 --> 01:27:14,383
It's just literally not true that the individual hashers must run any node.

1466
01:27:14,383 --> 01:27:18,383
All they need is an efficient way of recovering if the pool is screwing them over.

1467
01:27:18,383 --> 01:27:22,383
Fortunately, we have different pools competing for their business all the time.

1468
01:27:22,383 --> 01:27:28,383
Each pool would love nothing more than for the other pools to disappoint their clients in some way.

1469
01:27:28,383 --> 01:27:31,383
Basics of competition.

1470
01:27:31,383 --> 01:27:33,383
So I don't know.

1471
01:27:33,383 --> 01:27:36,383
But now this is when Peter addresses this claim now exactly.

1472
01:27:36,383 --> 01:27:43,383
He says the phone-a-friend model, or it could be phone-a-pool model, or it could be BIP301.

1473
01:27:43,383 --> 01:27:49,383
And he says, to avoid the necessity of miners running Drivechain nodes, it has been suggested that miners could just phone a friend

1474
01:27:49,383 --> 01:27:54,383
and copy withdrawal approval hashes from trusted sources like social media.

1475
01:27:54,383 --> 01:27:57,383
He says there's a lot of problems with this.

1476
01:27:57,383 --> 01:28:01,383
Number one, his first and most important problem, why should miners do anything at all?

1477
01:28:01,383 --> 01:28:04,383
There's no direct incentive to approving withdrawal requests.

1478
01:28:04,383 --> 01:28:09,383
But there's an indirect incentive of the revenues going up 10,000x.

1479
01:28:09,383 --> 01:28:14,383
As he's going to point out later, the miners could orphan freeloaders.

1480
01:28:14,383 --> 01:28:21,383
So you could say he either later contradicts himself or he later discusses it in more nuance.

1481
01:28:21,383 --> 01:28:22,383
I don't know.

1482
01:28:22,383 --> 01:28:29,383
He says this is a 51% attack if the miners orphan freeloaders.

1483
01:28:30,383 --> 01:28:37,383
When he says 51% attack, I find that to be somewhat misleading to the point of being dishonest,

1484
01:28:37,383 --> 01:28:39,383
because there's no reorg.

1485
01:28:39,383 --> 01:28:42,383
There's no transaction censorship.

1486
01:28:42,383 --> 01:28:48,383
The only thing that's happening is there's slow blocks for one day, and then everything returns to normal,

1487
01:28:48,383 --> 01:28:53,383
which is statistically something that happens on a random day anyway sometimes.

1488
01:28:54,383 --> 01:28:57,383
So that's the 51% attack.

1489
01:28:57,383 --> 01:29:04,383
That's the dreaded – when I think of 51% attack, I think there's either a reorg or there's transaction censorship.

1490
01:29:04,383 --> 01:29:08,383
It's something that affects me, because, I mean, who's attacking?

1491
01:29:08,383 --> 01:29:11,383
The miners are just attacking each other, not me.

1492
01:29:11,383 --> 01:29:13,383
So good for them.

1493
01:29:14,383 --> 01:29:18,383
But he says why should miners do anything at all?

1494
01:29:18,383 --> 01:29:19,383
There's no direct incentive.

1495
01:29:19,383 --> 01:29:20,383
Well, then just don't do it.

1496
01:29:20,383 --> 01:29:25,383
There's an indirect incentive in the form of having a more useful Bitcoin

1497
01:29:25,383 --> 01:29:31,383
and having a more transaction fee revenue coming in total, so you grow the size of the pie.

1498
01:29:33,383 --> 01:29:34,383
But it's true.

1499
01:29:34,383 --> 01:29:38,383
There's no direct incentive for each individual upvote.

1500
01:29:41,383 --> 01:29:48,383
That's actually the case whether or not you get the node from yourself or your friend.

1501
01:29:48,383 --> 01:29:55,383
Even if you run your own node, even if they ran their own drivechain node, L2 node,

1502
01:29:57,383 --> 01:29:58,383
there's still no direct incentive.

1503
01:29:58,383 --> 01:30:03,383
So this one is not really relevant either, even though it's both wrong and irrelevant.

1504
01:30:04,383 --> 01:30:06,383
But, yeah, two, workload.

1505
01:30:06,383 --> 01:30:12,383
Imagine a future with dozens or even hundreds of drivechains, miners doing research every week or so,

1506
01:30:12,383 --> 01:30:13,383
even without running.

1507
01:30:13,383 --> 01:30:15,383
That's an enormous increase in workload.

1508
01:30:15,383 --> 01:30:22,383
Yeah, again, this is like, though, to be a miner is to face a workload.

1509
01:30:24,383 --> 01:30:25,383
You don't mine for free.

1510
01:30:28,383 --> 01:30:30,383
The pool will just do it all for them anyway.

1511
01:30:35,383 --> 01:30:37,383
It's an enormous increase in revenues.

1512
01:30:37,383 --> 01:30:39,383
If the difficulty increases, that's an increase in workload.

1513
01:30:40,383 --> 01:30:44,383
So that does more to make the workload increase than this.

1514
01:30:46,383 --> 01:30:49,383
Trauma and legal risks due to failures.

1515
01:30:49,383 --> 01:30:52,383
Given how broken the system is, inevitable that some drivechains will fail.

1516
01:30:53,383 --> 01:30:55,383
Pressure will be put on miners to fix the problem.

1517
01:30:55,383 --> 01:31:02,383
Yeah, but, yeah, well, this goes back to what I was saying about everything in part seven is just how it affects Bitcoin miners.

1518
01:31:03,383 --> 01:31:08,383
So whether or not miners get pressure put on them and they yield to the pressure or they fight the pressure

1519
01:31:08,383 --> 01:31:14,383
or they ignore the pressure or they do something else, it doesn't make any difference.

1520
01:31:14,383 --> 01:31:20,383
If they, for example, if they yield to the pressure, okay, if they ignore the pressure,

1521
01:31:20,383 --> 01:31:23,383
then obviously really it's truly obvious that nothing is happening.

1522
01:31:23,383 --> 01:31:28,383
But if they yield to the pressure, it only affects the people who use that sidechain.

1523
01:31:28,383 --> 01:31:38,383
They're the one who have either their withdrawal either is stolen or paused or whatever counts as yielding to the pressure.

1524
01:31:39,383 --> 01:31:41,383
So either way, it doesn't affect anyone who's not using it.

1525
01:31:42,383 --> 01:31:44,383
The miners can ignore it.

1526
01:31:44,383 --> 01:31:47,383
That's one of the things they can do to the pressure is ignore it.

1527
01:31:47,383 --> 01:31:49,383
So they're also not affected.

1528
01:31:49,383 --> 01:31:54,383
Miners are only affected to the extent that they actually care about collecting these juicy transaction fee revenues.

1529
01:31:56,383 --> 01:32:00,383
This is the last is a particularly serious problem in light of Bitcoin's high degree of mining centralization,

1530
01:32:00,383 --> 01:32:02,383
which, again, by that he means there's two pools.

1531
01:32:02,383 --> 01:32:08,383
And even though he immediately contradicts himself by saying that it doesn't matter if there's two pools because you can switch,

1532
01:32:08,383 --> 01:32:10,383
which is the correct thing to say.

1533
01:32:11,383 --> 01:32:17,383
So there is no mining centralization in Bitcoin because it's just the cost of switching pools, which is outrageously cheap.

1534
01:32:17,383 --> 01:32:23,383
So Bitcoin mining is already almost perfectly decentralized.

1535
01:32:25,383 --> 01:32:32,383
But anyway, he says 51% of hash power can salvage a drivechain failure by attacking others to overrule their votes or lack of votes.

1536
01:32:32,383 --> 01:32:35,383
That's what I said before about miners orphaning freeloaders.

1537
01:32:36,383 --> 01:32:39,383
We do not want there to be more incentives to 51% attack.

1538
01:32:39,383 --> 01:32:43,383
But again, Peter says a 51% attack is just if miners orphan each other's blocks.

1539
01:32:43,383 --> 01:32:47,383
But there's no transaction censorship and there's no reorg.

1540
01:32:47,383 --> 01:32:57,383
And again, this thing, they'd only have to do it for a very short time before all the other miners would cave and fall in line.

1541
01:32:57,383 --> 01:33:02,383
Because they know they can't win against 51%.

1542
01:33:02,383 --> 01:33:06,383
So this is something that affects, this is like an inter-miner thing.

1543
01:33:06,383 --> 01:33:08,383
It doesn't affect anyone who's not mining.

1544
01:33:09,383 --> 01:33:13,383
A key thing enabling miner decentralization, this is back to Peter now.

1545
01:33:13,383 --> 01:33:21,383
The key thing enabling miner decentralization is the fact that at the moment it's still reasonably possible to form a new pool and to use decentralized mining pool tech.

1546
01:33:21,383 --> 01:33:23,383
The rules to create a new valid block are clear.

1547
01:33:23,383 --> 01:33:30,383
Provided you follow those rules, you are not risking enormous financial loss by using a small pool or a decentralized pool.

1548
01:33:30,383 --> 01:33:34,383
If these rules become unclear, the rules about creating a new valid block.

1549
01:33:35,383 --> 01:33:39,383
Because drivechain funds are being frozen or looted, that's an enormous centralization pressure.

1550
01:33:39,383 --> 01:33:44,383
It's enormous centralization pressure that introduces hashing power to move towards the largest pools.

1551
01:33:44,383 --> 01:33:52,383
Yeah, again, then he's going back to saying that it matters how many pools there are, which is not true.

1552
01:33:52,383 --> 01:33:56,383
I mean, maybe we should just ask him, like does it actually matter?

1553
01:33:57,383 --> 01:34:01,383
This is a riddle that Moon Settler and I discussed.

1554
01:34:01,383 --> 01:34:06,383
If you have only two pools, but you can instantly switch to another pool or start a new pool, then does it?

1555
01:34:06,383 --> 01:34:10,383
Is that a worse situation where there's a hundred pools, but you're locked in?

1556
01:34:10,383 --> 01:34:13,383
You're handcuffed to the pool and you can never escape no matter what they do.

1557
01:34:15,383 --> 01:34:17,383
The number of pools really just doesn't matter.

1558
01:34:17,383 --> 01:34:19,383
It's the ability to leave the pool.

1559
01:34:20,383 --> 01:34:35,383
But anyway, he's saying what Peter is trying to say here is that drivechain is going to make it harder to figure out whether or not a block is going to be accepted by the other miners because they will want certain upvotes in BIP300.

1560
01:34:40,383 --> 01:34:42,383
He says that's an enormous centralization pressure.

1561
01:34:42,383 --> 01:34:44,383
He uses the word enormous.

1562
01:34:45,383 --> 01:34:53,383
It doesn't make sense, though, because 51% could just start at any random day demanding that they could introduce an arbitrary rule at any time.

1563
01:34:53,383 --> 01:34:55,383
It has nothing to do with drivechain.

1564
01:34:57,383 --> 01:35:01,383
The whole point of drivechain is all the miners will be getting more money because of this.

1565
01:35:01,383 --> 01:35:02,383
That would be a good thing.

1566
01:35:02,383 --> 01:35:09,383
The miners will also be getting money from things that they can't really touch in other scenarios, like Zcash sidechain or whatever.

1567
01:35:09,383 --> 01:35:17,383
So their loyalty will be to the Bitcoin user, will be to even people who use privacy tech, and it will be able to re-decentralize mining.

1568
01:35:20,383 --> 01:35:25,383
But Peter is saying on the off chance that some miners disagree.

1569
01:35:29,383 --> 01:35:31,383
It doesn't have anything to do with drivechain, what he's saying.

1570
01:35:31,383 --> 01:35:38,383
He's saying that what people could do is miners would want to have a certain outcome.

1571
01:35:39,383 --> 01:35:42,383
They form a cartel and they force everyone to go along with them.

1572
01:35:44,383 --> 01:35:54,383
That counts as centralization pressure if they merely form a cartel, where that cartel does nothing other than what all the existing miners are doing.

1573
01:35:55,383 --> 01:36:02,383
Because this cartel is going to be putting each transaction into a...

1574
01:36:02,383 --> 01:36:05,383
It's not going to censor any transactions and it's not going to do any reorgs.

1575
01:36:07,383 --> 01:36:09,383
Only orphan blocks that don't comply.

1576
01:36:10,383 --> 01:36:14,383
So that's just no different than what any other soft fork does.

1577
01:36:16,383 --> 01:36:19,383
I don't know. It's just tiresome, I think.

1578
01:36:20,383 --> 01:36:35,383
You could flip it around and say something like, because we have no sidechains, we're going to have all this drama over which soft forks to activate and how and when, or even which hard forks to activate.

1579
01:36:36,383 --> 01:36:42,383
The fact that there would not be Ethereum if we had sidechains and there would not have been the Bitcoin Cash split.

1580
01:36:43,383 --> 01:36:53,383
So you could say that actually the drama and everything has increased or stayed or it's the same.

1581
01:36:54,383 --> 01:36:55,383
I don't know. It makes no difference.

1582
01:36:55,383 --> 01:37:00,383
7.4 is the worst part of the whole thing, which is a low bar.

1583
01:37:00,383 --> 01:37:05,383
But 7.4 says legal risks to drivechains make miners custodians.

1584
01:37:06,383 --> 01:37:09,383
And what he means by that is custodians in the eyes of the law.

1585
01:37:13,383 --> 01:37:22,383
The answer is obviously no, because the BIP300 rules allow the miners to, quote, steal, unquote, and they're held in place by their business revenues.

1586
01:37:23,383 --> 01:37:25,383
But the real thing is just such a sad question.

1587
01:37:25,383 --> 01:37:27,383
I mean, look how far we've fallen.

1588
01:37:28,383 --> 01:37:33,383
It's whether or not we're giving the law the ability to decide whether or not.

1589
01:37:34,383 --> 01:37:41,383
You know, of course, the law is going to decide if miners are in a certain jurisdiction, the law will decide what they can and can't do.

1590
01:37:41,383 --> 01:37:47,383
But it's not in the case of an abstract protocol like long division or something.

1591
01:37:48,383 --> 01:37:57,383
You know, what if carrying the two, you know, made you a criminal?

1592
01:37:58,383 --> 01:38:03,383
It's like just sad that that's what it comes to.

1593
01:38:05,383 --> 01:38:06,383
And he says maybe.

1594
01:38:06,383 --> 01:38:10,383
And then he has, of course, he has to say, I personally am being sued by Craig Wright in the lawsuit.

1595
01:38:10,383 --> 01:38:12,383
Amy, did you just that? Wow.

1596
01:38:13,383 --> 01:38:15,383
He just has to make it all about him, of course.

1597
01:38:16,383 --> 01:38:23,383
Anyway, I don't know anyone, anyone who thinks that there's even a shred of relevance to 7.4 should just find something else to look into, I think.

1598
01:38:23,383 --> 01:38:26,383
7.5, though, is kind of even worse than that.

1599
01:38:26,383 --> 01:38:27,383
This one is atrocious.

1600
01:38:28,383 --> 01:38:30,383
It's like high middle school level math mistake.

1601
01:38:31,383 --> 01:38:32,383
Just terrible.

1602
01:38:33,383 --> 01:38:35,383
7.5 says fees and drivechain block size limit.

1603
01:38:36,383 --> 01:38:41,383
It's been claimed that drivechains will benefit Bitcoin miners through higher fees generated by blind merge mining.

1604
01:38:42,383 --> 01:38:45,383
He says, however, drivechains have no minimum mechanism to limit total block size.

1605
01:38:46,383 --> 01:38:49,383
Yes, promoted as a way to dramatically scale Bitcoin without a limit.

1606
01:38:49,383 --> 01:38:52,383
It's obvious that the supply of block block space is unlimited.

1607
01:38:53,383 --> 01:38:54,383
False.

1608
01:38:54,383 --> 01:38:59,383
And thus, there is no reason to expect economic supply and demand to converge to anything more than trivial fees.

1609
01:39:00,383 --> 01:39:04,383
OK, it's hard to even know where to begin, but there's a big difference between price and revenue.

1610
01:39:05,383 --> 01:39:16,383
So if you sell whatever, watermelons and you make 10 cents of watermelon and you sell 500,000 watermelons, 10 cents each, 500,000.

1611
01:39:18,383 --> 01:39:19,383
Or whatever I said.

1612
01:39:20,383 --> 01:39:23,383
So you say 500 million, then that's 50 million dollars.

1613
01:39:24,383 --> 01:39:25,383
50 million dollars.

1614
01:39:26,383 --> 01:39:28,383
So then that's a low price, but a high quantity.

1615
01:39:29,383 --> 01:39:30,383
So it's a high revenue.

1616
01:39:30,383 --> 01:39:32,383
Revenue is the area of the rectangle.

1617
01:39:34,383 --> 01:39:40,383
But if the fees like the per watermelon cost could be instead of 10 cents, it could be like 75 dollars.

1618
01:39:41,383 --> 01:39:47,383
But if you only sell 100 or you only sell 1000 watermelons, it's 75 thousand dollars worth of revenue.

1619
01:39:47,383 --> 01:39:51,383
So it's millions versus thousands.

1620
01:39:53,058 --> 01:39:57,178
So how can it be that Peter Todd doesn't understand such a basic thing?

1621
01:39:58,178 --> 01:39:59,178
I mean, it's kind of shocking.

1622
01:40:00,058 --> 01:40:06,218
And he really is what he's saying is because he's saying he's we're imagining a world where all these chain fees exist.

1623
01:40:06,218 --> 01:40:10,418
It's just some emerge mind context with L1 and others not.

1624
01:40:11,097 --> 01:40:16,978
And so what he's saying is that Bitcoin miners to mine only collect fee revenue from only one chain.

1625
01:40:17,937 --> 01:40:23,857
Would give them more money than if they collected fee revenue from multiple chains, including the one.

1626
01:40:24,737 --> 01:40:28,417
Because it's main chain plus all sidechains, one main chain plus and sidechains.

1627
01:40:29,057 --> 01:40:33,897
And Peter is saying the N will be zero.

1628
01:40:33,897 --> 01:40:42,378
And in fact, it will decrease main chain fee rates and fee revenues somehow in a way that won't, given that those those chains will exist somewhere else.

1629
01:40:42,378 --> 01:40:44,858
If they're not, if they don't exist, the sidechains, they will exist somewhere else.

1630
01:40:45,178 --> 01:40:49,897
Maybe as altcoins, maybe as some kind of other thing, some permission thing, who knows?

1631
01:40:51,818 --> 01:40:57,098
So it's shocking, he's saying, and but even none of it is true, really.

1632
01:40:57,897 --> 01:41:00,217
Drivechains have no mechanism to limit total block size.

1633
01:41:00,537 --> 01:41:06,298
That's not true. The miners self-interest in maximizing the area of the rectangle.

1634
01:41:07,378 --> 01:41:11,177
That is the mechanism to limit it.

1635
01:41:11,978 --> 01:41:15,618
And says, indeed, promoted as a dramatic scale Bitcoin, no contradiction there.

1636
01:41:16,418 --> 01:41:19,738
Without a limit, it's obvious that the supply of block space is unlimited.

1637
01:41:20,778 --> 01:41:24,018
That's not true. Not only is it not obvious, it's not true.

1638
01:41:26,018 --> 01:41:27,018
It would have some limit.

1639
01:41:28,137 --> 01:41:29,937
And there's no reason to expect supply and whatever.

1640
01:41:30,137 --> 01:41:34,378
And then he says, note how this particular claim is reminiscent of big blocker claims from the block size board.

1641
01:41:34,577 --> 01:41:36,018
Well, they were right about that claim.

1642
01:41:36,897 --> 01:41:38,378
They were wrong about most other claims.

1643
01:41:38,378 --> 01:41:43,418
But time value of money, I mean, it's all so tiresome.

1644
01:41:43,458 --> 01:41:45,018
We've got to just skip through it at this point.

1645
01:41:45,018 --> 01:41:48,937
I think it's like every single paragraph is so bad.

1646
01:41:49,618 --> 01:41:56,458
But if they do somehow generate non-trivial free revenue, it's concentralized by increasing the capital costs required to merge mine.

1647
01:41:56,497 --> 01:41:58,338
Exclamation point. Not true.

1648
01:42:00,497 --> 01:42:05,977
The problem is the creators of blind merge mine blocks have to pay transaction fees now denominated in Bitcoin.

1649
01:42:06,018 --> 01:42:08,538
But they receive the transaction fees in the drivechain coins.

1650
01:42:08,577 --> 01:42:10,378
In theory, these coins are supposed to be pegged one to one.

1651
01:42:10,417 --> 01:42:14,337
But obviously, with a three to six month withdrawal period, that is certainly not guaranteed to succeed.

1652
01:42:15,538 --> 01:42:17,738
Wrong. It's all so wrong.

1653
01:42:17,777 --> 01:42:18,818
You don't even know where to begin.

1654
01:42:19,898 --> 01:42:26,977
But they're pegged one to one in the sense at the moment of withdrawal.

1655
01:42:27,098 --> 01:42:30,458
But there is no sense in which they will be.

1656
01:42:31,458 --> 01:42:40,777
The fact that the exchange rate will float and it could be ninety nine cents or ninety eight cents, that is what will equalize the two amounts.

1657
01:42:42,658 --> 01:42:43,658
I'm not sure if that.

1658
01:42:45,098 --> 01:42:55,057
I don't even know where to continue, but it's like they pay a different amount of L1 coins versus side coins, so that's the same.

1659
01:42:55,098 --> 01:42:56,137
It must be the same.

1660
01:42:56,137 --> 01:43:02,258
It's like you have the two you have a situation where each node is going to compete and bid up higher and higher.

1661
01:43:03,857 --> 01:43:10,458
So. There's no sense in which one person can be cheating the other, you know, it's like.

1662
01:43:12,057 --> 01:43:13,577
Competition is a much.

1663
01:43:16,337 --> 01:43:22,738
That is the superior way of getting the best deal, because you say, well, listen, anyone out there can give me a better deal.

1664
01:43:23,738 --> 01:43:27,057
I don't know that he links in this thing to where Shinobi is a good article explaining this.

1665
01:43:27,057 --> 01:43:32,378
This is in my tweet, Twitter highlights, and I have and then he kind of quotes Shinobi.

1666
01:43:32,378 --> 01:43:35,697
This is just more of Peter Todd's laziness that he can't even come up with his own thing.

1667
01:43:35,697 --> 01:43:38,937
He's going to take a terrible argument from Peter Shinobi that makes no sense.

1668
01:43:39,697 --> 01:43:41,618
I argue that swaps fix this issue.

1669
01:43:41,618 --> 01:43:45,977
But as Shinobi explains, the reality is shops just shove the liquidity requirements onto yet another party.

1670
01:43:46,697 --> 01:43:50,417
I think this just speaks to just it just speaks to the extreme laziness.

1671
01:43:51,618 --> 01:43:57,697
That the there's no liquidity requirement, anyone with L1 coins can do this at any time.

1672
01:43:58,137 --> 01:44:06,298
So you don't need to have the coins locked up until after you make the trade, then they become L2 coins.

1673
01:44:07,458 --> 01:44:10,377
But that's only after you set the price so that they're equal.

1674
01:44:10,417 --> 01:44:14,377
So you get your big discount, you collect your big fee and then you pull the trigger.

1675
01:44:14,537 --> 01:44:18,137
So you get you basically get all the yield up front in a way.

1676
01:44:19,338 --> 01:44:25,697
You swap 100 L1 coins for 102 L2 coins instantly.

1677
01:44:28,257 --> 01:44:31,537
So it's only after you you buy the block that you.

1678
01:44:33,577 --> 01:44:39,218
So it doesn't make any difference, at least in the capital costs required to blind merge mine, there is no there is no cost.

1679
01:44:40,218 --> 01:44:47,898
It's just a transfer of it's just an accounting operation of switching one a certain U.S. dollar amount of fees from L1 to L2.

1680
01:44:49,298 --> 01:44:56,137
So I don't know, this whole thing is just like Peter being too lazy to come up with something copying pastes from something from Shinobi that he didn't understand.

1681
01:44:56,778 --> 01:45:03,298
Probably maybe they all met in like a big group, big telegram group, and they put their heads together and Shinobi was like, oh, you got to put this in.

1682
01:45:03,338 --> 01:45:04,218
Peter was like, OK.

1683
01:45:04,218 --> 01:45:12,817
So, I don't know, it's all just terrible, then section eight, I mean, guys, this is too tiresome to really continue, but eight is our direction is going to see significant usage.

1684
01:45:13,058 --> 01:45:14,178
I mean, who even cares?

1685
01:45:14,657 --> 01:45:26,618
But I think like about what Peter thinks about this, because he either is saying no, in which case none of it matters, or he's saying yes, in which case it's validating the idea.

1686
01:45:26,618 --> 01:45:35,618
So it doesn't even matter, I think the obvious UI, UX problem, I mean, it's just silly final thoughts, I'm just skipping because I can't take it anymore.

1687
01:45:37,618 --> 01:45:48,618
He says, yeah, he's saying, he says there's not enough substance to the idea, concrete that can be distilled down to logic and math and critique with logic and math.

1688
01:45:48,618 --> 01:45:49,618
Drivechains is not like that.

1689
01:45:49,618 --> 01:45:57,618
Drivechains is a vapid, hand-wavy idea that replaces the careful incentive design we see in other Bitcoin protocols and Bitcoin itself with blind trust in miners.

1690
01:45:57,618 --> 01:46:03,618
Of course, blind trust could very well work in practice, but if you're willing to rely on trust, why are we going through the trouble of using Bitcoin in the first place?

1691
01:46:03,618 --> 01:46:08,618
Which is, that's the last sentence, and it speaks to just how truly awful the analysis is.

1692
01:46:09,618 --> 01:46:19,618
It's actually laughable because there is, I actually do have logic and math, I have an actual set of equations in the Drivechain security model in the 2015 post and on drivechain.info, the front page.

1693
01:46:19,618 --> 01:46:25,618
There's actually equations with these two parameters, M and B, and that is the security model, and it has math.

1694
01:46:26,618 --> 01:46:34,618
And he's saying that this should be possible to distill it down to logic and math, but he has not even addressed the math that I supplied.

1695
01:46:34,618 --> 01:46:38,618
And then he's saying it replaces, blah, blah, blah, with blind trust in miners.

1696
01:46:39,618 --> 01:46:45,618
But this is completely untrue, because the miners are kept in line by these M and B parameters, which are basically the fees coming in from the sidechain,

1697
01:46:45,618 --> 01:46:49,618
and the effect that having a multi-parameter security model is going to have on the miners.

1698
01:46:49,618 --> 01:46:55,618
And he's saying that this should be possible to distill it down to logic and math, but he has not even addressed the math that I supplied.

1699
01:46:55,618 --> 01:46:59,618
And then he's saying it replaces, blah, blah, blah, with blind trust in miners.

1700
01:46:59,618 --> 01:47:06,618
But the miners are kept in line by these M and B parameters, which are basically the fees coming in from the sidechain,

1701
01:47:06,618 --> 01:47:11,618
and the effect that having a multi-platform coin would have on the price.

1702
01:47:13,618 --> 01:47:18,618
So we're only trusting miners to be greedy, which is the exact same way they're trusted on L1.

1703
01:47:18,618 --> 01:47:21,618
I mean, after all, L1 is not going to exist.

1704
01:47:21,618 --> 01:47:28,618
After all, L1 is not going to exist at all if there's no miners.

1705
01:47:28,618 --> 01:47:33,618
So in that sense, Bitcoin Core requires miners to exist also.

1706
01:47:33,618 --> 01:47:36,618
And then he says, if you're willing, blind trust could work very well.

1707
01:47:36,618 --> 01:47:39,618
If you're willing to rely on trust, why are we using Bitcoin in the first place?

1708
01:47:39,618 --> 01:47:44,618
But it's like, that is completely missing the point.

1709
01:47:45,618 --> 01:47:47,618
So I don't know, I just think it's really terrible.

1710
01:47:47,618 --> 01:47:52,618
I think maybe I should go through it again on video or something, but I don't know.

1711
01:47:53,618 --> 01:48:01,618
If anyone actually thought anything in it was any good, I'd love for you to come up and say why you think that.

1712
01:48:02,618 --> 01:48:09,618
But I just couldn't believe like almost every paragraph and every sentence, lazy, incorrect, totally missing.

1713
01:48:09,618 --> 01:48:14,618
Often he's just making his own thing up and then criticizing that and then saying it's actually not a problem.

1714
01:48:14,618 --> 01:48:16,618
He does that like three or four different times.

1715
01:48:17,618 --> 01:48:20,618
The whole idea that it must matter.

1716
01:48:23,618 --> 01:48:28,618
Most of the mining thing is just a mix up between full node costs and mining costs.

1717
01:48:28,618 --> 01:48:35,618
And if you worry about mining costs and you want to get rid of upward difficulty adjustments from Bitcoin, you want to remove work from Bitcoin.

1718
01:48:35,618 --> 01:48:37,618
So it's just terrible.

1719
01:48:37,618 --> 01:48:41,618
And just anyone who thinks any paragraph of it was good, please come up and say.

1720
01:48:42,618 --> 01:48:47,618
Paul, I want to make a comment about the fees.

1721
01:48:49,618 --> 01:48:57,618
I don't understand why he kind of say that about the fees and, you know, the miners and stuff.

1722
01:48:57,618 --> 01:49:11,618
Because like today on L1 with all these ordinals, we see that the miners collect more fees, but also the fee rate for any other transaction is more expensive.

1723
01:49:11,618 --> 01:49:17,618
Because, you know, the fee rate is higher because everything happening on the L1.

1724
01:49:18,618 --> 01:49:30,618
So I don't understand how he don't see that when when drivechains, you know, send the transaction is just giving more fees.

1725
01:49:30,618 --> 01:49:37,618
But on L1, actually, the fee rate for other transactions stays the same or is much cheaper.

1726
01:49:38,618 --> 01:49:53,618
So there I make kind of a good point for drivechains, because even I believe that ordinals, if drivechains are, you know, enabled, that ordinals and all this stuff will be transferred to drivechains.

1727
01:49:53,618 --> 01:50:05,618
And another thing is how he don't see that, for example, ordinals exist today, but tomorrow can come another protocol that is the same like ordinals or thousands of them or hundreds of them.

1728
01:50:05,618 --> 01:50:18,618
So can you imagine then the fee rate, what will be if, you know, comes along some protocols kind of like on the same way like ordinals?

1729
01:50:25,618 --> 01:50:28,618
Yep. Well, yeah, I know. I don't get it.

1730
01:50:29,618 --> 01:50:38,618
I don't know. I think he he really wants to have a client said validation work, which is too bad because it's not going to work.

1731
01:50:38,618 --> 01:50:44,618
But I think he thinks that miners should never be touched, like under any circumstances.

1732
01:50:44,618 --> 01:50:52,618
And mining should I think it's this is a sad thing, because this is also not going to work, because the real world has a lot of transactions.

1733
01:50:53,618 --> 01:51:00,618
And so the real world is going to have a lot of transaction fees and, of course, visa and everything that's already 100 million per day ish.

1734
01:51:01,618 --> 01:51:13,618
So. That's the reality, and if there's going to be an L2 on top of one that cuts the miners out, that is going to be not incentive compatible.

1735
01:51:14,618 --> 01:51:16,618
The miners will be able to earn.

1736
01:51:17,618 --> 01:51:24,618
Millions of dollars a day by censoring that L2 and forcing people on to a different L2 that does cut them in.

1737
01:51:25,618 --> 01:51:28,618
So all that's dead, all that all that stuff is dead is going to be dead.

1738
01:51:28,618 --> 01:51:30,618
All the L2s that don't cut the miners and will probably be dead.

1739
01:51:31,618 --> 01:51:33,618
And we should still try them, but they're probably dead.

1740
01:51:34,618 --> 01:51:48,618
And so the. Because there's just no one on no one way on the planet Earth, if you can easily take 100 million dollars per day by doing something that you are not going to do it.

1741
01:51:49,618 --> 01:52:06,618
So. So he wants mining to stay the way it was in 2012 or something, but that's just wanting Bitcoin to fail, basically wanting Bitcoin to be super niche.

1742
01:52:07,618 --> 01:52:12,618
And if it's going to grow, then total revenues are going to skyrocket and then total costs are going to skyrocket.

1743
01:52:13,618 --> 01:52:19,618
So I just can't believe I really just I would have actually gone through it before I would have made like a video or more of like a thing.

1744
01:52:19,618 --> 01:52:28,618
But I just thought he really, really phoned it in and he doesn't really he's determined to put like zero thought into this.

1745
01:52:29,618 --> 01:52:39,618
It's just like I think he's just going to rely on his knowledge base from like 2014, which he's never going to update.

1746
01:52:40,618 --> 01:52:43,618
And he's just going to say, oh, look at me, I know about something with Namecoin.

1747
01:52:44,618 --> 01:52:52,618
Craig Wright is suing me. There's no way that anyone can get him to actually pay any attention to the idea in enough detail to.

1748
01:52:53,618 --> 01:53:06,618
But I mean, there's the one the one key disagreement is that he really thinks that each miner like he thinks that each individual he thinks something like each individual ASIC chip must run a full node.

1749
01:53:07,618 --> 01:53:15,618
So like I was saying, if you buy two ASICs, even though it's you and your house, you need like two full nodes.

1750
01:53:16,618 --> 01:53:20,618
He has this weird belief about that. I don't think he realizes that that's what he believes, but that is what he believes.

1751
01:53:20,618 --> 01:53:25,618
You say, why can't you just reuse the same node for both chips in your house?

1752
01:53:26,618 --> 01:53:31,618
But that's the same thing as all them reusing a single node at the pool.

1753
01:53:32,618 --> 01:53:39,618
It's the same principle. It's just a question of how efficient they are operating versus how paranoid they are.

1754
01:53:40,618 --> 01:53:46,618
Peter's saying that they should be paranoid, but that's a decision each person should make.

1755
01:53:47,618 --> 01:53:52,618
Anyway, people in the audience come up if you want or ask any drivechain question.

1756
01:53:54,618 --> 01:54:03,618
I think it's just horrendous that people have listened. I think Peter convinced Blockstream to or something like that.

1757
01:54:03,618 --> 01:54:10,618
I don't know. They convinced themselves. There's some kind of weird death cult or something. They convinced themselves to stop working on the idea.

1758
01:54:11,618 --> 01:54:21,618
And as a result, Bitcoin has suffered enormously. It would already probably have taken over the entire planet if we had had sidechains in 2016.

1759
01:54:22,618 --> 01:54:26,618
There would never have been Ethereum. There would never have been Bitcoin.

1760
01:54:27,618 --> 01:54:36,618
Already, we would have planetary scale. We'd have Zcash privacy. We'd have tons of other things. We'd have Namecoin prediction markets. We'd have lots of stuff.

1761
01:54:37,618 --> 01:54:44,618
We would have all this BitAssets, Ordinal stuff would have happened on its own chain. And that already would have been big.

1762
01:54:45,618 --> 01:54:50,618
We would have already had like a operating system. We would have already had a blockchain.

1763
01:54:50,618 --> 01:55:03,618
That already would have been big. We would have already had like OP_VAULT, CTV, all that stuff would have been invented in like 2018, 2019 and just activated immediately.

1764
01:55:04,618 --> 01:55:10,618
We would already have ARK. We would already have everything. And there would be no toxicity.

1765
01:55:10,618 --> 01:55:19,618
These horrible people who are ruining the industry because they have no real skills, except just trolling on the internet.

1766
01:55:20,618 --> 01:55:25,618
And those people have now invaded and become a core part.

1767
01:55:26,618 --> 01:55:38,618
We don't need social manipulation to win. We just need a better idea.

1768
01:55:39,618 --> 01:55:42,618
Cheaper transactions, cool stuff.

1769
01:55:43,618 --> 01:55:50,618
The whole Bitcoin project has been kind of gutted. It's all malinvestment.

1770
01:55:50,618 --> 01:56:01,618
All the Lightning VC funding, I think, is now hurting Bitcoin because it's just contributing to self-delusion on an enormous scale.

1771
01:56:02,618 --> 01:56:12,618
We look the other way for our Lightning people in the same way that the Fed looks the other way for their banker friends.

1772
01:56:13,618 --> 01:56:17,618
JP Morgan or whatever. We just have our thumb on the scale.

1773
01:56:18,618 --> 01:56:23,618
We say, well, sure, Lightning's not what we thought, but those are our people.

1774
01:56:24,618 --> 01:56:33,618
And in that sense, we are huge hypocrites and we're much worse than, in that way, we're much worse than the system we aim to replace.

1775
01:56:34,618 --> 01:56:38,618
I agree. Well said.

1776
01:56:39,618 --> 01:56:42,618
But, hey, anyone who disagrees, come up.

1777
01:56:43,618 --> 01:56:49,618
Or if you know a friend who disagrees, call them over. Send them in.

1778
01:56:52,618 --> 01:56:55,618
I guess everyone perfectly agrees, 100 percent.

1779
01:56:59,617 --> 01:57:03,617
Probably after some time, everybody will agree with you.

1780
01:57:04,617 --> 01:57:06,617
Well, this has happened, actually, quite a few times.

1781
01:57:07,617 --> 01:57:12,617
Sometimes I publish something on my blog and usually 12, 18 months later, people come around to it.

1782
01:57:14,617 --> 01:57:16,617
So sometimes they're much earlier than others.

1783
01:57:17,617 --> 01:57:24,617
But, I mean, I did the Lightning limitations post, and then I started seeing that phrase all around.

1784
01:57:25,617 --> 01:57:29,617
All kinds of people are doing a space with that, or they did a YouTube thing.

1785
01:57:29,617 --> 01:57:32,617
Or there's now all these panels that are all Lightning limitations.

1786
01:57:33,617 --> 01:57:36,617
So in that case, I was like two years ahead.

1787
01:57:37,617 --> 01:57:42,617
Very common, though. I've been in this industry for a really long time, and I've been ahead most of the time.

1788
01:57:43,617 --> 01:57:45,617
So not on everything, of course.

1789
01:57:46,617 --> 01:57:50,617
There's even certain things I got wrong, like I hated to bid USD and I thought it was a terrible idea.

1790
01:57:51,617 --> 01:57:57,617
And for Tether, I was always saying, I don't know that it's...

1791
01:57:58,617 --> 01:58:02,617
People had such strong opinions on Tether being the greatest idea or being certainly a scam.

1792
01:58:03,617 --> 01:58:05,617
And I would always say, like, I don't know.

1793
01:58:06,617 --> 01:58:12,617
But now, in hindsight, I say that was wrong because I think it kind of clearly seems to be working out just fine.

1794
01:58:13,617 --> 01:58:15,617
People love USDT. They love the product.

1795
01:58:16,617 --> 01:58:20,617
And now that interest rates are high, they have a phenomenal business model.

1796
01:58:21,617 --> 01:58:24,617
Just raking in the cash in exchange for doing basically nothing.

1797
01:58:25,617 --> 01:58:27,617
Raking in utterly enormous amounts.

1798
01:58:28,617 --> 01:58:31,617
One thing about Tether is I don't get why they're not closed down, though.

1799
01:58:32,617 --> 01:58:36,617
You would think they would get liberty reserved.

1800
01:58:37,617 --> 01:58:38,617
Kind of a mystery.

1801
01:58:45,617 --> 01:58:46,617
Yeah, so...

1802
01:58:51,617 --> 01:58:53,617
Come on, someone out there has to have some...

1803
01:58:54,617 --> 01:58:57,617
They have to be curious about something or another, even a beginner question.

1804
01:58:58,617 --> 01:59:00,617
We're here. We're up here. We're having fun.

1805
01:59:06,617 --> 01:59:07,617
Miguel is here. Hello.

1806
01:59:08,617 --> 01:59:09,617
Hey, Paul.

1807
01:59:10,617 --> 01:59:11,617
Can you hear me?

1808
01:59:12,617 --> 01:59:13,617
Great. Hello.

1809
01:59:13,617 --> 01:59:18,617
Yeah, like, I agree with everything that you said, but there's one thing that I don't agree.

1810
01:59:19,617 --> 01:59:23,617
Is that we have a good idea, so we don't need to fight a narrative.

1811
01:59:24,617 --> 01:59:32,617
I disagree with that because otherwise, those small group of people that complain about drivechains, they're going to win.

1812
01:59:33,617 --> 01:59:42,617
So I think we need to have a good narrative and kind of embrace everything because that's what drivechains is, right?

1813
01:59:43,617 --> 01:59:49,617
We're not against Lightning because if a drivechain has an HOC compatible, we can use channels between them.

1814
01:59:50,617 --> 01:59:51,617
So...

1815
01:59:53,004 --> 02:00:13,004
The thing here that I don't agree is it is a battle of narratives and we have to deal with this. It's hard. I don't like it all, but that's the way it is, right? So thinking that you just...

1816
02:00:13,004 --> 02:00:33,004
You're right. I mean, it's really like the Lightning idea itself is kind of collateral damage, actually, I think. I think if it weren't for the cultural issues, then probably Lightning would have quickly been introduced, supported by everyone. Then it would have transformed, rapidly transformed into something else.

1817
02:00:33,004 --> 02:00:51,004
It would specialize in duplex channels only or become Ark. It would become faster, but it's because it became political football, as they say. It's because of all that, that it was impossible to criticize Lightning and that's the beginning of the end. That means we're kind of all doomed.

1818
02:00:52,004 --> 02:01:19,004
Lightning is kind of reckless because we kind of have a lot of bugs. It's hard to open a channel with someone that you don't know, that you don't trust. So it's not done yet. And it's going to be, I think it's, we are far away from done. So that's why people are trying to, okay, let's put this new bip here to stable channels and stuff like that. So it's not done yet. So there's a lot of work to do.

1819
02:01:19,004 --> 02:01:39,004
So that's why drivechains could be a place to iterate faster because now we have to approve a bip and then iterate that bip. And then, okay, Lightning is not stable yet, so let's put another bip. And we're kind of doing that, following the pathway to Lightning don't be reckless anymore.

1820
02:01:39,004 --> 02:02:07,004
So for me, it's Lightning development, the driven development, what's going on with Bitcoin, you know? So for me, drivechains will embrace that. Okay, let's fix Lightning on another layer. And then if we can fix that in another layer, we could have like 30 years of testing out. Okay, we are stable. We don't have any side bags, like ordinals or stuff like that, that people kind of don't like. The maxis don't like it.

1821
02:02:08,004 --> 02:02:25,004
And that's okay. Now we have the 30 years trying to figure out how to build Lightning. And we do that in a drivechain. And after we do that, we can just pull all the features that is retrocompatible with the main chain, and that's it.

1822
02:02:25,004 --> 02:02:52,004
So drivechains, we have to have a narrative that embraces everything. And at the same time, you kind of ossify the first layer and we push the political battle to a second layer because I think that is the main narrative that kind of convey people because it's going to be hard if you don't battle with narratives, we're going to lose because a good idea is not enough. I think that's proven, right?

1823
02:02:52,004 --> 02:03:15,004
Because your work, like, I'm following you since I think 2017, 2018. And really, your good idea is not enough. I think it's, we all agree on that, right? So I think we have to push hard, but not the hard, that kind of a phrase everyone, but embrace everyone, you know? But I don't know. I agree with you.

1824
02:03:15,004 --> 02:03:17,004
Yeah, I don't know either.

1825
02:03:17,330 --> 02:03:24,750
I think it's important to note if you're talking about, if we're comparing and contrasting

1826
02:03:24,750 --> 02:03:30,410
Lightning and Drivechain with respect to like narratives, narrative management, it's important

1827
02:03:30,410 --> 02:03:37,090
to note that Blockstream has 66 times the funding.

1828
02:03:37,090 --> 02:03:43,650
So the difference of $197 million to put towards narrative management.

1829
02:03:46,004 --> 02:04:11,004
Even the next stream is not that big into Lightning. It's only, and the main things they do in Lightning, like Rusty Russell is like a nice guy, and a very smart, like professional, normal human. And so the Lightning is even more. There's all Lightning labs, there's all of chain code. There's, there's tons.

1830
02:04:11,004 --> 02:04:40,004
So the, I don't even know who's responsible for Eclair. I don't remember which, but then there's all the custodial Lightning companies. So this is what we did. This is why it's so important. People say, Oh, Paul, you care so much about the meaning of these words. Why do you, why are you such a stickler for all this? Let's just let it slide. Blah, blah, blah. People tell that to me all the time. But this is the problem. These are all these seeds we planted six, seven years ago.

1831
02:04:41,004 --> 02:05:07,004
We told everyone Lightning is the future. And the VCs, you know, and the other people, they invest in Lightning startups. Who knows how much money has been misallocated. It would be interesting to look up all of the money invested in Lightning and see how close it even comes to the total amount of Bitcoin in the Lightning network, which is like, you know, 5000 Bitcoin. It's like, not that much.

1832
02:05:08,004 --> 02:05:34,004
I mean, I don't know. I think it's true that the, I mean, it shouldn't matter how much money, I know it's gonna sound naive. People love money and people love, they love, they love joining a winning team. But, well, I don't know.

1833
02:05:34,004 --> 02:05:56,004
Well, I don't know. I mean, I'm not sure what to say, because I don't know to what extent it is just wishful thinking, or to what extent it is like desperation, or just humiliation. I don't know. But this is the problem is that people, this is the psychology is, of course, that people, they buy into something and then they can't let it go.

1834
02:05:56,004 --> 02:06:09,004
That's true of everyone, of course. I'm not sure what to make of any of that, or, you know, to do with it all, you know, what the plan should be, Miguel, like, what do you think? Like, what I can just go out and say, like, everything's great.

1835
02:06:09,004 --> 02:06:38,004
It's a mix between ego, fear, and ignorance, I think. Because I've talked to a lot of, I went to a conference last weekend, and I talked to a lot of maxis, well-known maxis that are against drivechains, and they are completely ignorant about the subject. Even for the Bitcoin Core stuff there. It's weird. It's weird to realize that it's kind of a kill your heroes, don't know your heroes, right?

1836
02:06:39,004 --> 02:06:53,004
Because you're gonna find out bad things about it. But it's weird, because I think it's completely ignorance and fear. It's hard to deal with this, right? I don't know.

1837
02:06:54,004 --> 02:07:03,004
I mean, do you think we should maybe we should do more fear than we should say, we're keeping track of everyone who was against this idea. And after it succeeds, we'll just humiliate them all.

1838
02:07:04,004 --> 02:07:13,004
But if they respond to fear, then that's, that's what you're saying, though, is you're saying they live in fear, and I'm too nice.

1839
02:07:14,004 --> 02:07:28,004
But, but then you're kind of, you're pushing too hard, and you don't like give them a chance to forgiveness, you know, it's kind of, it's hard, you know, because they're gonna double down if you push too hard, right?

1840
02:07:28,004 --> 02:07:43,004
That's what people does when they are in fear. Like, if you don't give them an exit to accept drivechains, just gonna, they're gonna double down, you know, so I don't think that's a good strategy. I think that's, you should embrace everyone.

1841
02:07:44,004 --> 02:07:46,004
What do you think that is a good strategy?

1842
02:07:47,004 --> 02:08:02,004
Yeah, so it's hard because people, I think it's an ignorance that people don't know how Bitcoin works. And, and they think bit drivechains are going to implode everything. That's, that's what they think.

1843
02:08:03,004 --> 02:08:06,004
And lack of understanding of Bitcoin.

1844
02:08:07,004 --> 02:08:23,004
Yeah, lack of understanding of Bitcoin protocol itself. And oh, you're trying to change Bitcoin in a way that blah, blah, blah, blah, blah, but they don't know the way Bitcoin works now. It's weird. And very well known guys don't know. So it's kind of strange.

1845
02:08:24,004 --> 02:08:27,004
Yeah, it's strange. It's very strange. I recognize that.

1846
02:08:27,004 --> 02:08:56,004
Yeah, so and then if you if you try to explain, they say no, that's not how Bitcoin works. And I say, no, it is. So it's kind of a, it's weird. Like, I think people like, are so comfortable and then don't need to work anymore, because maybe they're rich or so. And I don't know. They're not like us, you know, nerds. I think, you know, it's weird. I think it's education like, like, but it's also a battle of narrative. So if you don't do nothing, it's bad.

1847
02:08:58,004 --> 02:09:03,004
If you push too hard, it's bad. If you don't push at all, it's bad also. So I don't know.

1848
02:09:04,004 --> 02:09:05,004
Yeah, right.

1849
02:09:06,004 --> 02:09:07,004
I don't have an answer to that.

1850
02:09:08,004 --> 02:09:25,004
Hey, Paul, do you think it's like a, like, you know, the VCH thing, the big blockers, like, you could sit here and we could say they're wrong, right? But maybe they weren't, there wasn't a malicious, like they weren't motivated in any kind of evil way. They thought they had the right idea, but they just happened to be wrong, right? Do you think?

1851
02:09:25,004 --> 02:09:35,004
I agree with you. Yes, I think that a lot of people said that they were evil. But at the time, I was thinking, no, these people, you know, Roger Ver doesn't want Bitcoin to fail or whatever. It's absurd.

1852
02:09:36,004 --> 02:09:44,004
So the same thing with these guys. I don't necessarily think that they're malintended. But what do you think their motivation is?

1853
02:09:45,004 --> 02:10:03,004
I do think the key part of it is attention is limited. And if people think the idea doesn't have a chance already, because nothing controversial will be merged. And they think it's just it's already slightly controversial enough, then no one will rush to defend it.

1854
02:10:04,004 --> 02:10:23,004
And that's why I think it was Luke's pull request that sort of set it off before. And it will probably be more support from miners that sets it off again, when miners say we want this idea. Where is it?

1855
02:10:24,004 --> 02:10:44,004
That's my guess. But I think there's not a lot of I think people despair, like they think it won't be possible to get it across. And therefore it they think, okay, if I fight for this idea, I'm just going to lose. So I think I think people think it's a lost cause.

1856
02:10:45,004 --> 02:11:05,004
So they don't even investigate the idea to find out how much merit it has. And I think to some people, they think it's like you can always reinvent the idea and have a different name, like someone could always do. They could redo BIP300, but they could call it a lightning channel.

1857
02:11:06,004 --> 02:11:25,004
And then no one will know since it's since it's all inscrutable. All the technical stuff is so difficult to understand. No one will really know that they will. And that that probably will is what you know, like a 1984 style door to our well, that's probably like possible. So people just think, listen, I'm not going to get involved.

1858
02:11:26,004 --> 02:11:36,004
It's a it's too much of a collective action problem where either it activates for the whole network, or it doesn't. So people think kind of why should I get involved? I think that's

1859
02:11:37,004 --> 02:12:05,004
two sides here. Just okay, I have two points here. One is BSV, I think is an enemy. And two, I'm going to start with the two. Remember me the first one, the BSV is an enemy. Bitcoin Cash is an enemy. The first one is when I tried to speak for the Brazilian owners in Brazil, the first time that I speak was okay. But the second time, people saying that I was a layer to live agencies, I was paying to get to, to promote drive

1860
02:12:05,004 --> 02:12:34,524
chain. So people started attacking me and defaming. So it's kind of a, it's hard for you to expose yourself to, to those kinds of concepts, you know, complex concepts. So that's what I learned. Like, it's too hard. People don't understand. And they're saying that you're earning money, they're starting to, to say lies about you. So it's very hard to do that. So. So regarding that, please pay me invoice. So

1861
02:12:35,004 --> 02:12:36,004
I can say that I was paid.

1862
02:12:40,004 --> 02:12:52,004
I mean, like, even that is like, why? Why would that matter? Like, you know, to be paid to say true things or paid to say it's like, it's so weird that why this is like the bottom of the barrel that you get.

1863
02:12:52,004 --> 02:13:15,004
Like layer to lab is being funded by $7 million, right? So why does that matter? But anyway, but I didn't receive anything from you. So the second point is, I think that the Bcash, the Bitcoin Cash was an attack, because it's the same thing that Jimmy Sung's trying to build with the user reject support, right?

1864
02:13:16,004 --> 02:13:43,004
If for some reason miners decide to activate the BIP300, and Bitcoin Max is like, Jimmy Sung's decided to, to prevent that they are kind of the new owners of Bitcoin. So Bitcoin is not a decentralized protocol anymore, because they can they can censor soft forks, they can do whatever they want. So it's kind of now we have leaders. The same thing of Bitcoin, Bitcoin Cash. Now we have, we know the leaders, right?

1865
02:13:43,004 --> 02:14:09,004
So I think that kind of, you can say that they are naive, they think that it was good. So they push that. But for me, like looking from outside, I think that Roger Ver was a Bitcoin Jesus once, and now he's the enemy of Bitcoin, because he tried to, to force people to do the thing that he wants to do, right? So I don't like that, that type of, you know, I don't like hard forks.

1866
02:14:09,004 --> 02:14:38,004
Exactly. I think the part of the problem with Bitcoin Cash was that Roger had Bitcoin.com and he didn't want, he was like saying it was the real Bitcoin, which is tough, because there is no definition. Like, like, what if he just said, like, if it had had a new name, would that have helped or no?

1867
02:14:39,004 --> 02:15:06,004
No, because, like, the difference between soft forks and hard forks is that you have to convince everyone to update, to upgrade the software, and to upgrade to your version of the software that you like, that you promoted. So it's kind of a, now we have a leader, now Roger Ver is the leader. So I don't like that narrative. I like your narrative, like you're not the leader, even if you're, even if your BIP comes out, like in activated, and you're not the leader, right?

1868
02:15:06,004 --> 02:15:35,004
It's a soft fork. You don't need to convince all of the players, all of the nodes to upgrade their, their nodes. So, like, they're going to continue to receive blocks and everything's going to be well. So I don't like the, you know, forcing everyone to upgrade. That's, that's what the difference between soft fork and hard fork. So Bip200, it's okay. That's why my narrative here in Brazil, I try to pick the narrative of the prepper narrative, like, I want to be prepper for what's going to come, right?

1869
02:15:36,004 --> 02:15:41,004
If you saw a storm, I'm going to get my umbrella, you know, I'm going to prepare for the storm.

1870
02:15:41,004 --> 02:15:47,004
But what I mean by that is that if miners decide to defend the soft fork with a miner-activated soft fork,

1871
02:15:47,004 --> 02:15:52,004
there's nothing that the users can do, right?

1872
02:15:52,318 --> 02:15:58,618
And users, the only thing that the users can do is not use Drivechains at all, that's the

1873
02:15:58,618 --> 02:16:00,378
only thing, right?

1874
02:16:00,378 --> 02:16:04,658
That's the only defense against Drivechains because, okay, I don't want to use StepRoot,

1875
02:16:04,658 --> 02:16:05,658
don't use StepRoot.

1876
02:16:05,658 --> 02:16:07,698
I don't want to use SegWit, don't use SegWit.

1877
02:16:07,698 --> 02:16:10,138
I don't want to use Drivechain, just don't use Drivechains.

1878
02:16:10,138 --> 02:16:15,458
It's just an option, you know, just an option for you can spend your Bitcoins.

1879
02:16:15,458 --> 02:16:20,318
But, you know, I don't like the narrative of hard forks.

1880
02:16:20,358 --> 02:16:21,438
you have to...

1881
02:16:21,438 --> 02:16:23,818
It's not an opt -in, it's a force option.

1882
02:16:24,198 --> 02:16:26,698
that's what think.

1883
02:16:26,718 --> 02:16:29,758
Actually, a lot of people are arguing it the other way around, by the way.

1884
02:16:29,938 --> 02:16:33,566
Because if everyone decides to activate a soft fork,

1885
02:16:33,926 --> 02:16:38,906
if you don't have it, you don't really have a choice, you are just dragged along by the

1886
02:16:38,906 --> 02:16:39,966
tyranny of the majority.

1887
02:16:41,466 --> 02:16:46,786
hard forks actually require you to consciously opt in

1888
02:16:46,814 --> 02:16:54,414
to be part of the new network. So it's interesting that people disagree even on this matter. I have

1889
02:16:54,414 --> 02:17:01,534
many times heard the argument made that hardworks are actually more decentralized and more peer-to-peer

1890
02:17:01,534 --> 02:17:09,854
or whatever way to do updates because it's not like you have a bunch of devs who release a new

1891
02:17:09,854 --> 02:17:14,814
client and you know, people will drag you with them even if you

1892
02:17:14,814 --> 02:17:16,654
you don't want be dragged with them.

1893
02:17:17,334 --> 02:17:22,294
I'm not sure because the improve of work and the way Bitcoin works, kind of have to be

1894
02:17:22,294 --> 02:17:24,314
with the hard an -anivates.

1895
02:17:25,474 --> 02:17:25,994
But, yeah.

1896
02:17:27,564 --> 02:17:32,684
But I disagree with you on the decentralized part because hard forks kind of changes the policy of the network.

1897
02:17:33,164 --> 02:17:35,804
That's the thing, like nodes are going to reject each other.

1898
02:17:35,804 --> 02:17:42,684
But if you don't update the software, then you can't be on the new network.

1899
02:17:42,684 --> 02:17:45,004
That's the point. So you have a choice.

1900
02:17:45,404 --> 02:17:47,804
But of course, with proof of work, you don't really have a choice.

1901
02:17:47,804 --> 02:17:58,123
So if 90% of the network goes on, does a hard fork, then you are kind of either go with them or you go somewhere else.

1902
02:18:01,963 --> 02:18:04,644
Yeah, but that's how soft fork works, right?

1903
02:18:05,323 --> 02:18:15,164
Even if you don't agree with SegWit, for example, you don't run the node, you run the node like, I forgot the version that SegWit was activated.

1904
02:18:15,164 --> 02:18:18,443
But if you run a node before that, that's OK.

1905
02:18:18,764 --> 02:18:22,603
Like the thing that you're going to see that you don't understand what's going on there.

1906
02:18:22,843 --> 02:18:29,684
And if you try to spend a SegWit, miners are going to enforce the rule and going to reject the transactions.

1907
02:18:30,123 --> 02:18:38,443
So if you try to spend the drivechain address, miners are going to reject that because they are enforcing the rule.

1908
02:18:38,684 --> 02:18:50,684
Don't you see the contradiction from your point of view and your sovereignty that you are actually have a choice, a decision over which network to participate in?

1909
02:18:50,684 --> 02:18:52,764
With a soft fork, you absolutely have no choice.

1910
02:18:52,764 --> 02:18:55,323
If a soft fork is activated, then you are dragged along.

1911
02:18:55,323 --> 02:18:56,363
It's like democracy.

1912
02:18:56,843 --> 02:18:58,443
You can have a minority opinion.

1913
02:18:58,443 --> 02:18:59,483
Nobody gives a shit.

1914
02:19:02,443 --> 02:19:03,164
I agree with that.

1915
02:19:03,884 --> 02:19:11,644
If you don't agree with the soft fork, you kind of have to do a hard fork, you know.

1916
02:19:11,884 --> 02:19:15,723
So that's the nature of Bitcoin.

1917
02:19:18,764 --> 02:19:19,804
You don't control Bitcoin.

1918
02:19:20,044 --> 02:19:26,843
So if the majority of the users, miners decides to create an opt-in, it's opt-in.

1919
02:19:26,843 --> 02:19:30,924
You don't need to enforce that rule if you don't like the rule.

1920
02:19:31,164 --> 02:19:34,924
If I don't like SegWit, if I don't like Taproot, I can deactivate that on my node.

1921
02:19:34,924 --> 02:19:38,603
But it's a meaningless thing if you enforce or don't enforce a rule.

1922
02:19:38,603 --> 02:19:39,804
It's completely meaningless.

1923
02:19:39,804 --> 02:19:44,363
If a soft fork activates, then you are bound by that rule, whether you like it or not.

1924
02:19:44,363 --> 02:19:49,723
That's the point of the people that are saying that soft forks are actually evil.

1925
02:19:49,723 --> 02:19:53,884
Some people are saying that soft forks are evil and we should only upgrade by hard forks.

1926
02:19:53,884 --> 02:19:55,404
I'm not one of those people, by the way.

1927
02:19:55,483 --> 02:20:00,524
I'm just saying that there is a point of view of looking at this that is just in a direct

1928
02:20:00,524 --> 02:20:02,044
contradiction of what you are saying.

1929
02:20:02,843 --> 02:20:10,123
But do you think that if you only have a hard fork, if soft fork doesn't exist, the hard

1930
02:20:10,123 --> 02:20:13,963
fork would impose a narrative and now we have leaders?

1931
02:20:14,713 --> 02:20:28,713
Because soft fork is everything is opt-in. If for some reason all the users decide to impose a soft fork that is malicious and you don't agree with the soft fork, nothing is going to happen with the node, right?

1932
02:20:28,713 --> 02:20:38,713
No, that's the opposite. I'm telling you, you are absolutely wrong about that. If people decide to do a hard fork that you don't agree with and you don't update, then nothing will happen to your node.

1933
02:20:38,713 --> 02:20:48,713
But if they decide to do a malicious soft fork, for example, like burn certain coins forever and you don't actually agree with it, there is nothing you can do.

1934
02:20:48,713 --> 02:21:02,713
You are basically dragged along with the majority decision. You don't get to make your own decision. That's the entire point. That's the argument that the hard fork fanatics or fans make.

1935
02:21:08,713 --> 02:21:32,713
I don't think it's that important really. I think we have to draw a distinction. The distinction between hard and soft fork has been played out.

1936
02:21:32,713 --> 02:21:46,713
It's no longer useful. This is one of the problems with doing SegWit as a soft fork. I think it confused everyone forever.

1937
02:21:46,713 --> 02:22:02,713
But I think just having two options is not good because things get tricked into fitting into one of the two buckets, one of the two funnels, and it's just not helpful.

1938
02:22:02,713 --> 02:22:16,713
But I think it's a hard fork if everyone has to update, which basically will never happen. Don't you think it's different because we got onto this topic by discussing whether or not Bitcoin Cash was a good thing?

1939
02:22:16,713 --> 02:22:34,713
I'm against hard forks, but I do think being pro-competition is more important. And if you are just going to launch your own thing, doing the airdrop to all Bitcoiners, that's pretty nice for Bitcoiners.

1940
02:22:34,713 --> 02:22:55,713
I think the one thing that is worth taking a note of in the whole Bitcoin Cash fork drama is that roughly the same event, I know they are not exactly the same events, but roughly the same event, this separation, has been celebrated as a day of independence by both Bitcoiners and both Bitcoin Cashers.

1941
02:22:55,713 --> 02:23:12,713
So Bitcoin Cashers feel like they have been liberated from the majority. They don't actually think it's a majority. They think it's a small minority, an intolerant small minority that has taken everyone hostage and forced their will on them.

1942
02:23:12,713 --> 02:23:30,713
That's actually what they think. And they think that the hard fork actually liberated them and now they can be free. And the narrative in the small block camp is that they have been freed from the corporate interests that try to take over Bitcoin.

1943
02:23:30,713 --> 02:23:38,713
So both of the camps think that this has been their fight to independence and they won. It's pretty funny.

1944
02:23:43,713 --> 02:23:49,713
Well, I had another question to challenge you a little bit on, Paul, if I can.

1945
02:23:49,713 --> 02:23:50,713
Yeah, sure.

1946
02:23:51,713 --> 02:24:06,713
Well, so one of the things Peter Todd said about kind of dilution of fees actually is something I think is real because fees aren't this linear, you don't capture fees linearly.

1947
02:24:06,713 --> 02:24:22,713
So like fees rise exponentially due to restricted space. And so if you do always have a relief valve for those fees, the higher fees, you'll actually overall collect fewer fees, even if you have far more transactions.

1948
02:24:22,713 --> 02:24:26,713
So if your fees are, yeah, what's the lowest fee?

1949
02:24:26,713 --> 02:24:27,713
Yeah, of course.

1950
02:24:27,713 --> 02:24:32,713
8 cents forever as opposed to $2, $3. You got to make a lot more transactions.

1951
02:24:33,713 --> 02:24:46,713
The logic requires that it be the case that drivechain be such a good fee offload valve thing that it reduces the L1 fee rate.

1952
02:24:47,713 --> 02:24:57,713
But the thing is, how can that be the case? Like imagine a parallel world where there are no, there's no such substitute.

1953
02:24:57,713 --> 02:25:05,713
Then that means that the existing L2s are not serving as many people. By definition, we're not having as many transactions on Bitcoin.

1954
02:25:05,713 --> 02:25:13,713
So that's only possible in a world where drivechain is very necessary. Only in the world where drivechain is necessary can it bring the L1 fees down.

1955
02:25:13,713 --> 02:25:25,713
If there's something where people want the drivechain like thing and they can't get it, then that means that the end user is going to prefer to ditch that coin and purchase a drivechain enabled coin.

1956
02:25:28,713 --> 02:25:32,713
It is interesting, like the fees are still high, even though like...

1957
02:25:33,713 --> 02:25:37,713
Yeah, there's lightning, there's light coin, there's custodial, there's liquid.

1958
02:25:37,713 --> 02:25:44,713
So those things should either all push the L1 fee rate down the same as would the DC valve.

1959
02:25:46,713 --> 02:25:55,713
Or if they don't do that, then it just means that people really hate the existing thing of L2s in comparison to what they would like.

1960
02:25:56,713 --> 02:26:04,713
So it's kind of like the L1 fee rates are already low today.

1961
02:26:05,713 --> 02:26:15,713
Well, I think what drivechains would have done better than lightning, lightning meant to tackle, I think the developers focused on a problem that maybe wasn't there yet.

1962
02:26:16,713 --> 02:26:20,713
Users are not dead set on low fees yet.

1963
02:26:22,713 --> 02:26:25,713
Because obviously they're still using higher fees.

1964
02:26:26,713 --> 02:26:35,713
A free market might have been something more like Zcash would have succeeded versus instantaneous low fees.

1965
02:26:37,713 --> 02:26:42,713
Right, because when you say coin joins probably brings in more fees than lightning today.

1966
02:26:45,713 --> 02:26:47,713
Yeah, probably. To L1, yeah.

1967
02:26:50,713 --> 02:26:52,713
I have a question to Moon Sattler if I can.

1968
02:26:57,713 --> 02:27:02,713
Moon, how can you prevent a soft fork if it's already activated?

1969
02:27:05,713 --> 02:27:06,713
Please say it again.

1970
02:27:08,713 --> 02:27:14,713
How can you prevent a soft fork if there is a soft fork, like for example Taproot, how can you prevent that now?

1971
02:27:15,713 --> 02:27:16,713
Can you?

1972
02:27:18,713 --> 02:27:25,713
I don't understand the word you are saying there. I understand soft fork and Taproot and everything else, but what do you want with the soft fork?

1973
02:27:26,713 --> 02:27:29,713
When a software is activated, how can you deactivate it?

1974
02:27:30,713 --> 02:27:32,713
Ah, how can you deactivate it, yeah.

1975
02:27:33,713 --> 02:27:45,713
Let's assume your example, we activated a malicious soft fork and everyone, okay, the majority of the users decided to enforce that, the miners agree and now there is a malicious soft fork there.

1976
02:27:46,713 --> 02:27:48,713
How can you prevent that in the future or Bitcoin will be broken forever?

1977
02:27:49,713 --> 02:27:55,713
Yeah, you can, so usually you can very easily disable soft forks.

1978
02:27:56,713 --> 02:28:05,713
Most of the time we do soft forks in a way that we restrict the rules, previously undefined behaviors are restricted for a specific purpose,

1979
02:28:06,713 --> 02:28:14,713
and this can be a result of codes that do nothing for now and stuff like that, and then you can just further restrict them to do nothing.

1980
02:28:15,713 --> 02:28:23,713
Like you could actually create a soft fork change that basically makes Taproot transactions invalid,

1981
02:28:24,713 --> 02:28:38,713
or if OpenOp4 would be repurposed for CheckTemplateVerified, then you could further restrict that basically no hash is accepted, it's always invalid,

1982
02:28:39,713 --> 02:28:43,713
and that basically disables the usability of CTV if there is some problem.

1983
02:28:44,713 --> 02:28:50,713
So you usually can restrict things to unusability, that's how you soft fork out a soft fork.

1984
02:28:52,713 --> 02:28:56,713
And do you think deactivation using soft forks are better than hard forks?

1985
02:28:57,713 --> 02:28:59,713
I think technically yes.

1986
02:29:00,713 --> 02:29:05,713
So it's like probably a hundred times easier to coordinate soft forks,

1987
02:29:06,713 --> 02:29:13,713
and it also probably gives people like more safety if you can,

1988
02:29:14,713 --> 02:29:20,713
like let's say you are an economically significant node and you are not like mentally ill,

1989
02:29:21,713 --> 02:29:28,713
then you would probably just run both versions, and if they disagree you don't accept payments until you know what the hell is happening, right?

1990
02:29:29,713 --> 02:29:36,713
So you have this ability that you can just run the old software just in case the new software has some bugs in it,

1991
02:29:37,713 --> 02:29:41,713
and other users can be lazy in updating and see if anything breaks,

1992
02:29:42,713 --> 02:29:48,713
and Paul has talked about it a lot and I think he's largely right that soft forks actually protect the users,

1993
02:29:48,713 --> 02:29:55,713
especially if they are not taught about this, everyone has to update in lockstep,

1994
02:29:56,713 --> 02:30:00,713
like we are in the military or something, you know, whatever.

1995
02:30:01,713 --> 02:30:02,713
Miners have to enforce it, right?

1996
02:30:03,713 --> 02:30:06,713
Otherwise they produce the blocks, right?

1997
02:30:07,713 --> 02:30:12,713
So if miners decide to defend a BIP, they should defend the BIP, right?

1998
02:30:13,713 --> 02:30:15,713
Because they are going to produce the blocks, they are going to enforce the blocks.

1999
02:30:15,713 --> 02:30:22,713
Yeah, so if the miners don't enforce the soft fork, generally they risk that they are making an invalid block.

2000
02:30:23,713 --> 02:30:24,713
Of course there could be ways around this.

2001
02:30:25,713 --> 02:30:26,713
Let's take drivechains for an example.

2002
02:30:27,713 --> 02:30:33,713
Let's say a miner does not want, for whatever reason, they don't want to be thought of as custodians or whatever,

2003
02:30:34,713 --> 02:30:37,713
and they don't want to actually enforce the drivechain rules,

2004
02:30:37,713 --> 02:30:44,713
they have to do something, they have to acknowledge the existence of drivechains in a way,

2005
02:30:45,713 --> 02:30:51,713
with some custom software that makes sure that they are not making an invalid block under drivechain rules

2006
02:30:52,713 --> 02:30:53,713
or they get foiled off from the network.

2007
02:30:54,713 --> 02:30:56,713
So they have to do something.

2008
02:30:57,713 --> 02:31:04,713
I kind of have a vision on how drivechains could be enforced as a soft fork.

2009
02:31:04,713 --> 02:31:11,713
I think it would be the first miner activates soft fork, miners are going to enforce that rule,

2010
02:31:12,713 --> 02:31:16,713
and then users are going to come and try to do peg-ins,

2011
02:31:17,713 --> 02:31:21,713
and they go, oh, that's a good thing that I could do with my Satoshi, so let's do that.

2012
02:31:22,713 --> 02:31:24,713
And then users are going to enforce the rule as well,

2013
02:31:25,713 --> 02:31:27,713
so I think it's going to be from miners to users this time,

2014
02:31:28,713 --> 02:31:30,713
because I think it's good for the miners,

2015
02:31:31,713 --> 02:31:35,713
and they will activate it, there's no harm for Bitcoin,

2016
02:31:36,713 --> 02:31:39,713
and then they probably activate a drivechain, a sidechain,

2017
02:31:40,713 --> 02:31:45,713
and then users will come, they will enforce the rule because they're using the rule, right?

2018
02:31:46,713 --> 02:31:48,713
I think it's going to be bottom-up this time.

2019
02:31:49,713 --> 02:31:53,713
Yes, so I kind of think that in case of drivechains,

2020
02:31:54,713 --> 02:31:56,713
it should be a miner-activated soft fork specifically,

2021
02:31:57,713 --> 02:32:04,713
but the surrounding narratives with soft forks and how they all should be user-activated

2022
02:32:05,713 --> 02:32:10,713
are splitting the community in a pretty violent way to such a degree

2023
02:32:11,713 --> 02:32:17,713
that CTV has been opposed just on the grounds of the activation parameter.

2024
02:32:18,713 --> 02:32:20,713
Nobody actually gave a flying fuck what CTV was actually doing,

2025
02:32:20,713 --> 02:32:27,713
all the drama, all the people getting up in arms against it

2026
02:32:28,713 --> 02:32:31,713
and grabbing torches and pitchforks and everything,

2027
02:32:32,713 --> 02:32:39,713
all just happened over informally suggested activation parameters.

2028
02:32:40,713 --> 02:32:41,713
There was not even code.

2029
02:32:42,713 --> 02:32:46,713
Jeremy just talked about him releasing an activation client.

2030
02:32:47,713 --> 02:32:49,713
There was no code, nothing actually concretely proposed.

2031
02:32:50,713 --> 02:32:54,713
He suggested that CTV would be activated with a speedy trial,

2032
02:32:55,713 --> 02:32:57,713
same as taproot by the way, which was widely celebrated,

2033
02:32:58,713 --> 02:33:00,713
and then basically all hell broke loose,

2034
02:33:01,713 --> 02:33:05,713
and that is like incomparable to what we are talking about here,

2035
02:33:06,713 --> 02:33:10,713
like miners just activating without user consensus, anything.

2036
02:33:11,713 --> 02:33:14,713
So that's a whole different set of shitstorm.

2037
02:33:15,713 --> 02:33:18,713
Yeah, I do agree with you that it's going to be very hard

2038
02:33:19,713 --> 02:33:21,713
if miners decide to do their own soft fork,

2039
02:33:22,713 --> 02:33:25,713
but I think it's the only way,

2040
02:33:26,713 --> 02:33:28,713
because as we are talking about,

2041
02:33:29,713 --> 02:33:32,713
the narrative is kind of against everyone that defends these drivechains

2042
02:33:33,713 --> 02:33:34,713
because the status quo doesn't want to change.

2043
02:33:35,713 --> 02:33:41,713
The gatekeepers like Mike Peter Todd is going to scream about it,

2044
02:33:42,713 --> 02:33:50,713
and I really do think that miners will kind of have to activate it,

2045
02:33:51,713 --> 02:33:54,713
otherwise I don't see any way that we could,

2046
02:33:55,713 --> 02:33:56,713
probably I'm wrong,

2047
02:33:57,713 --> 02:34:02,713
but I don't see any way that we can activate drivechains in other ways.

2048
02:34:03,713 --> 02:34:06,713
Yeah, I mean activation is like,

2049
02:34:07,713 --> 02:34:11,713
it's like when you are opening the gates of an asylum

2050
02:34:12,713 --> 02:34:15,713
and letting all the crazies on the streets for a few days,

2051
02:34:16,713 --> 02:34:18,713
that's normal activation talk,

2052
02:34:19,713 --> 02:34:23,713
and if you are just suggesting that miners should activate anything

2053
02:34:24,713 --> 02:34:27,713
without the user node enforcing

2054
02:34:28,713 --> 02:34:33,713
or having as Adam Beck said, technical consensus first,

2055
02:34:33,713 --> 02:34:37,713
before even such a thing is suggested among core developers,

2056
02:34:38,713 --> 02:34:40,713
that's just straight up heresy,

2057
02:34:41,713 --> 02:34:43,713
and that will really get people up in arms,

2058
02:34:44,713 --> 02:34:48,713
and they will probably try to reenact the UASF of 2017,

2059
02:34:49,713 --> 02:34:53,713
and they are going to try to rally up a UASF movement

2060
02:34:54,713 --> 02:34:57,713
if you seriously go along with this,

2061
02:34:58,713 --> 02:35:01,713
maybe even release a client that will do this,

2062
02:35:02,713 --> 02:35:06,713
and I mean it would be fabulous and hilarious

2063
02:35:07,713 --> 02:35:10,713
and very sad to watch it unfold, but yeah.

2064
02:35:11,713 --> 02:35:15,713
But if miners decide to defend with all their hearts,

2065
02:35:16,713 --> 02:35:20,713
like there's nothing you can do doing a user reject soft fork,

2066
02:35:21,713 --> 02:35:24,713
you have to convince all the other players.

2067
02:35:25,713 --> 02:35:28,713
The UASF is a hard fork,

2068
02:35:28,713 --> 02:35:31,713
because it breaks the longest chain rule.

2069
02:35:32,713 --> 02:35:35,713
Only if it does not end up being the heaviest chain,

2070
02:35:36,713 --> 02:35:38,713
so it depends on who is winning.

2071
02:35:39,713 --> 02:35:42,713
If the miners are doing it and the users are determined

2072
02:35:43,713 --> 02:35:45,713
and they both pull the trigger,

2073
02:35:46,713 --> 02:35:48,713
then what will happen will be exactly the same.

2074
02:35:49,713 --> 02:35:52,713
Miner activates a fork, the miners are already there,

2075
02:35:53,713 --> 02:35:55,713
they already have the majority of hashing power,

2076
02:35:55,713 --> 02:35:58,713
they have to convince the miners that they are doing the wrong thing.

2077
02:35:59,713 --> 02:36:01,713
No, no, no, no, wait.

2078
02:36:02,713 --> 02:36:04,713
I don't think that's how it works.

2079
02:36:05,713 --> 02:36:09,713
So kind of how it works is that the users would get really riled up

2080
02:36:10,713 --> 02:36:11,713
about something.

2081
02:36:12,713 --> 02:36:14,713
It doesn't really matter if it's a UASF or a URSF,

2082
02:36:15,713 --> 02:36:16,713
it doesn't matter, it's the same thing.

2083
02:36:17,713 --> 02:36:19,713
So basically the users are signaling on social media

2084
02:36:20,713 --> 02:36:21,713
or whatever that they can do,

2085
02:36:21,713 --> 02:36:24,713
because they have no severe resistance way to signal

2086
02:36:25,713 --> 02:36:28,713
on the Bitcoin network whatsoever, so that's just complete garbage.

2087
02:36:29,713 --> 02:36:32,713
The idea of node runners enforcing things on their own

2088
02:36:33,713 --> 02:36:35,713
is probably completely meaningless,

2089
02:36:36,713 --> 02:36:38,713
aside from economically truly significant nodes.

2090
02:36:39,713 --> 02:36:41,713
But like I said, economically truly significant nodes

2091
02:36:42,713 --> 02:36:45,713
can just run all versions and see if their nodes disagree

2092
02:36:46,713 --> 02:36:48,713
and whatever, so that's a different story.

2093
02:36:48,713 --> 02:36:51,713
But let's say the users are convincing all the major exchanges

2094
02:36:52,713 --> 02:36:56,713
and everyone that they will simply not value that chain, that coin.

2095
02:36:57,713 --> 02:36:59,713
They will not buy the chain and the coin

2096
02:37:00,713 --> 02:37:03,713
that would fall under the new rules.

2097
02:37:04,713 --> 02:37:07,713
And if they are successful in making enough noise,

2098
02:37:08,713 --> 02:37:10,713
and like I said, this can be done by an intelligent minority,

2099
02:37:11,713 --> 02:37:12,713
like a very small minority.

2100
02:37:13,713 --> 02:37:15,713
There are millions, maybe tens of millions of Bitcoiners out there,

2101
02:37:15,713 --> 02:37:18,713
and there are like 100 to 1,000 people

2102
02:37:19,713 --> 02:37:20,713
who really make the noise on Twitter.

2103
02:37:21,713 --> 02:37:25,713
And if these 100 to 1,000 people manage to convince everyone,

2104
02:37:26,713 --> 02:37:29,713
all the major exchanges, all the major payment providers

2105
02:37:30,713 --> 02:37:33,713
to back out, basically, or turn against a change

2106
02:37:34,713 --> 02:37:36,713
or enforce a software change,

2107
02:37:37,713 --> 02:37:39,713
then those economically significant nodes decide

2108
02:37:40,713 --> 02:37:42,713
who gets paid and who does not get paid

2109
02:37:43,713 --> 02:37:44,713
when the miners produce a block.

2110
02:37:45,713 --> 02:37:47,713
These nodes reject the miners' block.

2111
02:37:48,713 --> 02:37:51,713
The miners are basically mining a shitcoin.

2112
02:37:52,713 --> 02:37:54,713
And so this is the theory behind how the users

2113
02:37:55,713 --> 02:37:57,713
can actually indirectly enforce the rules

2114
02:37:58,713 --> 02:38:02,713
by simply valuing the rule set that they want Bitcoin to be.

2115
02:38:03,713 --> 02:38:06,713
But what will happen is if miners decide to defend it,

2116
02:38:07,713 --> 02:38:10,713
even if the economic nodes decide to defend the other side,

2117
02:38:11,713 --> 02:38:14,713
what will happen is the miner will mine other chains,

2118
02:38:15,713 --> 02:38:17,713
the main chain, let's say.

2119
02:38:18,713 --> 02:38:19,713
It's not going to be like a shitcoin

2120
02:38:20,713 --> 02:38:21,713
because they decide to defend that.

2121
02:38:22,713 --> 02:38:24,713
No, no, it will be a shitcoin because they can't sell it.

2122
02:38:25,713 --> 02:38:26,713
Like literally, if you can't sell it to an exchange,

2123
02:38:27,713 --> 02:38:29,713
it's a worthless shitcoin and the miners will not even get that.

2124
02:38:30,713 --> 02:38:31,713
They won't even activate.

2125
02:38:32,713 --> 02:38:33,713
So if they get just a whiff of this,

2126
02:38:34,713 --> 02:38:35,713
that this is going to happen, they are not going to activate it.

2127
02:38:36,713 --> 02:38:37,713
Yeah, I agree with you.

2128
02:38:38,713 --> 02:38:41,713
But let's say that they are mining the right Bitcoin,

2129
02:38:42,713 --> 02:38:44,713
in this example, with the drivechain, right?

2130
02:38:45,713 --> 02:38:48,713
And the majority of the users, the economic nodes decided to

2131
02:38:49,713 --> 02:38:50,713
don't agree with that and invalidate blocks,

2132
02:38:51,713 --> 02:38:52,713
but they don't have hash rates on their side.

2133
02:38:53,713 --> 02:38:56,713
So they are going to do transactions,

2134
02:38:57,713 --> 02:38:59,713
propagate to that network, but there's no blocks coming in.

2135
02:39:00,713 --> 02:39:03,713
Right? So they're going to be like a huge plot to the miners.

2136
02:39:04,713 --> 02:39:07,713
Okay, let's switch our hash power to the other network

2137
02:39:08,713 --> 02:39:09,713
because there is a lot of Bitcoin that I can mine there.

2138
02:39:10,713 --> 02:39:11,713
That's the whole point of that.

2139
02:39:11,713 --> 02:39:15,713
This was the whole mistake that the big blockers made in 2017.

2140
02:39:16,713 --> 02:39:17,713
This is what you are saying.

2141
02:39:18,713 --> 02:39:19,713
They told the same thing.

2142
02:39:20,713 --> 02:39:21,713
They told that the users cannot go against the miners.

2143
02:39:22,713 --> 02:39:23,713
If the miners really decide to do something,

2144
02:39:24,713 --> 02:39:26,713
then they get to do bad.

2145
02:39:27,713 --> 02:39:30,713
No, the hard fork side is such an uphill battle

2146
02:39:31,713 --> 02:39:33,713
and such an impossible thing to win against the market

2147
02:39:34,713 --> 02:39:35,713
that actually values something.

2148
02:39:36,713 --> 02:39:39,713
Because Bitcoin is all gathered around a certain set of values.

2149
02:39:40,713 --> 02:39:41,713
In the end.

2150
02:39:42,713 --> 02:39:43,713
And if the miners try to go against that,

2151
02:39:44,713 --> 02:39:45,713
it's impossible and they won't even try.

2152
02:39:46,713 --> 02:39:47,713
I'm telling you, at least that's the idea.

2153
02:39:48,713 --> 02:39:50,713
The whole USF thing, you could say it was untried,

2154
02:39:51,713 --> 02:39:55,713
but it's very likely that it works perfectly well as a bluff.

2155
02:39:56,713 --> 02:39:59,713
And then the next time this happens,

2156
02:40:00,713 --> 02:40:02,713
it's a bluff because we did not actually...

2157
02:40:03,713 --> 02:40:05,713
It was a bluff.

2158
02:40:05,713 --> 02:40:06,713
It was a bluff.

2159
02:40:07,713 --> 02:40:10,713
But this time, if users decide to bluff,

2160
02:40:11,713 --> 02:40:12,713
we're not going to accept blocks.

2161
02:40:13,713 --> 02:40:15,713
We're going to invalidate blocks with drivechain rules.

2162
02:40:16,909 --> 02:40:28,909
It's the same thing that you're in a battle, you're on the top of a hill, and the miners on the top of the hill, they have a better position to battle and the user rejects the fork.

2163
02:40:28,909 --> 02:40:37,909
No, no, no, no. The exchanges are the top of the food chain, man. The miners cannot mine a block that they can sell the coinbase for. It's impossible for them.

2164
02:40:37,909 --> 02:40:46,909
Every miner would leave that pool that does that. It's not possible for them to go against the market in such a way. They can't mine invalid blocks.

2165
02:40:46,909 --> 02:40:48,909
But they are basically hard forked.

2166
02:40:48,909 --> 02:40:54,909
Yeah, but then we have a trypto. A tryptonomics hand has been up for a while.

2167
02:40:55,909 --> 02:41:10,909
Yeah, but my point here, Moon, is the thing that if a minority of users decide to reject the block, they're going to fork themselves, right?

2168
02:41:11,909 --> 02:41:29,909
Because, look, if miners decide to defend it, miners will upgrade their nodes to the BIP300 and BIP301. The majority of the nodes that decided to stay as they are, they're going to also validate their blocks.

2169
02:41:29,909 --> 02:41:39,909
You are right. If Lou Dasher and Peter Todd and a few other people decide to reject these blocks, then they are going to be left alone and basically die.

2170
02:41:40,909 --> 02:41:41,909
They're going to have to sink more.

2171
02:41:41,909 --> 02:41:54,909
That's not the USF or USF2. USF or USF2 is actually convincing the economically significant nodes that pay the miners in the end that they should enforce a certain rule set.

2172
02:41:54,909 --> 02:41:58,909
If they do, then the miners will lose. They will lose before the battle even begins.

2173
02:41:58,909 --> 02:42:15,909
It all depends on if the intolerant minority can raise enough noise in social media to convince these payment providers and exchanges and other truly significant nodes to basically go with the soft fork side.

2174
02:42:15,909 --> 02:42:17,909
Then the hard fork side loses.

2175
02:42:18,909 --> 02:42:27,909
Otherwise, the miners obviously win. You can't piece against the hash rate as a node. That's impossible.

2176
02:42:29,909 --> 02:42:37,909
Yeah, so that was my point. If miners actually defend it, they will defend. A majority of people will decide to complain about it.

2177
02:42:37,909 --> 02:42:44,909
Yeah, I know, but don't you guys mostly agree? I mean, what are you even disagreeing about? What about the tryptonomic in their hand?

2178
02:42:47,909 --> 02:43:01,909
Hello, how's everybody? Really cool discussion. So I am about to assist with launching a mining operation.

2179
02:43:02,909 --> 02:43:13,909
I came across a mutual friend's friend who owns a wealth management company. He wants to offer Bitcoin to his customers in a non-American market.

2180
02:43:13,909 --> 02:43:26,909
But he also wants to set up a mining operation. So they've gathered all the funds and it looks like they're going to be setting up, starting initially with 15 or 20 mining machines.

2181
02:43:26,909 --> 02:43:41,909
So, of course, I'll be recommending soft forking onto BIP300-301 and utilizing drivechains and configuring the nodes that way.

2182
02:43:41,909 --> 02:43:51,909
But are there any more maybe recommendations or suggestions on the configuration besides that and maybe any mining machine recommendations?

2183
02:43:52,909 --> 02:44:09,909
Also, maybe if you guys have any comments on a developer known as Gummo who says he has built a supercomputer and mines Bitcoin worth $7.5 billion. So I'm really curious about that as well.

2184
02:44:09,909 --> 02:44:25,909
Well, you know, I definitely, I mean, can you be more specific about what is the size of this mining operation?

2185
02:44:26,909 --> 02:44:39,909
Yeah, they want to start out with between 15 and 20 machines and I think the machines they're looking at are around $1,300. So, you know, pretty small.

2186
02:44:40,909 --> 02:44:50,909
Eventually, they're looking at multiplying that like 10 times and then just continuing to scale that as long as they see growth.

2187
02:44:51,909 --> 02:45:11,909
But I'm looking at your BIP and looking at soft forking and configuring the nodes this way. So, do you recommend anything else besides soft forking onto BIP300-301?

2188
02:45:11,909 --> 02:45:28,909
I would point it at Luxor. They care about maximizing the economic return of there and they're unpersuaded by the death cult. So I would go with Luxor as the pool. That's what I would do.

2189
02:45:29,909 --> 02:45:32,909
Okay. Luxor.

2190
02:45:35,909 --> 02:45:39,909
Yep, that's what I would do. That's the mining pool I would do.

2191
02:45:41,909 --> 02:46:06,909
Okay. So the two of you were quarreling about miner activated, user activated, etc. If the users fight the miners, they are breaking the heaviest chain rule. So they are. It's a very nuanced thing, but they are hard forking in that case.

2192
02:46:06,909 --> 02:46:18,909
The miners need to sell the coins. So the miners have no agency if they really can't sell the coins anywhere, if they mine a block that no one wants. So they need to have the block be wanted.

2193
02:46:18,909 --> 02:46:37,909
The exchange has an enormous short term because they have a huge network effect. So they have a competitive moat. They have liquidity. They have buyers and sellers. That's where the buyer and seller meet. They're like Craigslist. So they have some pretty decent market leverage.

2194
02:46:37,909 --> 02:46:53,909
So probably the exchange is, you know, what if an exchange did a user activated soft fork and it was just Coinbase and Kraken? Would that be enough? Yeah, probably.

2195
02:46:53,909 --> 02:47:16,909
Yeah, but again, they probably don't want to go against what the people want, what they value, what they are willing to pay for. I mean, assuming that the exchange is even care about Bitcoin and not just like getting 99% of the fee revenue from, you know, altcoins and DeFi.

2196
02:47:16,909 --> 02:47:38,909
My guess is at this point, probably, I don't even know if Brian Armstrong wants Bitcoin to succeed. He may just, he got his, he got his B, you know, his billion, he's in the three comma club. And so now he's kind of like, got a bunch of annoying people.

2197
02:47:38,909 --> 02:48:01,909
A lot of people are actually convinced that Brian Armstrong came to outright hate Bitcoin and like would actually do something to see it fail if he could. A lot of people are convinced of that. I'm not sure about this, but apparently he got really disappointed around the block size war and how things are going.

2198
02:48:01,909 --> 02:48:30,909
Well, I mean, he was like working really hard to make Coinbase a success. Sleepless nights, beeper duty, you know, like people have when you do a startup. I've never done this, but there's videos where Brian Armstrong actually talks about it, him and Fred Ursham, because I've been in Bitcoin a long time. So I remember the old videos, but they would complain about like, if the website would go down, they'd have this like beeper that would go off. Young people are like, what the f is a beeper?

2199
02:48:31,909 --> 02:48:54,909
To any young people listening, a beeper is like a cell phone with no screen. I don't know, watch house, watch the show. And it would beep and go off. And so then they'd have like, they would, they would like pass it around. And so then it'd be yours and it went off at 4am. You had to like try and get the site back on quick.

2200
02:48:55,909 --> 02:48:56,909
Site back on.

2201
02:48:58,909 --> 02:49:23,909
Sucks. Anyways, he started and he against all the odds, he succeeded. And yeah, it certainly looks much more. At the time, I really thought that people were trying the small blocker group that I was in. Because I was and still am a small blocker. But I really felt like we were doing it to keep the full node costs down. Like I thought we were doing it for a purpose.

2202
02:49:24,909 --> 02:49:43,909
But now in retrospect, it does seem like it was just like a kind of it turned into an ego thing. And now it just seems totally irrational to me at all. It doesn't seem like there was anyone who actually cared about Bitcoin. Except for a few other few people. So I think mostly

2203
02:49:44,909 --> 02:50:05,909
Now, interestingly, also, you have this where all the large exchanges are trying to create their own little gardens where people can do the small contract things. And they are actually trying to, to have people to use their stable coin and their contract chain and their whatever.

2204
02:50:05,909 --> 02:50:25,909
So they are they are trying to like lock people into their, their, their little universe. And I'm not even sure if they will be interested in any proposal supporting any proposal that actually wants to blow all that up or maybe just even has a chance to blow all that up.

2205
02:50:25,909 --> 02:50:32,909
I just wanted to mention that the world pretty much changed a lot since since that time.

2206
02:50:35,909 --> 02:51:04,909
You're absolutely correct that the exchanges will be, they are the final enemies of Bitcoin in a way because they are the enemy of hyper Bitcoinization. At first they're the strong ally. But then the last thing they want is for everything to happen in the crypto system. And the last thing they want is for every fiat currency and every altcoin to die, because there'll be no more, no more trading of those. So that'll just be over.

2207
02:51:05,909 --> 02:51:11,909
So the exchanges are actually in the long run, huge risk to Bitcoin.

2208
02:51:15,909 --> 02:51:26,909
Yes, but in the extreme short term, they are the guardians of the protocol in the sense that we discussed that that miners simply cannot make a block that that that nodes will not accept.

2209
02:51:27,909 --> 02:51:41,909
Yeah, one intriguing thing is that the miners are the biggest transaction processors at this particular phase. So they are the miners are the ones who actually process like deposits and withdrawals at an exchange.

2210
02:51:42,909 --> 02:51:58,909
So they're not like they're not quite Visa or whatever you want to call it. But but I think that's what Satoshi had in mind was that, well, the incentives will never get out of whack because the people who are actually processing the transactions will be the customers.

2211
02:51:59,909 --> 02:52:12,909
You know, they'll be like the big the big nodes will be like the Visa node. And so the incentives can never get misaligned because the Visa people, they just want to keep maximizing their transaction fee revenue.

2212
02:52:13,909 --> 02:52:28,909
And that means they want to maximize the number of transactions. And that means they're always just in when he says he has that cryptic line that goes, any needed rules can be enforced with this consensus mechanism, or he says something like that, where it kind of makes it seem like hard forks and soft forks will never be a problem and will never be contentious.

2213
02:52:29,909 --> 02:52:47,909
So I think that's what he's referring to. And the weird thing is, is right now it is the exchanges that actually process the deposits and withdrawals, you know, like they are the ones who because that's where most people send and spend their money from and to so.

2214
02:52:48,909 --> 02:53:07,909
And they have for a very long time set a reasonably high fees for withdrawals, of course, because that's not in their business interest to let people go. They actually want them to stay on the exchange and they do everything in their power to lure people into trading.

2215
02:53:08,909 --> 02:53:16,909
You get these alerts that something is doing whatever and then you should do something about it, maybe, wink wink, you know.

2216
02:53:17,909 --> 02:53:32,909
And I also think that miners don't actually process the largest. So probably the transaction volume that happens in centralized exchanges is probably completely failing what is happening on-chain.

2217
02:53:33,909 --> 02:53:35,909
And that's kind of how the centralized exchanges like it.

2218
02:53:37,909 --> 02:54:03,909
John, Paul, I think I shared a post in your space.

2219
02:54:04,909 --> 02:54:18,909
Because I try, as you guys are saying, I try to summarize all the features that all the players of Bitcoin would like and maybe we could have a pitch specific for everyone.

2220
02:54:18,909 --> 02:54:35,909
Because if you want to be a success, to have a success, we need to embrace everyone. So I was wondering if it's a good idea to go through all of them because I think for the users, the good pitch for the users is that it's going to increase.

2221
02:54:36,909 --> 02:54:38,909
I mean we can try, yeah. Let's give it a try. Let's do it.

2222
02:54:39,909 --> 02:54:45,909
Can you share? I don't know how to do that.

2223
02:54:45,909 --> 02:54:54,909
Can you send it, can you post it in the comment in the little bubble in the bottom right? You can comment and I think we can put it in the nest, I think.

2224
02:54:55,909 --> 02:55:02,909
Yeah, share in the space for me. I've already shared I think. Oh yeah, I think you've accepted, right?

2225
02:55:02,909 --> 02:55:18,909
You shared it three times. Well, this has happened to me once because I didn't see, I didn't see that I shared it because I didn't see the nest and I shared something three times.

2226
02:55:19,909 --> 02:55:30,909
Yeah, I shared it three times, I'm sorry. But the first thing is users, like I think for the users it's going to increase usability and functionality, right? Because you can do a lot of things with your Satoshis in the drivechain.

2227
02:55:31,909 --> 02:55:46,909
And it's trustless two-way peg in the sense that you only have to trust miners and potentially low fees, right? Because in the other side on the drivechain it could be like a low fee. And it can scale to planets, to billions.

2228
02:55:46,909 --> 02:56:03,909
Yeah, but I think it's a mistake, this whole miner trust thing, I wish we could fight back on it because I feel like it's a mistake because really we're not trusting them to do anything other than maximize their profits which is really a far less amount of trust than what other people are asking, you know?

2229
02:56:03,909 --> 02:56:12,909
The thing here is compared to tight chains like Liquid, you have to trust the Federation instead of miners, right?

2230
02:56:13,909 --> 02:56:27,909
Well, really though it's like the whole trust thing is kind of different because Liquid, no matter what the context is, they can remove, yeah, I don't know, I guess, I think with Liquid it's not really explained.

2231
02:56:28,909 --> 02:56:35,909
With Liquid it's, I think in all cases you're kind of trusting the fee revenue will be more than the amount taken or something like that, I don't know.

2232
02:56:35,909 --> 02:56:36,909
Yeah, I agree with you.

2233
02:56:37,909 --> 02:56:38,909
I agree with you.

2234
02:56:39,909 --> 02:56:40,909
Okay, we can change that.

2235
02:56:41,909 --> 02:56:52,909
But for core developers, I think we should focus on security updates and reduce soft fork overhead because we can do all the things, all the political battles that we're doing on the first layer, we're going to do in the second layer.

2236
02:56:52,909 --> 02:57:06,909
So I think it's a good pitch for them so you don't need to convince all the other developers of Bitcoin Core, you just have to convince a few miners to activate your BIP and you're good to go and you can test with real satoshis.

2237
02:57:07,909 --> 02:57:08,909
So I think it's a good pitch for them.

2238
02:57:09,909 --> 02:57:16,909
But of course, people like Peter Todd, they like the job they're doing today, they're liking the job they're doing today.

2239
02:57:17,909 --> 02:57:23,909
So I don't know if some of them are going to agree because they're kind of earning a little bit money in that.

2240
02:57:24,909 --> 02:57:26,909
So anyways, what do you think about that?

2241
02:57:27,909 --> 02:57:32,909
Okay, I think it's definitely the case that some people will lose a lot from drivechain.

2242
02:57:33,909 --> 02:57:41,909
I think we should just, I don't know, there's like a conflicts of interest type of a thing where like Peter Todd, he gets flown around the world.

2243
02:57:42,909 --> 02:57:45,909
He gets to just hang out in conferences instead of having like a real job.

2244
02:57:46,909 --> 02:57:49,909
And so it's kind of like, it's all fake.

2245
02:57:50,909 --> 02:57:56,909
So I don't know if anything will convince him, especially the people who have already come out against it, like the three or four.

2246
02:57:57,909 --> 02:57:58,909
I think it's not.

2247
02:57:59,909 --> 02:58:01,909
I think they'll never be convinced.

2248
02:58:02,909 --> 02:58:03,909
So they have to be like fought kind of.

2249
02:58:16,909 --> 02:58:17,909
Yeah.

2250
02:58:17,909 --> 02:58:20,909
So the third one would be like the miners.

2251
02:58:22,909 --> 02:58:25,909
They will have like earning petitions and replied much money.

2252
02:58:25,909 --> 02:58:27,909
They don't even need to look at the layer two.

2253
02:58:27,909 --> 02:58:28,909
Right.

2254
02:58:28,909 --> 02:58:33,909
Only care about layer one and petition solution for mining reward reduction.

2255
02:58:33,909 --> 02:58:34,909
Right.

2256
02:58:34,909 --> 02:58:40,909
Because we don't have like more fees coming in from the blocks.

2257
02:58:40,909 --> 02:58:43,909
They will have fees coming in from the drivechains.

2258
02:58:43,909 --> 02:58:44,909
Drivechains.

2259
02:58:44,909 --> 02:58:45,909
Right.

2260
02:58:45,909 --> 02:58:47,909
So it could be a good pitch for them to earn money.

2261
02:58:47,909 --> 02:58:48,909
Right.

2262
02:58:48,909 --> 02:58:49,909
That's what they want.

2263
02:58:50,909 --> 02:59:02,909
And regarding for the drivechain miners, like the drivechain block producers that you get, that you like to say, it's going to be earning petitions and protect the sidechain rules.

2264
02:59:02,909 --> 02:59:03,909
Right.

2265
02:59:03,909 --> 02:59:04,909
Because they want their own potential.

2266
02:59:04,909 --> 02:59:05,909
So that's the thing.

2267
02:59:06,909 --> 02:59:12,909
And for drivechain developers could be like an opportunity for innovation and real world test environment.

2268
02:59:12,909 --> 02:59:20,909
So there's no need to iterate on the first layer and wait for another soft fork or so.

2269
02:59:20,909 --> 02:59:23,909
So they could have this opportunity for innovations.

2270
02:59:23,909 --> 02:59:30,909
And of course, for entrepreneurs, also opportunity for innovations, provide liquidity, earn fees, earn money.

2271
02:59:30,909 --> 02:59:33,909
So I think it could be like good for everyone.

2272
02:59:33,909 --> 02:59:36,909
Don't you think that's a specific pitch for everyone?

2273
02:59:36,909 --> 02:59:41,909
So you could like take that from a starting point and then.

2274
02:59:41,909 --> 02:59:44,909
Well, I mean, I don't know, because it already is good for everyone.

2275
02:59:44,909 --> 02:59:48,909
And so I don't know where to go from there.

2276
02:59:48,909 --> 02:59:50,909
I mean, it is good for everyone.

2277
02:59:50,909 --> 02:59:51,909
Yeah, it is.

2278
02:59:51,909 --> 02:59:52,909
But we need to pitch that.

2279
02:59:52,909 --> 02:59:53,909
Right.

2280
02:59:53,909 --> 02:59:54,909
I think it's a battle of narratives.

2281
02:59:54,909 --> 02:59:57,909
And, you know, I think that's a problem because it's a good idea.

2282
02:59:57,909 --> 02:59:59,909
I think it's the best idea.

2283
02:59:59,909 --> 03:00:05,909
But we need to pitch them, you know, in order to get more players to defend it.

2284
03:00:05,909 --> 03:00:06,909
You know.

2285
03:00:13,287 --> 03:00:25,447
I was talking with Piotr and he really thinks that it might be too late because people who

2286
03:00:25,447 --> 03:00:29,047
want to do something new, they might just move to like, might have already moved to

2287
03:00:29,047 --> 03:00:36,607
like whatever, some whatever chain they like. So the idea of one, the future of there just

2288
03:00:36,607 --> 03:00:47,086
being one chain, one coin, maybe that just won't happen.

2289
03:00:47,086 --> 03:00:49,086
Maybe there'll just be many coins, there'll be lots of...

2290
03:00:49,086 --> 03:00:51,086
That's impossible in a way that...

2291
03:00:51,086 --> 03:00:53,086
Yeah, I think so.

2292
03:00:53,086 --> 03:00:58,847
No, no. I think it's impossible to have like only one coin because culture difference and

2293
03:00:58,926 --> 03:01:09,007
stuff like that. But there's only one coin that has the most hash power, right? So in that regard,

2294
03:01:09,007 --> 03:01:16,607
that's only be one Bitcoin. That's impossible, right? So if we want to succeed on that realm,

2295
03:01:17,407 --> 03:01:23,886
I think we need to have a good pitch for them. And over time, if we have the best idea that

2296
03:01:23,886 --> 03:01:32,047
could embord everyone, I think that's the way to go. But it's hard. I agree with you. It's kind of hard.

2297
03:01:33,886 --> 03:01:35,967
It's hard to do a perfect pitch for everyone, right?

2298
03:01:38,447 --> 03:01:45,486
I don't think it's the pitch. I think there's conflicts of interest, egos.

2299
03:01:46,367 --> 03:01:53,647
It's too hard for the layperson to understand, so they can't check the expert.

2300
03:01:54,767 --> 03:01:57,806
People don't do their own research. They rely on

2301
03:01:59,246 --> 03:02:07,647
Peter Todd or some oracle. They rely on whoever to do it. And that makes it so that

2302
03:02:09,246 --> 03:02:10,767
it's all based on trust, ironically.

2303
03:02:10,767 --> 03:02:18,926
Yeah, that's crazy. You're true. That's the truth.

2304
03:02:19,886 --> 03:02:39,486
Okay. It's a small set of people that don't trust verify, right?

2305
03:02:41,566 --> 03:02:46,206
The majority of people just trust don't verify. That's the problem.

2306
03:02:46,367 --> 03:02:59,167
Yeah. I think the best explanation and giving the kind of positive narrative or thoughts or

2307
03:02:59,167 --> 03:03:07,247
how you want to call it for drivechains is to compare the function of drivechain with

2308
03:03:07,247 --> 03:03:15,247
the already existing one that actually, you know, how drivechain improves. As I said before,

2309
03:03:15,247 --> 03:03:22,607
I don't know, Miguel, if you were here, but Paul was going through Peter Todd's article and

2310
03:03:25,007 --> 03:03:31,566
the fees that he's complaining about. I said, like, at the moment we have the ordinal

2311
03:03:32,686 --> 03:03:40,686
where you have on L1 so much overload with transactions and the fee rate goes sky high.

2312
03:03:41,486 --> 03:03:48,846
And but again, the miner is getting the fees. So with drivechain, the overload and the fee rate,

2313
03:03:51,247 --> 03:03:56,367
the high fee rate is eliminated through, you know, collecting the same fees or even

2314
03:03:57,167 --> 03:04:06,846
more fees in one transaction that is actually not causing any fee rate to go up. So on L1,

2315
03:04:07,727 --> 03:04:15,007
the fee rate will be cheap for other things to be done or other transactions. So something like

2316
03:04:15,007 --> 03:04:23,007
that, like if we compare, you know, the benefits of drivechain, I think people will better

2317
03:04:23,007 --> 03:04:30,447
understand. And maybe that's a good if you want to say pitch or whatever message or something like

2318
03:04:30,447 --> 03:04:38,126
that. And there is more. I totally disagree, by the way, with the take that first of all,

2319
03:04:38,126 --> 03:04:43,487
that ordinary inscriptions would go to a sidechain, drivechain, whatever.

2320
03:04:44,287 --> 03:04:53,327
There is there is not much chance of that. There is a reason that they value Bitcoin blockchain

2321
03:04:53,327 --> 03:05:00,047
main chain to do this stuff. And they are not doing it on Bitcoin Cash or BSV or whatever

2322
03:05:01,007 --> 03:05:05,007
and more plentiful. So that is not going to happen for multiple reasons.

2323
03:05:05,646 --> 03:05:12,526
So what they value is the identity, the replication of that of the block space, blockchain,

2324
03:05:13,966 --> 03:05:22,447
the archival distribution of the data, the availability of the data. Everyone expects

2325
03:05:22,447 --> 03:05:29,327
Bitcoin will be around forever and the prestige and the actual scarcity of the block space. So

2326
03:05:30,526 --> 03:05:36,526
the entire point, I think, in sidechains is that they are not they don't have this identity,

2327
03:05:36,526 --> 03:05:42,526
this uniqueness. They are they are one of one of many. So they cannot be as prestigious Bitcoin.

2328
03:05:42,526 --> 03:05:47,966
They will not be as scarce as Bitcoin. Yeah, but I don't think that's necessarily true,

2329
03:05:47,966 --> 03:05:52,447
though, because I don't think it's necessarily true because you can still have just one

2330
03:05:53,007 --> 03:06:01,566
sidechain that specializes in BitAssets and it would still be its own thing with its own block

2331
03:06:01,566 --> 03:06:07,327
size. And if you're saying it's all based on if they expect it to be around for a while,

2332
03:06:08,047 --> 03:06:13,566
those expectations could reappear for this. I think there's something to be said for like

2333
03:06:13,566 --> 03:06:17,167
they do like it to be a big party, like it's very social, like they like to throw their

2334
03:06:17,646 --> 03:06:21,327
party. And I think they want to throw a big party that has lots of people

2335
03:06:22,126 --> 03:06:25,327
attending. So I think if they could just have it keep growing and growing,

2336
03:06:26,207 --> 03:06:34,126
that would be something they would like. The fact that it would be because it's not like

2337
03:06:34,126 --> 03:06:39,806
the miners are going to gate the slots to some extent. You can't have a sidechain if it's

2338
03:06:39,806 --> 03:06:47,167
completely frivolous. Right. So you have to get something. I don't disagree that it could happen.

2339
03:06:48,126 --> 03:06:54,047
I don't expect that it would happen like I would expect that the people would simply like why you

2340
03:06:54,607 --> 03:07:03,007
organize on Bitcoin main chain like many, many times more than this would actually like the

2341
03:07:03,007 --> 03:07:08,047
luxury use case that Alex Kravets is talking about. He pretty much convinced me that we will

2342
03:07:08,047 --> 03:07:13,487
not be rid of this menace, even if there are sidechains where you could do it. Of course, I could

2343
03:07:13,487 --> 03:07:20,607
be wrong. Like that would be also like fine. But assuming that this is true, it's actually the

2344
03:07:20,607 --> 03:07:25,086
users who want to use the block space for transactions who are not looking for that

2345
03:07:25,086 --> 03:07:29,806
that easier application and forever data availability. That's actually not important.

2346
03:07:30,767 --> 03:07:37,327
In fact, it might be an anti-feature. So for you to buy anything with Bitcoin that

2347
03:07:37,327 --> 03:07:43,007
everyone will forever replicate the data and it will be there forever is not actually

2348
03:07:43,007 --> 03:07:46,927
like an important thing for you. Otherwise, nobody would use the Lightning Network, right?

2349
03:07:47,806 --> 03:07:54,287
So that's an anti-feature and you are not willing to pay a premium for that. So

2350
03:07:54,287 --> 03:08:01,646
I can totally see that these idiotic luxury use cases actually remain on main chain and

2351
03:08:01,646 --> 03:08:04,846
people who want to use the block space for transactions might actually

2352
03:08:05,487 --> 03:08:12,207
prefer a less replicated. That's true. I completely 100% agree with that. That will be more desirable

2353
03:08:12,927 --> 03:08:20,126
as a use case. But I think it could be both. You could have ordinals on L1 and on their own

2354
03:08:20,126 --> 03:08:24,366
BitAssets chain. I just wanted to mention one thing, which is part of it is the troll aspect,

2355
03:08:24,366 --> 03:08:31,086
which is that they get to troll. They're trolling L1. But I think also if drivechains

2356
03:08:31,887 --> 03:08:36,126
are a controversial topic, so people could get in on that as a troll.

2357
03:08:36,126 --> 03:08:43,406
It's almost a bigger troll in a way. So it's possible. Let me reply to Moon.

2358
03:08:43,406 --> 03:08:50,446
I know I'm following everything that's going on very closely and I see they try to

2359
03:08:50,446 --> 03:08:57,966
develop something that is off-chain. So they're moving from the real on-chain

2360
03:08:57,966 --> 03:09:05,966
inscribing and stuff and it's happening. They created even e-descriptions with indexers and

2361
03:09:05,966 --> 03:09:13,167
they try to eliminate the fee rate because it's expensive. I mean, anybody can check.

2362
03:09:14,287 --> 03:09:23,807
So when they move and they have a mindset that, okay, we try to do something that is off-chain,

2363
03:09:24,127 --> 03:09:32,687
which I disagree and I don't like off-chain things. If you're on L1, it should be everything

2364
03:09:32,687 --> 03:09:39,966
on-chain. So I'm thinking, okay, this is the opportunity because they want something that

2365
03:09:39,966 --> 03:09:47,167
is much cheaper. But on the other hand, I didn't make this example specifically. I just gave

2366
03:09:47,886 --> 03:09:54,367
an example of what can be done, like comparing stuff that has benefits.

2367
03:09:55,006 --> 03:10:01,406
I agree. I agree that first of all, not all block space is made equal. That's my main point.

2368
03:10:01,406 --> 03:10:08,927
So there will be demand for cheaper block space, but it's unlikely that the demand for the luxury

2369
03:10:08,927 --> 03:10:15,886
block space is going to go away over time as adoption grows overall. It's probably just going

2370
03:10:15,886 --> 03:10:26,367
to get worse. And even if only one, I don't want to call them NFTs, but one inscribed ordinals

2371
03:10:26,367 --> 03:10:31,886
for 1,000 that is inscribed on sidechain or whatever other block space or whatever

2372
03:10:31,886 --> 03:10:37,247
other data availability they come up with. I mean, eventually they could just decide to

2373
03:10:37,807 --> 03:10:47,646
inscribe hashes of files or magnet URIs or whatever, resource descriptors instead of

2374
03:10:47,646 --> 03:10:53,807
inscribing the whole thing. But there will always be people who will find it more valuable if it's

2375
03:10:53,807 --> 03:11:00,687
replicated on Bitcoin forever. And they will find that the block space is cheap for this luxury

2376
03:11:00,687 --> 03:11:06,927
use case because they expect they will be able to sell it for 100 times later than what they

2377
03:11:06,927 --> 03:11:13,326
paid for it. So that's the motivation. They want to make money on it. And I totally disagree with

2378
03:11:13,326 --> 03:11:19,966
this, but I can totally see that this insanity will persist and so long it is profitable to do,

2379
03:11:19,966 --> 03:11:27,487
so long anyone values this particular thing, it can just persist. And that's why I kind of think

2380
03:11:28,687 --> 03:11:34,367
that the idea that this will go to, you know, completely go to other block space is just not

2381
03:11:34,367 --> 03:11:40,446
going to stick. I'm pessimistic on that. But I totally see that there will be demand for cheap

2382
03:11:40,446 --> 03:11:47,567
block space as well. But the demand will be less than the most highly replicated,

2383
03:11:48,766 --> 03:11:55,406
most prestigious, most unique block space. So it has to be like a lower

2384
03:11:55,406 --> 03:11:59,807
paying demand for those block spaces, I believe.

2385
03:11:59,807 --> 03:12:03,086
I agree.

2386
03:12:07,807 --> 03:12:15,326
And that's kind of not a bad thing overall. So if you see that there are block spaces with different

2387
03:12:17,966 --> 03:12:23,006
costs to use, that will probably reflect their utility and their security.

2388
03:12:23,567 --> 03:12:28,927
And if everyone can find what they can afford and it gives them the maximum utility,

2389
03:12:30,127 --> 03:12:38,127
then you probably maximize the total collectible value for the system. And you also maximize the

2390
03:12:38,127 --> 03:12:44,206
total value that the system provides for the users and probably the number of users that can use

2391
03:12:44,206 --> 03:12:48,766
this ecosystem. You also maximize that. That's just like a hunch I have about this.

2392
03:12:49,326 --> 03:12:54,766
Yeah, listening to you guys, I just realized that I think it's a good pitch. I think the perfect

2393
03:12:54,766 --> 03:13:01,086
pitch for Drivechains could be like, it's a way that you can open free market of ideas on Bitcoin.

2394
03:13:01,727 --> 03:13:07,807
So, for example, on Ordinals, if you think that's a good way to do other stuff on Bitcoins, you can

2395
03:13:07,807 --> 03:13:13,086
do it. On Drivechains, you can do it. And there is a competition between the main layer and the

2396
03:13:13,086 --> 03:13:19,966
L2 layers. And this is for everyone, right? If you think that CTV is better and CFSF or whatever

2397
03:13:19,966 --> 03:13:27,086
APO, you know, it's a free market of idea that you can compete freely, you know, just do a

2398
03:13:27,086 --> 03:13:31,406
peg in and you can test it out and compete with other Drivechains. So I think this is a better

2399
03:13:31,406 --> 03:13:36,526
picture, I think. Yeah, but I've had on Drivechain.info, I've had a lot of people say,

2400
03:13:37,006 --> 03:13:51,487
I've had that up there for like a long time, like five years. That's like a little tagline and it

2401
03:13:51,487 --> 03:13:59,807
just, I don't know, it just doesn't seem to be working. Maybe you should try the opposite. If

2402
03:13:59,807 --> 03:14:03,247
you don't like free competition, you're a tyrant, you know?

2403
03:14:07,406 --> 03:14:13,167
Just push them a little bit, you know? Don't say names, don't say anything, just if you don't like

2404
03:14:13,167 --> 03:14:20,766
free market of idea, you're a tyrant, you know? Yeah, well, that is what I believe. But then

2405
03:14:20,766 --> 03:14:24,526
before you were saying at the beginning of this conversation, you were saying like, oh, don't

2406
03:14:24,526 --> 03:14:30,127
do such and such. No, no, don't push too hard. I said don't push too hard, push just a little bit.

2407
03:14:31,006 --> 03:14:39,886
Just a little bit. Yeah, it's a bit collectivistic, right? So when Luke Dashjr

2408
03:14:41,167 --> 03:14:50,687
posed these things about what should be and should not be tolerated on Bitcoin blockchain,

2409
03:14:50,687 --> 03:14:59,727
I always have this feeling that this road leads to communism, but I don't want to be mean to people

2410
03:15:00,446 --> 03:15:07,807
and Bitcoiners will probably take it real hard if you call them commies. Like, I don't know,

2411
03:15:07,807 --> 03:15:16,127
some S-clown called me a Keynesian and I really got mad over that. But so the point is that there

2412
03:15:16,127 --> 03:15:27,167
is some collectivistic and central planning feeling to this thing that is going on and that's

2413
03:15:27,167 --> 03:15:38,446
probably not good for Bitcoin, I believe. Yeah, I think it's a battle against capitalism versus

2414
03:15:38,446 --> 03:15:51,727
communism. I think that's the whole battle. Sorry, the other thing is that we see that benevolent

2415
03:15:51,727 --> 03:15:59,886
dictators get shit done. They make project progress faster. And obviously nobody wants

2416
03:15:59,886 --> 03:16:05,646
that on Bitcoin main chain. We don't want any dictators, even benevolent ones on Bitcoin. It's

2417
03:16:05,646 --> 03:16:13,006
a very good thing that Sotoshi left and did not hang around like Linus Torvalds. But on side

2418
03:16:13,006 --> 03:16:17,406
chains, you actually... Yeah, it's exactly what we do want. Right, exactly. We do want that because

2419
03:16:17,406 --> 03:16:23,406
they compete. Yeah, we don't want to exclude a guy from MIT that has a good idea and with good

2420
03:16:23,406 --> 03:16:28,607
intentions. We just put it on the drivechain, you know, and compete with the other guys from MIT.

2421
03:16:28,607 --> 03:16:36,446
That's the whole point. Yeah, I don't see any problem with that, like that you have these

2422
03:16:36,446 --> 03:16:41,167
inside chains and they actually compete with each other and the ideas compete and people can move

2423
03:16:41,167 --> 03:16:49,006
their value, their money to what they value and all that stuff. That's actually like a totally

2424
03:16:49,006 --> 03:16:57,006
good thing. Just a side note, I'm not sure if you saw it, Paul, but I'm pretty sure that you can

2425
03:16:57,006 --> 03:17:05,006
implement hash rate escrow with OP_CAT. With just string concatenation added to Bitcoin, you can

2426
03:17:05,567 --> 03:17:13,487
implement hash rate escrow and it will be very expensive and very cumbersome. It's not as

2427
03:17:14,607 --> 03:17:23,327
pleasant and nice as with BIP300, but you can actually do it. And I think you can do like...

2428
03:17:23,327 --> 03:17:27,327
Very interesting. We should code up like a proof of concept.

2429
03:17:29,006 --> 03:17:33,807
Correct if I'm wrong, Paul, but I think you can do like kind of sidechains also using

2430
03:17:35,406 --> 03:17:36,366
BitVM, right?

2431
03:17:39,327 --> 03:17:48,447
Well, BitVM doesn't easily allow people to expand the set of participants,

2432
03:17:49,967 --> 03:17:56,526
but you could have something where the BitVM people are like virtual miners and then there's

2433
03:17:56,526 --> 03:18:05,646
like a set of them and then they... It's not as good at all. BitVM is better when the participants

2434
03:18:05,646 --> 03:18:12,447
list is fixed and the game is sort of fixed, like they're playing chess or whatever.

2435
03:18:13,006 --> 03:18:19,567
And it's much more complex. Like if you just assume that Ocon's Blade, we should go for

2436
03:18:19,567 --> 03:18:25,486
BIP300 run, right? It's... Go with the simple solution, right?

2437
03:18:31,807 --> 03:18:37,327
Yeah, so BitVM does not really, as far as we know right now, it does not really

2438
03:18:37,327 --> 03:18:45,406
enable two-way peg mechanism that is trustless. Like that's not actually something that it can

2439
03:18:45,406 --> 03:18:52,287
do. What it can do is that you can commit funds to a statement. You can commit it to a script

2440
03:18:53,006 --> 03:19:01,327
where if you execute that program badly that you committed to, then you get slashed.

2441
03:19:01,327 --> 03:19:07,646
So you get punished. That's kind of the main thing that BitVM does and people who participate

2442
03:19:07,646 --> 03:19:14,366
in some state channel kind of thing can do this back and forth. But if one participant

2443
03:19:14,366 --> 03:19:20,847
like declines to commit to the next step and they are not committing to something that

2444
03:19:20,847 --> 03:19:26,847
could be falsified and they could be punished, then the whole thing is kind of stuck.

2445
03:19:26,847 --> 03:19:36,366
And so it's kind of limited to problems where you can like pre-sign a chain of transactions

2446
03:19:36,366 --> 03:19:43,486
that go through the whole thing and neither party can just decide to start cooperating

2447
03:19:43,486 --> 03:19:49,567
at a certain point or something like that. So it does not solve everything. It does not

2448
03:19:49,567 --> 03:19:55,087
really solve proper two-way pegs and sidechains as far as we know currently,

2449
03:19:55,087 --> 03:20:01,087
but it's very interesting. So you can do fraud proofs with it and I'm very excited about that.

2450
03:20:02,606 --> 03:20:06,766
Yeah, me too. Maybe because we are free market guys, right?

2451
03:20:06,766 --> 03:20:12,687
I think though that this is the bigger problem though is more important even...

2452
03:20:12,902 --> 03:20:18,902
than sidechains, which is the most important idea discussed so far.

2453
03:20:20,102 --> 03:20:25,102
If the community like becomes overconfident and complacent,

2454
03:20:25,802 --> 03:20:30,102
then I think it's just a fall of Rome scenario. It's just only a matter of time before

2455
03:20:30,902 --> 03:20:34,402
Bitcoin is just replaced by something else. Doesn't matter how good it is.

2456
03:20:34,902 --> 03:20:42,602
So in a way, I think fighting against the complacency is even more important

2457
03:20:43,102 --> 03:20:47,602
Maybe it could already be a dead project as far as we know, Bitcoin.

2458
03:20:48,102 --> 03:20:50,602
Even though I'm all in on Bitcoin.

2459
03:20:51,102 --> 03:20:56,602
It could be a zombie project. I mean when you see stuff like when you have Sailor and then you have stuff like this from Peter Tuck.

2460
03:20:58,602 --> 03:21:02,602
Like someone needs to defend free market, right? Someone.

2461
03:21:03,302 --> 03:21:08,302
Yeah, I think it's the time. It's the time that is critical.

2462
03:21:08,802 --> 03:21:18,302
Like we have wasted a lot of time on not scaling for a larger adoption and not gaining a larger adoption.

2463
03:21:18,802 --> 03:21:24,302
And now there is a lot more competition than there was like seven, eight years ago.

2464
03:21:24,802 --> 03:21:27,302
Like it's a completely different world.

2465
03:21:28,001 --> 03:21:35,001
And so I think that's probably the biggest issue is that people are complacent about time

2466
03:21:35,501 --> 03:21:38,001
and they actually want to slow down the rate.

2467
03:21:39,001 --> 03:21:43,001
Bitcoin changes and tries to adapt to the world and tries to compete with other stuff.

2468
03:21:43,501 --> 03:21:49,001
They don't even acknowledge that there is a competition, most of the people in Bitcoin, especially the laserized.

2469
03:21:49,702 --> 03:21:56,702
And that deep level of complacency like really puts us at a disadvantage, I believe.

2470
03:21:59,702 --> 03:22:00,702
Yeah, I agree with you.

2471
03:22:00,702 --> 03:22:09,702
But do you think that in the next program, the fees are going to be very high and people are going to try to see how we can scale?

2472
03:22:10,402 --> 03:22:20,402
And then if we have like the PR ready, if you have like, I don't know, people testing out on Cygnet or Testnet or whatever,

2473
03:22:21,402 --> 03:22:24,402
we could have a chance. Do you think that?

2474
03:22:25,402 --> 03:22:32,402
I believe the fees are going to be real high and it will alarm a lot of people when the mempool like really close

2475
03:22:32,902 --> 03:22:34,402
and we have persistently high fees.

2476
03:22:35,101 --> 03:22:42,101
It will alarm a lot of people and they will probably, they might demand the developers to finally do something.

2477
03:22:43,101 --> 03:22:47,101
There might be like an emergent social consensus that something needs to be done.

2478
03:22:48,101 --> 03:22:53,101
But most of the things that are being talked about will not provide an immediate relief.

2479
03:22:54,101 --> 03:23:00,101
Like that's impossible for most of the proposals that they will take many years to develop out.

2480
03:23:00,801 --> 03:23:04,801
In theory, of course, drivechains could, like I said, in theory, but in practice, I don't think they would.

2481
03:23:05,801 --> 03:23:13,801
Like it takes time when people start trusting or start using new software, whatever.

2482
03:23:14,801 --> 03:23:16,801
So I don't think it provides immediate relief.

2483
03:23:17,801 --> 03:23:26,801
At that point, at that point in time, when people are like panicking over the fees and everything in the middle of the boom market,

2484
03:23:27,502 --> 03:23:32,502
the only thing that can provide an immediate relief is a block size increase, a mandatory block size increase.

2485
03:23:33,502 --> 03:23:37,502
The thing that everyone wanted to avoid, like for the past seven years or whatever,

2486
03:23:38,502 --> 03:23:40,502
that's the only thing that can actually help at that point.

2487
03:23:41,502 --> 03:23:43,502
But in the long term, it can actually make things worse.

2488
03:23:44,502 --> 03:23:46,502
So there will be a strong pushback.

2489
03:23:47,502 --> 03:23:52,502
So I have no idea what will happen and I'm very curious to see it play out.

2490
03:23:57,502 --> 03:24:08,502
I just want to have a comment here that you said that people are not willing to put money on new software,

2491
03:24:09,502 --> 03:24:13,502
but with Lightning, people put money like very fast on that.

2492
03:24:14,502 --> 03:24:16,502
I don't know about other people.

2493
03:24:17,502 --> 03:24:20,502
I only put money on Lightning that I'm absolutely willing to lose.

2494
03:24:21,502 --> 03:24:26,502
Like I'm not putting my savings, I'm not even putting like a significant amount of my stash.

2495
03:24:27,502 --> 03:24:29,502
I put money on Lightning and I think most people.

2496
03:24:30,502 --> 03:24:33,502
Very few people actually did use it, of course.

2497
03:24:34,502 --> 03:24:37,502
I would go around there and ask people and they'd say, oh, I haven't used Lightning myself.

2498
03:24:38,502 --> 03:24:39,502
They'd say, Lightning is the next big thing.

2499
03:24:40,502 --> 03:24:41,502
I'd say, well, do you use?

2500
03:24:42,502 --> 03:24:44,502
And they would say, they would like change the subject.

2501
03:24:45,502 --> 03:24:46,502
And then you have some people who did.

2502
03:24:47,502 --> 03:24:50,502
Michael Tidwell, remember, he was like going to make his video.

2503
03:24:51,502 --> 03:24:54,502
He was all bright eyed and bushy tailed, as we say.

2504
03:24:55,201 --> 03:24:56,201
And he was just so excited.

2505
03:24:57,201 --> 03:24:59,201
And then he like lost all of his money like immediately.

2506
03:25:00,201 --> 03:25:03,201
And then he made the video about things to know about the Lightning Network,

2507
03:25:04,201 --> 03:25:07,201
where it was all just like about how he had lost his money and the seed phrase doesn't work.

2508
03:25:08,201 --> 03:25:12,201
And if your computer ever goes to sleep or something, it will like destroy all of your money.

2509
03:25:13,201 --> 03:25:15,201
And then people started retweeting it.

2510
03:25:16,201 --> 03:25:20,201
I remember Pierre Richard was like, Lightning is the future.

2511
03:25:20,902 --> 03:25:22,902
But he didn't even realize that the video was full of just like,

2512
03:25:23,902 --> 03:25:24,902
it was a litany of tragedies.

2513
03:25:25,902 --> 03:25:27,902
It was just like, it was all bad news.

2514
03:25:28,902 --> 03:25:29,902
So he didn't even watch the video.

2515
03:25:30,902 --> 03:25:31,902
And then people were like calling him out on it.

2516
03:25:32,902 --> 03:25:34,902
And he's like, I don't even, he's like, I don't watch anything I retweet.

2517
03:25:35,902 --> 03:25:36,902
And you're just like, oh, my God.

2518
03:25:37,902 --> 03:25:43,902
I was more lucky because what happened is I had the Lightning Node run in a virtual machine

2519
03:25:44,902 --> 03:25:45,902
and the host machine crashed.

2520
03:25:46,602 --> 03:25:53,602
And I was able to use the seed in, I think I used BlixtWallet.

2521
03:25:54,602 --> 03:25:56,602
It's a mobile wallet with an LND full node.

2522
03:25:57,602 --> 03:26:01,602
I used BlixtWallet to, you can, I think, use any LND software.

2523
03:26:02,602 --> 03:26:06,602
And I managed to, it was excruciatingly slow.

2524
03:26:07,602 --> 03:26:12,602
So for a very, very long time, it looked like I lost those sets that I had on Lightning.

2525
03:26:13,301 --> 03:26:19,301
But eventually, like a day later, I got my funds back, or most of them.

2526
03:26:20,301 --> 03:26:27,301
So that was the end of my Lightning Node running career, to be honest, for a while.

2527
03:26:28,301 --> 03:26:30,301
I'm waiting for things to stabilize a little bit.

2528
03:26:31,301 --> 03:26:35,301
And for now, I'm just making use of it.

2529
03:26:36,301 --> 03:26:38,301
But these are the things, though, where it's like,

2530
03:26:39,301 --> 03:26:41,301
the payments, like, they can't fail.

2531
03:26:42,002 --> 03:26:43,002
Like, at all.

2532
03:26:44,002 --> 03:26:48,002
Like, you know, Visa, it fails very rarely when I use my Visa card.

2533
03:26:49,002 --> 03:26:50,002
Sometimes it fails.

2534
03:26:51,002 --> 03:26:55,002
But it's just, no one is going to put up with it if it ever fails.

2535
03:26:56,002 --> 03:27:00,002
And no one is going to put up with it if it ever charges them money for something that they didn't get.

2536
03:27:01,002 --> 03:27:04,002
No one will tolerate loss or failure.

2537
03:27:05,002 --> 03:27:07,002
Like, at all. That's how far it has to go.

2538
03:27:08,002 --> 03:27:09,002
At first, it was very bad.

2539
03:27:09,701 --> 03:27:18,701
Like, Lightning payments at first failed more than they succeeded for any significant size of payment.

2540
03:27:19,701 --> 03:27:21,701
And I think that got a lot better.

2541
03:27:22,701 --> 03:27:25,701
So I did not have that experience of late.

2542
03:27:26,701 --> 03:27:28,701
But, yeah.

2543
03:27:29,701 --> 03:27:32,701
Like, I tried to run in 2018, I think.

2544
03:27:33,701 --> 03:27:34,701
And it was really bad.

2545
03:27:35,701 --> 03:27:37,701
I kind of lost a few money there.

2546
03:27:38,402 --> 03:27:40,402
But, yeah, I just had, I didn't put, like, the whole money.

2547
03:27:41,402 --> 03:27:42,402
I just tried to test it out.

2548
03:27:43,402 --> 03:27:46,402
And I really think that when we activate a drivechain,

2549
03:27:47,402 --> 03:27:49,402
people are going to do peg-ins really slowly.

2550
03:27:50,402 --> 03:27:51,402
They're trying to peg out.

2551
03:27:52,402 --> 03:27:53,402
They kind of get confidence on that.

2552
03:27:54,402 --> 03:27:57,402
And then, over time, you know,

2553
03:27:58,402 --> 03:28:01,402
I think people will have, like, we have like a million Bitcoins on the drivechain.

2554
03:28:02,402 --> 03:28:03,402
It could be, like, a thing.

2555
03:28:04,402 --> 03:28:05,402
I don't know.

2556
03:28:06,102 --> 03:28:09,102
We can probably solve a lot of these difficult issues with Lightning.

2557
03:28:10,102 --> 03:28:15,102
The one thing that cannot be solved with self-custodial Lightning, as far as I'm aware of it,

2558
03:28:16,102 --> 03:28:20,102
is that you have to have the liquidity logged in if you want to receive.

2559
03:28:21,102 --> 03:28:24,102
Like, that's a complete antipatent for normal users.

2560
03:28:25,102 --> 03:28:33,102
And it's totally not natural for someone that they, at some point,

2561
03:28:33,801 --> 03:28:35,801
have to have the money that they are about to receive.

2562
03:28:36,801 --> 03:28:41,801
And if their salary is over the amount that they have, you know,

2563
03:28:42,801 --> 03:28:45,802
in inbound liquidity, then they just can't receive it.

2564
03:28:46,802 --> 03:28:51,802
And that whole thing is, like, Burak has been explaining this in detail.

2565
03:28:52,802 --> 03:28:53,802
It's just a huge anti-feature.

2566
03:28:54,802 --> 03:28:57,802
The whole thing is a huge antipatent anti-feature for the users.

2567
03:28:58,501 --> 03:29:02,501
And they also have, like, absolutely horrible privacy.

2568
03:29:03,501 --> 03:29:07,501
In the hub-and-spoke LSP model, the Lightning service provider

2569
03:29:08,501 --> 03:29:10,501
absolutely sees everything that they do.

2570
03:29:11,501 --> 03:29:13,501
And they report the chain analysis, which they will.

2571
03:29:14,501 --> 03:29:18,501
Like, you can just assume that all the large providers right now

2572
03:29:19,501 --> 03:29:20,501
are reporting to chain analysis.

2573
03:29:21,501 --> 03:29:22,501
Volatov, Satoshi, everyone.

2574
03:29:23,501 --> 03:29:26,501
So they report the chain analysis, these large nodes.

2575
03:29:27,201 --> 03:29:28,201
And everyone is going through.

2576
03:29:29,201 --> 03:29:31,201
There will be absolutely zero privacy on the Lightning network.

2577
03:29:32,201 --> 03:29:41,201
And so I think what needs to happen is that there are alternative tools

2578
03:29:42,201 --> 03:29:47,201
that handle this part of the user interaction.

2579
03:29:48,201 --> 03:29:51,201
And people are not going to run the Lightning nodes.

2580
03:29:52,201 --> 03:29:56,201
And they are not going to lock in liquidity or buy locked-in liquidity

2581
03:29:57,201 --> 03:30:00,201
because they have the struggle that the channel they paid, like,

2582
03:30:01,201 --> 03:30:05,201
$6,000 for, which, I don't know, will cost at the point $6,000 or whatever,

2583
03:30:06,201 --> 03:30:07,201
or $600.

2584
03:30:08,201 --> 03:30:12,201
And it just closes on them because they did not receive the locked-in.

2585
03:30:13,201 --> 03:30:17,201
They did not receive money that would justify from the channel partner

2586
03:30:18,201 --> 03:30:19,201
to keep that liquidity there.

2587
03:30:20,201 --> 03:30:22,201
And all this horrible stuff that comes with, you know,

2588
03:30:23,201 --> 03:30:25,201
running your own Lightning node as an end user.

2589
03:30:25,902 --> 03:30:27,902
So I kind of expect that this will change.

2590
03:30:28,902 --> 03:30:29,902
And we will have stuff like Org.

2591
03:30:30,902 --> 03:30:35,902
And also, Lightning would, like, probably work really well with sidechains.

2592
03:30:36,902 --> 03:30:39,902
That's my other expectations, that if we manage to have sidechains,

2593
03:30:40,902 --> 03:30:45,902
then, you know, Lightning nodes want cheap block space.

2594
03:30:46,902 --> 03:30:50,902
They need cheap, available block space to be there just in case

2595
03:30:51,902 --> 03:30:53,902
for the Lightning network to work perfectly.

2596
03:30:54,602 --> 03:30:59,602
But we also know that if we just keep adding block space to mainchain,

2597
03:31:00,602 --> 03:31:01,602
then it will be gobbled up.

2598
03:31:02,602 --> 03:31:04,602
Like I said, it's a highly desirable block space.

2599
03:31:05,602 --> 03:31:10,602
And it's entirely possible that we can only have cheap and up-to-the-line block space

2600
03:31:11,602 --> 03:31:13,602
that is not utilized to the max on sidechains,

2601
03:31:14,602 --> 03:31:16,602
simply for the reasons that they are not as replicated,

2602
03:31:17,602 --> 03:31:18,602
not as permanent, not as desired.

2603
03:31:19,602 --> 03:31:22,602
But for Lightning, they don't need to be.

2604
03:31:23,302 --> 03:31:24,302
Like, literally, they don't need to be.

2605
03:31:27,302 --> 03:31:30,302
Yeah, and I do agree with your centralization on LSPs

2606
03:31:31,302 --> 03:31:32,302
and locking to wallets.

2607
03:31:33,302 --> 03:31:35,302
And just an observation, there is a technique called turbo channels.

2608
03:31:36,302 --> 03:31:37,302
I don't know if you've heard about it.

2609
03:31:38,302 --> 03:31:40,302
But the users don't have to have any channels open.

2610
03:31:41,302 --> 03:31:44,302
And it receives any voice intercepted by the LSP.

2611
03:31:45,302 --> 03:31:49,302
And the LSP just deducts the value from the opening channel

2612
03:31:50,302 --> 03:31:51,302
and opening channels from him.

2613
03:31:52,001 --> 03:31:54,001
So they don't need to have any knowledge about it.

2614
03:31:55,001 --> 03:31:58,001
Yeah, that's like a bit of a sleight of hand

2615
03:31:59,001 --> 03:32:01,001
because for the moment, it's basically custodial.

2616
03:32:02,001 --> 03:32:03,001
So the LSP receives the money.

2617
03:32:04,001 --> 03:32:07,001
So again, I was talking about non-custodial Lightning.

2618
03:32:08,001 --> 03:32:11,001
The real hardcore, not even for a second custodial Lightning,

2619
03:32:12,001 --> 03:32:13,001
when I talked about the impossible.

2620
03:32:14,001 --> 03:32:16,001
Of course, there will be a lot of clever tricks developed

2621
03:32:17,001 --> 03:32:18,001
and a lot of smart things developed.

2622
03:32:18,701 --> 03:32:21,701
But I kind of think the privacy issues

2623
03:32:22,701 --> 03:32:25,701
in the hub-and-spoke model are just inherent in the technology.

2624
03:32:26,701 --> 03:32:28,701
Yeah, you can do that in a direct chain with privacy,

2625
03:32:29,701 --> 03:32:30,701
not capture regularly.

2626
03:32:31,701 --> 03:32:32,701
They cannot capture anything.

2627
03:32:33,701 --> 03:32:36,701
We don't need to rely on LSPs.

2628
03:32:37,701 --> 03:32:40,701
It's much, much better to design a protocol model for payment.

2629
03:32:41,701 --> 03:32:46,701
I think we should do Ark pools on sidechains

2630
03:32:47,402 --> 03:32:48,402
because Ark is, again, another protocol

2631
03:32:49,402 --> 03:32:51,402
that really loves cheap and up-to-the-minute block space

2632
03:32:52,402 --> 03:32:53,402
that it does not even want to use.

2633
03:32:54,402 --> 03:32:57,402
So in theory, for a sidechain that you dedicate to Ark pools,

2634
03:32:58,402 --> 03:33:01,402
you would have a very low cost for people to validate that.

2635
03:33:02,402 --> 03:33:03,402
It would be like a small block sidechain

2636
03:33:04,402 --> 03:33:06,402
even if the max block size is 32 megabytes.

2637
03:33:07,402 --> 03:33:08,402
And the reason why that 32 megabytes

2638
03:33:09,402 --> 03:33:11,402
would not be packed full of fucking JPEGs or whatever

2639
03:33:12,402 --> 03:33:15,402
is that it's not a desirable, not a coveted,

2640
03:33:16,102 --> 03:33:17,102
not a prestigious block space.

2641
03:33:18,102 --> 03:33:20,102
It's not as replicated, not as permanent.

2642
03:33:21,102 --> 03:33:22,102
If someone starts bloating it,

2643
03:33:23,102 --> 03:33:25,102
someone else will start up another blockchain.

2644
03:33:26,102 --> 03:33:27,102
Everyone will move over that over time

2645
03:33:28,102 --> 03:33:30,102
and they will just abandon that fucking chain

2646
03:33:31,102 --> 03:33:34,102
that someone wanted to store his family albums forever

2647
03:33:35,102 --> 03:33:36,102
and suddenly that chain is just dead

2648
03:33:37,102 --> 03:33:38,102
and he's shit out of luck.

2649
03:33:39,102 --> 03:33:41,102
So I expect people will simply not do that.

2650
03:33:42,102 --> 03:33:45,102
Block space will be used for what it was meant to be used for.

2651
03:33:46,102 --> 03:33:49,102
To record transactions and to allow nodes

2652
03:33:50,102 --> 03:33:52,102
to reach consensus on the state of the UTXO set.

2653
03:33:55,102 --> 03:33:56,102
Yeah, I agree completely.

2654
03:33:57,102 --> 03:34:02,102
I do agree that maybe one of the first drivechains

2655
03:34:03,102 --> 03:34:05,102
that could be for activating Ark or something like that.

2656
03:34:06,102 --> 03:34:08,102
Because we do need an option for payments.

2657
03:34:09,102 --> 03:34:10,102
Yeah, well we do have one already

2658
03:34:11,102 --> 03:34:13,102
that is a latest version of Bitcoin Core

2659
03:34:13,802 --> 03:34:16,802
plus 1.18 and 1.19 and up vault.

2660
03:34:17,802 --> 03:34:20,802
So we already have one that could potentially,

2661
03:34:21,802 --> 03:34:23,802
although we've activated them the way they are

2662
03:34:24,802 --> 03:34:25,802
on like Bitcoin Inquisition or whatever.

2663
03:34:26,802 --> 03:34:27,802
I don't know exactly what the state

2664
03:34:28,802 --> 03:34:30,802
of like the wallet tooling or whatever would be.

2665
03:34:32,802 --> 03:34:34,802
But we do have one

2666
03:34:35,802 --> 03:34:37,802
that already could be used for that purpose.

2667
03:34:38,802 --> 03:34:41,802
I don't know if maybe they want something more customized.

2668
03:34:42,501 --> 03:34:43,501
Hey, we should put OPCAD in there.

2669
03:34:44,501 --> 03:34:45,501
Moon Settler, you should make it.

2670
03:34:46,501 --> 03:34:47,501
Join our project.

2671
03:34:48,501 --> 03:34:49,501
Put an OPCAD in there.

2672
03:34:50,501 --> 03:34:51,501
I know it's really small.

2673
03:34:52,501 --> 03:34:53,501
Actually, probably I can do it.

2674
03:34:54,501 --> 03:34:55,501
Probably anyone can do it.

2675
03:34:56,501 --> 03:34:58,501
I think it's a few lines probably the actual code

2676
03:34:59,501 --> 03:35:02,501
and you would have like 200 lines for activation and stuff.

2677
03:35:05,501 --> 03:35:06,501
We'll just reset it.

2678
03:35:07,501 --> 03:35:08,501
We'll just reset the chain.

2679
03:35:09,501 --> 03:35:10,501
We reset them all the time.

2680
03:35:11,201 --> 03:35:12,201
We'll just re-hard fork it back to nothing.

2681
03:35:13,201 --> 03:35:14,201
The sidechain with it.

2682
03:35:15,201 --> 03:35:16,201
It'll have that OPCAD the whole time.

2683
03:35:17,201 --> 03:35:18,201
We just frag them all the time.

2684
03:35:19,201 --> 03:35:20,201
And in fact, now we have it set up

2685
03:35:21,201 --> 03:35:23,201
that it just opens in reg test mode.

2686
03:35:24,201 --> 03:35:25,201
We need to get a SIGNET actually.

2687
03:35:26,201 --> 03:35:27,201
Someone wanted to do this,

2688
03:35:28,201 --> 03:35:29,201
but I never pursued it.

2689
03:35:30,201 --> 03:35:31,201
But it opens now with locally just reg test

2690
03:35:32,201 --> 03:35:33,201
and finding a block every two seconds.

2691
03:35:34,201 --> 03:35:35,201
So it's all just local anyway.

2692
03:35:36,201 --> 03:35:37,201
Every time the user opens it,

2693
03:35:38,201 --> 03:35:39,201
it's just like nothing happening.

2694
03:35:39,902 --> 03:35:40,902
We're going to get a SIGNET version now.

2695
03:35:41,902 --> 03:35:42,902
Send your DM by the way

2696
03:35:43,902 --> 03:35:44,902
on the gist.

2697
03:35:45,902 --> 03:35:46,902
I wrote about how you could

2698
03:35:47,902 --> 03:35:48,902
probably do

2699
03:35:49,902 --> 03:35:50,902
hash rate escrow with OPCAD.

2700
03:35:52,902 --> 03:35:53,902
And in that,

2701
03:35:54,902 --> 03:35:55,902
it is very clear how you could emulate

2702
03:35:56,902 --> 03:35:57,902
CTV very closely

2703
03:35:58,902 --> 03:35:59,902
for most practical use cases

2704
03:36:00,902 --> 03:36:01,902
with OPCAD.

2705
03:36:06,902 --> 03:36:07,902
I mean, it's a weird pseudo code.

2706
03:36:08,602 --> 03:36:09,602
I just made it up,

2707
03:36:10,602 --> 03:36:11,602
so it's not a real language or anything.

2708
03:36:12,602 --> 03:36:13,602
I'm not going to do this

2709
03:36:14,602 --> 03:36:15,602
in actual assembly

2710
03:36:16,602 --> 03:36:17,602
because Bitcoin VM is a stack machine

2711
03:36:18,602 --> 03:36:19,602
and it would be extremely painful

2712
03:36:20,602 --> 03:36:21,602
to read that code.

2713
03:36:22,602 --> 03:36:23,602
I tried to convey the actual meaning.

2714
03:36:24,602 --> 03:36:25,602
But what's important,

2715
03:36:26,602 --> 03:36:27,602
what I would like to tell people

2716
03:36:28,602 --> 03:36:29,602
is that OPCAD was part of Bitcoin

2717
03:36:30,602 --> 03:36:31,602
in the very beginning.

2718
03:36:32,602 --> 03:36:33,602
And what you can do with OPCAD

2719
03:36:34,602 --> 03:36:35,602
is you can actually

2720
03:36:36,602 --> 03:36:37,602
introspect the output script

2721
03:36:38,602 --> 03:36:39,602
that you can propagate a state

2722
03:36:40,602 --> 03:36:41,602
and you can propagate the contract

2723
03:36:42,602 --> 03:36:43,602
that is enforcing

2724
03:36:44,602 --> 03:36:45,602
the valid state transitions.

2725
03:36:46,602 --> 03:36:47,602
So basically you can do

2726
03:36:48,602 --> 03:36:49,602
finite state machines

2727
03:36:50,602 --> 03:36:51,602
that are enforced by Bitcoin consensus

2728
03:36:52,602 --> 03:36:53,602
with OPCAD on Bitcoin.

2729
03:36:54,602 --> 03:36:55,602
Which means, sort of,

2730
03:36:56,602 --> 03:36:57,602
that Bitcoin was actually

2731
03:36:58,602 --> 03:36:59,602
in a roundabout weird way

2732
03:37:00,602 --> 03:37:01,602
probably to incomplete

2733
03:37:02,602 --> 03:37:03,602
in the beginning.

2734
03:37:04,602 --> 03:37:05,602
It's a funny thing.

2735
03:37:06,302 --> 03:37:07,302
Yes, so what you're saying

2736
03:37:08,302 --> 03:37:09,302
is you have OPCAD

2737
03:37:10,302 --> 03:37:11,302
and then you have half of it

2738
03:37:12,302 --> 03:37:13,302
is the state transition thing

2739
03:37:14,302 --> 03:37:15,302
and half of it

2740
03:37:16,302 --> 03:37:17,302
is the actual state.

2741
03:37:19,302 --> 03:37:20,302
Yeah, yeah.

2742
03:37:21,302 --> 03:37:22,302
So you basically are going

2743
03:37:23,302 --> 03:37:24,302
to put a couple of

2744
03:37:25,302 --> 03:37:26,302
push operators

2745
03:37:27,302 --> 03:37:28,302
in the data

2746
03:37:29,302 --> 03:37:30,302
in the beginning

2747
03:37:31,302 --> 03:37:32,302
and then you are going

2748
03:37:33,302 --> 03:37:34,302
to have a hash of the

2749
03:37:35,001 --> 03:37:36,001
contract and then

2750
03:37:37,001 --> 03:37:38,001
the contract itself.

2751
03:37:39,001 --> 03:37:40,001
And the inconvenient thing about OPCAD

2752
03:37:41,001 --> 03:37:42,001
is that you have to put all

2753
03:37:43,001 --> 03:37:44,001
this data on the stack

2754
03:37:45,001 --> 03:37:46,001
when you execute the transaction

2755
03:37:47,001 --> 03:37:48,001
because you can't introspect.

2756
03:37:49,001 --> 03:37:50,001
Without introspection of course

2757
03:37:51,001 --> 03:37:52,001
you can't actually take these things

2758
03:37:53,001 --> 03:37:54,001
from Bitcoin or the transaction itself.

2759
03:37:55,001 --> 03:37:56,001
You have to put these things

2760
03:37:57,001 --> 03:37:58,001
in a witness parameters

2761
03:37:59,001 --> 03:38:00,001
but after that it can just

2762
03:38:01,001 --> 03:38:02,001
assemble them, hash them

2763
03:38:03,001 --> 03:38:04,001
and introspect them

2764
03:38:04,702 --> 03:38:05,702
and outputs and stuff like that.

2765
03:38:06,702 --> 03:38:07,702
There is this trick that you can do

2766
03:38:08,702 --> 03:38:09,702
with the signature

2767
03:38:10,702 --> 03:38:11,702
I think Andrew Polstra

2768
03:38:12,702 --> 03:38:13,702
might have written

2769
03:38:14,702 --> 03:38:15,702
the article about it

2770
03:38:16,702 --> 03:38:17,702
I'm not absolutely sure

2771
03:38:18,702 --> 03:38:19,702
right now but basically

2772
03:38:20,702 --> 03:38:21,702
you can use just OPCAD

2773
03:38:22,702 --> 03:38:23,702
without any other covenant proposal

2774
03:38:24,702 --> 03:38:25,702
OPCAD and Chexsig

2775
03:38:26,702 --> 03:38:27,702
to actually introspect

2776
03:38:28,702 --> 03:38:29,702
the transaction image

2777
03:38:30,702 --> 03:38:31,702
and it's very inefficient

2778
03:38:32,702 --> 03:38:33,702
but it works.

2779
03:38:34,702 --> 03:38:35,702
And

2780
03:38:36,702 --> 03:38:37,702
the easiest thing in the world

2781
03:38:38,702 --> 03:38:39,702
with it is like

2782
03:38:40,702 --> 03:38:41,702
put together on the stack

2783
03:38:42,702 --> 03:38:43,702
a transaction image

2784
03:38:44,702 --> 03:38:45,702
where you

2785
03:38:46,702 --> 03:38:47,702
basically hard code

2786
03:38:48,702 --> 03:38:49,702
the outputs

2787
03:38:50,702 --> 03:38:51,702
so how the output

2788
03:38:52,702 --> 03:38:53,702
scripts and amounts

2789
03:38:54,702 --> 03:38:55,702
should be distributed

2790
03:38:56,702 --> 03:38:57,702
and then you hash it

2791
03:38:58,702 --> 03:38:59,702
and compare it with a hash

2792
03:39:00,702 --> 03:39:01,702
and this allows you to

2793
03:39:02,702 --> 03:39:03,702
basically emulate CTV

2794
03:39:04,702 --> 03:39:05,702
there are miner detail differences

2795
03:39:06,702 --> 03:39:07,702
in CTV commits to various fields

2796
03:39:08,702 --> 03:39:09,702
and you can also do that

2797
03:39:10,702 --> 03:39:11,702
I did not go into

2798
03:39:12,702 --> 03:39:13,702
very much into details

2799
03:39:14,702 --> 03:39:15,702
I tried to convey

2800
03:39:16,702 --> 03:39:17,702
the basic idea

2801
03:39:18,702 --> 03:39:19,702
but the point is

2802
03:39:20,702 --> 03:39:21,702
that you can propagate a state

2803
03:39:22,702 --> 03:39:23,702
and you can restrict that state

2804
03:39:24,702 --> 03:39:25,702
to a certain contract

2805
03:39:26,702 --> 03:39:27,702
that can update that state

2806
03:39:28,702 --> 03:39:29,702
and you can propagate that as well

2807
03:39:30,702 --> 03:39:31,702
and this is enforced by Bitcoin consensus

2808
03:39:32,702 --> 03:39:33,702
this is very cool

2809
03:39:34,702 --> 03:39:35,702
it runs externally

2810
03:39:36,702 --> 03:39:37,702
this is actually

2811
03:39:38,702 --> 03:39:39,702
Turing complete code

2812
03:39:40,702 --> 03:39:41,702
or something very similar

2813
03:39:42,702 --> 03:39:43,702
practically

2814
03:39:44,702 --> 03:39:45,702
looping

2815
03:39:46,702 --> 03:39:47,702
finite state machine code

2816
03:39:48,702 --> 03:39:49,702
that is actually running

2817
03:39:50,702 --> 03:39:51,702
on Bitcoin consensus

2818
03:39:52,702 --> 03:39:53,702
it's interesting

2819
03:39:54,702 --> 03:39:55,702
Ok, excellent

2820
03:39:56,702 --> 03:39:57,702
hmm

2821
03:39:58,702 --> 03:39:59,702
well

2822
03:40:00,702 --> 03:40:01,702
we seem to have wound down

2823
03:40:02,702 --> 03:40:03,702
to about

2824
03:40:04,402 --> 03:40:05,402
what do we have here

2825
03:40:06,402 --> 03:40:07,402
we only have 20 people here

2826
03:40:08,402 --> 03:40:09,402
20 remain

2827
03:40:12,402 --> 03:40:13,402
just like

2828
03:40:14,402 --> 03:40:15,402
I don't know

2829
03:40:17,402 --> 03:40:18,402
a Call of Duty game

2830
03:40:19,402 --> 03:40:20,402
where only 20 people remain

2831
03:40:21,402 --> 03:40:22,402
um

2832
03:40:23,402 --> 03:40:24,402
so

2833
03:40:25,402 --> 03:40:26,402
I'm not sure if we should

2834
03:40:27,402 --> 03:40:28,402
end it here

2835
03:40:29,402 --> 03:40:30,402
or if anyone wants to

2836
03:40:31,402 --> 03:40:32,402
anyone is dying to say anything

2837
03:40:33,101 --> 03:40:34,101
particularly new

2838
03:40:35,101 --> 03:40:36,101
we've been going for a few hours

2839
03:40:37,101 --> 03:40:38,101
so

2840
03:40:39,101 --> 03:40:40,101
come on up if you want to say something

2841
03:40:41,101 --> 03:40:42,101
especially

2842
03:40:43,101 --> 03:40:44,101
well I have to leave

2843
03:40:45,101 --> 03:40:46,101
I just want to say to you

2844
03:40:47,101 --> 03:40:48,101
and all the guys

2845
03:40:49,101 --> 03:40:50,101
congrats for the work that you are doing

2846
03:40:51,101 --> 03:40:52,101
just continue

2847
03:40:53,101 --> 03:40:54,101
we need you

2848
03:40:55,101 --> 03:40:56,101
and I really do think that

2849
03:40:57,101 --> 03:40:58,101
in the next bull market

2850
03:40:59,101 --> 03:41:00,101
we are going to have a chance

2851
03:41:01,101 --> 03:41:02,101
so we should be prepared for that

2852
03:41:03,101 --> 03:41:04,101
ok, thanks

2853
03:41:09,101 --> 03:41:12,101
I had a slightly irrelevant question

2854
03:41:13,101 --> 03:41:14,101
that occurred to me when I thought about

2855
03:41:15,101 --> 03:41:16,101
what you said

2856
03:41:17,101 --> 03:41:18,101
what Shinobi said about

2857
03:41:19,101 --> 03:41:20,101
the

2858
03:41:21,101 --> 03:41:22,101
capital that one requires

2859
03:41:23,101 --> 03:41:24,101
to lock in

2860
03:41:25,101 --> 03:41:26,101
to do sidechain arbitrage

2861
03:41:27,101 --> 03:41:28,101
and withdrawals

2862
03:41:29,101 --> 03:41:30,101
and it just occurred to me that

2863
03:41:31,101 --> 03:41:32,101
this is not dissimilar from

2864
03:41:33,101 --> 03:41:34,101
buying a bond

2865
03:41:35,101 --> 03:41:36,101
that will mature in 3 months

2866
03:41:37,101 --> 03:41:38,101
and will have a certain yield

2867
03:41:39,101 --> 03:41:40,101
and of course it has a risk

2868
03:41:41,101 --> 03:41:42,101
like

2869
03:41:43,101 --> 03:41:44,101
not necessarily

2870
03:41:45,101 --> 03:41:46,101
a large full on default risk

2871
03:41:47,101 --> 03:41:48,101
but it has a risk of not going through

2872
03:41:49,101 --> 03:41:50,101
and you have to wait more

2873
03:41:51,101 --> 03:41:52,101
and you can just price that in

2874
03:41:53,101 --> 03:41:54,101
it just occurred to me

2875
03:41:55,101 --> 03:41:56,101
that for the same reason

2876
03:41:57,101 --> 03:41:58,101
why people buy bonds

2877
03:41:59,101 --> 03:42:00,101
they would probably do this

2878
03:42:01,101 --> 03:42:02,101
even though this is not a security

2879
03:42:03,101 --> 03:42:04,101
right and you can see how ridiculous

2880
03:42:05,101 --> 03:42:06,101
it would be

2881
03:42:07,101 --> 03:42:08,101
if we lived in a world with no bonds

2882
03:42:09,101 --> 03:42:10,101
and I said

2883
03:42:11,101 --> 03:42:12,101
I am going to release these 3 month bonds

2884
03:42:13,101 --> 03:42:14,101
into the world

2885
03:42:15,101 --> 03:42:16,101
and I am going to allow

2886
03:42:17,101 --> 03:42:18,101
people to issue a 3 month bond

2887
03:42:19,101 --> 03:42:20,101
this has never been possible before

2888
03:42:21,101 --> 03:42:22,101
but anyone in the world

2889
03:42:23,101 --> 03:42:24,101
can now issue a 3 month bond

2890
03:42:25,101 --> 03:42:26,101
and you can say

2891
03:42:27,101 --> 03:42:28,101
and then

2892
03:42:29,101 --> 03:42:30,101
somewhere fictional Shinobi

2893
03:42:31,101 --> 03:42:32,101
in this world says

2894
03:42:33,101 --> 03:42:34,101
all the capital required for that

2895
03:42:35,101 --> 03:42:36,101
would be too much

2896
03:42:37,101 --> 03:42:38,101
and it is like there is no

2897
03:42:39,101 --> 03:42:40,101
capital requirement

2898
03:42:41,101 --> 03:42:42,101
everyone has dollars

2899
03:42:43,101 --> 03:42:44,101
they have the same dollars they had before

2900
03:42:45,101 --> 03:42:46,101
and now they can spend them on something else

2901
03:42:47,101 --> 03:42:48,101
but it is not until they buy the bond

2902
03:42:49,101 --> 03:42:50,101
that they front the capital

2903
03:42:51,101 --> 03:42:52,101
I mean the bond itself

2904
03:42:53,101 --> 03:42:54,101
is also capital

2905
03:42:55,101 --> 03:42:56,101
basically

2906
03:42:57,101 --> 03:42:58,101
I don't know

2907
03:42:59,101 --> 03:43:00,101
yeah but there is no new thing

2908
03:43:01,101 --> 03:43:02,101
there is no capital

2909
03:43:03,101 --> 03:43:04,101
eaten up

2910
03:43:05,101 --> 03:43:06,101
in the L1 world

2911
03:43:07,101 --> 03:43:08,101
that

2912
03:43:09,101 --> 03:43:10,101
couldn't also have just been a deposit

2913
03:43:11,101 --> 03:43:12,101
to L2

2914
03:43:13,101 --> 03:43:14,101
you see what I mean

2915
03:43:15,101 --> 03:43:16,101
it is not like it requires

2916
03:43:17,101 --> 03:43:18,101
there is no

2917
03:43:19,101 --> 03:43:20,101
I mean if you look

2918
03:43:21,101 --> 03:43:22,101
from investor perspective

2919
03:43:23,101 --> 03:43:24,101
he is locking up liquid USD

2920
03:43:25,101 --> 03:43:26,101
into a T-bill right now

2921
03:43:27,101 --> 03:43:28,101
let's say you have a T-bill of 3 month maturity

2922
03:43:29,101 --> 03:43:30,101
you are locking up that liquidity

2923
03:43:31,101 --> 03:43:32,101
I mean someone else has it

2924
03:43:33,101 --> 03:43:34,101
you lock it up technically

2925
03:43:35,101 --> 03:43:36,101
because someone else is spending those coins

2926
03:43:37,101 --> 03:43:38,101
or whatever

2927
03:43:39,101 --> 03:43:40,101
but you from your perspective

2928
03:43:41,101 --> 03:43:42,101
have locked up for 3 months

2929
03:43:43,101 --> 03:43:44,101
and you are not liquid

2930
03:43:45,101 --> 03:43:46,101
I think that is the only thing

2931
03:43:47,101 --> 03:43:48,101
that is what he thinks it means

2932
03:43:49,101 --> 03:43:50,101
see but here is the thing

2933
03:43:51,101 --> 03:43:52,101
they do that in return for a yield

2934
03:43:53,101 --> 03:43:54,101
so

2935
03:43:55,101 --> 03:43:56,101
they voluntarily do that

2936
03:43:57,101 --> 03:43:58,101
so there is no

2937
03:43:59,101 --> 03:44:00,101
that is what I was getting at

2938
03:44:01,101 --> 03:44:02,101
we have this in this world

2939
03:44:03,101 --> 03:44:04,101
I mean there is no yield without risk

2940
03:44:05,101 --> 03:44:06,101
in an ideal world

2941
03:44:07,101 --> 03:44:08,101
if you have yield without risk

2942
03:44:09,101 --> 03:44:10,101
then something is extremely wrong

2943
03:44:11,101 --> 03:44:12,101
right

2944
03:44:16,101 --> 03:44:17,101
yes

2945
03:44:18,101 --> 03:44:19,101
it is unsustainable perpetual motion machine

2946
03:44:28,101 --> 03:44:29,101
so that one is

2947
03:44:30,101 --> 03:44:31,101
you know

2948
03:44:31,802 --> 03:44:32,802
if the

2949
03:44:33,802 --> 03:44:34,802
in a sense

2950
03:44:35,802 --> 03:44:36,802
if the bond has risk

2951
03:44:37,802 --> 03:44:38,802
or the maturity

2952
03:44:39,802 --> 03:44:40,802
the time value of money

2953
03:44:41,802 --> 03:44:42,802
is disadvantageous

2954
03:44:43,802 --> 03:44:44,802
and you have

2955
03:44:45,802 --> 03:44:46,802
situation where

2956
03:44:47,802 --> 03:44:48,802
people are not going to want the bond

2957
03:44:49,802 --> 03:44:50,802
demand falls for the bond for any reason

2958
03:44:51,802 --> 03:44:52,802
demand falls for the swap

2959
03:44:54,802 --> 03:44:55,802
then that is what sets the price

2960
03:44:56,802 --> 03:44:57,802
that is the only thing that sets the price

2961
03:44:58,802 --> 03:44:59,802
so

2962
03:45:00,501 --> 03:45:01,501
the price could be enormous

2963
03:45:02,501 --> 03:45:03,501
and horrible

2964
03:45:04,501 --> 03:45:05,501
but that does not make any difference at all

2965
03:45:06,501 --> 03:45:07,501
in fact

2966
03:45:08,501 --> 03:45:09,501
the people who are still

2967
03:45:10,501 --> 03:45:11,501
you see it is the same amount of money

2968
03:45:12,501 --> 03:45:13,501
I pay $90 for a $100 bond

2969
03:45:14,501 --> 03:45:15,501
you are paying $90 today

2970
03:45:16,501 --> 03:45:17,501
for a $90 bond today

2971
03:45:18,501 --> 03:45:19,501
it is only worth

2972
03:45:20,501 --> 03:45:21,501
$100 in the future

2973
03:45:22,501 --> 03:45:23,501
yes

2974
03:45:24,501 --> 03:45:25,501
that is what I am saying

2975
03:45:26,501 --> 03:45:27,501
yes

2976
03:45:28,501 --> 03:45:29,501
yes

2977
03:45:30,202 --> 03:45:31,202
you know because

2978
03:45:32,202 --> 03:45:33,202
the most patient person in the economy

2979
03:45:34,202 --> 03:45:35,202
is the one providing the swaps

2980
03:45:36,202 --> 03:45:37,202
and so

2981
03:45:38,202 --> 03:45:39,202
it is very implausible

2982
03:45:40,202 --> 03:45:41,202
that you would even tie that person

2983
03:45:42,202 --> 03:45:43,202
so the person on the sidechain

2984
03:45:44,202 --> 03:45:45,202
the person on the sidechain

2985
03:45:46,202 --> 03:45:47,202
is

2986
03:45:48,202 --> 03:45:49,202
they have an essentially $90 block

2987
03:45:50,202 --> 03:45:51,202
even if it is $100 BTC

2988
03:45:52,202 --> 03:45:53,202
they have a $90 BTC block

2989
03:45:54,202 --> 03:45:55,202
yes

2990
03:45:56,202 --> 03:45:57,202
today

2991
03:45:58,202 --> 03:45:59,202
so they are swapping $90 worth of L2 BTC

2992
03:46:00,202 --> 03:46:01,202
$90 worth

2993
03:46:02,202 --> 03:46:03,202
again it is $90 worth

2994
03:46:04,202 --> 03:46:05,202
of BTC

2995
03:46:06,202 --> 03:46:07,202
which could be $100 BTC

2996
03:46:08,202 --> 03:46:09,202
on L2

2997
03:46:10,202 --> 03:46:11,202
how I would put it

2998
03:46:12,202 --> 03:46:13,202
is that if there is a free market

2999
03:46:14,202 --> 03:46:15,202
like really a free permissionless market

3000
03:46:16,202 --> 03:46:17,202
ideally

3001
03:46:18,202 --> 03:46:19,202
then history shows us

3002
03:46:20,202 --> 03:46:21,202
that the market will find a discount rate

3003
03:46:22,202 --> 03:46:23,202
that makes sense

3004
03:46:24,202 --> 03:46:25,202
and find it automatically

3005
03:46:26,202 --> 03:46:27,202
right

3006
03:46:28,202 --> 03:46:29,202
of course

3007
03:46:30,202 --> 03:46:31,202
the type of thing I just sort of thought

3008
03:46:32,202 --> 03:46:33,202
went without saying

3009
03:46:34,202 --> 03:46:35,202
so I don't understand

3010
03:46:36,202 --> 03:46:37,202
it is very disappointing

3011
03:46:38,202 --> 03:46:39,202
in some sense we have to really wait

3012
03:46:40,202 --> 03:46:41,202
we in the sidechain group

3013
03:46:42,202 --> 03:46:43,202
we have to wait for the dumbest people

3014
03:46:44,202 --> 03:46:45,202
in the class to catch up

3015
03:46:46,202 --> 03:46:47,202
on like the official markets

3016
03:46:48,202 --> 03:46:49,202
I don't understand the fee thing

3017
03:46:50,202 --> 03:46:51,202
like about the fee rates

3018
03:46:52,202 --> 03:46:53,202
versus revenue

3019
03:46:54,202 --> 03:46:55,202
like that is like literally

3020
03:46:56,202 --> 03:46:57,202
it is not even like finance 101

3021
03:46:58,202 --> 03:46:59,202
it is not even

3022
03:46:59,902 --> 03:47:00,902
like a hand in a rectangle

3023
03:47:01,902 --> 03:47:02,902
it is baffling

3024
03:47:03,902 --> 03:47:04,902
so

3025
03:47:05,902 --> 03:47:06,902
I think

3026
03:47:09,902 --> 03:47:10,902
but as Bitcode was saying

3027
03:47:11,902 --> 03:47:12,902
they don't just say like

3028
03:47:13,902 --> 03:47:14,902
this is the problem

3029
03:47:15,902 --> 03:47:16,902
they just make up a big blur of stuff

3030
03:47:17,902 --> 03:47:18,902
all of which is wrong

3031
03:47:19,902 --> 03:47:20,902
I mean

3032
03:47:21,902 --> 03:47:22,902
Bitcode was especially disappointing

3033
03:47:23,902 --> 03:47:24,902
like

3034
03:47:25,902 --> 03:47:26,902
we waited a long time

3035
03:47:27,902 --> 03:47:28,902
for this proposal

3036
03:47:29,902 --> 03:47:30,902
I think it was extremely underwhelming

3037
03:47:31,902 --> 03:47:32,902
and disappointing

3038
03:47:33,902 --> 03:47:34,902
even though lately

3039
03:47:35,902 --> 03:47:36,902
he had many like weird

3040
03:47:37,902 --> 03:47:38,902
and

3041
03:47:39,902 --> 03:47:40,902
I would say from my perspective

3042
03:47:41,902 --> 03:47:42,902
very wrong takes

3043
03:47:43,902 --> 03:47:44,902
but

3044
03:47:45,902 --> 03:47:46,902
I did not expect him from

3045
03:47:47,902 --> 03:47:48,902
to do this

3046
03:47:49,902 --> 03:47:50,902
like nearly zero research

3047
03:47:51,902 --> 03:47:52,902
just write this

3048
03:47:53,902 --> 03:47:54,902
I actually did not expect this

3049
03:47:55,902 --> 03:47:56,902
to come out this way

3050
03:47:59,902 --> 03:48:00,902
right

3051
03:48:03,902 --> 03:48:04,902
yeah like I was going to say

3052
03:48:05,902 --> 03:48:06,902
that is why I didn't like

3053
03:48:07,902 --> 03:48:08,902
what I thought I would do

3054
03:48:09,902 --> 03:48:10,902
is he would write this post

3055
03:48:11,902 --> 03:48:12,902
then I would like read it

3056
03:48:13,902 --> 03:48:14,902
and then I would like react to it

3057
03:48:15,902 --> 03:48:16,902
and then we would go and do the podcast

3058
03:48:17,902 --> 03:48:18,902
but

3059
03:48:19,902 --> 03:48:20,902
he doesn't even really want to do the podcast

3060
03:48:21,902 --> 03:48:22,902
he has been telling Stefan Levera

3061
03:48:23,902 --> 03:48:24,902
he is like well I am traveling

3062
03:48:25,902 --> 03:48:26,902
I am at all these conferences

3063
03:48:27,902 --> 03:48:28,902
so

3064
03:48:29,601 --> 03:48:30,601
but yeah

3065
03:48:31,601 --> 03:48:32,601
so that is like

3066
03:48:33,601 --> 03:48:34,601
but I think he just

3067
03:48:35,601 --> 03:48:36,601
doesn't even want to do it

3068
03:48:37,601 --> 03:48:38,601
he just wants to

3069
03:48:39,601 --> 03:48:40,601
kind of get out of it or whatever

3070
03:48:41,601 --> 03:48:42,601
get out of the

3071
03:48:43,601 --> 03:48:44,601
finish the contract

3072
03:48:45,601 --> 03:48:46,601
so

3073
03:48:47,601 --> 03:48:48,601
yeah

3074
03:48:49,601 --> 03:48:50,601
so that is what he was saying

3075
03:48:51,601 --> 03:48:52,601
but you have to notice

3076
03:48:53,601 --> 03:48:54,601
how his story has also changed

3077
03:48:55,601 --> 03:48:56,601
in a very dishonest way

3078
03:48:57,601 --> 03:48:58,601
in a way that is

3079
03:48:59,601 --> 03:49:00,601
I think honestly

3080
03:49:01,601 --> 03:49:02,601
before he was saying something like

3081
03:49:03,601 --> 03:49:04,601
he would say this is the worst idea ever

3082
03:49:05,601 --> 03:49:06,601
merge my inside chains were Greg Maxwell's

3083
03:49:07,601 --> 03:49:08,601
biggest mistake

3084
03:49:09,601 --> 03:49:10,601
he would say stuff like that

3085
03:49:11,601 --> 03:49:12,601
and then I would ask like why

3086
03:49:13,601 --> 03:49:14,601
and he would say oh I don't have time

3087
03:49:15,601 --> 03:49:16,601
to write it down

3088
03:49:17,601 --> 03:49:18,601
so then really we were just paying him

3089
03:49:19,601 --> 03:49:20,601
we were paying him for the time it would take

3090
03:49:21,601 --> 03:49:22,601
for him to write it down

3091
03:49:23,601 --> 03:49:24,601
but it was as if he had these fully formed

3092
03:49:25,601 --> 03:49:26,601
rejections in his head

3093
03:49:27,601 --> 03:49:28,601
but then it was clear as of TabConf

3094
03:49:29,601 --> 03:49:30,601
that he was not into the idea at all

3095
03:49:31,601 --> 03:49:32,601
and really didn't know about it

3096
03:49:33,601 --> 03:49:34,601
and now what he's produced here

3097
03:49:35,601 --> 03:49:36,601
is really just

3098
03:49:37,601 --> 03:49:38,601
he doesn't even take a moment to acknowledge

3099
03:49:39,601 --> 03:49:40,601
like oh by the way

3100
03:49:41,601 --> 03:49:42,601
this doesn't affect L1 full nodes at all

3101
03:49:43,601 --> 03:49:44,601
it only affects miners

3102
03:49:45,601 --> 03:49:46,601
I mean he does indirectly acknowledge it

3103
03:49:47,601 --> 03:49:48,601
through the content of the post

3104
03:49:49,601 --> 03:49:50,601
but he doesn't actually say like

3105
03:49:51,601 --> 03:49:52,601
this really will not affect you

3106
03:49:53,601 --> 03:49:54,601
other than through the miners

3107
03:49:55,601 --> 03:49:56,601
and you already

3108
03:49:57,601 --> 03:49:58,601
if you're only running a full node

3109
03:49:59,601 --> 03:50:00,601
you don't go around

3110
03:50:01,601 --> 03:50:02,601
you don't go around with like

3111
03:50:03,601 --> 03:50:04,601
a helicopter and a car

3112
03:50:05,601 --> 03:50:06,601
and like look at what all the miners are doing

3113
03:50:07,601 --> 03:50:08,601
when you run a Bitcoin node

3114
03:50:09,601 --> 03:50:10,601
you know what I mean

3115
03:50:11,601 --> 03:50:12,601
so he doesn't even acknowledge that

3116
03:50:13,601 --> 03:50:14,601
hey mostly the mining is

3117
03:50:15,601 --> 03:50:16,601
a process that we don't observe

3118
03:50:17,601 --> 03:50:18,601
we only observe the L1 full node process

3119
03:50:19,601 --> 03:50:20,601
this does not affect that at all

3120
03:50:21,601 --> 03:50:22,601
the whole thing is like

3121
03:50:23,601 --> 03:50:24,601
when he said

3122
03:50:25,601 --> 03:50:26,601
there is no code

3123
03:50:27,601 --> 03:50:28,601
there is nothing for this

3124
03:50:29,601 --> 03:50:30,601
yeah at Baltic Honey Badger in September

3125
03:50:31,601 --> 03:50:32,601
that was months into having been

3126
03:50:33,601 --> 03:50:34,601
paid

3127
03:50:35,601 --> 03:50:36,601
the first half already to do that

3128
03:50:37,601 --> 03:50:38,601
to do this thing

3129
03:50:39,601 --> 03:50:40,601
so he had no idea

3130
03:50:41,601 --> 03:50:42,601
the code had been out for 2-3 years

3131
03:50:43,601 --> 03:50:44,601
yeah just would have to go to the website

3132
03:50:45,601 --> 03:50:46,601
and just look over it

3133
03:50:47,601 --> 03:50:48,601
yeah the very first page

3134
03:50:49,601 --> 03:50:50,601
there's a download link right at the top

3135
03:50:51,601 --> 03:50:52,601
come on

3136
03:50:57,601 --> 03:50:58,601
so yeah as you said

3137
03:50:59,601 --> 03:51:00,601
he made Apples Truman in his head

3138
03:51:01,601 --> 03:51:02,601
and he defeated it

3139
03:51:03,601 --> 03:51:05,601
and that's kind of how this comes across

3140
03:51:06,601 --> 03:51:07,601
like that's it

3141
03:51:14,601 --> 03:51:16,601
yeah but sure if we've got any great

3142
03:51:18,601 --> 03:51:19,601
fans of Peter Todd

3143
03:51:20,601 --> 03:51:21,601
this is the last opportunity before we end the space

3144
03:51:22,601 --> 03:51:23,601
so jump up quick and say whatever your thing is

3145
03:51:24,601 --> 03:51:25,601
that you need to say

3146
03:51:27,601 --> 03:51:28,601
quick

3147
03:51:29,601 --> 03:51:30,601
quick

3148
03:51:31,601 --> 03:51:32,601
last 5 seconds

3149
03:51:35,601 --> 03:51:36,601
going once, going twice

3150
03:51:40,601 --> 03:51:41,601
okay well

3151
03:51:42,601 --> 03:51:43,601
then I think the space

3152
03:51:44,601 --> 03:51:45,601
has come to an end

3153
03:51:46,601 --> 03:51:47,601
now until next week

3154
03:51:48,601 --> 03:51:49,601
you know the mass has ended

3155
03:51:50,601 --> 03:51:51,601
go in peace

3156
03:51:52,601 --> 03:51:53,601
see everyone later