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Our regular host Blake is in a different time zone right now, so I will be doing
this by

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myself and Blake will be back shortly.

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So before we begin, I have a bit of a spoiler.

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We're going to start a new show on the ShakeCoin.com podcast network with a
celebrity from crypto

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Twitter.

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I'm not going to name his name, you can try to figure it out.

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He is a former professional poker player and richer than all of you combined.

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And yeah, I'm not going to spoil anymore, we'll write about it on Twitter.

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So back with me and the show today is Paul Sztorc.

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Paul Sztorc is a statistician, an economist, a game theorist.

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You have worked under a Nobel laureate until you quit academia and turned a
full-time Bitcoin

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developer.

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Paul speaks at pretty much every Bitcoin developer-focused conference for, I don't
even know, let's call

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it eight years.

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I don't even know.

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You are not a libertarian, you're not a carnivore, you're not crazy, you're quite
reasonable.

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And you are currently the smartest person I know and the only true Bitcoin Maxi.

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I know.

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I don't know how that circle shrank so much from how big it used to be, but there it
is.

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Yeah, it's impossible because it's one of, I forget what the name is, but it's one
of

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those things where you don't get new Bitcoin Maxis, you get fake ones that try to
make

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some money, but it's a shrinking population, right?

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I guess so.

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There was a time when it was much more reasonable, like 2015, it was very
reasonable.

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There was nothing in Bitcoin's way, it was just going to succeed and it was going to

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take everything over.

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And now it does seem like there's something like a three or so percent chance that
Bitcoin

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is completely replaced by something else.

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Oh, I forgot, there's a disclaimer here.

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So we're going to be talking about a new venture you're doing and I am an investor
in that

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venture.

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So we'll get to what that venture is later.

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So I mean, we already talked about it.

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So Bitcoin today, January 23.

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Where are we?

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Like, what is the good?

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What is the bad?

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What do you think?

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Well, I mean, we've got a lot going on, as we always have.

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Bitcoin is a great idea and it is good to have discipline and say no to people who
want

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to screw it up.

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And that we're very good at that.

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I think we have gone completely off the deep end in terms of Drivechain or BIP300
was designed

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to be the exact opposite of what the mandatory block size increase that everyone was
talking

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about back in 2015, 2017, 2018, whatever, that whole period.

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That was like a mandatory thing that everyone would have to do and you'd have to
coordinate

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the switch.

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But BIP300 is a soft fork, it doesn't affect anyone's full notes, it was designed to
be

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the opposite and it was designed not to have any negative impact or really any
observable

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impact at all on the people who didn't opt in.

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I was going to get to the BIPs later, so I was going to think about what do we have
today

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on Bitcoin.

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We have El Salvador, have you heard of El Salvador?

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Yes.

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Have you heard of Michael Saylor?

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Yes.

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He has a great intern doing his tweets or whatever.

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I don't know, maybe he is a future of Bitcoin because we have, I mean, it is good
probably

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that we have attracted some boomer, a very greedy boomer with many, many
bankruptcies

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in his past.

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We want greedy people.

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Who has weaponized the leveraged financial system and Wall Street allows you to use
completely

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leveraged it against itself by buying Bitcoin in a company, public company and using
the

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shares in a public company to leverage up and buy more Bitcoin, which I think is
great

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for Bitcoin.

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I agree.

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But also it's created.

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Hopefully that's where the government bailout.

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That would be amazing.

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Oh my God.

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That would be amazing.

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I love that.

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Organized by the Fed.

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That would be beautiful.

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So I think that's a feature of Bitcoin.

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He has understood how to leverage Bitcoin against.

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And remember, people wanted, they wanted, remember the Bitcoin ETF?

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Like this is just a weird idea that just, it keeps orbiting.

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Like we've gone, it's like a Schrodinger's ETF, like we sort of have it and we don't

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have it.

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But when MicroStrategy just buys all this Bitcoin, then you just, if you want to own

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shares of MicroStrategy, buying Bitcoin, it's a Bitcoin ETF.

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If a boomer asked me how to buy Bitcoin, honestly, I can just tell them by
MicroStrategy because

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I mean, how much, how much overhead can they have and is leveraged.

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Yeah.

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Right.

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I agree.

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So that is a feature.

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And what is the, what is the bad?

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Well, unfortunately I think stuff has been settling in a little too much.

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You have the so-called static society, you know, things don't change.

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Don't you usually say that a static society is a dead society?

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Yeah.

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Right.

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It's not good.

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We don't want that.

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It's the kiss of death, honestly.

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So people have an idea that is a good idea, which is we want to make the network
reliable,

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but they forgot that, um, like a naive reliability, uh, like, so there's a big
difference between

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like Gutenberg standardizing the alphabet on 26 letters, but you being able to print

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an infinite variety of books on top of that, so you need the second layer that the
stability

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at one layer is all about the flexibility on the upper layer.

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So it's similarly when people want Bitcoin to be reliable and simple, very dumb,
they

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don't want to do anything.

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What they have in mind is that I, when I transact with it, no matter what I want to
do, if I

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want, if I want to like, you know, um, do whatever, uh, go shopping on the darknet
market

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or whatever I want to do, ransomware, weird exotic thing, capital flight, then I
won't,

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we're not going to mess that up.

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So the stability at one layer is all about flexibility at the upper layer, not about

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just stopping everything in the way it is.

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And in particular, where people really think is they just think we, uh, we're going
to

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succeed no matter what, nothing can stop Bitcoin success.

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And it's when you think that, that actually you're doomed.

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And, um, and you talked about this before, but what it's done, I mean, Bitcoin has
always

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been very dismissive of Ethereum.

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I was one of them.

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Uh, I, like I bought the, I bought the Ethereum ICO because it was very exciting.

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It was like the first time that was done, uh, and then was completely dismayed by
the

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amateurness of the development process, uh, the way this squandered the funds and
lawyers

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and many things.

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But over the years, uh, you cannot say that that is Ethereum anymore because simply,
uh,

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it is not the same thing anymore.

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And, uh, everything has improved, including the coin distribution, you know, most of
the

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wells have gotten wrecked by themselves.

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So this is solved itself.

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Uh, so what, what do you think is the big problem as you say, but as you also say,
since

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these people were terrible people, they, they, they lost it.

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Yeah.

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So what is the, what is the risk?

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I mean, on Ethereum and you'll have people like Udi probably saying Ethereum is a
ultrasound

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money because it's, uh, you know, the money supply is shrinking, which, uh, I'm
guessing

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you will say is irrelevant, uh, because it's short term and not so much, but what
about

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the amount of fees people are paying on Ethereum compared to how much fees they are
paying

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on Bitcoin?

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What does, what are the numbers and what does that mean?

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Well, there's a very disturbing trend because of how reliable it is.

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You can take all the available data and put it on a log scale.

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So you get this big, you know, big view of everything and you can see that it goes
up,

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uh, uh, you know, first it doesn't go perfectly steadily, but overall it goes up on
a straight

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diagonal line from being 1000.

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This is the ratio of all Ethereum, the purchasing power in U.S. dollars.

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So this is all the, the amount of money that regular users are spending on Ethereum
fees

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divided by the ratio of Ethereum to Bitcoin in terms of transaction fees.

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So this is who's paying more to use the blockchain.

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And it's going up a straight line on the log scale.

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Up and up and up and up and it passes being equal a long time ago and there's now,
you

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know, 10 to a hundred times.

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Does that mean that everyone in the world is stupid or does that mean that Ethereum

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is overtaking Bitcoin in, I don't know, could you say security?

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Could you say, I don't know.

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Well, it has more paying customers.

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Ethereum also sort of cheats somewhat to get this because it's not a completely
apples

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to apples comparison because there are different block times and things.

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But mostly it is an, mostly it is an apples to apples comparison.

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Like it's, it's not perfectly, but it, there's no way that that could happen in a
world where

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no one cared about Ethereum.

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They care about it as least as much.

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The people actually use it.

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So again, this is the intrinsic value.

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This is the big thing that someone has to do is someone has to like make a movie
called

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intrinsic value or like a short, like a little YouTube short, like a little animated
thing

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or like better.

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It would be really good if it had real actors, you know, someone, someone, people
using the

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Bitcoin, excuse me, the Bitcoin, you know, the, any blockchain for something.

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So like these would be like broadcasting a message, it could be someone on the run
and

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they broadcast a message in the blockchain with Opportunity through their like
their,

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their public key, you know, like someone like, and yeah, that was what you, that's
what you'd

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have to do is write this story so that like these, this young couple are reunited
and

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otherwise without the blockchain, they would never have been able to find each other
or

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something like the refugees or something like that, you know, we have the Ukraine
thing

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in there, we've all the stuff in there and it'll be that emotional stuff so that
people,

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but that is again, but people have an enormous anxiety about this topic of what does
the

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blockchain actually do in the real world?

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But there's lots of things.

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I mean, I think, I think what you said is I'm going to use that.

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I think that's really good.

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It's, it has more paying customers, because in anything else in this world, if you
say,

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you know, if you tell me that a certain, a certain product is better than another,

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because you're some kind of a hipster or I wouldn't even know.

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But if you say, well, if you look at it, people do prefer this one over that one.

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It's pretty, it's pretty simple if you just say like, what do people prefer?

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OK, anyway, and yeah, because with Bitcoin, I don't know if this is real, but to me,
it's

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felt like a bit of an issue with the static block size that if the fees are low, we
have a

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problem because that means we have no users.

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And if the fees are high, we have a problem because there's problems with using it.

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So Ethereum has, I mean, Ethereum has a solution to this, which is all this moon
technology

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that may or may not be invented, but they're already offloading a lot to these layer
twos.

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I know because I'm an Ethereum user.

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So, for example, if you want to, if you want to invest in a decentralized, if you
want to

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invest in a pretty like, in a pretty even safe basket of crypto, there's a service
called

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GMX. I'm not ref coding this, I'm just mentioning.

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There's a service called GMX that maintains, maintains an index like this.

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You put money in and it's like it's divided across like Bitcoin, Ethereum and some
fiat.

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I don't know, stable coins and just maintains this.

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And when you put your money in there, you get the appreciation of the underlying
assets and

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also you get a cut of the profit from people trading against this pool.

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So, but that smart contract cannot run on Ethereum because it's using too much gas.

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So it runs on like an L2, which means the base token is also Ether called Arbitrum,
which I

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know very little about, but I use it every day.

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I know a lot of people use it.

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So this offloading is happening.

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I'm not going to claim Arbitrum has the security of Ethereum because it clearly does
not.

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But it's like shit is working, you know.

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We don't want to live in a world where people have to justify something.

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So what you said was very important, which is that you use it, but you don't
understand it.

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Everything that is good works like that, actually, believe it or not.

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You know, Frederick Hayek, when he won the Nobel Prize, he gave this speech about
the use of

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knowledge in society and he said, we're supposed to think, we're often advised to
think about

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what we do. But if everyone did that, we would only be able to do very, very little.

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We would, you know, we would all be our own farmers.

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We would be our own plumbers.

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We would be our own everything.

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And it would, everything was, you know, mostly when you buy clothes, you have no
idea how

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they were made, really.

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00:14:34,380 --> 00:14:36,020
You have no idea where the thread came from.

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00:14:36,340 --> 00:14:39,140
When you use a computer, you have no idea about the operating system.

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You have no idea about the silicon.

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You have no idea who's generating the power or why.

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And that is the same.

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That is the same as Bitcoin.

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I mean, the first time I use Bitcoin, I download the exe file.

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It's like a graphical user interface on Windows.

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It's got three tabs.

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Overview shows your transaction history and there's a tab called receive, which
shows an

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address you can share with people so they can send you funds.

226
00:14:59,380 --> 00:15:03,500
And there's a tab called send where you paste an address in the amount, click send,
and it

227
00:15:03,500 --> 00:15:05,620
appears in the transaction history in the overview.

228
00:15:05,780 --> 00:15:09,660
And like this shit could have been PayPal, you know, when I was downloading it.

229
00:15:09,660 --> 00:15:16,180
I literally didn't know it could just run on Satoshi's server in his basement.

230
00:15:16,420 --> 00:15:18,980
But like, I don't know, somebody said it works.

231
00:15:18,980 --> 00:15:23,340
And I looked into it later when I had more staked on it.

232
00:15:23,540 --> 00:15:24,660
So moving on.

233
00:15:25,260 --> 00:15:30,140
No, but it's a very important point because it is about what's wrong with Bitcoin
today is that

234
00:15:31,300 --> 00:15:33,180
there's a need to like justify everything.

235
00:15:33,180 --> 00:15:38,500
So, for example, my my BIP300, you know, I just you have to field questions from it
all the

236
00:15:38,500 --> 00:15:42,940
time. And it doesn't matter, like, you know, like in the in the real world, people
would just

237
00:15:42,940 --> 00:15:45,500
use it in a functioning thing.

238
00:15:45,500 --> 00:15:46,860
They would just try it and use it.

239
00:15:46,860 --> 00:15:52,460
And if it didn't work, then they would not learn about it from using it.

240
00:15:53,220 --> 00:16:00,500
But I guess I guess an issue on Bitcoin that we have today is that we're we are and
this will

241
00:16:00,500 --> 00:16:08,100
lead to the next point, which is we're not able to build on it like we're we have no
way of

242
00:16:08,100 --> 00:16:13,300
establishing these layers like the Arbitrum or the DeFi and Lego pieces.

243
00:16:13,700 --> 00:16:15,580
We always thought we would, but we don't.

244
00:16:16,060 --> 00:16:18,740
And it's not that it's not that people don't want to do it.

245
00:16:19,260 --> 00:16:28,380
It's like they don't have a way to express that, which leads to what is and you have
to

246
00:16:28,380 --> 00:16:29,580
promise to keep this very short.

247
00:16:29,580 --> 00:16:32,980
What is Drivechain, BIP300/301?

248
00:16:33,980 --> 00:16:41,100
OK, my plan for sending coins to a different piece of software and back.

249
00:16:41,100 --> 00:16:43,420
So this is my sidechain BIP.

250
00:16:43,900 --> 00:16:47,620
That's so so so pretty much how I use Arbitrum.

251
00:16:47,620 --> 00:16:52,980
Right. Well, that would be the ideal thing is like, you know, no one could be a
specialist in

252
00:16:52,980 --> 00:16:58,100
everything. So you have to be a layperson and something, as I just said, it's like
this is very

253
00:16:58,100 --> 00:16:59,300
desirable for someone.

254
00:16:59,860 --> 00:17:04,900
The issue is really like it was designed from the ground up to have this property
where it

255
00:17:04,900 --> 00:17:07,060
doesn't affect anyone who's not using it at all.

256
00:17:07,700 --> 00:17:10,540
But people just kind of don't they decide they just don't believe that.

257
00:17:10,580 --> 00:17:15,980
And and the other thing is it can be added with a soft fork that's optional and it
can also be

258
00:17:15,980 --> 00:17:18,660
later erased by a soft fork.

259
00:17:18,940 --> 00:17:21,140
So there's literally no downside whatsoever.

260
00:17:22,580 --> 00:17:27,820
But still, this is what has happened in the Bitcoin community is, you know, it's not
as you

261
00:17:27,820 --> 00:17:29,860
say with people.

262
00:17:31,140 --> 00:17:37,340
There's just there's no will to actually do anything because everyone thinks that
everyone

263
00:17:37,740 --> 00:17:42,340
this is my view is that everyone because of the scaling war, people got xenophobic,
resistant to

264
00:17:42,340 --> 00:17:45,020
all change, and they just think that Bitcoin success is preordained.

265
00:17:45,020 --> 00:17:47,460
Now that we kicked out, we had to just kick out Roger Ver.

266
00:17:47,460 --> 00:17:48,580
And then it was that was it.

267
00:17:48,700 --> 00:17:50,060
That was that was the test.

268
00:17:50,060 --> 00:17:54,500
And now we passed and we will be rewarded in the afterlife or whatever.

269
00:17:55,660 --> 00:18:01,180
Yeah, I mean, I guess I guess the problem is like say this kick out Roger Ver thing,
but like

270
00:18:01,740 --> 00:18:04,740
and and get left with who.

271
00:18:04,740 --> 00:18:08,300
So there's some maybe there's like a I guess it's like a vacuum.

272
00:18:08,700 --> 00:18:13,100
There's no there's no like we don't have a vitalic what's at all.

273
00:18:13,420 --> 00:18:14,980
We have no one.

274
00:18:16,740 --> 00:18:24,060
Well, yeah, Vladimir decided to step down and he did so in a way that he did not
name who would now

275
00:18:24,060 --> 00:18:30,060
be the owner of the Bitcoin repository on GitHub for what that's worth.

276
00:18:31,060 --> 00:18:34,020
So it's very unclear exactly what happened with that.

277
00:18:35,020 --> 00:18:39,420
So at least to me, if anyone knows, tweet it to me.

278
00:18:40,020 --> 00:18:42,380
I mean, so Drivechain is sidechains for Bitcoin.

279
00:18:42,780 --> 00:18:49,100
Actually, it's so easy to explain these days because so many people use like
Optimism or

280
00:18:49,100 --> 00:18:54,380
Arbitrum and they don't really they just know that it's cheaper.

281
00:18:54,380 --> 00:19:00,100
So people are actually using they're using sidechain technology today on other
chains.

282
00:19:00,540 --> 00:19:06,260
I know this like Cosmos has something I'm a bit unclear how it works, but so people
actually

283
00:19:06,260 --> 00:19:11,780
use it today. But I guess the difference with Drivechain is that the creation and
also

284
00:19:11,780 --> 00:19:14,940
destruction of the sidechain is itself decentralized.

285
00:19:15,780 --> 00:19:20,300
Right. Which is a huge difference because it's a company.

286
00:19:20,420 --> 00:19:21,860
Optimism is a company.

287
00:19:22,740 --> 00:19:27,500
You know, the zero knowledge chains on Ethereum, they are companies with offices in
New York

288
00:19:27,500 --> 00:19:32,580
City and lawyers like this is this is not some utopian libertarian dream.

289
00:19:32,700 --> 00:19:38,180
And often they have like the backup key or whatever, like the the dev key that can
like

290
00:19:38,180 --> 00:19:40,180
whatever, just like reset everything or something.

291
00:19:40,180 --> 00:19:41,140
At least halt the chain.

292
00:19:41,140 --> 00:19:50,060
Yeah, for sure. So so what is what is the progress of getting this?

293
00:19:50,060 --> 00:19:51,860
This, I promise, is the last sad thing.

294
00:19:52,420 --> 00:19:57,580
So what is the progress of getting Drivechain deployed on Bitcoin today?

295
00:19:58,620 --> 00:20:04,500
Yeah, well, I mean, I think in the past I was more interested in I wanted to like do
the

296
00:20:04,500 --> 00:20:09,940
right thing and like try to explain it to people because I thought, you know,
there's no

297
00:20:09,940 --> 00:20:11,820
consent without informed consent.

298
00:20:11,820 --> 00:20:13,620
And I want people to understand what's going on.

299
00:20:13,940 --> 00:20:16,860
People clearly didn't know anything about SegWit when that was activated.

300
00:20:17,220 --> 00:20:19,900
You know, nothing about it years afterwards.

301
00:20:19,900 --> 00:20:21,740
So I was like, I didn't really want that to happen.

302
00:20:22,900 --> 00:20:29,380
Now, I kind of think like that's a big issue, because when you try to explain it to
people,

303
00:20:29,380 --> 00:20:31,940
then you're beholden to how much effort they're willing to put in.

304
00:20:31,940 --> 00:20:37,700
And I have learned that an enormous percentage of people are not willing to read the
BIP

305
00:20:37,940 --> 00:20:42,340
text or try the software or read anything or they won't even read the titles.

306
00:20:42,340 --> 00:20:45,460
Many of the people don't know the titles of the BIPs or whatever.

307
00:20:45,700 --> 00:20:49,500
So but mostly I think it actually has been going very well over the last two years.

308
00:20:49,500 --> 00:20:51,820
You know, I get invited to more and more and more conferences.

309
00:20:51,820 --> 00:20:54,180
I get invited on more and more podcasts.

310
00:20:54,180 --> 00:20:55,620
People seem to be getting the idea.

311
00:20:56,340 --> 00:21:00,300
But as I said before, we don't want to live in a world where everyone actually
understands

312
00:21:00,300 --> 00:21:03,580
everything. No one actually wants that.

313
00:21:03,580 --> 00:21:06,180
But that's kind of what I was trying for at first.

314
00:21:06,500 --> 00:21:13,060
Separately, though, I did since none of the critics have ever had any idea what
they're

315
00:21:13,060 --> 00:21:17,780
talking about. And all the proponents agreed with me about the potential.

316
00:21:18,860 --> 00:21:21,780
My main strategy has just been to build the useful stuff.

317
00:21:21,780 --> 00:21:23,100
So the Zcash sidechain.

318
00:21:24,740 --> 00:21:26,060
They will come. Yeah.

319
00:21:26,060 --> 00:21:31,740
And so so they have a tangible demonstration of what it's for, but the prediction
market

320
00:21:31,740 --> 00:21:33,420
software, the scaling sidechain.

321
00:21:33,420 --> 00:21:37,780
So we built like an NFT sidechain, a bit asset sidechain, basically.

322
00:21:37,780 --> 00:21:40,100
And so we have a bunch of stuff going on.

323
00:21:40,100 --> 00:21:41,820
And, you know, I'd like to do more.

324
00:21:41,820 --> 00:21:43,900
I'd like to do a Namecoin thing.

325
00:21:43,900 --> 00:21:47,180
We haven't really found the right person for that yet.

326
00:21:47,780 --> 00:21:50,460
But I would love to do that because I think that idea is great.

327
00:21:51,140 --> 00:21:54,460
And we're going to copy Seacoin.

328
00:21:54,460 --> 00:21:57,060
And we're going to go. I've always liked that project.

329
00:21:57,500 --> 00:22:03,780
Yeah. So the goal is to copy the projects that are actually useful so that no one
can ever

330
00:22:03,780 --> 00:22:06,300
have this intrinsic value anxiety again.

331
00:22:06,300 --> 00:22:11,060
So they people when because this is this is horrible to watch, you know, when you've
been in

332
00:22:11,060 --> 00:22:15,060
Bitcoin for a long time and people go on whatever Joe Rogan or they go on whatever
it is, a

333
00:22:15,060 --> 00:22:19,460
big a big television show and they just think this it doesn't do anything.

334
00:22:19,460 --> 00:22:22,420
And you're like, no, it does a lot of important things that only it can do.

335
00:22:22,420 --> 00:22:26,100
But but that you have to teach something like that by example, I think.

336
00:22:27,060 --> 00:22:32,700
And so that leads us to the next one, which is.

337
00:22:33,660 --> 00:22:37,220
What what is LayerTwo Labs and.

338
00:22:39,060 --> 00:22:41,140
And why are you attacking Bitcoin?

339
00:22:42,060 --> 00:22:47,340
Right. I think, well, you know, as a lot of people have said over the years,
including you,

340
00:22:47,340 --> 00:22:50,460
but including other people, friends of mine, they've said, you know, Paul, you have
to start a

341
00:22:50,460 --> 00:22:52,020
company and blah, blah, blah.

342
00:22:52,020 --> 00:22:53,740
You're you're so great, et cetera.

343
00:22:53,740 --> 00:22:55,660
People send me up, sell these nice things.

344
00:22:56,060 --> 00:22:57,140
Are they true? No one knows.

345
00:22:57,420 --> 00:23:04,100
But the the company is an attempt to actually kind of get something serious because
for a

346
00:23:04,100 --> 00:23:09,740
while I kind of do what I like, enjoyed the criticism of Drivechain because I come
from

347
00:23:09,740 --> 00:23:15,180
like academia where like criticism is like really serious and you just you just
dwell in the

348
00:23:15,180 --> 00:23:18,620
seriousness and you you just nothing affects the real world.

349
00:23:18,620 --> 00:23:22,980
So you can just be like you can just be like, ah, you know, and you can just be like
this

350
00:23:22,980 --> 00:23:27,340
idea. You can you can you can sit around with all your other academia friends and
jerk each

351
00:23:27,340 --> 00:23:28,300
other off. Yeah.

352
00:23:28,300 --> 00:23:31,300
And that's like criticizing each other.

353
00:23:31,300 --> 00:23:33,620
It's like the jerk, an S&M thing.

354
00:23:33,620 --> 00:23:36,900
You're like, oh, like this footnote, such and such believe.

355
00:23:38,420 --> 00:23:43,060
And I was kind of just like, I don't know, like, OK, let's just like get this for
real.

356
00:23:43,060 --> 00:23:46,380
So it's a lot about building a team.

357
00:23:46,380 --> 00:23:51,100
It's a lot about building a lot of people with skin in the game, people who would
benefit as a

358
00:23:51,100 --> 00:23:53,180
result. What are you what are you made?

359
00:23:53,180 --> 00:23:54,580
What is LayerTwo Labs making?

360
00:23:54,580 --> 00:23:55,740
What is its first product?

361
00:23:56,580 --> 00:23:59,580
We have the making this demo software.

362
00:23:59,580 --> 00:24:00,980
So we're making the sidechains.

363
00:24:00,980 --> 00:24:07,980
We're making the we're making improved improvements to the Bitcoin node software,
which

364
00:24:07,980 --> 00:24:09,580
many of which you can see right now already.

365
00:24:09,580 --> 00:24:14,380
If you go and download the software, the drivechain.info software.

366
00:24:14,380 --> 00:24:17,460
Yeah, I'll show the banner here still on the bottom of the screen.

367
00:24:17,460 --> 00:24:18,620
You can download.

368
00:24:18,620 --> 00:24:20,260
We're making these sidechains.

369
00:24:20,260 --> 00:24:23,260
We're making this we're making the Zcash clone and making the Ethereum clones.

370
00:24:23,260 --> 00:24:26,980
We're making up the sidechains that that's what we're going for.

371
00:24:26,980 --> 00:24:32,460
And we want to demonstrate the potential of all this technology by actually building
it.

372
00:24:32,460 --> 00:24:34,460
So that's the best way to teach people.

373
00:24:35,860 --> 00:24:41,660
So, yeah, I don't think it's I don't think we need to talk so much about like how
sidechains are

374
00:24:41,660 --> 00:24:48,220
created and destroyed and where the fees go and all this stuff, because that's
that's already

375
00:24:48,220 --> 00:24:56,740
been done a lot. But perhaps you can talk about the different sidechains you guys
will be

376
00:24:56,740 --> 00:25:00,260
making at LayerTwo Labs and so what they are.

377
00:25:00,533 --> 00:25:12,533
And what the functions are. And maybe for the copy ones, what will happen to the
original? And so, like, will we have smart contracts? Will we have prediction
markets? Just give it up.

378
00:25:12,533 --> 00:25:41,533
Yes. OK. So we're going to copy, first of all, like Zcash and Ethereum, because
Zcash has extremely useful privacy technology. And also the Zcash protocol has kind
of weird, has like attacks and stuff. So we're just going to delete that and copy
the what what makes it great, which is all that research that R&D into the Zk
protocol.

379
00:25:42,533 --> 00:26:04,533
Privacy technology. So because we want that and we want Ethereum just because it's
the number one competitor to Bitcoin. So we want to just show that no one is safe,
basically. And we're going to have large blocks are bad on layer one, but on layer
two, they are perfectly harmless and very good thing. So that's very easy to do.
We're going to do that.

380
00:26:04,533 --> 00:26:27,533
We're going to have lots of optimizations so that that's a very sane and simple idea
for payments. We're going to do the prediction markets. My prediction markets
project that was originally Truthcoin is now at BitcoinHiveMind.com. The purpose of
the prediction markets project is very important because it has this peer to peer
Oracle that tries to figure out what is happening in the real world.

381
00:26:27,533 --> 00:26:53,533
And that means you can wager on that as long as you know about that. So that means
that this entire world of derivatives is open to you, including these very important
conditional markets, such as should we keep this CEO or not? Or should we keep this
president or not? And you can just not only can you use them to easily figure out
what an organization should do, like what you should vote for or whatever.

382
00:26:54,533 --> 00:27:09,533
But you can also if people if you know that someone is going to be a good president,
but they'll never get elected, or if you know that someone is going to be a bad
president and they will get elected, you can use these markets to just make money
off of everyone else who doesn't believe you.

383
00:27:10,533 --> 00:27:34,533
Yes, we've actually done an episode. We've done an episode before on this. So we're
going to link to that episode. I know which one you talked about conditional
markets. If you give me more than two drinks, I will force you to watch the whole
presentation you gave on conditional markets on YouTube. I've shown it to so many
people. They've been very reluctant. They want to listen to dance videos on YouTube.
But I forced them anyway.

384
00:27:35,533 --> 00:27:48,533
So there's a privacy chain. So it's basically, if you want to make the perfect
Zcash, all you have to do is remove the token because the economics are awful and
people hate it.

385
00:27:49,533 --> 00:28:08,533
Exactly. One thing that sidechains won't copy. It's the thing that people don't
like. So technology is great, though. The fact that the privacy accumulates, it
scales, like that you're in the pool, the more users you have, the more people
you're mixing with. So it's desirable that way.

386
00:28:09,533 --> 00:28:18,533
And so there's the privacy chain. And there is the storage chain, you mentioned,
which is inspired by SIA.

387
00:28:19,533 --> 00:28:20,533
Yes, we want that.

388
00:28:21,533 --> 00:28:24,533
And there is the Ethereum chain.

389
00:28:25,533 --> 00:28:26,533
Ethereum, yeah, large block.

390
00:28:27,533 --> 00:28:37,533
So Ethereum, you can plug, you connect your Metamask like you're connecting to some
other EVM network. But it's on Bitcoin.

391
00:28:38,533 --> 00:28:54,533
Right. You can get this. This is like an Ethereum clone, but there's no ether there.
It's zero. And you can send BTC from layer one into it and you get credited with
stuff, Gui or whatever over there.

392
00:28:56,533 --> 00:29:04,533
And, you know, and that's where it comes from. And then you can send it back. When
you're done using it in Ethereum world, you send it back. This is the whole point of
sidechains.

393
00:29:05,533 --> 00:29:06,533
Okay, so I can...

394
00:29:06,533 --> 00:29:22,533
RSK, they've said, you know, they plan as soon as physically possible. They want to
turn their project from the federated model that it is into BIP300 sidechain, but
it's just not possible yet.

395
00:29:23,533 --> 00:29:31,533
And, yeah, so I can basically clone all my favorite smart contracts onto this EVM
sidechain.

396
00:29:31,533 --> 00:29:41,533
Yes. In fact, we made it by cloning the latest version of Ethereum and then just
adding a couple changes into that. So now when we make the clones, we have ones that
we make from scratch. And then we have ones that we clone.

397
00:29:42,533 --> 00:29:59,533
Now when we clone, we start with the altcoin node and we change it from there back
and we have like a little module. So we just change it to like, we make it like, we
turn it from altcoin to sidechain and then it's mostly their technology that we,
it's almost all their work.

398
00:30:00,533 --> 00:30:03,533
So you have a fork of GoEthereum?

399
00:30:04,533 --> 00:30:05,533
Yes.

400
00:30:06,533 --> 00:30:15,533
Oh, but you know, that's how all of these other EVM chains work. They're just like
even Binance Smart Chain, they're all forks. I think even Tron is an early fork.

401
00:30:16,533 --> 00:30:37,533
Yeah, I think that's very, I mean, this is the idea of horizontal scaling, which
gives us the large block sidechain idea, which is very different. Having one layer
one block that fills the whole world is very different from having one small block
main chain and having a team of different large block optional layer two sidechains.

402
00:30:37,533 --> 00:30:53,533
And you could mostly stay and your fraction, you're the one that you actually use,
ignore the rest. And then you're mostly immune to any kind of problems that happen
on there, you can recover and go back to the small block main chain at any time.

403
00:30:53,533 --> 00:31:22,533
And have you thought of the possibility of ending up like Avalanche, where Avalanche
has its own chain, I believe it's called the X chain, which might be the governance
chain, and there's like a staking chain. But when people use and think about
Avalanche, they think of what is called the Avalanche C chain, which is an EVM fork,
which is the only one that people use. Have you thought that this could actually
happen?

404
00:31:23,533 --> 00:31:52,533
Well, I think, you know, it should be up to the users, whatever the user likes,
whatever the customer likes, that's the thing, you know, at the end of the day, I
mean, obviously, if you, there are people out there, like who, it's their job to be
like an executive, like a Steve Jobs or something, you know what I mean? Like their
job is like, like, like, Ford said about if I asked the customer, they say they
wanted a faster horse or something. So people out there have to decide what they
think the customer is going to like, but

405
00:31:53,533 --> 00:32:22,533
at the end of the day, the customer gets the last word. And if they like something,
then that's what's going to be used. But I have a lot of ideas about what people
will like. I mean, Namecoin is another example of something where I just think the,
the potential is enormous. And the way we currently use the internet is so annoying
compared to what it would be like if we had just, we just had Namecoin out in the
world, it would be like impossible to deplatform people.

406
00:32:23,533 --> 00:32:52,533
You would have the same screen name on every single website, you would never have
any passwords again, you would just have a username. And it's something else,
something, some app or something that would give you the six digit PIN to log in.
And that would be gated by the 12 word seed or something. And so we have, there's an
enormous amount of improvements to everyday life that are possible just from the
Namecoin sidechain idea.

407
00:32:53,533 --> 00:33:00,533
That just is like not, we just never got around to like, no one never got around to
like finishing. So.

408
00:33:23,533 --> 00:33:38,533
You can do like old school, old school crop insurance. You can figure out how much
your house is worth, maybe, like, I don't even know.

409
00:33:38,533 --> 00:33:40,533
You can, I don't know the sum, the liquidity.

410
00:33:40,533 --> 00:33:48,533
Not your house, but the area, the area, the city you live in, you can figure out
what the property prices are like that.

411
00:33:49,533 --> 00:34:01,533
The key is betting on the future and then comparing two different futures to say if
we, if this was the mayor, what would be the value of all the land in whatever,
Chicago, and it versus if this person was the mayor.

412
00:34:01,533 --> 00:34:13,533
Yeah, it's like, if I put on this shirt, and I go out, what is the probability that
I'll find a date?

413
00:34:13,533 --> 00:34:20,533
That's theoretically possible. Sure. It does. Prediction markets can't aggregate any
knowledge that doesn't exist.

414
00:34:20,533 --> 00:34:27,533
So if you bet on what's this coin flip going to be while the coin is still in the
air, it can't do anything magically.

415
00:34:27,533 --> 00:34:35,533
But in theory, all that is possible with the right management of liquidity, which I
think is another thing that unfortunately is very misunderstood.

416
00:34:35,533 --> 00:34:42,533
And that explained what to do a long time ago, but people just don't listen and it
has to be shown by example, I think.

417
00:34:42,533 --> 00:34:49,533
Yeah. So to finish this off, everybody needs to download and test your software.

418
00:34:49,533 --> 00:34:54,533
That's what you want. It's on the bottom. And like I said,

419
00:34:55,533 --> 00:35:03,533
easier and easier over time, where eventually there will be no, there will all be
one, there will only be one launcher application.

420
00:35:03,533 --> 00:35:13,533
And eventually, maybe, hopefully, you'll even be able to just run the software from
far away, like through a web browser or something, we're going to try to make it as
easy as humanly possible for people to run.

421
00:35:13,533 --> 00:35:20,533
But right now, it's not that easy. So you will. But that is the best way to, to
really figure out what we are up to.

422
00:35:20,533 --> 00:35:32,533
And as I mentioned, we have a new show coming up with a new host, an anonymous
Bitcoin crypto celebrity.

423
00:35:32,533 --> 00:35:39,533
And Paul, where are you speaking this year? Where can people find you in meatspace?

424
00:35:39,533 --> 00:35:44,533
I was invited to a lot of stuff. I think I'm going to be at, I'm going to be at the
big Miami conference.

425
00:35:45,533 --> 00:36:00,533
I'm going to be at MIT Bitcoin Expo. I'm going to be some other places. I think
there's the Texas one that is like a layer two one. I'm going to be at that one. I
think I'm going to be all around.

426
00:36:01,533 --> 00:36:10,533
Okay, okay. And everybody, you should follow Paul on social media. We're going to
have links to that in the in the show notes.

427
00:36:12,533 --> 00:36:20,533
And of course, follow Chikunicom on Twitter, and subscribe to the weekly newsletter,
which is all memes and no alpha.

428
00:36:21,533 --> 00:36:24,533
And thank you for coming on the show, Paul.

429
00:36:24,533 --> 00:36:31,533
Thanks for having me. I love the newsletter. It's the best, the best newsletter, I
think out of every newsletter I've ever even heard of. So thank you.