1 00:00:00,000 --> 00:00:02,240 We have added a lot of L2s. 2 00:00:02,240 --> 00:00:05,360 What these all have in common, that Drivechain does not have in common, 3 00:00:05,360 --> 00:00:07,840 is that in Drivechain they're all merged mined, 4 00:00:07,840 --> 00:00:10,240 governed by the decentralized mining process. 5 00:00:10,240 --> 00:00:12,080 And that probably sounds like a small detail, 6 00:00:12,080 --> 00:00:18,160 but I don't think there's any way for the other type of L2 to succeed at a large scale. 7 00:00:18,160 --> 00:00:19,840 Paul, how are you? 8 00:00:19,840 --> 00:00:20,800 I'm doing great. 9 00:00:20,800 --> 00:00:22,320 Welcome to Mara Foundation TV. 10 00:00:22,320 --> 00:00:24,160 It's so exciting to have you here. 11 00:00:24,160 --> 00:00:25,440 I'm excited to be here. 12 00:00:25,440 --> 00:00:29,200 Yeah, we're going to talk about the LayerTwo environment right now, 13 00:00:29,200 --> 00:00:31,040 one of your favorite subjects. 14 00:00:31,040 --> 00:00:33,520 You are a prominent authority on this subject, 15 00:00:33,520 --> 00:00:36,240 the author of Drivechains and BIP 300, BIP 301, 16 00:00:36,240 --> 00:00:38,960 which is sort of a proposed software solution 17 00:00:38,960 --> 00:00:42,080 that enables L2 functionality on Bitcoin, which we'll get into. 18 00:00:43,520 --> 00:00:44,800 But before we get into Drivechains, 19 00:00:44,800 --> 00:00:48,160 let's just sort of like lay out the problem that Drivechains is trying to solve. 20 00:00:48,160 --> 00:00:49,840 I think that's the best place for us to start. 21 00:00:51,600 --> 00:00:54,000 Several L2s have sort of arisen, 22 00:00:54,000 --> 00:00:56,960 especially in the last couple of years in Bitcoin. 23 00:00:56,960 --> 00:00:58,000 Obviously, prior to that, 24 00:00:58,000 --> 00:01:03,760 there was an enormous amount of talk about Lightning specifically as sort of the L2, 25 00:01:03,760 --> 00:01:07,840 but now there's many possible other solutions, ARK, BIPVM, all of these things. 26 00:01:09,280 --> 00:01:11,520 You have sort of like a pretty clear, 27 00:01:11,520 --> 00:01:17,360 I would say like generalist critique of almost all of these possibilities. 28 00:01:17,360 --> 00:01:21,200 Do you want to offer kind of what you think the challenge is with these L2 solutions? 29 00:01:21,200 --> 00:01:21,600 Yes. 30 00:01:21,680 --> 00:01:26,960 Okay, so BIP 300 and 301 in Drivechain, that's very old. 31 00:01:26,960 --> 00:01:28,080 It's from 2015. 32 00:01:29,200 --> 00:01:34,880 Back then, I really thought what we needed was a way to like, 33 00:01:34,880 --> 00:01:36,400 okay, Ethereum was just coming out. 34 00:01:36,400 --> 00:01:37,760 So it was people were talking like, 35 00:01:37,760 --> 00:01:40,640 how can we just do whatever Ethereum is doing just on Bitcoin? 36 00:01:40,640 --> 00:01:42,560 And there was also the block size war. 37 00:01:42,560 --> 00:01:43,680 So it was like, how can we do, 38 00:01:44,320 --> 00:01:47,920 how can we have like large blocks and small blocks like kind of coexist? 39 00:01:47,920 --> 00:01:51,200 So that was what Drivechain was kind of like born into. 40 00:01:52,400 --> 00:01:57,360 And since then, I think we've gone like in the wrong direction of just like, 41 00:01:57,360 --> 00:01:59,360 so for example, when people say L2s today, 42 00:01:59,360 --> 00:02:01,280 they mean basically the Lightning Network, 43 00:02:01,280 --> 00:02:04,480 which was also big and starting around 2015. 44 00:02:04,480 --> 00:02:06,640 And it was also starting as a result of the block size war. 45 00:02:07,600 --> 00:02:13,040 But since then, we have added a lot of other L2s. 46 00:02:13,040 --> 00:02:16,400 What these all have in common that Drivechain does not have in common 47 00:02:16,400 --> 00:02:18,720 is that in Drivechain, they're all merge-mined, 48 00:02:19,280 --> 00:02:23,040 governed by the decentralized mining process in BTC. 49 00:02:24,080 --> 00:02:25,840 And that probably sounds like a small detail. 50 00:02:26,880 --> 00:02:29,120 But actually, I think it just syncs the other. 51 00:02:29,120 --> 00:02:31,760 I don't think there's any way for the other type of L2 52 00:02:31,760 --> 00:02:34,560 to succeed like at a large scale, 53 00:02:34,560 --> 00:02:37,280 which is the whole point of making it. 54 00:02:37,280 --> 00:02:41,680 And then also in practice, the big L2 today is the Lightning Network. 55 00:02:41,680 --> 00:02:44,560 And I just I'm convinced that the Lightning Network doesn't work. 56 00:02:44,560 --> 00:02:46,720 And when I talk to Lightning engineers, 57 00:02:46,720 --> 00:02:48,080 they kind of just shrug and they say, 58 00:02:48,080 --> 00:02:50,720 yeah, it doesn't work. 59 00:02:50,720 --> 00:02:54,240 And then they just kind of shrug and just kind of go on with what they're doing. 60 00:02:54,240 --> 00:02:54,880 So I don't know. 61 00:02:54,880 --> 00:02:56,720 I'm not sure exactly how to wrap my head around that. 62 00:02:56,720 --> 00:03:01,520 But people can see the TabConf debate that I did a few months ago 63 00:03:01,520 --> 00:03:03,200 against an entire room of Lightning support. 64 00:03:03,200 --> 00:03:07,120 So yeah, the L2 space has me a little perplexed. 65 00:03:07,120 --> 00:03:09,520 It's interesting because I don't know if you know this. 66 00:03:09,520 --> 00:03:11,280 I know you didn't see the announcement yesterday, 67 00:03:11,280 --> 00:03:13,680 but you should go and read it because I think you'll appreciate it. 68 00:03:13,680 --> 00:03:16,320 One of sort of the stated goals specifically 69 00:03:16,320 --> 00:03:18,800 for the R&D efforts of the Morrow Foundation 70 00:03:18,800 --> 00:03:23,280 is supporting technologies that basically pay miners, right? 71 00:03:23,280 --> 00:03:26,000 That makes sure that we have a functioning security budget 72 00:03:26,000 --> 00:03:28,960 for as long as possible, you know, develop healthy fee markets. 73 00:03:29,920 --> 00:03:31,760 I think merge mining would fall into that. 74 00:03:31,760 --> 00:03:32,400 Yeah, absolutely. 75 00:03:32,400 --> 00:03:36,000 I was like, see, to me, I thought that when I was first designing DriveChain, 76 00:03:36,000 --> 00:03:38,480 I just took it for granted that we don't want there to be 77 00:03:38,480 --> 00:03:43,200 like a tug of war between miners collecting the L1 fee 78 00:03:43,200 --> 00:03:46,240 or collecting the L2 fee and some other person. 79 00:03:46,800 --> 00:03:49,200 So this is the talk that I gave at OpNext. 80 00:03:49,200 --> 00:03:53,200 I said, just imagine that the Lightning Network is a big success 81 00:03:53,200 --> 00:03:54,560 and imagine that it's... 82 00:03:54,560 --> 00:03:57,120 or just imagine that one type of L2 is a big success. 83 00:03:57,120 --> 00:03:59,360 So just say it could be ARK or it could be whatever. 84 00:03:59,360 --> 00:04:02,080 But, you know, we have 8 billion people on Earth. 85 00:04:02,800 --> 00:04:05,440 People make more than one transaction per day. 86 00:04:06,080 --> 00:04:08,640 So we're talking in the trillions of transactions. 87 00:04:09,520 --> 00:04:11,920 And if you just say something like 10 cents per transaction 88 00:04:11,920 --> 00:04:13,040 or one cent per transaction, 89 00:04:13,040 --> 00:04:16,240 this is hundreds of billions of dollars a year in revenue. 90 00:04:16,800 --> 00:04:18,880 And so I'm just saying this is a huge pile of revenue. 91 00:04:20,640 --> 00:04:21,280 Do you want that? 92 00:04:21,280 --> 00:04:24,240 If that doesn't go to the L1 miners and it goes to someone else, 93 00:04:24,240 --> 00:04:28,000 and meanwhile, the L1 miners are just getting the dwindling block subsidy, 94 00:04:29,760 --> 00:04:31,680 you know, the miners are then in a weird position 95 00:04:31,680 --> 00:04:32,400 where they're kind of like, 96 00:04:32,400 --> 00:04:35,920 should we like attack and destroy the L2s to like re... 97 00:04:35,920 --> 00:04:37,520 like to alter the playing field? 98 00:04:37,520 --> 00:04:39,040 Because this is an enormous amount of money. 99 00:04:39,040 --> 00:04:41,280 This is far more money than, you know... 100 00:04:41,280 --> 00:04:47,280 Today, I'm not sure what the total mining revenue for all miners was like last year, 101 00:04:47,280 --> 00:04:50,080 but it's probably like a few billion dollars or something like that. 102 00:04:50,080 --> 00:04:53,200 But I'm talking like way more than that every year, 103 00:04:53,840 --> 00:04:55,680 growing with the usage of the network. 104 00:04:56,480 --> 00:04:58,000 Because, of course, the population grows, 105 00:04:58,640 --> 00:05:00,160 the world GDP grows, 106 00:05:00,880 --> 00:05:04,080 people transact, wealthier people are doing more transactions. 107 00:05:04,080 --> 00:05:05,920 So this was a huge number that would just like... 108 00:05:05,920 --> 00:05:08,880 it would be doubling like every 11 years, huge amount of money. 109 00:05:09,520 --> 00:05:12,160 And so, back in the beginning, I was like, 110 00:05:12,160 --> 00:05:13,600 well, I take it for granted that... 111 00:05:16,000 --> 00:05:17,520 Now, I take it for granted that, you know, 112 00:05:17,520 --> 00:05:18,800 this would all be like a merge mining, 113 00:05:18,800 --> 00:05:21,840 because Satoshi had already invented merge mining in 2011. 114 00:05:21,840 --> 00:05:25,040 But the community went in a different direction, 115 00:05:25,840 --> 00:05:28,880 and people were worried about like mining incentives or something. 116 00:05:28,880 --> 00:05:32,560 I think this was all very convoluted and none of it was borne out. 117 00:05:32,560 --> 00:05:37,200 And when you actually examine it, it turns out to be very, you know, confused. 118 00:05:37,200 --> 00:05:38,800 But people at the time were like, 119 00:05:39,360 --> 00:05:42,800 we just want the miners to be like a very simple thing. 120 00:05:42,800 --> 00:05:46,080 We don't want them to like be interacting with a lot of people. 121 00:05:46,720 --> 00:05:48,400 This was the view back then, 122 00:05:48,400 --> 00:05:51,440 that they said the miners should just mine and not do anything. 123 00:05:51,440 --> 00:05:53,280 I then invented something called blind merge mining. 124 00:05:53,280 --> 00:05:54,320 Let's do that. 125 00:05:54,320 --> 00:05:57,520 I don't know, like the whole thing is kind of a big mess, I think, actually. 126 00:05:57,520 --> 00:05:58,960 Let's tear this into pieces, 127 00:05:58,960 --> 00:06:01,280 because there's a few threads that we could go down here. 128 00:06:01,280 --> 00:06:04,160 So, number one, I just want to kind of like highlight, 129 00:06:04,160 --> 00:06:05,520 it sounds like what you're saying is, 130 00:06:05,520 --> 00:06:08,960 if you have, you know, L2s that are actually adopted, 131 00:06:08,960 --> 00:06:13,120 and there's tons of money being made via transaction fees for these L2s, 132 00:06:13,120 --> 00:06:16,240 but there's no like clear partnership, essentially, 133 00:06:16,240 --> 00:06:17,920 in some way between, you know, 134 00:06:17,920 --> 00:06:21,520 the revenue being generated on the L2 and the L1 miners. 135 00:06:22,080 --> 00:06:24,240 The game theory of that is like, you know, 136 00:06:24,240 --> 00:06:25,920 like how does that ultimately play out? 137 00:06:25,920 --> 00:06:27,520 Like at some point in, you know, 138 00:06:27,520 --> 00:06:29,600 if the subsidy is declining over time, 139 00:06:29,600 --> 00:06:32,160 the L1 miners are going to get pissed and, you know, 140 00:06:32,160 --> 00:06:33,760 start threatening people and being like, 141 00:06:34,560 --> 00:06:40,160 like, how does that ultimately play out from an incentives perspective? 142 00:06:40,160 --> 00:06:41,120 That's exactly it. 143 00:06:41,680 --> 00:06:46,800 And it's a shame to like frame it in such a adversarial way. 144 00:06:46,800 --> 00:06:48,640 But really, like everyone will admit, 145 00:06:48,640 --> 00:06:50,560 like if you talk to people, you know, 146 00:06:50,560 --> 00:06:52,320 if you talk to people who design the Lightning Network 147 00:06:52,320 --> 00:06:53,280 or support the Lightning Network, 148 00:06:53,280 --> 00:06:55,600 they will say it's not designed for a situation 149 00:06:55,600 --> 00:07:00,080 where your counterparty is a 51% hash rate coalition. 150 00:07:00,080 --> 00:07:01,920 So they say you can't use the Lightning Network 151 00:07:01,920 --> 00:07:05,920 if your opponent is someone with 51% of the hash rate. 152 00:07:05,920 --> 00:07:08,000 There's also criticism that's leveled of drive chain. 153 00:07:08,000 --> 00:07:12,160 But I think that's also unfair because when I do it, 154 00:07:12,160 --> 00:07:16,960 I say, okay, it won't work if 51% of the miners are evil. 155 00:07:16,960 --> 00:07:18,960 But then I immediately construct this argument 156 00:07:18,960 --> 00:07:21,280 for why they'd be making so much money 157 00:07:21,280 --> 00:07:23,840 from the merge mining fees that they, 158 00:07:24,400 --> 00:07:25,680 the last thing they would ever want to do 159 00:07:25,680 --> 00:07:27,600 is kill the goose that lays the golden egg. 160 00:07:27,600 --> 00:07:29,520 With Lightning, they don't even go down that road. 161 00:07:29,520 --> 00:07:30,960 They just kind of prefer to ignore it. 162 00:07:30,960 --> 00:07:32,000 You never really hear anyone say, 163 00:07:32,000 --> 00:07:33,840 well, how would Lightning Network work 164 00:07:33,840 --> 00:07:37,760 in a world where 51% of the miners want to attack it? 165 00:07:37,760 --> 00:07:39,920 And what I'm saying is maybe 100% of the miners 166 00:07:39,920 --> 00:07:40,640 want to attack it. 167 00:07:40,640 --> 00:07:42,000 You know, I mean, if it's a difference 168 00:07:42,000 --> 00:07:46,000 between being deprived of like $900 billion per year, 169 00:07:46,000 --> 00:07:48,240 net present value in the trillions of dollars, 170 00:07:49,760 --> 00:07:50,880 if there's a difference between that, 171 00:07:51,600 --> 00:07:53,760 being deprived of that and actually obtaining that, 172 00:07:53,760 --> 00:07:56,160 then of course you were really setting the stage 173 00:07:56,160 --> 00:07:57,440 for a big disaster. 174 00:07:57,440 --> 00:07:58,720 This is the same for ARK. 175 00:07:58,720 --> 00:08:00,000 And this is the same for a lot of the other, 176 00:08:00,080 --> 00:08:01,200 like Liquid and a lot of the stuff, 177 00:08:01,200 --> 00:08:03,760 the transaction fees are not paid to miners. 178 00:08:03,760 --> 00:08:06,080 All of this was an intentional decision back in the day 179 00:08:06,720 --> 00:08:09,920 to like avoid, I don't know, 180 00:08:09,920 --> 00:08:11,520 like inconveniencing the miners 181 00:08:11,520 --> 00:08:14,640 or maybe even just acknowledging them 182 00:08:14,640 --> 00:08:16,320 as relevant parties. 183 00:08:17,040 --> 00:08:18,480 But yeah, when push comes to shove, 184 00:08:18,480 --> 00:08:19,280 like all of this stuff, 185 00:08:19,280 --> 00:08:20,640 like everything with the Lightning Network, 186 00:08:20,640 --> 00:08:26,080 the HTLCs, the channels, the justice transaction, 187 00:08:26,080 --> 00:08:28,000 the whole idea that if someone tries to cheat you, 188 00:08:28,000 --> 00:08:29,680 you can publish this thing 189 00:08:29,680 --> 00:08:31,760 and take all of their money, 190 00:08:31,760 --> 00:08:34,160 which is what keeps everyone enforcing the rules 191 00:08:34,960 --> 00:08:36,800 on the L2 without touching the L1. 192 00:08:37,600 --> 00:08:39,360 I mean, all that falls apart 193 00:08:39,360 --> 00:08:41,600 if you have 51% hashrate against you. 194 00:08:41,600 --> 00:08:43,600 Despite sort of like the details 195 00:08:43,600 --> 00:08:45,360 of the different ways that this could play out, 196 00:08:45,360 --> 00:08:47,840 it does seem like intuitively correct, right? 197 00:08:47,840 --> 00:08:50,160 That ultimately if you have some sort of situation 198 00:08:50,160 --> 00:08:52,320 where revenue is being generated in full 199 00:08:52,320 --> 00:08:54,640 on a different layer, essentially, 200 00:08:54,640 --> 00:08:58,720 and miners are not being adequately paid 201 00:08:58,720 --> 00:09:00,400 for those transactions, 202 00:09:00,400 --> 00:09:01,520 you're going to have a problem, right? 203 00:09:01,520 --> 00:09:02,640 Like at the end of the day, 204 00:09:02,640 --> 00:09:06,720 miners sort of are the authority on L1 settlement. 205 00:09:06,720 --> 00:09:07,920 Like that's just not going to work. 206 00:09:07,920 --> 00:09:09,120 Like that's going to, 207 00:09:09,120 --> 00:09:10,080 something's going to happen 208 00:09:10,080 --> 00:09:12,000 and that is not going to work. 209 00:09:12,000 --> 00:09:14,560 Merge mining, it sounds like back in the day 210 00:09:14,560 --> 00:09:16,160 when you were first writing DriveChains, 211 00:09:16,160 --> 00:09:18,560 people were talking about merge mining all the time. 212 00:09:18,560 --> 00:09:21,200 Now you very rarely hear about merge mining, 213 00:09:21,200 --> 00:09:22,400 but back then, 214 00:09:22,400 --> 00:09:24,480 weren't like the original sidechains papers, 215 00:09:24,480 --> 00:09:26,720 weren't they all kind of advocating 216 00:09:26,720 --> 00:09:28,000 for merge mining originally 217 00:09:28,000 --> 00:09:29,280 as a solution to this? 218 00:09:29,280 --> 00:09:30,160 Well, this is what, 219 00:09:30,160 --> 00:09:32,880 my understanding was that merge mining works 220 00:09:32,880 --> 00:09:33,680 and it still is. 221 00:09:33,680 --> 00:09:35,280 I think merge mining works very well. 222 00:09:35,280 --> 00:09:37,760 It was invented by Satoshi in 2010 223 00:09:37,760 --> 00:09:39,840 to help support Namecoin, 224 00:09:39,840 --> 00:09:41,440 which was the first altcoin, 225 00:09:41,440 --> 00:09:43,600 which has been merge mined with Bitcoin 226 00:09:43,600 --> 00:09:47,600 ever since 2011 when they kind of shipped that. 227 00:09:48,640 --> 00:09:51,360 There's an article by the BitMEX research guy 228 00:09:51,360 --> 00:09:53,360 about merge mining that's very good 229 00:09:53,360 --> 00:09:55,600 and you could see that it's very widespread 230 00:09:55,600 --> 00:09:57,200 and it just kind of quietly happens 231 00:09:57,200 --> 00:09:59,120 because this type of merge mining 232 00:09:59,120 --> 00:10:00,800 has been used only for altcoins. 233 00:10:00,800 --> 00:10:02,480 So the type of merge mining 234 00:10:02,480 --> 00:10:03,440 that we've seen deployed 235 00:10:03,440 --> 00:10:05,840 is like a very, very tame, very small, 236 00:10:06,800 --> 00:10:07,920 you know, you could get like, 237 00:10:09,120 --> 00:10:10,400 you're mining your Bitcoin block 238 00:10:10,400 --> 00:10:12,880 that may give you three Bitcoin and change 239 00:10:14,320 --> 00:10:16,400 in subsidy and maybe like a little bit more in fees. 240 00:10:17,200 --> 00:10:18,320 So this is like, you know, 241 00:10:18,320 --> 00:10:20,480 we're talking like $200,000 plus 242 00:10:21,200 --> 00:10:23,040 and then you might also be able to get like, 243 00:10:24,240 --> 00:10:25,440 you know, eight Namecoin, 244 00:10:25,440 --> 00:10:27,280 which is worth like, you know, 245 00:10:27,280 --> 00:10:29,280 like whatever, like $25 or something. 246 00:10:30,560 --> 00:10:32,400 So it's kind of like, you know, 247 00:10:32,400 --> 00:10:33,920 hundreds of thousands of dollars versus a few, 248 00:10:33,920 --> 00:10:34,960 but there's still, 249 00:10:35,760 --> 00:10:37,680 even despite that small amount, 250 00:10:37,680 --> 00:10:40,000 still merge mining is very popular 251 00:10:40,000 --> 00:10:40,640 and people do it, 252 00:10:40,640 --> 00:10:42,080 but people don't talk about it. 253 00:10:42,080 --> 00:10:44,240 I think it's because these are all altcoins. 254 00:10:44,240 --> 00:10:46,400 There's no reason why we couldn't merge mine 255 00:10:46,400 --> 00:10:47,520 Bitcoin L2s as well. 256 00:10:47,520 --> 00:10:48,400 They have no altcoin. 257 00:10:48,400 --> 00:10:50,160 You just have Bitcoin on an L2. 258 00:10:50,160 --> 00:10:52,480 So that's what I advocate. 259 00:10:52,880 --> 00:10:53,520 Is it also, 260 00:10:53,520 --> 00:10:55,280 I hear this criticism of merge mining 261 00:10:55,280 --> 00:10:56,800 on a regular basis that basically, 262 00:10:56,800 --> 00:10:58,000 I think, you know, 263 00:10:58,000 --> 00:11:00,000 potentially the narrative around them has changed 264 00:11:00,000 --> 00:11:02,480 because they're so much easier to 51% attack 265 00:11:02,480 --> 00:11:04,000 because there's just not as much hash rate 266 00:11:04,000 --> 00:11:06,480 actually protecting these other networks 267 00:11:07,360 --> 00:11:08,400 with merge mining. 268 00:11:08,400 --> 00:11:10,480 What's sort of your point of view? 269 00:11:10,480 --> 00:11:12,160 I think that has a couple different 270 00:11:12,160 --> 00:11:13,920 like misunderstandings bundled up, 271 00:11:13,920 --> 00:11:15,360 but it's true to some extent. 272 00:11:16,000 --> 00:11:17,440 I think the real reason would be, 273 00:11:18,720 --> 00:11:19,680 again, as I just said, 274 00:11:19,680 --> 00:11:20,960 even with something like Namecoin, 275 00:11:20,960 --> 00:11:21,760 there were time periods 276 00:11:21,760 --> 00:11:23,200 I haven't looked recently, 277 00:11:23,200 --> 00:11:24,320 but there were long time periods 278 00:11:24,320 --> 00:11:28,560 where it had like 80% of the hash rate of Bitcoin 279 00:11:28,560 --> 00:11:31,520 because it costs them basically nothing 280 00:11:31,520 --> 00:11:33,280 to mine both blocks at once. 281 00:11:33,280 --> 00:11:35,200 This is the genius of Satoshi's 282 00:11:35,200 --> 00:11:36,640 merge mining invention 283 00:11:36,640 --> 00:11:38,560 that he co-invented with someone else. 284 00:11:38,560 --> 00:11:40,560 People can look this up on a great thread 285 00:11:40,560 --> 00:11:42,640 called BitDNS and Generalizing Bitcoin. 286 00:11:42,640 --> 00:11:43,520 It's a very neat, 287 00:11:43,520 --> 00:11:47,200 it's kind of like a proto side chain thread, 288 00:11:47,200 --> 00:11:48,160 and it's very interesting. 289 00:11:48,160 --> 00:11:49,200 Everyone should read it, I think. 290 00:11:49,360 --> 00:11:52,800 And so even then you had like 80%, 291 00:11:52,800 --> 00:11:54,000 even though it's a tiny amount, 292 00:11:54,000 --> 00:11:55,120 but it's the small amount 293 00:11:55,120 --> 00:11:56,240 that really makes it vulnerable 294 00:11:56,240 --> 00:11:57,120 because it says, well, listen, 295 00:11:57,120 --> 00:11:58,080 we could just rewrite it 296 00:11:58,080 --> 00:11:59,760 and what are we really losing? 297 00:11:59,760 --> 00:12:02,240 So it all comes down to security budget, 298 00:12:02,240 --> 00:12:03,280 I think, at the end of the day. 299 00:12:04,240 --> 00:12:06,080 These small altcoins, 300 00:12:06,080 --> 00:12:07,600 they're worth very little, 301 00:12:07,600 --> 00:12:10,000 they have very little in transaction fee value, 302 00:12:10,720 --> 00:12:12,560 and that's why they're not that significant. 303 00:12:12,560 --> 00:12:14,240 But you can easily have L2s of Bitcoin 304 00:12:14,240 --> 00:12:15,680 that pay much, much more 305 00:12:15,680 --> 00:12:17,520 in transaction fee revenue, 306 00:12:17,520 --> 00:12:21,520 and then it would be kind of debatable 307 00:12:22,400 --> 00:12:25,120 which one has more of the miner's attention 308 00:12:25,120 --> 00:12:27,280 because you could say maybe the L1 309 00:12:27,280 --> 00:12:30,080 gives you the three Bitcoin in subsidy, 310 00:12:30,800 --> 00:12:33,440 which will soon be 1.6 or so. 311 00:12:33,440 --> 00:12:34,320 So maybe it'll be one, 312 00:12:34,320 --> 00:12:36,720 and maybe let's just call it like one, 313 00:12:36,720 --> 00:12:38,000 let's just call it two Bitcoin 314 00:12:38,880 --> 00:12:40,640 and each L1 block. 315 00:12:40,640 --> 00:12:41,360 But you could have, 316 00:12:42,320 --> 00:12:43,520 theoretically, L2 blocks 317 00:12:43,520 --> 00:12:45,760 that have any amount of money being paid 318 00:12:45,840 --> 00:12:48,240 and you could have maybe something like 319 00:12:49,120 --> 00:12:50,960 hundreds of thousands of transactions in there 320 00:12:50,960 --> 00:12:52,160 that each pay like a small amount. 321 00:12:52,160 --> 00:12:53,840 So it could come out to being like, 322 00:12:53,840 --> 00:12:57,520 you know, 20 or 30 Bitcoin in the L2 block 323 00:12:58,720 --> 00:13:00,080 and then the miners would be thinking, 324 00:13:00,080 --> 00:13:02,160 well, okay, great, we love the L1 block 325 00:13:02,160 --> 00:13:03,760 because without this L1 block, 326 00:13:03,760 --> 00:13:04,960 you can't have the L2 block 327 00:13:04,960 --> 00:13:06,800 because of course you need to be able to deposit 328 00:13:06,800 --> 00:13:08,640 and withdraw and you need to do the merge mining, 329 00:13:08,640 --> 00:13:09,680 L1 is the base. 330 00:13:10,320 --> 00:13:10,800 So they would say, 331 00:13:10,800 --> 00:13:13,200 well, we're very happy about this L1 block, 332 00:13:13,200 --> 00:13:16,480 but really our bread and butter is the L2 block. 333 00:13:16,480 --> 00:13:19,520 I think that kind of actually frightens people either way. 334 00:13:19,520 --> 00:13:20,720 So on one hand, they say, 335 00:13:21,360 --> 00:13:22,560 this won't be very popular 336 00:13:22,560 --> 00:13:23,840 and it won't be very secure. 337 00:13:23,840 --> 00:13:24,640 Then the other hand, they say, 338 00:13:24,640 --> 00:13:25,120 well, wait a minute, 339 00:13:25,120 --> 00:13:26,720 this is gonna be more popular than L1, 340 00:13:26,720 --> 00:13:28,160 like that would maybe like change. 341 00:13:28,160 --> 00:13:29,680 So yeah, there's a lot of complaining out there, 342 00:13:29,680 --> 00:13:32,560 but I don't see a lot of like good, 343 00:13:32,560 --> 00:13:33,920 I don't see a good, 344 00:13:33,920 --> 00:13:35,920 other than my own vision 345 00:13:35,920 --> 00:13:37,520 that I published about the merge mine L2, 346 00:13:37,520 --> 00:13:38,640 I haven't seen anyone say like, 347 00:13:38,640 --> 00:13:41,200 this is how we would get to 8 billion people 348 00:13:42,160 --> 00:13:44,160 and how we would onboard 8 billion people 349 00:13:44,160 --> 00:13:45,520 and do all the transactions on earth. 350 00:13:45,520 --> 00:13:47,200 And I have like tests on GitHub 351 00:13:47,200 --> 00:13:48,400 that anyone can rerun 352 00:13:48,400 --> 00:13:49,520 and just like click on 353 00:13:50,160 --> 00:13:51,520 and they can see for themselves 354 00:13:51,520 --> 00:13:53,680 that at least it's like an actual picture. 355 00:13:53,680 --> 00:13:55,200 It's like one consistent picture 356 00:13:55,840 --> 00:13:57,680 and I don't see that with the Lightning Network, 357 00:13:57,680 --> 00:13:58,800 for example, at all. 358 00:13:58,800 --> 00:14:01,680 I think it's now totally admitted by everyone 359 00:14:01,680 --> 00:14:03,440 that you cannot onboard 360 00:14:03,440 --> 00:14:06,880 more than like half percentage of the earth 361 00:14:06,880 --> 00:14:07,920 to the Lightning Network, 362 00:14:07,920 --> 00:14:09,920 even in an absurd best case scenario 363 00:14:10,720 --> 00:14:11,680 that will never happen. 364 00:14:11,680 --> 00:14:13,520 So, and even then, 365 00:14:13,520 --> 00:14:15,280 like you have to roll this channels over, 366 00:14:16,160 --> 00:14:17,360 you know, periodically. 367 00:14:17,360 --> 00:14:18,240 So the question is, 368 00:14:18,240 --> 00:14:19,840 how many people would ever be able to use it? 369 00:14:20,800 --> 00:14:22,480 So I think that that's a non-starter. 370 00:14:22,480 --> 00:14:24,000 I mean, we can definitely talk about 371 00:14:24,000 --> 00:14:25,520 sort of like UX and, 372 00:14:25,520 --> 00:14:27,440 you know, people's actual ability 373 00:14:27,440 --> 00:14:28,400 to use these things. 374 00:14:28,400 --> 00:14:31,440 We should dig into your presentation, 375 00:14:31,440 --> 00:14:32,160 quote unquote, 376 00:14:32,160 --> 00:14:33,760 lightning derangement syndrome in a moment, 377 00:14:33,760 --> 00:14:35,840 but just to close the loop on the fees issue. 378 00:14:36,800 --> 00:14:38,560 A lot of people also make this argument that, 379 00:14:38,560 --> 00:14:39,840 you know, well, when we have L2, 380 00:14:39,840 --> 00:14:41,600 and all these people are using these L2s, 381 00:14:41,600 --> 00:14:43,200 there's going to be lightning channels 382 00:14:43,200 --> 00:14:44,640 opening and closing all the time. 383 00:14:44,640 --> 00:14:46,080 And that's how fees will be generated. 384 00:14:46,080 --> 00:14:47,200 And miners will be so rich 385 00:14:47,200 --> 00:14:48,080 and they'll be so happy 386 00:14:48,080 --> 00:14:50,480 because of all the lightning channel fees 387 00:14:50,480 --> 00:14:52,160 or, you know, picking out, 388 00:14:52,160 --> 00:14:53,520 you know, an L2 that you, 389 00:14:53,520 --> 00:14:55,200 that will have this, you know, 390 00:14:55,200 --> 00:14:56,960 data availability on, 391 00:14:56,960 --> 00:14:59,280 you know, or whatever. 392 00:14:59,280 --> 00:15:00,160 Right. Exactly. 393 00:15:01,280 --> 00:15:03,920 Do you think that that theory 394 00:15:03,920 --> 00:15:05,040 has any credibility? 395 00:15:05,040 --> 00:15:06,560 It only dents my argument, 396 00:15:06,560 --> 00:15:07,760 like a small amount, 397 00:15:07,760 --> 00:15:08,640 because what I'm saying 398 00:15:08,640 --> 00:15:10,240 in the merge mine L2 world, 399 00:15:10,240 --> 00:15:11,440 you pay an L1, 400 00:15:11,440 --> 00:15:12,720 miners collect fees 401 00:15:13,680 --> 00:15:15,760 when someone deposits to the L2, 402 00:15:15,760 --> 00:15:17,280 when they use the L2, 403 00:15:17,280 --> 00:15:18,640 and when they withdraw. 404 00:15:18,640 --> 00:15:19,280 So they get, 405 00:15:19,280 --> 00:15:20,800 the miners get paid the whole time. 406 00:15:21,920 --> 00:15:22,800 And then what people say is, 407 00:15:22,800 --> 00:15:23,520 well, hey, wait a minute 408 00:15:23,520 --> 00:15:24,560 for the lightning network, 409 00:15:24,560 --> 00:15:27,040 like when they open the channel, 410 00:15:27,040 --> 00:15:27,600 they pay a fee. 411 00:15:27,600 --> 00:15:28,560 And when they close the channel 412 00:15:28,560 --> 00:15:29,440 or roll the channel over, 413 00:15:29,440 --> 00:15:30,080 they pay a fee. 414 00:15:30,720 --> 00:15:31,760 And of course, 415 00:15:31,760 --> 00:15:33,280 but of course, in between, 416 00:15:33,280 --> 00:15:34,720 when it's doing all the heavy lifting, 417 00:15:34,720 --> 00:15:38,000 there's no fee paid to the L1 miners at all. 418 00:15:38,000 --> 00:15:39,120 The whole point of lightning 419 00:15:39,120 --> 00:15:40,480 is to try to make that ratio 420 00:15:40,480 --> 00:15:41,440 as high as possible 421 00:15:41,440 --> 00:15:43,520 and to hope desperately 422 00:15:43,520 --> 00:15:45,040 that the channel open 423 00:15:45,040 --> 00:15:46,640 and channel closed transactions 424 00:15:46,640 --> 00:15:48,160 will leave enough block space 425 00:15:48,160 --> 00:15:49,680 for everyone to use them, 426 00:15:49,680 --> 00:15:51,040 and that everyone will be transacting 427 00:15:51,040 --> 00:15:51,760 in the lightning network 428 00:15:51,760 --> 00:15:53,280 with the channels that are already open. 429 00:15:53,280 --> 00:15:56,000 So the whole point of these L2s 430 00:15:56,000 --> 00:15:57,120 is to offload the trend 431 00:15:57,120 --> 00:15:58,640 as much transacting as possible 432 00:15:58,640 --> 00:16:00,000 into the L2. 433 00:16:00,000 --> 00:16:01,280 So that's kind of the contradiction 434 00:16:01,280 --> 00:16:02,320 of that point. 435 00:16:02,320 --> 00:16:05,760 When I did the tab comp debate, 436 00:16:05,760 --> 00:16:06,720 the lightning people 437 00:16:06,800 --> 00:16:08,080 sort of the last refuge 438 00:16:08,080 --> 00:16:08,800 was to go to this 439 00:16:08,800 --> 00:16:10,560 like connecting tissue point 440 00:16:10,560 --> 00:16:12,000 and saying there'll be all these L2s 441 00:16:12,000 --> 00:16:14,240 that sort of use the lightning network. 442 00:16:15,040 --> 00:16:17,200 But everyone has now admitted basically, 443 00:16:17,200 --> 00:16:19,040 like the lightning network was pitched 444 00:16:19,040 --> 00:16:20,720 as this is how we scale Bitcoin. 445 00:16:21,760 --> 00:16:25,040 I think even the original presentation 446 00:16:25,040 --> 00:16:26,080 and the lightning white paper 447 00:16:26,080 --> 00:16:27,200 are like how do we scale 448 00:16:28,160 --> 00:16:29,520 to billions of transactions? 449 00:16:29,520 --> 00:16:31,680 How do we scale to the planet? 450 00:16:32,480 --> 00:16:33,520 And so that's kind of 451 00:16:33,520 --> 00:16:34,640 what it was originally pitched at. 452 00:16:34,640 --> 00:16:35,920 And now people say, 453 00:16:35,920 --> 00:16:37,280 well, hey, sure, 454 00:16:37,280 --> 00:16:39,360 the lightning network can't do that, 455 00:16:39,360 --> 00:16:41,840 but it doesn't technically do nothing either. 456 00:16:41,840 --> 00:16:43,600 It still can do like these little things. 457 00:16:43,600 --> 00:16:44,320 I think all of that 458 00:16:44,320 --> 00:16:46,320 will ultimately be discarded 459 00:16:46,320 --> 00:16:49,360 because the lightning model 460 00:16:49,360 --> 00:16:50,400 has terrible UX 461 00:16:50,400 --> 00:16:52,000 and you have to be online to receive, 462 00:16:52,000 --> 00:16:53,280 you need to be online with a hot wallet 463 00:16:53,280 --> 00:16:54,400 to receive money 464 00:16:54,400 --> 00:16:56,160 and people don't want to run 465 00:16:56,160 --> 00:16:56,960 the lightning node. 466 00:16:56,960 --> 00:16:58,960 So very few people are doing that. 467 00:17:00,080 --> 00:17:01,440 Most people use custodial lightning, 468 00:17:01,440 --> 00:17:02,800 which is equivalent to saying 469 00:17:02,800 --> 00:17:04,320 that you've given up on lightning. 470 00:17:04,320 --> 00:17:05,520 In many ways, it's actually worse 471 00:17:05,520 --> 00:17:06,880 because it's kind of like you've given up, 472 00:17:06,880 --> 00:17:09,120 but you're kind of like still telling people 473 00:17:09,120 --> 00:17:09,760 that you're using it, 474 00:17:09,760 --> 00:17:11,200 but there's no lightning technology 475 00:17:11,200 --> 00:17:12,320 in the custodial lightning. 476 00:17:13,200 --> 00:17:15,360 When people offload to the LSPs, 477 00:17:16,320 --> 00:17:17,360 the LSP does all the work, 478 00:17:17,360 --> 00:17:18,480 but then they charge a fee 479 00:17:18,480 --> 00:17:19,920 and they know everything you're doing. 480 00:17:19,920 --> 00:17:24,720 So I think that it's time to hang up the hat 481 00:17:24,720 --> 00:17:25,120 or whatever, 482 00:17:25,120 --> 00:17:26,800 throw in the towel for the lightning network. 483 00:17:26,800 --> 00:17:27,840 But of course, so many people 484 00:17:27,840 --> 00:17:29,360 have invested so much time 485 00:17:29,360 --> 00:17:30,320 and energy and money. 486 00:17:31,040 --> 00:17:32,400 I guess I don't see that happening 487 00:17:32,400 --> 00:17:32,960 anytime soon, 488 00:17:32,960 --> 00:17:33,840 but I think that it's, 489 00:17:34,560 --> 00:17:35,360 I don't see a future 490 00:17:35,360 --> 00:17:36,240 for the lightning network. 491 00:17:37,040 --> 00:17:38,880 So let's kind of move into 492 00:17:38,880 --> 00:17:40,480 what it's been like for you 493 00:17:40,480 --> 00:17:43,680 to be advocating for BIF-300, BIF-301 494 00:17:43,680 --> 00:17:46,000 and or DriveChains, this new proposal. 495 00:17:46,000 --> 00:17:47,520 So DriveChains, I mean, 496 00:17:47,520 --> 00:17:49,280 you mentioned merge mining. 497 00:17:49,280 --> 00:17:50,160 Do you want to kind of just give 498 00:17:50,160 --> 00:17:51,520 like a quick TLDR 499 00:17:51,520 --> 00:17:53,040 on sort of how DriveChains works? 500 00:17:53,920 --> 00:17:55,680 I don't know what the shortest summary 501 00:17:55,680 --> 00:17:57,120 of that is that you usually give 502 00:17:57,120 --> 00:17:58,640 and kind of what you're really proposing 503 00:17:58,640 --> 00:17:59,520 with the soft fork. 504 00:18:00,720 --> 00:18:01,040 Right. 505 00:18:01,280 --> 00:18:03,920 DriveChain takes this existing idea 506 00:18:03,920 --> 00:18:04,800 of merge mining 507 00:18:04,800 --> 00:18:06,400 and the existing idea of the altcoin. 508 00:18:06,400 --> 00:18:07,360 But it just says, 509 00:18:07,360 --> 00:18:08,240 we can have an altcoin 510 00:18:08,240 --> 00:18:10,160 that starts with zero coins on it 511 00:18:10,800 --> 00:18:13,440 and you deposit BTC there 512 00:18:13,440 --> 00:18:15,440 and then this other chain 513 00:18:15,440 --> 00:18:16,880 that is its own blockchain. 514 00:18:16,880 --> 00:18:17,680 So it's an L2, 515 00:18:17,680 --> 00:18:18,720 but it's also a blockchain 516 00:18:18,720 --> 00:18:20,880 as if it were Ethereum or whatever. 517 00:18:20,880 --> 00:18:22,960 So it's L2s basically that are built 518 00:18:22,960 --> 00:18:25,440 into the L1 protocol essentially. 519 00:18:25,440 --> 00:18:28,240 Like you're giving the L1 520 00:18:28,240 --> 00:18:30,000 at the soft fork level 521 00:18:30,000 --> 00:18:33,040 the capacity to create L2s. 522 00:18:33,040 --> 00:18:33,360 Is that fair? 523 00:18:33,360 --> 00:18:34,640 Right. The L1 has to be aware 524 00:18:34,640 --> 00:18:35,440 of a few things. 525 00:18:35,440 --> 00:18:36,080 Like it has to know 526 00:18:36,080 --> 00:18:37,440 like how many L2s there are 527 00:18:37,440 --> 00:18:38,080 and like it has to have 528 00:18:38,080 --> 00:18:39,200 like a number of them 529 00:18:39,200 --> 00:18:40,720 so that it can keep track of 530 00:18:41,760 --> 00:18:43,280 which deposits have been sent in. 531 00:18:44,000 --> 00:18:45,120 But it's the L2 itself 532 00:18:45,120 --> 00:18:46,320 that does all the work. 533 00:18:46,320 --> 00:18:48,720 Each L2 node needs a Bitcoin full node. 534 00:18:48,720 --> 00:18:50,640 It needs the whole L1 blockchain. 535 00:18:50,640 --> 00:18:52,080 It watches for deposits 536 00:18:52,080 --> 00:18:52,880 and then when it sees them, 537 00:18:52,880 --> 00:18:56,640 it creates coins with the same owner. 538 00:18:56,640 --> 00:18:58,480 It says, oh, I own these coins on L1. 539 00:18:58,480 --> 00:19:00,480 The L2 credits them. 540 00:19:00,480 --> 00:19:02,720 It says, now you have coins on this L2. 541 00:19:03,680 --> 00:19:05,760 And then crucially, 542 00:19:05,760 --> 00:19:07,440 there's also a way to get the coins back 543 00:19:08,480 --> 00:19:11,200 without the L1 knowing too many details 544 00:19:11,200 --> 00:19:12,560 about what's happening in the L2. 545 00:19:12,560 --> 00:19:13,840 And that takes maybe a little while 546 00:19:13,840 --> 00:19:15,760 to explain how to, 547 00:19:15,760 --> 00:19:16,800 so we can skip that part. 548 00:19:16,800 --> 00:19:17,760 We can skip that part, yeah. 549 00:19:17,760 --> 00:19:19,760 But basically the L2s have 550 00:19:19,760 --> 00:19:21,120 as much freedom as altcoins 551 00:19:21,120 --> 00:19:22,000 where they can be written 552 00:19:22,000 --> 00:19:23,360 in a different programming language. 553 00:19:23,360 --> 00:19:24,240 They could be like, 554 00:19:24,240 --> 00:19:25,360 they could have smart contracts 555 00:19:25,360 --> 00:19:26,000 like Ethereum. 556 00:19:26,000 --> 00:19:27,520 They could have any block size. 557 00:19:27,520 --> 00:19:29,920 They could have ZK-SNARK, privacy. 558 00:19:29,920 --> 00:19:31,040 The only thing they have to do 559 00:19:31,040 --> 00:19:32,400 is merge mine, basically. 560 00:19:32,400 --> 00:19:33,680 They technically don't need 561 00:19:33,680 --> 00:19:34,800 to be merged mine. 562 00:19:34,800 --> 00:19:35,840 But as I've already said, 563 00:19:35,840 --> 00:19:37,760 I'm a huge advocate for merge mining. 564 00:19:37,760 --> 00:19:38,880 I don't understand why people 565 00:19:38,880 --> 00:19:40,160 are creating alternatives 566 00:19:40,160 --> 00:19:42,000 to merge mining because merge mining, 567 00:19:42,000 --> 00:19:43,280 I think it works just fine. 568 00:19:43,840 --> 00:19:45,840 It was invented by Satoshi a long time ago. 569 00:19:46,640 --> 00:19:47,760 It does, you know, 570 00:19:49,760 --> 00:19:50,880 what you would have to do instead 571 00:19:50,880 --> 00:19:52,720 is someone else would have to be saying 572 00:19:52,720 --> 00:19:54,080 this is what the next block is. 573 00:19:54,080 --> 00:19:55,440 Like you could have someone just say, 574 00:19:56,000 --> 00:19:56,960 this is the next block, 575 00:19:56,960 --> 00:19:58,560 but then you have recentralized 576 00:19:59,840 --> 00:20:00,480 the whole thing. 577 00:20:01,200 --> 00:20:02,640 So I think merge mining works great. 578 00:20:02,640 --> 00:20:04,320 I think it automatically gives, 579 00:20:04,320 --> 00:20:06,400 it pays the transaction fee revenue 580 00:20:06,400 --> 00:20:07,440 to the L1 miners. 581 00:20:07,440 --> 00:20:08,880 So the L1 miners have no 582 00:20:09,840 --> 00:20:12,400 incentive misalignment with the... 583 00:20:12,400 --> 00:20:13,200 So for DriveChain, 584 00:20:13,200 --> 00:20:14,160 the idea is that 585 00:20:14,800 --> 00:20:16,640 because of the merge mine revenues, 586 00:20:16,640 --> 00:20:18,160 the miners would be happy 587 00:20:18,160 --> 00:20:21,040 to facilitate this ecosystem of L2s. 588 00:20:21,040 --> 00:20:23,120 And support like the trustless exchange 589 00:20:23,120 --> 00:20:24,480 between L2s and L1s 590 00:20:24,480 --> 00:20:26,240 and all of these other things that we need. 591 00:20:26,240 --> 00:20:28,960 So you wrote this paper originally in 2015, 592 00:20:28,960 --> 00:20:30,080 which was quite a long time ago, 593 00:20:30,080 --> 00:20:30,960 over a decade ago, 594 00:20:30,960 --> 00:20:33,440 but when did you get the actual BIP written? 595 00:20:33,440 --> 00:20:34,480 When did you get a BIP number? 596 00:20:35,440 --> 00:20:37,680 I think I drafted it in like 2017 597 00:20:37,680 --> 00:20:38,720 and then finally, 598 00:20:38,720 --> 00:20:39,360 like it got, 599 00:20:39,920 --> 00:20:41,200 because you draft it first 600 00:20:41,200 --> 00:20:42,320 and then they give you the BIP 601 00:20:42,320 --> 00:20:44,320 after you get some feedback, 602 00:20:44,320 --> 00:20:45,440 you get the BIP number. 603 00:20:45,440 --> 00:20:48,320 I think that was February 2018, 604 00:20:48,320 --> 00:20:49,280 but I don't remember. 605 00:20:49,280 --> 00:20:51,120 So also, so not that much longer after. 606 00:20:51,120 --> 00:20:53,280 And how's the process been for you 607 00:20:53,280 --> 00:20:55,040 in terms of navigating 608 00:20:55,040 --> 00:20:56,400 Bitcoin governance 609 00:20:56,400 --> 00:20:58,240 and kind of moving through 610 00:20:58,240 --> 00:20:59,600 the sort of political 611 00:21:00,320 --> 00:21:01,920 Bitcoin improvement proposal process? 612 00:21:02,560 --> 00:21:03,760 Yeah, I think that, 613 00:21:03,760 --> 00:21:05,920 you know, I'm a huge fan of Bitcoin 614 00:21:05,920 --> 00:21:07,680 and Bitcoin has done very well. 615 00:21:08,640 --> 00:21:09,280 Even over, 616 00:21:09,280 --> 00:21:10,560 if we just restrict ourselves 617 00:21:10,560 --> 00:21:12,880 to that period of 2015 to present, 618 00:21:12,880 --> 00:21:14,000 Bitcoin has done very well 619 00:21:14,000 --> 00:21:15,120 and has changed the world. 620 00:21:15,680 --> 00:21:16,880 I don't think that there really is 621 00:21:16,880 --> 00:21:18,480 a BIP process anymore. 622 00:21:19,200 --> 00:21:20,080 It's possible that maybe 623 00:21:20,080 --> 00:21:21,920 there never really was one 624 00:21:21,920 --> 00:21:24,720 because when we really started 625 00:21:24,720 --> 00:21:26,240 to lean on it was during 626 00:21:26,240 --> 00:21:27,520 the block size war, 627 00:21:27,520 --> 00:21:29,280 which started like basically, 628 00:21:29,280 --> 00:21:30,240 of course, it kind of always 629 00:21:30,240 --> 00:21:31,680 been around to some extent, 630 00:21:31,680 --> 00:21:34,480 but it really heated up in early 2015 631 00:21:34,480 --> 00:21:36,160 with Bitcoin XT 632 00:21:36,160 --> 00:21:38,400 and then the scaling Bitcoin conferences. 633 00:21:39,040 --> 00:21:40,160 So really, that was when people 634 00:21:40,160 --> 00:21:42,000 started to really lean on it. 635 00:21:42,000 --> 00:21:43,600 And the BIP, 636 00:21:45,440 --> 00:21:46,800 there's like multiple types of BIP. 637 00:21:46,800 --> 00:21:48,240 So some of them are just informational. 638 00:21:48,240 --> 00:21:48,960 Some of them are just like, 639 00:21:48,960 --> 00:21:50,240 OK, this is how we're going to do 640 00:21:50,240 --> 00:21:51,200 like the HD wallet. 641 00:21:51,200 --> 00:21:52,480 So these are the paths 642 00:21:52,480 --> 00:21:53,920 that I'm using or something. 643 00:21:53,920 --> 00:21:58,880 So these are like non-controversial BIPs. 644 00:21:58,880 --> 00:21:59,840 And then the soft forks 645 00:21:59,840 --> 00:22:00,720 were like a different type. 646 00:22:01,280 --> 00:22:03,440 And even there were many hard fork BIPs 647 00:22:03,440 --> 00:22:05,200 during the block size war era. 648 00:22:05,200 --> 00:22:07,200 Of course, none of them came to pass. 649 00:22:07,920 --> 00:22:10,720 But what I'm trying to say is 650 00:22:12,000 --> 00:22:12,880 like a lot of the stuff 651 00:22:12,880 --> 00:22:14,000 that goes into the BIP process 652 00:22:14,000 --> 00:22:14,800 never comes out. 653 00:22:15,440 --> 00:22:17,760 And Segwit and Taproot 654 00:22:17,760 --> 00:22:18,960 are the main exceptions. 655 00:22:20,320 --> 00:22:22,000 But they went through, 656 00:22:22,000 --> 00:22:22,880 like there were people 657 00:22:22,880 --> 00:22:25,200 who were very influential pre-2015. 658 00:22:26,560 --> 00:22:28,480 Like 2013, we would be talking about 659 00:22:28,480 --> 00:22:30,960 like P2SH, pre-descript hash 660 00:22:30,960 --> 00:22:31,680 and other things. 661 00:22:32,480 --> 00:22:35,200 Those same people kind of did Segwit. 662 00:22:35,200 --> 00:22:37,680 Segwit was kind of famously a giant, 663 00:22:37,680 --> 00:22:40,160 like politically, it was a giant nightmare. 664 00:22:40,960 --> 00:22:44,000 And miners were like blockading it and stuff. 665 00:22:44,000 --> 00:22:45,600 So it led to all this chaos. 666 00:22:46,640 --> 00:22:47,760 And then ultimately, 667 00:22:47,760 --> 00:22:48,960 Segwit was to support Lightning, 668 00:22:48,960 --> 00:22:51,040 which I think Lightning is like a failure. 669 00:22:51,040 --> 00:22:52,560 So I don't think that... 670 00:22:52,560 --> 00:22:54,000 It was also supposed to be a compromised 671 00:22:54,000 --> 00:22:55,440 block size increase, which it was. 672 00:22:56,720 --> 00:22:57,840 In theory and in practice, 673 00:22:57,840 --> 00:22:59,680 it's an increase from one megabyte 674 00:22:59,680 --> 00:23:00,640 to four megabytes. 675 00:23:01,760 --> 00:23:05,280 That did not placate the large blockers 676 00:23:05,280 --> 00:23:08,160 because they wanted to still do Segwit2x 677 00:23:08,160 --> 00:23:09,600 and then they wanted to do Bitcoin Cash. 678 00:23:09,600 --> 00:23:12,160 And so the whole thing was all for naught, mostly. 679 00:23:12,880 --> 00:23:13,840 So yeah, I kind of think Segwit 680 00:23:13,840 --> 00:23:15,040 was kind of a giant mess. 681 00:23:15,040 --> 00:23:16,480 And then Taproot was kind of like 682 00:23:16,480 --> 00:23:18,480 a weird reflection of Segwit, 683 00:23:18,480 --> 00:23:20,080 where it was kind of like the miners 684 00:23:21,040 --> 00:23:22,720 felt bad about blockading Segwit. 685 00:23:23,840 --> 00:23:25,600 Developers felt bad about everything 686 00:23:25,600 --> 00:23:26,400 that happened with Segwit, 687 00:23:26,400 --> 00:23:28,160 yet it's Peter Weil and other people 688 00:23:28,160 --> 00:23:29,280 just saying they didn't want to 689 00:23:29,280 --> 00:23:30,320 comment on activation. 690 00:23:30,320 --> 00:23:32,960 So I think anything with software activation 691 00:23:32,960 --> 00:23:33,760 is basically dead. 692 00:23:34,480 --> 00:23:38,000 And we've had no software to activate since. 693 00:23:38,000 --> 00:23:40,160 And how many other things that were BIPs 694 00:23:42,080 --> 00:23:43,120 that weren't... 695 00:23:43,120 --> 00:23:44,480 Like how many other things happened 696 00:23:44,480 --> 00:23:47,120 that went through the BIP process 697 00:23:47,120 --> 00:23:50,400 and actually resulted in anything? 698 00:23:51,520 --> 00:23:52,320 Do you think... 699 00:23:52,320 --> 00:23:53,520 I mean, it sounds like you have 700 00:23:54,480 --> 00:23:56,560 some criticisms of the BIP process. 701 00:23:56,560 --> 00:24:00,000 And I'm curious, is there a solve there? 702 00:24:00,000 --> 00:24:01,360 Are there specific reforms 703 00:24:01,360 --> 00:24:03,840 that you would like to see in the BIP process? 704 00:24:03,840 --> 00:24:05,920 How do you think we could fix the BIP process? 705 00:24:07,280 --> 00:24:08,880 Well, I think first we have to recognize 706 00:24:08,880 --> 00:24:11,040 that maybe there is no such process, 707 00:24:11,040 --> 00:24:14,160 but I think we could improve it 708 00:24:14,160 --> 00:24:15,600 tangibly and easily 709 00:24:15,600 --> 00:24:18,080 if you had something like due process for the... 710 00:24:18,640 --> 00:24:20,000 So I've made this joke before 711 00:24:20,000 --> 00:24:21,840 about like when you're in the legal system 712 00:24:21,840 --> 00:24:23,280 in the US, in theory, 713 00:24:23,280 --> 00:24:24,560 you kind of know like when you're... 714 00:24:24,560 --> 00:24:26,320 They have to tell you you're under arrest. 715 00:24:26,320 --> 00:24:27,920 You know, they have to tell you the charge. 716 00:24:28,560 --> 00:24:29,760 They have to tell you like, okay. 717 00:24:29,760 --> 00:24:30,720 And then when you're in court, 718 00:24:30,720 --> 00:24:31,440 they have to tell you, you know, 719 00:24:31,440 --> 00:24:32,640 you've been indicted. 720 00:24:32,640 --> 00:24:33,360 Then they have to tell you 721 00:24:33,360 --> 00:24:34,240 you've been found guilty. 722 00:24:34,240 --> 00:24:35,280 Then they have to tell you 723 00:24:35,280 --> 00:24:37,360 you've been sentenced and et cetera. 724 00:24:37,360 --> 00:24:40,560 So at least it may not always work out perfectly. 725 00:24:40,560 --> 00:24:41,600 Of course it doesn't. 726 00:24:41,600 --> 00:24:43,440 But at least you know 727 00:24:43,440 --> 00:24:44,880 where you are in the process. 728 00:24:45,360 --> 00:24:46,720 Like just having a process 729 00:24:46,720 --> 00:24:48,000 that's sort of like lined, 730 00:24:48,000 --> 00:24:49,440 that's more clearly defined, 731 00:24:49,440 --> 00:24:51,520 do you think would be the most useful step forward? 732 00:24:51,520 --> 00:24:52,800 The government can't just throw people in jail 733 00:24:52,800 --> 00:24:54,800 and then you have no idea what's happening. 734 00:24:55,680 --> 00:24:57,200 You know, it's like that joke about... 735 00:24:57,615 --> 00:25:24,615 I think Christopher Hitchens visited like communists, Czechoslovakia or something, and he was like attending a talk with like, it was like a Franz Kafka talk or something, or maybe it was in Germany, and then they arrested everyone there and he said, what's the charge? And they said, we don't have to tell you that, and he was like, well, now I have to write about Franz Kafka when I write about, you know, this event. Do you think that the BIP process will help? 736 00:25:24,615 --> 00:25:34,055 Will have to be more formalized in order for us to sort of actuate into, you know, global reserve currency status and for this asset to be, to like get to the next level of adoption? 737 00:25:34,055 --> 00:25:43,415 I mean, do you think that there's, you know, any part of the Bitcoin, existing Bitcoin governance process that might be limiting how great we can grow? 738 00:25:43,415 --> 00:25:58,135 What I really think we should do, Mara R&D people and everyone who's maybe watching, but it's like, we really need to, the Bitcoin core developers, you know, they become very timid and they don't want, this is a result of many things. 739 00:25:58,135 --> 00:25:59,815 One is they don't want to be arrested. 740 00:25:59,975 --> 00:26:01,335 They don't want too much responsibility. 741 00:26:01,335 --> 00:26:03,855 You know, they don't want to look what happened to the samurai devs and whatever. 742 00:26:03,935 --> 00:26:06,455 The developer community doesn't want too much responsibility. 743 00:26:06,455 --> 00:26:11,735 I'm talking like all these, the maintainers on GitHub, the big, you know. 744 00:26:11,895 --> 00:26:12,775 The core developers. 745 00:26:12,775 --> 00:26:13,275 Yeah. 746 00:26:14,295 --> 00:26:20,375 People know who they are, but they don't, and like, they don't want to be sued by like Craig S. Wright sued them. 747 00:26:20,695 --> 00:26:27,895 I think they make a little bit of a bigger deal out of that then, but it's not fun to be sued even by a crazy person who, who, so that's not fun. 748 00:26:28,535 --> 00:26:31,135 And so they don't really even want attention. 749 00:26:31,695 --> 00:26:38,535 And we've evolved to a situation where they don't want to do any, they want to, they don't want to stick their neck out in any way. 750 00:26:39,535 --> 00:26:44,655 And that's very difficult to get anything done in that type of a situation. 751 00:26:44,655 --> 00:26:51,935 So what really should happen is the mining pools should shoulder the burden of responsibility and they should drive the process instead. 752 00:26:52,135 --> 00:26:54,095 Because really the mining pools are going to die off. 753 00:26:54,095 --> 00:26:55,855 Like everyone else has like an out, right? 754 00:26:56,215 --> 00:27:00,935 Like if you're a great developer, you can get a job where you have a lot of money. 755 00:27:01,255 --> 00:27:18,215 And if the miners can pivot to like, um, AI data centers, even, even the ASIC chip manufacturers, they can like, you know, people have outs, but the mining pools, you know, uh, as revenue shrinks and all this stuff, they will just like collect less and less and less money. 756 00:27:18,775 --> 00:27:26,575 And, um, if Bitcoin dies, it's not like you can just be like, oh, I'm going to be like, you can't even like be like, oh, I'm going to be like a litecoin pool or something. 757 00:27:26,575 --> 00:27:28,215 Cause they already have their pools that they like. 758 00:27:28,215 --> 00:27:38,655 So that the, the marathon, all the pools, Foundry, whatever, they should be specialists and they should look into everything. 759 00:27:39,135 --> 00:27:42,775 And if necessary, they can communicate with their clients. 760 00:27:43,855 --> 00:27:52,255 They should certainly do more of a ask for forgiveness, not permission thing, because of course there's a story that apparently happened with Foundry, with the Epic Sat. 761 00:27:53,015 --> 00:27:57,815 I don't know if we have ever talked about this, you and I, but the, there's the Epic Sat. 762 00:27:57,935 --> 00:28:04,895 The Ordinal Sat, ended up being worth, this is one Satoshi that ended up being worth 13 plus BTC. 763 00:28:04,895 --> 00:28:05,255 Right. 764 00:28:05,615 --> 00:28:07,775 So as you know, this is like Ordinal's craze. 765 00:28:08,135 --> 00:28:08,575 Right. 766 00:28:08,855 --> 00:28:15,975 So you could sell one Sat, which is basically worth nothing for 13 BTC, which is much more than the value of like, you know, multiple blocks. 767 00:28:16,415 --> 00:28:26,815 Foundry emailed, suppose this is what I was told, Foundry emailed their clients saying, you know, this is, we will take steps to secure the Epic Sat. 768 00:28:27,735 --> 00:28:28,455 The Ordinal Sat. 769 00:28:28,455 --> 00:28:36,255 And they got, apparently they got like a bunch of angry emails back because people were thinking, oh, this has to do with like JPEGs on the blockchain inscriptions. 770 00:28:36,255 --> 00:28:37,295 It had become controversial. 771 00:28:37,295 --> 00:28:39,935 So they're like, why are you involving us in this shit? 772 00:28:39,935 --> 00:28:40,815 Coinering basically. 773 00:28:40,815 --> 00:28:41,895 Exactly. 774 00:28:42,935 --> 00:28:47,735 That was of course a misunderstanding because Ordinal's and inscriptions were very conflated at the time. 775 00:28:48,495 --> 00:28:56,735 It had nothing to do with JPEGs on the blockchain, but I think, which is also besides the point, but it ended up being mined by, I think it was via BTC. 776 00:28:56,735 --> 00:28:58,095 That mined the Epic Sat. 777 00:28:58,095 --> 00:29:02,375 So Foundry didn't mine it, even though they're the largest pool, they were statistically the most likely to mine it. 778 00:29:02,575 --> 00:29:06,895 So the question is, like, what exactly happened there? 779 00:29:06,895 --> 00:29:09,775 And are people at Foundry happy that they missed out on? 780 00:29:10,095 --> 00:29:17,375 Because of course they buy, they mined it, got it for 13, sold it for 13 BTC and then distributed that to their clients. 781 00:29:17,495 --> 00:29:24,775 Your broader point, though, it sounds like is that mining pools should be taking a greater hand in governance broadly. 782 00:29:24,815 --> 00:29:28,975 And, you know, I don't know if it was you who said this to me or somebody else, but somebody made the suggestion. 783 00:29:28,975 --> 00:29:39,215 It's like, oh, what if every mining pool basically had sort of like an elected representative whose job was to stay up to date on what's happening and sort of protocol development, etc.? 784 00:29:39,455 --> 00:29:45,655 You know, you could have a situation where a mining pool is actually because I mean, right now, there's no incentive for them to do that. 785 00:29:45,655 --> 00:29:48,815 They're not very involved in protocol governance, broadly speaking, but they could be. 786 00:29:48,815 --> 00:29:49,855 And they should be. 787 00:29:49,855 --> 00:29:52,055 I think it's they will miss out. 788 00:29:52,055 --> 00:30:03,495 They actually stand to benefit or suffer if the price of BTC goes way down or if it goes way up, like that will affect how much money that the mining pools collect. 789 00:30:03,495 --> 00:30:09,695 And then, you know, so the mining pools are also they are the ones who create they run the software that assembles the blocks. 790 00:30:10,535 --> 00:30:14,655 So they really should be specialists and they should have knowledge about. 791 00:30:16,135 --> 00:30:18,495 How to make blocks the most valuable way. 792 00:30:19,415 --> 00:30:20,335 And so I think it's. 793 00:30:22,295 --> 00:30:35,415 The epic sad story is a very depressing story of like knowledge, not, you know, we're not being governed by knowledge or being governed by like, I don't know, like optics or or spineless, the cowardice, maybe. 794 00:30:35,415 --> 00:30:44,495 I don't know. But I think we should be in a world where the mining pools know more and care more. 795 00:30:44,495 --> 00:30:53,495 And they and I think that that would be very easy for them to just have like one full time person or something or a whole team, you know, especially if we're going to have like marathon R&D like department. 796 00:30:53,495 --> 00:30:54,495 Oh, we certainly do. 797 00:30:54,495 --> 00:30:56,255 But it's not terribly common. 798 00:30:56,255 --> 00:30:57,495 It's not, unfortunately. 799 00:30:57,495 --> 00:31:06,455 It's weird. There are parts of it that are common because like the brains people are they put out like books and stuff and they are kind of recognized as sort of more egghead or something. 800 00:31:06,455 --> 00:31:13,135 I hope that's not offensive to say or whatever, you know, but they're like the you have some people who have like put out research and stuff. 801 00:31:13,135 --> 00:31:22,135 I do think that like, OK, so like Luxor was more like overtly pro ordinal and they're more pro soft fork, I think, where they were like, we will support. 802 00:31:22,135 --> 00:31:24,135 So they're like, we will support BIP 300. 803 00:31:24,135 --> 00:31:30,135 But they're also like, we love the ordinals that go into the parties because it's more transaction fee revenue. 804 00:31:30,135 --> 00:31:31,135 Yeah, makes total sense. 805 00:31:31,135 --> 00:31:33,135 So why don't more people do that? 806 00:31:33,135 --> 00:31:35,135 I don't know. But hopefully they'll start. 807 00:31:35,135 --> 00:31:37,135 Well, it's a good CTA, Paul. 808 00:31:37,135 --> 00:31:38,135 Thank you so much for coming on the show. 809 00:31:38,135 --> 00:31:39,135 I'm excited. 810 00:31:39,135 --> 00:31:46,135 We'll have to do more of a part two and here as the drive chains story unravels. 811 00:31:46,135 --> 00:31:53,135 But yeah, thank you so much for coming on and kind of sharing a little bit about merge mining, which super interesting topic from our perspective. 812 00:31:53,135 --> 00:31:55,135 So excited that we got to talk about it. 813 00:31:55,135 --> 00:31:56,135 Thank you. 814 00:31:56,135 --> 00:31:57,135 Great. Hey, thanks for having me.