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So we are going to have a conversation that I think is very important in the moment
that we are right now in Bitcoin and with a lot of what is happening in the world,
really.

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And I am very happy, Paul, that you have taken time from your schedule to come here
and talk to us about Drivechains and what they are and what they could mean for
Bitcoin.

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So I am very much looking forward for this conversation.

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This is going to be recorded and posted as a podcast afterwards for those that can't
be here live.

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But, yeah, I think that the best thing to start will be just give a little
introduction of yourself in case that some of the listeners may not know exactly who
you are.

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Okay, sure. So I have been a Bitcoin researcher for a while, and I wrote a long time
ago, I wrote an essay about nothing is cheaper than proof of work.

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I actually wrote one before that that was called Long Live Proof of Work back in
2014, and then Adam Back linked to it from BitcoinTalk.org.

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And that was like the big break.

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And then since then, I have been presenting at various conferences.

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I travel all around the world and go to Bitcoin meetups.

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And most relevantly, I have been the author of BIP300/301, which is
Drivechain collectively.

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Drivechain is something that uses those two BIPs.

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The purpose of Drivechain is to allow people to switch software so they can switch
as if they switch to an altcoin, but it's an altcoin that has no new coins on it.

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So it's 21 million Bitcoin only, and yet it gives us the freedom to move to a
completely different piece of software with new developers who may disagree with
each other or may hate each other.

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They may want completely different things.

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You have small blockers, large blockers.

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You could have zk-SNARKs, ring signatures, EVM, your own virtual machine, whatever.

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You have all the freedom of launching a completely different piece of software, and
you have the freedom of people who just disagree with each other and don't like each
other.

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But despite that, there is never a new coin.

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And so that's a tiny intro of me and a tiny intro of the idea.

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Yeah, yeah, that's a great place to begin.

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I think in case people haven't paid attention to all the Drivechain conversations,
like what you are describing is you're using Bitcoin as the main settlement layer.

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And then you're allowing trustless connections with what we think of as sidechains.

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And you're allowing Bitcoin to be bridged from the Bitcoin main chain into the
sidechain.

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And the sidechain doesn't have to work the same way as Bitcoin works.

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You can create this blockchain with different parameters and you can have something
that is more like Ethereum and you can have a sidechain that is more like something
like Solana or like Monero.

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And you can have all these different versions, but it's all tied to the Bitcoin main
chain because the way the bridge works, you're never breaking that 21 million coins
across all the different sidechains.

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There can only be 21 million Bitcoins.

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Yeah.

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Yes, that's it. Exactly.

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All right. Perfect. I encourage the audience to make as many questions as they can,
since we have Paul here.

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I think it's a great way to to start thinking what this could be for Bitcoin and how
it actually works.

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Manu, is there something you want to add to the conversation?

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Hi, Paul. How are you?

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How are you?

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This is very happy in Argentina, but not so.

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Welcome to the Money On Chain community first.

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I've been following you for many years, actually, so very happy that you are with us
today.

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And yes, I have many questions, but maybe trying to go directly to the main issue is
after so many years of you proposing this and I've been reading your proposals and
listening to you.

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And I have never heard about any risk on implementing Drivechains, but I have read
some.

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But maybe it would be interesting if we can recap which are the main reasons why
some Bitcoiners resist to the BIP300/301.

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Of course, I'm biased, so you should get it from them.

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I really think that they misunderstand the idea, though.

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I actually think it's all irrational.

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It's all just a misunderstanding.

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A lot of it is someone is working on a different L2, so they don't want this to
succeed.

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Or even it's a case where someone originally might want this to succeed.

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Like imagine if you really wanted a feature, such as maybe you're like a large
blocker.

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You push for large blocks on layer one and then you don't succeed and you try to
maybe get the extension block, but then that doesn't work.

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You try SegWit2x and then finally you launch Bitcoin Cash, the altcoin.

51
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And now it's like the last thing you want is for BTC to actually obtain the feature.

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You wanted it to be that if large blocks are a winning idea, then Bitcoin Cash would
be the winning investment.

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I think that's a lot of it.

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I can give you what they say the risks are, but they don't make any sense.

55
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People say there's a risk of miners stealing the funds, but it doesn't make any
difference because miners can already steal the funds from the Lightning Network.

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And that doesn't matter anyway because the user is going to choose what type of
security model and what kind of risk they would like to take.

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So really none of it matters.

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Every coin starts on L1 main chain.

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The user has to voluntarily send them into the Lightning Network or into the
Drivechain.

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So giving people an option that they might like in the future.

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It's like you go to your favorite restaurant and there's a new item on the menu.

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It doesn't matter if it might be bad.

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But the way it will work in practice is people will put $20 in at first and then
they'll say.

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So then other people will try to come up with other critiques.

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Some kind of reason that says, okay, how is this going to harm everyone else?

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And just the absurd lengths to which they take some of the reasoning is just so
bizarre.

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They say they have to chain together these weird steps where they have to say maybe
it might give some people an incentive to do this or whatever.

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So what they say is something like miners will make a ton of money from these sidechains because they'll be so popular.

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And then some miners will not take the money and those miners will be at a
disadvantage and then they'll go out of business.

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Which isn't a ridiculous thing to say.

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It's literally exactly the same in every way as if they had said something like some
miners will not censor layer one transactions.

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It's exactly the same.

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Some miners will censor and some won't.

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And then the ones who censor, they will pass on transaction fees that they won't
get.

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And then they'll go out of business or something.

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Some miners will light their own money on fire and other miners will not light their
own money on fire.

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It's like the whole point of the difficulty adjustment is that uncompetitive miners
are kicked out.

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So that's always happening.

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And this is why I tell those critics, should we just remove the upward difficulty
adjustments from Bitcoin?

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Should we just remove proof of work from Bitcoin?

81
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Because that's really the implication of this argument that says we feel bad for
some miners that go out of business because they don't take advantage of what this
is and what it really is.

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It's basically for free.

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The only requirement is that the miner partner with a sidechain node that already
exists, which costs basically nothing.

84
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So basically for free, the miners all get access to huge amounts of additional
revenue in return for basically doing nothing.

85
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They have to maybe do a couple of tiny things, but it's basically nothing and it has
nothing at all.

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It's not even comparable to if a new ASIC comes out that's like twice as efficient.

87
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Every single miner must have a business plan of upgrading to that ASIC.

88
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You can't be half as efficient.

89
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So it's no different from what they always do all the time in every other context.

90
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So this is some of these weird things.

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They make up a bunch of stuff.

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They try to use bad words and tie them to this idea.

93
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Like they say stuff about MEV, like Ethereum has MEV, Miner Maximal Extractable
Value, or Miner Extractable Value, depending on who you ask.

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And this is all a misunderstanding of how it works.

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Whatever defects the sidechain software has, they stay over there.

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And it is merge mining and Blind Merged Mining of 301.

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That transforms all of that into just an L1 transaction fee.

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So everything is already firewalled off.

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Everything is already converted to just L1 transaction fees.

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So if you're against L1 transaction fees, then would you be against removing all L1
transaction fees from Bitcoin itself?

101
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So that's my rambling answer.

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I don't think there are any risks.

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What the idea does is it takes the unused OP_NOP5 and uses it to count to 13,000 over
and over again.

104
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That really can't be risky.

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But even if it were, we could just shut OP_NOP5 off the exact same way we turned it
on.

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Ctrl-Z.

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This is probably the least risky concept in all of Bitcoin's history, I think.

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And I'm not a technical guy, so for me, you will need to have a lot of patience.

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From my understanding, there is no risk against, for example, if we compare, for
example, with RSK.

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In RSK, it is a sidechain, and the only difference in implementing a Drivechain will
be that the payout will be trustless.

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Is that right? Is that correct?

112
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Yes, it's hard to summarize.

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And of course, people have furious debates over what trustless means.

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But the federated model is deficient compared to the model of BIP300 in a few ways.

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One is the federated model you have to pick.

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You have to preemptively choose a bunch of pubkeys that control everything.

117
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And the question is, how do you pick this?

118
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You say, oh, there's 15 different people or whatever, but you don't really know.

119
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They could all be the same person.

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How do you know?

121
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And how do you know that at every stage of the project, they will have an incentive
that is aligned with yours?

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So in BIP300, it's just this big time horizon, three months worth of blocks.

123
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And the miners, you don't have to pick any identities ever at any point.

124
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It's an automatic process.

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And the miners are already going to be permanently incentive aligned with you
because they are the ones who will get all the transaction fees.

126
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All the future transaction fee revenues, which should be a decent amount and growing
probably forever.

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They get all that and they are the ones who are always paid in BTC on all chains,
including L1.

128
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So they are the most sensitive to the Bitcoin price.

129
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They are the ones who have already invested.

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They have invested in ASIC chips.

131
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But the best thing of all is that the whole thing is procedural, which is to say
it's automatic to add new sidechains, drop, add sidechains, deposit, withdraw.

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Whereas with the federated model, you have to pick these people.

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There has to be a date when you pick them and then there's a fixed group and then
the group cannot be changed, which is not good.

134
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Whereas in the mining process is constantly, because of the difficulty adjustment,
is constantly firing anyone who's an underperformer.

135
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So there's more dynamism.

136
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But yeah, if you wanted a short answer, I would say yes, that the federated model is
trusting some people or trusting with the process that chose those people.

137
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Whereas in BIP300, it's basically the same idea as L1 Bitcoin itself, where you
trust the proof of work, which is definitely not infallible, but I think it's pretty
reasonable.

138
00:13:34,480 --> 00:13:43,480
Yes, I think at least it sounds like if you can have something like Rootstock
without the federation, would that be a better model?

139
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According to them, yes, of course, because they have always insisted since day one
that they wanted to not use the federated model and they wanted something procedural
and algorithmic.

140
00:13:56,480 --> 00:14:01,480
So they have always insisted that they would prefer that and they still insisted to
this day and they're right, I think.

141
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Yes, yes, and that is part of the reason why we wanted to have these conversations.

142
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I am also surprised that this kind of conversations doesn't happen more often.

143
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I always see in the big podcast scene, the same people going around talking about
the same things.

144
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And a lot of times these type of ideas don't get the air they deserve.

145
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I just have a little conjecture that the podcast industry has evolved a certain way
and it's not very much like CNN or Fox News or something where they're just telling
people what they want to hear.

146
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And the more nuanced and complicated something gets, the smaller the audience gets.

147
00:14:46,480 --> 00:14:53,480
And they want to maximize the number of eyeballs and maximize the number of
whatever, the ad revenue indirectly, I think.

148
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Yeah, yeah, that definitely plays a big role.

149
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They're all businesses making business decisions.

150
00:15:02,480 --> 00:15:14,480
But I wanted to ask you about, because you said that there's a lot of the criticism
that Drivechains receive that are not very in your view, that don't make much sense.

151
00:15:15,480 --> 00:15:34,480
And I often wonder if these kinds of criticisms that we hear are not just maybe
masking something like, if I say that Drivechains are a good idea, I am validating a
lot of experimentation that happened in the altcoin space.

152
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And for a long time, a lot of people have been telling us that all altcoins are
shitcoins.

153
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I don't know if you have any thoughts.

154
00:15:41,480 --> 00:15:43,480
No, I think you're 100% correct.

155
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I think that's exactly what has happened.

156
00:15:46,480 --> 00:15:55,480
They worry that in the time between we admit that sidechains, just any sidechain,
because it doesn't have to be BIP300.

157
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Any person who works on a sidechain technique would validate the altcoin
experimentation.

158
00:16:02,480 --> 00:16:08,480
And so yeah, it's like in the time between we admit that's a good idea, then we have
to contradict ourselves.

159
00:16:09,480 --> 00:16:13,480
We have to say, wow, the EVM, Ethereum and DeFi, this is the future.

160
00:16:14,480 --> 00:16:16,480
And this is part of the future.

161
00:16:17,480 --> 00:16:20,480
So then you admit that and then it's like you have to hope that people will come to
BTC.

162
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So I think you're 100% right.

163
00:16:23,480 --> 00:16:30,480
And I would only add that it speaks to the extreme pessimism that people actually
have about Bitcoin.

164
00:16:31,480 --> 00:16:37,480
They really think like they don't really believe that it will succeed on its merits.

165
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They just think it will succeed because of being memed really hard or like shutting
down conversation about things that the user likes.

166
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So they just think it's all like post-modernist arbitrary.

167
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It's just a meme.

168
00:16:57,480 --> 00:17:04,480
It's just like cultural relativism and whoever spreads the fastest and whoever's the
most intolerant will win.

169
00:17:05,480 --> 00:17:17,480
And they don't actually believe in Bitcoin's properties and features as actually
something that will easily allow it to defeat rival cryptocurrencies and then the
rival fiat currencies.

170
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It's an irony.

171
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Yes. If Bitcoin is what it's supposed to be, then it should have no problem
competing openly.

172
00:17:29,480 --> 00:17:34,480
I think we have another guest. QR, do you want to ask a question to Paul?

173
00:17:35,480 --> 00:17:38,480
Hi, Tomas. Yes, thanks.

174
00:17:39,480 --> 00:17:40,480
Good morning, everyone.

175
00:17:41,480 --> 00:17:54,480
Paul, I guess that a federation for a sidechain should pose any potential risk to
the people in the federation, right?

176
00:17:55,480 --> 00:18:01,480
But there shouldn't be any risk for the people on layer one, correct?

177
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Is there any risk that is posed against Drivechains regarding what effect their
existence could bring on to other users of Bitcoin layer?

178
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I don't really think so.

179
00:18:19,480 --> 00:18:22,480
It was designed from the ground up to not have everything.

180
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The whole point of the sidechain idea is to have blame fall on only the right
people.

181
00:18:28,480 --> 00:18:39,480
So if a sidechain developer creates a terrible sidechain and it's a disaster, then
it only affects the reputation of the developer who created it and the users over
there who may lose their money.

182
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I really would flip the question around and say, what risk are we taking in BTC if
we really adopt a policy that we permanently will not pursue any alt technology?

183
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I think that is a crazy risk to take, especially when we could do it more or less
for free.

184
00:19:02,480 --> 00:19:14,480
We're going to say that we will never under any circumstances, no matter what we
learn, no matter what is invented, no matter what we learn about our own things that
we try that don't really work out.

185
00:19:15,480 --> 00:19:22,480
We are just committed to if anything that was invented anywhere else first, we will
not take that thing.

186
00:19:23,480 --> 00:19:24,480
I think that's a huge risk.

187
00:19:25,480 --> 00:19:29,480
And what could happen on L1, again, on L1 it's just counting to $13,000.

188
00:19:30,480 --> 00:19:33,480
And it is slightly diluting the focus of the miners.

189
00:19:34,480 --> 00:19:40,480
But it doesn't really, if the miner earns like $5,000, let's just say, I'm just
making these numbers up or whatever.

190
00:19:41,480 --> 00:19:44,480
Let's say they earn $5,000,000 a day from L1 BTC.

191
00:19:45,480 --> 00:19:51,480
And then we turn this on and they earn additionally $100,000,000 per day.

192
00:19:52,480 --> 00:19:54,480
So they earn $105,000,000.

193
00:19:55,480 --> 00:19:58,480
So in one sense you can say a miner's concentration has been diluted.

194
00:19:59,480 --> 00:20:07,480
But in a different sense you can just say they still care about L1 to the tune of
$5,000,000 a day.

195
00:20:07,480 --> 00:20:10,480
So they care kind of the exact same absolute amount.

196
00:20:11,480 --> 00:20:12,480
You know what I mean?

197
00:20:13,480 --> 00:20:15,480
What if they play poker on the side?

198
00:20:16,480 --> 00:20:21,480
So we're going to say that anything that anyone could ever do in the economy would
dilute miners' concentration.

199
00:20:22,480 --> 00:20:24,480
So I just don't see it really.

200
00:20:25,480 --> 00:20:30,480
I thought about it for a while and I think what's happening is I think a lot of
people are just hearing about it for the first time.

201
00:20:31,480 --> 00:20:33,480
And they want to take their time thinking through it all.

202
00:20:34,480 --> 00:20:35,480
But I just don't get it.

203
00:20:35,480 --> 00:20:40,480
To me the bigger risk is that Bitcoin is replaced by a different currency, a
different cryptocurrency.

204
00:20:41,480 --> 00:20:42,480
We should worry about that.

205
00:20:43,480 --> 00:20:46,480
We should wake up every day thinking about, okay, what can we do to stop that from
happening?

206
00:20:47,480 --> 00:20:50,480
Because that will affect the L1 Bitcoin users, right?

207
00:20:51,480 --> 00:20:54,480
The price goes to zero, the project's dead, everyone's humiliated.

208
00:20:55,480 --> 00:20:56,480
There's no mining.

209
00:20:57,480 --> 00:20:59,480
If the price falls to zero, there's no proof of work.

210
00:21:00,480 --> 00:21:01,480
The whole thing is dead.

211
00:21:01,480 --> 00:21:03,480
And I think it's just the network effects of money are very strong.

212
00:21:04,480 --> 00:21:05,480
So I think they all compete.

213
00:21:06,480 --> 00:21:07,480
It's winner take all, loser lose all.

214
00:21:08,480 --> 00:21:15,480
Yeah, my point is that if the miners are paid in Bitcoin, in any case, there's no
competition there.

215
00:21:16,480 --> 00:21:29,480
And if the people that choose to send resources to the sidechain, which is
basically to send resources to an address, do it on their own will, under their own
will, I don't know how you say that.

216
00:21:30,480 --> 00:21:32,480
Then there's no problem, right?

217
00:21:33,480 --> 00:21:36,480
Because it's like sending your money to, I don't know.

218
00:21:37,480 --> 00:21:38,480
Yeah, not to me.

219
00:21:39,480 --> 00:21:47,480
I asked this exact question to Peter Weil when I was in Amsterdam several years ago.

220
00:21:48,480 --> 00:21:50,480
I'm going to be back in Amsterdam next week.

221
00:21:51,480 --> 00:21:55,480
But I was like, this is basically the same series of questions.

222
00:21:56,480 --> 00:21:58,480
The user is free to destroy their own Bitcoin, right?

223
00:21:59,480 --> 00:22:06,480
They're free to send it to BitcoinEaterDon'tSend, which is this address that would
eat the Bitcoin because no one knew the private key.

224
00:22:07,480 --> 00:22:11,480
But they're also allowed to sell their Bitcoin for goods and services or sell their
Bitcoin and buy an altcoin.

225
00:22:12,480 --> 00:22:19,480
So this is just spending your own Bitcoin that you own into a BIP300 script.

226
00:22:20,480 --> 00:22:22,480
Yeah, I see that very similar.

227
00:22:23,480 --> 00:22:24,480
I live in Argentina, right?

228
00:22:25,480 --> 00:22:34,480
And I see that very similar to some decisions that people in the government take,
say, using as an argument that they are taking care for you.

229
00:22:35,480 --> 00:22:43,480
So they do not consider you as being enough, have enough autonomy to make your
decisions, right?

230
00:22:44,480 --> 00:22:51,480
I think that people in Bitcoin should take care of making the protocol secure,
right?

231
00:22:52,480 --> 00:22:56,480
And enforcing that what you want to do is done, right?

232
00:22:57,480 --> 00:22:58,480
But nothing else.

233
00:22:59,480 --> 00:23:00,480
I agree with you.

234
00:23:01,480 --> 00:23:02,480
Where is the owner?

235
00:23:03,480 --> 00:23:04,480
Sorry.

236
00:23:05,480 --> 00:23:10,480
Yeah, no, I agree with your saying that you're free to burn your own Bitcoin if you
want to.

237
00:23:11,480 --> 00:23:12,480
Yeah, you're the owner.

238
00:23:13,480 --> 00:23:14,480
You're the sovereign owner.

239
00:23:15,480 --> 00:23:20,480
If you can't do something, if there's stuff with it that you can't do, then you're
not really the owner anymore.

240
00:23:21,480 --> 00:23:22,480
But yeah, I don't get it.

241
00:23:23,480 --> 00:23:25,480
I think this is also where this idea is tricky to understand.

242
00:23:26,480 --> 00:23:29,480
You have to be very intelligent to understand this whole Drivechain idea.

243
00:23:30,480 --> 00:23:36,480
But what I mean by that is it's like the customer is no one who's a Bitcoiner right
now.

244
00:23:36,480 --> 00:23:41,480
The customer is like someone who would use Solana or something.

245
00:23:42,480 --> 00:23:46,480
So it's deliberately off-brand.

246
00:23:47,480 --> 00:23:58,480
It's saying, listen, do you want something that has a node that no one can run and
is an EVM, super fast EVM nonsense chain?

247
00:23:59,480 --> 00:24:00,480
And it's like everyone in Bitcoin is like, no.

248
00:24:01,480 --> 00:24:02,480
But that's not really the point.

249
00:24:02,480 --> 00:24:05,480
The point is like we have a restaurant and we serve only one thing.

250
00:24:06,480 --> 00:24:07,480
We serve hamburgers.

251
00:24:08,480 --> 00:24:12,480
But there's all these other restaurants on the street and it's just like we could
sell all that other stuff too.

252
00:24:13,480 --> 00:24:14,480
And network effects.

253
00:24:15,480 --> 00:24:16,480
Network effects are the key to winning.

254
00:24:17,480 --> 00:24:20,480
Most people are going to use the money that their friends use.

255
00:24:21,480 --> 00:24:42,480
I can think, for example, about the biggest stable coin, which is USDT, which is
outside the blockchain because it's fiat money.

256
00:24:43,480 --> 00:24:54,480
For example, if you want to exchange your Bitcoin for dollars for any reason, you
would, I don't know, you would take that.

257
00:24:55,480 --> 00:24:59,480
I don't know if I'm doing the right economic thought.

258
00:25:01,301 --> 00:25:17,301
But if you are taking the resources out of the blockchain, but instead if you're
using the Bitcoin backed stable coin, like DollarChain, then you would be actually
keeping your Bitcoin in movement, right?

259
00:25:17,301 --> 00:25:24,301
In any case, Bitcoins are always there, right? Because you're exchanging them by
dollars, but the Bitcoins remain, right?

260
00:25:25,301 --> 00:25:45,301
But if the dollars are used on the sidechain, then the Bitcoins, in this case
miners, right, keep on receiving the transaction fees because the dollars continue
to be used in the Bitcoin environment, right?

261
00:25:45,301 --> 00:25:52,301
That's one simple reason. I mean, in the end, it's the same that you said about the
miners getting additional fees, right?

262
00:25:55,301 --> 00:26:16,301
Yes, and I think another point that people often don't think about with the whole
Drivechain situation, and the way that I'm thinking is that, OK, maybe the Bitcoin
more maximalists don't see the value on the altcoin space because of their own
reasons.

263
00:26:16,301 --> 00:26:32,301
But they should still be able to at least accept that that space is attracting the
most amount of developers and the most amount of brainpower and mindshare is going
over there to experiment with all this stuff.

264
00:26:32,301 --> 00:26:38,301
So you can bring all these people and have them develop use cases for your asset.

265
00:26:39,301 --> 00:26:49,301
I think it's quite… First of all, yes, USDT is so popular. People love the product.
I'm shocked personally. I'm very surprised.

266
00:26:49,301 --> 00:26:58,301
But if you go to Asia, people don't even want to be paid in BTC. They just want
USDT. They love USDT. Can't get enough of it.

267
00:26:59,301 --> 00:27:17,301
But I think you're right that it's not just that you have to think that you don't
like any of the altcoins. You also have to say something like, in your head, you
have to say Bitcoin Core is the best and will always be the best under all
circumstances for everyone.

268
00:27:17,301 --> 00:27:25,301
And I just think that it's really bizarre. I just don't understand. When else would
we say that? Like one television show is the best television show for everyone or
something?

269
00:27:25,301 --> 00:27:30,301
Especially now when you have so much turnover and so many people try different
ideas.

270
00:27:30,301 --> 00:27:36,301
But yeah, it's so easy to just point at a few ideas because 99% of the altcoins are
terrible.

271
00:27:36,301 --> 00:27:45,301
And it's very easy to just either point at that in average or to just pick out
specific failures that are very salient.

272
00:27:45,301 --> 00:27:55,301
And that's just a very easy thing to do. But what should also be easy is to just
say, of course, we want a situation where someone could invent some new thing.

273
00:27:55,301 --> 00:28:00,301
Because, of course, there was a day before each of us had heard about Bitcoin for
the first time.

274
00:28:00,301 --> 00:28:08,301
You were coasting through life and you thought the best thing that you had ever
discovered was something other than Bitcoin.

275
00:28:08,301 --> 00:28:16,301
But then you discovered Bitcoin and you're like, wow, this is my new favorite thing.
So you can always have a new favorite thing tomorrow. A new favorite thing.

276
00:28:16,301 --> 00:28:23,301
If we don't have sidechains, then that thing will have to be a different coin.

277
00:28:23,301 --> 00:28:28,301
Whereas if we did have sidechains, it would just the existing BTC investment would
not be disturbed.

278
00:28:28,301 --> 00:28:31,301
So it's pretty straightforward, I think.

279
00:28:32,301 --> 00:28:39,301
We just lost Rodolfo Andragnes. I think you know him, right? We have it now.

280
00:28:39,301 --> 00:28:47,301
Let me add him because he was telling me to ask you something, but even better if he
asks yourself.

281
00:28:48,301 --> 00:28:52,301
Yes, hello. I have two questions.

282
00:28:52,301 --> 00:29:14,301
First, it's more a personal for myself question, which is what needs to happen to
change your soft confirmation to the Bitcoins to a strong confirmation to the
Bitcoins this November and come down to discuss cross-pollination with Sergio and
Alexei from Italy?

283
00:29:14,301 --> 00:29:16,301
Yes, this is one of them.

284
00:29:16,301 --> 00:29:23,301
Oh, my gosh. I've been doing a lot of traveling and it's very time consuming, but I
really would like to go.

285
00:29:23,301 --> 00:29:25,301
Everyone has told me how great it is.

286
00:29:25,301 --> 00:29:32,301
There's no better place in the crypto space this year than Argentina in November.

287
00:29:32,301 --> 00:29:39,301
That's what I think. So I don't know where you've been lately, but I know where you
should be in November.

288
00:29:40,301 --> 00:29:47,301
Just one country that has nearly hyperinflation, a big Bitcoin community.

289
00:29:47,301 --> 00:29:53,301
And just now the government has proposed to implement a CBDC.

290
00:29:53,301 --> 00:29:58,301
So it's like perfect place to be in the universe.

291
00:30:02,301 --> 00:30:04,301
I still need to convince you.

292
00:30:04,301 --> 00:30:07,301
Don't forget about the elections, Manu.

293
00:30:08,301 --> 00:30:10,301
Oh, we have. Oh, yeah, of course.

294
00:30:10,301 --> 00:30:15,301
Yeah, that guy. That guy seems like a real a real whole lot of fun.

295
00:30:15,301 --> 00:30:17,301
How long? When is the election anyway?

296
00:30:17,301 --> 00:30:21,301
It's one week. It's the 22nd of October.

297
00:30:21,301 --> 00:30:24,301
Yes. So 22nd. It's the first election.

298
00:30:24,301 --> 00:30:27,301
And if we go to Balotage, if we have a second round, it's on.

299
00:30:27,301 --> 00:30:31,301
It's one week after LaVitConf, which is 19th of November.

300
00:30:31,301 --> 00:30:39,301
Yes. So you could even stay and see if we get a new liberal president on stage in
Argentina.

301
00:30:39,301 --> 00:30:41,301
But this one was one of the things.

302
00:30:41,301 --> 00:30:48,301
So please keep thinking about coming down to LaVitConf and have also a live
discussion on Drivechain itself.

303
00:30:48,301 --> 00:30:50,301
Yes. With the Bitcoin community.

304
00:30:51,301 --> 00:30:53,301
No, but my I will.

305
00:30:53,301 --> 00:31:04,301
But my only my only two cents to this is I don't agree, really, that it's just a
thing about we are against everything that happens in the space.

306
00:31:04,301 --> 00:31:12,301
Yes, I think they are that yet have not been some concerns about.

307
00:31:12,301 --> 00:31:17,301
Yes. OK. The main thing, though, is that only happens on the sidechain world.

308
00:31:17,301 --> 00:31:24,301
It only it's between the person who constructs the sidechain block and the users
who get scammed over there.

309
00:31:24,301 --> 00:31:31,301
And it has no effect. It has no actual effect on anyone on L1 or anyone using any
other sidechain.

310
00:31:31,301 --> 00:31:41,301
So it may it encourages certain types of vertical integration, but not the kind with
L1 miners or L1 Bitcoin nodes.

311
00:31:42,301 --> 00:31:48,301
And actually gave a whole presentation on this long before Mav was invented in 2016
in May.

312
00:31:48,301 --> 00:31:54,301
If you go to drivechain.info slash literature and you scroll to the very bottom.

313
00:31:54,301 --> 00:32:00,301
I gave a long presentation about this idea of the sidechains attacking each other
and affecting each other.

314
00:32:00,301 --> 00:32:10,301
And this is partly why the several overlapping reasons why the miners should be in
charge of the sidechain drop ad and the withdrawal,

315
00:32:10,301 --> 00:32:23,301
because they will then if there are sidechains that attack other chains, then the
miners will have to weigh that against any benefit that chain adds to the rest of
the Bitcoin community.

316
00:32:24,301 --> 00:32:32,301
They should optimize the whole thing. But there's no sense in which they are like
led into any kind of disaster or something.

317
00:32:32,301 --> 00:32:36,301
It's all just conditional payments to mine like miners get five dollars if something
happens.

318
00:32:36,301 --> 00:32:43,301
So the MEV thing, I think it's just giant. It's the timeline is like we made an
Ethereum sidechain and then Ethereum talked about Mav.

319
00:32:43,301 --> 00:32:49,301
So then people thought, oh, that will bring Mav to Bitcoin. But it's it's only
bringing Mav to the Ethereum sidechain.

320
00:32:50,301 --> 00:32:58,301
Yeah, but my my my side question was related to to in Bitcoin space, you have things
that come and go.

321
00:32:58,301 --> 00:33:03,301
You have discussions that come and go and we don't take immediate action.

322
00:33:03,301 --> 00:33:06,301
Yes. And discussions take two, three, four years.

323
00:33:06,301 --> 00:33:09,301
And the right thing has been running since long. Yes.

324
00:33:09,301 --> 00:33:16,301
In the space as a discussion. Do you think this is a matter of time or do you think
it's a matter of touch?

325
00:33:17,301 --> 00:33:25,301
I think the discussion will will finish in a positive way.

326
00:33:25,301 --> 00:33:28,301
Or do you think this. How are you feeling?

327
00:33:28,301 --> 00:33:35,301
The discussion, because shortly, a few months ago, we have active the discussion
again.

328
00:33:35,301 --> 00:33:38,301
So what do you think it will eventually happen with this?

329
00:33:38,301 --> 00:33:46,301
I think the long run they will it must eventually happen for because there's all
kinds of different things that will eventually happen.

330
00:33:46,301 --> 00:33:50,301
There will be the security budget issue in the very, very long run.

331
00:33:50,301 --> 00:33:57,301
The miners will want to get paid instead of getting a diminishing amount of money
that shrinks to zero.

332
00:33:57,301 --> 00:34:02,301
They would want to have a growing amount of money that asymptotically approaches the
infinities.

333
00:34:03,301 --> 00:34:06,301
But that's one. The other one is that more people be more creative.

334
00:34:06,301 --> 00:34:09,301
The more alt tech will be invented.

335
00:34:09,301 --> 00:34:12,301
So there will be stuff that is actually good.

336
00:34:12,301 --> 00:34:14,301
That's not just like aspirational.

337
00:34:14,301 --> 00:34:17,301
They'll be like stuff that does what you might call.

338
00:34:17,301 --> 00:34:20,301
They'll be like cool privacy tech. They'll be cool scaling tech.

339
00:34:20,301 --> 00:34:23,301
They'll be able to school stuff like whatever zk-SNARK people invent.

340
00:34:23,301 --> 00:34:31,301
Eventually, someone will invent something that's so new that it makes the zk-SNARK
look like just a virtual tree or something.

341
00:34:31,301 --> 00:34:33,301
People keep inventing new stuff.

342
00:34:33,301 --> 00:34:38,301
I think also a lot of problems in Bitcoin like the cult problem will get worse.

343
00:34:38,301 --> 00:34:42,301
The idea that it becomes this is mostly I think just North American Twitter.

344
00:34:42,301 --> 00:34:49,301
But it's just like the idea that only a certain set of views is correct and
everything else is just shrinking.

345
00:34:49,301 --> 00:34:56,301
Ratchet turning that where it's basically saying eventually everyone will just get
canceled.

346
00:34:56,301 --> 00:34:58,301
It'd be like the political left.

347
00:34:58,301 --> 00:35:00,301
People cancel themselves.

348
00:35:00,301 --> 00:35:02,301
So that will become more intolerable.

349
00:35:02,301 --> 00:35:09,301
I think also people will slowly add things like covenants or whatever.

350
00:35:09,301 --> 00:35:11,301
They'll add OP_CAT or something.

351
00:35:11,301 --> 00:35:16,301
And since all that you need for BIP300 is to count to 13,000,

352
00:35:16,301 --> 00:35:21,301
someone will just eventually figure out how to do that in some kind of hacky
roundabout way.

353
00:35:21,301 --> 00:35:25,301
And at that point, it will just make no sense not to stop BIP300

354
00:35:25,301 --> 00:35:29,301
because you'll just have an inefficient BIP300 that wastes a bunch of bytes

355
00:35:29,301 --> 00:35:33,301
and probably memory and consumption and all kinds of other stuff.

356
00:35:33,301 --> 00:35:40,301
There's many overlapping reasons why I think it will eventually happen.

357
00:35:40,301 --> 00:35:43,301
I think it probably was a better idea in 2015.

358
00:35:43,301 --> 00:35:47,301
I ignored it because we went with SegWit and we went with all in different
directions.

359
00:35:47,301 --> 00:35:49,301
So I was just going to find whatever.

360
00:35:49,301 --> 00:35:51,301
And it seemed like we were doing fine.

361
00:35:51,301 --> 00:35:54,301
The big question was how to deal with the large blockers.

362
00:35:54,301 --> 00:35:56,301
And they forked off.

363
00:35:56,301 --> 00:35:59,301
And they forked off and the price of Bitcoin skyrocketed.

364
00:35:59,301 --> 00:36:02,301
And then, like, whatever, COVID happened and the government printed a bunch of money

365
00:36:02,301 --> 00:36:03,301
and the price went up.

366
00:36:03,301 --> 00:36:06,301
So all in all, things have gone just fine.

367
00:36:06,301 --> 00:36:12,301
That's why I neglected to push the idea more actively until recently.

368
00:36:12,301 --> 00:36:16,301
But that's my kind of rambling answer.

369
00:36:16,301 --> 00:36:19,301
Thank you, Paul.

370
00:36:19,301 --> 00:36:22,301
I have one question.

371
00:36:22,301 --> 00:36:31,301
Do you think it's because I read and I listened to many people just shouting against
BIP300

372
00:36:31,301 --> 00:36:41,301
and also understood that the miners are able to implement this as a soft fork.

373
00:36:41,301 --> 00:36:43,301
Correct me, I'm not a technical guy.

374
00:36:43,301 --> 00:36:45,301
Yes, that's correct.

375
00:36:45,301 --> 00:36:51,301
Is it possible for Drivechain just to be implemented with a soft fork?

376
00:36:51,301 --> 00:36:54,301
If you oppose, there is nothing you can do.

377
00:36:54,301 --> 00:36:59,301
Because from my understanding, no one can oppose Rusto.

378
00:36:59,301 --> 00:37:01,301
Because it is happening outside.

379
00:37:01,301 --> 00:37:05,301
And a miner is choosing to mine.

380
00:37:05,301 --> 00:37:07,301
You are correct.

381
00:37:07,301 --> 00:37:12,301
There's no sense in which someone could stop the miner-activated soft fork of
BIP300.

382
00:37:12,301 --> 00:37:20,301
Except in the very narrow, exceptional sense that they could try to stop anyone from
using Bitcoin.

383
00:37:20,301 --> 00:37:23,301
They could blacklist a certain UTXO or something.

384
00:37:23,301 --> 00:37:26,301
But you'd be playing cat and mouse if you did that.

385
00:37:26,301 --> 00:37:30,301
And ultimately, the winners would be...

386
00:37:30,301 --> 00:37:34,301
You'd either have to remove proof of work from Bitcoin or something else.

387
00:37:34,301 --> 00:37:35,301
Something equally as drastic.

388
00:37:35,301 --> 00:37:39,301
So basically, the answer is that yes, miners could activate at any time.

389
00:37:39,301 --> 00:37:45,301
And something weird that I would like to stress is that we could actually have
Drivechains with no soft fork.

390
00:37:45,301 --> 00:37:47,301
It would just be that...

391
00:37:47,301 --> 00:37:51,301
Because the soft fork is to keep the miners on a short leash.

392
00:37:51,301 --> 00:37:57,301
But you could do it as a kind of just handshake deal with the miners today.

393
00:37:57,301 --> 00:37:58,301
The miners could all just agree.

394
00:37:58,301 --> 00:38:00,301
Okay, we will follow these rules.

395
00:38:00,301 --> 00:38:04,301
There's no code enforcing it, necessarily.

396
00:38:04,301 --> 00:38:07,301
So any miners...

397
00:38:07,301 --> 00:38:09,301
They don't have to run the 13,000 count.

398
00:38:09,301 --> 00:38:12,301
They don't have to do the three-month slow withdrawal.

399
00:38:13,301 --> 00:38:16,301
But you would have something that works immediately.

400
00:38:16,301 --> 00:38:17,301
But that would actually be not very good.

401
00:38:17,301 --> 00:38:21,301
Because it involves much more trust among all the participants.

402
00:38:21,301 --> 00:38:24,301
And much more likelihood that someone will get stolen from.

403
00:38:24,301 --> 00:38:26,301
So these are all bad things.

404
00:38:26,301 --> 00:38:29,301
And that's why we want BIP300 to constrain the miners.

405
00:38:29,301 --> 00:38:31,301
That's the goal.

406
00:38:31,301 --> 00:38:35,301
We don't necessarily even need the soft fork.

407
00:38:35,301 --> 00:38:38,301
We need it per se, but there's no reason not to pursue it.

408
00:38:38,301 --> 00:38:42,301
The modern hatred of the soft fork is very irrational.

409
00:38:42,301 --> 00:38:44,301
And I think must come to an end.

410
00:38:44,301 --> 00:38:46,301
Because it's just this bizarre situation.

411
00:38:46,301 --> 00:38:49,301
Where the soft fork is this great invention.

412
00:38:49,301 --> 00:38:52,301
Where only the people who want to use it.

413
00:38:52,301 --> 00:38:54,301
There should be some various miners.

414
00:38:54,301 --> 00:38:57,301
And a few miners and a few users.

415
00:38:57,301 --> 00:39:00,301
Like 55% of miners and a few users who want to opt in.

416
00:39:00,301 --> 00:39:03,301
Those are the only ones who must upgrade.

417
00:39:03,301 --> 00:39:07,301
And so this is a very voluntarist, useful institution.

418
00:39:08,301 --> 00:39:12,301
And it was unfortunately ruined partially by SegWit being a block size increase.

419
00:39:12,301 --> 00:39:16,301
Being a mandatory block size increase, I think.

420
00:39:16,301 --> 00:39:18,301
Okay, I have to go for now.

421
00:39:18,301 --> 00:39:20,301
But I'll be back.

422
00:39:20,301 --> 00:39:22,301
Hey guys, I managed to come back for now.

423
00:39:22,301 --> 00:39:24,301
For just a little more time, I think.

424
00:39:24,301 --> 00:39:26,301
But anyway.

425
00:39:26,301 --> 00:39:28,301
What's this about Moonsettler saying.

426
00:39:28,301 --> 00:39:30,301
What is this about?

427
00:39:30,301 --> 00:39:33,301
Increasing profitability with increasing share of hash rate.

428
00:39:34,301 --> 00:39:40,301
That's no more true of the sidechains than it would be of reorg risk on L1.

429
00:39:40,301 --> 00:39:45,301
Their argument around that was that actually it is different.

430
00:39:45,301 --> 00:39:50,301
And I'm not sure which is better, actually.

431
00:39:50,301 --> 00:39:53,301
But if you would reorg.

432
00:39:53,301 --> 00:39:56,301
So let's say that you would have to reorg L1.

433
00:39:56,301 --> 00:39:59,301
To replace a sidechain block.

434
00:39:59,301 --> 00:40:01,301
By replacing the bid.

435
00:40:01,301 --> 00:40:05,301
That would mean the person who made the bid is actually getting their coins back.

436
00:40:05,301 --> 00:40:08,301
Because that transaction would be invalid.

437
00:40:08,301 --> 00:40:10,301
And basically it did not happen.

438
00:40:10,301 --> 00:40:16,301
So it would actually risk the Blind Merged Mining operation for non-mining pools.

439
00:40:16,301 --> 00:40:19,301
But we probably don't.

440
00:40:19,301 --> 00:40:27,301
I think both Bitcoiners are not too keen on having L1 reorgs duke out this kind of
stuff.

441
00:40:27,301 --> 00:40:30,301
So I don't think most people would prefer that.

442
00:40:30,301 --> 00:40:34,301
But that would be one solution to the issue at hand.

443
00:40:34,301 --> 00:40:37,301
Yeah, but what is the issue though?

444
00:40:37,301 --> 00:40:40,301
The issue is that someone...

445
00:40:40,301 --> 00:40:42,301
Did you read the article by the way?

446
00:40:42,301 --> 00:40:43,301
Yes.

447
00:40:43,301 --> 00:40:45,301
He doesn't have real thoughts.

448
00:40:45,301 --> 00:40:46,301
You don't understand.

449
00:40:46,301 --> 00:40:49,301
At the bottom of the piece, he starts with a blank piece of paper.

450
00:40:49,301 --> 00:40:51,301
And he writes, therefore Drivechain is a bad idea.

451
00:40:51,301 --> 00:40:54,301
And then he just tries to connect.

452
00:40:54,301 --> 00:40:56,301
And try to connect.

453
00:40:56,301 --> 00:40:58,301
All of it is really legitimate.

454
00:40:59,301 --> 00:41:03,301
Why don't you go ahead and say whatever you think it is that he came up with.

455
00:41:03,301 --> 00:41:12,301
Yeah, so the entire reason I even came up in this space is just to share and mention
that post that I made.

456
00:41:12,301 --> 00:41:15,301
I tried to share it, but I did not see it.

457
00:41:15,301 --> 00:41:18,301
I don't see the nest, so I shared it three times.

458
00:41:18,301 --> 00:41:19,301
Anyhow.

459
00:41:19,301 --> 00:41:27,301
I just shared the Bitcoin Magazine article that you were talking about a couple of
minutes ago from Shinobi.

460
00:41:27,301 --> 00:41:28,301
Yeah.

461
00:41:28,301 --> 00:41:30,301
So what I wanted to say...

462
00:41:30,301 --> 00:41:33,301
But you know that each time I give a huge reply though.

463
00:41:33,301 --> 00:41:35,301
It's in my Twitter highlights.

464
00:41:35,301 --> 00:41:36,301
Yeah, yeah.

465
00:41:36,301 --> 00:41:38,301
So what I wanted to say...

466
00:41:38,301 --> 00:41:45,301
What I came up here to say is that I feel you are making a really bad job of...

467
00:41:45,301 --> 00:41:49,301
I'm not saying steelmanning, but just representing the gist of the critique.

468
00:41:49,301 --> 00:41:51,301
Yes, what is it then?

469
00:41:51,301 --> 00:41:52,301
What is the critique then?

470
00:41:52,301 --> 00:41:53,301
Why don't you tell me?

471
00:41:53,301 --> 00:41:54,301
Critique?

472
00:41:54,301 --> 00:41:56,301
It's in the post.

473
00:41:56,301 --> 00:41:57,301
That line there.

474
00:41:57,301 --> 00:42:02,301
Yeah, but in what way does someone with more hash rate become more profitable?

475
00:42:02,301 --> 00:42:05,301
Because they decrease the risk.

476
00:42:05,301 --> 00:42:10,301
First of all, they really don't have to bid in the mempool.

477
00:42:10,301 --> 00:42:13,301
So they lower the risk by not bidding in the mempool.

478
00:42:13,301 --> 00:42:17,301
And they also decrease the risk of getting their sidechains...

479
00:42:17,301 --> 00:42:19,301
No, but I think, again, this is a big...

480
00:42:19,301 --> 00:42:23,301
The Blind Merged Mining is only supposed to happen when the full node is very
expensive.

481
00:42:23,301 --> 00:42:25,301
So it's just a partnership.

482
00:42:25,301 --> 00:42:29,301
It's just if the miner chooses to partner with a full node that they don't run
themselves,

483
00:42:29,301 --> 00:42:32,301
it just makes that trustless and private.

484
00:42:32,301 --> 00:42:34,301
It doesn't change anything else.

485
00:42:34,301 --> 00:42:35,301
Yeah.

486
00:42:35,301 --> 00:42:38,301
So the other part of this that Shinobi was more focused on...

487
00:42:38,301 --> 00:42:40,301
Yeah, but what was the first part?

488
00:42:40,301 --> 00:42:42,301
The first part was this.

489
00:42:42,301 --> 00:42:43,301
Simply this.

490
00:42:43,301 --> 00:42:48,301
If there is significant MEB, if there is a lot of money, like multiple times of what
is Bitcoin's subsidy

491
00:42:48,301 --> 00:42:52,301
and their one fee revenue, multiple times of that, 10 times, 100 times, whatever,

492
00:42:52,301 --> 00:42:55,301
coming in total from sidechains.

493
00:42:55,301 --> 00:42:56,301
Right, yes.

494
00:42:56,301 --> 00:43:02,301
So when you have that situation, let's say, because that would be like the desirable
outcome in some way.

495
00:43:02,301 --> 00:43:06,301
So if someone is very bullish on Drivechains, someone wants Drivechains to solve
this,

496
00:43:06,301 --> 00:43:12,301
then that is their ideal scenario, that Drivechains are very successful and a lot of
this.

497
00:43:12,301 --> 00:43:14,301
Right, yes.

498
00:43:15,301 --> 00:43:23,301
So in that case, it is absolutely very significant how much risk someone exposes
themselves in prime merge mining.

499
00:43:23,301 --> 00:43:30,301
And the whole vertical integration and centralization arguments is trying to
highlight that this can actually...

500
00:43:30,301 --> 00:43:33,301
This changes the deal that we have with mining pools right now,

501
00:43:33,301 --> 00:43:37,301
where with the size of the mining pool, you only have decreased variance.

502
00:43:37,301 --> 00:43:39,301
That's the only thing you have.

503
00:43:39,301 --> 00:43:41,301
And it's diminishing returns.

504
00:43:42,301 --> 00:43:46,301
Yes, because there's also a dis-economy of scale, which is the block withholding.

505
00:43:48,301 --> 00:43:50,301
I'm not sure if you're totally familiar.

506
00:43:53,301 --> 00:43:55,301
You are breaking up, Paul, I'm sorry.

507
00:43:57,301 --> 00:43:58,301
I'm not hearing you.

508
00:44:01,301 --> 00:44:02,301
Do you guys hear, Paul?

509
00:44:02,301 --> 00:44:04,301
No, maybe he's standing.

510
00:44:04,301 --> 00:44:07,301
I don't know if I can do anything differently about whatever this is.

511
00:44:07,301 --> 00:44:10,301
No, we can listen to you.

512
00:44:11,301 --> 00:44:13,301
You are all trained, so it's probably normal.

513
00:44:13,301 --> 00:44:15,301
I think we just have to deal with this.

514
00:44:15,301 --> 00:44:17,301
All right, so the point is...

515
00:44:17,301 --> 00:44:20,301
Yes, but the pools have economies and dis-economies of scale.

516
00:44:20,301 --> 00:44:23,301
And right now, there are various sizes.

517
00:44:23,301 --> 00:44:25,301
Some are big, some are small.

518
00:44:25,301 --> 00:44:28,301
Almost none of them are less than 2%.

519
00:44:28,301 --> 00:44:30,301
That's the current size.

520
00:44:30,301 --> 00:44:33,301
The point is, if you introduce a dynamic where,

521
00:44:33,301 --> 00:44:37,301
by derisking the Blind Merged Mining activity,

522
00:44:37,301 --> 00:44:44,301
you can actually create significant differences in revenue per tera hash

523
00:44:44,301 --> 00:44:46,301
with the pool sizes.

524
00:44:46,301 --> 00:44:47,301
And that's bad for Bitcoin.

525
00:44:47,301 --> 00:44:48,301
No, but why?

526
00:44:48,301 --> 00:44:50,301
Why is that different?

527
00:44:51,301 --> 00:44:53,301
What do you mean, why is it different?

528
00:44:54,301 --> 00:44:57,301
You just take the Blind Merged Mining revenues

529
00:44:57,301 --> 00:45:00,301
and just imagine that they're L1 fees.

530
00:45:00,301 --> 00:45:02,301
It's one L1 fee that pays a huge amount

531
00:45:02,301 --> 00:45:04,301
versus everyone paying slightly more.

532
00:45:04,301 --> 00:45:07,301
So if everyone pays slightly more L1 fees, then...

533
00:45:07,301 --> 00:45:09,301
This is the point.

534
00:45:09,301 --> 00:45:12,301
There is no bidding in the man pool after a while

535
00:45:12,301 --> 00:45:14,301
because it's economically ruinous.

536
00:45:14,301 --> 00:45:17,301
And that's the point with the vertical integration

537
00:45:17,301 --> 00:45:19,301
and economy of scale argument,

538
00:45:19,301 --> 00:45:21,301
is that it will simply not happen.

539
00:45:21,301 --> 00:45:24,301
And at that point, the small pools are just completely fucked.

540
00:45:24,301 --> 00:45:28,301
They are raking in like fifth or tenth or hundredth of the revenue

541
00:45:28,301 --> 00:45:30,301
than the big pools are per tera hash.

542
00:45:30,301 --> 00:45:32,301
And that's game over.

543
00:45:32,301 --> 00:45:33,301
No, but why?

544
00:45:33,301 --> 00:45:36,301
Why are they raking in a different amount of money?

545
00:45:37,301 --> 00:45:38,301
No, what do you mean?

546
00:45:38,301 --> 00:45:40,301
Why do you keep saying yes?

547
00:45:40,301 --> 00:45:42,301
You haven't actually explained anything.

548
00:45:42,301 --> 00:45:45,301
I'm saying yes because by asking that question,

549
00:45:45,301 --> 00:45:47,301
it answers my real question.

550
00:45:47,301 --> 00:45:50,301
I was curious if you understand these arguments.

551
00:45:50,301 --> 00:45:53,301
Basically, that's my main question.

552
00:45:53,301 --> 00:45:56,301
And if you are saying you don't understand them...

553
00:45:56,301 --> 00:45:58,301
You don't understand them.

554
00:45:58,301 --> 00:46:01,301
Listen, what you're saying is yes.

555
00:46:01,301 --> 00:46:07,301
So what you're saying is vertical integration means that...

556
00:46:07,301 --> 00:46:09,301
I don't even know what you're saying.

557
00:46:09,301 --> 00:46:12,301
But I know what you're saying is he is misunderstanding

558
00:46:12,301 --> 00:46:15,301
the reorg risk would be discounted.

559
00:46:16,301 --> 00:46:19,301
I'm saying that after a while,

560
00:46:19,301 --> 00:46:23,301
if this dynamic that has been outlined there is going on,

561
00:46:23,301 --> 00:46:25,301
after a while there simply will be

562
00:46:25,301 --> 00:46:28,301
no not vertically integrated sidechain block finder

563
00:46:28,301 --> 00:46:30,301
because they will go bankrupt.

564
00:46:30,301 --> 00:46:32,301
And after that...

565
00:46:32,301 --> 00:46:34,301
Are you saying...

566
00:46:34,301 --> 00:46:37,301
Can you just say whether or not you believe

567
00:46:37,301 --> 00:46:40,301
everyone will use 301 or not?

568
00:46:42,301 --> 00:46:44,301
What do you mean everyone?

569
00:46:44,301 --> 00:46:46,301
What do you mean?

570
00:46:46,301 --> 00:46:48,301
When you say vertically integrated,

571
00:46:48,301 --> 00:46:50,301
you mean they are not using BIP301.

572
00:46:50,301 --> 00:46:53,301
They're running nodes of everything.

573
00:46:53,301 --> 00:46:55,301
They can technically use it,

574
00:46:55,301 --> 00:46:58,301
but they will not be in the mempool.

575
00:46:58,301 --> 00:47:00,301
Because there is a difference.

576
00:47:00,301 --> 00:47:02,301
There is a difference.

577
00:47:02,301 --> 00:47:04,301
Paul, there is a difference.

578
00:47:04,301 --> 00:47:06,301
If you bid with the mempool,

579
00:47:06,301 --> 00:47:08,301
but what you find...

580
00:47:08,301 --> 00:47:12,301
BIP301 does not require anything to be in the mempool.

581
00:47:12,301 --> 00:47:14,301
Yes, that's the point.

582
00:47:14,301 --> 00:47:16,301
That's the point.

583
00:47:16,301 --> 00:47:18,301
Yes, but why do you say if then?

584
00:47:18,301 --> 00:47:20,301
It makes no difference.

585
00:47:20,301 --> 00:47:22,301
Okay, so when, by the time

586
00:47:22,301 --> 00:47:24,301
the vertical integration happens,

587
00:47:24,301 --> 00:47:26,301
it will not be in the mempool.

588
00:47:26,301 --> 00:47:28,301
There will be no significant bids in the mempool.

589
00:47:28,301 --> 00:47:30,301
That means small miners

590
00:47:30,301 --> 00:47:32,301
either run the sidechain nodes

591
00:47:32,301 --> 00:47:34,301
or they don't get that revenue, basically.

592
00:47:34,301 --> 00:47:36,301
And even if they try to get that revenue,

593
00:47:36,301 --> 00:47:38,301
they have enormous reorg risks

594
00:47:38,301 --> 00:47:40,301
compared to the big players

595
00:47:40,301 --> 00:47:42,301
who find blocks much more often

596
00:47:42,301 --> 00:47:44,301
and can secure that.

597
00:47:44,301 --> 00:47:46,301
No, this is why it's a contradiction now.

598
00:47:46,301 --> 00:47:47,301
Why?

599
00:47:47,301 --> 00:47:49,301
You understand that when you say

600
00:47:49,301 --> 00:47:51,301
the small miners are at a disadvantage,

601
00:47:51,301 --> 00:47:53,301
that's only because

602
00:47:53,301 --> 00:47:55,301
they must run

603
00:47:55,301 --> 00:47:57,301
a sidechain node.

604
00:47:57,301 --> 00:48:00,301
But BIP301 allows them to escape.

605
00:48:00,301 --> 00:48:03,301
It only allows them to escape

606
00:48:03,301 --> 00:48:05,301
when the bidding happens in the mempool.

607
00:48:05,301 --> 00:48:07,301
That's the only scenario.

608
00:48:07,301 --> 00:48:09,301
The problem with running a sidechain node

609
00:48:09,301 --> 00:48:11,301
is that it will only provide

610
00:48:11,301 --> 00:48:13,301
50th of the miner extractable value

611
00:48:13,301 --> 00:48:15,301
by collecting the fees.

612
00:48:15,301 --> 00:48:17,301
No, that's not true. That's not true at all.

613
00:48:17,301 --> 00:48:19,301
No, that's correct.

614
00:48:19,301 --> 00:48:21,301
No, wrong.

615
00:48:21,301 --> 00:48:23,301
How can you,

616
00:48:23,301 --> 00:48:25,301
you're such a smart guy,

617
00:48:25,301 --> 00:48:27,301
and yet you fall for all this BS.

618
00:48:27,301 --> 00:48:29,301
It's so obviously false.

619
00:48:29,301 --> 00:48:31,301
You don't really understand.

620
00:48:31,301 --> 00:48:33,301
I know you disagree on that.

621
00:48:33,301 --> 00:48:35,301
On the other hand...

622
00:48:35,301 --> 00:48:37,301
But why do I disagree?

623
00:48:37,301 --> 00:48:39,301
I don't disagree because

624
00:48:39,301 --> 00:48:41,301
I understand the argument,

625
00:48:41,301 --> 00:48:43,301
and I don't necessarily see it happening,

626
00:48:43,301 --> 00:48:45,301
but I understand the argument that there is

627
00:48:45,301 --> 00:48:47,301
literally no upper bound in the competition

628
00:48:47,301 --> 00:48:49,301
required to extract the maximum MEV.

629
00:48:49,301 --> 00:48:51,301
There is no upper bound on that.

630
00:48:51,301 --> 00:48:53,301
In the protocol or in anything.

631
00:48:53,301 --> 00:48:55,301
No, that has literally nothing to do with it at all.

632
00:48:55,301 --> 00:48:57,301
There's literally nothing whatsoever to do with it.

633
00:48:57,301 --> 00:48:59,301
But it has.

634
00:48:59,301 --> 00:49:01,301
It has, because if you can't extract...

635
00:49:01,301 --> 00:49:03,301
No, listen, let me just...

636
00:49:03,301 --> 00:49:05,301
Could you please stop talking for a second

637
00:49:05,301 --> 00:49:07,301
while I explain it to you?

638
00:49:07,301 --> 00:49:09,301
If there's MEV on the sidechain,

639
00:49:09,301 --> 00:49:11,301
then someone on the side...

640
00:49:11,301 --> 00:49:13,301
This is what I explained to Alex B,

641
00:49:13,301 --> 00:49:15,301
and this is why he deleted his space

642
00:49:15,301 --> 00:49:17,301
in a humiliation,

643
00:49:17,301 --> 00:49:19,301
but I have a copy of it.

644
00:49:19,301 --> 00:49:21,301
If there's MEV on the sidechain,

645
00:49:21,301 --> 00:49:23,301
someone will...

646
00:49:23,301 --> 00:49:25,301
There's like a...

647
00:49:25,301 --> 00:49:27,301
The searcher will optimize the block

648
00:49:27,301 --> 00:49:29,301
not only for the L2

649
00:49:29,301 --> 00:49:31,301
transaction fees,

650
00:49:31,301 --> 00:49:33,301
but also for the MEV added value.

651
00:49:33,301 --> 00:49:35,301
So say it's $5 worth of fees

652
00:49:35,301 --> 00:49:37,301
and $2 worth of added value.

653
00:49:39,301 --> 00:49:41,301
Are you following this so far?

654
00:49:41,301 --> 00:49:43,301
Yes, but I would prefer

655
00:49:43,301 --> 00:49:45,301
if you said $2 of fees

656
00:49:45,301 --> 00:49:47,301
and $30 of added value.

657
00:49:49,301 --> 00:49:51,301
What difference does it make?

658
00:49:51,301 --> 00:49:53,301
What did you prefer to see?

659
00:49:53,301 --> 00:49:55,301
It makes a difference,

660
00:49:55,301 --> 00:49:57,301
because running the sidechain node

661
00:49:57,301 --> 00:49:59,301
will give you $2,

662
00:49:59,301 --> 00:50:01,301
and running a fucking huge map searcher

663
00:50:01,301 --> 00:50:01,321
will give you $20.

664
00:50:01,321 --> 00:50:13,321
Okay, fine. That's exactly what doesn't matter at all. So this is when you say stuff
like that, that's when I know that you didn't read any of the stuff. You didn't even
read BIP301. You didn't read the post.

665
00:50:13,321 --> 00:50:24,321
The person who bids in the mempool will pay $20, so they'll pay $19.9. That person
will have nothing to do with L1 BTC or Bitcoin Full Node at all.

666
00:50:25,321 --> 00:50:32,321
From the point of view of the miners, it won't make any difference if it comes from
MEV or from L1 transaction fees. None whatsoever.

667
00:50:32,321 --> 00:50:40,321
You are back to bidding in the mempool. We just left that word in the argument
before, and you are back to bidding in the mempool.

668
00:50:40,321 --> 00:50:51,321
But we are talking in a vertically integrated world where those that run the
sidechain node, small miners, are getting $2 per block, and those that run the MEV
searcher are getting $20.

669
00:50:51,321 --> 00:50:57,321
No, absolutely not. How can you say that? Why do you keep repeating that when it's
not true at all?

670
00:50:57,321 --> 00:51:00,321
Because this is my understanding. I could be wrong.

671
00:51:00,321 --> 00:51:11,321
Yes, you are wrong. Now let me explain something else. The issue of whether or not
they choose to run the sidechain node, which in my view includes the MEV.

672
00:51:11,321 --> 00:51:17,321
Just say every sidechain node is an MEV node. Just assume that's the case. It makes
no difference.

673
00:51:17,321 --> 00:51:32,321
Now, when you say the vertically integrated world versus the non-vertically
integrated world, if you are playing rock, paper, scissors, and one of them is paper
and the other is rock, you can switch back and forth however you like until the cows
come home.

674
00:51:32,321 --> 00:51:39,321
So it makes no difference if the argument is built on one or the other because the
miner can just flip-flop whenever they like.

675
00:51:40,321 --> 00:51:50,321
So if the sidechain node is producing enormous profits that exceed revenues, if they
do that, then it makes no difference.

676
00:51:51,321 --> 00:51:55,321
Can you guys give me a second? I'm sorry about that.

677
00:51:55,321 --> 00:52:13,321
Yes. So the sidechain, it's like it doesn't matter if the person who is bidding in
the mempool in the 301 world, they run basically a different version of a sidechain
node that collects more fees.

678
00:52:13,321 --> 00:52:16,321
Okay, Paul.

679
00:52:17,321 --> 00:52:22,321
I know, but this is what you don't seem to understand.

680
00:52:22,321 --> 00:52:37,321
Either the cost is low, in which case it makes no difference if the miner runs it or
not, or it's high, in which case some of the smaller miners will start to shirk it
by just partnering with a node that already exists.

681
00:52:37,321 --> 00:52:41,321
So it's only the small miners that will use 301.

682
00:52:41,321 --> 00:53:00,321
If the argument about the reorg risk is also wrong, though, because there's no
additional reorg risk if you are a small pool any more than there is with regular
Bitcoin Core today.

683
00:53:00,321 --> 00:53:04,321
If there was, though, it wouldn't even make any difference. None of this makes any
difference at all.

684
00:53:05,321 --> 00:53:26,321
So for example, the bidding in the L1 mempool, if you bid up to, let's say you only
bid half of the value of the block, this will lead to decreased revenues for
everyone using 301, and then they will try to figure out a way of stopping that from
happening.

685
00:53:26,321 --> 00:53:39,321
But even if they didn't, and even if none of that mattered, all they would mean
ultimately is that all the pools, we live in a world where there are 25% pools
instead, or pools of some different shape or size, and none of that makes any
difference either.

686
00:53:39,321 --> 00:53:41,321
It's because of pools.

687
00:53:41,321 --> 00:53:48,321
So what's the cheapest move, Paul? What's the cheapest move for a small miner that
does not get that sweet sidechain revenue?

688
00:53:49,321 --> 00:53:51,321
Join the 5% pool.

689
00:53:51,321 --> 00:53:53,321
Join, join.

690
00:53:53,321 --> 00:54:03,321
A small miner is doomed without a pool anyway, so we should be very grateful that
pools exist, because otherwise it would be impossible to have small miners.

691
00:54:03,321 --> 00:54:11,321
So this is just another restatement of that, so it's irrelevant in that way as well.
It's just completely irrelevant in five different ways. This makes absolutely no
difference.

692
00:54:12,321 --> 00:54:22,321
You're making logical jumps, Paul, and then you can come to the conclusion that it's
irrelevant, but no. You are ignoring the core arguments, I believe.

693
00:54:22,321 --> 00:54:28,321
And it's okay. It's completely fine if you don't understand each other. That just
means we have to talk more.

694
00:54:28,321 --> 00:54:30,321
No, I understand them all.

695
00:54:30,321 --> 00:54:37,321
I'm not sure, because you are saying things that this is irrelevant, that won't
happen, that just don't make sense to me.

696
00:54:38,321 --> 00:54:46,321
What difference would it even make if everyone had to join a 5% pool that's already
the world that we live in?

697
00:54:46,321 --> 00:54:54,321
So even if all this, everything you said, none of which is really true, but even if
it was, it wouldn't make any difference.

698
00:54:55,321 --> 00:55:08,321
Okay. Anyhow, my main point was basically that this is a better representation. What
I wrote is a better representation of the opposing arguments than what you said in
the beginning.

699
00:55:08,321 --> 00:55:11,321
I listened to it. So that was my main argument.

700
00:55:11,321 --> 00:55:33,321
How about this? I can explain it like this in a different way. Let's say the miners
partner with an L2 full node in some way other than BIP301, such that someone gets
a reward, they get a payment on L2, not in the L1 mempool.

701
00:55:34,321 --> 00:55:44,321
But it's just based on, because the whole point of, the whole point, it's so hard to
even know where to begin, because none of it makes any difference anyway.

702
00:55:44,321 --> 00:55:52,321
Because the whole reason I invented Blind Merged Mining, which I think I regret at
this point, because it just gives more fuel to the hopelessly confused people out
there.

703
00:55:53,321 --> 00:56:06,321
So I think, because the whole problem isn't real anyway, because it doesn't matter
what the miners, first of all, it doesn't matter what miners' fixed costs are,
because if their fixed costs rise, then the difficulty adjustment will just
decrease.

704
00:56:06,321 --> 00:56:16,321
But it also doesn't matter because every miner shirks the fixed costs. They shirk
the node costs. They have one node that does all the work for everyone, which
there's nothing bad about that at all.

705
00:56:16,321 --> 00:56:19,321
It's a superstitious belief that there's something bad about that.

706
00:56:19,321 --> 00:56:26,321
And then the belief that the sidechain node costs can rise and become significant is
also false.

707
00:56:26,321 --> 00:56:34,321
It's just not possible, because plenty of regular users must be running the
sidechain node for free, people who aren't mining at all.

708
00:56:34,321 --> 00:56:36,321
So the whole thing is like...

709
00:56:36,321 --> 00:56:38,321
I agree with most of that, Paul.

710
00:56:38,321 --> 00:56:40,321
It's all just nonsense.

711
00:56:41,321 --> 00:57:03,321
I agree with most of what you said, but the one thing that I just don't understand
how you can come to this jump, this reach, is the assumption that there is no
significant difference in cost to running a sidechain node and to find the maximum
MEV, especially when we are talking about weird stuff like cross-domain MEV.

712
00:57:04,321 --> 00:57:07,321
I agree with you that we have a pretty significant disagreement there.

713
00:57:07,321 --> 00:57:10,321
The cost is not relevant, though.

714
00:57:10,321 --> 00:57:16,321
This is why I asked Alex to write down a numeric example.

715
00:57:16,321 --> 00:57:18,321
And that's why I'm going to ask you to do the same thing.

716
00:57:18,321 --> 00:57:19,321
Just write it down on a piece of paper.

717
00:57:19,321 --> 00:57:22,321
The sidechain is going to pay $100 in fees.

718
00:57:22,321 --> 00:57:24,321
And if you pay...

719
00:57:24,321 --> 00:57:27,321
The sidechain node costs $3, so it's $97.

720
00:57:28,321 --> 00:57:37,321
But if you run a more expensive node that costs another $40, then you can collect
another $3,000 in fees.

721
00:57:37,321 --> 00:57:40,321
So it's whatever that is.

722
00:57:40,321 --> 00:57:44,321
$2,960 plus $37.

723
00:57:44,321 --> 00:57:48,321
So it's $3,007 or whatever.

724
00:57:48,321 --> 00:57:49,321
I don't know.

725
00:57:49,321 --> 00:57:51,321
Don't do math live on a recorded space.

726
00:57:51,321 --> 00:57:53,321
So now it's...

727
00:57:53,321 --> 00:57:55,321
That number...

728
00:57:55,321 --> 00:57:56,321
It doesn't even matter.

729
00:57:56,321 --> 00:57:57,321
You see what I mean?

730
00:57:57,321 --> 00:57:58,321
This is a palace affair.

731
00:57:58,321 --> 00:58:00,321
It has nothing to do with L1.

732
00:58:00,321 --> 00:58:04,321
On L1, they'll bid up to $3,699.

733
00:58:04,321 --> 00:58:06,321
And no one will know.

734
00:58:06,321 --> 00:58:09,321
No one will know if it came from MEV or something else.

735
00:58:09,321 --> 00:58:11,321
So, basically...

736
00:58:11,321 --> 00:58:14,321
Again, I believe this is where the main disagreement is.

737
00:58:14,321 --> 00:58:24,321
Some people say that the expertise that is required for extracting a significant
amount of MEV and the computational upper bound...

738
00:58:24,321 --> 00:58:29,321
By the way, this is a very different computation than it is required for hashing for
Bitcoin.

739
00:58:29,321 --> 00:58:30,321
Of course.

740
00:58:30,321 --> 00:58:32,321
But again, it has nothing to do.

741
00:58:32,321 --> 00:58:35,321
Less dense physically and have different properties.

742
00:58:35,321 --> 00:58:38,321
So even more prone to centralization than Bitcoin mining.

743
00:58:38,321 --> 00:58:45,321
Because miners are getting pretty good at packing miners into containers and
shipping them into remote locations.

744
00:58:45,321 --> 00:58:50,321
Let's say that in order to do the MEV, you have to cut off your own legs.

745
00:58:50,321 --> 00:58:53,321
So it doesn't matter how expensive it is.

746
00:58:53,321 --> 00:58:54,321
Yeah, so the point is...

747
00:58:54,321 --> 00:58:56,321
I feel this is some disconnect.

748
00:58:56,321 --> 00:59:06,321
People are saying that this expertise and this computational power that is pretty
much unbound by the protocol that can be required for this.

749
00:59:06,321 --> 00:59:11,321
They are saying this is a centralizing effect and will affect miner
decentralization.

750
00:59:11,321 --> 00:59:13,321
Right, but it won't though.

751
00:59:13,321 --> 00:59:19,321
Yeah, you are saying this is complete nonsense and it's not even worth entertaining
and they are wrong.

752
00:59:19,321 --> 00:59:27,321
But I don't think they understand your reason for saying that and I'm not sure that
you understand their reason for saying that.

753
00:59:27,321 --> 00:59:29,321
So this is a weird situation.

754
00:59:29,321 --> 00:59:42,321
There is no sense in which you can gain more money by running the searcher as an L1
miner versus as the sidechain BIP301 bidder person.

755
00:59:42,321 --> 00:59:52,321
But you can accept that it's possible that it will have a cutoff limit for these in
computation and cost and infrastructure.

756
00:59:52,321 --> 00:59:56,321
Yes, but that has nothing to do with it though.

757
00:59:56,321 --> 01:00:01,321
No, no, no, but I told you it doesn't matter if you have to cut off your legs to do
it.

758
01:00:01,321 --> 01:00:04,321
It doesn't matter how expensive it is because the L1 miners aren't paying.

759
01:00:04,321 --> 01:00:06,321
The L1 miner pays nothing.

760
01:00:06,321 --> 01:00:10,321
They don't even pay the sidechain full node costs in 301.

761
01:00:10,321 --> 01:00:13,321
And 301 only applies if the costs are significant anyway.

762
01:00:13,321 --> 01:00:18,321
If the costs are insignificant then it's a moot point and it makes no difference who
pays because no one cares.

763
01:00:18,321 --> 01:00:24,321
I wish I could understand what you mean by this sentence.

764
01:00:24,321 --> 01:00:26,321
I don't understand what you mean by it.

765
01:00:26,321 --> 01:00:29,321
You just wipe things off the table basically.

766
01:00:29,321 --> 01:00:31,321
That's what happens.

767
01:00:31,321 --> 01:00:35,321
But you have to write an example and you have to follow the BIP301 logic.

768
01:00:35,321 --> 01:00:44,321
You understand the person who's bidding, the person who's bidding, they are someone
on L1 who has their own sidechain node.

769
01:00:44,321 --> 01:00:47,321
Maybe they don't show it to anyone else in the whole world.

770
01:00:47,321 --> 01:00:49,321
They only show it to two or three other people.

771
01:00:49,321 --> 01:00:52,321
The L1 miners never see it.

772
01:00:52,321 --> 01:01:02,321
On 301 they bid in the L1 mempool and they say put this hash in this certain spot
and we will pay you.

773
01:01:03,321 --> 01:01:11,321
I, the sidechain Simon, the sidechain full node, pays Mary, I will pay you $3006.

774
01:01:11,321 --> 01:01:15,321
And the miner has no idea what's going on in the sidechain.

775
01:01:15,321 --> 01:01:17,321
That's why it's called Blind Merged Mining.

776
01:01:17,321 --> 01:01:19,321
So they have no idea.

777
01:01:19,321 --> 01:01:20,321
They just know the hash.

778
01:01:20,321 --> 01:01:27,321
And they say okay, someone is bidding $47 to put this hash in for sidechain slot 3
and someone is bidding $3006.

779
01:01:28,321 --> 01:01:32,321
This bid is not atomic with a payout.

780
01:01:32,321 --> 01:01:34,321
We already talked about this.

781
01:01:34,321 --> 01:01:36,321
This bid is a very risky thing.

782
01:01:36,321 --> 01:01:38,321
It's not atomic with a payout.

783
01:01:38,321 --> 01:01:42,321
The key is it has risks.

784
01:01:42,321 --> 01:01:49,321
But those risks are already, those are inherent to, it has no US dollar purchasing
power risk.

785
01:01:49,321 --> 01:01:54,321
So the sidechain is paying, maybe the sidechain is paying 8 Bitcoin.

786
01:01:54,321 --> 01:02:02,321
But because it's a sidechain that reorgs frequently or because it's a sidechain
where the withdrawal is very slow,

787
01:02:02,321 --> 01:02:06,321
that 8 Bitcoin is only worth $3,000.

788
01:02:06,321 --> 01:02:12,321
But it has an objective value because these are new coinbase transactions and not L2
transactions.

789
01:02:12,321 --> 01:02:16,321
So maybe if it was 8 L2 they would be worth like $36,000 each or something.

790
01:02:17,321 --> 01:02:22,321
I think we should take the mod to the Friday Drivechain space if it's okay with you.

791
01:02:22,321 --> 01:02:23,321
Because I'm afraid we will lose.

792
01:02:23,321 --> 01:02:26,321
We will lose a lot of people if this continues.

793
01:02:26,321 --> 01:02:28,321
And I really want to understand you.

794
01:02:28,321 --> 01:02:33,321
There are the highlights and find where I reply to Tidwell and then I have four
slides with happy faces.

795
01:02:33,321 --> 01:02:35,321
And then maybe that will help.

796
01:02:35,321 --> 01:02:39,321
Yeah, we will definitely talk about that because I have something to say about it.

797
01:02:39,321 --> 01:02:40,321
All right.

798
01:02:40,321 --> 01:02:41,321
Okay, great.

799
01:02:41,321 --> 01:02:45,321
Guys, I also have to go again in about 10 or 12 minutes.

800
01:02:45,321 --> 01:02:48,321
So yes, I would love to.

801
01:02:48,321 --> 01:02:49,321
Don't worry.

802
01:02:49,321 --> 01:02:52,321
We've been like, I think, two hours already.

803
01:02:52,321 --> 01:02:55,321
I will leave only if you have any questions.

804
01:02:55,321 --> 01:02:57,321
Let's try to get some cool questions.

805
01:02:57,321 --> 01:03:03,321
If someone has any like really new question or whatever or something, then we'll see
if we can get anyone.

806
01:03:03,321 --> 01:03:04,321
Yes, hello.

807
01:03:07,321 --> 01:03:08,321
He is muted.

808
01:03:08,321 --> 01:03:09,321
Oh, there we go.

809
01:03:09,321 --> 01:03:10,321
Yes, hello.

810
01:03:10,321 --> 01:03:14,321
When it comes to running a public company, how do you guys feel about marketing this
to people?

811
01:03:14,321 --> 01:03:18,321
Because so far, the reception I've seen from the boardroom has been not very
positive.

812
01:03:18,321 --> 01:03:20,321
People aren't really receptive.

813
01:03:20,321 --> 01:03:23,321
I'm wondering, how do you guys going forward?

814
01:03:23,321 --> 01:03:28,321
I know it's a matter of mining and it's a large global enterprise, but what's the
plan?

815
01:03:28,321 --> 01:03:30,321
I think I don't actually want everyone to understand it.

816
01:03:30,321 --> 01:03:39,321
So I have LayerTwoLabs.com slash friends list, which is like many of the top people
over there still.

817
01:03:39,321 --> 01:03:41,321
Sorry, I didn't understand what you said.

818
01:03:41,321 --> 01:03:44,321
Henry from BlockFi, is he still over there?

819
01:03:44,321 --> 01:03:45,321
Yes.

820
01:03:45,321 --> 01:03:47,321
Hell yeah, Henry's a good friend of mine.

821
01:03:47,321 --> 01:03:48,321
We go way back.

822
01:03:48,321 --> 01:03:51,321
Yeah, he's very nice.

823
01:03:51,321 --> 01:03:52,321
He made the list, actually.

824
01:03:52,321 --> 01:03:53,321
He started that list.

825
01:03:53,321 --> 01:03:56,321
So that was his idea and his project.

826
01:03:56,321 --> 01:04:00,321
So I think a lot of people, I've actually seen this before many times.

827
01:04:00,321 --> 01:04:04,321
Like I remember in 2013 when Peter Todd was hated by everyone for supporting small
blocks.

828
01:04:04,321 --> 01:04:06,321
And then like people came around to his point of view.

829
01:04:06,321 --> 01:04:10,321
And then like Jeremy Rubin, everyone hated him a year ago, two years ago.

830
01:04:10,321 --> 01:04:12,321
Now everyone likes CTV.

831
01:04:12,321 --> 01:04:18,321
So a lot of this is just, if you meet people in person, they're very supportive
usually.

832
01:04:18,321 --> 01:04:22,321
I mean, I get invited and people even pay for me to come and speak at their meetup.

833
01:04:22,321 --> 01:04:24,321
And I get invited to spaces like this all the time.

834
01:04:24,321 --> 01:04:27,321
You heard that they're trying to get me to come to LaBitConf.

835
01:04:27,321 --> 01:04:33,321
So it's true, there's a few people on Twitter who don't like it.

836
01:04:34,321 --> 01:04:38,321
You have to do what's best for most people most of the time.

837
01:04:38,321 --> 01:04:45,321
And there's really no possibility ever of doing something that will please literally
100% of the people all the time.

838
01:04:45,321 --> 01:04:52,321
Especially if they don't read the BIPs or download the test software or make any
kind of real attempt to understand what they're talking about.

839
01:04:52,321 --> 01:05:02,321
And especially in this particular industry where lots of people gain or lose money
as a result of which investments pay off or become popular or something like that.

840
01:05:02,321 --> 01:05:04,321
So I think it hasn't been going great.

841
01:05:04,321 --> 01:05:09,321
I did make some changes as a CEO and probably those were...

842
01:05:09,321 --> 01:05:12,321
Being CEO is tough.

843
01:05:12,321 --> 01:05:14,321
Yes, it is tough.

844
01:05:14,321 --> 01:05:20,321
And you have to take responsibility for everything, even when it's other people who
are disappointing you.

845
01:05:20,321 --> 01:05:22,321
But it's just, it gets tough.

846
01:05:22,321 --> 01:05:28,321
There's going to be tribulations, the kind of thing where as you receive some kind
of pushback, what would you say?

847
01:05:28,321 --> 01:05:31,321
If you wanted to be, I know you're not a salesman.

848
01:05:31,321 --> 01:05:33,321
I know that's not the attempt here. I get it.

849
01:05:33,321 --> 01:05:34,321
True, I'm not.

850
01:05:34,321 --> 01:05:36,321
That doesn't make me understand.

851
01:05:36,321 --> 01:05:39,321
Like why would I want to change Bitcoin?

852
01:05:39,321 --> 01:05:42,321
Yeah, I think partly there is no real...

853
01:05:42,321 --> 01:05:48,321
The idea of changing Bitcoin, it's partly true because of the soft fork, but it's
also partly false because of the soft fork.

854
01:05:48,321 --> 01:05:56,321
Because nothing that your existing node is doing today will change at all as a
result of BIP300 activating.

855
01:05:56,321 --> 01:05:58,321
It's just an improvement, that's all?

856
01:05:58,321 --> 01:05:59,321
It's more than that.

857
01:05:59,321 --> 01:06:03,321
You don't even have to upgrade your software and it will do exactly what it was
doing before.

858
01:06:03,321 --> 01:06:11,321
So every time you are sent money, it will measure confirmations for you and it will
check signatures and it will check the box size limit.

859
01:06:11,321 --> 01:06:13,321
It will check all these things for you.

860
01:06:13,321 --> 01:06:19,321
So it's not as much of a change, but I do think that I was ready for this to some
extent.

861
01:06:19,321 --> 01:06:22,321
There's some things that don't bother me at all.

862
01:06:22,321 --> 01:06:25,321
So like when the critique is completely false, it's weird.

863
01:06:25,321 --> 01:06:36,321
See, I like Moon Settler so much that I get very agitated when he falls for this
weird misdirection or just something that people don't really care about the truth.

864
01:06:36,321 --> 01:06:41,321
And they, like Alex B or whatever, has just made something up and now people trip
over it for months later.

865
01:06:41,321 --> 01:06:47,321
But what doesn't bother me at all is when people would say, oh, this is bringing
shitcoins to Bitcoin or something.

866
01:06:47,321 --> 01:06:50,321
People clearly don't get it at all.

867
01:06:50,321 --> 01:06:52,321
Then I just think they weren't paying attention before.

868
01:06:53,321 --> 01:06:55,321
Now I have their attention.

869
01:06:55,321 --> 01:06:58,321
They aren't right, but they'll figure it out.

870
01:06:58,321 --> 01:07:04,321
Eventually, it will be very obvious as this idea has already been proved.

871
01:07:04,321 --> 01:07:07,321
You sound like a Litecoin guy when you say it like that.

872
01:07:07,321 --> 01:07:09,321
Eventually, they'll see it.

873
01:07:09,321 --> 01:07:18,321
Let me explain what I mean by that because what I mean is the technology will be
tried on other things like tried on altcoins or tried on Litecoin.

874
01:07:18,321 --> 01:07:20,321
There's a million of them.

875
01:07:21,321 --> 01:07:29,321
Eventually, people will learn, even if they just want to do a critique or if they
just want to – they'll have to learn something about it.

876
01:07:29,321 --> 01:07:34,321
And then they'll see that there really is no Zcash, the altcoin on Litecoin.

877
01:07:34,321 --> 01:07:39,321
It's just Litecoin now has private addresses where you hide this under the receiver
in the amount.

878
01:07:39,321 --> 01:07:41,321
And they'll see that nothing bad is happening.

879
01:07:41,321 --> 01:07:43,321
Nothing else is happening as a result.

880
01:07:43,321 --> 01:07:46,321
So they'll eventually learn all about all of that.

881
01:07:46,321 --> 01:07:51,321
So that's why – that type of thing is inevitable.

882
01:07:51,321 --> 01:07:53,321
So many of the errors are easier to correct.

883
01:07:53,321 --> 01:07:55,321
It's just a matter of time.

884
01:07:55,321 --> 01:07:57,321
But, yeah, it's difficult.

885
01:07:57,321 --> 01:08:01,321
I think, though, it has been going pretty well, to be honest with you.

886
01:08:01,321 --> 01:08:05,321
What you can actually do is you could say – you can go back six months.

887
01:08:06,321 --> 01:08:12,321
You can go back six months and ask yourself something like, how many people were
talking about this idea at all?

888
01:08:12,321 --> 01:08:18,321
And then it was like maybe 95% negative, 5% positive.

889
01:08:18,321 --> 01:08:22,321
But then now it's probably like 80% negative, 20% positive.

890
01:08:22,321 --> 01:08:31,321
And if you actually just plot it on a line graph, I actually think that it's only a
matter of a few more months, to be honest with you.

891
01:08:31,321 --> 01:08:33,321
Sorry, I didn't quite hear what you said.

892
01:08:33,321 --> 01:08:35,321
War of tradition? Is that out of the art of war?

893
01:08:35,321 --> 01:08:36,321
What makes you –

894
01:08:36,321 --> 01:08:38,321
Oh, yeah, war of attrition.

895
01:08:38,321 --> 01:08:43,321
I think it is just – I'm not sure how I would describe it.

896
01:08:43,321 --> 01:08:55,321
But I would say that it is – it's just a matter – it's like a matter of just
continuing to explain why the idea is good.

897
01:08:55,321 --> 01:09:06,321
As I mentioned in the first half, there's a sense in which new stuff will be
invented all the time, new covenants and new other ways in which counting the 13,000
will be invented.

898
01:09:06,321 --> 01:09:09,321
New altcoin tech is invented.

899
01:09:09,321 --> 01:09:15,321
Miners will get greedier and want more fees, and their desire for fees will
increase.

900
01:09:15,321 --> 01:09:18,321
So I think it is an inevitability.

901
01:09:18,321 --> 01:09:20,321
For me, it's a long-term thing.

902
01:09:20,321 --> 01:09:28,321
I look at it like, why would I introduce something that I don't understand for a
slight short-term gain when I know everybody is looking long-term?

903
01:09:28,321 --> 01:09:34,321
I agree. I 100% agree with that, which is part of why it has moved so slowly over
the last eight years.

904
01:09:34,321 --> 01:09:39,321
Weirdly, though, it's only by pushing for it aggressively that now people have
actually decided to learn about it.

905
01:09:39,321 --> 01:09:40,321
So that's bizarre.

906
01:09:40,321 --> 01:09:55,321
But another thing I would say is even though I agree with what you're saying, the
implication is not very good because the implication is no one in Bitcoin will be
able to do anything unless everyone in the world understands that thing.

907
01:09:55,321 --> 01:10:03,321
And that just means we're only going to be able to do a very small percent, the most
unremarkable percent of all the things that are worth doing.

908
01:10:03,321 --> 01:10:05,321
I disagree. I like it as a secret club.

909
01:10:05,321 --> 01:10:08,321
When I talk to people in the world they don't understand, I like it.

910
01:10:08,321 --> 01:10:11,321
I don't recoil or say, you must take this orange pill.

911
01:10:11,321 --> 01:10:12,321
My name is Morpheus.

912
01:10:12,321 --> 01:10:13,321
The first movie.

913
01:10:13,321 --> 01:10:14,321
The third movie.

914
01:10:14,321 --> 01:10:17,321
It doesn't work.

915
01:10:17,321 --> 01:10:20,321
It's a secret club, and we better get used to that.

916
01:10:20,321 --> 01:10:23,321
That's how it's going to be.

917
01:10:23,321 --> 01:10:24,321
All right.

918
01:10:24,321 --> 01:10:26,321
Anyway, guys, I have to go very soon.

919
01:10:26,321 --> 01:10:29,321
So maybe the last question for today.

920
01:10:29,321 --> 01:10:32,321
And then come on Friday if you wish.

921
01:10:32,321 --> 01:10:33,321
Yes.

922
01:10:33,321 --> 01:10:37,321
Remember, everyone, on Friday, LayerTwo Labs.

923
01:10:37,321 --> 01:10:40,321
That's the name of the account, Paul.

924
01:10:40,321 --> 01:10:42,321
Yes, that's right.

925
01:10:42,321 --> 01:10:48,321
You have a place every Friday to talk about Bitcoin 300 and Drivechains.

926
01:10:48,321 --> 01:10:49,321
So I've been there.

927
01:10:49,321 --> 01:10:51,321
I'm a fan of that spaces.

928
01:10:51,321 --> 01:10:59,321
So please, everyone that is listening to this want to go deeper and to discuss about
this with Paul.

929
01:10:59,321 --> 01:11:00,321
He's normally there.

930
01:11:00,321 --> 01:11:01,321
So Friday, I think.

931
01:11:01,321 --> 01:11:05,321
What time is it in Europe on Friday?

932
01:11:05,321 --> 01:11:06,321
Normally?

933
01:11:06,321 --> 01:11:13,321
It's 1 o'clock in Argentina normally, but midday.

934
01:11:13,321 --> 01:11:16,321
Anyway, it's on Friday.

935
01:11:16,321 --> 01:11:18,321
Breaking up a little bit.

936
01:11:18,321 --> 01:11:21,321
Don't worry.

937
01:11:21,321 --> 01:11:22,321
Don't worry, Paul.

938
01:11:23,321 --> 01:11:33,321
I think Moon Settler has his hand raised, so maybe he wants to do a last question.

939
01:11:33,321 --> 01:11:44,321
I just want to ask Paul how he sees this, because it appears to me that there is
some wider consensus on that sidechains will be a reality.

940
01:11:44,321 --> 01:11:49,321
Of course, there is a huge disappointment in what we have accomplished so far.

941
01:11:49,321 --> 01:11:52,321
There is some lash back from the early enthusiasm.

942
01:11:52,321 --> 01:12:05,321
But basically, the two philosophies that seem to be battling here is that miners
should get the fees from the sidechains versus miners should not get the fees from
the sidechains.

943
01:12:05,321 --> 01:12:09,321
That's kind of how the directions seem to be boiling down.

944
01:12:09,321 --> 01:12:11,321
What do you think about it?

945
01:12:11,321 --> 01:12:13,321
I think that's correct.

946
01:12:13,321 --> 01:12:15,321
I agree that is the basic dichotomy.

947
01:12:16,321 --> 01:12:33,321
I think ultimately it's going to be very important for the miners to get the fees
because of the difficulty adjustments, but also it's because the miners are the ones
who can censor any message from the chain.

948
01:12:33,321 --> 01:12:42,321
As a result, they are the ones who ultimately control what the contents of the
blockchain are, and so that's why the fees are important.

949
01:12:46,321 --> 01:12:53,321
Okay, I think maybe you are, I don't know if you're still in the train or whatever,
Paul, don't worry.

950
01:12:53,321 --> 01:12:58,321
It was almost like the speaker just waiting for Paul to start speaking.

951
01:13:01,321 --> 01:13:05,321
We are more than two hours and 20 minutes since we started.

952
01:13:05,321 --> 01:13:08,321
So again, Paul, thank you for your time.

953
01:13:08,321 --> 01:13:10,321
Thanks for inviting me, guys.

954
01:13:10,321 --> 01:13:11,321
Invite me again.

955
01:13:11,321 --> 01:13:12,321
It'll be fun.

956
01:13:12,321 --> 01:13:13,321
Come on Friday.

957
01:13:13,321 --> 01:13:14,321
See you.

958
01:13:14,321 --> 01:13:15,321
Yes.

959
01:13:15,321 --> 01:13:16,321
Bye bye.

960
01:13:16,321 --> 01:13:17,321
Thank you.

961
01:13:17,321 --> 01:13:18,321
So bye everyone.

962
01:13:18,321 --> 01:13:20,321
Thank you for joining this space.

963
01:13:20,321 --> 01:13:24,321
Normally we have these spaces on Tuesday.

964
01:13:24,321 --> 01:13:29,321
This has been by far our longest Twitter space in English.

965
01:13:29,321 --> 01:13:34,321
So please join us next Tuesday on these talks with Zato.

966
01:13:34,321 --> 01:13:43,321
Actually, we had one last question that I didn't ask to Paul, but this is a question
that we will keep so we can do another space with Paul.

967
01:13:43,321 --> 01:13:45,120
So thank you all for joining.