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Okay, yes. Okay, great. Hi, thanks. I've been invited to speak about BIP300, which
is one of my ideas for taking Bitcoin to the next level.

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So BIP300 proposes these new LayerTwos that are called sidechains. Sidechains are a
response to the threat of altcoins, but they're also a response to the desire of
Bitcoiners for creativity and innovation.

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The desire to try new things without asking for anyone's permission. So how do we
let everyone try the ideas that they like, and how do we keep other people's bad
ideas away from me?

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So here we have the world of altcoins on the left, and then we have the revenge of
BIP300 on the right. We've copied Ethereum and Monero into our own projects that
respect the 21 million coin limit of BTC.

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So there's no inflation, there's no extra coin. So the ideal thing is that with BIP300, if some annoying person asks, sure, Bitcoin seems great, but can it do whatever
stupid things, smart contracts, DeFi, whatever, you just say yes, it can do that.

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And then you don't have to talk to them anymore. Similarly, if some innovator, in
quotes, dreams up like a crazy idea, they say like, hey, I can improve Bitcoin, it
only needs my new idea, Turing completeness, or whatever, larger blocks, whatever,
KYC coins, then they can now do that without anyone's permission.

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They don't do it on the Bitcoin base layer, but they do it on a BIP300 sidechain.
So that is the goal. Developers can write whatever code they want. Users can use
whatever code that they like. Everyone gets what they want.

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So now I'm going to try to explain how this is accomplished. I'm going to break it
down, BIP300, into three aspects. These are full autonomy, protecting the base
layer, and improving miner incentives.

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But before continuing, I did want to mention that this project is not Vaporware. The
code is open source. It's on GitHub right now. And there's downloads with the GUI.
We have Windows and Mac versions. And there's even a YouTube video of me using BIP300 on Testnet to copy the Zcash altcoin.

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So the software is very usable. You can download it right now. Okay, back to the
three aspects. Number one, full autonomy. So each new BIP300 sidechain is its own
app, and you can change the sidechain software however you like.

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So it's just like making a new iPhone app. Each app has its own development team.
The software they write can have any validation rules or no validation rules. So for
example, they could add zk-SNARKs or MimbleWimble or Taproot or anything, whatever
you like. Any idea, good or bad, they could add them in, and no one could stop them.

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So it's like releasing a new iPhone app. Each app starts with no zero Bitcoin actual
coins on them. So you write the app, but it has no coins on it at all. So it's very
different from an altcoin. So you have Zcash in the top left with the purple coins.
That is an altcoin. But right next to that we have BitZcash, which does the exact
same thing, but it has no coins on it yet.

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And so the users have to voluntarily choose to send their BTC over to these
networks. So it's very similar to a Lightning app. I'm going to now kind of give a
little thing here. So you see the coins move over. Two coins went over to Zap in the
Lightning world, and one coin went over to Zcash in the BIP300 world.

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Okay, good, way ahead of you. So there's still 21 million coins total.

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Now, aspect two is the most difficult to explain, but I'm going to try anyway.

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The base layer, which is Bitcoin Core or Layer 1 or the main chain or whatever you
want to call it, your Bitcoin node, this is unaffected by problems on the sidechain.

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So this is a core part of the design, that even under very extreme adversarial
conditions where the sidechain is experiencing all sorts of chaos, the Layer 1 is
just going to soldier on and ignore all of that.

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So any drama can just go in one direction, from Bitcoin Core to the upper layers,
but it cannot go in reverse. So I'm going to try to explain how this is
accomplished.

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This is a representation of Bitcoin's blockchain. The squares are block headers, and
the trailing rectangles are the transactions.

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Blocks aren't always the same size, so they have different lengths.

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Time is flowing from left to right. You can see across the top I'm going from
December to April. Normally, of course, that would be tens of thousands of blocks,
but obviously that would not have fit on the slide, so I moved it to 17 blocks.

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And now what if there was a sidechain this whole time, like a clone of Monero? So
we're going to clone Monero and we're going to say this sidechain has been here the
whole time, and we're going to put it up on the slide in red.

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And it has its own blocks and its own block headers and its own blockchain, from
December on the left to April on the right.

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And now the idea with BIP300, this is the idea, that three months of sidechain
activity, three months, are compressed into one little 64-character string here.

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And this string is the only thing that is inserted into Layer 1, ever. So no matter
what BIP Monero over here is doing, this is all that Layer 1 will see.

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So this is it right here. This is all that Layer 1 will even see.

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So as a result of this setup here, the full nodes, the mainchain Layer 1 Bitcoin
core nodes down in blue, they don't check anything that's happening on the
sidechain.

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However, there could be theoretically unlimited complexity. So the sidechain doesn't
even need to be a blockchain. It could be anything.

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It could be in weird programming language. It could be filled with errors. It could
be so confusing that it never reaches consensus. It doesn't matter.

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BIP300 only operates on Layer 1. It operates entirely off of this one little string
here in green.

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It does an awful lot of logic to that little string, and there's a lot of
assumptions and engineering, game theory, economics, etc., but I don't have time to
explain all of that.

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I'm just trying to make the point that Layer 1 cannot be harmed by Layer 2 because
Layer 1 is not looking at Layer 2. It doesn't have any idea what's going on over
there.

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I feel compelled to just try and drive this point a little bit further with two more
screenshots. Here's one and two. Here it is. Now it's over.

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This is a screenshot of our software, or an older version of it. This little row
here is an entire withdrawal over three months, and the entire BIP300 idea is
encapsulated in this one tiny row.

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And that little hash where it says WT caret hash. The entire idea is encapsulated in
this one thing.

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The software says double-click for details, but that is misleading in the context of
this presentation because if you actually click on that, what our software will do
is try and see if you have a sidechain full node on that same computer.

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And if you do, it will ask it questions. It will ask that node questions. But if you
don't have a sidechain node, or any sidechain nodes on your computer, it will just
report back that it has absolutely no information to give you whatsoever.

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I just wanted to make this as painfully clear as possible.

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So the third and last aspect here. This is the only one slide here. This is a couple
parts, but it's very short. We want to improve mining incentives.

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This is technically BIP301. I separated the two BIPs to make them both easier to
read.

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I think anyone with a brain who uses BIP300 will also use BIP301, blind merge
mining.

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In Blind Merged Mining, even the miners don't need to pay attention to sidechains at
all.

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Already we had the layer 1 users not paying attention, but now the layer 1 miners
also are not paying attention.

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How is this going on? The miners will still collect all the transaction fee revenues
from the sidechain transactions, but they won't be seeing any of them.

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How does that happen? The layer 1 miners contract with someone else who is running a
sidechain full node, and the miner basically sells them the block rights.

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They still get basically all the money, but the other person assembles the block and
pays themselves the sidecoins over in the sidechain's coinbase transactions.

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This is the important part. If miners just do what they normally do today and
include all the transactions that pay them the most money,

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then they will automatically mine all the sidechain blocks and collect revenue from
all the sidechain transactions.

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I think this is kind of a cool concept. It could boost fee revenues by maybe 1,000x,
if not much more.

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I don't have very much time to tell you about this, but I did write two articles
that are below there about security budget that you can look up if you are
interested.

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I also want to mention that I gave this talk in June, using these little numbers
over here to the right, the crypto fees numbers.

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That was in June 4th, and yesterday I updated the slide to look up the latest
numbers.

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I thought it was noteworthy that the Bitcoin revenues are substantially down and the
ETH revenues are way up.

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Maybe that was just unlucky timing. You never know, of course, but maybe something
to think about.

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So that was the first half of the talk. You made it through the first half. The
second half I think is more fun, so it will be over soon, thankfully for us all.

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We're going to talk about the altcoins we should copy, and then I'm going to discuss
two supposed drawbacks of BIP300 that are not drawbacks in the slightest, but people
think that they are mistakenly.

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So that was the idea of the first half, and now we're going to the concrete use
cases here.

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I'm going to give you specific examples of altcoins that we should consider ripping
off, because they're actually kind of cool.

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So obviously Zcash, I mentioned at the beginning of the talk. Zcash has these cool
transactions where the sender, the receiver, and the amount are all private.

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So then we Bitcoiners, we have to put up with comparisons like this, where someone
puts something up and they say, oh, Bitcoin versus Zcash, you know.

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If we had BIP300, this infographic wouldn't make any sense in the slightest.

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In fact, all debates about one coin versus another coin would make no sense at all,
which brings me to a related point.

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There was a darknet market. It retired last month. They made so much money that they
retired.

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They didn't exit scam, but they decided to close down, and then they said they would
give everyone their money back, and so that's kind of an interesting thing.

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But in December of last year, or 2020, this darknet market, big darknet market, said
that they were going to drop Bitcoin transactions and move to only Monero
transactions.

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So that's kind of a slap to the face. This is just more revenues that Bitcoin isn't
getting, more users that Bitcoin doesn't get.

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If we had BIP300, there would be no reason for them to accept Monero at all, let
alone exclusively.

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So BitDNS was an idea proposed on Bitcoin Talk a long time ago, which later became
the altcoin known as Namecoin.

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This thread here where it was proposed is something that absolutely everyone should
read if they have the time, because there's a lot of cool history here.

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Satoshi invents merged mining. He coins the term sidechain, and he writes about how
there will be lots of different chains with different block sizes and different fee
rates.

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And he wrote all of this back in 2010, which is kind of shocking and kind of crazy.

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Anyway, the idea of the thread, BitDNS, I think it has tremendous potential.

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We don't have time to talk about it, but I did write a big article here in February
of this year called BitNames, and there's this URL here.

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You can read about it if you like. I'm going to give a few images from the article
to sort of tease the article. You can read it if you're interested.

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This is someone pretending to be Elon Musk on Twitter. This happens a lot. This
happens a lot to many Bitcoiners.

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This is the Liberty Reserve website domain name being seized by the United States
government.

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And this is a guy on YouTube. In the bottom right, he has to list out all of his
different screen names and where people can reach him.

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And to add insult to injury, one of them, the Facebook one at the bottom, doesn't
match the rest.

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Apparently, I guess he couldn't get the one that matched exactly, so he had to get a
different one or something.

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With BitDNS, none of these problems would exist. Everyone would just have one login
for every service.

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You wouldn't have to go anywhere, and people would always be able to find you. You'd
have just one name.

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Now, digital assets, ERC-20, NFTs, et cetera, like digital baseball cards,
basically,

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except unforgeable and indestructible and unseizable, which is kind of neat.

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So people like to collect things. Now most NFTs are on Ethereum, which I think is
kind of lame, especially because we Bitcoiners,

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we were the ones who created actually all this originally. We started this with
counterparty colored coins and all this other stuff.

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So if we had BIP300, again, we could have a whole special ERC-20 chain or
something,

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and that would domesticate all of this competitive energy into Bitcoin

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instead of having it outside Bitcoin and compete against Bitcoin.

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This is one of my other projects, BitcoinHiveMinded.com. Check it out. It's a
prediction markets project.

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I designed it to be a sidechain from the very beginning. Here I've got some
screenshots.

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Again, there's no way I could possibly explain it all, but I can give you cool
screenshots.

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The software does a lot of cool things, but the crowd favorite is Futarky,

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which is an idea where you have futures markets on how well certain leaders would
perform if they were in charge.

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And so this idea is obviously very distressing to bad leaders,

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because we can learn about exactly how bad they are going to be before we cast a
vote for anyone.

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So I think this is one of the most important ideas in the whole world, and so it's a
big interest of mine.

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This is David Vork's project, SIA. It's a decentralized peer-to-peer cloud storage
managed by a blockchain.

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So he has this altcoin project, but you have a hard drive at home, and a lot of that
hard drive space you're not using.

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You have a bandwidth connection at home. Most of that bandwidth you're not using.

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So with SIA, you sort of rent it out. SIA has been running for five years.

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It's very decentralized. The dev team could quit, and it would still run.

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He's got the cost down an order of magnitude below Amazon.

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If you walk across a border with nothing, buy a new blank computer, type in your
12-word seed phrase into the software,

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and it will regenerate your entire file system to that computer. So that's kind of
neat.

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Again, I got these numbers from when I gave the talk at Bitcoin 2021 in the summer,
and then I looked them up yesterday,

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and you can see that they're up a lot.

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But a lot of people don't hear about these projects because, unfortunately, 99% of
altcoins are scams and useless projects.

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So that drowns out the useful projects, but that's too bad.

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There's yet another thing that would be solved by BIP300, though, since no scammer
would make a BIP300 sidechain in the first place,

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since you can't use it to scam.

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So I will mention that as an added bonus.

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If miners upgraded to activate BIP300/301, it's theoretically possible that
that would be the last time anyone would ever need to upgrade their Bitcoin
software,

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again, ever, because you could have the new software releases come out on sidechain.

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So that state of affairs would be more convenient, but also more secure as well if
you're worried about protecting Layer 1.

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It's the ossification idea.

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Oh, sorry. Let me slow that down.

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Furthermore, in my opinion, BIP300 is the only practical way of eventually forking
the Layer 1 block size down to 350k,

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which I know at least some Bitcoiners claim to want, because it would improve
decentralization.

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This is the two drawbacks.

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So here they are.

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The first supposed drawback of BIP300 is that miners can, with a little bit of
setup and technical knowledge and effort on their part,

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and certainly a great deal of patience,

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miners can remove all of the coins from a BIP300 sidechain and pay those coins to
themselves.

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So here I have a very technical diagram of a miner replacing that little green hash
with their own red hash.

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You can see, you know that it's evil because it's red.

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The evil miner is going to steal all the coins after three to six months.

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So this is called the miners can steal problem.

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The second supposed drawback of BIP300 is this really weird idea.

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I'm going to just read it out. It sounds silly, but it goes as follows.

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If some miners ever have a profitable side hustle, like some way of making money,

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then maybe some other miners might not have that side hustle, and then they might go
out of business,

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and then they wouldn't be able to buy as many Christmas presents for their children
as the other miners who are still in business,

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and that would be really sad, and we should do something about that because we're
all communists.

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So both of these are really false, but it's so hard to know where to begin that I'm
literally exasperated by attempts to even deal with these,

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because it's really just an enormous difference in philosophy, but I'm going to try
to just cut through a little of this really fast.

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BIP300 is designed to prevent the miners from stealing from sidechain, but it
remains technically possible.

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It's also possible that miners can, in quotes, they can steal from the Lightning
Network.

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In fact, it's much easier because the Lightning Network doesn't have this three to
six month timeout that BIP300 has.

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But I'm not saying this to even compare BIP300 to the Lightning Network at all.

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I'm just trying to establish the fact that this criterion is ridiculous,

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but the 51% hash rate can do a lot of horrible things if they're in charge forever.

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But if you were not worried about miners stealing from the Lightning Network like
ten minutes ago,

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then I suggest you just cross this entire left half of the page out of your mind.

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And there's plenty of other reasons that I'm not going to have time to explain, but
this criterion is not real.

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We still allow users to risk their own coins in whichever way they like, so it's the
user's coins.

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It's Bitcoin, not prison.

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The second one is also silly. I mean, I don't even know what's going on, but the
implications are very strange.

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So like if BipFury sold T-shirts on the side for profit, then T-shirts would be bad
for Bitcoin,

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and T-shirts would be as bad for Bitcoin as BIP300 is anyway.

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If Michael Saylor paid miners altruistically ten cents per year, then Michael Saylor
would be bad for Bitcoin, blah, blah, blah.

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So I have this one. The lower one is what I really think is happening here,

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is that people are confusing the node decentralization with the mining costs.

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It is very important that nodes be very cheap to run. That is absolutely essential
and super important.

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But miners run nodes, not the other way around, so it's absolutely not important
whatsoever that mining be cheap.

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In fact, if we wanted mining to be cheap, we could just remove all of the upward
difficulty adjustments from Bitcoin,

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and then mining would be super cheap. But you can see how that would be ridiculous,
hopefully.

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So I don't know. That's what I think the confusion is, but the whole thing is
confusing.

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I have total contempt for these two supposed drawbacks. In fact, both of them are
not drawbacks at all.

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The left one allows for super reliable Oracle and high quality smart contracts,

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so the right one is the only thing that's going to keep hash rate security up in the
long run future.

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So I think actually they're both pretty great, and to me they're not drawbacks in
the slightest.

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So now we've made it to the end of the talk. What should you do about this if you're
interested?

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Here's what I suggest. The most important thing is to learn, of course.

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The best way to learn is to actually download the software and use it.

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It's test software with play money, so you don't actually lose any money.

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Do not listen to what anyone else says about the software.

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You have to run it yourself, otherwise you know nothing, because that's the only
reliable way to learn about this,

168
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something as complicated as this.

169
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Second, the Bitcoin community prides itself on consensus.

170
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We don't make a change until a lot of people agree that they want it,

171
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so you do have to help spread the word if you are interested in this change or in
any of those projects.

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I suggest that we rip off.

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And last, this may help. You could change the way that you view altcoins.

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They are not rivals that are inherently evil in all circumstances.

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Instead, they are a place where technology is previewed before it is copied into
BTC.

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And so there we go. So we made it to the end.

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And now I have a little time for questions, I think, because we only have 25
minutes, right?

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So I think I have like two minutes for questions, which is exactly what I wanted.

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So thanks a lot. I hope that made some sense to someone or whatever.

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So thanks.

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And if you have a question, I think there are microphones,

182
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and then you could shout it out also and I could repeat it.

183
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I was just curious on the three to six months timeline.

184
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So it's basically a hash threshold, right?

185
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Is that if the dominant amount of people are hashing on it,

186
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decide to steal the coins for a specific amount of time for that three to six month
threshold.

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So evil miners have to do the wrong thing openly in public with the wrong hash being
in view of everyone for six months.

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So that is one of the reasons why I think it's kind of silly.

189
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I'm curious about that. Is there a way to actually attach a failsafe,

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like a form of a federation like redemption to it that is in combination of the hash
threshold?

191
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Some people have suggested these ideas, but I think actually they don't help at all

192
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because at the end of the day, if 51% hash rate is against you,

193
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51% hash rate can filter any message they don't like from the chain ever.

194
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So it just kind of moves what's going on.

195
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I just think these are all just desperate attempts.

196
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I certainly understand the motivation, but people are just trying to get around the
whole,

197
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they're trying to get escape proof of work as like what Bitcoin is running on.

198
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And Bitcoin is running on proof of work and it's sort of inescapable.

199
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People say zk-SNARKs and they say other things, like we'll do things,

200
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but it doesn't matter because the 51% hash rate could just filter the zk-SNARK.

201
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So they can filter anything.

202
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So I kind of think that these attempts to get away from it are not going to be worth
whatever the complexity.

203
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They may never be worth it at all and usually they involve complexity and things.

204
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So I kind of, I don't know, I'm not optimistic about adding some more stuff like
that

205
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because the 51% can always just veto it.

206
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Gotcha.

207
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So with the three to six month timeline, does that mean that essentially three to
six months

208
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is all you really need to keep of the blockchain history of a sidechain like that?

209
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Yes, that is another thing.

210
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The sidechain can have a better, you're like a plant or something.

211
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You're asking my favorite question.

212
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The sidechain can, it doesn't need to keep more than,

213
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it's already toast if there's more than six months of bad hash rate on it.

214
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So there's kind of really no reason to keep more than that.

215
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So you could do like UTXO commitments and then start just discarding completely the
old blocks.

216
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So it does have an advantage like that since you're already dead

217
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if it's going to be more than six months of bad blocks.

218
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So you might as well just, you lose absolutely nothing by just,

219
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and you can gain a lot with just the UTXO set commitment and discarding the old
blocks.

220
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Sweet, okay.

221
00:23:49,000 --> 00:23:51,000
Thank you.

222
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So if miners try to steal the funds locked up in a Drivechain

223
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and the users respond by launching a UASF attempt,

224
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could that lead to a reorg on the main chain?

225
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The thing is that you really can't actually.

226
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You might think that it could, but it's kind of a bizarre situation

227
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because what the UASF is just going to do is the UASF is going to say

228
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that the bad transaction paying it out at the end of the long period

229
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cannot enter the blockchain.

230
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That's what the UASF will.

231
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So people can right click and say UASF, we block this withdrawal.

232
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At any time, they don't have to coordinate anything.

233
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They just have some time during the three to six months,

234
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they have to just decide to flag the UASF.

235
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And now if they do that and they are going to lose,

236
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nothing can really reorg because if you think about it,

237
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what they will get, the majority hash rate will just keep building blocks

238
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and those people, the UASF group, will kind of be paused.

239
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The blockchain will just be paused at this moment here

240
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when the red one pays out.

241
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So the UASF people will know that they've lost

242
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and there probably won't be any blocks on there at all

243
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because the evil miners will be mining there

244
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and then any neutral miners will be mining on the longest chain,

245
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which will be the evil miners chain.

246
00:25:04,000 --> 00:25:08,000
So it's kind of bizarre, but actually not really anything bad

247
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can happen as a result of the UASF.

248
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It's always possible that something really, really strange could happen,

249
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but because the miners will just keep building that chain out,

250
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you will then not, you'll know that you've lost

251
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and then those people can just wait until they give up

252
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and then they'll click back onto the attack

253
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and they'll realize that they failed.

254
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We're out of time, but I will come find me later.

255
00:25:36,000 --> 00:25:38,000
We're out of time, so yeah, we're good, yes?

256
00:25:38,000 --> 00:25:40,000
Thanks.