Drivechains with the creator, Paul Sztorc, or something.
Don't you think?
I mean, this is a funny title, but.
Okay.
Yeah.
Hey, Paul.
Oh, hey, Wayne.
Having fun yet?
I'm having fun.
Good.
I see you're working on most hated figure in Bitcoin status.
I respect that.
Yeah.
It's easier than it looks.
It's kind of funny.
I think that one thing that's occurred to me, because obviously, I've been staying up to date on this stuff for almost 10 years now, is that the people who are criticizing you, some of them have legitimate reasons.
Legitimate criticisms.
And some of them who even are, whose criticisms are illegitimate, you might say, there's like a grain of truth in them, or they're just mistaken about something.
But in totality, it almost feels like there's, it's almost like, this isn't quite the right metaphor, but it's like obfuscation through complexity.
It's like, there's just so much of this stuff.
And people don't know how to evaluate these claims for themselves.
So just like with many other things in the world, they just gravitate towards some tribe or some figurehead, go along with whatever they say, pro or against the arguments.
And it's, you know, it's kind of funny, because it feels like we're stuck in the same type of arguments that happen in politics, where people just yell at each other over things that they don't, that they have fundamental opposing views or misunderstandings about, in perpetuity, with nobody ever really having any intention of ever changing their mind.
It's all just virtue signaling and tribalism.
And doing that every day has got to be, it's got to wear and tear, wear on you.
Well, I think it must, it doesn't really wear and tear on me, because again, I like have like, you know, I'm like working with the actual details up close.
I think you're completely right.
I wonder about, to your point about there being like this wide distribution of critics.
I do wonder about some of the critics who have like something really intelligent or nuanced to say.
I do wonder like, how do they feel when one of the terrible critiques that has nothing to do with anything is like completely false?
If that one like, becomes really popular and trendy, I do wonder if like a smarter critic, does that make them feel like, how do they feel about, do they think like, oh, no, I'm in a group with really misinformed people, or do they, I wonder about that?
Maybe, but I would suspect that even if that is the case, that it doesn't really matter.
The net effect of that person realizing, hey, look, you know, the people on my team are not doing the best job of criticizing this, or they're doing it in an embarrassing way.
I just think it's no different than other issues, whether it's your local school board or politics inside a large company or something.
What people really matter, what matters to people is the tribe and the outcome, not so much the specific point.
It's not, it's, this isn't sort of like academics, to a certain degree, where you prove somebody wrong on a particular point, and you don't really get a point, you don't score.
It's just, the noise is enough to prevent change from happening, and the noise is enough to get other people excited about something that they don't really understand.
I mean, who would ever, like, just to kind of extend the metaphor that I was using yesterday, who would ever feel really qualified about criticizing the deposit and withdrawal methodologies imposed by different Bitcoin exchanges?
It's not a precise metaphor, but it kind of maps, whereas, you know, you have these software applications that you might be able to develop, and there's this way of essentially depositing and withdrawing Bitcoin from them.
Like, that's just such an esoteric thing that most people don't really care about.
But in this particular instance, people feel like they have to have an opinion on this.
And even if their opinion is colored by the block size wars, where it's like, miners bad, node operators good, like, they can't come out and say that and have someone take them seriously.
They have to come up with all these other things, and sometimes that are not so high level, that are more specific.
And when they get more specific, sometimes their arguments fall apart.
And it, it just becomes a lot of noise for everybody else who's listening or participating in the conversation, because people are bike shedding about all these little, very detailed minutiae, when people's root objections tend to be like, at more like a 50,000 foot level, and it's more like a conflict of visions than a disagreement about a specific technical implementation of the proposal.
Software.
I had a question.
I think we have two more speakers now.
So if someone has a question, I think, well, Jack rolled for initiative.
So you can go ahead.
Okay, so I was looking for the kind of stick your hand up button.
I think things on Twitter have changed recently.
So sorry to put in like that.
But what the guy was just talking about there.
It kind of reminds me about election cycles.
Like, so I mean, if you look at if you regard Bitcoin as an election cycle, I mean, kind of the kind of kind of block subsidy goes, what was it created 2009 goes on to around 2001 40.
So that's like, you know, it's over a century.
And people can have like, kind of different views over that time about what the majority decision is, and who votes for this, who votes for that.
And that kind of what the what the guy was just talking about there.
That's what it kind of reminds me of.
And so I don't I don't completely understand drivechain, I get it, it's some sort of idea where other coins or other kind of implementations can be introduced into Bitcoin.
Ultimately, I think it does it come down to kind of what the majority decision is, as in what people are going to want to accept.
And, you know, then you kind of get into the philosophy of forking and what's, you know, people want to follow.
Yes, I agree with that.
I think that I think there was a mistaken conclusion made in around 2017.
There was this big fight, and it involved miners wanting a hard fork and involve this UASF.
I don't know how many, actually, it's very hard to tell with any certainty how many people actually participated in the UASF.
But it was probably not, you know, it's hard to measure, but it's like, it wasn't 100% of Bitcoiners running the UASF client.
So this idea sprung up that we must have 100% of people agree on something, which, you know, 100% of human beings have never agreed on anything.
So I'm not, you know, I don't think it's an open question how to deal with that.
But before, like in the 20, you can go back and read interesting that Gavin Andresen's old, like, I think, like, I think it's in a GitHub commit or something or comments that he wrote in the code about how it's too difficult to do the difference between hard and soft changes, which can be hard and soft fork.
And he said, it's too difficult to get everyone to upgrade.
So we need to do this soft fork thing, because not everyone will upgrade.
And so that idea has now changed.
In my view, it has changed.
But it's a hotly debated issue into something that says, even to do a soft fork, everyone must do it.
So it's kind of become the opposite of what it was originally was, it's become, it no longer solves the problem that it originally had solved.
Anyway, thanks for your comment about how sometimes people disagree, and it looks like an election.
So I think Jack did want to say something first, and then we'll go to Rio, I guess.
I was just wondering, I guess, like, where, like, were there like a Bitcoin or like a hive mind main chain with a drivechain, like Bitcoin sidechain, I guess, where do you think, like, the sort of like specialization that like a Bitcoin main chain can add versus like, I guess, like, people saying like, oh, other coins are going to add drivechains or something like that.
Well, I think other coins might, it's not 100% completed project until we have this nice, pristine pull request, which Luke Dashjr has been helping us with, it's kind of kicked this party off, I think.
So but there is, we have our own test software that we release, and someone has forked that is kind of unaffiliated with me, but they hang out in our drivechain telegram group, and they have forked that into an altcoin
called Sky Doge, which I'm not shilling, but I do think it is kind of funny, and it is, it does exist. And I don't know what else they changed, probably not, but they're having fun over there with it, I suppose.
So yeah, I think other people might, does that answer your question? I think people may do that. I mean, division of labor, I don't understand the question.
Yeah, I don't know, it was, maybe you should go to Rio, because I could formulate it better.
Okay, great. Come back when you have formulated it. Let's do Rio.
Hi, thank you for having me up. And let me ask a question. I was going to transition to smidge technical, if I may. Paul, why can we not do drivechains with what we have with hash time lock, and a concept of atomic swaps with blind merge mining?
What, what is preventing a drivechain now, with that we could have, you know, an extremely long hash time lock that essentially is federated or something like that? Just what's the main, if that's,
And I think it's a very reasonable question, because people think like, why is, why push so hard for this soft fork? And it's because I'm determined, I think I really think it's what's best for literally everyone, including the people who think they don't want, you know, a soft fork, it's really best for them.
And it's, it's also not a big deal. I'm also kind of very basically certain of that, but other people have different points of view, but I'm going to unpack that a little bit right now.
So like, what BIP300 does is it puts the miners on a short leash. It has nodes, forcing the withdrawals to run this gauntlet, which is difficult, this 13,000 gate gauntlet.
And that makes it more difficult for the miners to take the funds out of, they still can, but we force it through this, this lens where this force it through this kind of filter, where it's just very, very, very easy to prove that it wasn't an accident that they really, they really fully intended, they had every opportunity to not take the money or do the right thing or just do nothing, but they did.
So, so that is what it does. BIP300 is full nodes, keeping miners on a short leash. And that is good for the miners because it facilitates people depositing to the sidechain in the first place.
The miners can say, listen, you're holding a gun to our head to some extent, to the extent of BIP300. And say, you're, you, you've got, you've got some leverage on us because we can't withdraw like at 2am when you're asleep, we've got to go through this huge process.
So it's actually, we could do it today with nothing. We could do BIP300 with nothing, but it would be as secure and we could do it with various other things, but it just wouldn't be as good. It would waste bytes or it would, it would not have the same game theoretic leverage.
And so I just think that this is the technically superior way to do it. But of course, if anyone has a specific like technical thing, like about they think something should be done a different way, then I'm happy to answer those questions in detail. But it seemed to me like you were asking more generally, like, why don't we, why don't you just use the pieces we have?
Yeah, I mean, your point stands. I think, I think if I may just poke at that string, just one more that you did at the stuff. If I get a substantial amount of miners that are willing to merge mine, and I get a substantial amount of miners that are willing to atomic swap their assets onto this other merged mine chain, I can do it today.
With atomic swaps being the trustless bridge and a cartel of miners, which would have to agree to activate chains, which is part of the BIP, the 90%. I can do it today. Is BIP superior because it's more transparent and the game theory is explicit? Is that the premise?
Yeah, I think so. I think that's very close to it. I think that's part of it. It's kind of like, you could do that, but it would just be, it would be like an off the books.
OPEX, full on their rules. The miners cartel is the miners cartel. Now you're saying you're a cartel, but you have to agree with the gauntlet. Do you have to asking? What is the term?
Acknowledge.
Acknowledge. Oh, that's what it stands for. I was doing it wrong. Okay, thank you.
Yeah, so that's kind of the, it's kind of like, the question can also sort of be flipped. It's kind of like, since so much of it could just be replicated with a miner handshake, it's kind of like, why not do it?
But of course, the reason why, the reason why to deal with this would be to have layer one, you want layer one to enforce the BIP300 rules, since that enforces the smart contract. And the BIP300 rules are not, they are not the sidechain rules. They are just the counter counting up to.
They do enforce that the sidechain can only give you consensus every 10 minutes still though, right?
That's a very good question, because these things are often confused. And I think I get into, unfortunately, my job is made a little bit more difficult in this way, which is that the merge mining, 10 minute block time, etc. That is a completely separate thing.
I think one of the smartest things I did was separate the BIP into two, because to try and do what little I could possibly do to get people to understand this, it's actually very difficult, difficult because, you know, I just think it's easy to mix these up.
Whereas if I work with the code every day, it's impossible for me to mix them up. But it's the merge mining thing and the 10 minute block time, that is totally separate. That's already been done. We already merge mine Namecoin. We've been doing that for 10 years.
Slush Pool, or what is now called Brains, they used to have a whole list of stuff they would merge mine. It's been going on for a long time. You can read BitMEX research. This is why people don't really have controversy over BIP301. You never really hear about that.
BIP300 is the deposits and especially the withdrawals. So these are two completely separate things. It's true when you say there's a whole other question of, does merge mining with Bitcoin, does that tie you to the 10 minute block time?
Which it mostly does. There are weird hacky ways of changing the block time, but I don't think they're actually that important. I think Satoshi picked a very good number with 10 minutes and a lot of the people who want something else, they'll be able to deal with some lightning style thing where they open a thing that confirms.
And then after that thing is like 20 confirmations, you have some kind of instant back and forth. If it's not instant, then what's the difference between 15 seconds and 10 minutes? Because 15 seconds is too long.
It's not horseshoes or grenades. You're right. Close doesn't count. Fair point. Granted.
Okay. Jack, do you want to?
Yeah, sure. I don't know. This is probably just a different question, but if you have a drivechain which is failing, rather than just steal, would you think that miners or some affiliated mining group like a pool or something like that would just buy the coins in the sidechain on a secondhand market for some percentage of their worth?
And then just kind of make a deal with the miners to allow them to move them out as opposed to just killing the sidechain?
Yeah, I think the answer is yes. And I would kind of like reframe that whole issue. And I would say that probably it will never be the case that miners will actually, even under like absurd circumstances where there's like the sidechain node software fails to work and it doesn't even work and no one even understands what the L2 blockchain is or just crashes and can never be recovered, all of which are kind of implausible.
Or even if the miners are super evil, most self-interested, greedy, whatever, short-term miners, and there's tons of coins on the chain and the chain generates no fees and it will never generate fees and its failure will not even interrupt the reputation of the other drivechains or it won't even be – there'll be nothing bad about stealing.
So even in the worst case scenario, I kind of don't think that anyone will ever lose 100% of their coins. There'll always be someone buying the coins, as you say, in the L2 world. The coins will be changing hands to the extent that that's possible as long as the blockchain still exists over there or at least something, some kind of like signatures can exist.
People will buy and sell the claims to those coins and so probably what will ultimately happen is the miners themselves could buy the coins for like 80 cents on the dollar or something and then they would be the owners and then they could walk them out of the L2 world.
You know, on the BIP300 rules on L1 and then they would have the coins that they get on.
So I kind of think that even in a horribly disastrous scenario such as what you're talking
about where the drivechains are going to fail, I think still people on there would probably
not lose.
They would probably still just be able to sell for 80 cents on the dollar, which is
of course sad, but of course the whole idea behind drivechain is not that it offers like
a completely perfect security because nothing actually offers that.
There's literally nothing that really offers that under the hood, but this says you have
the freedom to leave and use a different piece of software and you get the benefits and the
risks.
But yeah, I think this is an intriguing phenomenon that the peg, since the peg will always hold
on L1 with the BIP300 rules, someone is going to get the coins out at one to one and the
miners are kind of buyers of last resort because they know that they can just take
the coins out.
So it's kind of interesting like that.
Do you think that there would be any like sort of like soft power disagreement among
miners among like who would be able, I mean, I guess that would just be a market price
of purchasing them on the secondhand market, but is there any other?
An interesting question.
One thing that I think is fascinating about it is that you might think it would like,
oh, some people are going to form a group.
They're going to form like a 51% group and then they'll want to, but the game theory
of that is like very unstable in my view in a good way, which is like no one can really
be cut out because you can always, if you form a 51% group and try to muscle the coins
out, the 49% who aren't in the group, they can always cut a deal with like two or 3%
in the 51 group.
And so this is like, it's a game of rock, paper, scissors.
It has no real converging.
Do you think there's anything like additional BIP or something like that you could add on
the main chain that would like, I guess like codify that in some like sort of op code for
the two to 3% to be able to like?
No, actually, because it's like, there's actually, this is actually, this is literally a, there's
actual, an actual game theory game called the three person divide a dollar game.
And I encourage anyone who's interested in this, who finds this to be like distressing
and weird, then you can just look this up because it's kind of a sort of simple intuition
that if, if you're, if two, if 51% is ganging up on you, you and you, you are outside of
the winning group, you're getting nothing, but that's actually good for you because now
you have, you have a lot of leverage, you cut a deal with the two, 3% and you, then
you are back in the winning group and you say, we'll give you the two, two and 3%, we'll
give you 90% of the spoils as long as you give us something because right now we're
getting nothing.
But it's just an endless chain of people stabbing each other in the back.
And the only like Nash equilibrium of this game is that someone just proposes that they
split it equally three ways and then no one opposes it.
And then otherwise it would like never converge.
So it just starts this endless argument.
So another result in game theory that argument costs people things, but it doesn't benefit
anyone, anything.
So I mean, I guess like the difference between that, like sort of like game and like mining
would be there is like some sort of like cost associated with mining.
Well, yes, there's a cost associated with doing negotiation and like if you spend an
hour negotiating that salary and you reach the same negotiation that you would have
reached in five minutes, then you wasted 55 minutes and no one got anything out of that.
So all I'm trying to say, though, is that this is kind of like a, uh, this is a, this
is an entry that could be like intrigue and drama.
But what I'm actually bringing this up is to say that there probably would not be
because there is no there's no like easy way out.
The either the so since there's no easy way out, it's just what I'm talking about with
this divided dollar game where they just say, well, we'll just try to withdraw the
coins normally or if the thing crashes, the miners will just divide all the coins and
split them amongst those on hash rate or something like that.
So these these are like worst case scenario situations where still everything kind of
works, basically.
So I think that.
So those are some of my thoughts on that, I think those those types of things actually
help. Um, drivechain work because they can I just make a quick point now about what you
just said, Paul?
Sure.
Yes.
You mentioned the Nash equilibrium and kind of whenever the realms of game theories
kind of people kind of Nash equilibrium, you know, it's kind of people that's what
they kind of.
Kind of default to almost, but before Nash kind of wrote that kind of non-cooperative
idea paper, non-cooperative games, you came up with the bargaining problem and he
formulated an axiomatic solution to kind of games and like the two he kind of
formulated an answer to the two person non-zero sum game.
And I always kind of associate when I read the Bitcoin white paper, it says peer to
peer. You've got peer one and peer two is like a two player game and kind of Satoshi
says kind of explicitly that the main benefits are lost in Bitcoin.
It is a third party required.
So I kind of almost from that rightly or wrongly discount kind of third parties in.
In a two player game and a kind of I just associate Bitcoin software or the Bitcoin
client. It's kind of almost like a like a suedo third party.
It's like a peer to peer two players and you've got the software acting as a third
player canonical arbitrator with the software program to a set of values.
That's kind of how I associate the game theory in Bitcoin.
And I think this is my view on this is what you're suggesting is kind of over
complicating what's kind of is a simplistic,
generalized solution to a classical game theory problem in terms of how two players,
whether those two players are individuals or nation states or groups or collectives
interact and arrive at a deterministic kind of point of view as to a bargaining idea
where the kind of the money or we call it money, but we could also maybe regard it as
media to cooperative bargaining.
And yes, whenever I whenever I'm sorry, whenever I hear the kind of like game
theory, like game theories can sometimes become a bit of a hacking kind of phrase.
That's kind of how I I completely agree, I think too many people use it as a like in
place of an actual argument or whatever they want to say.
They just say like, oh, the game theory.
Yeah. And I'm you know, I actually really like game theory.
I'm a real student of game theory.
I studied actual academic game theory, which I actually don't even think is that great.
My favorite. I like Tom Schelling and his style of his books, strategy of competition,
strategy of conflict is one of my favorite books.
Yeah, Nash is great. I think that, though, too many people just use the game theory and
then they don't they don't just say whatever they want to say.
I brought it up in that particular case because I just wanted to say that there's it
actually is a racist because the questioner asked about miners buying up the coins
themselves. And I wanted to try to explain why if they do that, they will probably just
do that and withdraw the coins and divide them equally among the hash rate and or give
them to their proper owners like in the worst case scenario.
So kind of making kind of an arcane point.
But I think I think everyone would benefit from reading about the two person divide a
dollar game on Wikipedia.
I think it's pretty easy to understand.
And I hope I didn't confuse too many people by rambling about that.
Could you post that on Twitter or something like that?
I'll put it in the nest, probably.
Yeah, we'll fill the nest with fun things to for people to look at.
OK, now, Stuart in Dubai, what's up?
Hi, everybody.
I'd just like to sort of suggest that Rio mentioned that you referred to the miners
as a cartel.
I think it might be healthy to sort of change the perspective a little bit to change the
point of view.
I would think it's probably a better way of looking at it such that miners can be seen
as board members of a company.
And the sidechains themselves would be like the executive staff within the company.
Now, you're going to have two hundred and fifty six different, you could say, staff
members that need to sort of be managed.
And, you know, these board members, they're not going to go out of their way to fucking
destroy their own company.
Do you see what I mean?
They're going to be looking after this just as each of you are looking after your own
business because it's feeding your goddamn families, man.
And it just it's just like if there are if there are underperforming staff, you have
no qualms in firing that staff member.
So like if there is an underperforming sidechain, maybe they've gone rogue or something
and they're stealing from people or something like that.
It kind of, you know, very naturally these miners, these board members will come up with
procedures to to sort of decide, OK, how will we choose to fire this person, this side
chain?
How will we choose to elect a new one?
What are the processes that we will choose to select a sidechain such that it is most
profitable for us?
Because, goddammit, we're the ones that are fighting the thermodynamics, the laws of
thermodynamics.
And she is a very harsh mistress.
So these board members now, it's not unheard of to hear of board members embezzling money
from their company.
But in this scenario, we've got difficulty adjustments and every two fucking weeks, we're
going to have miners that just get fired from this from this from this situation.
So you're looking at people who have to be on their toes all the goddamn time to keep
the ship going.
And anyway, so that's that's the sort of change of view I'd be keen to hear if there's
any flaws in this different point of view or or maybe, for example, you want to stick
with the whole hardcore crypto, this is, you know, Alice and Eve mentality and just
view them as just like the enemy of the enemy.
I don't think it's always healthy to take that perspective.
And I very much don't believe miners are enemies.
They are valuable members of the network and a participant in the in the game.
And I think speak to the two person game game theory aspect of things.
But but there I do feel very explicitly this crowns them as a before they had not a lot
of incentive to really work together outside of pooling, but all work was the same.
Now you have this 90 percent activation and you have the necessity for them to all come
to consensus to activate these chains.
They can be bribed to do so.
One chain is extremely terrible for users.
Users want miners to quit.
As long as that chain keeps bribing the mine pool operators, they put our stuff in the
software and everybody says, well, we're going to use these pools even if we are divided
energy.
We're not divided software operators anymore.
This is where I do think the point comes of making pool mining and peer to peer and peer
pool come back and then thinking about BIP300 is a valid critique.
And I'm not saying that there are curtail now, but this gives cartelish moral hazard
in my view.
I don't feel we should demonize miners.
Your point is well taken.
Yeah, very good point.
And I think people do demonize miners, which I think is wrong.
And I think you are absolutely correct in pointing out that.
Like this does give miners a way to make more money if they coordinate, but that does not
necessarily mean anything bad at all.
After all, that is exactly what the Bitcoin Core software already does.
If the miners can coordinate on which blockchain tip is the tip, like the heaviest valid
chain, then they.
So it's just a matter of, as you also point out, it's a matter of writing software so
that they can coordinate even if they're if there are many, many of them and they're in
different locations and you just automate everything as much as possible.
And so, you know, like 100% of the hash rate is coordinating on many things.
But that doesn't mean that any human is literally making a decision anywhere.
It can be all software.
It's all automated.
So just because things are coordinated does not literally mean that there's only like
there's some like they all have each other's phone number and they're calling each other
and talking to each other.
People coordinating can just mean that the software does it like it's something like
BitTorrent gives everyone the same file or something.
I think it's worth just talking a little bit about how miners basically just get their
block templates and the relationship between miners and pools just as a matter of defining
terms within all of this.
And, you know, I'm a healthy, healthy skeptic along all of this.
And I think it's worth talking about just because it gives light to kind of the I don't
think it's the centralizing force that's at play, but it's just it's just sort of the
engineered reality.
But basically, like there's two there's two largely used versions of the mempool.
There's the mempool that sits on your nodes that are capped at 300 megabytes.
And that is sort of the somewhat narrow snapshot of what are viewed as the most valuable
transactions to be included in in the next series of blocks, let's say.
And then there's mining pools that are running mempools themselves that are somewhere larger
than 300 megabytes, you know, call it, you know, I don't know, a gig to a gig and a half,
maybe two gigs tops.
And the reason that they run a bigger mempool is because there might be transactions outside
of the 300 megabyte slice that end up actually being more valuable for lots of reasons.
We don't need to dig on right now, but they end up running this wider viewpoint into the
future transactions to be included.
And then what the what the pool does is they basically pre-generate a ton of block templates
that include those transactions.
And then they serve up those block templates to all of the mining constituents within their
pool.
And then we generate pool shares against that series of templates.
And so, you know, when you when you think about like what coordination is happening,
there's an algorithm that is running against that larger mempool on the pool side.
The templates are really just sort by expected fee revenue and then give it to all the miners
to mine against.
And then once the next block is found, you know, that process repeats.
It's sort of the straightforward way to think about it.
But the pieces that confuse me a little bit or where I'm not clear on sort of the game
theoretic piece are, and I think we saw this, we saw this pretty aggressively in ETH, where,
you know, the economic value of some of the projects that are sitting on top of ETH basically
end up becoming the decision makers for how the base chain is developed and functions.
So this sort of multi-collateral environment, you know, the US dollar is not really governed
the same way because the dollar is so big from a monetary based perspective.
But like, you know, if you're if you're one of three or four projects on ETH, you know,
you, you know, if it's, you know, USDC or some of these other sort of mega projects,
you know, because you're built on top of a chain, if there were to be a fork,
you know, you basically need to consent to the fork.
And so that's the centralizing dynamic and economic piece that that starts to
concentrate power along different members of the stakeholders within that kind of ecosystem.
And sort of that that ability dovetails with the MEV component pretty closely.
Yes, we can talk about that. But first, let me interject to say, I mean, first of all,
I think it's actually kind of, you know, just a little side note that I definitely do think
the US dollar is big, but I definitely think one of the biggest customers of the US dollar
chain, so to speak, would be like the US government themselves.
And I think we would all agree that the US government does influence monetary policy,
you know, and fiscal policy, you know, obviously, to state the obvious.
So I just think there's a kind of interesting side note.
Yeah, I just want to double click there. Yeah, because I think it's interesting.
But like, like what, but what's interesting is that the US government is, is all is all doing
all doing dollar native things, right? It's not like Apple stock is able to govern monetary policy.
Or, you know, so there ends up being sort of this, this, like dollar loop dollar ecosystem.
Yeah, you're saying a big project, like a mega project on ETH, it has influence over
the development, like with the full node, the next version of the full node software.
Correct.
Change in ways that but you see, this is exactly what one of the things I was worried about,
that led me to have an interest in sidechains, in the first place and to create BIP300.
Because you have several different in the the sidechain vision is you have like,
you know, like a couple different versions of the L2 blockchain that compete.
And so the L2 devs are the people they they should be worried about pleasing their customers
and their big customers, but they also have to worry about some kind of like
what you might call mission creep
values slide where if they change the project too much, the whole ecosystem will
leave, pick up and go to a different sidechain.
So it's actually good.
want to have the L1 blockchain not really change very much.
and then when they have the
L2s kind of the vulnerable to collapse,
least vulnerable to losing their users to a different L2.
So I think it's actually the best of both worlds.
You have a situation
much by one person, it will kill the whole L2.
the fact that there are different L2s makes it very easy to just lose one.
It's like a food court with many restaurants.
say, well, wait a minute.
People can just walk down this hallway
to the next place.
we have to make sure that, sir, a bunch of people come here and they tell us every time
that they really like the lasagna over and over.
we cannot, they have to worry about staying in business.
So I think we get the
best of both worlds.
then you were going to say, oh, the MEV thing.
We could talk about that.
Yes. This is a similar thing where merge mining firewalls off the MEV effect.
In ETH, it's not the same as it is in
Proof-of-Work Bitcoin merge mining. With ETH, there's like this strong incestuous relationship. But with merge mining, all the stuff happened, all the MEV, the whatever, what you call the searchers, or all that stuff, that happens over there. And then they just, whoever has constructed the block, just pays on, they pay on L1. And the block is just whatever they say. And the layer one Bitcoin miner has no idea what's going on.
It has no idea what MBV is, it has no idea what ETH is. It just knows, oh, I'm getting a lot of money now.
So can you, I mean, and I'm not as technical as I'd like to be, but can you walk me through a little bit how that would function in the context of just getting more valuable transactions pushed to the mempool?
There's a separate mempool on L2. So if we had, let's say we have ETH, the sidechain. It's funny because I just made pictures for this, but I wanted to see if they were any good before tweeting them. So I made some nice pictures, but this is like literally just off by like 10 minutes, which is kind of a shame.
But I'll put up these pictures soon, and so they may help or they may not. But the L2 has its own mempool, and it has its own, in blind merge mining, there's like a miner of the L2 who's a different person than the L1 miner.
And the L2 miner, they get a very raw deal because they get basically almost nothing. They get like a free tiny amount of money, and most of the money just goes to the L2 person.
Excuse me, most of the money goes to the L1 miner. It's like 99.5%. It goes to the L1 miner, and the L1 miner has no idea what's going on. And the L2 miner is the one that does all the work. And this may be easier to explain with the pictures, but what's going on is you have a bunch of people running full nodes of the EVM sidechain.
And they know their own mempool. So as you say, we start with a mempool. So they know their L2 mempool, and they're trying to figure out what the next block is going to be, even for their own self-interest, just so that it's easier propagation of the block.
So your node, let's say you're just a random sidechain user. You use the EVM sidechain. Your node has a mempool, and your node is going to try to figure out what's the next block going to be anyway. People are broadcasting transactions. Some pay a higher fee than others. So you think, well, this is probably what the next block is going to be.
What you do in blind merge mining is you say, this is the block I want. It has a certain hash, has a certain hashmerkle root. I want this to be the block. You pay yourself the fees on L2.
It's very important that we use U.S. dollars, believe it or not. We can use anything, hamburgers, U.S. dollars. But the point is the L2 and L1 may actually have different value because the peg may not hold at this exact time.
The next withdrawal might have just started or might be about to start. So it could be 99 cents on the dollar, the one-to-one peg, or it could be 99 and a half, or it could be something else.
So this block is worth to you, let's say, $2,000. It's $2,000 worth of Bitcoin on L2. So is this making sense so far? I realize I haven't actually explained what happens yet, but I'm trying to set it all up.
The next block is worth $2,000. You want to pay yourself. You aren't an actual miner yet. We haven't actually created this block, but I'm talking about merge mining. You aspire to make the next block. You hit block 43 and you're going to make block 44. It's going to pay you $2,000 worth of L2 Bitcoin in the L2 Coinbase. This is all in L2. L1, we haven't talked about yet. So is it making sense so far?
Just to clarify, the $2,000, is that the 0.5% or is that the 100% or is that the 99.5%?
Believe it or not, this value is going to end up being the – this will be the 100%.
Okay. So it'll be whatever, $100 for the L2 miner and $1,900 for the –
We have not split it yet, but it will be – you get paid on different chains, which I think is part of why people – even I was confused by this a lot. Sometimes I would be working on the software and I'd be like, what? And I would mix it up myself and then I'd be like, oh yeah, I forgot. I'd be like, why is it paying on L1 and not L08? Because that's the design. And I'd be like, oh yeah. So it's kind of mystifying.
What makes blind merge mining work – I need to explain this. It's very important. The fundamental key idea of blind merge mining is there's going to be someone who has – the same individual, the same person who has coins on both chains.
And that is how I cheat and get the trust to bridge, because everyone who's on L2 is also on L1. Now, not everyone has coins on both. You could be very poor, maybe have no coins on either network. But if you run a full node of L2, you have one on L1.
So every user has some presence on both networks, and it just stands to reason that people won't have 100% of their coins in one network or the other.
So you just need someone out there who is willing to do this, is willing to activate this, run this software part, and they will be the bridge of trust. I don't know if that makes any sense.
But what I'm saying is the key is that it's the same individual. Someone's going to pay themselves in L2 – they will pay themselves in L2 coins worth 2,000 or whatever we said. Did we say 4,000 or 2,000? I don't remember. But say 2,000.
And then on L1, they're going to pay the miners 1,996 with L1 coins, which are different. But it's the same person. So it's not like, oh, do I trust myself? Of course I do. I'm the same person. I trust myself completely.
So maybe this is just mystifying to everyone, but I have some pictures that I'll put up later.
Awesome. Okay, so everyone just give me a couple seconds. I don't know if this will help or not, but maybe it will. Just give me like 45 seconds. Talk amongst yourselves, and I'll screenshot these and send them.
Austin, why don't you say something? It's just sad to hear so much silence. I'll do that while I'm getting these pictures.
Yes, yes, very good. Yeah, I actually had trouble with that concept, I'd say, in the earlier days, trying to sort it out. And I have heard some interesting critiques around kind of locking up capital.
That because you'd have to, worst case scenario, you would have to be a competitive miner on a very vibrant L2, you may have to have a lot of capital locked up for that time period.
I think that the critique would be that only miners themselves are going to end up being the L2 miners as well. I mean, did you have a response to that?
Well, I think you'll see, when you see how it works, you'll see that it's actually, I don't think it's really possible for miners to have an edge, because actually they always have an edge if they don't. It should be always more profitable to use blind merge mining because the full node, the sidechain full node is not going to cost zero.
And you can just get away with not running the full node. But there's a tiny amount of overhead because it takes something like, I don't know, like a few bytes, like 50 bytes on L1. So there is a tiny, but whatever, it doesn't kind of really matter. It will just be, it will be like tiny, tiny amounts.
I mean, it's kind of interesting when people really like to get into this minutiae, but it's like, the Ethereum network is paying $7 million a day in revenue. So it's like, how, you know, what do people, people are talking about like 10, literally like 10 cents worth of overhead or something. It's like, completely de minimis.
I got two of the pictures so far. I think I got four good ones.
I can elaborate on merge mining. So when we talk about merge mining, you're using the same set of proof of work, and you're just getting a portion, in this case, it's going to be a hash that is put on L1. So there is some portion of the thing.
There's fees charged for the L2 on L1, but really, it's a very small portion that will stay because you're just saying there's this new type of way that I want to use L1 block space for a recognition of an L2 block, but it literally is like a tiny little header or hash or something, right?
It's just competing for space like SegWit does compete for space or anything with ordinals, right? Anybody can put a dickbutt if they want on SegWit data. So the L2, there's people willing to pay L2 BTC to be included in an L2 block.
If the miner includes the small portion of that in L1, they also will get the L2 portion. So in essence, that data becomes subsidized where it can be cheap to include it on L1 because you get this subsidy on L2. You get these L2 tokens as the merge miner.
So they'd be like, why would you pick that level one data that's not paying you as much over my transaction? Well, you don't realize I'm getting subsidized on the other side. This is one of the concerns saying I have to now price my transactions knowing L2s environment of subsidy to try and place my L1 transactions.
I now am beholden to L2. I think that's overblown unless L2 is extremely successful. But these are the things that I think, again, speak to. This is not as benign as it may seem when you play the game out and you think about humans in my view.
Of course, if the L2 achieves that level of success, the trade-off is likely well worth it. That potential bit of uncertainty or confusion and on top of it, a massive new...
It's not as though it affects the whole block. It's like one transaction that pays a huge fee. So it's not like anyone on L1 is really getting priced out because there's only 256 possibilities.
The L1 block would be like, here's all the ones that are not part of an L2. They're not like an L2 accounting transaction. Those have a fee rate of like 50 cents per transaction. And then there'd be like one that pays like literally $7 million worth of Bitcoin. But it's like it's in its own category.
Okay, I tried to post these pictures as a reply to the space. And I think it may have worked. But I don't know if anyone can see them. Or if they make any sense to anyone at all. But I think I put them in order.
They're supposed to start with something that you know, which is normal Bitcoin. And then I say, how does blind bridge mining work normally? And then I say, what is Ethereum doing? And then I say, what would be something that has MEV?
And then I say, why is it the case that MEV makes absolutely zero difference? Literally none whatsoever to the blind bridge mining?
Alright, so I'm looking through the pictures. I guess where my question still sits is like, let's just say I pay one Bitcoin in fees on L2. And then there's one transaction that hits L1, where the fee is one Bitcoin.
Who's sending the one Bitcoin on L1 in the transaction?
This is this person, what I call the BMM miner in the picture. We used to call him the briber. We gave him a bad name, because they bribed him to just put this hash in which the hash defines the L2 block.
So what's happening is the whole sidechain block, the whole L2 block is worth like, whatever it is $4,000, or one, you know, say whatever you like, like 0.2 Bitcoin. That's the whole sidechain block is worth that.
On the side, Bitcoin. So then you assemble that block, this person, the BMM miner, this yellow, this diagonally sort of centric to the, you know, the guy in the middle of the five group with the yellow, he's BMM miner.
That guy, he pays himself the 750, $750 in this, in the whatever, which is the second picture to he pays himself $750. Then on L1, he pays 749 as a fee to the miners.
Got it. So, so, so basically, if, if the L2 miner doesn't have enough Bitcoin on L1, after he pays himself L2 Bitcoin, he then needs the liquidity in L1 to be able to pay for the fee.
The, he's, in blind merge mining, you always pay on L1. I think as someone was saying, I think, was it you? Did you just say like, it could be, you could be vertically integrated.
The miners could, L1 Bitcoin miners could just vertically integrate and they could say, we will run the sidechain. We will pay ourselves on L2. And then they don't do any of this, but they get paid on L2.
So actually an advantage of blind merge mining is that the miners don't have to run the sidechain at all. And they get paid on L1. Now they may not get paid the same unit quantity of BTC, but it should be basically the same dollar amount because there's some inconvenience associated with withdrawing, not with deposit.
Sure, sure. What's to stop the L2 miner from keeping more than that percent?
It's a very good question. And the answer is competition. Every single, the way BIP301 is, every single sidechain node could connect to the L1 miner. And this is what BIP301 does. It makes it so that on L1, this is why BIP301 is its own, is its own concept.
On L1, it says miners can only include, sorry, something else happened. I was distracted. Miners can only include one of the, what do we call the bids? So these are like a bidding process.
Someone says, I'll pay 710, I'll pay 712, I'll pay 713, I'll pay 725. So they're broadcasting these all on L1. And then only one of them can actually be included in a block on L1. The rest just expire immediately. They're like fill or kill. So they're out.
So since only one can be included, it's like an auction where you broadcast transactions, but they're really just you at an auction house raising the little thing with the number, the little whatever that's called, the bid flag that you have.
And so you're broadcasting these transactions on L1. Now either you win, you say I'll pay you 710, I'll pay 715, I'll pay 716. Now if they include the one that pays 716, then the one that bids 710 cannot be included in a block, and so you safely keep your money.
You didn't win the L2 block, but you didn't pay on L1 either. So it makes it an atomic, indivisible link between those two things.
So a follow-up question is, what if there's two miners on the L2 who both contribute different hashes or have solved what they perceive as different blocks?
That's if I include them both.
That's not allowed under the, yeah, so this is also the case that the second thing that BIP301 does is it keeps the slot in a defined organization.
So it says this part, it basically says this part of the Coinbase, defined by some little whatever code, like an algorithm basically.
This part of the Coinbase is where the hash of sidechain 4 will go. Sidechain slot 4 or whatever. This is where that hash is. Whatever is there, that is the spot.
And then on L1, people say, put my hash there. I'll pay 710. And then someone says, no, put my hash there. I'll pay 711. I'll pay 712.
They can only put one hash in the slot because it's a defined piece of real estate. It's a 32-byte location, so it can only fit 32 bytes.
And then what the BIP301 thing says, they can only take one bid. And if they include the bid in the L1 block, the body of the block, not the Coinbase, if they include this 301 bid, they have to include the BMM, what we call the BMM accept, which is to say the real estate has to match.
So they say on L1, the person says, I'll pay this money straight to the miners as a transaction fee if this hash is in the special real estate spot.
So then the miners say, you know what, sold. They set the 32 bytes in the Coinbase to what they were told to set them to. They have no idea why or what's going on. They don't care.
And then they collect your transaction on L1.
And then on L2, when the L2 software is programmed so that it's looking also at the special real estate, and when it sees that a hash has been put in the special real estate spot, the L2 node software says, this is a new block that meets what is the equivalent of the difficulty requirement.
So it's like, this is a valid block header. And then it will download the block and check it for validity. It may still be invalid because it may, who knows, that block may not even exist.
It could be filled with errors. But it first jumps what is in L1 Bitcoin, the proof-of-work requirement. So it does that.
And then the L2 block, well, the L2 full node will then download a block header matching the hash and download the Merkle tree or whatever they've done over there, the equivalent thing of the vector of transactions or whatever is in the sidechain, the new block.
And it will check all those for validity. And if that is valid, then it will extend the chain.
And then, of course, your Coinbase, you're winning those coins in the Coinbase.
So this is another reason why it may not be the same unit of coins equally, because on the sidechain you have reorg risk, and you also have the 100 block maturity period, and you have the difficulty withdrawing back to L1.
So the numbers may not line up in terms of their BTC unit, but they really should be the same U.S. dollar amount or something really close.
Do you know what I mean? Because this is just an inconvenience associated with the block maturity with those coins being on L2.
It actually has nothing to do with the blind merge mining like conveyor. So I don't know. I hope that some of that made some sense.
It does. I would say that it could – oh, sorry. Harry, did you want to – I think it does, if I may be real quick.
But I will say that I think it speaks to the gentleman's critique of the lockup of capital of miners accumulating their returns on the L2 and having a big sell pressure, which could increase that discount.
And then also saying I'm not going to activate on the L2 unless I know as a miner activating on L2 I'm going to be able to dump into your L2 community to get my mining rewards out, which again speaks to my cartel critique.
Not that miners are currently acting that way, but it gives them a heck of incentive to say bribe me first to activate to make sure if I need to dump and I'm at a discount, I'm not going to take an LUR.
Give me a security deposit to activate your chain. This is stuff that's that bargaining game theory commentary critique back before that pool mining potentially at least provides a counterargument or counterforce to which I don't find currently in the analysis.
Again, they won't accumulate. If everyone's using blind merge mining, then the L1 miners will not accumulate. They're getting paid on L1, and it's someone who's using L2. They're accumulating L2 coins.
Then the pressure is the L2 guy and the L1 not being the same one as your picture shows would be the same person. If it's not the same person, then those two people again have a negotiation game, right?
In blind merge mining, it relies on them being the same person. So I don't know if you can see, it's kind of ghosted out, but the…
Right, it's the same person. I'm accumulating on the other side, right? Granted, because I'm paying out on my side, and I'm accumulating on the other side, so I'm actually bridging in every time I solve a block. I'm bridging in. And if I want to bridge out, I'm a natural self-force.
You're sort of bridging out, really, because you're the sidechain user, and you are… Oh yeah, I guess I see what you mean.
As a dual miner, I'm accumulating in. And if I want to get out to pay for my expenses to mine, I have to pay for my electricity, I'm a natural self-force. I'm always going to sell on L2 first.
The L2 miner doesn't spend any electricity, remember.
It's the same person as the L1 miner, right?
No, no, no, no, no. That is… That's not correct. When I have on these photos…
It could be separate people.
No, it's the person who is… The key, when I have blind merge mining, and I have these pictures, and I have this dotted line that's the same person, that is an L2, someone who is an L2 quote miner, but they're not doing any hashing.
They're just getting paid in the Coinbase on L2. It's kind of weird where they're like a virtual miner, and they are a regular person on L1. So they don't own any hardware.
But to keep paying the L1, I have to take my rewards that I get on L2 and put it back on L1 to keep paying the L1 people that's doing the mining for me.
So that L2 person is still a natural self-force because they have their expenses paid in L1, and their revenue is on L2.
Yeah, no, that is correct. I mean, of course, the miner has a flip side where the miner is getting more L1 currency.
But yeah, you're absolutely right. The L1 person is protected. Fair, fair.
But you're right. Anyone who does blind merge mining, they will get a tiny little bit of an opportunity for a little bit of a yield or a little bit of like – they'll collect some money.
But they will be, in general, losing – they'll be shedding L1 coins and picking up L2 coins, which they will then have to swap.
They can swap back or they can use the three-month withdrawal. But since anyone can use the three-month withdrawal, there should be always some people willing to swap.
They can swap HTLC or they can go to whatever, Coinbase.
Would a drivechain be able to support an atomic swap down to L2 to avoid the three-month? Is that a way that somebody could be prevented from doing that in some way?
Absolutely. In fact, you can do that today.
You can do that today with Litecoin or some altcoin. You just have an HTLC and you have the same hash algorithm. Sorry.
So you're right. So if you don't want to wait the three months and you find a willing partner on the other side, you could peer-to-peer atomic swap down.
Absolutely.
You really have to wait for the three months if you're a whale. But again, mining pools are whales. They're not going to find a peer on the other side.
So for the end user though, you're not as trapped as the potential B2B miner, which would need to have some vested interest in the continuation of the chain.
Actually, I think I'm pretty sure I first had this idea because I had learned about the atomic swaps.
And that is actually how I think came up with this drivechain idea.
I thought these atomic swaps, because I was like, everything's so close.
I remember the idea. It's like the people who want large blocks, they're willing to run the large block software.
So they're willing to do the extra. It's just that some people aren't.
And I was like, okay, we can have everyone share one megabyte and then seven megabytes only some people run, since people disagree.
And then I thought, well, the coins can move in one direction easily because the one megabyte small block people don't have to pay attention.
And the seven megabyte optional people, they want eight megabytes total.
So they're still users of the original one. They have seven plus one.
So they will know to them, it'll look like a normal transaction.
So I was like, this is really close because we have people willing to run the eight megabyte nodes.
You know, it's not like the large blockers were complete freeloaders or anyone who wants, if someone wants a Zcash, they run a Zcash node.
So this is how I came up with drivechain, really partly because I was like, we're very, very close.
We have merged mining already with Namecoin.
We have people willing to do the extra less decentralized, more expensive node.
They're willing to run for an extra seven megabytes.
And we have a way of getting the deposits.
And then we even had a way of doing, there was this thing, an extension block.
And then I was like, what about the withdrawals?
And I think you honestly have nailed it because what I thought was, my literal exact thought was something like,
well, they can, they can, it can HTLC like atomic swap out at any time.
They just need something somewhere to fix the price at a one to one ratio.
Even if it's like really rare or really difficult to use, or if it's like, it's not perfect.
So that is when I decided, oh, we can just make the withdrawals take a really long time.
So it's because of, it's exactly because of this,
the atomic swaps that I sort of came up with this idea.
So I think the fact that you have picked up on that is very encouraging for me.
I mean, some people out there are finally getting the idea, I think.
I guess I'm still just like, I'm still just struggling with the,
the piece where somebody takes in currency A and is obligated to pay in currency B.
In blind merge mining, you mean?
Yeah, in the blind merge mining component.
The other piece is just that there's also now a huge incentive for the miner to also vertically integrate into the second component.
I don't think so.
And take, well, the reason being that the miner can then, you know, A, you know, they've got,
they've got incentive to take currency A, you know, L2 coin.
They pay, they pay L1 coin and then they just short L2 coin heading into the release of the lockup.
Like there's a, it just, it creates a bunch of these synthetic complexities where you're betting for perverse incentives.
Well, they could short, the miners could try to create chaos on the sidechain and force people to lose hope.
And they could threaten to steal the coins.
And in fact, they can also not only threaten, but they can literally take the coins.
That is the unfortunate consequence of giving this freedom and this loose coupling.
And I, you know, I've explained the economic model, why I think they probably won't in many scenarios.
And I've also explained that this is a long run economic model of Bitcoin.
And of course, each individual user is free to take this risk if they want or not take it.
But the thing is, the miners can threaten to take all the coins and then buy them up cheap and then walk them out.
Or the miners can actually just actually take all the coins, you know, it's the case.
So if since they can do that, I don't really see it.
The reason why they don't annoy, like threaten to take the coins is the same reason why they won't actually take the coins.
Either they will take the coins and it's just not a, you know, it's basically the sidechain is being gutted and killed or they won't.
I don't really see why they would do like 10% of the way, you know.
They're either because users would just say this sidechain is not supported or they would say the drivechain idea doesn't work.
Because look, this is like miners are not being, you know, being very mean to us.
So we're not doing it.
Just like it introduces a huge amount of vulnerability to me.
It's like it's a very similar problem to like it's an abstracted senior age environment where, you know, the miners are basically able to print themselves.
No, no, no.
They can take the coin.
They can take the coins on L1.
They don't print though.
They take the coins on L1 and that they can also do things that are like milder versions of that.
Like they can say we might take the coins and then buy them for 90 cents on the dollar.
Everyone panics and then legitimately withdraw them having taken.
But you see, if they do stuff like that, then it's just kind of the equivalent of just killing the coin.
They're killing the whole idea off.
So, yeah.
And what we found is that wherever the extraction of value can be taken, it is taken.
Yes, but that's only if you extract the value and there's no consequence.
This is we were talking about Tom Schelling before.
He wrote another great book called Choice and Consequence, which is another great one.
Now, I'm not saying that because I've read some magic book by Tom Schelling that this is all going to work.
But what I am saying is as a consequence of supporting the sidechain honestly by mining its blocks and by doing the withdrawals,
which is copying and pasting one hash every three months.
As a consequence of that, they get the fees, which again is no guarantee that that will be enough.
But I'm just saying it's worth trying and it has no risk and people who are against it don't really understand it.
So that is what I'm saying is that it's 7.2 million in fees per day when I did the math like two days ago or something.
You can go on cryptofees.info and see if Ethereum is having a good day or a bad day or whatever.
But that's a lot of money.
The net present value is $33 billion.
So let me ask you, if I could offer you $33 billion, do you want $33 billion?
Are you going to risk that so that you can maybe steal whatever you think it is like 10,000 BTC?
Well, you'd kind of do some math and you'd say how much.
And that's exactly the math that I did, question number five of Tidwell's list of questions.
So that's like you lose the $33 billion if you don't play ball with the drivechain idea.
I don't think it's that clear cut and straightforward.
Well, that's good.
But I think you can look at the, that is reductive, but it's supposed to be like a little model.
So you can just like, if you look at it, you can see what the logic of it is and where the numbers come from.
No, I understand.
I think like the two pieces that are worth highlighting as it relates to that math are, you know, number one,
there's a ton of development and work and users and effort that's gone into generating that fee revenue over the last five to seven years.
Now, do I think that, you know, building on a proof of stake, you know, fundamental consensus mechanism is building on bedrock?
No. Do I think that the risk profile of all of those projects are high and higher than my tolerance?
Yes. But to say that like that just ports over and we're leaving all of that on the table today.
You know, I don't think that that's, I don't think that's accurate.
Well, I agree that, yeah, I think that we've got to go to Portland.
That it's ended up very patiently and it was like I started to ignore Portland.
And then I was like, we've already ignored it for so long that the damage is done.
So we might as well. But I think the it is like I agree that it won't port over overnight.
But what what I'm trying to demonstrate is that is a situation where something was built up over years.
You know, it it was built up from nothing.
So I'm just trying to say, like, listen, it is possible.
See, I kind of think if you ever want to demonstrate something, they'll always be skeptics every step of the way.
Like when I first wrote the idea in 2015, people will say, well, that's just a blog post.
We need more details. And they say, OK, here's I give them more details.
And they say, well, we need an analysis of all the different risks.
And then I do this analysis of all the different risks.
And I say, well, we need working software.
And they say, we need a BIP. And then they say, we need such and such.
Every single step of the way, people will say, well, sure, you have a BIP and you have software and you have a pull request.
And you have lots of relevant experience in the industry and you have a lot of experts signing off on it.
And you have this examples.
And we have something like wrapped BTC in the real world that is demonstrating this idea in a different context.
But you still need some other thing.
And then when you finally do all the things, all those same people, I'm absolutely certain,
all those same people are going to say, this idea was obvious the whole time.
OK, then we'll go to Portland.
Thank you very much.
We talked about blind merge mining and I'm still putting together some pieces.
So please tell me if I'm wrong in any of these points.
But basically, that would imply that validation is being outsourced.
That's like the primary use case of blind merge mining is that the miner wouldn't have to do validation at their site.
They would offload that in the form of a bid for the block from the blind merge miner.
So my next thing was, OK, like I was thinking about myself as a node runner.
Like I got a pretty powerful server at home.
And even if somebody had like a bigger block sidechain, maybe 10 megabyte blocks and they come in very fast.
But I could validate that and I could then bid with my blind merge mine block.
What if suddenly I had miner extracted value outside of the actual value of the coins, for example,
because I'm assuming that my block, if accepted, would be the state of the sidechain.
So would that stop me from bidding even more on L1 fees than L2 to bribe a miner to take my side?
And then does centralization of the sidechain become a function, centralization of validation of the sidechain
become purely a function of the person who is able to validate at the least cost, right?
Or basically who's able to provide the most value for the miner.
And if I continuously say, hey, I'll do it for free, you can collect all the fees on L1 and I'll just take L2
or even I'll give you a bonus on L1 to take my blocks. Does that make sense?
Like centralization becomes a function of basically who's able to race to the bottom the fastest, right?
First of all, it makes perfect sense. This is what I was trying to explain to Alex B for like the last 10,000 years.
And he doesn't understand it at all. He would just overbid.
And that's why I repeated to him over and over again, the sidechain MEV income is no different than having extra fees on L2.
But I don't understand why you think it's some kind of a problematic thing.
But luckily, since you at least understand that concept, you can hopefully explain it to Alex B
because I can't possibly deal with repeating it any longer.
But I did make these pictures. But please explain why you say it's centralizing.
See, it's a problem on L2. It's a problem on L2, but it's a problem that has to do with the design. Okay, yes.
So I'll explain why. And first, I really don't like ad hominem.
Like I respect everybody in this community. If it takes somebody longer to get an idea, it's fine.
If they get it quick, whatever. But basically, my thought on this was I, Portland Hoddle,
want to either for personal reasons, I really don't like a sidechain.
But I have the server. I can validate very easily.
At worst case, I can at least tell the miner, hey, I'll front some of my Bitcoin to you on L1
so I can get these sidechain tokens on L2. And I'll be very disingenuous, guaranteeing me the withdrawal of my coins.
But everybody else just gets shafted, right? And the miners go, oh, that's cool, whatever.
That's the state of truth because this guy bidded the highest.
And if I really had a vendetta against a sidechain,
why couldn't I just incentivize a miner with some coins I got a long time ago from some Silk Road?
Not that I've ever partaken in that or some older coins.
I'm thinking of maybe another participant going, hey, I'll give you an extra Bitcoin per block
for these 13,000 blocks just to nuke the sidechain.
Aha. Well, that's a very good question because the answer is that it's a perfect analog of a 51% attack on L1.
So meeting the difficulty adjustment on Layer 2, since there's no real hashing or proof of work,
it's only if you're included in L1. So basically, it's like the total amount of, I'm trying to,
so like, let's think about it like this. You use thermodynamic energy on L1, L1 thermodynamic energy.
And you say, okay, I have this much thermodynamic energy and have A6, I have the physics world.
I spend, it's going to cost me, whatever, $20 million to rewrite, to do this reorg.
On L1, excuse me, on L2, God, I really hope I don't mix that up because it's going to be extra confusing.
On L2, instead of expending thermodynamic energy, you're just expending L1 Bitcoin.
So I've turned the thermodynamic energy, we've gone up a level, we've moved up a layer.
So now everything that was true before about Layer 1 Bitcoin reorgs is also true on Layer 2 with L1 BTC.
So you're spending the L1 BTC. Now, what you can do, you can do the same things that you can do on,
you can do the same types of things on L2 that you could do on L1 today if you had hashrate.
So you can do, as you say, you can mine 13,000 blocks in a row and you can then block other people from withdrawing.
You can really control the chain, but the value of, okay, yes, yes.
No, please, I was just, I was putting it up for my final comment.
Then I do got to jump off, but yeah, I'm really interested in kind of one final question,
I think it's a part of this Layer thing, like you can do mischief on L2, just like on L1, but it costs you money.
Just like on L1, you can do mischief, but it costs you, you actually have to run the electricity through the hashrows
and you have to pay the opportunity cost of not getting the fees and not getting the block subsidy and L1.
So I hope that's making some sense that it's, you can do all the things.
Basically, it's going to be expensive and at worst, I'm sorry.
Well, let me just say, you have to buy this, it's better if you buy this security budget frame,
because the frame is the L2 block is only worth what its fees pay.
And so just as on L1, I could outbid everyone and I could put an ordinal, I could inscribe a picture of me.
I could outbid everyone, but it would cost me, it costs me basically, what is the total fees on L1?
So let's say the most recent Bitcoin block paid $5,000 in fees, I just made that up, it's a completely fake number.
But if it did, if I pay $5,001, I can outbid everyone and inscribe a JPEG of my face.
And I can, you know, I can basically, I'm taking over L1 and I can do this over and over again if I wish.
Similarly on L2, if you bid, if you outbid whatever that is amount, whatever the L2 is paying in fees,
you control that block.
So I'm saying I just take that as reality and I don't try to fight that because I think that it is reality.
So I think that ultimately the value of the L2 block is the fees, that is the security, that is the inducement,
that is the opportunity cost of just not mining that block.
So it's all based around that.
If there's no fees, it won't work.
If there are fees, it probably will work.
So I hope that is clarifying what you were saying.
Like that someone could, someone with L1 coins could just be like,
okay, that's kind of like you just recreationally mining, you know, you just decided for fun,
you're going to mine Bitcoin SV or do a 51% attack or something.
I mean, people have done it.
So with that said, my final kind of question on this, and I get what you're saying as well.
But on layer one, there's an element of decentralization in terms of miners.
So it's not like one miner just gets to choose the block each and every time.
On the L2, the centralization or decentralization is in the form of basically in terms of blind merge mining.
Like you could obviously have a mix where some miners actually validate in-house
and then some will do blind merge, correct, for sidechain?
The side, well, in drivechain is sort of defined as something that is using BIPs 300 and 301.
It's possible to actually split, you can split them into four groups of like yes, no for each.
You could actually blind merge mine in altcoin.
And you could also have, you can like mix and match.
I don't know why you would, but you could.
Okay, yeah.
So, but I don't know this, this central, I think the metric for decentralization,
it must be the cost of running the full node.
And everyone who has tried to define it as some other thing,
I think has run aground and caused like enormous confusion and disaster.
I actually think we want, we want the cost of running the full node to be low.
That is decentralization, because that's the peer-to-peerness of it.
You say everyone's an equal peer, everyone runs a node, all the nodes are equal.
If we have 100,000 nodes and then the government cracks down
and there's only 73 nodes remain and we all go into hiding
and then we start turning on our computers again.
Just one or two or three of the remaining nodes can regenerate the entire network.
Just like a cell that's replicating.
And then once they do, once we're back up to like maybe 80,000 in this scenario,
they'll all be exactly the same.
So that is what it is.
It's the cost of the cell dividing.
It's the cost of the full node.
Now there's a separate thing in mining, which I think is the security budget,
which is how much total fees paid, how much money are we paying the miners.
Do the, are the miners like getting paid a ton of money
and doing a lot of proof of work so that we cannot get reorg'd or Sybil attacked.
So I think that number we want to be very high.
And that's my conception of it, but I think other people use the word decentralization
and all this other stuff.
I think it doesn't work.
And I think it's, I think it's very bad for the conversation, but yes.
My final question before I got to jump off,
and thank you for answering all these, by the way, I really appreciate it.
At the end of the day, if a chain is blind merged mining
or blind merged mine by the majority of basically actual hash rate
that's available on this planet to mine SHA-256,
will basically with a almost guarantee, like by game theory, I guess I would say,
they're going to pick the bid that where they're going to receive
the most L1 Bitcoin for that block template, right?
Or that template?
Yes.
Well, they don't, remember they don't.
Are we talking about L1 or L2?
I'm talking the L2 sidechain proposing a template to L1 to mine.
It doesn't really propose the template really.
It just says, because this L2, one person will, they have their own block template,
but they make the whole block as a finished product.
Yeah.
And it's just the hash of the...
Okay.
But otherwise...
It proposes hash, and then, so the miners will pick the highest bid.
But according to that, basically, if an individual participant was willing to take a zero cost,
like basically, I'll give you full L1 for these L2 tokens,
I'll withdraw them later for some reason or whatnot.
They would take that person's basically block every single time
or their hash every single time, right?
Until another participant came in and offered a higher bounty,
or they stopped offering that much, and then the market became more competitive.
Well, it doesn't matter if it's the same person, right?
Because what they're doing in that scenario is,
if we're ignoring a situation where people are being altruistic or destroying their own money,
what they're doing is they're assembling every single transaction they can find on L2
that's valid and that would fit in the block.
They're doing all the work that we need them to do,
which fortunately, the sidechain nodes, they already have a mempool.
They're already doing all the work.
They already propagate transactions.
They already propagate blocks.
We're asking the L2 network, it already does this.
You just say, everyone just act as though you were a miner.
Act as though you were a miner and as though the difficulty were just like,
it's minimum value and anyone could find a block in like one second.
Just act as though you were.
And that person is doing everything right.
They are collecting all the Layer 2 transactions that they can find in the block.
There's no transaction censorship, so they are fully in great health
and they are working diligently.
And then they pay on L1, they pay the full amount.
So they pass through the entirety of the fees.
They don't lose any money.
We assume that whatever they lose on L1 has exactly the same economic value
as what they gain on L2.
The miners make the most amount of money.
It is exactly as if the miners themselves included all those transactions on L2,
but they didn't have to do anything.
They did nothing at all except include in L1.
Yeah, they outsource the work.
So before I go, I'm going to zoom out like 5,000 feet for my brain.
And basically in summary, the solution to the Oracle problem
that exists between main chain and sidechain or that bridge,
which is the hash, the state of the sidechain that represents truth
is now basically solved by a bidding process.
Or the highest bidder is the source of truth for the sidechain
in that round or over time.
Is that a good way of thinking about it?
You bid in electricity in proof of work on L1 and then on L2 you just bid with actual Bitcoin.
I want to fight for that metaphor.
I want to say both that...
Stuart, I think you have some feedback.
Maybe you can mute.
I just wanted to mention that the proof of work, the hashing is inherited.
You just can't mess around with that.
It's inherited.
Do you see what I mean?
Well, the proof of work then covers all the L2 chains, if that's what you mean.
But what I'm saying, I'm fighting for this metaphor because I want to explain
that it has all of the pros and all of the cons.
It's like a perfect, almost perfect metaphor.
So it's like rather than explain the details,
I would rather just explain this is the same as you bid with A6,
hydroelectric power, immersion cooling or whatever.
And then on L2 it's the same thing.
You just have to be willing to pay.
So all the differences are as a result of that.
It's actually not true.
I'm sure that Will Settle will come up here and say a bunch of clever things.
I guess.
I guess I'm a little bit.
But you have some advantages actually and one disadvantage,
which is that it's easy.
Everyone's got coins, but most people don't just buy an ASIC like on a LARC.
But it actually has some advantages as well.
There's this Professor Warner who wrote this interesting post.
I think he mostly covered the advantages.
He thinks they're disadvantages, but he covered the advantages.
Anyway, his post is interesting.
People should find it and read it if you wish.
As a final note before I go, I guess you could do the same thing in real life.
I just feel it would be a little bit more difficult.
But you could go to mining pools and bribe them to build blocks the way you would like.
And I think we've actually seen this to a degree with ordinals and inscriptions.
Because people will pay extra money to the miner to say,
hey, please ignore these other transactions.
I want my taproot wizard in this block.
I'm not saying that's a good thing that that exists.
And I do believe deep down that L1 is harder to pull this off at scale
than a layer 2 sidechain.
It would be easier to centralize with one player on an L2 sidechain.
Because right now you really only see one participant really participating
in these kind of added value type of transactions that are out of band.
And that's Luxor, right?
They'll take your money to put your JPEGs in there for that side hustle.
But yeah, it makes sense, but I still don't think it applies one-to-one.
That is my final statement.
So thank you, Paul. I appreciate it.
Great space.
I just have one response to what Portland just said.
The first is that the difference is that a drivechain needs block space
in every block, or almost every block, in order for it to function properly.
Whereas an ordinal or inscription just needs a one-time amount of block space
for each time that that image hash needs to move.
So there's exceedingly different dynamics.
Can you repeat what you said?
Because my phone glitched out.
I'm getting better at telling when it's about to crash,
but this has been happening a lot.
I was about to say, hey, wait, this is about to freeze and crash,
but then I think I got cut off.
Could you repeat what you said?
Yeah, the difference between what Portland said about ordinals
and the competition for block space there
is that the difference between that
and what I understand drivechains to function as
is that drivechains require block space
on an ongoing basis in order to function,
whereas an ordinal is a one-time usage of it.
And so there's pretty different fee pressure and fee dynamics there,
where bidding for an out-of-band transaction for an inscription
is a one-time usage of block space,
whereas a drivechain is going to just be a persistent demand for block space.
Well, I would actually flip that premise around a little bit.
I would say that Portland was right when he said
that it's difficult to sustain.
I think it's kind of like it was a cool novelty
when they spent $4,000 to make that whatever,
Tapper Wizards-like picture or whatever,
but notice that they didn't decide to just keep doing it
block after block after block forever
because that would have gotten expensive.
And they would think, you know,
they put on their little economist hat and they say,
you know what, we've got a lot of little notoriety
for doing this stunt,
but how much are we going to get
by doing this over and over again?
Not very much.
Diminishing returns.
Not worth $4,000.
I would rather buy.
There's lots of things I'd rather buy with $4,000.
So I kind of flip it around.
But actually, it's because the L1 block space
is expensive enough that it deters too much
of a repeated frivolous use,
if that makes any sense.
So I don't think in principle they're different
because it's just each individual transaction
is like a one-time thing, I think.
I mean, don't you?
Like each TFID or each whatever you want to call it,
like each transaction.
If I may add to Orville's thing there,
you're talking about SegWit data, which is fungible.
SegWit data is not,
any part of the SegWit data that wants to contain a dickbutt
is just as good as any other area
of the SegWit data that wants to have a dickbutt.
This is different with the drivechain,
again, to your point of a reserved real estate position.
We are taking and devoting
a very specific portion
of every single block
to the drivechain mechanic.
It is a perpetual acceptance
of fiefdom for that area
and a very specific area
to be devoted to that drivechain,
which is why it requires activation
so it doesn't get out of hand.
But it is a claim
on permanent block spaces,
and I think the gentleman does have a strong point.
Well, no, I don't think,
first of all, I'm not sure that was what he was saying,
but what I mean is that
for blind merge mining,
there is a way, it's really a way
of finding the 32 bytes.
You don't have to,
that every L1 block must mine
every drivechain
or even any drivechains.
They don't have to do that at all.
They can just not include,
because think about it like this,
what if the drivechain just doesn't find,
there's no reason to find a new block.
There's no transactions at 10 minutes,
so they just don't make.
So it's basically an option
to use some of the Coinbase
space in a certain way,
and that's no different than
There was something else I wanted to say
about what Portland said before he left,
which is about this idea that
the Ordinals reveals that security, the way I would tell this story is I would say that Ordinals reveals that the security budget framing was the right frame the whole time.
And what I mean by that is the Bitcoin community is fighting this frame and in various ways has fought it in the past, such as, you know, I love Luke Dashjr.,
but he's always been against people using OpReturn, even though he himself has put prayers on the blockchain, I'm pretty sure.
But I think, but he has always been against these people storing random graffiti and stuff in the chain.
And people have always tried to discourage this. They limited OpReturn to a certain size.
Now Peter Todd wants to discourage a bare multisig. Luke Dashjr. didn't like BIP-47, even though it really only wasted like maybe, it made the first transaction between two people like 20% larger.
And then afterwards, neither of them had to share addresses with each other. They could just go back and forth.
So they have fought this the whole time with the OpReturn limit is the biggest fight where it's a standardness limit, but actually it's not a block validity limit.
So they have tried to fight this this whole time. And I think as a result, the Ordinals thing is really just the mistake finally being completely like, I don't know.
I don't want to say corrected, but I want to say like, this resistance to this idea is futile.
And it's especially futile when you consider that Mikeinspace, who is in the audience, has decided to go completely rogue and literally do something that probably Alan Turing would like, which is build out of actual Bitcoin transactions, something that converts to like an image.
Because Alan Turing had this universality of computation idea, which is a fascinating idea that I'd be happy to digress on, but it's not really that.
But the point of this idea is that you don't know if something is a JPEG.
Like you take a file and in Windows, you can change it to .JPEG.
You can have the computer try to interpret it as a JPEG.
And you could interpret it as a PNG or something.
So everything is interpretable as everything else.
And so this is the ultimate equilibrium outcome of storing data on chain.
You just store it on chain in the form of UTXOs or in the form of transactions.
And so that's why I think it's just foolish to fight this the whole time and inevitable that it wouldn't work.
And this is just kind of the moment when finally it's going to work.
Paul, can I see that David Bailey's here?
So I know that he had posted something that was somewhat controversial earlier today about miners activating a miner activated soft fork or something like that.
I kind of replied to Frank and David, but I didn't finish it in time.
I was like literally like 90 percent done.
Well, maybe maybe, Paul, you can kind of play out how it might look if there was some sort of a miner activated soft fork.
How how what if you could steal, man, like what the opposition could do as far as a user resisting software?
I don't know why we're having this conversation because I have officially killed the 300 and it's over.
So I don't even know. Shut the space.
What was it like? It was like incivility or something.
Did he say I don't even remember the word, but it was like it was because of your because of your actions, David.
It was we were on track and then it was your tweet.
And now that it's over.
So I wrote this big response to Frank and I love it.
So I'll just give it here verbally to people.
And I was going to tweet this, but I didn't I just didn't quite finish it.
And it became 1 p.m. and I was like, darned.
And I didn't, you know, you know, not enough hours in the day, but I'm going to finish it and I'll send it to him.
But, you know, Francis seems to think that if Francis favors this bit eight LLT true form of activation.
But I think that I mean, I think Francis is great.
I think I think Francis is completely crazy.
But I think in a good way, which is, you know, it's kind of crazy that Bitcoin does certainly need some of.
And he's he runs a great service.
If you know anyone who's Canadian bull Bitcoin.
So I, Francis, I think he has this preferred way of activation.
But I think that a couple of misunderstandings or paradoxes have emerged.
So I was going to send this to him and then he can reply.
But since we're all talking in the space, I'll just kind of.
Talk about it, which is he likes this bit eight thing.
And my guess is stupid phone is I think the phone will Apple crash again soon, but I'm going to keep talking.
So it's not going to.
So it's like he likes his bit eight.
He says you should make bit eight.
You should make like a website.
You should proselytize.
And he doesn't want the miners to be in charge.
But the thing the curious thing is bit eight allows the miners to activate the soft fork kind of early.
Or at least like it's like where are the money?
It's like a it's like a there's like an important date.
And then there's this debate over lock in true versus false.
And if it's locking on false, then nothing happens.
If you don't meet the hash rate threshold, you try again.
And if it's true, then you basically force them.
You try to force the miners to upgrade and add the feature.
So this is Francis's preferred method.
And the weird thing is, I think that I'm more or less doing that, actually.
That's one point.
There's three points.
I think I'm actually more or less in line with this method.
It's just kind of not.
It's just kind of like happening in a weird way that involves social media and narratives going out of control.
But then the second thing I'd like to mention is.
This is since this particular soft fork just happens to be very miner centric.
You know, it just works better if the 300 works better if miners really understand it and like celebrate it.
You know, since the security model, it relies entirely on like calculations of miner profitability.
You know, fees collected by miners and stuff.
So it happens to be a very miner centric BIP.
Whereas something like the BIP that we did that bans duplicate transaction IDs, it does not affect.
You know, no one needs to like know anything about that or like the wrong S value.
So in that situation, it's pretty normal, I would say, to talk to miners about this BIP.
And the other thing that I think we have to push back on, which we touched on this earlier in this conversation,
which is the idea that miners are like the enemy and everyone miners need to be like.
Miners are like a dangerous and wild animal.
And I think that's kind of mean, you know, miners are Bitcoiners, too.
Right. So can't we just talk to the miners?
Like, why does it have to be a big deal?
So that's my second point is BIP300 is miner centric.
And also, why are we being so mean?
You know, like miners are fine.
It's fun to kind of almost troll people with that because people are so sensitive to it.
You know, they're like the evil miner.
So it's SegWit2x all over again, even though that was a hard fork.
So my third thing, though, I realize this is very rambly, but I'll get through it.
This third thing is that I think Francis's method is actually has a kind of paradox
because he says BIP-8, lock in, true.
But it's like, I mean, does he think that we're going to you're going to be able to have miners run the like?
What exactly does he like?
Because he says make a client first and do BIP-8, but BIP-8 has miner signaling.
So what's the difference between that and start to work on the client like via Luke's pull request
and then ask miners their opinion and then have miners like publish their opinion?
That just like is BIP-8, just like not in the software version.
So it's kind of like not really any different.
And so that's why I wonder about because Francis basically says campaign with your client and get people to install it.
But what if those people are miners?
And what if they then tell the world, you know, the miners are all wearing the UASF hat?
You know what I mean?
If you have a photo of a bunch of miners, mining pools, huge.
You get everyone at mining disrupts to wear the UASF hat.
Does it become a miner activated soft fork at that point?
And then if so, does Francis switch from saying this is the process?
Does he switch to saying, oh, this is an attack on Bitcoin?
Like that's what he wanted.
So I was going to send him this note and hopefully he can unravel his paradox.
But that's my rambly speech about it.
I was confused about it as well because I thought like with BIP-8, if you don't hit your activation threshold from the hash power,
like you have the flag date and it moves ahead, right?
Like doesn't that make it easier to actually get a soft fork?
Yeah, BIP-8 has the like the miner threshold idea contained within it, or at least the last time I checked.
So I don't know if BIP-8, like it's hard to say which of these have ever been tried.
But anyone can look this up.
BIP-8, and I think you'll find that it's like you have a hash rate.
Hash rate can activate the feature.
And then the debate, there was this debate last time with Taproot about what should be done if the miners, if we do not get enough signaling.
And Luke, of course, was militantly L-O-T true, saying something like, Luke's version, as well as I understand it, is something along the lines of,
the community has decided, because with Luke, everything is always very black and white, which is a very funny thing about talking to him.
For example, he just says, we haven't had a real pope since whatever the year, 1960 something.
And he just says that with the exact same confidence that he'll say some Bitcoin thing, which is always quite funny.
But Luke is a genius. He's really a genius, and he knows a lot about Bitcoin.
And so his view is that we, the community, have decided to upgrade to this.
And then it says, miners, you have this long to get on board.
And if you don't, we don't care. We are activating it anyway, because it is now the next, it is the protocol.
And I had a kind of a little bit of a different view.
My view is more like I'm more into like error correction and like feedback loop type of a thing.
So I was kind of thinking more back at the time.
I was thinking it should be LOT false, which is to say if we try to upgrade, but if the miners, who are the main people we can actually measure,
if the miners have not upgraded in the time period, it kind of means like something is going wrong.
And so it's kind of like, OK, we won't activate. We will try to figure out what's going wrong and then fix it.
And then the counter argument to my point is people say the problem with my, what was my preferred thing, LOT false.
The problem with my view and the advantage of Luke's view is that the miners can kind of like either be lazy or they can use it as some kind of leverage.
They can say, well, we, the miners like will not, you know, it kind of like leaves the door open for them to just not upgrade.
Whereas if the LOT true says we will force them to upgrade, so they might as well get it in gear and do it.
So blah, blah, blah. I don't know if, but that was, that was the, that was like the sort of debate last time.
And then speedy trial, if I'm remembering it correctly, I don't know.
It was honestly kind of confusing, but I think speedy trial just came out of nowhere on the list.
And then someone made the taproot.watch and then it just kind of happened.
I should have researched that as to whether or not, but I think it's like, I don't understand why Francis thinks his view is so different.
This is something that people really split hairs over. They really think, yeah.
Another question is like, you know, it seems like there's parts of the community that are just like very pro user activated soft fork.
Like, could we not take that same approach for BIP300 to a user activated soft fork and also go pitch the miners on being a part of it?
Well, right. That's what I was trying to say is that what difference does it make?
Because the miners are also users.
So it's kind of like, and it's also like, it's not like you would have the miners activate and then prevent non-miners from running the software.
Like no one would really want, literally no one would want that, I think.
So I don't, so I think that's why I'm, that's the paradox is like what Francis would prefer.
I think his optimal thing is just, it's really like very, very, very, very, very close to what has happened so far.
So I think it's just like a weird, I think this is a weird thing.
This is just like a weird tribal, this triggers people somehow.
But yeah, I don't know, but I wanted to send him this message and hopefully he'll, maybe, I mean, of course, if anyone can get him to join the space.
I'll see if he'll join.
Tell him, well, yeah, I was going to message, yeah, he should join the space.
Yeah, it's just that I redrafted this giant thing and now it's going to be useless.
I can read it to him now.
Anyway, so yeah, people really get touchy.
It's a very touchy subject, this activation.
And this is ever since SegWit activation.
And this is all because of baggage that goes back many years.
And Paul, what was the most controversial software prior to SegWit?
That's the thing.
The idea of this controversy didn't really exist.
But you could say people, there were a lot of regrets with pay to script hash.
There have been many times where there were regrets.
But there wasn't controversy.
There wasn't controversy in the sense of, I don't think there was anything like what there was with SegWit.
SegWit was literally like, because I think stuff had become so high stakes also.
The previous soft forks were not, many of the soft, what we would call a soft fork was just some kind of boring bug fix thing.
Like this thing that bans duplicate TXIDs.
There's no controversy over that.
And like CheckLockTimeVerify taking OpNop2 or whatever, no one cares.
It wasn't like a thing.
That would be a really funny experiment if we could have a parallel universe.
And we could say there was no CheckLockTimeVerify somehow until 2023.
And then just have someone just come up with it.
And to see how badly would it be bike-shedded.
I don't know.
That's a good question.
Paul, I'd like to understand more the security budget.
As well as, you know, you mentioned it was different like security budget framing.
How to see it in a different light.
Could you expand on that please?
Yes.
The security budget, for some reason, this has taken on some kind of controversial element.
And I have absolutely no idea why.
I think it's because of this delusion people have that in the future people will willingly pay $50 per transaction as a fee.
For the privilege of using the great and sacred Bitcoin.
And I think that – but I don't know.
I don't even understand how that connects.
I can smell the correlation, but I don't even know why.
But anyway, it shouldn't be controversial at all.
It's a very simple idea.
It's just saying the total amount of money we pay to miners, that's miners' revenue.
And they can't spend any more than that.
You know what I mean?
Because they run a business.
So they have to pay for all their costs and including the cost of their own time, the opportunity cost, et cetera.
So we have all the miners' costs.
Now some miners spend less on hashing than others, and they're all equally efficient.
And some are – eventually the difficulty will rise and put some out of business.
So this total amount of money that we pay to miners, which is the total L1 fees.
So let's say the L1 fees are $5,000 per block.
It's just a made-up number.
We pay the miners $5,000 per block.
This is what it costs to – this number happens to be equal to several different things at once that all seem kind of unrelated but are not.
They're all the same number.
So first of all, if you want to censor all those transactions, the opportunity cost you pay is $5,000.
And if you want to instead inscribe a JPEG of yourself, you pay the opportunity cost of $5,000 to do that.
And so this total fees is equal to the value of the block, which is also equal to what it would cost to destroy the block basically,
which is also equal to what it would cost to like denial-of-service attack mute the block.
So this is $5,000 per block.
That's what it costs to make the block.
That is the miners' revenue for the block.
That is also basically the miners' costs.
$5,000 per block should be about their costs if you include all the economic opportunity costs, cost of capital, cost of profit, whatever, etc.
So eventually, the total amount of money paid to miners should be the total amount of money that miners spend on hashing.
So it should be equal to the cost of the proof of work basically.
And this should also be equal to the cost of renting 100% of the hash rate because it's just the miners' costs.
So that's how much it should cost to rent it out in some kind of abstract economic way.
And additionally, this would be the cost of not only renting 100% of the hash rate,
but it should also be the net present value of that cost should be how much it would cost to build the entire parallel hashing.
If you wanted to copy and paste and double the size of the Bitcoin mining universe, it should cost you the net present value of that.
Security budget number. So this is the cost of doing a 51% attack. This is the cost of the block.
This is the cost of, you know, this is the proof of work number. So one thing that's important to
keep in mind is that this is a per time number. It's $5,000 per block, $5,000 per 10 minutes.
So you could take net present value if you wished, but it's $5,000 per time.
And as a result, it's sort of like this is how much it would cost if you wanted to hold down a
button that disables the Bitcoin network. Because you could just mine empty blocks or you could
mine blocks that are filled with transactions that are from you to yourself, which sort of
don't look empty, but they de facto are empty. And so this is the cost of attacking the Bitcoin
network from the proof of work direction. This is how much does it cost. If it only costs $0.10
a year to make all these blocks, then we basically don't have any proof of work. Because anyone can
just rewrite. Rewriting six blocks is something that anyone's CPU could do because it only costs
$0.10 a year. But on the other hand, the higher this number gets, the more expensive it is to
interfere with what the miners do, which is order transactions and order blocks and order
trajectories of blocks. So it's kind of just an interesting idea that all these things are like
the same number in a sense of being a zoomed out economic theory point of view. So some people say
the security budget isn't real, but I don't know what they mean. Because if all it's doing is
adding up the total amount of money paid to miners, and that undoubtedly is real. So that's
the idea. And I wrote this huge post about it. You can find it, I think, at securitybudget2
when I discuss merge mining. And it's securitybudget2, low fees, merge mining.
Great. Yes, I know about the blog post, but do you think you could also try to
try harder to try to understand what Luke Dashjr's concerns are? And maybe there's somebody
else in this in this space that understands what Luke Dashjr's understanding is of this
security budget issue? I don't know if Luke has ever commented on this security budget issue. It's
not him that... it's these other people. Well, then who was it? It sounds like you
who was it? Sometimes, like the people who are like, like the like the safe team kind of group,
they, they just think it's kind of like, maybe Joe knows, I think some they say something like
it implies that there's a certain amount of fees that is needed for security. And whereas they say
they don't really buy this 10 cents a year thing, they just think, well, it's probably gonna work
no matter what the number is, or they just think something happened. Anyway, maybe Joe will tell us.
Hey, yeah, I just related to that topic. I just wanted the smart people in this room to just
think about one thing. So when miners 51% attack Bitcoin, they still get the subsidy. So the
subsidy isn't clearly related to certain aspects of Bitcoin security. And I just think this makes
the argument for more transaction fees even better. So I just wanted to say that. So kind of
Paul's sort of steelmanning that, that concern a little bit, but transaction fees are even
better than subsidy. So yeah, that's all. The subsidies, of course, this, remember,
used to be 50 Bitcoin per block, and then 25, and then halves every four years, and now it's six-ish
Bitcoin per block. And if you just mine empty blocks, or you mine transactions that pay from
yourself to yourself, and they pay a fee to from yourself to yourself, you're still getting
six BTC, you know, change, you're still getting that subsidy. So you don't actually lose anything
by being an attacker. But the fees are what you do lose.
Paul, I'm interested in, you know, your thoughts on activation of BIPs more broadly through this
process. Like, after our space yesterday, we did like another space right afterwards. I was on
spaces like all day yesterday. And, you know, part of the conversation went and I kind of became
clear. And I don't think this is a BIP300 specific issue that like there is a bit of a
I don't want to call it cognitive dissonance, but there's a bit of a breakdown happening
in terms of the historical, you know, Bitcoin doesn't have any leaders, but it definitely has
people that are respected and help navigate or create like a Schelling point around certain ideas
to be put forward. And over time, those kind of structures have eroded to now we're starting to
find ourselves in this place where like no one really is quite sure about how something moves
forward. And I don't want to call it a crisis of confidence because I feel like that's a reach. But
you know, I think that there's like a bigger issue here of like, how does stuff get activated,
period? Like, who's calling the shots? And if no one's calling the shots, how do things happen?
And, you know, I feel like we've like demonized the miner activated soft fork, but it does seem
like that is the most straightforward way to have something be activated. And, you know, I'm just
interested in hearing your thoughts on it in general, like, you know, should it be an easier
process or should there be like a, I don't want to say an easier process, like the process of getting
BIP300 activated, like, what do you think it's going to do in terms of creating a, I don't know
what the right way to frame this is, a treaded path for other BIPs to follow down later?
I think that it's, so for starters, the miner activated soft fork, it's really like basically
the case that every soft fork that has activated has been a miner activated soft fork. Tapper was
Tapper was speedy trial and the miners upgraded it. No one, no one would ever, we would never
know if it was LOT true or LOT false because the miners upgraded. So it didn't even, it was a
moot point. And then with the SegWit UASF, certainly the UASF happened and kind of held
the gun to the miner's heads, but they actually activated SegWit before they, before it would have
before the UASF part would have kicked in. And they did anyway, as part of their signed
agreement that they'd signed in May, the 83% of the hash signed the SegWit, the infamous SegWit 2x
agreement. But the agreement was to activate SegWit and then later try to do this block size,
which of course that was a really doomed idea. And there was lots to say about that traumatic
event in Bitcoin's history. But yeah, every like soft fork has been like activated, like
there, you know, well, that's not exactly the case. The one with the same transaction ID,
which is BIP30, I think, but that was March, 2012. So, and then the one that I mentioned
before, the pay to script hash, that was, what was that BIP16, the multi-sig-ish one.
Uh, that one had a funny, there's so much regret with that one where
something, some, like there was a 55 hash rate threshold, but not enough miners activated. And
so it was like delayed. They pushed it back a month. So that was also in 2012. So like,
does it matter what happened in 2012? I don't know, but everything was miner activated. And
then secure to your point, like, or it's like a paradox. Miners are users. So if we want users
to be wearing hats and signaling that they are activating, they go on their website and they
say, we support SegWit. And they put USF in their Twitter. How is that any different than a miner,
you know, upgrading and putting that in the blocks? Like at least we can prove that they
are what they say they are. And it seems to be a strict improvement. So I get it.
I see Francis in the audience. Can we have him come up to talk about BitBait?
And I wrote you a big thing, but I just barely didn't finish it in time.
Before like Francis speaks, my question to that is like, uh, uh, like, is it necessarily
bad that that is how activations happen? And like, what is, what is the right way? If users wanted to
reject BIP300, what is the most effective and appropriate way for them to do that? So that
there's tension on both sides of the, of the activation process?
Well, I think what's the best way to, I think, so like, personally, I don't think of it as like a
subjective thing. I just think of it as like soft fork should meet certain criteria and they should
be, it doesn't interfere with any other Bitcoin operation, like on the technical level, like if
people are trying to send money to each other or people are trying to use multi-sig or people are
trying to use whatever, then they should not like the BIP should be written so that it doesn't
interfere with it. And it also doesn't interfere with other more nebulous things like how much,
how difficult it is to do upkeep on the code and how difficult it is to review the code. Those
things persist through time. But I see it as like, you know, the soft fork should, should not harm
anything. And I think that's really the only criterion. And once that criterion is met, I don't
see the difference between a soft fork and any other pull requests really, other than, uh, well,
I mean, there's some differences, but I don't see any fundamental difference.
Soft fork should not break public contracts.
Sorry, I couldn't really hear you there.
Soft fork should not break public contracts.
Yeah, well, it shouldn't break any, any existing use case of Bitcoin. I mean, plenty of stuff is
merging to Bitcoin all the time that any of it could break Bitcoin. You know, of course it doesn't,
but it's like there was a speed up. I don't know, you know, this could happen to anyone, but there
was a speed, a tiny bug where that allowed inflation that was just to like speed up some
operation by a few milliseconds or something. So, but that's part of the, part of what makes the
soft fork great is that people don't have to upgrade. You can stay on the old, if you really
want to, if you don't want the feature, you actually can just not upgrade.
SegWit was kind of an unusual case and also script versioning. It's very nuanced, so it's
unfortunate that I think, I actually think that probably we should just retire the entire, the
whole hard and soft fork language. I think it's probably doing more harms than good or whatever,
because I think the, it's kind of like, it encourages people to,
people don't think about it as like the right way, which is like, is this
objectively a good idea? Maybe this is evading the answer or something, I don't know.
No, I agree with you completely there, Paul. It's so easy to misunderstand it and can become
controversial very quickly. Yeah, let's just do away with the terminology.
Anyway, I'm going to bed. It's like three o'clock in the morning. Thanks very much. Good night.
Anyway, Francis, I was going to write you this big thing and it was only 12.55
and then I didn't finish it. But what I'm trying to say is that a couple of different things,
which is, okay, so as I understand it, the way you prefer things to be activated is
make BIP-8 LLT true client that is not officially affiliated with Bitcoin Core,
like per se, and then like make a website and then proselytize and get people to wear hats and
then hope that it activates on the day. And is that more or less the shape of it?
Hey, Paul, I just joined. Are you asking this question to me?
Yes. Yes, I think that's the best way to activate the soft fork. I was listening to like the last
five minutes. First things is you are correct in saying that the miners ultimately activate
the soft fork. They're the ones who technically deliver the block production to the users.
And with SegWit, as you pointed out, the users can't activate the soft fork without the miners
agreeing to it. That's why BIP-8 exists. That's why BIP-148 existed. It was, as you mentioned,
to put a gun to the miners' heads and to force them to activate the soft fork. And I think,
you know, before kind of like Taproot and before BIP300 and BIP-119, the premise was that we were
afraid that miners would refuse to activate a soft fork. We were refused, you know, for whatever
reason. And the users wanted or needed to have a mechanism to force the miners to activate the soft
fork. So this is what essentially BIP-148 did. I think BIP-8 locking on time equals true with a
good decent activation period is the way to go. The decent activation period is also so that the
users who want to reject that soft fork can have time to properly mount a user-resistant soft fork
and to also, you know, put a gun to the miners' heads and say, we don't want you to activate the
soft fork. What really worries me about a soft fork is that the users do not have the time to
have their say either with speedy trial. And I agree with you. I don't think speedy trial was a
good idea at all. I think the concept of speedy trial is that it's so fast that users who don't
want a soft fork, they don't have the time to mount a resistance. And what's worse than that is,
you know, a secret soft fork, as you pointed out, which by the way, it was kind of like the first
time I was made a little bit wary of BIP300. And, you know, you and I have talked about this. I
don't have any strong opinion towards BIP300. I kind of even had a little kind of like bias
towards BIP300 because I'm generally a fan of sidechains, even though, you know, as we've
discussed, I think the market, that's another issue, but I don't think the market really wants
them. But I kind of have a little, you know, small bias towards sidechains. I think what's
really dangerous is a secret soft fork. So in the case of a secret soft fork, the miners could, as
you point out, activate a soft fork. Nobody would even know that there is a soft fork. And then we
would presumably only discover that there is a soft fork afterwards by, you know, running the
sidechains capable clients, assuming it's not, you know, in Bitcoin Core. And then we would be
in front of an accomplished fact. And if that's the case, then the only thing that we can do as
users to prevent that soft fork from remaining active on the Bitcoin network is to force,
essentially force a chain split. I don't know exactly the mechanism that would be used to do
that, but it would essentially force the network into a chain split. And obviously, that's a
terrible, that's a terrible outcome, because that would create a downtime in the Bitcoin network.
The best outcome for the miners in that case is that there's like a week or two of downtime in
the Bitcoin network. There would probably be loss of funds on one chain, on the losing chain. And
that would be a terrible outcome for everybody in the network. And you also said that, okay,
if the soft fork meets certain parameters, one of the parameters that you outlined was that there is
no externality imposed on other users of the Bitcoin network. There's no harm done to the
Bitcoin network. And I know that you believe that BIP300 doesn't have any externality or harm on the
rest of the Bitcoin network. Honestly, I haven't paid that much attention to BIP300 to be able to
determine whether or not there is some harm on other users. There is one thing that you cannot
opt out of, though, in Bitcoin is we all share the same hashers. So we all have the same hashers
providing the service to us. We all share the same unit of account, and we all share the same brand.
So whether or not the soft fork has a direct harm on people who don't opt in,
if for some reason it causes a misalignment of incentives with miners, which is, I guess,
a popular concern with BIP300, or if it causes some impact, the existence of
Drivechain or BIP300 causes some impact on the Bitcoin price, on Bitcoin reputation,
this affects all of us. So as I said, I think if you want to activate BIP300 or any soft fork,
run a BIP8 client that has a long enough activation period so that the miners can make up their minds.
The miners are going to see, okay, there's a constituency of people that are willing to fork
me off if I don't activate a soft fork. There's also another constituency of people that are
willing to fork me off if I activate this soft fork, and then we can let the game theory
play itself out. And ideally, the miners are going to be able to gauge
somehow the commitment and dedication and motivation and capital behind one group or another
and be able to make a decision that reflects consensus. I also posted a meme today
regarding consensus. We can't know what the consensus truly is
unless there is a chain split. The only way to know where consensus truly lies is
if there is a chain split and that chain split is resolved for a winning side, which in UASF,
we didn't have a chain split. It was resolved before, presumably because the miners
understood that they were going to end up on a losing chain. So yeah, that's my
thoughts on that. What really concerns me is the idea of a secret hard fork, which is
activated, and then later, just randomly, we figure out that the soft fork has been activated,
and then those who want to oppose it are forced into the decision of forcing a chain split.
Since it's already been activated, there's a good, decent chance that
there would be a chain split if users were to, for example, say, okay, we're going to invalidate the blocks of miners who are running BIP300 or implementing a sidechain.
Yeah, I hear you. I think that makes perfect sense because more time is something that usually, like an attacker or someone who's up to something bad,
they normally would want to rush things because they'd say, well, I'll do this, and it will be the fait accompli.
Amusingly, I was amused that you translated it into English because in English, we never say fait accompli.
So I hear what you're saying, and I have actually a lot of comments, and I wrote a bunch down.
Okay, so I think there's some interesting points that may be some misunderstandings or something.
Okay, what I mean by that is, BIP300 is a miner-centric idea, so I think it's kind of normal to talk to the miners about it first, before even,
because it's kind of like if they don't like the idea, then it's already dead, so then it would never even progress.
You know what I mean? It's not like the soft fork that requires the Coinbase transaction to include the block height, where it's like,
it's like some, it's not really, this is like a slightly more ambitious type of thing.
So you'd say, okay, we'll go to the, we'll talk to the miners first and see if they're even interested in this, because if they are definitely not, then the idea is already dead.
But if you go and you say, well, you know, the thing about, like, if we go, we're not going to go and ask them, like, are you interested in pay-to-script hash or something?
Like, we don't really care if they are interested in pay-to-script hash, and neither do they.
So I think, and also another thing is that when I pointed out the secret soft fork, that's partly because, I hate for that to be misunderstood,
like as you probably know, Francis, I write on my blog a lot about, I wrote like this post, the UASF contradiction,
and I wrote this thing about the miner-activated hard fork, and this is like 30, 40 pages of just like kind of like theoretical interest in how people activate forks or what they are.
So I kind of was like tweeting that in the vein of like a researcher pointing out a potential problem.
I wasn't really, and similarly when I said, I was sort of saying, well, I really think this is inevitable,
because I think it's, it makes, miners can make a ton of money off of this if it works, and it's the long-run security model of Bitcoin,
so we might as well try it early and see if it works.
So some of the things I wrote down, we do all share the same miners and the same price and the same reputation,
but that is kind of like a double-edged argument, because it's saying if something bad is done, then everyone suffers,
but also if something good is done, then everyone benefits.
So it's kind of like, it kind of becomes a, they're all kind of tied up into one, because of course the reputation influences the price.
Is it miners, price, reputation?
But they're really kind of all the same thing to some extent, because the price and the reputation are obviously related.
And the miners are paid in BTC only, and so they, did you want to say something?
No, no, no, go ahead.
So the miners are paid in BTC, and they must pay, they have to pay in electricity and in physical items that are not BTC.
So they're always in BTC world.
And so it's kind of like, they're kind of all the same thing, and then at that point, that kind of reintroduces the idea of,
is it really the worst thing if it's like a 51% miner threshold?
Because it's actually a pretty decent take on price, reputation, miner, like hashers.
It's kind of like, they're all somewhat aligned.
But another thing I wanted to say is, I kind of don't see what I have been doing as out of line with your preferred activation method,
because Luke's pull request didn't have any activation logic in it at all.
So it could never activate by itself.
And of course, the pull request, it has enormous value, even if it's never actually merged into core,
because you kind of have to have review of the code and of the details.
Until there's the reviewed code, there can't be a client, right, or any client.
I don't think you've done anything that's contrary to, at least publicly, and I'm going to trust you on that, Paul.
That's contrary to how I would activate a soft fork.
You haven't, for example, proposed a speedy trial pull request to Bitcoin Core, as far as I can tell, have you?
Or I don't think so.
No, I have not.
So this is part of the problem, is activation was so traumatic because of SegWit,
and that now people don't even, it's a third rail, and no one even wants to have conversations about it.
And honestly, I found the taproot activation to be even a little bit more traumatic than SegWit.
Maybe not more traumatic, but more dangerous.
Because, you know, and also with, you know, a lot of my concern stems from the taproot activation.
I was friends with a guy who works at a really big mining pool, and he told me his side of the story with taproot,
which was that, you know, he was on the phone with other mining pools, and their mentality was,
we're going to fucking get this done, we're going to get taproot activated ASAP.
And the mining pools actually did have, you know, I wouldn't call them like secret cabal kind of negotiations,
but they definitely had private meetings where a bunch of pools just basically decided we are going to activate taproot.
What was a little bit more traumatic to me was that, okay, that was done in collusion with the Bitcoin Core developers,
which, you know, by integrating the taproot speedy trial into, you know, into Bitcoin Core itself,
you're kind of like forcing everybody, all right, if you want to continue using the updates to Bitcoin Core
and the reference client and all the optimizations and security patches that come with it,
you don't have a choice, you need to opt out of Bitcoin Core if you don't want to activate, you know, this soft fork.
What concerned me, to be honest, was David's comments about, you know, okay, so there's miners talking about activating soft fork,
and then, okay, when I hear that, I feel, okay, so miners are talking to each other, kind of like similar to taproot,
there's the idea of the secret hard fork that's floating around, there's people that might be trying to convince them,
hey, you know, if the Bitcoin Laser, Bitcoin Maxi, Laser Eye people don't want to activate this,
are you aware that you could secretly activate this soft fork? That's a scenario that I want to avoid.
It's actually not that hard to convince miners to do something like that, you know, for example, for Bitcoin Unlimited,
you'll probably remember, Paul, the Tumen brothers, you know, these two guys, the Tumen brothers,
yeah, so they spent, yeah, they were wiped out from Bitcoin history, they recused themselves from Bitcoin history.
Probably so, they should have been, I mean, the part where Adam Beck confirmed on Slack that the one was like blazed out of his mind,
he's like, yeah, well, it's a story for a different time.
Yeah, but, you know, what they did was they went to convince the Bitcoin miners to run Bitcoin Unlimited,
I can't remember, either it was Bitcoin Unlimited or…
Classic, I thought.
Oh, yeah, Classic, yeah, that's right, that's right, yeah, it was Bitcoin Classic.
So they went around and they convinced the miners, and then, you know, how much hash rate were they able to motivate to signal for Classic,
like 40%, 50% or something like that.
And then in the case of Taproot, it really was a small number of developers that contacted a small number of mining pools
and told them, hey, like, we're going to merge this into Bitcoin Core, do you want to do a speedy trial and just get this done?
Because, you know, we don't, the Bitcoin Core developers, and I don't want to single them out,
but, you know, there's other developers that are not Bitcoin Core developers.
And there was this part of the Bitcoin developer kind of group of peers that felt like,
okay, we feel like Taproot has consensus, there's not a lot of opposition to it,
we don't want to go through another UASF, we don't want to go through another BIP9 episode,
do you just want to activate this?
And I thought that was pretty scary.
I didn't have any objection to Taproot.
There's nothing about Taproot that, for example, I thought was harmful, but I don't know.
Maybe other people thought that there was something harmful with Taproot,
and they didn't get a say in that decision.
And as we saw with Stegwit, there are some things that you can do with Bitcoin.
If a soft fork is deployed, for example, it inevitably will become adopted by nodes over time.
That's just something, right?
And in the case of Stegwit, okay, we had the block size increase with Stegwit that was added as a soft fork.
And now, you know, everybody's using Stegwit because it's become the standard,
and you don't really have a choice to opt in to opt out of the four megabyte blocks
that are now being mined on Bitcoin.
We had almost a three and a half, four X block size increase with Stegwit as a soft fork.
And whether or not you implement Stegwit yourself or you use Stegwit yourself,
you have to deal with the fact that most Bitcoin transactions have witness transactions,
or not sure if most, but a lot of them.
And we now have four megabyte blocks, and if you want to run a full archival node,
then you need to spend four times more disk space and bandwidth to do that.
So that's really mainly my concern.
And again, I do understand that, and your point is that there's no downside to drivechains
because it doesn't affect the other users.
But, you know, that's also not up to the miners to decide,
because if there are downsides to drivechain,
maybe the downside risk is at the miner level.
Maybe there's something about the game theory of drivechain that's going to fuck up with miners.
I don't know.
But maybe there's something that's going to fuck up with the price of Bitcoin
or some aspect of decentralization or some aspect of validation
or some reputation or some legal risks that are going to be borne by the nodes.
So definitely, the fact that the benefit is concentrated at the miner level primarily,
and I understand your point that if, you know, if BIP300, as you say, kills all coins,
that's another debate.
But, you know, you also imagine that it's not just the miners that benefit.
I know that you imagine that the users also benefit from drivechain.
But the downside risk of drivechains seems to me to be concentrated more at the user level,
not the miner level.
And, you know, my opposition to BIP300, which is not really an opposition,
my opposition is to miners deciding when and how a soft fork gets activated.
And I don't debate that miners are the ones who ultimately do activate the soft fork.
That's just a fact.
But miners deciding when and how a soft fork is activated is kind of like my main concern.
And I had another point, which I'm forgetting.
Sorry, guys.
I have a hand on my pan.
I'm cooking a steak right now.
Can I jump in real quick just to clarify that, you know, the picture I shared earlier,
like there's no secret activation plan.
I think that there was a response to the tweet I put out two days ago,
saying miners are interested in this topic.
And, you know, there were some miners in the comments on that tweet saying,
hey, miners are interested.
And so I had a couple of people reach out to me from the mining industry saying,
hey, actually, you know, our firm is interested or X firm or whatever.
And so there's nothing really deeper than that.
Just like people talking and disseminating an idea amongst themselves.
And then I guess my question for you is like with BIP8,
like I don't understand like exactly what the differences are between the activation.
Like, OK, so first off in our kind of thread today that we were talking,
there's a lot of people who were upset about this idea of basically users
that are against BIP300 having to lobby against it.
But it sounds like through a BIP8 process,
that's exactly the type of environment you're trying to create
where users who oppose it have enough time to organize themselves
and have their own user rejected soft fork.
Well, it's a lot harder, right?
So if users want to lobby for a soft fork via BIP8, it's a lot harder.
So and especially if the BIP8 is done with an activation client,
which is a fork of Bitcoin Core, which is not just Bitcoin Core itself.
So first of all, you need to code the activation client.
You need to get that reviewed.
And you need to specifically opt out of running Bitcoin Core and running.
So you can't just like opt into a soft fork by auto updating Bitcoin Core.
You have to like consciously decide, I'm going to run a fork of Bitcoin Core.
And then if you want the soft fork, you have to put your skin in the game
and your money on the line with BIP8.
So it puts the onus of demonstrating commitment and activation motivation
to people who want the soft fork.
What do you mean by that? I don't follow that part.
Okay, because if you want a soft fork activated with BIP8,
you need to run a separate client that's not Bitcoin Core.
So first of all, you need to be aware of an activation client.
You need to be very interested in this topic.
You need to make a decision to trust an activation client,
which is obviously rebased on Bitcoin Core.
And it would probably be coded by Luke Jr.
or a very reputable Bitcoin developer.
But you still need to trust that very far less reviewed activation client.
And you need to be able and willing to put your money on the line
so that if the miners don't activate this soft fork,
you will essentially lose money.
You're risking your money if you do that.
Because you're good.
In your mind, though, about that,
you could just kind of basically play chicken with that
and then back off at the last minute if you didn't get enough support.
Yeah, you could.
Of course, you could back off at the last minute
and stop supporting it at the last minute.
We got Lucas here.
Luke, I don't want to start anything,
but moments ago Francis did say that
miners are the ones who ultimately activate every soft fork.
But we can return to that in a moment
because I think, Francis, I was listening carefully
to the ideas you were expressing.
And maybe I can generalize it as
people need a lot of time to make a decision.
Because I was also concerned about
what bothered me about SegWit and Taproot
was a lot of people clearly had no idea
what it was they were activating.
And I think that's what bothers me.
It's the lack of knowledge.
How can you give consent for something
if you don't know what it is?
That is significantly better
than people actively opposing SegWit and Taproot,
which no one did.
Apart from, you know,
we can talk about the obvious exceptions,
but there is obviously clear,
massive opposition to Drivechain.
So the idea that you'd ever get consensus
and discussion of activation
is basically you stating an intention
to ignore the will of the community.
So a quick question about that.
And I think, Francis, you mentioned it earlier,
but how do you determine actually
what is consensus without having the game theory
actually work itself all the way out?
Okay.
So as I mentioned,
there's no way to truly determine consensus
unless there's actually a chain split
that is resolved.
But I know you don't want to hear this,
but, you know, hats on Twitter,
people putting the hats,
there's a reason why people were putting
the USF hats.
I mean, it's not just a trivial meme.
The point of it is I am willing
to risk my money on this soft fork
on invalidating the miners potentially.
And if the miners decide
not to implement the soft fork,
I will invalidate their blocks
and I'm willing to lose money on this.
I'm willing to accept Bitcoin payments
and invalidate other Bitcoin payments
depending on which, you know,
blocks they're mining.
So signaling on Twitter
is whether you like it or not
is an important part.
Another way, for example,
as I mentioned also today,
there was a breaking Bitcoin conference
in Paris in 2017.
And, you know, there was a
raise your hands poll
as to who here supports SegWit2x.
And, you know, there was 150 people in the room.
I don't know if you were there, Paul,
breaking Bitcoin Paris in 2017.
You might have been there.
It was awesome.
But there was like 150 people in the room.
And I want to be careful not to say
that like Bitcoin is, you know,
determined by experts.
But there was 150 very high level
security and Bitcoin experts in the room.
And none of them were supporting SegWit2x.
There were businesses that were
putting themselves on lists publicly
saying if you want to use, you know,
if you want to use a service
that is a UASF enabled service,
you can use my service
and I will accept your UASF coins
and I will give the price of Bitcoin
to you.
To the UASF enabled chain and not to the other one that I will reject.
There were futures markets. I don't know if there was one for UASF, but there was definitely one for
SegWit2x. So there was a futures market for that. That's a good indicator. So basically, the miners,
like they have to look at all of these elements combined and say, OK, so first of all,
they have to look at the opposition. Right. So SegWit had almost no opposition. I think
Bitcoin Mechanic, I think it was you or Grasshopper Bitcoin anyway, who just said,
yes, SegWit had almost no opposition. So I think it was safe to say that. And, you know,
that was also discussed for like two and a half years and nobody was really opposed to SegWit.
There were some, but even the ones who were opposed to SegWit, they were opposed to SegWit
only as a mechanism to obtain a concession for the larger blocks. So their opposition to SegWit,
you know, and I think a lot of them were like, we're not really opposed to SegWit,
but we want larger blocks, too. So we're going to block SegWit in order to get larger blocks.
Taproot, there was not a lot of opposition to Taproot. I mean, I was definitely opposed to
SpeedyTrial. And if you guys remember, I was not a fan of the SpeedyTrial activation of Taproot.
But ultimately, my opposition to SpeedyTrial and Taproot was not sufficient enough for me to say,
you know, all right, let's URS of this thing. For BIP-119, because we had had and because I knew
nothing about BIP and Taproot, I had some degree of knowledge of what Taproot did and what it
didn't do. And, you know, but for BIP-119, when I saw the SpeedyTrial proposal by Jeremy for BIP-119,
then, you know, we were definitely ready to do a URSF for that one, for sure. Right. So in that
case, the miner is looking at, you know, I would suppose the miner looks at this and, all right,
so there's people who are so opposed to this thing. And I was opposed to it because I didn't
know what it was. And I was like, I don't want a soft fork to come in if I don't know what it is.
And a miner would see the opposition first and be like, all right, there is a strong core of people
that are willing to lose money to oppose this thing. So that's the number one way to gauge
consensus is to look at, all right, so who's opposed to it? And are the people opposed to it
motivated enough to, you know, your URSF? That's probably the best way to gauge it.
And then a good way for a miner to do that, to gauge, all right, so which side has consensus,
because the miner doesn't want to do that. The miner wants the same consensus because the miner
doesn't want to lose its block reward and its fee reward, is to have a long period of time
where people are signaling. And yes, it is possible to, you know, spin up a bunch of nodes on AWS,
but it's a lot harder to clone your reputation. So you attach your personal and your company's
reputation to a certain fork, you know, you're going to say, okay, I want to activate BitApe,
and I'm willing to say that my exchange will activate BitApe, or me personally will activate
BitApe. And you make a promise, basically, you know, you can call it a bluff if you want, but
sometimes it is a bluff. You know, in the case of USF, it's, you know, debatable that it was more
of a bluff. I mean, I wasn't bluffing, but there was not that many of us who were pushing for USF.
So the miners had decided, in the case of USF, to, you know, not implement SegWit.
It would have been pretty tough for people like me who were committed to losing their
money on the SegWit chain. So yeah, I guess the miners need to have two competing factions
that are signaling publicly and via software, their commitment to lose money for implementing
a fork. That's the only thing they can do. So it's a very good idea, but it does have a drawback
of that, you know, it's not, it's psychopathic in terms of like, everyone is private, everyone has
like a NIM, you know, everyone is like anonymous or something. It is kind of like, not that that
should be the only criterion, but you could do something else where there could be like,
whenever someone has news they want to announce, they put, they pay an unusually high fee
in OP_RETURN or something. So because I'm imagining a world where there is no Twitter
and all of us are hiding in bunkers and none of us use a real name and stuff, just hypothetical
idea. If someone pays an abnormally high fee to broadcast this conspicuous message,
and they point people to like the, this onion site that has the software, and then maybe
miners could signal interested, there could be different periods where a miner signals interest,
because you have to, the miner signaling is the only signaling that is like, you know,
it's very like robust, so like tampering.
Let me jump in for a sec, because there's two pieces of the puzzle here that are missing that
are kind of bewildering me. One is the point that there's this notion going around that miners
activate or don't activate. And what they're doing is much more important to be viewed as
coordination than activation, because you can't activate anything as a miner. The only reason we
had a UASF movement in the first place is because if we got our way running these alternative
clients, we would activate stuff that the actual nodes that ran vanilla clients would still be
enforcing because the SegWit logic existed. And the logic for Oh, if miners flip this version bit,
we will start enforcing these new SegWit rules were everywhere in the Bitcoin network.
If the miners tried to do a similar thing that UASF clients forced miners to do to activate SegWit,
if they did that with drivechain, you have a new rule set that's being enforced by miners
that is totally ignored by all of the nodes in the space because none of this stuff is getting
into Bitcoin Core. So that is, that is the definition of a 51% attack. It's a totally
different scenario. There, there is no enforcement of the drivechain rules. I'm not talking about
the rules of the drivechains. I'm talking about the rules of drivechain as its own soft fork.
None of that would be enforced by any nodes on the network. So it wouldn't just be miner
coordination that's necessary. You need the actual nodes to run it. Yes, you would need some,
some nodes. I don't think anyone has ever disputed that at that point.
It's a very different circumstance, right? Like the UASF, the BIP-148 battle, the Bitmain,
all that stuff, it came in an environment where you had SegWit logic in all of the nodes,
basically on the network. So there was actually something to activate on a network-wide level.
SegWit existed, it was acknowledged. Well, but you understand, I'm sure, that in order for miners
to even activate the soft fork, the client software must exist somewhere. Yeah, but does it?
I don't know of a drivechain enforcing node that you can run. Well, yes. No, I have not produced
one and that one does not exist as far as I'm aware. But that's what we were originally talking
about. I don't know if you've been here, you may have been here the whole time, maybe not. But we
were talking about Francis, he has like Puyo activation. Instead of speedy trial, it's because
I think I've been listening carefully and taking notes. For Francis, it's very important that
people have a lot of time to carefully consider the issues. So it could actually be called something
like instead of speedy trial, it would be like something slow, like I don't know, like slow
trial or something. But what if I didn't catch that because I only did just get here like around
10 minutes ago. And initially, I'm saying consensus is what's important. And you bring up a counter to
that, which does warrant adding more nuance to it. Because anyone can come along and actually
characterize the massive opposition to SegWit as a genuine breaking consensus. Because what it was,
is more, it was it was not actually consensus in the end, it was a genuine analysis by the
community that all of the concerns against it were actually unfounded. So people were against
SegWit because it got used as a political football. And people said, Oh, if we try and scale via
lightning, which SegWit allows, then we'll lose motivation to have big blocks, knack, right?
People just think that's not a good enough argument against SegWit. We're fixing transaction
malleability, we can't scale with big blocks, it's not the right approach. So people said those
claims are unfounded. And we had to, we had a split in the community. And that was it, like
everyone that didn't want this went over to Bcash. And then, you know, decided Craig Wright was our
Lord and Savior and all this stupid stuff. So obviously, it's not valid, right? And we're not
going to go down that path. But then you also have taproot. Like, where was the opposition to that?
There wasn't really any the only legitimate opposition that ever really came around was
one guy saying it was paid to public key instead of paid to public key hash. So quantum FUD,
you know, it's not safe from quantum computers. And everyone said, that's just not really a
concern. So we're going to proceed with it. Like, but the concern about drivechain is founded,
the concern about drivechain is totally founded. It's a, we're talking about massive changes to the
ecosystem, a complete, I'm not going to say corruption of miner incentives, but it's certainly
a big, chaotic change that most people are like, I don't even trust that we could figure out all
the ramifications of doing this, even if I like what's on offer.
I disagree with all of that. But I think it's not the point. The point is about taproot and
SegWit was actually that, to me, in my own personal view, is there were many downsides
that were not the people who, it's true that what you say, first of all, your story is mostly true.
And I agree with it about the SegWit opposition. And it was mostly, it's mostly exactly the way
you said, and it's true that we didn't hear complaints about SegWit or taproot, except from,
from Luke, of course, who is a genius, but he was not very many other people. A lot of people were
for SegWit, but they had no idea that it was a block size increase. You know, John Carvalho or
something in 2019, he said, like, oh, I had no idea it was, this was like two years after it
had activated after he'd been like militantly signaling for it. So you're right to say that
we didn't hear any opposition. But then sometimes it's just because people don't realize that
there should be opposition with taproot. It was abundantly clear to me that most of the people,
many people knew a lot about it, like a small number, but lots of people were faking it. They
were bullshitters. They were just saying, oh, taproot, we don't want to repeat it.
You're completely right about this, but I don't, when it comes to advocating for drive
chain, doesn't this just make your life harder? Because in the case of SegWit and taproot,
unintended consequences, people signaling in favor of it, despite not fully understanding it,
with drivechain you have active opposition already. Yeah, well, we aren't actually, we're
sort of, you kind of jumped, as you said, you jumped into the conversation kind of midway.
We weren't really, we were talking about a conversation between Francis and David,
so it was kind of like a different, kind of really not on that topic right now, per se,
but I'm sure we'll return to it very soon. But Paul, your point about people not understanding
the full ramifications of SegWit and people bullshitting with taproot, both of them I agree.
I did not fully understand the ramifications of, I knew about the block size increase,
I didn't actually understand, I thought the logic was a lot more technical than political
of SegWit, of the block size increase of SegWit, and for taproot, I was also kind of, you know,
upset about the marketing. The marketing was around, you know, taproot will make bitcoin more
private and taproot will enable bitcoin to compete with Monero and Zcash and all that.
They were, there was all this kind of disappointment and smart contract upgrade,
like I heard, but I think this proves the point that people need even more time to study the
potential downsides. And, you know, the downsides of drivechain are, you know,
Bitcoin Mechanic pointed out, there's a lot of people that see a lot of downsides in drivechain.
I'm the first to say that I don't understand the downsides of drivechain enough to be very opposed
to the idea. I've always had a kind of like neutral-ish stance on drivechain, because
even though I don't believe in the upside, I also don't fully understand the downside. So that's
where my neutral-ish position came about. But I witnessed through, you know, Twitter, through
mailing lists, through discussion groups, that there is a sizable group of people
that, you know, they definitely see a lot of downsides to drivechain, and that's after studying
drivechain. And as you point out, Paul, a lot of people don't even study drivechains that much,
you know, and then you study drivechain for a couple of months, and then they see a lot of
downsides. So maybe we're going to see more downsides after a year or two. And for me,
the unknown downsides of drivechain and the potentially unlimited downsides of drivechain
are, they, even though I don't fully understand them, I don't see any significant benefit to
drivechain. And also, that's not my, I don't plan to use drivechain personally, but I don't really
see a lot of upside to drivechain. Some people do, some people don't, but a lot of people see
the downsides to drivechain. So, you know, and again, I think all of this discussion is going
around, okay, the potential for a secret hard fork, or the potential for a speedy trial,
or the potential for miners to, you know, miners could activate, you know, drivechain, and you,
Paul, could be the only person, assuming there's a drivechain client, like, you, Paul, should be
the only, could be the only person basically using, you know, drivechain in the entire network,
and the miners would have implemented BIP300. And then the potential of just you using drivechain
and that having some externality on the rest of Bitcoin users, that's still something that's
possible, right? Can I ask two questions here, a bit related? You know, first off, like, I think
you're, you know, in terms of people's opinions on drivechain, they're, at the end of the day,
a lot of them are opinions. Like, there has to be a process to adjudicate, like, which,
which opinions are valid, and which ones are, like, where do people sway to? And so, like,
I like having people have the opportunity to reject a soft fork, but like, people are busy,
they have to have a reason to care. So there should be some sort of activation process put
forward that actually drives people to, to make up their mind. If they don't like it, great,
they don't, they don't like it. But I don't think that that's a, it's not a justifiable reason for
stopping the process from ever even beginning. If, you know, so that's one, one kind of comment.
Second thing, with BIP-8, like, the, if it's going to be like, the, I mean, with user-activated
soft fork approach, you know, it's about the economic power of the nodes that are, are voting
for or against, etc, that are threatening to fork off the network. My fear with...
No, it isn't.
Okay, well, my fear with that is that, like, if you had a Coinbase, who signed on and said,
hey, like, we're going to go all the way with, with supporting this specific BIP soft fork,
or rejecting the specific soft fork, their economic power in the, in the ecosystem would
be such that it would have a pretty immense effect on miners trying to make a determination of what
they're going to choose. Maybe I'm wrong on that. But like, like, is it not the economic power of
the nodes that matters?
That, that's true. That's true. If, if, for example, Paul was to put out a BIP-8 client,
and, you know, Coinbase was to publicly claim, okay, we will run BIP-8. And if the miners don't
activate BIP-8, Coinbase, we, Coinbase will invalidate the miners blocks. That would obviously
have a huge effect on the miners decision making process. There's no doubt about that.
But Coinbase did also sign the SegWit2x and the NYA agreement.
Yes, but no, this is actually, I'm glad you brought that up. That was something I've written
down when you were talking before. And I wanted to come back to it, which is, it's theoretically
possible that Coinbase could, it's, I'm not, you know, don't, this is like a hypothetical scenario.
But it's theoretically possible that Brian Armstrong could be sitting there thinking,
oh, those stupid Bitcoiners, the last thing I want is for them to succeed. And the last thing
I want is for my exchange business to go away. So I should actually run the, I should, to make
Bitcoin worse, I should run the user resisted soft fork. And I thought that was an intriguing
idea, that is. That, well, I mean, that's certainly possible. If we were to run BIP-8 today,
I think BIP300 via BIP-8 would lose. I think if Coinbase today was to support BIP-8,
BIP300, people would be very suspicious. There's enough opposition to that so that people would
run a URSF against that BIP-8 in case the miners. So what would happen basically is, all right,
so let's say, Paul, you launch BIP-8 clients, and then, you know, nothing happens. The, you know,
miners are not signaling, miners are not interested. And then suddenly Coinbase,
and then, you know, most economic node runners, they're just like, we don't give a fuck, you know,
Paul is running his BIP-8 client and, you know, he's either going to get
forked off at the lock-in time or, you know, he's going to, you know, you're going to get
forked off or you're going to bail out at the last minute. I think most reasonable people would
assume that if it was just like just you, your organization, and then maybe like a few people.
But if, you know…
Francis, sorry to interrupt, but I've got to jump off in two minutes. So I just wanted to
say a little thing before I… Ultimately, it comes down to the legitimacy of people's
reasons for doing things. Because if Drivechain suddenly gets maliciously pushed onto us as a
soft fork that people haven't consented to, or that we feel that the negative consequences of
which haven't been properly addressed, then people are going to run URSF clients. And once that's
happened, we've totally changed the dynamic of soft forks forever. Because every… We'll have
established a mechanism by which we can do this. And even as you say, a bad actor like Brian
Armstrong is in your hypothetical scenario, and also in reality, by the way. Even if that was the
circumstance, people will just launch URSFs for future soft forks that are actually warranted and
good. That's a nightmare scenario. So it comes down to analysis. What's the motivation? What's
the legitimacy behind it? Why is it a nightmare scenario though? Because it seems like that's
a valid way to resolve some of these outcomes. If someone says they have valid concerns,
but they're not valid, and then they run a user-activated rejection, then they're just
going to be bounced.
Well, it comes down to your judgment about what's actually good for Bitcoin and what's not.
It's not like we got SegWit and that was it. Hooray. There literally was a big break-off of genuine people that thought we have to scale with big blocks.
Medium of exchange is the only thing that matters, and not people being able to run nodes or anything like that.
And they're gone, and the community broke up over it.
Is that the difference between a hard fork and a soft fork?
Well, that doesn't matter because a URSF essentially becomes its own hard fork away from the new, more tightly enforced rule set of the soft fork that Drivechain would become.
We'd essentially hard fork away from the malicious soft fork.
It kind of depends on how you do it and how the URSF actually works.
It might be just us doing a UASF of a rule set that conflicts with Drivechain, or it can just be us rejecting a version bitflip.
So it depends on how you guys plan on running your activation.
If you're going to do it in an open way, in an appropriate way that follows precedent, you're just going to flip a version bit.
But in reality, we know there's already been threats as well made by you guys that you're just going to get 51% of the miners in backhanded conversations to activate it without even signaling on the network.
So if you're going to do that, then the URSF looks very different.
So it kind of depends. There's a lot of question marks here about how you guys plan to move forward.
But essentially, it's a proposal that has very good reasons for people not to want to activate it on the network.
And it's going to encounter a lot of resistance, as it very well should.
And I don't really know how you plan to proceed with that.
Thank you. Thank you for the conversation.
Nonetheless, I have to jump off now and have a good one.
Well, that was nice. But I do think it's as far as Drivechain critics go, it's kind of par for the course, because he jumped in halfway through.
He had no idea what we were really talking about, presumed that he did, and then was in a bad mood.
So that's normally what our critics are like.
But it just so happens that me and Lex are pretty aligned on this, pretty much perfectly.
And the point that he made in the end is a very important point, which is that you cannot create a URSF client if you don't know how it's being activated.
So for example, in the case of BIP119, I and a bunch of others, we're like, okay, fuck, there's another speedy trial coming.
So what can we do in the case of a BIP119 speedy trial?
And then we're like, all right, I think it was Michael Folkestone who presented the idea of a URSF on the mailing list.
I don't know if it was the first time ever, or people had discussed it before.
But all right, so I became interested in that.
And then I went to a Bitcoin Core developer, and I was like, all right, so could you code up a URSF client?
And that Bitcoin Core developer told me, well, I can't, because there is no UASF activation client, or there is no activation proposal at all for BIP119.
It's just talk so far. So we have to wait until we see the activation client to be able to do the URSF client.
But if there is a secret miner arrangement, and the activation client is a secret one,
so let's say that, Paul, you were actually malicious, and you have this software that is not open source,
and the miners are running the BIP300 soft fork without telling anyone,
we couldn't do a URSF until after we've detected that it has happened.
Presumably, because one day you would be like, ha-ha, I released the client, it's now open source,
and you can check, Drivechain is actually activated.
And that would be from that point on that we could do something.
And then in that case, it's not even a question of whether or not people are going to back out of a soft fork or of being forked off.
I don't see a scenario where a chain split would not occur in that case.
I have a question, like a dumb question.
I don't understand what the difference are between, like if the miners kept it secret and then revealed to the users later,
and users, once they find out, do a chain split, versus if the miners did it publicly,
and users got upset and decided to run a user-activated rejection,
and the miners just decided, I don't care, go ahead and do it, and chain split.
Is it kind of like the same outcome either way?
Well, there is a chance of no chain split.
If it's all done transparently with enough time, there is a chance that there is no chain split.
If it's done in secret, and we have to oppose it after the fact, there is for sure going to be a chain split.
So you're like removing the opportunity for one side to back out, essentially, by doing it in secret.
So I think it's better to do it publicly.
I think that's how you get people to actually give their true and full attention.
I think, unfortunately, the gentleman derailed us a little bit,
because what I was saying before he joined that he didn't hear, but now everyone else is going to have to hear twice,
is that I write commentary like this often on my blog, which I've done for many years,
like a long time, 10 years, about various puzzles in Bitcoin and strategies and activation.
I've written many. I've written an essay called The UASF Contradiction.
And I wrote an essay about the miner-activated hard fork and replay protection.
I write about all these kinds of things, so I'm interested in that.
And so I was commenting on what could be possible, which I'm sure a bunch of people took as a threat.
But here's the thing about that is the really threatening thing would have been for me to not –
to know that that is the case and not to tweet it, because that would have been actually very threatening.
So I kind of didn't really see it that way. I was just kind of pointing it out that, hey, you don't actually have –
the people who want the UASF, they don't have like – they don't have the cards that I think they have, if that makes sense.
Well, I mean, you tweeting it got me thinking about it, so I think it was a good thing.
And just to be clear, I never accused you of trying to do a secret hard fork.
Although, you know, it's in the back of my mind, but I didn't accuse you on Twitter of leading that.
But the idea is out there, right? And then it can – and if the miners are talking about this,
which I'm sure they are now because it's attracted their attention, clearly.
I also have had a miner like 45 minutes ago contacting me and saying, by the way, Francis, like, we don't want drivechains.
I don't know who these miners are, but we specifically don't want, and our mining pool doesn't want that either.
So, you know, miners are obviously talking about it now. So the concept of, you know, all right, we can just fuck politics.
Fuck the politicking. We're just going to run the code and activate the soft fork.
Like, the idea that that's possible exists in the dieguys, and it's like it's always existed.
Nothing has changed since you've tweeted that.
And nothing has changed, like, you know, in practice since Dave tweeted his recounting of conversations with miners.
But, you know, people are like, oh, people are discovering now.
Most people are discovering now that that's something that's possible.
I mean, I genuinely didn't really think about this, the evil, quote unquote, secret soft fork.
I probably thought about that, you know, five years ago during the UASF.
And it was probably part of the discussion at some point, but it was not part of my day to day, you know, thoughts.
And now it definitely is. So I think it's definitely understandable that people are scared that that will happen because the idea is out there.
And there's another thing also, you know, and it's not just people on this call.
There's other people that are either professional trolls or spooks or agents of chaos.
And they definitely are the types of people, I think, that would start talking to mining pools.
You know, a lot of these people were associated to ordinals and that kind of movement.
And maybe for the lols, maybe just for the fucking fun of it, maybe because they hate Bitcoin, maybe because they hate the maximalists.
Maybe because they generally think it's good for Bitcoin.
They might go. It's definitely a possibility that these people might go and convince the miners to either do a secret hard fork or do a very quick, you know, public bit nine, you know, type situation where, you know, or even I mean, and actually got this idea from people.
A speedy UASF is almost indistinguishable from just a regular miner activation.
Because, you know, maybe Udi is going to say, all right, I'm going to do a bit eight client for drivechain and I'm going to, you know, put a lock in time in two months.
And I'm going to enforce it and all the miners signal for that in two months.
And nobody has time to do a UASF because, you know, we're kind of taken by surprise of this thing.
So that's definitely a concern.
It's a very real concern that people have that miners are just going to get this idea.
And the miners are also different miners than in 2017.
So I think the miners in 2017 probably learned their lesson saying, all right, we're going to stop the idea that we control the hash rate by voting.
The idea that miners are voting for consensus rules, like that's kind of like died in 2017, kind of.
But the miners that we have today are different miners.
So maybe they haven't learned that lesson.
Maybe they don't even know about 2017.
And maybe they're going to get someone whispering in their ear saying, hey, like, we know you're hurting really hard.
You know, your stock is fucking crumbling on your public miner.
Did you know that you actually control Bitcoin and you could actually assert your control over Bitcoin?
I mean, that might be a concept that's alluring to a big miner, you know.
So the idea that there's potentially scheming going on, I think it's totally a reasonable assumption for us to have.
Oh, absolutely.
But you can see that, of course, as I was saying, the more threatening thing, since I already knew that to be possible, the more threatening thing would be probably not to tell anyone about it, per se.
But I would say.
Correct.
So earlier you complained about the taproot activation, about it's just a bunch of people called each other and he says, we're going to get this done.
I wrote it down in my little notebook here.
And I think actually that was the pendulum over swinging back and over correcting from the SegWit.
I think they were thinking, we don't want anyone to think that we will hold up this soft fork.
It's not going to be held up because of us.
So instead they did something else that you didn't like, which is they rushed it.
So I kind of think, yes, I'm not exactly sure what our North Star is supposed to be here, which I think what David was talking about is should there be like some actual process so that you know when someone is not following the process?
Because otherwise it's just kind of like everyone's just going to make it.
Your point, Francis, about like a secret 51% attack, like if that can be done, we used to have this view that like if you can attack Bitcoin in a certain way, it will be attacked like that.
So to me, it seems like we would benefit from a process that people should go through.
So that way, if someone does try to pull an attack like that, there are people realize that's not kosher and hit a red alarm or something like that.
It's not a terrible point. It's not a terrible point. It's a similar point than the ordinal spam attack where people are like, well, you know, if you can attack Bitcoin by spamming it, then we might as well do it right now.
The thing is also like we don't have fucking time for this shit.
Like there's no reason for us to go through to purposefully put ourselves through a 51% attack just so that we can learn that we can defend from a 51% attack.
Like people will lose money. We're going to lose a lot of time.
Like I lost like basically six months of my life with SegWit.
You know, I was going to fucking conferences all the time.
I was going to meetups. I was on Twitter almost every single day.
I was in chat rooms like we don't want to have to go through that.
I agree with you that if it happens, if, for example, there was a secret hard fork and then or a 51% attack or, you know, miners were to implement a blacklist or something like that.
And then we wanted to, you know, I don't know, invalidate certain miners.
We didn't always wanted to invalidate certain miners for another reason.
And we could demonstrate that the nodes can protect themselves from the miners in the long term.
I think it would probably be beneficial for Bitcoin, but it's kind of like saying like, I'm going to make myself sick right now so that I have any bodies in the future.
Well, it's like, I don't know. I don't feel like making ourselves sick.
I don't feel like we want to go through this like right now.
Everybody's honestly pretty fucking busy building their own stuff.
And we don't want to have to deal with this.
And Paul, to your point about the pendulum swing, there was two pendulum swings.
You're very correct that I think the miners, they were for Taproot.
They're like, oh, we're totally going to play ball with Bitcoin Core.
We're going to absolutely do what Bitcoin Core says.
We've learned our lesson.
And I think also Bitcoin Core had this pendulum swing where they were like, all right, it was a really, really traumatic event where we did, where we were opposed to miners.
And we don't want to have a lengthy activation process like we did for SegWit that was too long.
And because it was too long, there was too much opportunity for drama to happen.
And also, I think, you know, maybe the Bitcoin Core devs or some of these devs, they were like, well, in the end, the users actually don't even know what the fuck they're doing with SegWit and Taproot.
They don't understand any of this anyway.
So let's just get it done and let it get over.
So there was definitely a pendulum swing, both from the miners and both from the developer community, which I call the SegWit PTSD or the 4Core PTSD.
It's definitely a real thing.
People are still traumatized by the 4Core in the dev community.
And then, you know, there is that middle ground, which, you know, I should probably write it down at some point, which I propose, which is open BIP-8 for like two years or two and a half years or three years or something like that.
This gives people time to do the ERSF and to go back to the Coinbase example.
OK, let's say you, Paul, you run BIP-8 and then nobody, miners don't give a fuck.
OK, miners start to signal for BIP300 and then Coinbase joins BIP-8 and the miners suddenly get interested in BIP-8 because, oh, fuck it, we don't want to get forked off by Coinbase.
We have a lot of our coins, which are eventually being sold on Coinbase because whoever's buying the coins from us, a large portion of them are presumably going to sell them on Coinbase.
And Coinbase is custodian of a lot of other exchanges and Coinbase is a liquidity provider to a lot of exchanges.
I definitely recognize that the economic node ecosystem is highly, highly centralized at the custodial level, at the metacustodial level.
Like BitGo, for example, BitGo is probably the biggest economic node in the network because not only are exchanges big economic nodes, but they're not even nodes because they're not running their nodes.
BitGo is running their node for them and validating the inbound payments for them.
BitGo or an ETF.
Yeah, or an ETF, sure.
Although the ETF is probably a little different because the ETF is not like, I don't think they're accepting, they're validating inbound payments.
Of course, they would decide which chain they spend it on, but if you're just holding and not transacting a lot, you don't risk as much.
You can just do nothing, basically, and wait it out.
You don't have to put skin in the game for at least a few weeks.
GBTC could say, I'm not going to touch Bitcoins for a month until this is resolved.
Coinbase and BullBitcoin, we don't have a choice to make a stand on day one because people are making deposits every single day.
And we have to determine, well, is that deposit worth 30 grand or is that deposit worth a thousand bucks?
We have to choose which fork is the one that we're going to price as Bitcoin and the one that we're going to price as the altcoin.
But with BitAid, if Coinbase was to do that and people thought, okay, well, we don't trust.
And I think also, Paul, people are not very good at determining the pros and cons and the trade-offs of a soft fork.
I've been in Bitcoin forever, and I cannot articulate the downsides of drivechain against you.
You would smoke me, I don't understand it enough to have an opinion.
But people are actually quite good at sniffing out consensus.
So the average pleb on Twitter may not understand the trade-offs, but they are good at understanding consensus.
That's why people were supporting Taproot, even though they didn't know what it did and what the benefits were and what the downsides were.
People were still intuitively able to determine, okay, Taproot seems to have consensus.
But it has its own problem, though, of course.
Well, how is – I mean –
You can create the appearance of total consensus, and then it's self-perpetuating.
And then similarly, you can create – anyone can create the appearance of controversy.
That would be self-perpetuating, too.
They say, well, why are they pushing something controversial?
They must be –
This is why we use proof of work.
I mean, this is like – that's – yeah.
Well, I mean –
I did have something else that is so big that you may want to hear it.
It's a big idea.
It's kind of interesting.
Go ahead.
It relates to this idea of if there can be an attack on Bitcoin, then we should so that we build antibodies or whatever.
But it's bigger than that because it's an intriguing possibility.
I mean, I'll just share it with you.
I mean, hopefully you like it.
But it goes something like this.
Miners could activate something with like they have op-nop 5 or op-nop 6 or something.
We're talking about a soft fork where you –
Miners activate, and then it ends up being really bad for Bitcoin.
This idea refers to the miner's incentive to get it right.
Like the miner wants to get it right.
If the miner gets it wrong – I've expressed this idea already.
So like if the miners add something with op-nop 6 and then something goes wrong, the miners can then just ban op-nop 6 from being like –
you can't spend any money to op-nop 6, and then eventually you can't spend from op-nop 6.
They can just shut it off, and it would be as if it had never happened.
So in that sense, the miner has like an error correction option.
So you could try something, it's not working, and then untry it.
But of course, any serious person will now say, well, maybe something about it is like unfixable or brainwashes the miners, or maybe the miners like it, but it's not good for the nodes.
But this is the idea that I was going to bring up.
That also is not exactly a coherent, consistent belief because what it's basically saying is at some point an idea will come into the world, idea X.
And miners will want idea X, and then it will be good for miners and bad for nodes.
And either – like if it's an unblockable idea X, it kind of doesn't matter if I have the idea and it's called BIP300, or if the miners themselves have it and it's called something else.
Or if it's like someone – you know, the world is full of people having ideas.
It's kind of like if someone has an idea for op-nop-6 or something, it doesn't have an aura of inevitability about it, I think.
Which is like if this is the way to attack Bitcoin, and the miners think that they want it or something, then this sort of will inevitably happen.
It is possible, but in that case, the URSF scenario or the users opt into this new software that invalidates blocks of miners and punishes them by refusing them as valid blocks is also inevitable.
You know, from a very theoretical perspective, like as a – what do you call it? – a suspicious person, or there's a term for it, I forget.
Adversarial thinker, you can say, all right, like whatever attack is going to happen, so it's inevitable.
But you know, is your point like someone's going to attack Bitcoin, so it might as well be me?
You know, that's kind of like the UDI point for ordinals.
It was something like, why hold this against this change?
It's kind of like, if it's this easy to kill Bitcoin, then what are we all doing here?
So I think it was something like that.
It's not that easy to kill Bitcoin because the users would still have this mechanism, which is to invalidate evil miners.
It's just not something that we want to go through.
It really isn't.
It's like the best outcome is that consensus is determined like way beforehand.
I think we all agree on that.
There's an important disagreement, though, because it's kind of like people will not pay attention to the idea.
The idea is from 2015, so I see myself as having gone about obtaining consensus in an incredibly slow way.
But here's the thing.
It's just that everyone ignores it until Luke's pull request.
And then they say, why is everyone rushing this?
You know what I mean?
Because the idea is from November 2015.
I mean, honestly, people were still ignoring it after Luke's pull request.
I think it was like Dan Held tweeting about it that got people riled up.
To be honest, that's the way that I saw it.
I saw Luke's pull request and I was like, that's great.
Luke's getting paid to do something.
And it's pretty clear that he's not coding the activation client.
And it's pretty clear that it's not...
Details, of course.
That should benefit everyone that we say, well, this is the actual details of the proposal.
What actually drove the attention to Drivechain is like, okay, so whether or not you like Ordinals yourself,
people fucking hate Ordinals overall.
Because, yes, it may be good for miners and like miners made, I don't know, like a thousand bitcoins more.
But it's not people issuing the Ordinals that were paying the transaction fees to the miners.
It's not like the miners took the money from the Ordinals issuers and like, oh, the fucking scammers.
It's like all of us were paying those transaction fees.
All of us.
So anybody who's transacting on Bitcoin that is not of four Ordinals specifically is like against it.
Because they were paying a fucking ton of money on transaction fees.
Which, okay, it's inevitable one day.
Okay, fine.
But I mean, we paid it like this year.
Specifically non-custodial exchanges.
It was fucking brutal.
So when people saw that the Ordinals people were also promoting Drivechain,
I think that's what caused the...
I don't think it had anything to do with Luke's pull request.
I think it had everything to do with, you know, shit corners and grifters are suddenly paying attention to something.
And people are like, well, I don't like this person.
This person's opinions are usually very bad.
And they are supporting this Drivechain thing.
Let's look into this Drivechain.
I think that's probably what happened.
That's not really a true framing.
Because the same fucking thing happened to BIP119 and Jeremy Rubin.
And like, you know, I think there's...
I don't think there's ever going to be consensus on a soft fork again in the future.
I think that we're at the point where people's issues that they have with the soft fork include stuff like,
why are you rushing it?
Or why do we need this now?
Things that are not falsifiable.
So it's like, what's a legitimate...
How do you push back on something like that?
It can't be proven wrong.
It's just like an opinion with, yeah, no counterfactual.
There has to be a mechanism to battle these topics out where consensus can actually be determined.
There just has to be.
Or otherwise, we're going to get to this point where everything's fucking frozen.
And if you take a step back and you just look at it big picture,
we had fucking SegWit.
Then we had Taproot.
Then we had...
Now we've had two different BIPs that have come up since then.
Both of those have been shouted down and shut down.
I think the community is searching for an activation method and path forward,
and it's getting harder to find one.
And I would just say in general with BIP300,
if BIP300 is going to be a thing,
I think there are very strong feelings from the critics of BIP300 about how things should be activated.
Those ideas need to be injected into the conversation,
because if BIP300 is successful in getting activated,
it's going to lay a path for other BIPs to go down.
So we're creating a framework of how shit is going to work going forward that's contentious.
The main difference with BIP300 is that the contention against it is not towards the activation method.
The contention towards the activation method of BIP300 is pretty much the last three days.
It's pretty much from your tweets about miners talking about activating BIP300,
and it's coming mostly from me.
So most of the actual contention against BIP300 is completely unrelated to the activation method,
which is a huge difference from Taproot and BIP 119.
BIP 119 was absolutely based on the activation method.
And then you had James O'Brien put OP_VAULT,
and when I looked at the OP_VAULT BIP, it said in the BIP,
well, we should activate this just like we activated Taproot, which was a speedy trial.
And then there was some backlash to OP_VAULT,
and I think James got a lot of flack, maybe mostly from me, I guess,
because it was implied or suggested that it would be a speedy trial.
And no one has committed to any activation method for BIP300
other than the anonymous miner that you just talked about on Twitter.
The only thing that we've heard is there is a miner who's like,
fuck it, I'm going to run the software.
I'm suggesting that that's an opportunity for the critics of BIP300
to improve the process for activation going forward.
I'm not saying that activation is the specific concern with BIP300.
Well, BIP300 is not the right one because it clearly does not have consensus yet.
I'm not saying it will never, perhaps in 10 years, perhaps in 5 years, perhaps.
Is that not the right type of BIP to do this on?
It's CTV. I think it's CTV. I think it's BIP 119.
I guess my question is, do we not want a BIP in which there is people who are resistant to it,
where we can trial a way for them to express their resistance and shut it down?
I don't really fucking care if at the end of the day BIP300 doesn't go through,
if the community doesn't want it.
I think we should minimize conflict. I think we should minimize conflict for a while.
I don't think we need conflict at this point.
I think having conflict now is not better than having conflict in 5 years.
I don't think it's like a kid that you want to get them sick when they're younger
because it's not like some disease that is worse for older people.
If we can avoid conflict, that's the best outcome.
But I think we're in conflict right now.
No, I don't think so. I don't think there's serious conflict
because Paul hasn't even put out an activation client yet.
Right now it's just rhetoric. There's no conflict.
There's a looming potential.
I think this is not David's point, and also I just want to point out my app is frozen again,
so it will probably crash soon. So sorry about that.
The other thing is though, I think when David's pointing out that there's no process,
that doesn't mean there's no process in the open,
but that doesn't mean that there's no process
because this is like when people feel like democracy doesn't work
or their activism doesn't work, then they just riot.
You know what I mean?
You can't just say there's no process and then expect the status quo to hold
because if there's no process, that is what will trigger some kind of insane bad process
that actually no one wants.
So you can't fight the fact that there's no process.
If people just say, well, we'll just have the status quo for a while, for five years,
and why have conflict?
But it's like you don't get to choose.
You know what I mean?
Someone declares war on your country, you can't just say, I choose not to have conflict.
Well, yeah, but what David's saying is that he wants the opponents of BIP300 to suggest a process.
Obviously, Paul, you're the one who's supposed to suggest this is how I want to activate.
I think at this point, unless you want to debate it again further,
you may want to because right now, I mean, there seems to be a kind of momentum.
You may want to wait a little bit before you try to activate,
just as a friendly advice if you really want this to go through.
But I mean, it should be up to you to be like, all right, this is the activation.
And we've talked about it for a while.
And now it's time to make the final bet.
If you want to use the poker analogy, it's like, all right, I'm putting my bet or I'm folding.
But certainly not as the opponents of BIP300 that are going to suggest the best path forward for BIP300.
I think if we're going to use a BIP to have an activation method,
which I believe is the most appropriate one, the least conflictual,
or not necessarily the least conflictual, because obviously, speedy trial is the least conflictual.
But the most, I guess, decentralization preserving, we should do that with CTV.
Because CTV has at this point, like Lex was saying,
there is not a lot of legitimate and credible opposition to CTV.
Other than the speedy trial, which is a separate thing.
It does seem to have some level of consensus.
And thanks to them, what CTV has missing is an app that's actually ready for production.
I think there are probably some, I haven't looked into that too much.
And as you said, what worries me the most is not a specific BIP300 activation method.
As you said, it's like there is potentially a secret one that we're not aware of.
And I see tweets, for example, from Udi.
I saw a tweet, a screenshot today.
I don't know what the context was, but it was like,
laser-eyed maxis are about to learn a very important lesson in consensus.
The soft fork is definitely coming.
You know, I don't know, is he fucking trolling?
Is he trolling?
Is he friends with F2Pool? I don't know.
I will tell you this.
I don't know, I have no idea what he's referring to there.
But I think Udi is, just from having spoken to him over the last 12 months,
I can tell that he is a fan of the fake accompli.
As like, you know, he's like that with Organos.
He's like, well, we just did it.
And if he would have said, if we had asked for permission from Organos,
people would have stopped us.
He's the exact character that Paul was talking about,
where when you don't have guardrails or a system in place, anarchy reigns.
And he's like the joker who thrives in an environment like that.
And I think the framing that Paul gave it is like an election.
The only way consensus is determined in Bitcoin is by the hash rate.
That's the violent path.
If we're going to layer rules on top of that,
and try to be more civil and gentlemanly about it,
then both sides of a topic need to be aligned on how an election works.
Both sides have to buy into the legitimacy of the process,
or otherwise it's just going to devolve to the violent process.
I'm just going to say that that's not entirely correct,
because if 90% of the hash was to switch to a version of Bitcoin,
which is either 2x block size or is printing more Bitcoin,
it wouldn't work.
That wouldn't determine what is Bitcoin.
You know what I mean?
But if 95% of the hash rate did that,
and Coinbase and Binance supported it,
that would determine it.
No, it's still not Bitcoin.
If you would change the rules of Bitcoin to a degree which is obviously non-consensual,
even if you have 100 Bitcoin exchanges and 95% of the hash rates,
there is something that's not quantifiable,
that you have to use your judgment on,
which is if the exchanges and the miners decide to print more Bitcoin,
it's just not Bitcoin.
I don't have a logical reasoning behind it,
other than we all know it's not Bitcoin.
I think I understand what you're saying,
and I think David probably does also,
because we all see in Bitcoin something.
Even Bitcoin today is not really Bitcoin.
What Bitcoin is is a vision for the future.
It's like this abstract thing.
So it's kind of like a near versus far, abstract versus concrete thing.
But I think what David is saying,
and what I think you would also agree with, Francis,
is that if you really do have 95% hash rate and some large exchanges,
and we're using the word Bitcoin to describe something on Monday,
this was Roger Ver's problem.
They tried to get Bitcoin in the ticker for Bitcoin Cash,
but words don't really work that way.
A word has to refer to something on Tuesday that it refers to on Monday,
otherwise people get really annoyed.
So I don't know where that would leave,
the intersection of all those different effects,
but it really would be the case that one thing would just be sticky enough.
There are things that are not to the core identity of Bitcoin,
like script type.
And that's maybe why Taproot got a free pass,
even though people didn't understand it,
and it was Russian.
It didn't have the same flag that you're getting.
SegWit as well.
But there are some things that are at the core of Bitcoin
that the layman understands.
And one of the reasons why BIP300 is getting so much flack versus Taproot
is that it's touching the miner incentives.
So miner incentives.
People believe that it is, but it really…
I know. I don't know.
I know you believe it doesn't.
I know you believe it doesn't.
It improves the miner incentives.
It saves the miner incentives in a way.
It's the only extent that it changes them.
It gives an opportunity to make huge amounts of money.
It doesn't affect L1.
So this is a meme that is spreading, unfortunately.
It has an effect on the economics of Bitcoin.
Your contention is that it's good.
Yes.
But you understand that because it's established that it has an effect
on the economics of Bitcoin,
it is understandable that people are like,
well, maybe it has a downside on the economics of Bitcoin.
Whereas SegWit arguably did have an effect on the economics of Bitcoin,
but we didn't really foresee that,
which was people using the Witness signatures to store JPEGs.
Had we known that in advance, for example,
that was not part of the contract,
like the social contract of SegWit.
You know what I mean?
The social contract of SegWit is we're going to fix malleability,
which allows us to have lightning.
It's also going to be easier to spam Bitcoin.
There is an informal understanding that this is the core contract,
the identity of Bitcoin.
It's decentralized.
It's this.
There's a delicate balance between miners and nodes.
The incentives and mining incentives are pretty clear to anybody
that studies it for more than three or four months.
You can be a layman and understand these incentives reasonably well
without understanding how script works and how the block formats work
and all that.
So that is why B300 is getting more flack
because it does have an effect on the economics of Bitcoin.
Whereas the other soft forks, they might, but it's unknown.
Whereas for Drivechain, it's known.
It will affect the incentives of miners in maybe a positive way,
but also maybe a negative way.
I think it was always part of the vision for Bitcoin.
This is, of course, the territory of what is the vision for Bitcoin.
If Jenobi is here, we will get to him in a second.
But I think it was always part of the vision for Bitcoin.
Sidechains was part of the vision for Bitcoin at one point,
and it was certainly part of Bitcoin's vision to dominate the world
and take on enormous influence and be used by lots of people.
Generally, sidechains has been part of the vision for Bitcoin
for at least a while.
Merge mining, whether we like it or not,
was part of the original inventor's vision for Bitcoin.
However, hashrate escrow is not.
Hashrate escrow is the component that people are...
And also the fact that we need to change Bitcoin's rules
to satisfy a business case, essentially.
The sidechain idea was the SPV proof.
So it's really a hashrate escrow.
It's not quite the same, of course,
but the SPV proof was like the Blockstream,
white paper, sidechain definition, as I remember.
So hashrate is like a type of that.
Can I lob one grenade in this conversation, another grenade,
which I think is a real part of the resistance to BIP300,
is the pervasive cultural attitude and identity
that has come to Bitcoin of hating and despising shitcoiners.
Yes, that's a great attitude.
And the framing of BIP300 as shitcoin technology
because as an opt-in system,
it gives users the ability to do things
that other users look down upon or don't like.
I think that that's a real part of this.
I think it's a complicated part of it.
And I think that when we talk about,
at the end of the day, how is consensus determined
or who gets to make up what Bitcoin is?
I've been taking heat for this,
but my view is that it's the users.
It's the users of Bitcoin.
It's the people who pay fees.
They may aggregate themselves into one large economic node,
but it's the people that actually use Bitcoin.
And a lot of those users...
We're extremely dismissive of. I mean, we're extremely dismissive of.
And so I don't know. I do think that there is cultural misalignment between the people that actually operate Bitcoin and the masses, the tens of millions of people that actually pay transaction fees and actually kind of make the whole business of Bitcoin tick.
So I just want to surface that issue.
Real quick, David, before we move too far past things, I have two things to say to two prior topics. One, Paul, your claim that BIP300 and 301 don't alter miner incentives, that is just objectively, factually false.
The entire having an independent ordering for sidechain blocks that can have conflicting states on the main chain absolutely alters the incentives by allowing mainchain miners to reorg sidechain blocks, both without having to redo any work and lose the money for past work, but two, without taking money from the miner who, air quote, mined it last time.
Because without sourcing block production, that outsourced person pays the original miner.
Every other miner can see that there was an anomalously high fee there, and then they can simply reorg the sidechain without reorging the mainchain, claim that money themselves on the sidechain without taking it from the miner who received it on the mainchain for the prior block, which is a huge disincentive for anybody as an outsourced block constructor to take that risk.
And it's completely risk-free for a miner, because they can just do it themselves.
And also, miners can try to do that amongst themselves, even if it's only miners doing this.
So it drastically alters, just through that mechanism alone, mining incentives.
And two, what you guys were saying earlier in regards to trying to push BIP300 and 301 through just to test contentious changes, like, are you guys even listening to yourself?
Instead of doing something productive, instead of moving forward with things there are consensus for, or with at least wider consensus than something like drivechains, and actually enabling productive changes people will use right now, we should waste our time trying to ram something through with no consensus just to see what happens?
That's fucking insane.
That's not what was being suggested. What was being suggested is that we have a mechanism for contentious topics to be rejected by the community, rather than just people on Twitter saying, I reject this idea, because that is not...
Well, I mean, I didn't just say I reject that idea, David, I just factually went through how it significantly alters the entire miner incentive structure, which Paul repeatedly denies, and that's a substantial criticism.
Where's the response to that? Besides, you're wrong, facelessly.
Let's talk about that issue. I'm not really making a statement about BIP300, it could be BIP119, it could be any of the BIPs that come in the future. It's just like there's always going to be people that are detractors of any BIP at this point.
Yeah, but David, this is an established thing. There is an established process for this. It's called rough consensus. It's what the Internet Engineering Task Force uses, which is how it was actually adopted for the process of Bitcoin development.
There is no voting, there is no convinced people, how many are there? Unconvinced people, how many are there? It's substantial arguments. Is there a substantial criticism or worry of harm that has not been addressed, either through a modification to solve that problem, or through showing that that problem doesn't really exist? That's the criteria.
And right now, drivechain does not meet that criteria.
So, separate from drivechain, what happens if you get to the point where someone is of the view that all the substantive arguments have been addressed, and that the remaining criticism is not valid, and the people who have that criticism have the other view?
That's always how it's going to be. You ignore them, and you move on. You see what happens then. But until you've reached that point, we're still at the phase of what are the problems, and have they been addressed?
That's fair.
On that topic, there isn't even an activation proposal, and I've already spent seven hours on this, so if ever there actually was an activation proposal for this, as Shinobi said, it is a fucking huge time sink. Huge, huge, huge, for people who are building in Bitcoin and care about it.
So, on this note, I'm going to leave you guys. Great to talk, David, and Paul. That was a good conversation. So, thanks for your time, guys.
Hey, Francis, before you bounce, I just want to say thank you for joining the space, and I know Twitter can get heated. Well, he's gone. All right. Love, Francis.
So, Shinobi, your example was basically something like the L2 blockchain can reorg.
That's all you took away from that point of criticism?
No, I was just trying to zero in on it. So, what exactly is it that you're complaining about?
I literally just went through that. Did you ignore me?
No, I don't think so. I think you said something like mainchain can reorg the sidechain without reorging the mainchain. They can claim fees.
Seriously, Paul? This is what we're going to do?
Well, I mean, this is where I say seriously also, because I think you're like a fake critic many times. I'm just asking you to explain whatever your critique is.
No, you're asking me to explain for the second time instead of responding to it. But okay, we'll play this game.
When there is an anomalously high spike in fees on a drivechain, the outsourced block constructor has to pay real on-chain Bitcoin to collect that and a profit margin on it.
When people see that, the miner of the next block, he can just redo that block and claim those coins on the sidechain instead.
And he has an incentive to do that because it's an anomalously high block that he missed out on.
And there is no real big disincentive because he doesn't waste any of his work taking the mainchain backwards.
And he also does not disrupt the other miner who claimed the mainchain funds for the last block.
So there's really no big negative consequences for doing that.
And if the incentives are there for that, it's probably going to happen.
And if that becomes normal, who is going to risk being an outsourced block constructor for the sidechain?
No one. It'll just be the miners doing it.
And then we're back at that situation where the incentives have taken us that miners wind up doing this themselves because no one else will.
Because there's an incentive to do that that's more profitable.
And you do have those centralization pressures.
But it does boil down to the fact that they're just real.
It's like the long run future of Bitcoin where there's no block subsidy and it's fees only.
And this is called fee sniping.
And this is the fate that awaits Bitcoin L1.
And it will be on the drivechain immediately.
Well, you're asserting that.
You're presupposing that with a bunch of assumptions that you're not even defending.
And two, you're ignoring the fact that with drivechains, this dynamic removes most of the negative externalities that that behavior imposes on miners.
No, I don't think so at all.
I think I'm trying to explain to you that what you're describing is just reorg risk on L2.
And it may impact how much the person is willing to pay on the BMM conveyor.
But if so, then miners will wonder about why that is and what they can do to get more money.
So I mean, I guess in that sense...
Or they'll just turn the nodes on themselves.
Yeah, but they may if that's very cheap now.
No, again, you can't assert that because it's totally unbounded.
The resource cost, block size, etc.
If it's cheap, they'll do whatever makes them the most money.
So that's not really changing miner incentives from my point of view.
See, when I use the changing miner incentives phrase, I'm zooming out and I'm looking at miners have done many things.
There was a time before ASICs.
There was a time before pools.
There was a time before immersion cooling.
So I say, what does it really mean to change miner incentives?
I mean, like some situation where they would want to censor transactions or do reorgs or something, some new kind of thing.
But there is no new kind of thing in this.
It's the same thing it always has been.
Oh, so you're saying it's impossible for there to be new incentive factors?
No, I'm just saying that with BIP300, there isn't anything new.
Okay, there isn't anything new.
Okay, so if a massive, say, BSV style sidechain got spun up using drivechains, that would not be subject to incentive distortions.
Like if the chain got absurdly large and centralized, that it's impossible to enter as a new competitor in producing blocks for that sidechain.
Because so few people have a copy of it, you literally need one of their permission to enter that set of people.
Well, that's basically liquid today, ironically, because no miner can become a liquid.
Liquid does not distort mining incentives because miners are not involved in liquid as a system beyond...
That's your criterion, though, that you can't break in.
No miner can collect.
Liquid fees are collected and they go straight to Blockstream.
So liquid, but you cannot break in and get those fees.
I think the bigger problem, though...
No, see, you're glossing over a very important distinction there.
Those systems don't hitch into or depend on proof of work for your consensus on the state of the system.
Things using drivechains do.
But liquid certainly does because you can't establish which deposits have taken place without consensus.
That's not the internal state of the system.
Something where the internal state depends on...
That's every merge mine thing, including Namecoin.
Exactly.
That is not something like liquid.
Liquid does not interfere or involve itself.
If liquid had been merge mined, but the deposits and withdrawals were gated and had infinite cost to join,
then you would have a problem with liquid if it was merge mined.
Paul, why do you keep asking half rhetorical questions that you know the answers to?
Like, yes, I have a problem with merge mine systems.
I've literally gone through these problems I have with you for years until you've lied to me.
I genuinely don't understand what you are saying most of the time.
So I'm sorry about that, but I'm going to give it a try.
You're saying if you have a problem with liquid just because it's merge mined,
if Blockstream decided, because all the liquid transaction fees go to a wallet controlled by Blockstream,
if they just decided that they were going to donate the proceeds to miners,
then you would say that's affecting miner incentives.
And then it would be equivalent to BIP300 in your view.
Paul, I'm going to ask you a question.
Paul, no, it wouldn't if somebody freely just donated money unconditionally to miners.
That, like, dude, like, see how far you have just walked us away from the concrete example
of fee sniping now becoming something that does not require redoing work,
which is a factual incentive change.
And how far you've walked the conversation away from addressing that point?
Like, on any level?
I mean, is it your view, though, that affecting miner incentives is just if someone pays like 10 cents a year?
Like, if I start a new mining pool?
See, no, you're just being a smartass and reducing things to the most absurd possible irrelevant.
It has no impact in terms of scale of effect.
This is a structural change to the incentives, to the opportunities available to miners added by this fork,
something that you have explicitly and repetitively claimed it does not do.
Here is a factual example of a structural change.
So what's your response to that?
I don't believe that it is a change because it's just...
So your response is to redefine the word change.
Okay.
Well, let's go with your example.
And let's say that line merge mining doesn't exist at all.
And there's fee sniping on L2.
How is that a change in miner incentives?
So what are you talking about, Paul?
What are you talking about, Paul?
Let's remove the thing from the conversation that introduces this dynamic.
And then let's talk about that dynamic.
That makes no sense.
Okay, well, which thing are we supposed to reintroduce?
Which is the thing that causes the dynamic?
I thought you were saying before that...
Dude, are you serious?
You are just like going in circles trying to go repeat yourself every five minutes
and just refusing to actually respond.
You claim there are no incentive changes.
I have just given you a crystal clear concrete structural change to the incentives.
And now you're just arguing, well, let's talk about the incentive change of the thing that introduces it.
Or, well, what does change really mean?
Well, is that really unfair to ask if I start a mining pool and I pay an extra 10 cents a year?
Does that count as incentive?
Again, the most ridiculous fucking strategy here.
You're trying to equate something that you say will 10x miner revenue be millions of millions of dollars
and the variable that represents in this situation.
And you're trying to compare that to 10 cents?
Do you not see how ridiculous that is?
That's just deflecting.
You're not responding.
First of all, my phone, I think, is probably going to crash again, but I'll be back if it does.
But I think it is taking an extreme case.
And it's a well-known thought experiment like in physics and stuff.
You get the underlying picture.
You take two extreme cases and then you blend things in between.
So I'm just trying to get an idea of if it's really the case that you think that…
I mean, I don't know what you mean by effect.
Like if someone broadcasts a Layer 1 transaction, does that affect miner incentives?
If they pay 10 cents more with that transaction, if they pay 15 cents more, are they required?
As if a gun was being held to their head, are they required to mine the transaction?
I'm just trying to figure out what these words you're using mean to you.
So that's the only way I know how to understand what it is you're saying.
So for me, the fee sniping, that has always been part of Bitcoin's incentives.
And people even do it today.
There have been times in Bitcoin's history when someone paid an unusually high fee
that was way higher than the fees of the surrounding blocks.
I think there was a case where miners kind of fought over it, the fee.
But that raises some other questions.
Fee sniping is already part of Bitcoin today and so is the risk of reorg.
We don't want there to be any reorgs, but reorgs are part of Bitcoin
and that's why people wait for more than one confirmation usually.
Okay, Paul, it's like you ignored every single thing I say.
That risk of reorg to the main chain has nothing to do with anything I said
because that's the whole change that drivechains introduce.
You can reorg the layer two without reorging the layer one.
You do not incur that opportunity cost.
And this disincentivizes outsourced people from producing blocks for these drivechains.
And if there is still economic demand for them, that leaves only the miners to do this.
So this winds up in complete contradiction to your assertions
with miners having incentives pushing them towards being the ones that have to run these systems.
Well, it seems to me that the first part of what you said goes something like this.
It says something like, because of fee sniping on L2,
the miners will use classical merge mining instead of blind merge mining,
which I don't actually agree with, but I think is at least a sentence that I could understand.
So is that the first part of what you were saying?
Well, you don't agree with that? Why don't you agree with that, Paul?
Well, because I think it doesn't actually play out in equilibrium.
Because I think the sidechain will have its own fee maximizing block size.
And so it will not be possible to, it will not be desirable to fee snipe on L2 in the first place.
What does the block size have to do with that?
Here's this pot of money that somebody tried to claim and paid main chain coins to a miner to claim,
being free for a miner because they do not have to pay themselves on chain Bitcoin
to commit to that block and re-orbit that money.
What does block size have to do with that?
It's literally completely irrelevant.
It's the dynamic of, they can claim, miners can claim that twice,
once from a third party and once themselves,
without the miner who takes it the second time in the re-org
economically harming the miner who took it the first time.
They both get to claim that money.
Block size is irrelevant to that. That's a complete non sequitur.
Well, it sets on L2 the value of each sidechain block. So if there are 5,000 blocks, $5,000 each.
But I think...
Paul, that has no relationship to this conversation.
But I think I now understand what you really meant, which is that there are two people who are harmed.
The person who paid, as you know, you're saying this person who used blind merge mining in the first block gets scammed out of their money.
Because they paid on L1, but now they're not going to get an L2 block.
That's what I correctly summarized as re-org risk on L2.
And then there is the miner on L1, when they mine the sidechain block a second time.
So maybe we call them mainchain block 100 and 101.
And then we have sidechain block 7 and 8.
So they're going to, instead of mining block 8 in block 101, they'll mine like 7B or something.
An alternative 7 to claim the fee, having vertically integrated.
But the miner doesn't necessarily, the L1 miner doesn't necessarily get that money until the sidechain block on L2 has its maturity period, and then they withdraw the coins back to L1.
So there's kind of like a live by the sword, die by the sword re-org risk.
Except the miners don't have that capital cost.
They just hitch the commitment in there.
They don't have to pay money and take the risk of being robbed.
Only non-miners do.
Well, yes, but that's not the point.
The point is that on L2...
That is exactly my point.
Yes, but they can get re-org'd on L2.
They can get counter-re-org'd.
If someone builds on the original 7 versus 7B, then they didn't collect anything, for they paid an opportunity cost of a block.
So they lose, they actually just lose the money in that case.
That if the L2 does not go through with the fee sniping, then the L1 miner who attempted to take the block, they found a block on the sidechain that is re-org'd out.
And so they lost money by doing that.
So it's just like the risk you want to take if you start this.
And because people will lose money in fee sniping, that's exactly why I don't think anyone will do it.
But if anyone does do it, it's only affecting people on L2 anyway.
So it doesn't even make really any difference to the users, regular users on L1.
But do you understand what I'm saying about the L...
You're saying a miner...
You have block 100 and 101 on the mainchain.
You find block 7 and 8.
So block...
You have mainchain block 100.
They find block 7.
And then you're saying...
This person's thinking, okay, I just took L1 cash to find block 7.
Now when I find block 101, I'm going to mine a different version of sidechain block 7.
Re-org that person out, basically.
Take their money.
Take the L2 coins.
That's what you're saying, right?
And then I'm going to get away with it.
Yes or no?
Sorry, I didn't hear what you said.
Yes, you have introduced an entirely different dynamic for this that does not involve redoing and wasting the cost and the profit for your base work and your machines looking at the mainchain.
Yeah, but to me, each of the sidechain blocks is just as if it were one transaction on L1.
And so when the sidechain miners are on 101, they find the L2...
They find block 7B.
They are finding it at a risk of themselves being re-org'd out.
Because when block 8 is eventually made...
Because the sidechain has the block maturity period the same as the mainchain.
But it really doesn't matter if it didn't.
But the point is, you can't actually get the coins back to L1 for some period of time.
You can swap them out, as you like to point out all the time.
Sure, but that's in the next block or so.
So if the sidechain is re-org'd, then that doesn't happen.
So if the person is...
If you start with block 7 and someone has 7B, and then someone makes block 8...
It depends on which one they build on.
One of those people is going to lose their money.
Yeah, but here's the thing.
They, according to you, if they aren't just running their own node, they don't care.
It's whatever pays the most.
So the miner who just grabbed that money...
I'll just overpay a little bit to make sure somebody grabs one building on the block that I just made.
And that also is a very small risk, considering the incentive there.
And those miners having no way to tell anything except what's bidding the highest bid.
Yeah, but I don't see why you think it matters so much.
To me, it's just the same thing that miners already do, which is...
Because, Paul, this dynamic playing out and the low, extremely low level of risk for miners doing this...
Is a massive risk for anybody who is not a miner trying to take advantage of this to get fees.
It is a huge risk and a huge disincentive for them.
So that's also a reason for them to really bid low for these fees, like you said.
Which means that the margin miners have to capture if they do it themselves is that much larger.
It's that much greater of an incentive financially for miners to do this themselves.
I don't really think so, because why would it not also apply to the miners themselves who can re-org for free the sidechain?
For free, they pay opportunity costs.
But when they mine the block themselves, they're mining a block that itself can get re-org'd.
So the risk hits them both, which is, again, part of my point.
Okay, dude, it's like you literally just ignored everything I said.
If most miners aren't running these nodes themselves, all they see is the fee for a block commitment.
And the miner who just double-spent and fee-sniped that really juicy block has more money to pay a higher fee to ensure their block is the one that gets built on.
And that miner sees nothing but the fee.
That is a much, much smaller risk than you are trying to make it out to be.
Because you're ignoring the dynamic of the block that comes after and the economics there.
And the scenario you assume, which is most miners don't run these nodes themselves.
I didn't hear what was said in the last, like, five seconds.
But what I'm getting at is if there's re-org risk on the sidechain, then every single person finding blocks over there, it hits all of them.
It hits the value because every block you find is reduced in value because you don't know.
You have to say, like, maybe there's only a 50% chance that I keep this block.
So it seemed to me like what you were saying was people will bid low, and then the re-org risk will price the blind merge miner people out of the market.
And it will only be L1 miners who vertically integrate.
But after they vertically integrate, the threat of people re-org-ing will still be there.
So actually, the value will fall again.
Yes, Paul, which is why miners will just do it themselves.
That's what I'm saying.
They will not bid in the open to try to get a sidechain block in other miners' blocks.
They will just include their own commitments and their own blocks.
And that will be how it goes.
That will be how it reaches an equilibrium.
No one's willing to create the risk because you have to actually bid and pay on the main chain to set this whole scenario up.
So miners won't do it.
It will devolve to just miners doing this themselves in their own blocks and not bidding for inclusion in any other miners' blocks.
So what I'm saying is it won't stop there.
They'll still be feesniping each other.
And this will just reduce objectively the value of each coinbase by the same factor.
And that will reach an equilibrium.
But that equilibrium will be reached with miners running all of this themselves, contrary to your claims,
with massive disincentives for non-miners to participate and pretty big incentives for miners to directly participate.
I think we should have a separate—I'm going to continue to explain why I think I'm right,
but I think we should have a separate conversation that just said, like, if blind merge mining had never been invented,
because I think it has substantially distracted you and JC from the bigger picture of why I don't think this whole category of things matters.
But first, let's finish, because what you're saying is the sidechain will have feesniping,
so let's say one out of every two blocks is reorg, so you only have a 50% chance of getting the coinbase, the L2 coinbase money.
And you'll say, well, that's not enough, because the person—BMM mining—
Paul, you're trying to claim equal risk here. That's not true.
It's proportional risk to your share of the hash rate as a pool.
So you do not have evenly distributed risk here.
But that's not what I'm saying at all. I'm saying this—
No, that's what I'm saying.
You're saying that if someone has more L1 hash rate, they can more easily reorg the L2 block.
No, I'm saying their risk of being reorg is lower,
because their probability of finding the next block to guarantee their block is built on is higher.
It is not a symmetric risk profile for every participant.
I know, but I don't think we can go into, like, every single—we have to, like, continue each—we have to, like, consider each—
No, see, this is the whole problem, Paul.
My issue with this proposal is how all of these things interact with each other to change the incentives.
And you refuse to engage with that complete picture.
You consistently try to narrow things down to a tiny aspect of something and look at that in a vacuum.
And that's pretty much the exact same as just totally ignoring my argument and pretending it's not there.
Okay, so why don't we just—let me give you this one little example first, and then we'll see if it matches.
See, because what I'm saying is the sidechain has reorg risk, so now maybe the sidechain coinbases are worth $10.
But since one out of every two is reorg-ed, the person's really not willing to bid more than, like, $4.99 or whatever.
So the miners vertically integrate into your story.
That's what you just said.
The miners are the only ones running the sidechain.
But the L1—the miners can reorg—continue to reorg L2 at the same rate.
But it does not have the same downside because those miners are not having to capitalize Bitcoin up front in proportion to what they're claiming, like people who don't mine.
So the downside now that miners are the ones doing it is very different.
Isn't it the same thing, though, at the end of the day?
You get a coinbase for $10 on the L2, but you only get it—you only actually win it half the time because of the reorg, because of the fee sniping.
No, that's a new equilibrium.
Yes.
That is not—I actually paid somebody money to get this extra money, and I did not get the extra money and also lost what I paid for it.
That's not what's happening here.
That equilibrium is just bringing down the average of the revenue being generated by that.
And it does not come with the double whammy of you lose money you already had to.
Yes, but you haven't let me finish my story.
The story is that we start with blind merge mining and 100% of it goes through and there's no fee sniping.
Then we enter a time—there's no reorging.
Then we enter a time of troubles where there's reorging.
The revenues are cut in half because you don't know what you're going to get.
You don't know if you're going to win or not, the actual block.
And then we enter a period where people stop using blind merge mining and the miners vertically integrate.
Then there's still fee sniping.
So then why is it a different number is the question because it should be just $5 or $4.99.
The miners do not—it's like you literally just ignore everything I say.
Miners don't have to pay anyone anything to get their sidechain block committed to in a mainchain block.
So they'll just do that.
And because that risk is low, they will stick with just doing that.
They will not try to bid to get a sidechain block in other miners' blocks because that increases their risk profile.
Whereas sticking with just including theirs in their own blocks does not increase their risk profile.
Yeah, but do you believe that if a miner vertically integrates with Drivechain and they find the L2 block,
do you believe that they pay anything on L1 to do that?
No, Paul. They do not.
They only get the coins on L2.
So why are you fighting it when I say if that L2 block is then reorked, then that first miner didn't get anything.
Whereas before, when everyone was playing nice, they got $10 per block per sidechain or whatever.
Because again, you're just ignoring my argument, essentially.
You're trying to pretend, let's look at this one block in isolation and not look at the long time horizon and average of when they do or do not get to keep that block,
which will exceed that $5 that's all anyone will pay because they actually have to pay money.
It's like, dude, every single time I lay out an argument, you ignore it and find some tiny isolated piece of it
and then just try to focus the entire discussion on that and that alone and refuse to even acknowledge the whole overarching argument exists.
Well, I'm having trouble understanding what it is.
It seems to me that it is about what…
Well, Paul, you seem to be one of the only people who has trouble understanding this.
Because when I make these arguments and I explain these things to all kinds of other people, they seem to understand it just fine.
Maybe they just nod and say, well, that sounds bad, but they don't really understand it.
Okay, Paul.
So we'll just throw out a little random subtle ad hominem insulting all kinds of other anonymous people to just dismiss the possibility that you are in fact the one missing something here that other people are in fact understanding.
Well, I'm going to try to understand it one more time.
It seems like you were saying that miners will reorg L2 without reorging L1 so that everyone who's pre-drivechain is not affected at all.
There's no reorgs happening on L1 and no one cares.
But something is happening to the quote, miner incentives unquote.
And so the miners are looking at these drivechains and they're saying, listen, I'm going to reorg and feesnipe these drivechains.
And then if they feel that that will maximize their revenue, they'll engage in that behavior.
Even though what it does is makes the sidechain more difficult to use, makes the users unhappy.
It doesn't really achieve anything because if you reorg every other block, then half of your blocks will be reorged out also.
So it's kind of like just adds a lot of risk for no reason.
Paul, you're the only one who thinks it's got to happen that frequently.
That can just happen with feespike outliers.
Who knows?
But it introduces risk for non-miners trying to produce those blocks that will disincentivize them from participating, which more and more over time leaves miners as the only candidates who can take this role without that risk.
Well, let's say that they did, though.
But before I want to say something else, though, which is that imagine that someone pays an unusually high fee on layer one and then miners fight over that block.
I mean, that has happened in Bitcoin already.
That could happen at any time.
Yeah, that's not an analogous situation there because the opportunity cost is drastically higher than my scenario, Paul.
It's not the same situation.
The risk profile is radically different.
Well, let's say that there is no blind merge mining at all and everyone classically merge mines.
And then there's a feespike on L2.
The miners fight over it over there.
I mean, how is this like a different miner incentive is the question.
I'm still trying to figure out how it's different.
Because without the composite picture of 300 and 301, the peg and the merge mining scheme, it's a completely different game.
Because you're talking now either a trusted, explicit federated system, which things like RSK and Liquid have shown people are not interested in, or you're talking a free floating shitcoin.
See, the thing about a free floating shitcoin is it doesn't follow the price of Bitcoin.
And no matter how much traffic is happening on that chain, that can occur while the price of that coin trends down, which is objectively what has historically happened.
It has trended down to a nothing percentage of miner revenue.
And it is a completely different picture and scenario than something actually anchored to the price of Bitcoin that cannot just freely drop in price on its own.
Yeah, but I'm just asking about your example so that I can figure out more about what it is.
So let's just say there is no blind merge mining.
And there's only classical merge mining.
Paul, what are you talking about?
That is a meaningless, pointless discussion.
Because my entire assertion here, my entire problem is that blind merge mining does not do what it claims to do.
That it devolves to the situation that exists in merge mining.
So what in the actual fuck do you mean, let's talk about if blind merge mining didn't exist?
This entire conversation is about blind merge mining.
That's literally the core of the discussion.
OK, well, let's talk about blind merge mining in general then. So let's say the blind merge mining is not only not invented, but it's impossible. And everyone, every miner must run. We go back to the pre-BIP301 world and every miner must run.
Jesus Christ.
Yeah, isn't that fair? I want to find out what the problem is with that. So let's say that happens. And then what is the issue? Where is the negative impact on someone?
To me, someone who runs mining, someone who like it's not even the full node cost of the sidechain miner is a lot like paying for like an immersion cooling.
Dude, Paul, it's like you don't actually try to have a conversation with people. You don't actually listen to what they're saying. You don't actually try to consider the arguments they make and the scope that they make them. It's like you just hear words come out of people's mouths and then go, let's have this different conversation. Like that's not the conversation I'm having. That's not the things that I'm commenting on.
You're saying BIP301 has some kind of flaw and will not be used because of L2 fee sniping. I disagree, but I say let's look at it for the sake of argument and we'll just assume that it doesn't exist. And then I want to see what the problem is with that. Because to me, blind merge mining is...
Paul, I have said and I am saying the same things I have said for literally years until you blocked me and just prevent me now from responding to anything or repeating these things.
The problem is a peg that holds a token's price to Bitcoin's price in combination with a blind merge mining scheme devolves into something that does affect miner incentives.
And the difference between blind merge mining in general or merge mining in general when it comes to miner incentives is the price. Is it pegged to Bitcoin or can it independently crash? Because empirically, all the historical data is that they trend down to nothing if they freely float with their own price.
And miners eventually just don't care. You point at Namecoin. Do you know how many times miners stopped merge mining Namecoin and then start again when the price pumps? It's a little irrelevant nothing that always trends to a irrelevant tail end. That is not possible when the peg is combined with things and keeps the price of something anchored to Bitcoin.
But I think it would be very easy for most people to see why I bring up Namecoin because Namecoin was invented by Satoshi and has been used for 10 years and is in constant use. It's true that it's not very popular. It doesn't generate a lot of revenue.
But it's something that no one can stop miners from doing and that they already are doing. So what you're really saying is I hope merge mining, which is this inevitable thing that has always existed and always will exist.
You're saying I hope that this thing remains small and niche. But you can see how when I'm criticized for changing miner incentives, why I just think, well, that's just clearly not true because merge mining has always been part of miner incentives. It's just been very small.
So if that's, you know, there's no in principle change in miner incentives. It's just they would get a lot more money from merge mining than they used to. So you can hopefully understand why when the critique is something like, oh, you're changing miner incentives, that it would be fair game to point out.
It absolutely is a change in miner incentives, Paul, because you are taking something that has empirically, observably always trended to nothing. And by combining it with the peg and anchoring the price of those things to Bitcoin, you are removing a factor in the current incentives, which is those things are freely priced.
They don't just track the price of Bitcoin. By removing that possibility and anchoring the price to Bitcoin, you are changing the incentives. You are changing the situation.
Well, I mean, it seems to me like now you're saying something like you would support the 300 of Namecoin were worth as much as Bitcoin. I mean, I know that's not literally what you're saying, but...
No, Paul, that has no relationship to anything I just said at all. That reflects nothing of what I was trying to convey.
Why do you do that?
Billy phrases Shinobi about this has nothing to do with, it has nothing at all, 0%.
Because you are consistently trying to reframe everything I'm saying in a different context to ascribe a different meaning to it in a public discussion with numerous people listening to it. That's why I'm saying that, Paul. I'm correcting you. And I'm stopping you from just putting words in my mouth, essentially, which you have repetitively done this entire time.
Well, I'm going to do it right now because you know full well that you just said a moment ago, empirically trends to zero. And then I said, well, what if the price was the same? And you said, the problem is the peg. And then I said, what if the price of Namecoin was the same as Bitcoin? So it's not like it had absolutely no relationship whatsoever. And I'm some kind of bad faith.
Yes, it does. It's not anchored to that price, Paul. It's completely freely formed. If a shitcoin pumps, you know what it has done empirically every time? Crash. It does not just track Bitcoin's price. It is not perpetually, permanently linked to it in a way where it will never substantially deviate from it. Those are not the same situations.
Namecoin could be in a situation where its price happens to pump when it gets less usage, and then as a merge mine's chain, and then when the price goes down, the chain gets more usage. And so even though the price is not pegged, then despite being not pegged, the monetary value of the L2 blocks could still be the same amount of US dollar value as if it had been pegged to Bitcoin.
Paul, you are trying to take any extreme fringe edge case example with an insanely low probability and trying to hold that up to the comparison of this is guaranteed 100% of the time. That's absurd.
Oh, that's true.
Absolutely.
I'm just trying to say that you're saying that your case is based on this empirical concept that something that may or may not happen.
Yes. The historical, empirical reality of all of these coins that have been merged is that it crashes.
Hey, can I attempt to moderate just a little bit? Because I think Shinobi is probably the most valid critic of BIP300 that I've heard, and I really don't want this to be something where Shinobi leaves and then we all suffer because of it.
And in Shinobi, I'm also, I do find it a little bit hard to follow your rationale, but I also find it equally hard to follow Paul's rationale too in his responses.
So I'm not going to claim to fully understand you or Paul's response to your points, but it seems like to me, Paul, what Shinobi is saying, and Shinobi, please correct me if I'm wrong, there are things that are already possible.
There's already kind of issues with MEV and ideas here, but drivechain exacerbates these things and makes them even worse, and just because we can do something doesn't mean we should do it.
It's like shooting yourself in the foot. Even though we already have examples of this, which I think you're pointing out, I think what Shinobi is trying to say is this releases it and opens up the ceiling for this to get way, way worse, and it gives people a direct path to it, versus right now it's sort of muddled on how this necessarily becomes worse, even though it is possible for this to become worse.
Yes, that is the core of my entire argument. If your oven has a 1% chance of blowing up in your face, why do you want to increase that?
So, Paul, I think what you need to prove out in order to satisfy this concern, which is somewhat .8 on the list, this list I'm trying to promote, but whatever, I think what you need to try to prove out, or at least acknowledge that, yes, this is a problem, but does it make it any worse?
And I don't know how easy it is to prove, hey, this isn't going to make it worse, because Shinobi is pretty convinced that this does enable easily for this to get way worse, and I think Shinobi is coming from a very, very good place with his concerns here, so I don't want you to necessarily brush this off as if Shinobi is trolling you right here.
I think he's being completely sincere with his concerns, and Paul, I'll just step aside. I don't want this to be something where it's like we're missing this opportunity to progress the conversation, either acknowledging issues or making people understand things differently, you know what I mean?
Yes. Okay, so I think if we zoom out, my plan for explaining why there is no issue is, see, like, blind merge mining is an optional thing.
They can always reintegrate the same person. Blind merge mining is designed to separate the L1 miners from the L2 blockchain on a day-to-day, but you could always have a vertical integration where the Layer 1 miner decides that they want to wear both hats, so to speak.
So what Shinobi seems to be saying is that, for me to be correct, it relies critically on that never happening, but I don't feel that way at all. To me, it makes no difference if it happens every time, and so I think that is where we should take the conversation next, because to me, blind merge mining is like a clever way of helping the miner not run a node.
And I actually think it will work, and I think the fee sniping thing doesn't apply, and actually I think Professor Warner's essay, he frames it in a certain way, but I think he actually explains sort of why it won't happen in that long essay, so people should maybe look it up if they're interested in that, or I can continue to talk about that detail, but I think maybe it's just easier to just say that Shinobi, he thinks that there's a problem if there's no blind merge mining.
I'm convinced also that there is absolutely zero problem, even if blind merge mining had never been invented, and in fact was impossible, and every sidechain miner, I would say that it has not changed miner incentives, even if it were required that every miner run every sidechain node, I would still say it doesn't affect miner incentives.
So that's, I think, where the conversation should go next, but I need Mike to tell me whether or not any of this is making any sense to him or the other people in the audience.
Who do you love more, Mike, your child, your crying child, or the Bitcoin community who wants you to moderate this important…
The thing that I think Shinobi has brought up in the past, which I'm not exactly sure if this is what he or you are getting at is…
Well, Mike, you mind real quick if I just get a quick word in to what Paul just said. Like, please. Like, Paul, you just said you don't care if miners always wind up running these nodes themselves.
So what you have just explicitly said then is you do not care if miners are affected by the consensus equivalence of a block size increase and the incentive changes that creates, especially in pool dynamics and all of that.
So then there's just an impasse, like, period. You will never get consensus on this proposal ever if that's your attitude, because a shit ton of people in this space, that is a line.
That is a serious concern, and you have literally just said you don't care, you don't see that as a concern, you don't even see that as something to address.
That's a final impasse. Like, there is no moving forward here. There is no moving towards consensus.
We just got started, though. I was just saying that we should talk about what this is really about, which is the prejudice against miners…
That's what this is about. That's what this is about, Paul. What I just said, what you said you don't care about, is what this is entirely about.
But let me ask you this.
That is a complete and total impasse. That's a brick wall.
If it's the case that a miner must spend a certain amount of money to buy an S9, or if it's the case that you must have a certain amount of hash rate to join a pool, why is that any different from any other requirement, including the requirement to run onerous sidechain node software?
Because the entire viability of Bitcoin as a system, Paul, is neutrality and censorship resistance.
That was accomplished through the limitation of the block size.
That was not just about miners and how it affects miners. That was also about users.
It was about how both of those things interact.
It's about users being able to actually validate things, but it's also about the mining ecosystem having a floor of decentralization that they can hit.
And when you start trying to turn this up in a way that only affects miners so that you can look to users and go, this has no effect on you, it does.
Because it starts creating those centralization pressures that have a big effect on censorship resistance, on neutrality, by raising the floor of how decentralized things can be.
By raising the floor consciously and artificially, by tweaking this knob, how small scale of a participant in the mining system can be viable.
Yeah, but it's true that there is a knob as how small scale a miner can be viable.
But that's my point, is that to buy even like a block eruptor or something, or like an S9, it's like thousands of dollars.
This is why pools exist, to pool things.
This is why people are looking at pools, which are a point of centralization and researching how to turn them into distributed protocols,
where every individual miner running hardware can actually have their own node plugged into this protocol,
do their own block selection to actually decentralize the block template construction as much as, or at least allow it to be decentralized as much as the actual hardware ownership is.
And drivechains and these merged mine systems artificially increase the cost of that.
They raise the floor of how low you can go there.
Well, but let me ask you this, though.
You're saying that you have a problem with anything that increase a miner's costs.
In terms of coordination of a pool, the validation cost of doing that, yes.
The entire system was designed, Paul, to increase the cost and the profit margins with the difficulty adjustment.
So please do not try to take this conversation down the road of conflating those two things.
That's what the system was explicitly designed and needed to be designed for, to function properly.
The block template construction, the actual validation aspect of pooling, that needs to be decentralized, too.
And drivechains is something that makes it harder and harder and more expensive and less inclusive in terms of shit we can do to improve decentralization.
So you're talking about how much it costs to start a new pool.
You are not at all talking about how much it costs to become like a hasher, like someone who's buying an S9.
Because you seem to agree with me that the miners have huge costs, even a small miner has costs that are much, much higher.
I'm not just talking about starting a pool.
I am also talking about the cost of participating in a protocol that replaces pools.
What do you mean by that?
I mean, every miner hashing away is also running a node, and they are picking their own transactions.
They are actually making their own block templates.
And when their share actually meets the difficulty, their block template that they constructed themselves is what's sent out to the network.
And all you need is fancy scripting in the Coinbase, and you can have a totally trustless way to divvy that money up between miners.
There are numerous designs out there for that right now.
The possibility of design space gets bigger and bigger the more you start adding things like CTV, or APO, or other very basic covenants.
And drivechains completely undermines how decentralized that type of landscape can be in the future.
And I know for a fact that there are major mining operations, even pools, who want to see things go in that direction.
Because they see that as a protection of their investment long term by actually maintaining and optimizing those specific properties.
So I don't know if maybe Mike can answer the question about if he's talking about costs of starting a new pool.
I honestly don't understand what the...
Jesus Christ.
Jesus Christ.
Paul, I have a question for you.
I just want to simplify the conversation because I have an ADIQ smooth brain here.
No you don't.
I guess what I want to get at is, would you be able to...
Because what I really want to do is see if I can find common ground between you and Shinobi.
Would you be able to agree that if MEV opportunities exist on sidechains, that that is a centralizing factor as mining pools and miners would need to...
benefit by running those sidechains?
We actually did it before and you can maybe see that in the reply to this tweet thread, I put some images and we actually already discussed it at the beginning.
I apologize. I apologize.
But the MEV on the sidechain is contained completely on L2 and the people who...
The L2 nodes are separate from the L1 nodes. So sidechains just firewall everything off.
Even though there could be MEV, whoever's collecting on L2, that's the software that gets you that money and there's nothing that L1 miners need to do differently.
Paul, that's a completely oversimplification.
Just as a concrete example, if you have chains with MEV going on, all of them need frontends and most of them are centralized.
Whoever's running that frontend has a massively privileged position in terms of extracting more MEV than people who don't run that frontend.
And that is not just guaranteed to be an open access thing that anyone can do and just have equal footing for competition.
No, I was saying that the sidechain is contained in the... it's like basically running a sidechain full node.
It's just sidechain full node plus MEV.
And so that the coinbase, the value of the sidechain L2 coinbase goes up basically.
But it's contained completely on the sidechain, it doesn't affect L1.
Well now you're just like essentially pretending every argument I've made up until this point about the interactions between L2 and L1 are just invalid and don't exist and you're back to ignoring them.
Wait, hold on. Let me, on behalf of Shinobi, and I might bastardize his points so Shinobi can give me shit later.
But I want to just hone in on this idea just because I don't actually understand your answer to Shinobi, Paul.
Or at least the take I'm trying to explain here, which is miners are going to be in a position to have asynchronous kind of skill sets and asynchronous kind of abilities to be involved with these MEVs that your, I guess you could call it your average pleb, your average node runners on these blockchains are not going to be able to compete with.
The idea is miners are going to be more or less in a privileged position because of their scale and their, I guess you could say their resources, and I use resources abstractly as well as human resources.
But they're going to be in a position to produce MEV asynchronously better, or I guess you could say uniquely better than other people, which would then give them the opportunity, which would then put them in a position where blind merge mining is going to be completely out the door where you have these more sophisticated, large scale, complicated blockchains potentially.
Maybe not every sidechain is going to be, give really this opportunity for MEV, but there will be enough or one or multiple of these that will cause miners to essentially be centralizing, especially if these sidechains…
See, why do people say it's true and then people just throw this word centralizing in there? Like what if I said that miners have a unique advantage, they run software that allows them to collect transaction fees, and so they give an inherently centralizing advantage.
It's like, no, that's just what they do. What miners are doing is they pay a list of costs, which include running full nodes and getting power and shedding their variance by joining a pool.
Miners pay, they do a list of tasks, they pay a list of costs, and in revenue they collect the block subsidy plus transaction fees, and that is why I'm mystified when people say the incentives change, because they seem to be saying something like, instead of running this software, they'd run some other software.
Instead of collecting these fees, they'd collect some other fees, but it doesn't really make any difference.
Let me attempt to demystify. So in the situation where you are… We talked about this in the past, almost as a joke but not really, where we're talking about terabyte blocks, which would require an incredible amount of infrastructure coordination and all this stuff, and potentially something that's producing well above layer one fees.
If there's some sort of minimum fee on this terabyte blockchain, terabyte blocks being produced, and there's some sort of minimum fee, and it's just the gravy of Bitcoin, and everyone's using it, and it's creating tons of transaction volume and tons of transaction fees, and now it's dwarfing layer one fees and ideas, I think this is more in line with,
okay, well something over there now can perversely mess up layer one. In terms of if something goes down there, people are going to be incentivized to act differently, and maybe reject blocks, mine differently, 51% attack, whatever, if there's kind of these unique fee opportunities going on on these layer twos.
Shinobi, I really hope I'm not mischaracterizing your argument, by the way. I'm going to mute myself now.
Well, it did seem like you switched there from saying they'll be really popular, so that miners will care about them more.
Yeah, but the whole premise of Shinobi's arguments are not whether or not drivechain will work, it's if drivechain does work and becomes exceedingly popular, is that going to essentially be bad for Bitcoin?
The whole premise of what Shinobi's talking about is the extremes of if drivechain actually does work, I would argue he probably doesn't think it will, but if it does, we're kind of two ifs deep or something, where it's like, it's not good, but if it is good, it's still bad kind of idea.
So even if drivechain gets a lot of adoption, that's kind of where we're at. So it's already the assumption that this is going to be something that gets popular.
Well, I don't know, let's say there's terabyte blocks, the full node costs a fortune. I mean, how much do you think it could cost? Because there is actually a ceiling on how much it can cost.
Well, let's just say Google and AWS.
Economies of scale.
There have to be some full node users who are basically 0% hashers, so there is some ceiling to how much it can cost before the network just dies off.
Right, but let's say AWS, Jeff Bezos, I mean, Jeff Bezos isn't CEO anymore, but you know what I mean. Let's just say Amazon's fully in support and they're the only people, they've dedicated a whole data center just for...
$10 million a day it costs to run the full node.
Sure, sure, whatever. And literally no one else wants to do this with them.
Right, so then continue the example.
So in this example, there's like a minimum fee. There's obviously no pressure on block size, but there is like a minimum fee, so you end up getting some sort of large amount of fees in comparison to L1.
The fees must be larger than the costs because of course the costs are, I mean, surely it must be like $30 million a day.
Paul, get inventive. Amazon ran at a loss for 20 years. Companies at those scale have lots of profitable things that they can use to subsidize loss leaders. It's not that simple.
You pick the example then. Let Shinobi pick the numbers then.
I don't want anyone saying that Shinobi would pick, so shouldn't Shinobi pick all the numbers or no?
The numbers have nothing to do with it, Paul. I'm responding to your assertion that the fees have to cover the costs. They don't necessarily.
Well, I just thought that it wouldn't be a very interesting example if they didn't because if the fees, the total fees don't cover the costs, then it seems to me that no one is just running this network.
Well, hold on. It could be something even more abstract and even more extractable where the people…
What if Amazon gets a bunch of new business because people who couldn't buy things on Amazon can now?
So even though running this giant giga node is not profitable, the secondary effect of the commerce that it generates for Amazon makes it profitable.
Yeah, so they run this thing that's too expensive for… Oh, Portland is back. Hello.
They run this thing that is too expensive for anyone else to run. No one else can run a node, including the users, but people pay transaction fees.
I mean, now this is kind of just becoming like a Steam game marketplace or something. This isn't really even a blockchain anymore.
No, but Paul, it's Bitcoin because drivechain and people don't understand and you shouldn't expect users to understand all the technical nuance under the hood of things they're using.
And now it's generating this revenue and it's having this influence.
Maybe Portland can save us from this, but I did want to throw one last thing, which is to say that, again, I could already start a business today and I could say, I'm the only one allowed to run this node.
As far as everyone else is concerned, it's impossible. It has infinite costs. And I have a store and I sell things for Bitcoin.
And you pay here with Bitcoin. You pay micropayments. I give you whatever. I sell hats for a small amount.
And then that's just not a blockchain. So again, the fundamental effect of miner incentives, I hate to be so, but maybe Portland can help us.
I don't think I'm here to help, but I do have a statement that you could actually create a sidechain that has specialized validation hardware, if I'm correct.
You could have an Amazon AI compute sidechain that you would peg in your Bitcoin and you could pay Amazon addresses with this AI compute coin.
And literally they would put it on their calculations. The actual script you want to execute on the sidechain would get ran on their GPU clusters.
Nobody has access to some of that stuff that we have. That would be a one-node scenario that would basically control the validation of the sidechain, because no user could possibly validate the computation they're doing with the scripts on that sidechain.
Yes, that's correct. But you wouldn't say that that's the end of Bitcoin, though.
No, I think that Amazon would control the consensus on that entire sidechain.
But you see Amazon already controls.
Well, actually, they wouldn't control the consensus on the sidechain because the miners still could vote against what they say. So the miners actually technically still control the entire situation.
It's a very perplexing situation would be that they're using BIP300 for some reason, but all it would say to run the sidechain node software would just be a hyperlink to a URL controlled by Amazon.
And they would say, this is where we will put the hash. So it's kind of bizarre. It doesn't really make sense that they would use BIP300.
I was just saying, you could create a blockchain on Amazon clusters where literally the scripting language of the blockchain is outputs of tokens or something, or a hash of some result of work that this thing has done.
And so no other user on Earth could have that kind of compute to ever validate.
I guess, yeah, you're right. It doesn't make any sense. They could just falsify the results unless you're doing actual some proof of work that's added into that.
But nonetheless, I just feel that you can create drivechains and it would pay the miners fees with specialized hardware that nobody would have access to. You could do FPGAs.
You're quite right, of course. But the reason why I assumed the revenues would be more than the costs was because I just thought it's not a very interesting example if the costs exceed the revenues.
Paul, whether you think it's interesting or not is kind of irrelevant. It can happen. The scenario laid out does make sense. If it can be used as a loss leader to generate secondary profit, that is an economically rational thing to do.
This is the basket we can open for every type of idea for a blockchain out there. And they're all open now if you turn drivechains on. These are all possible things.
AWS was a loss leader for Amazon for probably three or five years.
I've been misunderstood two times in a row, though, because when I say not an interesting example, I mean no one in the audience will care about it because it has no implication on anything.
So you know what everybody sitting here listening now is interested in?
Okay, let's go into it. Let's say it costs $10 million a day and it only makes $30,000 a day in transaction fees. So let's go. Now we'll see how the miners incentives are affected.
Now let's look at $15 million of revenue generated on Amazon against all of that. You make $5 million in profit when you look at it.
Okay, so now I would like to hear now how the miners incentives are affected by this.
How much of what they're getting paid is required?
If you remove all of the revenue from that node, are miners still profitable or not? Can they selectively withhold or share that revenue with only certain miners?
All of a sudden, they have a very interesting role and position to be coercive, to directly and consciously mess with individual miners' profitability with their revenue.
I'm a miner. I want to make money. And someone says, there's this new sidechain that comes out. It generates $30,000 a day in transaction fees. I'm like, wow, that's pretty good.
It's not bad. It's not quite an Ethereum, which is $7 million a day, but $30,000 a day. And then they say, oh, the full node cost is $10 million a day.
I would be like, okay, well, I'm not running a node. I'll tell you that. At best, I'm going to try to find another node that exists and ask them what's going on, which is basically what blind merge mining is, which is the whole point of blind merge mining.
I'm not paying $10 million a day if I don't have to. But I want to get my hands on this $30,000 a day if I can. Maybe I look at the pool.
He says it's only $30,000, Paul. They make $5 million in revenue.
No, again, Paul, this is what I mean, where you just refuse to engage with the point someone else makes, and you just try to look at one piece only and pretend like that's the whole argument.
Here's the scenario. The node costs $10 million to run. The transaction fees are fucking $30,000 or whatever the hell. And there's $15 million of revenue that wasn't there before to Amazon products.
So they are in net making $5 million and $30,000. Economically, that $5 million can be dipped into to pay miners. That can become way more than $30,000 of miner revenue.
And that might be something that over time brings operational costs, because new miners come online when new revenue is available, above the point where miners can continue their operations without that.
Now, that fucking Amazon node can actually start directly interfering with the entire mining landscape. It could selectively withhold fees from miners that aren't doing something they want them to do.
It can play games and delegate who gets that money or who doesn't get that money after it's ramped up the difficulty and brought operational costs to the point where that money from Amazon is necessary now to run profitably with this difficulty.
Amazon is giving out $30,000. Oh, Portland wants to say something. Guys, you have to let me know.
You don't have to give me the floor every time. It's fine. I just raised my hand because in my mind, I'm assuming that basically if a node is unprofitable to run, it basically relegates it to blind merge mining only.
No mining operation would ever run this. And as such, it would be a blind merge mine sidechain only.
Yes, I would like to point out that I think of blind merge mining as not only a BIP, but as a kind of equilibrium outcome of just outsourcing, of just trying to shed the cost of running a node.
So if there's a $10 million node, I'm a miner. I'm thinking, I don't want to run this node. I'm going to look at a pool and I'll see, do you have the node? Because I'm not going to run it.
And I'll ask the pool, do you have some way of proving to me that you're really going to pay me the money that I'm supposed to be getting? I'm going to shop around at the pools.
And then the pools probably also, if it's $10 million a day and I'm running a pool, I would be like, wow, this sucks.
And we're only getting 30,000 a day is coming in total for everyone to split up across the pools or whatever across the days block winning.
I would be like, well, I would be like, who is running this pool? Who can I partner with? And then this is like a blind merge mining type situation where they say, well, okay, I'm not.
But if I'm an individual miner and I'm hashing, I'm doing my SHA-256 hashing, I got my S9 plugged in.
I want to connect to a pool that's at least trying something to get the $30,000 in fees because I want that.
So I want all the revenue and I don't want to pay the costs.
I have no choice when it comes to my hash rate.
I would cheat the laws of physics if I could, but I can't.
But I would love to get these additional revenues.
It's like a weird ordinal or something, this mysterious Amazon chain.
It's like Amazon is just paying people money.
And that is why Shinobi is not trying to evade the issues or do something weird or mysterious and nefarious.
Before, when many minutes ago, I asked you a question along the lines of, if I just start a pool and I start paying people extra money, such as $30,000 a day.
If I just start a pool and I just start paying people extra money.
Have I now changed the miner incentives in your view? And is this now bad for Bitcoin?
And this is the reason why we shouldn't have this BIP, because I'm changing miner incentives.
I'm starting Paul's generous pool, payout pool, and out of my own, I just pay $30,000 out of the goodness of my heart to anyone who connects to me.
Yeah, see Paul, but that was ridiculous. And my contention with that was the fact you're trying
to compare 10 cents to something like millions of dollars. And two, what I just did here,
piggybacking on Mike's initial example, is lay out a concrete, actually properly structured scenario
where I, as an outsider, can actually profitably generate a pretty big pool of money to use
specifically to attack Bitcoin. And that is enabled by drivechains. That's not possible
in the same way with the same guarantees, with the same incentives, because you're using the
Bitcoin token without drivechains. You enabled that new attack factor where it can actually be
profitable for me, the outside actor, to come in and start fucking with mining incentives,
just to fuck things up. Can I ask a like a just a person's question? I mean, is it different than
like, let's say, Bitmain, running a profitable hardware manufacturing company, and then using
the profits from that company to subsidize the operation of the, you know, amp pool or whatever,
and, you know, artificially giving users of amp pool a competitive advantage just subsidized off
of another business? Like, does it have to be a drivechain that uniquely accomplishes what you're
describing? A drivechain makes it a lot fucking smoother and a lot simpler and more incentive
secure, in my opinion, because you're not dealing with outside value. It's Bitcoin. It's the native
token miners are already going after. It's not some new consideration or some new market. It's
just, here's more Bitcoin. Well, I will say that there is a phenomenon that existed in mining.
I don't know if it's still around, but where basically new mining pools got going, and they
would provide, you know, better luck, effectively, for miners who are like different incentives to
try to get a hash rate to come to them. So that way, they could climb up the rankings of the
largest pools. And it was like, they looked at it like an advertising cost. And so, there are like,
maybe some examples of that happening on layer one in a lesser way. But yeah, just throwing that out
there. Should we integrate that possibility more tightly with layer one? Should we bake it into
consensus rules and couple those things tighter? Should we make the likelihood and possibility that
these types of scenarios happen more likely by anchoring the price of that token to Bitcoin
instead of it has to make or break on its own? Like, why should we make these things worse?
Like materially worse, make the risks materially higher? Why? Yeah, but it seems to me it's just
the risk of, if I start a pool, and I give away $30,000 a day, then miners are getting more money
temporarily, that may induce more people to join the mining ecosystem, the difficulty will then
adjust upwards. And then taking my $30,000 a day will be in some sense mandatory.
But to me, that doesn't add up to, like, I now control Bitcoin, or now Bitcoin is doomed.
Because you're again, doing what you've done this entire time, Paul, you selectively ignore me.
I, it's not just required, I can decide to give it to Michael and to Portland, but I can withhold
it from you. I am a conscious actor who can now for my own reasons, selectively withhold that.
It's not just this amorphous, abstract thing. Yes, but you know, for a while, I could say,
I'll give $30,000 to everyone in my pool. But only if they send me their driver's license
or something. And then people would decide, they would say, why do you keep doing this
and come up with these ridiculous examples? This is a fleshed out example of something
profitable. And you keep trying to compare that to I'll just pull infinite money out of my pockets,
that's not generating any profit for me. And you're trying to compare the two.
Well, you seem to be saying it was conditional on something. Like you were saying before,
maybe it would give it to Michael, but not me. And the reason why it doesn't really matter to
me if it's profitable or if it's subsidized by me is because I take it for granted, I presumably,
you don't have a problem with people making money, like in general, in the abstract,
like, you know, people making money is good for them. But you must, you clearly must care
about something that is induced as like a side effect of all this money making.
So you don't care about the difference between rational profit generating economic behavior versus
complete, full, retard, illogical behavior that generates no profit. You see no point in drawing
any distinction between those two things at all. They're the same. They're equivalent. Are you
serious? I think it's kind of like testing an airplane in like a wind tunnel before you fly
it outside. It's like, no, it's not Paul. That's not let's not do the analogy hopping thing where
you just keep trying to obscure the topic and shift away from it hopping from analogy to analogy.
Like no. Well, I think because you seem to be worried that something bad will happen to
like some guy who's listening in the audience. They own Bitcoin.
No, I seem to be, oh, maybe no, Paul, I have explicitly in crystal clear English,
this entire time delineated my exact concerns in exact scenarios. And you just keep backing away
and coming up with exert just totally batshit, absurd examples, or trying to compare things
that are literally the opposite and pretend like they're equivalent things. Like this is ridiculous.
Well, my view is that someone listening probably is thinking like, I own Bitcoin, is BIP300 going
to hurt my Bitcoin? And so they were thinking, oh, change miner incentives. They're thinking,
okay, what's going to happen that's going to make these incentives for me in the audience,
some guy who owns like some Bitcoin and they're just like, I like my Bitcoin the way it is. I
like being able to broadcast transactions. I really like multi-sig or whatever. They're
thinking like, what's the change going to be? And so when you lay out this story that says,
it may at some point be profitable. It's not a story, Paul. It's an argument. Like that's
a subtle thing you're doing. Just like, this is story time. We're all just making things up.
When you lay out your argument, the reason why I use story is because it's a scenario involving
lots of people doing things over time. It's not supposed to be disparaging comment about
the level of seriousness of the argument. But when you lay out your scenario where
someone is, a pool finds it profitable to obtain $30,000 a day via some other network,
which would be like a drivechain. And that costs $10 million a day, but is somehow,
they have some arrangement with someone else who's running that software and a loss. They have it as
a loss leader and they have other ways of earning money. So like the US government or Amazon or
whatever, they have this node that costs them $10 million a year. They pay 30,000 into the
Bitcoin world. It doesn't matter if it's the US government or Amazon or a drivechain,
it seems to me. And then what you're saying, so the person in the audience is thinking,
how is this going to affect me? Okay, miners will be greedily gobbling up the $30,000 a day extra.
Paul, no, we're not going to sit here and pretend like, oh, there's no difference here.
The government just printing money out of thin air, there's negative externalities that limit
how much they can do that. Inflation, if they go insane, having to reallocate budget money from
other things that are then not going to be taken care of. You pulling money out of your ass, you
can only fucking do that for so long because you don't have a money printer, Paul. Amazon here
though, actually generates profit. That's a sustainable thing that can continue long term.
So no, I'm not going to sit here and just go through analogy chain and pretend that those
are in any way equivalent things. Those are not equivalent things. Stop trying to pretend like
they are. First of all, we'll just say that it's Amazon and we'll leave it at that. But I would
like to just give a little comment purely for everyone's benefit as to why it doesn't seem to
matter to me where it comes from because to me it's kind of like, I know you don't like my
analogies but I'm doing the best that I can to explain what I really think. It's like you order
a restaurant and you want a hamburger made by Chef A and there's Chef A and B. You order a
hamburger made by Chef A and it comes out the door and then you eat it and then you come in the next
day and you say you want it made by Chef A but then Chef B watched, he's been an observant of
Chef A. Actually, Chef B makes the sandwich the exact same way, the hamburger and because you're
not in the kitchen, you don't really know and if they both can really make it the same way
and they put the cover over the tray of the two plates and then they shuffle the plates around,
it kind of doesn't actually make any difference which one comes out the door. There's no way
of telling but so it's like it's a thirty thousand. Yeah, it makes a big difference,
Paul, because one of them is going to stop being able to do that and the sandwich is going to taste
like shit on day three. The other one is not going to be able to do that after the first week because
hey, guess what? He's not making it up there. He's got to go get another fucking job and only Chef A
is going to be the one there consistently making the same sandwich and just like what, dude,
these analogies do not help people understand this shit at all and I know this for a fact
because people come to me and they ask me to directly explain things because they hear shit
like this and they go, what the fuck does that mean? This is not a productive conversation.
Can I ask you just a dumb question? Is the whole crux of this argument just boiling down to
the ability for someone to have a sustained competitive advantage through subsidizing
miner revenue through a profitable business of some type whether in whatever format?
Specifically tightly integrated into the base consensus and a sidechain and its interactions
directly with miners. Yes, that's the core of this specific example right now.
Can you explain how, what about the sidechains makes that dynamic unique? I guess that's the
part I'm struggling with. Because instead of taking out, you have an existing business that
has nothing to do with Bitcoin. You have a profit margin. Your board, your shareholders, your owners,
whatever, expect a profit margin and they're going to go, what the fuck? You're just going
to take this and give this away? In my scenario, the entire thing is about this being pitched as
a equivalent good for Bitcoin and actually generating new revenue and new profits indirectly
that did not exist before. So they're not a business that's just for no rational reason
cutting into their profit to give to miners to fuck with things. They've actually generated a
whole new surplus of profit, which they can take a small cut of or a percentage of to mess with
miners. And they're still making more net profit than they did with their previous venture.
Hey Shinobi, can I back up real quick into what you're saying about how you can basically
curate incentives on a per-miner basis? In your example of the Amazon basically chain,
drivechain, in that example, the chain would have to be blind merge-mined or very centralized
to the point where the miners could never afford to actually validate it themselves, correct?
Yes. And the point of this example is that you can have very disastrous incentives on both
extremes when it's just something miners can run and do that increases the cost, but you can also
have similar disastrous consequences on the other extreme when it's so big and expensive to run,
even miners can't run. Both of those create bad incentives.
Yeah. And then, so the mechanism for the actual delivery of these different incentives based on
who you want to have them, basically, maybe Foundry is favorable and Luxor is not favorable
in this case. Do you just create a different block for these people before you deliver it?
Like your on-chain reward for minting this block for me for Foundry will be 1.1 Bitcoin and for
Luxor you get 0.9. Is that kind of how you'd curate those incentives on a per-miner basis?
No, you just stop broadcasting in the public men pool and start reaching out directly to miners.
And then if a miner doesn't want that to respond, well, then they're not getting the revenue. And
once you've established a private back channel, you can just selectively withhold it.
So it's just like out of band, basically.
Yeah.
Yeah.
Okay. Nice. Thank you for clarifying that.
So I want to know what Michael Thidwell thinks of this so far.
Is that allowed? He's too busy, I think.
This is your space, Paul.
Well, okay. So, but it does still seem to me. So we have Amazon paying for 30,000
and then difficulty goes up.
Then I, as Amazon, can selectively choose who I'm going to pay,
you know, which I'm going to pay Antpool, but not Foundry or vice versa.
Portland, yes, you have your hand up.
Oh, no. Once you're done, I just want to jump to a different topic on drivechain specifically
as a node runner and a couple of options I was thinking about.
Cool. So what's happening is Amazon is running something that costs $10 million a day,
but they have other revenue that pays for this, or they have other funding.
It generates $30,000 worth of fee revenue a day for miners.
At first, everyone is invited.
And so mining, everyone takes this up. The miner said, thank you for the free money.
The difficulty increases. And now the Amazon can say,
I will remove this $30,000 unless you do such and such. Is that the argument?
Yes, Paul, except it's not just the $30,000 because like I've explained in this example,
running this chain indirectly generates $5 million of profit per block with new business to
Amazon because these people who didn't have access to that now because of payment infrastructure
now do and they have now expanded their customer base.
Can I ask another question that might be dumb? What's the competitive advantage that they have
operating this drivechain? Because if we were to just like take drivechains out of it and just
talk conceptually, if you had one business that was basically using a profitable venture to
subsidize another business in order to say gain market share and influence, typically the answer
to how that would be solved in the free market is a new business would come along and would out
compete the business that was effectively spending their profits subsidizing a tertiary business.
Is there some built in moat to the drivechain that they're operating that keeps
another actor from out competing them?
Yeah, Amazon. The whole value of this chain is that Amazon will accept Bitcoin on it as payment.
So unless you want to go out compete Amazon in their entire core business model of being Amazon,
good luck with that.
So if the story is or the scenario is without Amazon, without drivechain, Amazon would never
have been able to create this sidechain that gives this 30,000 to it's not it's 30,000
in selective transaction fee revenue. That is the scenario.
Paul, there are a million scenarios for this. Maybe they want to get into mining and they want
to gain an advantage there. Maybe they just want to fuck with Bitcoin and try to break it so they
can launch Amazon coin and instead of something like Bitcoin, we can enter the world of fortune
500 fucking mega coin. And I think that's the scenario.
Fortune 500 fucking mega coin for everything. Like this is the point, Paul. This is such a
complicated design space and incentive space. Once you turn it on, you cannot control
what happens within that space. All of this kind of shit is now you just open the door,
you turned it on. So you better pray to fucking God that not even a fraction of this happens or
it's going to start fucking things up. It's going to start opening new ways to attack this system.
But what is the way, though? Because so far, all they can do is.
Oh, my God, I got another one that came to my mind. Okay, so you have Amazon,
Amazon drivechain and slot 40 or whatever. And people are using this for some AI computational
workloads through Bitcoin script. Okay, so there's a pot of Bitcoin. Could the miners then
hold that pot like glued together and hold that pot hostage against Amazon at some point just
because they know that it's a single entity, a single point of validation and nobody could
actually prove anything is true.
Well, I think in a mysterious situation where there's a node that no one can run and it's all controlled by one party, you would think that why would like the miners might think, especially if the fees are going to be selectively withheld from the miners, this person says, listen, because remember, the decision calculus is the stream of
transaction fee revenue versus how much can I just take today?
So yeah, that's what this evolves to.
There's a certain amount in the sidechain, certain amount in drivechain 40, the Amazon drivechain, whatever. If there's a certain amount there, then maybe the fees make it worth it. But then if Amazon says, well, I'm not giving you the fees unless you, you know, do something that, see, it kind of depends on what they ask you to do.
That, that can never play out, Paul.
If you jump up and down three times, then they'll just do it and they'll keep the fees. But if they say, we want you to...
No, no, Paul, that, no, that is just, that cannot play out that way. Paul, if you selectively withhold coins from a small percentage of miners, there's nothing they can do to try to steal from that peg because you need 75% of miners to actually withdraw coins.
So no, that, that is not a recourse available to small miners who are having that money withheld with conditions attached to it.
I was saying they, they, they withhold it from everyone.
In my scenario, they're saying we won't, we'll give it to whichever miners, you know, I don't know, like sign a deal with us, granting us half of their equity.
And then they might even say, okay, we're not doing this anymore.
We're done with this.
And then, so I was, I wasn't saying that they'll single out small miners.
And then they'll get driven out of business by miners who do do it.
Yeah, but that, so, okay, that's an interesting scenario where you say...
That's, that's an unstable game that the equilibrium of that game is, oh, okay, I'll do it because that, that, that mitigates the most risk.
But it's whatever, it's, but it's really no different than moving the 30,000 number up to something else, right?
Because if the cost is less than the revenue, then it's just more profits for the miner.
So it's just more mandatory things that they have to do.
They have to take the 30,000, they have to cut deals with Amazon, they have to, anyone, anywhere who's offering them money, they, they must do it.
They have no choice.
That, yes?
Dude, you're completely, like, dude, it's again, like, every single time you just selectively choose, I'm going to ignore half of what he said.
This is the entire dynamic that, like, is subtly different than just this in a vacuum with a business that has nothing to do with Bitcoin.
I can just ease into it and give no indication I'm going to do something like this.
And then, oh, everything's cranked up difficulty-wise, now I start trying to do this.
Versus you just culled out of nowhere trying to approach miners.
Even though the game is very similar there, you can't just ensnare people into it ahead of time before you change the game.
Did we lose Paul?
Did we lose Paul?
Yeah.
Nice.
Thank you for coming back.
Can I change topic to, as kind of the user side of this as a node runner, some things I was thinking about?
I think we can take a break from this topic for now and maybe return to it.
Are you okay with that, Shinobi?
Not my space.
Okay, I'm going to do it.
So I was thinking about, basically, as a node runner, let's say I really, I strongly oppose drivechains and their implications that they can cause.
And I have my reasons.
So far, the only options I can think of, if the miners have activated the soft fork or even if it's been merged into core, is I can abstain completely by using an older version of Bitcoin Core that doesn't have drivechains enabled.
I could manually invalidate blocks or a block that has a drivechain op in it.
Or I can basically mark anything with a drivechain or UTXO with a drivechain op as unspendable on my nodes.
I can patch it so that if UTXO has an op drivechain, it's just marked as unspendable.
And if anybody tries spending it, it's invalid on my node.
And then I'd have to wait for hash rate to kind of join up and uninstall my node.
Is that all? Is that it?
Are those the only options I have as a node runner is basically abstain, actively invalidate blocks or invalidate the script op to mark it as unspendable to kind of push back against this.
Yeah, this scenario is you run a full node, but you do not want to validate the drivechain rule.
I think the first one makes the most is the most straightforward because now you you're getting what you wanted.
You're not validating the drivechain rules.
I guess it depends a little bit on what you want.
If you if you want if you don't want anyone else to do it either and you want to mount the URISF campaign, then you certainly want the second one where you say, don't touch this opnop5.
And in fact, I think just to be safe, you'd have to say opnop5 is burned forever because otherwise you have kind of an awkward.
Unspendable, you just put it as a part of is unspendable and you'd put opnop5 in script and then basically burn them as part of the second one.
I thought I was talking about when you say I militantly because in this one, you're not just trying to.
You don't it's not just that you don't want to do the work of validating the BIP300 rule of like counting to 13000, et cetera.
You want you also want to you say anyone who is doing this, I'm not friendship over and you go to a different network.
You know, the hope of being, yes, with the hope of being, you know, with the economic majority.
And so that would be so it depends on what you want.
Did you understand what I was trying to convey there is like I think the first one is kind of like if you just really don't want.
If you think there's some problem with the software, you don't want it, you don't want BIP300 rules being enforced on your computer, then you just run the old version.
You say, I don't know, I know other people are enforcing those rules.
But if the thing is, you just don't want anyone sending their Bitcoin to a BIP300 script on the network that you participate in, then you would do the second one.
I'm not really sure when you would do that third one you you mentioned.
I guess you're like, it would it would basically be if miners were to attempt to spend an op, basically, because right now my node would see this op drivechain as a spendable transaction when it validates because of the fact that it's spendable.
It basically will evaluate to one.
And so what I would do is I would say that, OK, anybody who attempts to spend from these drivechain or op drivechain transactions, those are not valid.
And thus that block will not validate on my node because they're trying to spend from an unspendable UTXO from the perspective of my node.
I would basically be soft forking my node into that because I'm actually reducing the rule set of that.
So, yeah, that's kind of my thought is like basically you could you could mark op six as unspendable or whatever op drivechain is.
And that way, if anybody attempts to spend from these drivechain deposits, it would automatically invalidate that block.
And anybody using them forever would just be these are burnt coins, same as OP_RETURN is now.
Well, it happens to be that's a very funny scenario, but remember, it happens to be a detail of drivechain that when you deposit coins in, you always spend the previous UTXO.
So you sweep the dust constantly.
So there's never so there would be funny amusing.
It's like an accumulator.
The amusing result would be that you just someone someone used it first and then and then that person's coins are gone and no one else can use it then.
So but yeah, I don't really know what the point of that would be, but that would that would be something you could do.
And last question kind of on that vein in this threaded UTXO, is each new output bound by op drivechain to those rules or is that how did that?
OK, cool.
I'm sorry, I'm just I was just going to clarify that that is only it's an intriguing situation where that that only is only you increasing the number of coins.
So it's a it's a kind of a funny thing where the the the block the block validity rules are aware of whether or not it is a deposit or withdrawal literally by using the coin amount.
So that is unusual.
Of course, there's nothing bad with that, but it's just a funny little quirk so that because you can see how when you withdraw, that can't be the case.
Those people want the money wherever they want it to go.
They want to take it out of the drivechain.
So sorry, what were you saying after that?
Hey, I just want to say I got to bounce.
I promised the family that I'm going to take the weekend off of Twitter, but Paul, thank you for running the space.
Catch you all later. Ciao.
Thanks, David. See you later.
So basically, at that point, those are the three things I could think of, basically, is you invalidate the block, you completely abstain from upgrading your version and you still will just accept the results of whatever's happening while mining or you invalidate the op.
Are there any other ways as a node runner that I could basically push back or like resist this change if I wanted to?
I'm trying to think of let me try to think of you and I'm using consequence of the first one is you're kind of just saying you're doing exactly what you were doing before by just running the old you're really just not doing something you're not upgrading so that you're not enforcing the node.
And then I guess rejecting the whole block is the other.
And I mean, like in terms of like there's like, you know, social things you could do, like you would come on this space and you could tell me why this BIP is a bad idea.
I'm still trying.
The.
OK, so I guess I think it is certainly the case.
I mean, Francis was here before, for instance, and he was like, we do all share the same.
We share the same brand. We share the same market price and we share the same miners, which I regard as kind of very similar things.
And he was saying, you know, so but I think that's certainly fair game to some extent that the miners.
Are in some sense trying to get the right answer and they haven't they have an interest in getting the right answer, they it's at least clear that they will tend to benefit financially if they do things that are good for the price, good for fees, good for users in general, and they will tend to suffer if they get it wrong.
If they say don't turn on SegWit that people like or if they don't turn on other things that people like or if they make the market price go down or if they make it look like the Bitcoin brand isn't going to be a super winning.
Coin or whatever, so I'm just saying in general.
You could try that, you could say, I'll make a site.
If you're under the Sox dot com or whatever and then.
Send people there, send miners there.
I think pretty much covered it, though you just either you either you just go along and you say I'm compatible, but I don't enforce this, I don't I don't run this code, but I don't care either, or you say the paradox of the second one is you kind of need to know something about.
The.
The.
Drivechain code inactivation, this is kind of a paradox, you know going out of your way to.
Identify the op drivechain.
And now you are going to.
Reject the block if it is used, but I think those are basically the two ways I think I can't think of anything else.
OK, so then I want to scale this idea of OK, so we have node runners that abstain from upgrading and the consequence of that would be that their nodes would see that there's spendable transactions, but if miners are validating the rules they those transactions would never go through because miners wouldn't mint them and the outcome of that is that.
The miners could change the rules because the consensus is only among them, so drivechains really couldn't accrue value.
If the majority of node runners and economic actors didn't go with the plan so you could use drivechains, but they just it would be very tough to trust them to have value and then if you actively.
Use a resisted soft fork this thing you're basically having to bank on having enough economic power on your chain and hash rate to continue doing business.
that to me, I don't think my own opinion, I don't think most people would stomach that
to actually invalidate a block, even if they dislike Drivechains a lot.
My personal opinion is that, mean, we actually, yeah, you and I, like that you,
I like
liked that liked my analogy about the dog holding his own leash.
I think that's a good one.
And I know people don't like my analogies often, but that one I thought was good.
And then I think, as we already discussed, and then I think that I agree with you that
to choose to invalidate a block is to,
breaking the longest heaviest chain rule and you are you have effectively hard forked yourself because in order for people to even be on the same network as you they need to know which block you invalidated and why.
And so it is it's like incorporating new information into that just like how with Bitcoin Cash Incorporated changing a one to an eight and changing a certain block height at which whatever August 2017 was.
I think it inescapably the the option to invalidate a block is a hard fork and I think that I think that SegWit2x failed for many reasons but a big one was because there was a hard fork and every hard fork is a bad idea and I think this one would also be a bad idea it's just my guess but that's just this all hypothetical of course there is no current client or anything that will activate BIP300 on Bitcoin it does not exist.
Yet in any form.
Also just I think this concludes what I was looking for from this is the author Luke here.
He was here before but I don't think he's here now.
Okay.
Oh you mean Luke is the Luke is the pull request.
Yeah it says open discussion with the BIP author.
He's the he's the author of the pull request.
Yeah.
But I'm actually sorry I misheard that I'm dyslexic oh my god I'm so sorry.
Yeah that's okay.
Did anybody actually criticize the implementation at all yet or is it just been Ryndell Ryndell did code review on some of it I think it was actual work.
Yep I had hoped with the pull request I had hoped in vain it seems but I had hoped people can discuss the actual details and they'll say OK like we can at least like agree on what the best implementation would be and what the you know we can look at that and we don't have to like deal with.
We have like a real specific idea here this is where the rubber meets the road this is the idea.
Everything else is just a summary of the idea you know the code.
The pull request is the actual details of the idea so I thought that that would maybe help move the discussion in a productive way but it seems to have had an ambiguity.
Like Paul if that if that thread is a mess I'm sorry like I have stayed out of it for that exact reason that is not the place to attack the concept but like this like like I said earlier man like we are at a impasse this is a brick wall if your attitude to some degree is that increasing cost to miners even if they do run these all themselves doesn't matter.
Like this this is not moving forward while that criticism or concern is just brushed off like that it's not happening.
Well in the scenario you mentioned the car there was this 10 million dollar a day node but the miners avoided paying the cost because they could.
No that was that was the extreme example of the other end of the spectrum I'm talking about what we were discussing earlier with the fee sniping issue and just the incentives pushing miners towards running nodes themselves.
But I was saying before that let's just take it for granted because you seem to be requiring like the let's say that that example held and the miners had to run nodes themselves but they cost 10 million dollars.
Then I think they were just not they would just say well there's only $30,000 in revenue coming in so I'd just pass I won't do this at all.
Okay Paul this is a one-time offer you want some actual constructive criticism from me instead of just saying why this is a shit idea that shouldn't happen.
Yeah.
I don't think this entirely fixes the issue at all and it might even make no difference but it would be a lot smarter if you actually had a simple SPV proof that could be propagated along with a bid for a block in the main chain that just shows the coinbase transaction.
So that a blind merge mine block constructor can just give coins on the sidechain to the miner not require the capital up front and the miner actually has a transparent view directly in that how much is being kept from.
Well that's an interesting idea it certainly would work like you could have the layer one block have the include the whole Merkle branch.
Of the sidechains assuming that well one issue with that is you don't necessarily know that the sidechain has is using like a Merkle tree versus like some other tree you know like there's many implementations so they don't necessarily know but if you could just assume every drivechain has a Merkle tree and they all have a coinbase and always the coinbase is always the one to the left or whatever all the way. You could always just a lot if to account for new things like
the same way Tapscript or Witness does. This would accomplish the fact that L1 would know. I mean you say it should be part of BIP301 or you should just say it should be part of the understanding of blind merge mining that when the miner receives the bid from the people they also just ask them for like as a courtesy they ask them for the Merkle branch. No I'm saying it should be an explicit
part of BIP301 because this way you do not have to have that capital up front as a block proposer
though you know obviously this is still a DOS issue opening up here to consider but you would
no longer require that capital so the entire fee sniping risk that is going to push all of this
node operation responsibility onto miners would never occur because the actual outsourced block
proposer constructors do not have to have like Bitcoin they're capitalized with to pay on the main
chain in order to try to negotiate with a miner. Yes you're saying instead of bid with L1 coins
they just bid with the Merkle branch. Yes. Well that's an interesting idea but
yeah I'll consider that but shouldn't we stay focused on this scenario where
you seem to find it problematic when there's no more blind merge mining allowed and there's
the node that's 10 million dollars a day and it only brings in 30,000 dollars a day.
That's the scenario where blind merge mining does stay around like that that's my whole point
in drawing the comparison between these two examples both a situation where miners can and
do profitably run these nodes themselves as well as the insane extreme where even miners can't
afford to run it there are paths for massive incentive distortions on both sides of those
extremes. Yeah but what is the incentive distortion in the original case? So that
you actually have to be able to run all of these things to participate in a decentralized mining
pool protocol. Yeah but like everybody everybody's so focused on scaling right now Paul but we are
seeing a world where mining further and further vertically integrates. The biggest mining pool
right now is literally a relatively brand new pool set up by an actual mining operation.
That is vertical integration and that's happening right now. So we need to be thinking about how to
de-integrate that how to make that as scalable as possible and that necessitates turning pools
into a protocol which is two parts the actual block template construction and the transaction
sorting and then the handling of the payouts. The handling of the payouts could very easily be
accomplished with a lightning channel setup Belcher proposed. You could also do a multi-party
like general payout if we got APO. If we get CTV you could have a staged transaction tree
and even have cooperative paths if you buried it under taproot for more efficient like atomic
negotiation to condense UTXOs off-chain. Like that is a very easily solvable problem but the block
template problem for all of that to be constructed by individual miners maximally. The more nodes
they have to run the more expensive it is to be that type of participant and you degrade the
censorship resistance like that is there the higher you raise that cost and the more smaller players
have to outsource that aspect of it. Yeah but you in if they if the cost exceeds the revenue then
they just won't do it at all. Well see that's the whole thing Paul about why this is a problem.
A decentralized pool protocol right now is just a main chain node. Costs literally nothing. You can
copy paste and start a pruned node on a fucking raspberry pi that costs twenty dollars when you
already have thousands of dollars for hardware equipment. That is an insignificant thing but if
that same person now needs to do that and then run a BSV chain and a Zcash chain and a Monero chain
whatever the hell chain that all gets more expensive. It's not a neat no it's getting
cheaper because the only deal if it's profitable. Each blockchain makes the others cheaper actually.
Paul you are like just ignoring everything I said. I am not talking about the profitability
of running the piece of hardware. I'm talking about running the piece of hardware in addition
to validating and constructing your block templates yourself. Just the main chain as necessary
as necessary for optimal like profitability their optimal censorship resistance is one chain.
You start adding all these other nodes you are increasing the cost there. I am no longer the
member. If I cannot afford to run all these things myself I am not the one deciding what's the
optimal. I am not looking at optimal template construction myself. I am not the one ensuring
that things are not being censored. I am outsourcing that which weakens that guarantee
which weakens the decentralization of that property. Well okay you're pushing at an open
door with me if you say that the full node costs should be as low as possible because you know I
wrote that essay measuring decentralization in September 2015 and so we want everyone wants the
full node cost to be as low as possible. You should only pay additional full node costs if you opt in.
So this is the this is the idea of sidechains is the end user who's not a miner. We're not talking
about miners. The end user if they want to run big block sidechain then they can. It will be less
decentralized. It will be more expensive. If they want to run the Zcash sidechain they can.
So I completely 100% agree that the full node costs are of preeminent importance but now you
seem to be saying something else. You seem to be saying in one sense if these if running these nodes
is actually profitable and making life easier for miners then it's some kind of burden which
doesn't make sense to me and then the other alternative is that the miner for whatever reason
the miner for whatever reason finds the cost of running the node higher than their expected
revenues. Well if I'm a guy with one S9 running in a closet I can afford to have a main chain node
and do my own template construction and all that and then I directly broadcast that block that I
made when my machine is the one that finds the valid piece of work. I can't do that
with all these other chains. So I can't even make a profitable block because I can't construct all
this other shit and put it in there because I can't run these other nodes and now I'm sure
you're immediately going to say well BIP301 solves this you just propagate it across the
peer network. Well now hey you're talking more complexity to build into these distributed pool
protocols more things to consider. Then I am not able to be a participant in this distributed
pool protocol as an actual peer in it. I am not capable in all of that. You just say I'm not going
to run the Solana chain. Hey Paul you know what happens when my when my block like meets the
difficulty requirement and I shoot that out and then everybody else I'm mining with in my little
protocol pool sees that that block template sucked dick and was missing a shit ton of money because
it didn't consider all these other things. They're all going to ban me and I'm going to get evicted
from that pool protocol and now I can't participate in it because I constructed a suboptimal block
because I screwed everyone else out of money because I couldn't afford to do that.
Well again you could get it I would say again with blind merge mining is such a scenario where if it's
important you would work out some other way of obtaining the block. But the fee sniping Paul
the fee sniping risk there no one else is going to do that they're only going to put them in their
own blocks because only when you put it in your own block are you protecting yourself from that risk.
It doesn't blind merge mining it doesn't have to be the actual BIP301 blind merge mining it can just be you have
uh you have some kind of relationship with someone you pay them a you bet like let's say the node
costs 10 million dollars a year or 10 million dollars a day sorry and so in other words my
decentralized pool protocol and my participation in it is now dependent on a centralized entity
there you do not see how that kind of undermines the whole value and point of that protocol
of which protocol it does the L2 protocol I agree is kind of pointless I don't know why
anyone is on it but when it comes down to what effect it has on miner incentives it is equivalent
to just replace this protocol with just one guy an eccentric guy who's paying a fee
okay like Paul you do realize like the entire thing I'm discussing here is decentralizing
a mining pool making it a protocol so you don't have to depend on the guy that's the entire
purpose of that and now when I'm pointing out how drivechain introduces massive complexity
and problems with that your response is well just trust the guy the whole goal is to not have to do
that no I'm not saying that you should trust the guy I'm saying that is as part of the miners
efforts to minimize their costs and maximize their revenue they will do things that uh
they'll do like whatever they feel they have to do so they'll think okay I want these revenues
from this drivechain but I don't want to pay the cost of running the node so they'll say well
maybe we'll get some kind of way of we'll have you know have two nodes and we'll just check
some kind of subscription or something but to me it doesn't make any difference what it is because
it's just a conditional payment from it's in this case the conditional payment from the drive
chain it says we'll pay you this amount if you get if you obtain the block template if you pay
if you obtain the block template you get this amount of money and so whether or not they do
that by running the node or by pairing up with someone who does run the node it doesn't make that
much of a difference to me it makes a huge difference paul because he can look at me when
I go I need a template please and go no and then we're right back to I can't make the optimal block
template when I find a block everyone in my pool protocol goes fuck this guy he just lost his money
and I get banned by every peer in it and kicked out so you would measure how do you measure mining
centralization because you use that phrase a few times
I've literally written a whole article about it sitting on bitcoin magazine right now paul
it is a massive stack with multiple layers and each layer's degree of centralization or
decentralization impacts other layers it's not just a thing okay well I'll look for it
sounds interesting the scenario you've laid out where everyone must use p2pool and everyone must
use the solana chain or whatever you want to call it
that is the scenario where it's a it's like a conditional payment from the solana blockchain to
you if you are able to obtain the block template
paul it's with without any drivechains that type of protocol can get us to 10 on the
decentralization spectrum your spectrum you add drivechains no wait no we can only go as far as
seven oh wait nope only five wait oh nope only three depending on what types of drivechains
and it completely undermines that goal
to you it's very important that the cost of running every see I don't understand why you don't
uh the to me the running a sidechain node even in the case where blind merge mining is magically
impossible which I think is the case that we should probably focus on because I think you
can see how if in if if line merge mining is possible and easy and also the the handshake
version is done then it kind of doesn't matter because there'll always be a 10 million dollar
node and the miner will always say I'm not paying for that and they'll always say I'll get this from
somewhere else so if we just say that by merge mining is magically impossible then it's really
just saying that well how is it different for you from I guess you would say it's not different like
from some other fixed cost of mining so like it's a fixed because this is like how much it costs to
start up a new mining operation is all the nodes plus a bunch of other stuff about like what is
the smallest amount of money you could spend because there's you know various economies and
diseconomies of scale in mining of course as we both know so there's some today there's some
minimally viable miner size right that's profitable minimum profitable miner size
of like whatever it is two thousand dollars up front and then certain amount you know per day
so there's some minimal threshold for that and you're saying it's very bad if that goes up
paul we're back to conflating the cost of constructing your own block template to maintain
decentralization and censorship resistance of that with the cost of running the mining hardware
i have disentangled and clarified the separation of those two things i don't know how many times
we are talking about you're talking about the what when i think of the pool i think of the
person who is assembling the block and then the hashers are just blindly hashing away at it
so you're saying like basically your version of the pool and in your ideal scenario everyone is
in some kind of using like p2 pool or something yes yes paul that is incredibly important almost
like no more than i think 50 percent of the hash rate on the network is all kyc'd with their pools
right now all of the big pools are kyc'ing everybody like do you not see do you not think
that will get more invasive that that will not be a path explored by governments and regulators
to start talking with things we should be obsoleting that and replacing it with a protocol
and you're arguing right now to enact a change that makes that 10 times more difficult maybe
even impossible to get to a a good level of decentralization that will protect the network
from those types of attacks yeah i don't think that it's it is concerning that the miners will
sign up for kyc and so many of them are huge corporations that are publicly traded which
then of course can't forget kyc they have like auditors they have all kinds of stuff
they're fully plugged in to the matrix um but i don't understand why i think the focus on pools
is a mistake because it's very easy to switch from one mining pool to another and it's not easy
for a mining pool to just spin up a giant warehouse full of hash rate equipment so i
i don't actually think the i think what we should do is make it very easy to start up a new pool
and very easy to switch pools but i actually don't think that p2pool is the way to go because p2pool
has like a big coinbase transaction and it has uh i think it has just other issues it's partly
you can't just make a pool easier to spin up it's not that simple because you have the chicken and
the egg problem of yeah i would say we're distribution and the hash rate is first like
yeah i agree but we would make like open source pool software and we would make like there already
is open source pool software and if you if you open source that pool it still doesn't matter
because like you just said in your own comparison a pool can't snap their finger and bring a bunch
of hardware in a warehouse into existence how do they snap their finger and get people to switch
uh like just take no fees right
yeah they're okay so so so you have to subsidize that and eat a loss to no but that's not what i'm
saying so that's that's a capital requirement then portland which is a huge centralization
choke point in as far as who can actually do that well okay hold on you know the cost of
okay if i wanted to spin up portland pool today what is my cost of operation for my pool it's a
full node and bandwidth for internet right so a couple hundred oh no no no no no no no no no no
pools are not just a node and a connection they have redundant infrastructure all over the planet
they have different work servers like specifically located in different regions to
lower the latency as much as possible they have nodes scattered around connected to all of those
work servers so that they can optimally get blocks out as fast as possible once the the work server
actually verifies that it's actually a very complicated distributed like set of infrastructure
it's not just a node and then blah blah blah well okay i agree that that's probably the way it's
done at a commercial scale right because you want that redundancy and the lower latency for your
clients that are mining because mining a block faster or getting it propagated is better but in
terms of me just starting portland pool today in my no one's gonna want to do that straight to join
is that all i need though like all i need is if i say i'm gonna do zero percent fees on my pool
and i have a decent internet connection in a home computer and people sign up what the no okay
like i mean no one's gonna do that portland no also in addition to all all the broadcast
infrastructure you need a wallet system you need an accounting system you need to link that into
all of your work servers so that you can actually keep track of accounts and balances make sure
that's all redundantly stored because if you lose that data and don't know who who's owed what oh
shit that'll get fucking you need a withdrawal system and security for that
i guess what i'm getting at is though if you you're right it costs something to make a new
pool but one because the pools are also you know a pool is really not viable unless there's a
certain percentage of the hash and once you get into percentages it just inherently limits the
number of pools you can have like if each pool has to be at least one percent of the hash rate
then you can only have a hundred of them max of course uh and pool has to be each pool wants to
be around ten percent you can only have ten and i guess what i'm actually getting at is what if we
only had two like what could make a list of all the bad things a pool could do which would be
like sensor transactions or do a reorg basically maybe some other things like software activation
or something but would you be okay like would you trade if we could offer a magic trade and we say
there will only be two pools but both of them will always behave perfectly or something you
know like they none will ever transaction sensor and none will ever reorg and they both charge
minimum fees etc like that i mean that's i guess that's a question i would ask paul that's it's
ridiculous like here's some fantastical situation that in zero percent of any possible universe will
it ever occur where all the concerns of the system don't exist like would you take that
like if we lived in that world you don't need bitcoin yeah that'd be cool okay but the reason
it bridges to my next question which is what if people had every everyone actually hashing
the people doing the shot 256d of course the hasher miners what if they had a way of detecting
an error in a pool pool is charging too high a fee pool is censoring a transaction whatever
they had a very very cheap way of detecting that and then switching pools
would two pools be enough in that scenario just like what on earth are you thinking when you lay
out an example that is not a p2 pool like variant that that scales better with the payouts
um where it's like let's not do that but let's have the exact same requirements to keep these
two big pools in check because the you know how they how do they find that out they run a node
and they check the mempool against the the blocks like that is the exact requirements of just doing
p2 pool so like what is coherence about that question i don't see anything well i you know i'm
going somewhere with it of course but i think presumably you'd say the answer is that actually
two pools is enough as long as you can always switch when one is making a mistake we just need
that both not making a mistake at the same time or something like that but if they all switch now
i guess you could throw in as in a different ingredient you could say the ability to launch
a new pool from scratch if both of the pools screw up and in which case if everyone runs that
algorithm then if both pools screw up then a third pool will appear and immediately get 100%
of the hash rate in this kind of fictional example but the dude that that oversimplified
fictional example is like useless you know like here's a wild and in the final part of the
space the final part of the algorithm is if you're if you're if you have just done this
recreate a third pool move then uh 10 minutes next block split randomly flip a coin and flip
into two split into two pools again so now you think we should have open source software for
anybody to just be able to spin up an exchange and get millions of dollars of other people's
money that they're responsible for custodying because that is a wildly underappreciated part
of a pool it's not just the coordination infrastructure it's not just the work servers
not just the node not the careful latency management it's also you're effectively an
exchange you are a custodian of shit tons of other people's money so any anybody should just jump in
to do that that's easy to figure out like that's not something that requires a lot of specialization
and risk management that isn't widely available if there was open source exchange software i
would say that probably it would end up putting competitive pressure on the exchanges that exist
even though they have enormous network effects from liquidity it would be probably easier for
someone to start an exchange and then i i would imagine that brian armstrong wouldn't sleep
quite as soundly at night well i think you missed my point the answer is no like everybody is not
just equally competent at securing a giant pile of bitcoin that has to be connected to a hot wallet
to process withdrawals when miners want them that is a complicated incredibly delicate system to
keep secure it's not just spin it up question one was there's two magic pools that never make a
mistake that would be good and then i say well that's a fantastical scenario why are they never
making a mistake but then i have algorithm that if one pool makes a mistake you switch
and if both the mistake continues you start a new pool and and then if 100 of the people are
in a pool you flip a coin and split the pool into two now if everyone 100 of the miners run that
algorithm then we are actually in the first case the pools really cannot make it a mistake they'll
they'll go out of business instantly and die if they make a mistake and now we have this kind of
like stable scenario where no one's making a mistake and now as long as there's two pools
it actually does not matter what the costs are of the pool at all whether it be these software costs
or any other kind of cost because they're shared equally the two pools pay them equally and
whichever pool you know if it's really the case that the solana chain makes more money than it
costs to run then both pools will do it and if it's not the case then neither will do it paul you
know what this type of stuff is you know when you when you make arguments like this it's just
instead of reasoning towards this is why i'm right you just like drop an example and go i'm right
and then go backwards to explain why exactly how you constructed this example makes it impossible
for you to be anything but right like that is not constructed in any type of debate or conversation
it's glossing completely over any actual assessment or analysis of the things people
are actually arguing or putting forward it's just going from example to example to example
of the weird examples you come up with that are constructed specifically just so
i'm right in this example how is that productive well it seemed to me like you were concerned
about not being able to mine because the p2 pool would kick you out but now you don't have that
problem
because you have two pools that will run all the node software and they never make a mistake so
no one has to worry about that and so as a miner you don't need to run any of the nodes of course
every single user will need to be running a node if they want to actually have like a real wallet
but now this is not a question of mining profitability it's just a question of
regular decentralization which is the more important thing but it's now
you can like factor it out of the mining cost structure
you know what paul as fun as it has been to sit here for like three hours of you just
selectively ignoring half of everything i'm saying at all times um i think i'm going to
go cook dinner and do something actually productive with the rest of my day so yeah
see you next week see you later everyone i know thank you thanks for letting me up
thanks for hanging out
okay cool do we have anyone else who wants to speak i'm good thank you for hosting
you're welcome uh is there anyone raise your hand if you want to speak
uh okay here we have someone
ghost of something
paul can you uh can you rebut that
uh i want you to rebut what uh what that gentleman just did uh rebut his point i can't really hear it
oh my god okay i got i got one last question i guess before i'm gonna head out um but thank
you again for hosting um my final question would be to you what would you do if you were
okay i got i got one last question i guess before i'm gonna head out um but thank you
again for hosting um my final question would be to you paul and that is as if drivechains don't
work out for example and i'm always thinking of like adversarial events we have now merged this
into bitcoin core and it has been adopted by miners what technical debt does that induce or
what maintenance costs are required as part like can we just i'm pretty sure you could just stop
using it like everybody could just abandon it but you still would have like small implications
throughout the code base of like how to do potential workarounds for op drivechain is
gone officially now uh what other pieces of technical debt would be basically brought
about if this thing ends up like neopets technical debt well i mean i think it depends on the
software like the actual code details if no one ever actually wants to use it then you can just
ban op and op5 from ever being used again and um and then you could just delete all the code
after everyone upgrades to that you know especially after 51% hashrate upgrade to that
uh i think it's kind of like keeping it around yeah i think there's uh
i don't think it's that it's in the bit like the maximum size that the two caches can grow to
and it's very small so but then i mean like the code debt would always be there but also i think
it's not that many lines of code i think ryan doll said something like that like oh this is not as
many as i would have thought but yeah i think that is an issue where anyone who works with
bitcoin core or works on any software project with other people does not want to have lots of
code changes yeah just have to hang around for no no reason you got to make sure you
keep track of these things so that you don't actually run into some bug or you're testing
something and don't understand why and it turns out oh hey this feature implemented for the uh
sidechain registration of op drivechain is now causing me a problem that i have to go work around
now and i just was wondering like from a basically it sounds like the solution to remove it would be
to soft fork back out again into uh drive chainless bitcoin but um yeah but all the old
there's another name for that it's called the rug pull you could then comment out the
code and then eventually just delete it if you banned op not five the only incidents where that
would become a problem is if a miner you'd have to have miner consensus that that was the direction
we're going so that these miners wouldn't mint op not five blocks and they would get propagated to
these kind of former drivechain enabled nodes that this isn't a thing anymore and as such they
would stall out um or start building no because the newer chain would have more hash power ideally
but you would have to get miner consensus to soft fork it completely out the miners would
have to go hey we don't want this anymore we want to get out that using op not five would make the
block invalid okay thank you yeah good answer thank you we have a miner who is also a raccoon
or something cat yes yeah no i'm just gonna listen and respond to something that sounds interesting
okay i think we will have to end it soon because we have been going for six hours plus and um it
is a friday of course so but i hate to tear up take up too much of people's friday but let's see
if we can maybe do any last minute comments all right paul a lava grenade so when you uh
become evil uh bitcoin hitler which is that inevitable when when uh there's an evil miner
activated software i don't think i'll be evil miner hitler or whatever but you never know
i mean are you able to grow a mustache it doesn't look good it's like really red and weird
really red and weird i don't like it at all can we can we really trust a man that can't grow
a mustache probably not i mean like a software developer that doesn't have like a giant wizard
beard like are you kidding me like it's probably not keep me away from bitcoin that's why
we collaborated with luke
okay
paul this is uh you have stamina i'll give you that you have the most stamina um also suzy uh
you need to look at suzy's picture that she posted um why why is this the accurate representation of
BIP300 oh where's this picture it's uh it's shared on uh okay i'm gonna look for it
the twitter space it's right there it was shared by sir farts a lot
uh i don't think so i can't really see it very clearly but it does not look
like it maybe i have that for my i get that from my living room do you feel like you
and shinobi will ever find common ground uh i'm not sure i mean i don't know like i was trying to
analyze what he was saying he seemed to really think that i was not
um i also kind of thought he was just being disagreeable on purpose i would just be like
talking and he would say oh you're doing this again you're ignoring me and i was like i really
don't think that i am but you know that's sometimes you don't notice subconsciously i i was only half
listening and one thing i i kept hearing over and over was you're only addressing half of his
half of his argument um one thing that i would be interested in is uh you uh figuring out a way
where he feels or you are actually addressing his whole argument i don't know what that looks like
but he was he was pretty he he he definitely um was under the impression um and i was under the
impression after hearing him that he felt like he wasn't being heard or his whole point wasn't
being acknowledged yeah but i felt like i was trying to acknowledge it i mean so like what
was his point do you think it was it was the point really like if you that sometimes miners
have to pay costs in order to be competitive like was that his point i noticed i noticed something
that nobody talked about when bootstrapping a new pool um no miner wants to connect their pool
to a pool that doesn't find blocks or doesn't pay so if you're a pay per block pool and you don't
have the hash rate to find you know reasonably consistent blocks you're gonna have to pay per
share and that means you need to have some bitcoin up front to pay the miners even though no blocks
were found yet and that could be a sizable cost to starting a new pool it could be you know
tens hundreds of bitcoin yeah that makes sense i think um we
uh yeah i think that makes sense and i think another aspect of starting a new pool is actually
well what i was trying to go he didn't really you know not the easiest person to talk to in
my humble opinion you know i actually i was enjoying our conversation somewhat and the back
and forth but where i was trying to go with the whole two magic pools thing or what does it cost
to make a pool i was trying to actually touch on the idea that if all the pools are doing the
perfect thing like if they're all every existing pool is fine then you can't actually break in
at all without like altruism or without like destroying money or something so it's not like
anyone can run a node or anyone can run a new node or anyone can run a new miner unless some
part of the pool because it's pool it's just like slices of a pie you know it's 100 percentage
points but if all 100 percentage points are doing the right thing then there's no way to break in i
think it's kind of like an infinite cost or at least it's just involves altruism and like
burning money or something well choosing a pool is an inherently political decision
yeah that's another interesting uh a facet of it that perhaps we would wish that it was purely
economic but anyway i think i saw tao come up and raise his hand and now we have a surfer and jim i
think came up and raised their hand should we go to them yeah i'll be really quick um hey paul
so at the beginning of this space i went ahead and took a poll
and i just asked a simple questions do you want drivechain we have 105 votes so far
93 percent said no seven percent yes what are your thoughts about that i think even one percent
is actually enough to activate the feature because it's like how many people use you know
check lock time verify or how many people use uh who used how many people used to tap root for a
while until the ordinals but yeah i mean i don't think that's just some poll on twitter with 105
votes i don't think that i don't think that matters as much as like the actual economic
reality of the situation of like network effects being crucial for bitcoin to succeed wrapped
bitcoin having billions of dollars and being many many times 40 times the size of the lightning
network and stuff like that i think but there is one any individual poll can help i mean we could
certainly look like if you had run that poll last year it would have been a hundred percent would
have said i don't i've never heard of that so now we're up to seven percent yes so but it's a seems
like kind of a small poll to me so that's my thought so for jim uh yeah hey paul um good for
you going six hours dude uh i i i admire your willingness to help people understand something
that you believe in um i still don't know much about it i'm not a developer i i try to understand
the technical stuff uh but i i haven't studied it close enough um but i was listening to you
and shinobi and um my takeaway was that he his position seemed to be to me that um
uh the whatever it was you guys were discussing with these mining pools
was something that increases the cost for this for for for the smallest user let's just say um
you know one of these things i've always understood about the bitcoin network and why
the small blocks and and you know the whole block size war thing was the idea that you know
let's make it so that as many people as possible could run a note i think he was looking at from
that same perspective and that my takeaway was that he was asserting that this uh by implementing
the the drivechain into the base layer protocol you just made it harder now you guys are focusing
on mining but essentially it seems like you you've made it harder to the point where some people now
no longer can adequately or equally participate can get kicked off can be shunned by you know the
other people because they can't include the sidechain things because they cost more money
again you know i don't know enough about it i'm just paraphrasing and so it's just seemed to me
that he's going just with that one main argument and i didn't hear you rebut it but again maybe
it's too technical for me to understand and then the other the last thing i would say is that um
you were i think you also would say that anybody wanting to defend their position in in anything
related to bitcoin especially especially a change in bitcoin that if you're going to make an argument
for a thing it should be the most rational logical potentially executable thing not a um
not a uh for lack of a better word a fantasy of two mining pools and i get your point as to show
the pureness of if you had this it would it would equal that and i i don't know the significance the
overall significance of it but i i think i get what you mean but since the world will never see
that no all the miners in the world are not going to agree to join two pools so it's a silly argument
to use to make a point i think or let's put it this way i think what he was trying to say was
that if you're going to make that point make that point in a way that could actually happen in the
real world so instead of using a two mining pool example use an example of what we have now and
show how that could work i think that's again i think that's what he was getting at but without
the level of technical knowledge you guys have i could be off and i apologize if i am i want to say
also i compliment both you guys for being so cordial while completely disagreeing on things
that shit felt like shinobi was holding back um wanting to scream and you you have such a calm
demeanor about this whole thing i give you a lot of credit boy um because most of what i see in
the bitcoin space is pushing back against your idea i see a lot of very um knowledgeable people
um you know well-known people not agreeing with your position and since i don't understand it
well enough i'm just sitting here watching essentially not really knowing what side to take
because i don't know how it works and i don't know what effect it would have ultimately to
everything but i still just want to give you a lot of credit for trying i don't i don't perceive you
as a bad actor you've been around a long time i've listened to you on podcasts um i think you just
believe in an idea that almost nobody else believes in so this is what's good about bitcoin
what i think we're watching here is literally what's been going on for 14 plus years in the
bitcoin space is really smart people hashing it out writing code testing trying to prove their
point and and making bitcoin what it is today so um even if you don't get what you want i don't
see this as an exercise in futility because it's an exploration into a direction that may
actually benefit bitcoin if it can be proven so and everybody agrees so i'll stop there thank you
for letting me up just to say all that and i appreciate everything you guys are trying to do
for me and for bitcoin and for everybody else cool yeah thanks for your uh comments so i think
it is absolutely the case i wish people you know because i agree that this whole running a node
should be cheap thing i wish people would read the essay that i wrote measuring decentralization
september 2015 and it's a it's a very crucial idea because exactly as surfer jim said the higher it
is to the more expensive it is to run a full node the less decentralized the network becomes and it
makes the blockchain dark and it's hard to see into the blockchain whereas the node is really
really cheap really really easy to run it's very very easy to spin up a new node sometimes people
give the example of like the government cracks down and everything and most of the nodes get
shut off but as long as there's you know two or three or four or five nodes that remain they can
regenerate the entire network and the cost of that is the cost of spinning up a new node and so i
want the full node cost to be cheap and in fact i in in favor of a layer one block size reduction
i'm one of the few people who openly is some people think i'm doing it ironically but i am not
i actually think layer one block size should shrink so that the node is even more affordable
so then why is it that i don't care about miners having to run expensive nodes quite as much
and the answer is because mining is a different thing than running a node in order to mine you
need to run a node but it's not the other way around so if you run a node it's not like you
must mine like if you if you don't have one percent of the hash rate your your node just
bursts into flames or something so the miners are customers they they uh it's not the case that we
need to to worry about the miners it's true that we all share this mining network but the mining
industry is this cutthroat uh fight to the death when you say mine do you mean a pool
i mean the whole thing this is another way in which i think my view is a little bit different
from other people so a lot of people look at like the causality of time and they say
the pool assembles the block and most miners don't really run nodes right i mean it's an
intriguing question like the the fact that most miners don't run nodes is kind of a funny outcome
because it kind of shows that blind merge mining already is real and that shinobi's concern is not
doesn't really apply but that we don't we don't want to dismiss him as easily as that but um the
miners the end miner kind of should run a node so that they know whether or not the pool is paying
them and cheating them and yet i know from personal experience that many do not many just
whatever they do or they use what i mean is most miners don't run a node that they mine to they
don't run a yeah they have the pool their own nodes they have their the pool do that i agree
when they use a node to verify that they're getting paid but that has nothing to do with
the mining part right now i agree with you um so the it's why so but i'm trying to draw this
important distinction between the important having cheap nodes is important and yet in a way
the problem of sidechains is how do we make the node more expensive because what the sidechain
world is saying is instead of just running one piece of software i actually want to run
two pieces of software or more i'm trying to read between the lines here and from what i understand
is mining pools already have so much invested into infrastructure that they can afford to run
uh more hardware because it's already expensive for them to operate
if it's a profitable activity you know a small increase for them anyway it may be like it may
affect the economies of scale of the pool although i think i personally think that this is basically
not possible because i think the economies of scale of the pool are set by the statistical
variance universe and i also think that the pool like the normal optimal pool size is already so
big that i find it implausible that any amount even 256 sidechain full nodes because something
that people have to keep in mind is the example with the 10 trillion dollar a day note is kind
of a good one because of how implausible it is because regular users of the sidechain like if
you're just using monero to buy things i'm a dark net market you're running like a monero node
so like they can't be so expensive that the end user finds it just completely impossible to do
the network just won't exist so i find it very implausible that even 256 drivechain nodes or
even many many could actually have a significant impact on the actual economics of scale of the
pool at all but but even if it did what i'm trying to say is so this is very important that we want
the full node cost to be down but the whole problem of sidechains is some people want more stuff they
say we want larger blocks or we want evm they want these are a few people a minority a subset
of people who who deliberately want the to increase the amount of money they spend on full nodes
so that is the whole point and so this is this may appear to be a contradiction but it's not it's
saying we everyone's forced to run the the L1 cheapest node but everyone else has the option
to run more so if you want you can run more so you see this is why it's not a bad thing
because only the people who really want the feature would do it
and it's so they're saying like oh i would i want whatever it is zcash level privacy so i want to
run the zcash node so the whole point is we're moving those costs up on purpose so that's on
that's on the node side this is the non-miner side so we have to i want to try to keep all
this straight here because i think it might be confusing for the audience which is the lower
the full node cost the better but actually that's just subject to the constraint that we're doing
everything that the user wants to do if the user wants to run more nodes than the node costs are
going up now we can switch to the mining world my take on the mining world is that the mining world
is a cutthroat place i did math two days ago about what is the value of like ethereum if we if we
could port ethereum the altcoin into bitcoin as a drivechain hypothetically that's just a
hypothetical scenario because i said look ethereum is doing all this stuff maybe they do it for weird
reasons or or what have you but they do this and that and um and they are getting this seven
million dollars a day in fee income so like in my view like even back in the day back when i came
up with drivechain the first time like just as a blog post in 2015 it was already the case that
in order to buy miners from bitfury you had to like buy them buy the 40 foot marine container
so you had to like to be a customer of bitfury you had to like play call them spend millions of
dollars uh they would send it in a marine container and then you'd load it onto like
an 18 wheeler or something so they would sell it by the marine container so it was kind of like
people say well what about these nodes oh the node is going to make it more difficult for a miner
to participate in the net i'm just like i don't know what these people are talking about you know
like people say that but it doesn't seem like it's actually like grounded in reality to me
nonetheless i am happy to continue to discuss like every detail i mean for now i'm happy to
continue to discuss every detail of what people think would affect the miner economies of scale
of mining but i i just don't think any of this actually will affect what because what is already
in place seems to be like not it seems to be stable enough that it's not going to be affected by
software that's my strong opinion so to me it sounds like in the absence of a ursf what you
end up with is a earmark feature and a chain that could get forked off at any time in the future
could be tomorrow could be in 10 years
well i didn't really understand what you meant about in the absence of what
in the absence of a ursf ursf yeah if there's no ursf and there is
activation somewhere and somebody's using this feature
and you don't know what the support is for this feature then you know it could be in sync until
it isn't it could be what i'm sorry it's just kind of hard for me to hear you it it could be
in sync until it isn't uh if a few people support the feature
what you mean like what is the long like 10 years from now the future of mining
could be 10 minutes
uh but i still don't understand what you're asking about you're saying that the feature is not used
and then it is used and mining economics i'm saying it's so that the feature is earmarked
it's some nodes run it some nodes don't um like it it doesn't necessarily have to be a fork until it
does oh i know well that was what i was to be honest with you that was what i was thinking with
luke's pull request i was thinking like we will just prepare it so that we have it uh there and
then um with the other commentary i was just like i i've repeated this a few times already but i
i like to muse about and i've done this on my blog i like to muse about different activation
ideas and i have written giant at huge essays about like i wrote this essay at the uasf
contradiction and then i wrote this other essay called the miner activated hard for hard fork and
replay protection the maf hf so i kind of like i'm interested in that topic and like just as a
separate type of a thing it's just like a you know bitcoin researcher anyway tau has his hand up now
anyway tau has his hand up now
hey um there's a request from the audience um they're wondering if you can invite beauty on
and i'm not sure if he wants to join either but if you can invite beauty on up here
and ask him for his input um the audience would appreciate it somebody just you know
reached out to me so i was wondering if you can do that on beauty on he's no longer here
he just left yeah he's gone can anyone say what he would have said if he were up
uh yes he would say um drivechain is probably not needed because
actually you know what i can't steal man beauty on's uh point
i i would i would i would say that he would be against it it would i'm like 99 sure but
i'm not sure what his rationale would be exactly he just left i just was looking earlier and he was
on um but that's fine
beauty on's an interesting guy i uh i i talked to him for the first time recently and um he
he wants so first off um ordinals are an attack on bitcoin
um i'm not 100 sure what he would what his exact thoughts would be on drivechain but i would
imagine that because it seems because it is a change that would change uh because it's the
software that would change bitcoin i would i would say i would go on a limb and be confident to say
he this is one of the primary reasons he would not be a fan of it i think it's because he thinks
bitcoin is money and that that conflicts with his idea of what bitcoin is okay yeah that's also a
good point if if you start introducing more use cases to bitcoin other than the use cases that
exist right now then it's completely like a distraction like not needed kind of thing
unfortunately my phone glitched out there but the essence of it is that he doesn't think it's needed
right now but if you're trying to add more cases to some extent i do understand this point of view
like hey this isn't gonna you know this isn't really i don't see how this benefits me so
just don't change anything but on the other hand i don't see that really at all because this is
giving you an option for something you might use later and i just like when else would we actually
say this you know what i mean like what if if satoshi
what if satoshi was working on bitcoin and then he met beauty on in a bar and he told beauty on about
bitcoin because i don't think we really need that i mean she's just shelved this idea like
i just it doesn't really make sense to me i think uh
people anyone can always say i don't think they need that even if it's life-saving
heart defibrillator or something you know like you never know what you're going to need
it might not be possible for beauty on and satoshi to meet in a bar because no one's act
no one has actually seen beauty on and satoshi in the same place at once there might be
some suspicion that he is indeed satoshi never know hey you could be satoshi
i mean there's at least a 50 50 shot
it's just as likely as not it's basically so um yeah uh i don't know like people say oh i don't
think we need it but it's kind of like that's it doesn't matter like what if some if someone else
thinks they need it it's kind of like uh you know it's like that meme isn't there someone you forgot
to ask or whatever it's like i consent i can say it's like the miners run it some users want it
some users want it isn't there somebody you forgot to ask and then beauty on so so uh paul
i did add uh an asterisk to 0.1 uh today um from hector lopez and the point it the the reason i
amended 0.1 and maybe this would be its own separate point because i'm trying to make these
points digestible and not try to conflate them too much from your list that i've been working
through yeah right when we saw that i had uh some answers to point to part eight which i don't know
if anyone could understand but i put them in the space here so i'm i've got i've done a few of them
i think i still have to do what six is the only other good one that i have to do and then there's
like some that i don't think are that i mean who are you right you can yeah there's going to be
some that you can't do anything about obviously but um but something that that was interesting
that i think a lot of people don't think about or um you know maybe maybe people haven't heard is
i would argue not there's not too many bitcoin people that are friends or at least in
communication whatsoever with people that are gung-ho on bitcoin cash and um
and there's a bitcoin cash guy hector lopez that um pretty much said like you know emotionally
appealed very very closely to you know i think i think his argument made perfect sense at least
like from how he thinks why would i go from a second class citizen on bitcoin cash to a second
class citizen on bitcoin via a worse um security model um and you know i i uh what he said to me
makes sense because every layer two has to make trade-offs and arguably i would say that there's
some merit to be said like layer two layer twos aren't going to be perfect there's going to be
some sort of trade-off and you're trying to optimize that trade-off as well but of course
that's an easy one though but that's the right half of the meme that i have on my twitter banner
about there's an awful lot of trade-offs you make by going onto a shift line also
like such as losing all your money and so so his his point of view is uh why would i go from
something bad to something bad when i want to go from something bad to like something amazing
well as you may remember he came on the space two weeks ago and he was like he was convinced
he's not see the thing is he's not actually a second class citizen because he's i thought he
was a bitcoin svr actually not a bitcoin cash person but either way he was in like the full
trust the miners mode completely already on his on the network he was on so he was already
trusting the miners far more than BIP300 requires like way more they're like completely full spv
mode like for everyone so he doesn't even realize that he's like he's not even a second class
citizen by his own standard he is by many people here who would not they don't want to use anything
with like the hash rate escrow but he's like uh so he's really not a second class citizen because
he would just stay he would he would stay on the L2 his entire life and if someone just told him
this is actually they lied to him and they said this is actually an L1
he wouldn't even really notice but this is kind of the funny thing if you work on this
because this idea is supposed to be a compromise and if you work on a compromise you do get people
it's sort of like everyone should be equally disappointed i actually wonder if there's like
an enormous silent majority out there i don't know that's like wishful thinking on my part perhaps
but it's like you have some people complain and they say i don't even want to see opnop5 be used
on bitcoin core i never want any line of code changed in bitcoin you have these extreme people
who are like you know the extreme gatekeepers and then you have like the extreme altcoiners who are
like well i want my what i what they would prefer is for bitcoin cash to just defeat btc and and
defeat everything and just win and it's kind of like this is in the middle and i do wonder about
how many people out there are just thinking like you know i don't really know what's going on in
zcash or ethereum but i'd like the option to just copy and paste all their code or i don't know how
many people out there in bitcoin cash thinking like oh man we made a huge mistake we should just
settle we should go back to btc if we can if we can get anything that is even remotely similar to
what we wanted and we can just get a way out we'll have our we'll have our own drivechain and we'll
have our own devs but we won't have to suffer as being a minority altcoin at ranked 46 or something
so i wonder how many people are in this silent this middle middle ground between these two
extremes you know these people who say well i don't want to use this i prefer my altcoin to just
do really well and the people who say we don't want you know bitcoin core to change at all in
any way even though bitcoin still has yet to you know if bitcoin obviously i would never i would
drop this issue completely if bitcoin like had taken over the entire planet earth but we haven't
done that yet so surfer jim has raised his hand and now hector is here so i'll just serve yeah
so i've always been of the opinion that um every altcoin out there is just slowing the adoption of
uh the worldwide adoption of global sound money like andrews always puts it on toxic happy hour
essentially you just made my point for me um we wouldn't need this stuff if the world was
on a bitcoin standard and everything that slows that down including the drive train that allows
shit coins to maintain their life and somehow stay pegged to bitcoin and let them not feel so bad
i don't know they should just come back to bitcoin directly uh you know maybe
that's what i'm suggesting that they're doing though because you understand that what i'm
suggesting that they do is copy and paste their software their the software but not the coin
so it's this is pro hard money because i'm saying the L1 part isn't changing at all
and yet you have like a pressure release valve for people to instead of defecting to the altcoin
they now get what they want it's still the same 21 million bit coins but it's the z cash software
so i think sometimes i don't know why but uh because this is wait how does excuse me how does
the bitcoin network benefit from some altcoin having their software tied to bitcoin and again
for my lack of technical knowledge i don't quite understand why how that benefits them or bitcoin
and why you know why can't they just abandon like the theory being not my theory what i've heard
that people will move to the hardest money the one only one will win and so i agree we need their
software is it because certain features in their software are not in bitcoin and then
the bitcoin network gets those features now without disrupting the layer one all right i
need to look into what that's a that's a a nice thought it sounds like most of the technical
community in bitcoin doesn't agree with either the idea of doing it but that it's it doesn't
sound like a bad idea to me but it's probably more the idea of how it gets implemented and
it sounds like with shinobi he thinks of it as an additional cost to certain people uh restricting
people from being allowed to participate in the network because of that and so even if it doesn't
have a direct effect although i've also heard that it requires some kind of a fork i think you
mentioned that a soft fork doesn't need yeah i mean you don't have to follow it right you don't
have to upgrade to it i get it so so um but it's still a code change at the base layer if i'm not
mistaken correct me if i'm wrong 300 is a small code change for to support BIP300 which is just
this counter so that's the pull request and the bit are about but it does not you do not actually
run the software on bitcoin layer one okay so you run a different piece of so attaching it like an
altcoin but there's no coin there so you run it's like as if you ran zcash the the privacy altcoin
but there's no there's no zec or whatever there and you you take a bitcoin from your wallet and
L1 and you send it there and it shows up over there it's like an atm you convert it and over
there now you have a z address you have zcash privacy and zk-snark you get whatever you want
and then you withdraw it and it comes back so the idea is really to have total freedom in which
piece of software you use with your own bitcoin you don't you're not don't have to only use
bitcoin core you could go to a sidechain that has 119 active in them already okay so
that that explains a lot to me that helps me understand this entire idea quite a bit because
i haven't heard it put that way and i definitely appreciate that but then my immediate thought
not knowing how code works and where the risks are is that my bitcoin is now at risk of course
i know that your position is that it's not i can't imagine why it wouldn't be that and and i don't
know and i don't need you to explain it to me now as a matter of fact i really can't keep
standing i can't believe you're doing this for probably now seven hours um i i you know i just
worry like so i i'm not if i can see the nuts and bolts and i can see how my bitcoin would never be
at risk and that there's some value in having this software and then what would the cost of that be
me to add it to my node or whatever else again some of these things you know we brought up that
i don't fully understand if i could see all that then i can make a judgment as to whether i think
i would care uh whether i think it's a good idea whether i think it's a horrible idea i think
there's essentially those three possible positions um and some people seem vehemently against it and
other people seem just like you know no we don't need it like i think beauty on did make a statement
like simply it's not needed why are you going to change the money why why do we need this and so i
hear what you're saying why we need it i would have to do more work on it i appreciate everything
you've done you helped me learn a lot so some of these other smart people that have been here
so thank you for everything and i can't believe you're still doing this it's like almost seven
hours you're crazy yeah thanks um before we go to hector i did want to mention something that i
think was i think i learned over the last two weeks which is i actually think it's the explanation is
actually flipped upside down where people have already published their book or they've already
published their thing that says bitcoin doesn't need anything bitcoin doesn't need to change
bitcoin is whatever and i weirdly think that that is the only reason that they are against this
proposal is because it would prove that they were mistaken when they wrote that into their book
and i think that that's literally but of course there's also various technical things but
but i actually think you know like shinobi and some of these other people have been against
this idea for a long time they've just been like you know to me there were just some internet random
person and i had this blog post from 2015 that i would like talk about sometimes and get invited
to speak at bitcoin conferences about from time to time and it just seems like there are just
some random guys against it and then uh now it kind of actually looks like that uh you know if
the idea ends up being a big success they'll be really embarrassed so i actually think the
embarrassment of people who have pre-committed to the idea that bitcoin does not need z cash level
privacy or that they just they want to sell this idea that ethereum could never be a threat even if
it flippens bitcoin and then the market cap is 100 times bitcoins and it has 700 times as many users
then that's some people actually say stuff like that they say i welcome the flippening or whatever
it's kind of they say well ethereum is just an illegitimate blockchain or it's like a silicon
valley startup and they can't be compared and i think it's honestly that the explanation is kind
of flipped around where people have said they already told someone else in an unrelated context
bitcoin doesn't need anything bitcoin is already perfect and now my idea comes along and says
actually bitcoin can go from what it's doing now to doing 10 million more things with really no
risk to the people who don't want to do the new things uh it's kind of as if we had like a
a broadcast state where it's like we're in television in the 19 1955 and there's only one
television station and everyone's talking about people are saying this is the greatest station
there is and then i'm turning it into like youtube where there's lots of competition
some people don't want they don't want to know how bad the show is we're going to do
hey i would just say that i don't i don't think you can as a percentage of everybody that's against
it i would have to say that's a small percent um that have stuck their neck out vehemently
against it wrote about it whatever i just can't imagine that's big i could be wrong um
the uh there are other proposed changes to bitcoin that some of these same people that are against
drivechains would potentially be in favor of like ctv or some of these other things that i've
learned about minimally again don't know enough technically um sound sound good but i i don't
know all the risks um so i don't i would say about that but i think you're 100 correct about
that but those are relatively small changes in this context you are actually escaping bitcoin core
and going to a different piece of software and in fact the idea the idea of the the youtube
versus just having one channel one television channel on broadcast television
is sort of closer because the idea actually is would that different software development teams
would actually compete and that they would they would hate each other and once the success of one
would be the failure of another and they would have to they would be grinding out software
quickly and there would be some software that doesn't change very much layer one would change
almost not at all and uh but other there would be like liberal and conservative versions of each
software maybe so the vision is kind of like it's much more subversive than just i think part of it
but i think you're right though to point that out you are right about that that there's like there's
other changes although i think that 119 is a good example of a change that didn't like go through
the proper channels like they didn't go to the the director of the broadcast television station
or whatever so they were canceled and so but yeah i think that's uh it's a very fair thing to say
um but i think that it was kind of like one person was saying this team naturally produces the best
shows or i'm saying we can always get it we can just get a completely new team at any time and i
think that is will that levels up the subversiveness a little but i think yeah you're right about that
that maybe that's only a small percent should we go to hector hector is here and he's going to tell
us about why he would prefer to be on bitcoin cash or bitcoin sv or wherever everywhere
so um as i understand it your entire premise as to why you're creating this thing is because
there is a limitation on the main chain right there's a 600 600 650 000 limitation i wouldn't
describe it like that i would say different people want different things no no but i'm saying but the
reason you're you are proposing what you're proposing is because that limit exists and
therefore you think that you want to appeal to more people because you can only appeal to up to
600 650 000 per day if you don't do something about it in the scaling direction you are right
that only we can only use the block space of L1 whereas drivechain does allow us to
and you do that because you believe that right that's part of your belief and you you do that
because you think that there is a security issue in terms of many more people using
bitcoin on the L2 drivechain not on L1 is that what you're referring to so you cut out for a
second i don't know if that was for me or for everyone i was saying while this is the case that
right now we only have the block space on L1 to use to onboard people to bitcoin and move them
from there to lightning network or whatever with drivechain it's possible that someone will send
coin to make a big deposit and then onboard people on L2 and if those people are onboarded
on L2 and they stay on L2 their whole lives then we have more people quote using bitcoin unquote
right on there too but they're not on that one there there in lies your whole theory right so
like you are agreeing with me that you can only serve 600 650 000 people per day on L1 and your
solution to onboard millions of people or the entire rest of the world or the seven point
basically almost eight billion people the rest of the world onto bitcoin is through a solution
such as drivechain because the current way won't allow it technically and you fear that since it
can't do it the miners will starve and the incentives to mine bitcoin will go down and
therefore that will become at risk right
um well i think this scaling future of bitcoin is uncertain but i do think that this is a good way because i think some people clearly prefer the large block they don't mind running the large block thing and i think we should just take those people at their word and then we've scaled those people so then why are you appealing to the people who want to serve the vast minority the 90 the 0.1 of the population instead of serving the 99.9 of the population in the fact that you're advocating for a trustless money
where everyone should be on L1 rather than what you're rather than the suggestion is these should
be L2 and if it's okay if they're L2 their whole lives that only furthers the fact that your whole
the whole purpose and reason why the 600 650 000 limitation exists is to have a copy but 99 of the
population like we're agreeing to won't ever be able to run be on L1 so what is the purpose of
having a copy only the riches of the rich will have a copy and they'll be the ones the 0.1
transacting on L1 because it would be too expensive and everyone else will be on a drive
chain future so then what is the point of bitcoin when you're just advocating for a non a non bitcoin
solution i didn't totally understand that part about the 0.01 being the only ones who are on L1
because of the fee rates on L1 is that what you were saying right we agree that 600 000 people
at most right can be served per day therefore we we entrance drivechain to allow the rest of the
world to come in and it's okay if they end up their whole lives like you said on L2s because
that's their way of getting exposure to bitcoin or using bitcoin right but you're saying that
and that that whole idea is that the majority of the world can only use drivechain because
they can't ever be part of that 600 000 because at 600 000 hey let's not get ahead of ourselves
right now it's right now it's only seven it's 93 percent saying that they're not even going to be
able to use anything because we don't have this drivechain idea we don't even have this idea yet
but anyway uh so i agree with you i'm saying your solution is is only a solution that allows the
whole world to jump on but it's based on the on the actual underpinning of everyone should run a
copy like you just said you gave reasons as to you even said you wrote at length as to why people
should have a copy of this blockchain but yet you're advocating for the exact opposite because
you know the majority won't ever be able to use the chain that you're advocating to have a copy for
most okay everyone who's using L2 needs an L1 full node that's part of the design so
but that doesn't matter because the L1 node is much smaller so they might have a copy of
something you can never use you when you say never use you mean the you just said you just
no yeah yeah you just said that people but the L1 is the smaller thing it's like uh you know the L1
is the bootloader it's like it was like why have electricity if you don't have an operating system
or something it's like the L1 is the lowest what is worse having a few economically incentivized
parties that may not like each other but have economic incentive to be truthful and have them
hold the ledger rather than just the elites hold the ledger because you're too poor to hold the
ledger because it's not irrelevant to your life like i think i think the arguments there aren't
very really really like clear like it seems that you guys for some reason think and i think that's
true that should be the challenge as to why that that idea of having a copy when the future is
telling you and you're advocating for that exact future that the majority and you're conceding to
the fact that the majority won't ever be able to use L1 or shouldn't use L1 so what is again like
your premise on everything is kind of like on on sand well you because the way it's designed
is that L2 every L2 node needs L1 node so the that part of the design is just because it doesn't
really make sense to put a small block L2 on top of a large block L1 but the reverse makes perfect
sense so you know what i mean you wanted a gradual escalation of commitment you know what i mean like
you don't say i love you on the first date so you first you get the L1 node then you get the
L2 node which costs more and um that is logical conclusion paul just take it to the end take it
to like the time that we're just dating and doing nothing it's irrelevant we're gonna get married
so when we get married we're going to understand this is what's actually going to happen who cares
what happens when we're dating what we care about is having a successful marriage and to you a
successful marriage is not using bitcoin it's using a using a layer on top why don't you think
that so we got into this before let me first let me finish what i was talking about which is to say
that you need the node first in order to even receive money so you have no money you get your
node now you receive money only then can you spend it and pay the transaction fee so it's kind of
just like an order of operations thing but why is it that you say that the L2 blockchain isn't real
this is what i was telling these people about maybe you overheard me and maybe you're in the
audience that i didn't notice i was telling them oh this guy hector is an interesting character
and he he thinks the L2 is something bad but really the L2 is just very very similar to what
he's already getting i mean do you run you run like uh electron sv or electron cash or something
right you don't run the full node correct right i know so it's kind of like what difference does
it make if you're on the drivechain or on L1 is my question to you so my question to you is the
exact same thing right like if the majority are on L1 why why does it matter to you if they are on L1
why don't you just let them be on L1 too because not every because it's a simple fact that some
people want the block size high up some people some people who are a very vast minority of this
world right and you're trying to create global money but the vast minority of this world
is somehow dictating what the world should do and i don't understand why that's the case
well if that were the case then i would agree with you but the reason is that you can always
increase you know it's it let's say one some people wanted eight megabyte block size other
people wanted to stay at one that was the original scaling or bubble or whatever so
it happens to the fact that you can you can say one plus seven equals eight and you can say okay
one is mandatory for everyone that's the small block L1 and then the seven is optional and then
that adds up to the desired amount and then people add you know it's like there's an optional
increase in costs for the end user opts into the full node cost but you don't want to be
you don't want to it doesn't make sense to opt to pay seven and then say oh i have an optional one
and you know it's just it's unreasonable like i understand i understand your goal
is to create more more ability for bitcoin and allow more people to use it like
if otherwise if your solution or a solution like
then you can't you nothing is going to happen like this is going to be the elite of the elite
of the elite using this because the majority will always be or it will be basically beat in price
so you're if you don't have a solution like drivechain there is no there is no future
of global money for bitcoin because it just technically can't do it so i i advocate the
opposite of like why the ideology is flawed you advocate you okay you're okay with the ideology
you're accepting the ideology today therefore you're trying to build within the parameters
of the ideology and i understand that and i commend that but i think that that's where
that's where it kind of falls like you must we must question the ideology before trying to build
something for the ideology all right i'm just trying to take people if someone says they want
something i just say okay i i take them at their work which is if the world wants global money
you can only you're only adhering to the 600,000 to want to have layer one solidified just for
them i tell you i agree with you on that and you may have seen if you watched all my tweets
carefully over the last week or so i don't i do i think inappropriately in my head i weigh
like we have like 50,000 80,000 full nodes of bitcoin i say that's how that's the size of the
bitcoin network and we do have half a trillion dollars but yeah in my head i'm thinking how do
we get eight billion nodes which which will make 50,000 look like a speck of dust that is
meaningless and i think how can we get we're really we should be getting we should be at you know 200
trillion or something so we're we're we're like 4 000 times or whatever hey paul can i uh can i
just come in uh and and just suggest you know you've been fighting people who are already pro
bitcoin right and we're talking we're talking to people who are quote-unquote btc maximalist
bitcoin you know true you know and and uh you know it's been going on what six seven hours i
think uh you know trying to fight multiple wars at the same time is is exhausting yeah but it's
the same it's the same world i was going to suggest for your own health maybe maybe you
think about a ending time yeah we should we can end this very soon we'll end it we'll end it uh
we'll end like right after this i guess if any people didn't come up by now they really don't
want to come up and talk so we'll end after this but it's important that i mentioned it's the same
war because to me it's a situation where you have two people who both want to use bitcoin but they
disagree and one says i want large blocks one say i wanted small blocks well in my head i understand
why one has to be L1 and the other has to be L2 but i actually it's kind of like it's actually
it's the same it's the same war so all these people who are like oh why do you need to change
bitcoin or whatever they actually think it's great that someone comes in here and says
like you know L1 small block ism is dead and we need something we need like a complete rethinking
of everything because then you get this is what we just heard moments ago was like oh nobody wants
this nobody needs this everyone's happy here in bitcoin core everyone loves everything that we do
and it's all perfect here and it's just weird paul is such a weird guy why is he doing this
so yeah i think all the altcoiners the fact that you know like the all the altcoiners the
existence of altcoins to some extent obviously not to a complete extent but the existence of
altcoins to some extent that all those are the people who want this they wanted they wanted this
instead many there's many cases vitalik was for bitcoin magazine roger veer tons of people
including myself was my prediction markets project that i never launched as an altcoin but
probably if i could do it over i probably would but the there's all kinds of people who wanted
to do something cool with bitcoin that they were forced into doing altcoin ism so anyway i'd be
austin has come up to whenever your final word austin before i well i was just gonna suggest that
maybe you could um go 24 hours as you know you are yeah that would be pretty neat but uh yeah
we probably shouldn't do it on a friday if we're gonna do that i think we should end it in fact
well it's uh much appreciated your efforts paul and uh all these months and months and months and
we were having spaces with three people and now uh there's 300 something here earlier i think
even 400 so it's a good growth okay cool well yeah happy to have everyone here so come back next week
although next week will be TABConf so we probably won't be able to do it that week but
hey TABConf i'm doing this debate with peter todd about drivechain on thursday so it's probably not
too late to get your tickets in atlanta um so yeah i think we let's end the space though thanks