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In Bitcoin, there are many derangements. Lightning is one. But a second derangement
is the soft fork

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in general. The soft fork is a very, very, very safe, very useful tool. It is
opt-in. It is mostly

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reversible and ignorable. So the soft fork is not like a bad thing. It's a very good
thing.

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Paul, welcome to Bitcoin Rails. How are you?

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I'm doing great. Thanks for having me.

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I'm so, so excited. This has been like a long time coming. I feel like, you know,

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we've scheduled, we've redone the whole thing. We've rescheduled a couple times.

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It's my fault. Sometimes, you know, I can be the absent-minded professor, maybe.

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I'm just grateful you made it, Paul. And yeah, I'm excited to talk about the story
of Drivechains.

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I don't know if you know, like, the background history on the podcast, but so I
started this

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pod to cover, you know, Bitcoin technologies, mostly in Bitcoin Season 2, right? I
think,

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I don't know if you remember.

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I remember Bitcoin Season 2 from, I remember, East Denver two years ago.

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Correct. That's where we met. I don't know if you remember we met that.

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In person the first time, yeah.

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Exactly. We met in person at East Denver. I was working in ordinals. And yeah, and
so like,

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that's sort of like the general theme of the pod. But I feel like Drivechains is a
really

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interesting kind of, it's Bitcoin Season 2-esque technology, but it really happened
in Season 1.

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And I think that we should discuss that.

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Yeah. There is a lot of like, if Drivechains had happened earlier, there would never
maybe have been

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any altcoin phenomenon at all. And so there would never have been needed to have
been

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a Bitcoin Season 2. Everyone would have taken it for granted. Who knows?

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Who knows what would have happened? Okay, so we're going to get into like the whole
story

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of Drivechains and how it happened. But like, let's just start with talking a little
bit about

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you. You were just about to tell me how, offline, you were just about to tell me how
you got into

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Bitcoin.

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Well, you know, I got into Bitcoin, at first I had heard about it from the FreeTalk.
I don't

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think I heard it on FreeTalk Live. And that was the first thing that happened
chronologically.

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But the first thing that happened to me was to get this email from the Free State
Project in

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New Hampshire about, if you come to Porkfest, which is this libertarian, you know
what I'm

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talking about?

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Of course I know Porkfest. Yeah, yeah. But that's helpful context. So you're a
libertarian.

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Certainly back then, I was enough of a libertarian to have signed this thing that
said,

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we're going to get like 20,000, I don't remember exactly, but we're going to get
like 20,000

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liberty-minded people to sign this pledge. And then we're all going to move to New
Hampshire,

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and we're going to change. So that was like back in, you know, whatever, 2006 or
something.

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I did hear about the move to New Hampshire pledge.

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So I signed the... I was like too young to move.

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But I signed the...

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This was when? Like, when was this?

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I think it was like, for me, it was like 2006 or something like that, that I first
signed.

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And then eventually, like in 2010 or so, they sent this email saying that they're
giving away

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free Bitcoin. You know, that was the email that made me unsubscribe from the mailing
list.

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You were like, they've gotten into scams.

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I was like, yeah, this is so stupid. You can't just make your own money.

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If that worked, then people would copy it. So ironically, I kind of had sketched out

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a lot of like what would happen later. But I was like, money has important network
effects.

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It's socially, it's very important. There's too much stigma, this type of thing.

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These libertarians don't know what they're talking about.

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And so just keep that attitude in mind when people dismiss Drivechain today,

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because now it's swapped around.

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So I got this email and I was like, this is the stupidest thing I've ever done.

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These crazy libertarians are never going to get anything done.

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I was wrong on both counts, obviously.

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And a few people moved, I don't know, 20,000 or whatever.

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But now they have kind of taken over the legislature in New Hampshire,

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the liberty minded people.

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And I don't know if they have a complete,

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I don't know if they've achieved complete control of the state,

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but they're definitely now a very important movement.

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Were they not before this?

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Yeah, there was nothing.

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Wasn't New Hampshire always like the land of the free?

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What is the free and whatever?

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Live free or die.

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Live free or die. That's the New Hampshire motto.

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Yeah.

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Well, it's kind of a quaint, small place.

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It's not, you know, it's too far away.

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It's not Texas.

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Yeah.

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It's like north of Boston, right?

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Right.

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So it's like, you're really, no offense,

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like, you know, it's not going to change the world from there easily.

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Not the most appealing place also to like a call to action, get people to move
there.

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You know, like it would be a little tough to incentivize myself personally

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to move there regardless of my politics.

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Right.

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It's a very important decision.

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So you do think like Miami and Texas have been overall better at

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being more of like a dynamic entrepreneur-based sort of economic growth angle?

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Well, there's good quality of life in both of those places, right?

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I mean, like Miami, Austin.

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Yeah, exactly.

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You can imagine like young, ambitious people moving there.

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So were you always a libertarian?

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Well, I don't think so.

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You know, like obviously when you're like, you know, 10 or 11 or something,

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you're not really anything.

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Okay.

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But I did study economics very early.

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I was very interested in it.

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And economics lays bare a lot of important truths about the world that are very easy
to grasp,

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but for some reason are not implemented in the world.

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Like, you know, the congestion pricing here in New York,

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or the fact that the minimum wage is not an effective way to help the poor.

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If you want to help the poor, that's great.

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But the minimum wage...

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This is right in an Econ 101 textbook that they gave to us in high school.

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So in high school, this is when you started thinking about this.

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In Greg Manko's AP Econ.

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And so you kind of like...

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You do have to face the fact that places that have studied economics

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have become incredibly prosperous and, you know, implemented certain ideas.

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You know, like you can imagine the Netherlands invented the stock market

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and then became a huge golden age, Amsterdam, etc.

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London, a trade-based naval power, the British Empire, Singapore.

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The institution of capitalism has generally like led to positive growth.

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And so you think like all the suffering in the world that someone experiences

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because they grew up in a communist country and they have to go to the supermarket

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and there's no food there.

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The person comes back and they say, what did you manage to get?

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Did you get any bananas?

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And they say, no.

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You figured this out pretty young, despite, you know,

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because like typically I feel like in American politics,

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it's like you think of like young people as being more socialistic, for lack of a
better word.

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Yeah, of course.

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At first, I was kind of into the whole like Richard Dawkins new atheism.

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So that would take me strong to the left when I was like, you know, 14 or 15 or
something.

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Okay.

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I think a lot of people reach a point where they become socially liberal, fiscally
conservative.

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Right.

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And then they go into libertarian world.

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And then they pick from after that, they pick one of the two teams.

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Right.

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All of that is perfectly rational.

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I think the only irrational thing about that is that people haven't quite grasped
that.

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It's intentional.

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Each of the parties has some objectively good ideas.

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And then each of the parties also gets away with as much corruption as the other
party is doing.

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So they build up a budget in a way.

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They say, we'll be reasonable on these points in order to fleece people in these
other ways.

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Right, right, right.

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Scam the public.

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So of course, the libertarians sort of have the right answer.

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But it's the first past the post two party system.

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It's a waste of time.

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In fact, I think that the libertarian party basically formed in 1971.

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And so, you know, the website WTF happened in 1971.

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The implication is that it's Nixon taking people off the gold standard.

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Right.

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Really, I think the libertarian, the formation of the Libertarian Party actually did
more damage.

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Because that's when the Libertarian Party was formed.

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It was 1971, the same year that we went off the gold standard.

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I think you have to like, look at like, because even though it was kind of makes
sense,

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it's kind of nothing.

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But people were sick of they were kind of it was almost a reaction to.

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Right.

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I was gonna say it makes sense to me that they like, Richard Nixon was like a crazy
statist.

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Right.

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He was against he invented pretext to get he invented on the tape.

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He admitted that he made up the war on drugs to get back at his political opponents,

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the blacks and the hippies.

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He you know, it's like he we Watergate and all this stuff.

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You can see how people would just be like,

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No, it makes complete sense that the Libertarian Party would be like a reaction to
coming off of

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the gold standard.

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When you do that, now it means that the you have abandoned the our system, the two
party system.

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And I think that was a mistake.

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And in fact, we, we free like the two parties.

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I think I understand how it works, which is that it makes the it is a winner take
all

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loser lose all system.

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So when Trump won, the blue party, the Democratic Party was crushed completely and
now has to

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suffer for four years.

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So it's really about suffering.

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It's like we have two whips.

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One is red and one is blue.

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And we're whipping this like horse or something.

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And I think is I have a very cynical view.

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But the two party system is an engine that runs on cynicism, actually, because it
says

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no matter how bad one party is, you can you can crush them, you can make them really
suffer

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by when they lose in other places around the world have a different system where

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power distributed amongst the parties.

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And exactly.

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And so if someone loses a few seats, if they go from 51% to 49, or if they go from
like

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32% to like 29% actually nothing will happen.

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And so you don't think that that's like a better, more fair system?

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I don't, because the that system tries to be representative of the people.

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But this is over highly overrated.

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What we really want is accountability to the people.

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And we want a system where you get guillotined if you don't do the best job you
could possibly

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do.

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I once heard Casey Rotemore say democracy is a boondoggle.

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I don't know.

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That sounds like a very Casey thing.

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That's a Casey thing to say.

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He's having a lot of fun.

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Was he wearing like a costume when he said that?

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Maybe.

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That sounds about right.

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It was like, it was during that time in his life for sure.

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I like Casey a lot.

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We need more irreverence.

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This is a very important topic.

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It's all related to, of course, Bitcoin culture and it's related to Drivechain
tangentially.

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But we have, there's a difference in life between the people who are close up to
something

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and they see the details every day.

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And people see something from far away.

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Far away is like one day I'm going to write that book.

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Right.

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But near is, okay, what's the first sentence of the first chapter going to be?

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And it's like, okay, one day I'm going to go, I'm going to take a trip around the
world.

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And it's like, okay, why don't we, you notice it sometimes, you think, oh, it would
be fun

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to go, you know, I'll go to wherever, Atlanta.

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Then it's a completely different part of your brain that kicks in when you have to
sit down,

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open the thing up, look at all the different flights, look at all the hotels.

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I'm going to go on this day, on this specific time.

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That's the near mode versus the far mode is like politicians saying, you know, if
we're,

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and we want fairness, we want, you know, whatever, millionaires and billionaires to
pay their

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fair share.

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It's incredibly vague.

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Right, right.

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It's more like philosophical than it is action oriented.

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From far, exactly.

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It's very often very impractical.

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And, you know, love is all you need, stuff like that.

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Right.

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Which is great.

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Hold on the heartstrings.

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That's how you get voters.

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And it's so far away that it's always vague and abstract and it has the disadvantage
of

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being like, not serious.

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It reminds me kind of, and we'll get a deeper into this, and then I swear we'll go
back

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to like the beginning of your story.

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But like Bitcoin governance, I feel like it's much safer to just say like
ideological, nice,

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warm, fuzzy things, you know, when you're talking about Bitcoin than it is to
actually

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put out plans.

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Yeah, decentralization.

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Plans, right.

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00:12:10,320 --> 00:12:11,440
And same with the US government.

233
00:12:11,440 --> 00:12:15,040
It's like you say like what you actually want to do, you give an actual plan and
somebody's

234
00:12:15,040 --> 00:12:16,000
just going to rip it apart.

235
00:12:16,000 --> 00:12:16,400
Exactly.

236
00:12:16,400 --> 00:12:16,560
Right.

237
00:12:17,760 --> 00:12:23,840
But if you just say warm, fuzzy things, if you just say permissionless
decentralization,

238
00:12:23,840 --> 00:12:25,680
you know, then like, you know, you're good.

239
00:12:25,680 --> 00:12:26,160
You know, people like you.

240
00:12:26,160 --> 00:12:28,240
Any concrete, you said it exactly right.

241
00:12:28,240 --> 00:12:30,480
Any actual plan that has the details.

242
00:12:30,480 --> 00:12:30,880
Right.

243
00:12:30,880 --> 00:12:32,720
Will always be disappointing to someone.

244
00:12:32,720 --> 00:12:33,040
Right.

245
00:12:33,040 --> 00:12:36,720
And that person will come out and say, I don't like this about the plan.

246
00:12:36,720 --> 00:12:39,840
If you keep it vague, people won't be able to criticize it.

247
00:12:39,840 --> 00:12:42,080
And it's also many people have perfected the art.

248
00:12:42,080 --> 00:12:46,000
If you speak clearly, sometimes you can be clearly wrong.

249
00:12:47,280 --> 00:12:52,720
So if you say very clearly something like, I hate to say, I hate to pick on, Udi was

250
00:12:52,720 --> 00:12:56,000
making a big deal about being so right about the Iran war or whatever, which is
great.

251
00:12:56,000 --> 00:12:56,800
Good for him.

252
00:12:56,800 --> 00:12:57,760
And I don't know anything about that.

253
00:12:57,760 --> 00:13:01,280
So I'm just happy that he has an ex Mossad agent or whatever.

254
00:13:01,280 --> 00:13:01,840
I think he's great.

255
00:13:01,840 --> 00:13:02,400
I love Udi.

256
00:13:02,400 --> 00:13:03,920
But he's a very funny character.

257
00:13:03,920 --> 00:13:11,840
But he said also the previous two years ago, he said, when OP_CAT activates by the
end of

258
00:13:11,840 --> 00:13:17,360
this year, talking about 2024, with no controversy, I will like accept everyone's
apology or whatever.

259
00:13:18,080 --> 00:13:19,440
But of course, that hasn't happened.

260
00:13:19,440 --> 00:13:21,280
Now, of course, I'm just nothing against Udi.

261
00:13:21,280 --> 00:13:22,400
I think Udi's great.

262
00:13:22,400 --> 00:13:23,040
I just bring this up.

263
00:13:23,040 --> 00:13:24,800
I think you and Udi are kind of similar.

264
00:13:24,800 --> 00:13:25,680
So do I.

265
00:13:25,680 --> 00:13:29,280
But I'm bringing it up as an example of him being admirably clear.

266
00:13:30,000 --> 00:13:31,840
He says it will activate by the end.

267
00:13:31,840 --> 00:13:33,280
You have a specific date.

268
00:13:33,280 --> 00:13:34,720
It will activate by this date.

269
00:13:34,720 --> 00:13:35,920
There will be no controversy.

270
00:13:35,920 --> 00:13:36,880
I will accept everyone's.

271
00:13:36,880 --> 00:13:38,320
But then that's the issue.

272
00:13:38,320 --> 00:13:45,440
Whereas other people, the charlatans, of course, the charlatans will say like
something vague.

273
00:13:45,440 --> 00:13:49,040
They'll say, you know, we need Stratum V2 to help with mining decentralization.

274
00:13:49,680 --> 00:13:52,080
And that'll never be proved wrong.

275
00:13:52,640 --> 00:13:55,200
You can ask people, how do you measure mining?

276
00:13:55,200 --> 00:13:57,600
How do you define mining centralization?

277
00:13:57,600 --> 00:13:59,200
No one will ever give you an answer.

278
00:13:59,200 --> 00:14:00,240
How do you define MEV?

279
00:14:00,880 --> 00:14:02,560
No one will ever give you an answer.

280
00:14:02,560 --> 00:14:05,760
So the charlatans take refuge in the vagueness.

281
00:14:06,800 --> 00:14:09,840
And yeah, they hide in the lack of clarity, right?

282
00:14:09,840 --> 00:14:10,480
Right.

283
00:14:10,480 --> 00:14:17,360
So the two-party system, I don't know, but it has the advantage of someone when you
win.

284
00:14:17,360 --> 00:14:21,520
What the libertarians should do is what we recently did, which is free Ross Ulbricht

285
00:14:21,520 --> 00:14:24,400
by backing temporarily one side.

286
00:14:25,040 --> 00:14:26,960
And that is the smarter thing to do.

287
00:14:26,960 --> 00:14:29,760
You back one side, and you say, we support you.

288
00:14:29,760 --> 00:14:32,640
And then you say, but you're on a very short leash, and we will pull this support.

289
00:14:33,200 --> 00:14:34,880
If you stab us in the back, we're going to flip.

290
00:14:35,760 --> 00:14:40,000
If you're willing to flip, now you have an actual vote.

291
00:14:40,000 --> 00:14:41,200
There's something at stake.

292
00:14:41,200 --> 00:14:41,760
Right.

293
00:14:41,760 --> 00:14:46,480
And this is, you know, I think like the LGBT community did that with the Blue Party.

294
00:14:47,840 --> 00:14:50,800
Whereas other people, the libertarians are out of the game.

295
00:14:51,360 --> 00:14:52,960
So you can't get the libertarian vote.

296
00:14:53,760 --> 00:14:56,880
It's the party principle of never voting for one of the two major parties.

297
00:14:56,880 --> 00:14:57,120
Right.

298
00:14:57,120 --> 00:14:58,720
So they have nothing to fear.

299
00:14:58,720 --> 00:15:04,400
They have no, by ignoring the libertarian party, there's no greed either.

300
00:15:04,400 --> 00:15:07,920
But they're also kind of like, they're the swing voters, arguably, right?

301
00:15:07,920 --> 00:15:09,280
Only if they actually vote.

302
00:15:09,280 --> 00:15:10,640
If they vote.

303
00:15:10,640 --> 00:15:12,000
That's exactly what we did do.

304
00:15:12,000 --> 00:15:15,760
And this is sort of what, for some, you know, obviously Trump is a very
controversial figure

305
00:15:15,760 --> 00:15:16,240
in many ways.

306
00:15:16,240 --> 00:15:19,600
But he was able to do this where he said, listen, I'm the real libertarian vote.

307
00:15:19,600 --> 00:15:21,200
I'm the weird outsider vote.

308
00:15:21,280 --> 00:15:23,520
That's because he won both times when he did that.

309
00:15:23,520 --> 00:15:24,320
He got Kennedy.

310
00:15:24,320 --> 00:15:27,680
I feel like that was like the tipping point in him really getting the libertarian
vote.

311
00:15:27,680 --> 00:15:35,280
This is a very important example of Trump kind of centralized the power around
himself,

312
00:15:35,280 --> 00:15:39,360
which allowed him to make these ad hoc modifications to the platform.

313
00:15:40,320 --> 00:15:46,960
Whereas I think probably Kamala is unable to, you know, there's like a huge
interlocking set of

314
00:15:47,760 --> 00:15:51,680
supporters and staff, people who have strong opinions, like she can't go on Joe
Rogan or

315
00:15:51,680 --> 00:15:53,200
whatever or something like that.

316
00:15:53,200 --> 00:16:01,520
Whereas Trump, there was a time when Trump had to face the pro-life people who
wanted the party to

317
00:16:01,520 --> 00:16:02,880
be more pro-life.

318
00:16:02,880 --> 00:16:06,320
And he basically just said, just like kick those people out of like the RNC.

319
00:16:06,320 --> 00:16:07,840
He like basically kicked all these people out.

320
00:16:07,840 --> 00:16:12,480
They wrote a bunch of blog posts about how upset they were about, because Trump is
just

321
00:16:12,480 --> 00:16:15,680
saying he got rid of Roe v. Wade and that's the last he's going to do.

322
00:16:15,680 --> 00:16:19,360
So if you want to capture the center, this is why the two-party system works,
because

323
00:16:20,240 --> 00:16:26,000
it's a goal of capturing the center during the election, but then in between the
elections,

324
00:16:26,000 --> 00:16:28,720
it is about persuading more people.

325
00:16:29,440 --> 00:16:33,840
So it is inherently based on persuasion and consent.

326
00:16:33,840 --> 00:16:35,680
And so it actually is good in that way.

327
00:16:35,680 --> 00:16:37,920
And the rival systems are terrible.

328
00:16:40,160 --> 00:16:43,840
The election actually makes no difference because at the end of the day, they form
the

329
00:16:43,840 --> 00:16:46,480
coalition government and that's the real election.

330
00:16:46,480 --> 00:16:49,360
So like Germany had like five parties or whatever.

331
00:16:50,560 --> 00:16:53,120
You vote and then the proportions change.

332
00:16:54,000 --> 00:16:58,560
So the winning alternative for Deutschland or whatever, they could get like 35% or
whatever.

333
00:16:59,280 --> 00:17:00,560
I don't know, I'm just making this number up.

334
00:17:00,560 --> 00:17:03,120
I don't even care enough to look into it because it doesn't matter.

335
00:17:03,120 --> 00:17:11,680
But they could win, but you still have to add up to 51% to form the government, so
to speak.

336
00:17:11,680 --> 00:17:15,760
So the real election is a vote of three out of five of the leaders of these parties.

337
00:17:15,760 --> 00:17:17,920
And it makes no difference what the German citizens do.

338
00:17:17,920 --> 00:17:23,280
And so I'm strongly against the European-style proportional representation.

339
00:17:23,280 --> 00:17:26,000
And I'm strongly in favor of the first past the post.

340
00:17:26,000 --> 00:17:27,680
It has very little to do with Bitcoin.

341
00:17:27,680 --> 00:17:33,520
But it is all related because it is all about competition, sorting the best ideas to
the top.

342
00:17:33,520 --> 00:17:37,200
Well, and the two-party system, you have two healthy competitors that fight to the
death

343
00:17:37,200 --> 00:17:38,080
and one wins.

344
00:17:38,080 --> 00:17:40,400
And this was, I mean, I think this is the key thing.

345
00:17:40,400 --> 00:17:41,120
This is how you got it.

346
00:17:41,120 --> 00:17:45,760
This is like a way that people got into Bitcoin, especially like the OG, right.

347
00:17:45,760 --> 00:17:47,200
The Ron Paul, gold bug, Peter Schiff was right.

348
00:17:47,200 --> 00:17:48,160
Were you a gold bug?

349
00:17:48,160 --> 00:17:49,840
I was like a Peter Schiff was right.

350
00:17:50,480 --> 00:17:55,040
Peter Schiff did this mortgage banker speech in 2006 that everyone should watch.

351
00:17:55,040 --> 00:17:55,680
And it's amazing.

352
00:17:55,680 --> 00:17:56,960
He predicted the financial crisis.

353
00:17:56,960 --> 00:17:58,880
So again, I was someone interested in economics.

354
00:17:59,600 --> 00:18:04,800
The traditional orthodox economics had this completely wrong from beginning to end.

355
00:18:05,520 --> 00:18:08,320
You know, they misunderstood and did not predict the financial crisis.

356
00:18:08,320 --> 00:18:13,440
But on the other hand, there was Peter Schiff who seemed to predict it in detail and
explain

357
00:18:13,440 --> 00:18:14,160
it in detail.

358
00:18:14,720 --> 00:18:19,360
Prediction is overrated, but explanation is underrated.

359
00:18:19,360 --> 00:18:20,000
Right.

360
00:18:20,000 --> 00:18:23,360
He really said like why it would happen.

361
00:18:24,720 --> 00:18:29,600
And he was saying that this is basically because you have these unaccountable,

362
00:18:30,320 --> 00:18:34,960
Fannie Mae, Freddie Mac, the Fed, et cetera, the regulators, the politicians, the
people.

363
00:18:35,760 --> 00:18:39,120
It's neat if you really investigate it after the fact, this is only the tip of the
iceberg.

364
00:18:39,120 --> 00:18:47,200
And in fact, Peter Schiff even missed a few things, such as the big financial firms,
the

365
00:18:47,200 --> 00:18:51,440
traders and the CEOs, all the people making these decisions, they're paid on like a
bonus

366
00:18:51,440 --> 00:18:55,280
where they, if they can beat the market by five or 6%, they get a huge bonus.

367
00:18:56,240 --> 00:19:02,640
If doing so, like AIG, if doing so, even though their insurance company, which makes
it make

368
00:19:03,040 --> 00:19:06,640
even less sense because you think they would know about like correlated risk and
stuff.

369
00:19:06,640 --> 00:19:10,640
But the point is, these people play some bets.

370
00:19:11,440 --> 00:19:14,640
They earn a huge bonus, 2005, 2006.

371
00:19:14,640 --> 00:19:19,520
I think maybe it was, I don't remember which it was.

372
00:19:19,520 --> 00:19:24,000
One of the rating agencies was like the most profitable company in S&P 500.

373
00:19:24,000 --> 00:19:24,800
Moody's?

374
00:19:24,800 --> 00:19:25,680
I think it might've been Moody's.

375
00:19:25,680 --> 00:19:26,080
Yeah, that sounds right.

376
00:19:26,080 --> 00:19:27,520
In 2005, 2006.

377
00:19:27,520 --> 00:19:28,480
That sounds right.

378
00:19:28,480 --> 00:19:28,880
Yeah.

379
00:19:28,880 --> 00:19:29,360
They...

380
00:19:29,360 --> 00:19:31,120
They were just printing money, handing out ratings.

381
00:19:31,200 --> 00:19:34,640
Their job to rate them accurately.

382
00:19:34,640 --> 00:19:35,120
Yeah, yeah.

383
00:19:35,120 --> 00:19:35,520
So...

384
00:19:35,520 --> 00:19:36,000
Terrible.

385
00:19:36,000 --> 00:19:38,320
They screwed all of us, basically.

386
00:19:38,320 --> 00:19:39,200
Of course.

387
00:19:39,200 --> 00:19:42,400
But the question is, you profit, profit, profit, profit, profit.

388
00:19:42,960 --> 00:19:48,320
Then a huge blow up that obliterates the company, you know, like $5 trillion.

389
00:19:49,120 --> 00:19:51,040
But then the employees would just walk away.

390
00:19:51,040 --> 00:19:52,480
They got, they cashed out their bonus.

391
00:19:52,480 --> 00:19:56,000
They may lose their job now, but they got, you know what I mean?

392
00:19:56,000 --> 00:19:56,960
Some random guy.

393
00:19:57,520 --> 00:20:00,800
It's like some random guy on the Titanic is...

394
00:20:00,800 --> 00:20:01,680
Goes in and he's...

395
00:20:02,240 --> 00:20:05,200
For steering it closer to the iceberg, he gets like $10, $20.

396
00:20:06,000 --> 00:20:10,160
And then he just takes the lifeboat away when it hits the iceberg.

397
00:20:10,160 --> 00:20:10,400
Boom.

398
00:20:10,400 --> 00:20:11,040
And so...

399
00:20:11,040 --> 00:20:14,160
So this was only Fannie Mae and Freddie Mac and all that was the tip of that...

400
00:20:14,160 --> 00:20:15,600
Tip of the metaphorical iceberg.

401
00:20:15,600 --> 00:20:16,000
So when did...

402
00:20:16,000 --> 00:20:18,240
Okay, so you were like a Peter Schiff was right type of libertarian.

403
00:20:18,240 --> 00:20:19,760
Yeah, so he got me into gold.

404
00:20:19,760 --> 00:20:21,440
And then he got you into gold.

405
00:20:21,440 --> 00:20:24,480
And then you first heard about Bitcoin, but you were like, this is stupid.

406
00:20:24,480 --> 00:20:25,040
I thought it was so stupid.

407
00:20:25,280 --> 00:20:27,520
You were like, the libertarians have lost it.

408
00:20:27,520 --> 00:20:29,840
And then when did you change your mind about Bitcoin?

409
00:20:29,840 --> 00:20:31,680
The Silk Road article.

410
00:20:31,680 --> 00:20:33,200
I didn't read it when it first came out.

411
00:20:33,920 --> 00:20:35,200
I was months late.

412
00:20:35,200 --> 00:20:36,320
The Silk Road article?

413
00:20:36,320 --> 00:20:37,360
There was an article.

414
00:20:37,360 --> 00:20:38,160
There was one.

415
00:20:38,160 --> 00:20:39,360
I think it was Wired.

416
00:20:39,360 --> 00:20:40,720
I can't quite remember.

417
00:20:40,720 --> 00:20:42,560
But it ended up on Slashdot.

418
00:20:42,560 --> 00:20:44,560
I did not see it on Slashdot, unfortunately.

419
00:20:44,560 --> 00:20:48,720
I think everyone who religiously read Slashdot was like a tech news site.

420
00:20:48,720 --> 00:20:49,280
Okay.

421
00:20:49,280 --> 00:20:51,440
That people were addicted to back in the day.

422
00:20:51,440 --> 00:20:51,760
Okay.

423
00:20:51,840 --> 00:20:55,280
You know, they have these little fads.

424
00:20:55,280 --> 00:20:56,240
You know, like Twitter is the biggest today.

425
00:20:56,240 --> 00:20:58,160
I missed this period, yeah.

426
00:20:58,160 --> 00:21:00,320
But this was like 2011, I think.

427
00:21:00,320 --> 00:21:04,640
There was an article, Silk Road, the online drug marketplace.

428
00:21:04,640 --> 00:21:06,240
You can buy anything or something like that.

429
00:21:06,240 --> 00:21:06,480
Okay.

430
00:21:07,840 --> 00:21:08,960
And you were like, oh, wow, it's been used.

431
00:21:08,960 --> 00:21:13,040
I read it in maybe 2011 or something like that.

432
00:21:13,040 --> 00:21:13,520
Okay.

433
00:21:13,520 --> 00:21:15,040
So I read it months after it came out.

434
00:21:15,680 --> 00:21:17,360
And then I thought, oh, I'm too late.

435
00:21:17,360 --> 00:21:19,760
Yeah, of course.

436
00:21:19,760 --> 00:21:23,120
Because you had a situation where, well, first of all, I thought it must work.

437
00:21:23,120 --> 00:21:27,600
Because if you're addicted to drugs, I mean, it was funny.

438
00:21:27,600 --> 00:21:29,920
Also, Breaking Bad was big at that time.

439
00:21:29,920 --> 00:21:37,440
You think like the lengths people would go to to get the drugs that they want if
they're

440
00:21:37,440 --> 00:21:38,240
addicted.

441
00:21:38,240 --> 00:21:43,360
And of course, everyone, I think, you either know someone, friend of a friend,
someone

442
00:21:43,360 --> 00:21:46,160
in the family has alcoholism or something.

443
00:21:46,160 --> 00:21:49,040
People suddenly get—this was in Nassim Taleb's book, which also came out.

444
00:21:49,920 --> 00:21:55,600
Black Swan and Antifragile, about someone, a drug addict has a certain number of IQ

445
00:21:55,600 --> 00:21:56,880
points normally.

446
00:21:56,880 --> 00:22:00,480
And then when they run low, they suddenly get really, really clever.

447
00:22:00,480 --> 00:22:02,480
Their IQ goes up.

448
00:22:02,480 --> 00:22:03,760
And they become a great actor.

449
00:22:03,760 --> 00:22:05,920
They become hardworking and resourceful.

450
00:22:05,920 --> 00:22:07,040
And they need to get that.

451
00:22:07,600 --> 00:22:09,360
And wow, like, you know.

452
00:22:09,360 --> 00:22:13,600
So I thought it must work because if you could get free drugs out of this anonymous
website,

453
00:22:15,200 --> 00:22:16,320
you know, people would have—

454
00:22:17,200 --> 00:22:20,320
You figured demand for Bitcoin would increase, basically.

455
00:22:20,320 --> 00:22:26,080
And I thought, like, people are already now using it to solve a non-Bitcoin problem.

456
00:22:26,080 --> 00:22:26,240
Right.

457
00:22:26,240 --> 00:22:29,680
So this is a case where we have fallen from where we were back then.

458
00:22:29,680 --> 00:22:29,840
Right.

459
00:22:29,840 --> 00:22:31,040
It was a real use case.

460
00:22:31,040 --> 00:22:37,520
And I'm sure you're familiar with the Bitcoin Uncensored 2016 podcast, which was all
about

461
00:22:37,520 --> 00:22:38,720
the Bitcoin user.

462
00:22:38,720 --> 00:22:39,520
And that was a joke.

463
00:22:40,320 --> 00:22:45,680
The joke was the Bitcoin user is like a drug addict or like a prostitute or
whatever.

464
00:22:46,560 --> 00:22:47,600
They would say the underserved.

465
00:22:47,600 --> 00:22:48,960
The underserved, yeah.

466
00:22:48,960 --> 00:22:50,720
That was kind of like the unbanked.

467
00:22:50,720 --> 00:22:51,120
Right, right.

468
00:22:51,120 --> 00:22:52,080
But it was like a joke.

469
00:22:52,080 --> 00:22:54,560
It was like drug dealers are underserved.

470
00:22:54,560 --> 00:22:56,000
That was like what they were talking about.

471
00:22:56,000 --> 00:22:56,800
OK, right, right, right.

472
00:22:56,800 --> 00:23:01,680
And they had this hilarious, you know, this hilarious schtick or whatever.

473
00:23:02,320 --> 00:23:07,200
They had all these like coded euphemistic words inside jokes.

474
00:23:07,200 --> 00:23:09,680
To basically talk about prostitutes and drug dealers.

475
00:23:09,680 --> 00:23:13,680
To basically say these are the real Bitcoin users and all this other stuff that's
happening

476
00:23:14,240 --> 00:23:17,600
with cryptography and with finances is a pretentious distraction.

477
00:23:17,600 --> 00:23:18,800
It's just Ivory Tower.

478
00:23:18,800 --> 00:23:20,800
We need to be focusing on the underserved.

479
00:23:20,800 --> 00:23:22,480
Because, well, this is what's really happening.

480
00:23:22,480 --> 00:23:25,600
And everything else is just what they'll put on CNBC.

481
00:23:25,600 --> 00:23:26,880
But it's actually not accurate.

482
00:23:26,880 --> 00:23:27,280
Right.

483
00:23:27,280 --> 00:23:27,520
OK.

484
00:23:27,520 --> 00:23:28,560
We actually have ransomware.

485
00:23:28,560 --> 00:23:30,800
That narrative has now shifted a little bit.

486
00:23:30,800 --> 00:23:34,160
And now we're talking about like the starving babies in Africa and remittances.

487
00:23:34,160 --> 00:23:34,400
Yes.

488
00:23:34,400 --> 00:23:35,200
It's slightly different.

489
00:23:35,200 --> 00:23:41,520
In many ways, the blockchain without Bitcoin bank people, the R3 people, these are
like

490
00:23:42,080 --> 00:23:44,800
IBM blockchain, Microsoft Azure blockchain.

491
00:23:44,800 --> 00:23:46,640
We all laughed at that back then.

492
00:23:46,640 --> 00:23:49,680
But there is a bizarre sense in which it has come back now.

493
00:23:49,680 --> 00:23:51,840
Because people say, oh, you shouldn't use Bitcoin for anything.

494
00:23:51,840 --> 00:23:53,200
Just buy it through the ETF.

495
00:23:53,200 --> 00:23:55,360
Just buy the Bitcoin treasury company.

496
00:23:55,360 --> 00:24:00,320
So now you're owning Bitcoin through something registered to your name, like
legally.

497
00:24:01,120 --> 00:24:02,160
It's going to be regulated.

498
00:24:02,160 --> 00:24:03,360
It's going to pay taxes.

499
00:24:04,000 --> 00:24:05,120
The treasury company will.

500
00:24:05,120 --> 00:24:09,760
Treasury company will, you know, it will have to have audits and have, you know,
quarterly

501
00:24:09,760 --> 00:24:10,960
statements and etc.

502
00:24:10,960 --> 00:24:12,880
And it's kind of like, yeah.

503
00:24:12,880 --> 00:24:14,400
And they're kind of paper Bitcoin-y.

504
00:24:14,400 --> 00:24:17,680
I mean, we can have a whole treasury conversation at some point.

505
00:24:17,680 --> 00:24:18,320
Precisely.

506
00:24:18,320 --> 00:24:18,560
Wait.

507
00:24:18,560 --> 00:24:19,680
So OK.

508
00:24:19,680 --> 00:24:22,480
So then you kind of were like, OK, it's actually being used.

509
00:24:22,480 --> 00:24:25,360
And that's what turned you on to look into it more deeply.

510
00:24:25,360 --> 00:24:27,520
And then you read the white paper, went down the whole thing.

511
00:24:27,520 --> 00:24:28,640
The forum, white paper, etc.

512
00:24:28,640 --> 00:24:28,960
I got it.

513
00:24:28,960 --> 00:24:32,720
One thing was I read the, I understood, when I understood how mining worked, then I
was

514
00:24:32,720 --> 00:24:33,520
more interested.

515
00:24:33,520 --> 00:24:33,760
Really?

516
00:24:33,760 --> 00:24:38,480
Because I thought it's not going to work if you just create this currency and give
it

517
00:24:38,480 --> 00:24:38,960
to yourself.

518
00:24:38,960 --> 00:24:40,080
You have to get it out somehow.

519
00:24:40,640 --> 00:24:41,200
You can't just.

520
00:24:41,200 --> 00:24:42,960
And this is a hard problem from the gains area.

521
00:24:42,960 --> 00:24:44,160
Like how do you distribute it?

522
00:24:44,160 --> 00:24:48,640
Because if you just give it to yourself and your friends, then you give people an
incentive

523
00:24:48,640 --> 00:24:49,440
to.

524
00:24:49,617 --> 00:24:56,617
Then you give people an incentive to redo that with a separate inventor, do it with
them and their friends, and now you don't get critical mass.

525
00:24:56,617 --> 00:25:02,617
So how do you get people in the coalition? But if you don't give it to yourself and
your friends, then what are you going to do? Give it to people who don't understand
it?

526
00:25:02,617 --> 00:25:08,617
Give it to your enemies like you're not going to do any of those things. So I
thought that also was like an impossible nut to crack.

527
00:25:08,617 --> 00:25:12,617
You feel like mining solved the nut of how do you distribute money?

528
00:25:12,617 --> 00:25:27,617
Yes, which is very important because you need to get people. Everyone has to find
out about Bitcoin and then decide, do I want to join or do I want to stay in the
fiat world or do I want to basically become an alt-coiner?

529
00:25:27,617 --> 00:25:30,617
Would be how it would have been put. Would be how it's put now.

530
00:25:30,617 --> 00:25:33,617
Alt-coining would be having a very broad definition.

531
00:25:34,617 --> 00:25:45,617
Okay, Bitcoin did that, but I can also do that. And this is Peter Schiff's original
complaint about Bitcoin, like I can just replicate this project on my own computer.

532
00:25:45,617 --> 00:25:56,617
But that's part of what he didn't understand about there's just enough of a reason
why enough people would not do that to give it more of a chance.

533
00:25:56,617 --> 00:26:11,617
Of course, Bitcoin success is not guaranteed. But the point was instead of doing
nothing at all or saying something like I gave all the coins to myself on the first
day or saying something like I alone have a magic key that can create new coins
whenever I want.

534
00:26:11,617 --> 00:26:17,617
And this would be like a corporation. We can issue new shares because that also is
kind of not great.

535
00:26:17,617 --> 00:26:20,617
No, that's centralized distribution basically.

536
00:26:20,617 --> 00:26:26,617
And it's kind of off-putting for people. It's like that person's so special. But
mining had also solved this problem.

537
00:26:26,617 --> 00:26:33,617
I didn't know that much. I didn't really know. I knew about cryptographic hashes
from the BitTorrent era.

538
00:26:33,617 --> 00:26:36,617
Okay, so you were somewhat cryptographically aware.

539
00:26:36,617 --> 00:26:43,617
Only a little. But then I didn't really realize. I hadn't fully grokked at the time
how the public-private keys worked.

540
00:26:43,617 --> 00:26:49,617
Because I thought, oh, when you show up to Bitcoin, you have to register and make an
account.

541
00:26:49,617 --> 00:26:51,617
Because, of course, most things work this way.

542
00:26:51,617 --> 00:26:53,617
Right, that's the standard.

543
00:26:53,617 --> 00:26:55,617
Almost everything precisely.

544
00:26:55,617 --> 00:26:59,617
So I thought, and then I kind of thought, I don't know, what's it going to do? Keep
track? Like 8 billion people are going to register an account?

545
00:26:59,617 --> 00:27:01,617
I was kind of confused about that.

546
00:27:02,617 --> 00:27:07,617
And then I looked into it after the Silk Road article.

547
00:27:07,617 --> 00:27:09,617
And I figured out how the public-private keys work.

548
00:27:09,617 --> 00:27:15,617
And it's like, no, a trillion bajillion accounts already exist.

549
00:27:15,617 --> 00:27:17,617
And you just pick one.

550
00:27:17,617 --> 00:27:24,617
And the fact is, there's so many, that if you just pick one at random, no one will
ever pick the same one as you.

551
00:27:25,617 --> 00:27:36,617
If they have the whole population of Earth guessing a million times a second for
2,000 years, that still cumulatively will be 0% out to the 20th decimal point.

552
00:27:36,617 --> 00:27:46,617
So the very special kind of account model, if you will, or non-account model, was
also another big unlock for you in terms of understanding and grokking.

553
00:27:46,617 --> 00:27:50,617
So you were not an engineer then. You were working in finance?

554
00:27:50,617 --> 00:27:58,617
I was in graduate school and I was studying math and doing MBA in finance.

555
00:27:58,617 --> 00:27:59,617
Okay. All right.

556
00:27:59,617 --> 00:28:04,617
So you were in grad school when this was happening. So then did you immediately go
work in Bitcoin after grad school?

557
00:28:04,617 --> 00:28:11,617
No. I actually went to work for Yale University in the economics department as a
statistician.

558
00:28:11,617 --> 00:28:15,617
Oh, you did? For how long until you decided to go work there?

559
00:28:15,617 --> 00:28:24,617
Basically until – it was from 2012 to the end of 2014, beginning of 2015.

560
00:28:24,617 --> 00:28:31,617
This was basically your Bitcoin education period. So you were working at Yale and
you were quietly just researching Bitcoin.

561
00:28:31,617 --> 00:28:32,617
Right.

562
00:28:32,617 --> 00:28:33,617
Aggressively.

563
00:28:33,617 --> 00:28:35,617
Right. I was becoming obsessed with it.

564
00:28:35,617 --> 00:28:39,617
You were becoming obsessed. You got the disease. You caught the illness. Okay.

565
00:28:39,617 --> 00:28:44,617
And so then did you go – what was your first foray into working in Bitcoin
professionally?

566
00:28:44,617 --> 00:28:52,617
A separate thing that had happened, I'm a huge proponent of this prediction market
idea, which has now taken the form of a Polymarket.

567
00:28:52,617 --> 00:28:58,617
But there was a pre-Polymarket site, which was my favorite website on the whole
internet, called Intrade.

568
00:28:58,617 --> 00:29:05,617
And it was this funny little rinky-dink site, but it was the pre-Polymarket of its
day.

569
00:29:05,617 --> 00:29:07,617
And you could do betting on elections and stuff.

570
00:29:07,617 --> 00:29:08,617
What was it called?

571
00:29:08,617 --> 00:29:10,617
Intrade. It's a joke on like insider trading.

572
00:29:10,617 --> 00:29:11,617
Oh.

573
00:29:11,617 --> 00:29:12,617
I think. I assume.

574
00:29:12,617 --> 00:29:13,617
Okay. Sure.

575
00:29:13,617 --> 00:29:14,617
That's what I always thought.

576
00:29:14,617 --> 00:29:17,617
Intrade. And this was like a website in 2013 or 2014.

577
00:29:17,617 --> 00:29:28,617
This guy from Ireland ran it sort of and he would be on CNBC sometimes and they put
up the chart of – the volume was unbelievably low.

578
00:29:28,617 --> 00:29:33,617
But this idea is a huge idea. To me, this idea is like as big as the printing press.

579
00:29:33,617 --> 00:29:35,617
The prediction market idea in general.

580
00:29:35,617 --> 00:29:36,617
Yeah.

581
00:29:36,617 --> 00:29:37,617
Okay.

582
00:29:37,617 --> 00:29:41,617
And even now, we've only explored the tip of the iceberg of what is possible.

583
00:29:41,617 --> 00:29:45,617
I have a whole separate website called BitcoinHiveMind.com where people can read all
about it.

584
00:29:45,617 --> 00:29:47,617
I've written tons of stuff and put up videos.

585
00:29:47,617 --> 00:29:49,617
Were you blogging at this point already?

586
00:29:49,617 --> 00:29:54,617
I started to because in 2012, the US government closed down Intrade.

587
00:29:54,617 --> 00:29:57,617
They forced it – the CFTC forced it to close down.

588
00:29:57,617 --> 00:29:58,617
Okay.

589
00:29:58,617 --> 00:30:02,617
And so I was being obsessed with Bitcoin at the time and I thought, well, can we do
this on Bitcoin?

590
00:30:02,617 --> 00:30:03,617
I started writing about that.

591
00:30:03,617 --> 00:30:05,617
Because then the government couldn't shut it down.

592
00:30:05,617 --> 00:30:06,617
Right.

593
00:30:06,617 --> 00:30:07,617
So that was the original idea.

594
00:30:07,617 --> 00:30:08,617
That was how I got in.

595
00:30:08,617 --> 00:30:14,617
But then I realized people are going to compare this idea to a bunch of horrible
ideas that were coming out around the same time.

596
00:30:14,617 --> 00:30:15,617
No offense.

597
00:30:15,617 --> 00:30:16,617
But there was these other ideas.

598
00:30:16,617 --> 00:30:18,617
One was Ethereum, of course, which is kind of funny.

599
00:30:18,617 --> 00:30:20,617
But there was like BitShares.

600
00:30:20,617 --> 00:30:21,617
Terrible idea.

601
00:30:21,617 --> 00:30:25,617
And like NXT and these other low-quality ideas.

602
00:30:25,617 --> 00:30:28,617
Ethereum was a low-quality idea.

603
00:30:28,617 --> 00:30:35,617
Well, it's funny because Ethereum – this is the origin of the Bitcoin maximalism
type culture maybe.

604
00:30:35,617 --> 00:30:40,617
And if you look at Ethereum, it does look like a counterexample.

605
00:30:40,617 --> 00:30:49,617
But actually if you look at the whole set and you just say it's a survivorship bias
and you say what actually people wanted was – they didn't want a monopoly.

606
00:30:49,617 --> 00:30:52,617
They didn't want Bitcoin to be – they didn't want to have all their eggs in one
basket.

607
00:30:52,617 --> 00:30:53,617
Okay.

608
00:30:53,617 --> 00:30:55,617
So they just wanted some second thing.

609
00:30:55,617 --> 00:30:56,617
Do you think that's why Ethereum exists?

610
00:30:56,617 --> 00:31:06,617
Well, I think if you average the Ethereum financial ROI with all the projects that
went to zero and failed, whatever.

611
00:31:06,617 --> 00:31:09,617
Then they were all just some version of we need to diversify.

612
00:31:09,617 --> 00:31:13,617
I think that is a missing part of the story.

613
00:31:13,617 --> 00:31:19,617
Even though they're all incredibly correlated and those are just worse and just
extra volatile relative to Bitcoin.

614
00:31:19,617 --> 00:31:20,617
Well, yeah.

615
00:31:20,617 --> 00:31:21,617
I think that –

616
00:31:21,617 --> 00:31:24,617
That's a terrible diversification strategy.

617
00:31:24,617 --> 00:31:27,617
But it's better than nothing at all, which is what we had.

618
00:31:27,617 --> 00:31:29,617
For many years, there was only Bitcoin.

619
00:31:29,617 --> 00:31:35,617
Bitcoin had like 99, 95 percent of the coin market cap.

620
00:31:35,617 --> 00:31:36,617
Right.

621
00:31:36,617 --> 00:31:38,617
A lot of the stuff on there would be like flash in the pan.

622
00:31:38,617 --> 00:31:40,617
What was there even before Ethereum?

623
00:31:40,617 --> 00:31:41,617
Like Omni?

624
00:31:41,617 --> 00:31:42,617
I don't even know.

625
00:31:42,617 --> 00:31:43,617
What was Litecoin?

626
00:31:43,617 --> 00:31:44,617
Counterparty?

627
00:31:44,617 --> 00:31:45,617
There was Namecoin.

628
00:31:45,617 --> 00:31:46,617
Oh, right, right.

629
00:31:46,617 --> 00:31:47,617
There was – right, exactly.

630
00:31:47,617 --> 00:31:48,617
Namecoin, I forgot.

631
00:31:48,617 --> 00:31:49,617
There was Peercoin and –

632
00:31:49,617 --> 00:31:50,617
Those – okay, right.

633
00:31:50,617 --> 00:31:51,617
There was like a whole stream of like –

634
00:31:51,617 --> 00:31:52,617
It was this era.

635
00:31:52,617 --> 00:31:54,617
Litecoin was the silver to Bitcoin's gold.

636
00:31:54,617 --> 00:31:56,617
That didn't make any sense, but they said it anyway.

637
00:31:56,617 --> 00:31:57,617
The Bitcoin forks era.

638
00:31:57,617 --> 00:32:01,617
And then there was like a Feathercoin and Dustcoin.

639
00:32:01,617 --> 00:32:02,617
They were like Litecoin.

640
00:32:02,617 --> 00:32:04,617
It was all like – it was all a bunch of nonsense.

641
00:32:04,617 --> 00:32:09,617
You must have somewhat appreciated, though, this idea of like, okay, we're going to
make –

642
00:32:09,617 --> 00:32:12,617
we're going to create like a programmable option.

643
00:32:12,617 --> 00:32:13,617
Right.

644
00:32:13,617 --> 00:32:16,617
And we're going to have something that can do things other than be payments.

645
00:32:16,617 --> 00:32:20,617
That's how I started the blogging was I was kind of thinking like, okay, I have this
good idea,

646
00:32:20,617 --> 00:32:27,617
but actually there's a lot of these other – it resembles these other ideas that I
think are not as good.

647
00:32:27,617 --> 00:32:32,617
So then I started to start the blog to try to write about what all these ideas were

648
00:32:32,617 --> 00:32:34,617
and why some were better than others.

649
00:32:34,617 --> 00:32:37,617
Because you were writing the blog to kind of explore all of this.

650
00:32:37,617 --> 00:32:38,617
Right.

651
00:32:38,617 --> 00:32:42,617
And then you actually created a company with the predictions you created.

652
00:32:42,617 --> 00:32:44,617
You actually actuated this predictions program.

653
00:32:44,617 --> 00:32:49,617
What happened was Roger Ver hired me away from Yale for about two years.

654
00:32:49,617 --> 00:32:50,617
Really?

655
00:32:50,617 --> 00:32:52,617
We even made the software back in 2015.

656
00:32:52,617 --> 00:32:54,617
I did not know this history.

657
00:32:54,617 --> 00:32:57,617
Early versions can be found on BitcoinHiveMind.com.

658
00:32:57,617 --> 00:32:58,617
What was your role?

659
00:32:58,617 --> 00:32:59,617
What was your –

660
00:32:59,617 --> 00:33:05,617
We were going to – well, I invented the peer-to-peer – the idea of having the whole
thing be decentralized.

661
00:33:05,617 --> 00:33:08,617
So people would create markets and bet on them.

662
00:33:08,617 --> 00:33:11,617
It would be like Polymarket, but there would be just software.

663
00:33:11,617 --> 00:33:12,617
So you helped architect this?

664
00:33:12,617 --> 00:33:13,617
Right.

665
00:33:13,617 --> 00:33:14,617
I designed this thing.

666
00:33:14,617 --> 00:33:15,617
You designed it.

667
00:33:15,617 --> 00:33:16,617
This is what Truthcoin was called.

668
00:33:16,617 --> 00:33:20,617
It was a Bitcoin peer-to-peer Oracle system and prediction marketplace.

669
00:33:20,617 --> 00:33:22,617
But you were not an engineer.

670
00:33:22,617 --> 00:33:23,617
That was not your background.

671
00:33:23,617 --> 00:33:27,617
Well, I was – I knew a little bit about writing software.

672
00:33:27,617 --> 00:33:28,617
Okay.

673
00:33:28,617 --> 00:33:35,617
Just being self-taught and as like a research academic statistician type person,

674
00:33:35,617 --> 00:33:37,617
you have to know a certain amount.

675
00:33:37,617 --> 00:33:38,617
Okay.

676
00:33:38,617 --> 00:33:41,617
So I was a little bit self-taught and I knew a little bit.

677
00:33:41,617 --> 00:33:42,617
Okay.

678
00:33:43,617 --> 00:33:48,617
So I would write the – like a lot of the new pieces of Truthcoin.

679
00:33:48,617 --> 00:33:53,617
I wrote them myself in R and then in Python and then translate them to C++.

680
00:33:53,617 --> 00:33:54,617
Okay.

681
00:33:54,617 --> 00:33:55,617
So you were a self-taught coder.

682
00:33:55,617 --> 00:33:56,617
So a little bit.

683
00:33:56,617 --> 00:33:58,617
But yeah, not quite as much.

684
00:33:58,617 --> 00:34:02,617
But that's sort of what I was doing around 2015.

685
00:34:02,617 --> 00:34:03,617
Okay.

686
00:34:03,617 --> 00:34:04,617
Okay.

687
00:34:04,617 --> 00:34:07,617
And so Roger – I did not realize that you worked directly with Roger Beer on this.

688
00:34:07,617 --> 00:34:09,617
So what happened to Truthcoin?

689
00:34:09,617 --> 00:34:13,617
Well, probably it should have launched as a –

690
00:34:13,617 --> 00:34:16,617
it would have been better if it had taken more of a Monero road

691
00:34:16,617 --> 00:34:20,617
and just launched as an altcoin because I always thought that we would have
sidechains on Bitcoin.

692
00:34:20,617 --> 00:34:23,617
And because the sidechain is such a great –

693
00:34:23,617 --> 00:34:24,617
You always thought we would have sidechains.

694
00:34:24,617 --> 00:34:25,617
Yeah.

695
00:34:25,617 --> 00:34:26,617
The sidechain idea was old.

696
00:34:26,617 --> 00:34:28,617
Wasn't there a paper when the whole term sidechain kind of became a thing?

697
00:34:28,617 --> 00:34:29,617
Yes.

698
00:34:29,617 --> 00:34:30,617
Was that an Atomback paper?

699
00:34:30,617 --> 00:34:31,617
Yes, it was.

700
00:34:31,617 --> 00:34:32,617
Okay.

701
00:34:32,617 --> 00:34:35,617
It was October 2014 and it was called Enabling Innovation with Pegged Sidechains

702
00:34:35,617 --> 00:34:36,617
or something like that.

703
00:34:36,617 --> 00:34:37,617
So this was after that.

704
00:34:37,617 --> 00:34:39,617
So you were already on the sidechains train at that point.

705
00:34:39,617 --> 00:34:41,617
It had already been existed.

706
00:34:41,617 --> 00:34:46,617
There was like a Luke Dashjr. forum post in December 2013, I think.

707
00:34:46,617 --> 00:34:47,617
About sidechains.

708
00:34:47,617 --> 00:34:49,617
About – it wasn't called sidechains at the time.

709
00:34:49,617 --> 00:34:51,617
But the idea existed.

710
00:34:51,617 --> 00:34:52,617
Something like that.

711
00:34:52,617 --> 00:34:59,617
And then I – in 2014, I had designed this prediction market thing and I was like –

712
00:34:59,617 --> 00:35:02,617
but there's no – it's too complicated to be bolted onto Bitcoin.

713
00:35:03,617 --> 00:35:09,617
They had come up – they being the authors of that paper which included many –

714
00:35:09,617 --> 00:35:12,617
it was like 12 or so people.

715
00:35:12,617 --> 00:35:14,617
They had come up with this idea and I thought, okay, great.

716
00:35:14,617 --> 00:35:16,617
I'll do all the new stuff.

717
00:35:16,617 --> 00:35:19,617
They will do the sidechain stuff and then I'll just combine it all

718
00:35:19,617 --> 00:35:21,617
and then this will be great.

719
00:35:21,617 --> 00:35:25,617
This will be a great sidechain of Bitcoin and that's what I thought.

720
00:35:25,617 --> 00:35:28,617
This was also kind of like, again, sort of a foray for you

721
00:35:28,617 --> 00:35:31,617
into like architecting protocol systems kind of, right?

722
00:35:31,617 --> 00:35:32,617
I mean, which –

723
00:35:32,617 --> 00:35:34,617
I mean, I suppose.

724
00:35:34,617 --> 00:35:35,617
Right?

725
00:35:35,617 --> 00:35:40,617
I mean, this is like sort of a new skill to be flexing that I imagine was useful for
you

726
00:35:40,617 --> 00:35:43,617
when you were thinking about BIP300, BIP300.

727
00:35:43,617 --> 00:35:46,617
When did the Truthcoin project kind of end for you?

728
00:35:46,617 --> 00:35:50,617
Yeah, BIP300 is very, very, very, very, very, very simple compared to the prediction
market.

729
00:35:50,617 --> 00:35:51,617
To Truthcoin.

730
00:35:51,617 --> 00:35:52,617
Right, right, right.

731
00:35:52,617 --> 00:35:54,617
So I was going to say Truthcoin was like a wild –

732
00:35:54,617 --> 00:35:58,617
It was very like a long shot, which intentionally so

733
00:35:58,617 --> 00:36:00,617
because it's kind of like high risk, high reward.

734
00:36:00,617 --> 00:36:03,617
It actually has never really ended, although I did –

735
00:36:03,617 --> 00:36:06,617
I thought this is a high risk, high reward.

736
00:36:06,617 --> 00:36:12,617
In my view, the Drivechain BIP300 stuff is very low risk, also very high reward.

737
00:36:12,617 --> 00:36:15,617
So I kind of shifted to that.

738
00:36:15,617 --> 00:36:17,617
But I have never really given up on it.

739
00:36:17,617 --> 00:36:19,617
In fact, I was talking about it earlier today with someone

740
00:36:19,617 --> 00:36:25,617
and I rewrote some of it in Rust back in, I think, the winter in December maybe.

741
00:36:25,617 --> 00:36:31,617
So I still plan to create the Truthcoin Drivechain or whatever.

742
00:36:31,617 --> 00:36:32,617
Oh, really?

743
00:36:32,617 --> 00:36:33,617
It's an L2 –

744
00:36:33,617 --> 00:36:35,617
The Truthcoin Drivechain.

745
00:36:35,617 --> 00:36:41,617
Yes, it's still different enough from Polymarket that I think it would be a niche
for it.

746
00:36:41,617 --> 00:36:42,617
Polymarket does a bunch of things –

747
00:36:42,617 --> 00:36:43,617
And it's on Bitcoin.

748
00:36:43,617 --> 00:36:44,617
Right.

749
00:36:44,617 --> 00:36:46,617
Polymarket does a bunch of things that I really like

750
00:36:46,617 --> 00:36:48,617
and that I always advocated for a long time.

751
00:36:48,617 --> 00:36:51,617
As a prediction market advocate, I said for many, many years –

752
00:36:51,617 --> 00:36:54,617
I don't know if people will be able to go back and make the super cut of all the
times I've said this,

753
00:36:54,617 --> 00:37:00,617
but I said it a lot in interviews and in forum posts and stuff, in conversations
with people.

754
00:37:00,617 --> 00:37:03,617
I said – and I told Roger also, Roger Ver –

755
00:37:03,617 --> 00:37:08,617
I said, listen, I will make this thing because I think that this is something that –

756
00:37:08,617 --> 00:37:10,617
it will be on blockchain.

757
00:37:10,617 --> 00:37:15,617
People will try to censor this because it will be too disruptive and so they won't
like it.

758
00:37:15,617 --> 00:37:18,617
And even the Polymarket guy, they arrested him and took his phone.

759
00:37:18,617 --> 00:37:19,617
Yeah, they arrested him.

760
00:37:19,617 --> 00:37:20,617
Yeah, exactly.

761
00:37:20,617 --> 00:37:21,617
So you know he was on to something.

762
00:37:21,617 --> 00:37:22,617
That's what I'm getting at with this.

763
00:37:22,617 --> 00:37:26,617
The blockchain thing is actually viable, unlike crazy IBM blockchain and Microsoft
Azure,

764
00:37:26,617 --> 00:37:29,617
which is all just a bunch of waste of time nonsense.

765
00:37:29,617 --> 00:37:31,617
Do you know why Shane was arrested?

766
00:37:31,617 --> 00:37:33,617
What was the charge that Shane –

767
00:37:35,617 --> 00:37:37,617
These prediction markets are an unbelievably good idea.

768
00:37:37,617 --> 00:37:40,617
So you can imagine if you invent the internet and you say,

769
00:37:40,617 --> 00:37:45,617
we're going to be able to look at how every politician voted or who's donating to
every politician.

770
00:37:45,617 --> 00:37:46,617
Or you invent the printing press.

771
00:37:46,617 --> 00:37:47,617
We can't have that.

772
00:37:47,617 --> 00:37:52,617
I think the guilds were like, well, normally you have to train under the master
craftsman

773
00:37:52,617 --> 00:37:55,617
as an apprentice for years, but we're just going to print.

774
00:37:55,617 --> 00:37:58,617
This is how to tan leather or something.

775
00:37:58,617 --> 00:38:02,617
This is how to make a whatever, a gear or a clock.

776
00:38:02,617 --> 00:38:03,617
Right.

777
00:38:03,617 --> 00:38:06,617
And you can see how this is not – some ideas are just too good.

778
00:38:06,617 --> 00:38:07,617
Too disruptive.

779
00:38:07,617 --> 00:38:08,617
Yeah.

780
00:38:08,617 --> 00:38:09,617
Okay.

781
00:38:09,617 --> 00:38:12,617
So at what point, though, did you kind of maybe shift focus,

782
00:38:12,617 --> 00:38:15,617
even if Truthcoin is still – the embers are still there?

783
00:38:15,617 --> 00:38:18,617
Well, I finished the Truthcoin part at the end of 2015.

784
00:38:18,617 --> 00:38:19,617
Okay.

785
00:38:19,617 --> 00:38:21,617
And then I thought, okay, now it's time to connect it all.

786
00:38:21,617 --> 00:38:22,617
So then I went to Blockstream.

787
00:38:22,617 --> 00:38:25,617
It turns out Blockstream hadn't done any work on their part.

788
00:38:25,617 --> 00:38:26,617
What do you mean?

789
00:38:26,617 --> 00:38:27,617
Oh, you mean on the sidechain?

790
00:38:27,617 --> 00:38:34,617
Blockstream had originally an idea where you would be able to take coins from
Bitcoin L1

791
00:38:34,617 --> 00:38:36,617
and move them to a different blockchain.

792
00:38:36,617 --> 00:38:38,617
Today we would say L2.

793
00:38:38,617 --> 00:38:40,617
At the time they did not.

794
00:38:40,617 --> 00:38:42,617
At the time, in fact, they had like a column.

795
00:38:42,617 --> 00:38:46,617
They kind of equivocated, and they said you have asymmetric sidechains and symmetric
sidechains.

796
00:38:46,617 --> 00:38:49,617
The symmetric ones would be kind of like two L1s or something.

797
00:38:49,617 --> 00:38:53,617
In my view, this is – I had that exact look on my face when I looked into it,

798
00:38:53,617 --> 00:38:55,617
and I was like, does this even make sense?

799
00:38:55,617 --> 00:38:57,617
Because what if one of them re-orgs?

800
00:38:57,617 --> 00:39:00,617
Symmetric means there's no, like, base chain.

801
00:39:00,617 --> 00:39:05,617
It's like they're equally weighted, and then asymmetric is like there's some more
valuable chain

802
00:39:05,617 --> 00:39:07,617
and some less valuable chain.

803
00:39:07,617 --> 00:39:09,617
After I looked into it, I decided it didn't make any sense.

804
00:39:09,617 --> 00:39:10,617
Okay.

805
00:39:11,617 --> 00:39:12,617
But this was an Adam Back idea.

806
00:39:12,617 --> 00:39:13,617
100%.

807
00:39:13,617 --> 00:39:15,617
It's in their paper that you mentioned, the 2014 paper.

808
00:39:15,617 --> 00:39:16,617
Oh, it is. Okay.

809
00:39:16,617 --> 00:39:20,617
And I thought I'll make Drivechain be 100% asymmetric.

810
00:39:20,617 --> 00:39:24,617
And today we would just say an L2 because like lightning, you need a Bitcoin –

811
00:39:24,617 --> 00:39:28,617
you need a fully synced Bitcoin node to go back to run the lightning node,

812
00:39:28,617 --> 00:39:29,617
if that makes any sense.

813
00:39:29,617 --> 00:39:30,617
Oh, my goodness.

814
00:39:30,617 --> 00:39:31,617
So I thought, you know.

815
00:39:31,617 --> 00:39:33,617
But it's interesting because the definition –

816
00:39:33,617 --> 00:39:37,617
this is something we get into on the show a lot is sort of this definition of an L2,

817
00:39:37,617 --> 00:39:40,617
and so much of it has to do with, you know, trustlessness

818
00:39:40,617 --> 00:39:43,617
and this ability to go back and forth in a permissionless way.

819
00:39:43,617 --> 00:39:46,617
But sidechains, I mean, when we think about sidechains now,

820
00:39:46,617 --> 00:39:50,617
and I think this definition came later after Adam Back's paper,

821
00:39:50,617 --> 00:39:54,617
but, you know, the federated bridge at some point became the thing.

822
00:39:54,617 --> 00:39:56,617
I don't know exactly when that happened.

823
00:39:56,617 --> 00:39:57,617
Not so trustless.

824
00:39:57,617 --> 00:40:02,617
This is also in the paper, and the interesting thing is it's in Appendix A as a kind
of like,

825
00:40:03,617 --> 00:40:08,617
we'll do this now just so that we have something that works, but we'll abandon it
later.

826
00:40:08,617 --> 00:40:12,617
And there are actually interviews with Greg Maxwell on YouTube

827
00:40:12,617 --> 00:40:16,617
where he says that this isn't the true two-way peg and this isn't real.

828
00:40:16,617 --> 00:40:17,617
The federated bridge model.

829
00:40:17,617 --> 00:40:22,617
And, of course, as you may remember, Matt Corallo tweeted at one point

830
00:40:22,617 --> 00:40:26,617
he left Blockstream to join Chaincode in some year, maybe 2018.

831
00:40:26,617 --> 00:40:27,617
Yeah.

832
00:40:27,617 --> 00:40:28,617
Is that why?

833
00:40:28,617 --> 00:40:31,617
Did he leave because sidechains were just not enough?

834
00:40:31,617 --> 00:40:33,617
I don't know if it's unique for him in that complex matter,

835
00:40:33,617 --> 00:40:38,617
but I do think he later tweeted, and I give him a lot of credit for this,

836
00:40:38,617 --> 00:40:41,617
but he tweeted something like,

837
00:40:41,617 --> 00:40:45,617
liquid is not supposed to be used as a real sidechain.

838
00:40:45,617 --> 00:40:47,617
He didn't quite say it like that, but he said something like,

839
00:40:47,617 --> 00:40:51,617
we invented liquid to make it easy to send Bitcoin among different exchanges.

840
00:40:51,617 --> 00:40:55,617
If anyone tries to tell you to use it for a different purpose,

841
00:40:55,617 --> 00:40:58,617
you should treat them as though they are trying to steal your Bitcoin.

842
00:40:58,617 --> 00:40:59,617
Wow.

843
00:41:00,617 --> 00:41:02,617
He was just like, this is not trustless at all.

844
00:41:02,617 --> 00:41:06,617
Because the multisig part was originally going to be something like,

845
00:41:06,617 --> 00:41:10,617
people already have some Bitcoin with them in exchange,

846
00:41:10,617 --> 00:41:13,617
so the exchanges themselves will have some of the multisig keys.

847
00:41:13,617 --> 00:41:14,617
Right.

848
00:41:14,617 --> 00:41:17,617
And it's kind of like, now the security model is exactly what it was, more or less.

849
00:41:17,617 --> 00:41:20,617
And now you can easily move your coins.

850
00:41:20,617 --> 00:41:21,617
You know, at the drop of a hat,

851
00:41:21,617 --> 00:41:24,617
you could move it from Coinbase to Kraken or something like that.

852
00:41:24,617 --> 00:41:26,617
That was the original idea.

853
00:41:26,617 --> 00:41:30,617
But Blockstream basically put out this paper.

854
00:41:30,617 --> 00:41:32,617
Blockstream was formed.

855
00:41:32,617 --> 00:41:34,617
They were theoretically going to start creating these L2s,

856
00:41:34,617 --> 00:41:35,617
and then they just didn't.

857
00:41:35,617 --> 00:41:37,617
They just kind of fumbled the bag.

858
00:41:37,617 --> 00:41:43,617
I think they were misled or either confused about something.

859
00:41:43,617 --> 00:41:46,617
They have a part of the paper.

860
00:41:46,617 --> 00:41:49,617
I believe it's section 3.4.

861
00:41:49,617 --> 00:41:50,617
It might be 4.3.

862
00:41:50,617 --> 00:41:51,617
It's one of those.

863
00:41:51,617 --> 00:41:55,617
But they have a risk of centralization of mining, which is a mistake.

864
00:41:56,617 --> 00:41:58,617
Part of it, it's almost like a math.

865
00:41:58,617 --> 00:41:59,617
There's no math in it,

866
00:41:59,617 --> 00:42:03,617
but it's almost as if they dropped a negative one somewhere,

867
00:42:03,617 --> 00:42:09,617
so they thought something would get worse.

868
00:42:09,617 --> 00:42:11,617
The more we do this, the worse it will be.

869
00:42:11,617 --> 00:42:13,617
But actually, the more they do that thing, the better it is.

870
00:42:13,617 --> 00:42:16,617
So they have a whole backwards conclusion from this.

871
00:42:16,617 --> 00:42:19,617
I've tweeted about this many times.

872
00:42:19,617 --> 00:42:22,617
Connect the dots for me, though.

873
00:42:22,617 --> 00:42:23,617
How are we on centralization?

874
00:42:23,617 --> 00:42:25,617
So how do we go from L2s to mining centralization?

875
00:42:25,617 --> 00:42:27,617
This is just a part of their thing.

876
00:42:27,617 --> 00:42:34,617
They think that, for example, if the L2 has a very expensive node,

877
00:42:34,617 --> 00:42:36,617
this cost will be a burden to the miners.

878
00:42:36,617 --> 00:42:38,617
In reality, though, none of this is true.

879
00:42:38,617 --> 00:42:41,617
This is not an accurate version of the story

880
00:42:41,617 --> 00:42:45,617
because the miners don't need to run the L2s at all.

881
00:42:45,617 --> 00:42:47,617
We're on Drivechains now, basically.

882
00:42:47,617 --> 00:42:52,617
But even if they did, they would only run them if they made more money.

883
00:42:52,617 --> 00:42:54,617
They can just do nothing if they don't want to participate.

884
00:42:54,617 --> 00:42:56,617
Then they are where they are now.

885
00:42:56,617 --> 00:42:59,617
But this is how it happened because Drivechain was from November 2015.

886
00:42:59,617 --> 00:43:02,617
So this was at the end of the year 2015.

887
00:43:02,617 --> 00:43:06,617
I thought, oh, now it's time to plug the pieces together.

888
00:43:06,617 --> 00:43:12,617
And so I thought, okay, now let me see what Blockstream is up to.

889
00:43:12,617 --> 00:43:14,617
And then I looked into the details.

890
00:43:14,617 --> 00:43:16,617
This gets into the near versus far thing.

891
00:43:16,617 --> 00:43:18,617
I looked into the details, and they hadn't actually done anything.

892
00:43:18,617 --> 00:43:22,617
They had this elements project, but none of it was about sending coins back and
forth.

893
00:43:22,617 --> 00:43:24,617
It was just like their little playground.

894
00:43:24,617 --> 00:43:29,617
So then I thought, oh, I'm going to have to do this myself, which I did.

895
00:43:29,617 --> 00:43:30,617
And that's what it was.

896
00:43:30,617 --> 00:43:32,617
So you're like, okay, I'm going to have to solve this problem

897
00:43:32,617 --> 00:43:34,617
because Blockstream isn't solving it.

898
00:43:34,617 --> 00:43:35,617
Yeah, unfortunately.

899
00:43:35,617 --> 00:43:38,617
And so did you think, I'm going to write a bib,

900
00:43:38,617 --> 00:43:40,617
or were you interested in starting a company?

901
00:43:40,617 --> 00:43:43,617
No, I thought I would just write the post, and then everyone would read the post,

902
00:43:43,617 --> 00:43:46,617
and then they would all just get on board with that idea and steal the idea.

903
00:43:46,617 --> 00:43:48,617
Were there criticisms, or was it like a plan?

904
00:43:48,617 --> 00:43:49,617
No, the post was a description.

905
00:43:49,617 --> 00:43:51,617
It was a description of what would work.

906
00:43:51,617 --> 00:43:52,617
A description of what would work.

907
00:43:52,617 --> 00:43:55,617
At the end, I have an FAQ kind of, and I say, how is this different?

908
00:43:55,617 --> 00:43:57,617
One of the questions is, how is this different from Blockstream?

909
00:43:57,617 --> 00:44:01,617
So it was effectively like a precursor to the bib, I mean to the two bibs.

910
00:44:01,617 --> 00:44:05,617
And I thought that I would not have to do any more work on it.

911
00:44:05,617 --> 00:44:06,617
Was it called Drivechain?

912
00:44:06,617 --> 00:44:07,617
Is that what you called the paper?

913
00:44:07,617 --> 00:44:08,617
Yes.

914
00:44:08,617 --> 00:44:10,617
Okay, you were like, this is the plan for how we're going to actually actuate these
L2s.

915
00:44:10,617 --> 00:44:12,617
Drivechain, the simple two-way peg.

916
00:44:12,617 --> 00:44:14,617
The simple two-way peg, okay.

917
00:44:14,617 --> 00:44:16,617
And how was the response to this original paper?

918
00:44:16,617 --> 00:44:18,617
Originally, it was very, very, very good.

919
00:44:18,617 --> 00:44:19,617
Really?

920
00:44:19,617 --> 00:44:25,617
And it was also, it enjoyed a lot of heyday in the end of 2015 and then during 2017.

921
00:44:25,617 --> 00:44:28,617
But there was a lot of weird history that happened.

922
00:44:28,617 --> 00:44:31,617
So I don't want to bore anyone with long historical tales.

923
00:44:31,617 --> 00:44:35,617
But basically, one thing that, in 2015, the Scaling Bitcoin conferences were
happening.

924
00:44:35,617 --> 00:44:36,617
Right.

925
00:44:36,617 --> 00:44:39,617
So Scaling Bitcoin was very contentious,

926
00:44:39,617 --> 00:44:43,617
and the hard fork was being threatened left and right by the large blockers.

927
00:44:43,617 --> 00:44:44,617
So this is, what are we?

928
00:44:44,617 --> 00:44:45,617
We're in like 2016, 2017?

929
00:44:45,617 --> 00:44:47,617
This is the end of 2015, I'm still talking about.

930
00:44:47,617 --> 00:44:48,617
Okay, 2015.

931
00:44:48,617 --> 00:44:49,617
Because this is what I'm talking about when I first wrote the post.

932
00:44:49,617 --> 00:44:50,617
Okay.

933
00:44:50,617 --> 00:44:52,617
In fact, it was before.

934
00:44:52,617 --> 00:44:58,617
Drivechain was November 2015, which was between Scaling 1 was September and Scaling
2 was December.

935
00:44:58,617 --> 00:44:59,617
Okay, okay.

936
00:44:59,617 --> 00:45:04,617
So, okay, so at this time, people are kind of into this paper.

937
00:45:04,617 --> 00:45:05,617
It's getting...

938
00:45:05,617 --> 00:45:10,617
Well, what I really wanted to bring up was that at the time, people were worried
about scaling.

939
00:45:10,617 --> 00:45:13,617
They were worried about what to do about the hard fork.

940
00:45:13,617 --> 00:45:15,617
And they were worried about like governance.

941
00:45:15,617 --> 00:45:19,617
They were like, okay, we've reached a situation where we don't agree on the block
size.

942
00:45:19,617 --> 00:45:23,617
What if we don't agree on all kinds of other things, you know, with our op return or
whatever?

943
00:45:23,617 --> 00:45:25,617
I was going to say, has anything changed?

944
00:45:25,617 --> 00:45:26,617
Is anything different?

945
00:45:26,617 --> 00:45:29,617
Paul, we're going to talk about governance as a common problem.

946
00:45:29,617 --> 00:45:33,617
This is a common thread on this podcast, is the governance issue.

947
00:45:33,617 --> 00:45:38,617
So it opens the door because you think, wait a minute, if there's a disagreement
that persists,

948
00:45:38,617 --> 00:45:41,617
probably one side is right and the other side is not.

949
00:45:41,617 --> 00:45:44,617
We don't know which is which necessarily.

950
00:45:44,617 --> 00:45:49,617
And so it means that maybe instead of Bitcoin being this unified team that's going
to take on,

951
00:45:49,617 --> 00:45:52,617
maybe we'll have to make a lot of, you know, there'll be a lot of forks in the road.

952
00:45:52,617 --> 00:45:58,617
Do you worry there will be forks in the future related to these kinds of
disagreements?

953
00:45:58,617 --> 00:46:02,617
I think we could get back to that because that involves like a future thought.

954
00:46:02,617 --> 00:46:06,617
But actually now I think we should rehabilitate the hard fork and people should do
it more.

955
00:46:06,617 --> 00:46:11,617
And actually because it introduces competition to the Bitcoin software stack

956
00:46:11,617 --> 00:46:13,617
and it just gives everyone free money.

957
00:46:13,617 --> 00:46:15,617
People are overly afraid of hard forks.

958
00:46:15,617 --> 00:46:17,617
Exactly. It made sense.

959
00:46:17,617 --> 00:46:21,617
What happened at the time was Roger Ver owned Bitcoin.com domain

960
00:46:21,617 --> 00:46:24,617
and then the fork was called Bitcoin Cash.

961
00:46:24,617 --> 00:46:28,617
I still met last Thanksgiving, I met a cousin of mine who's a very smart guy.

962
00:46:28,617 --> 00:46:30,617
He's a lawyer and everything.

963
00:46:30,617 --> 00:46:32,617
And I told him, oh, yeah, Bitcoin versus Bitcoin Cash.

964
00:46:32,617 --> 00:46:34,617
These are like, you know, disagreements that people have had.

965
00:46:34,617 --> 00:46:38,617
And he'd be like, oh, I would have just thought those are the same thing or
whatever.

966
00:46:38,617 --> 00:46:43,617
So the brand confusion angle, I think we should rehabilitate the hard fork

967
00:46:43,617 --> 00:46:47,617
and we should say you must pick a completely new name every time.

968
00:46:47,617 --> 00:46:54,617
And I think actually that alone would have fixed a lot of the inherently
adversarial.

969
00:46:54,617 --> 00:46:56,617
But not necessarily, of course.

970
00:46:56,617 --> 00:46:57,617
But think about it like this.

971
00:46:57,617 --> 00:47:02,617
Is it really so good that everyone argues all the time?

972
00:47:02,617 --> 00:47:04,617
A lot of it is performative.

973
00:47:04,617 --> 00:47:06,617
A lot of these people have no idea what they're talking about, no offense.

974
00:47:06,617 --> 00:47:10,617
And so is that really better than just split the coin?

975
00:47:10,617 --> 00:47:12,617
I mean, Bitcoin Cash, everyone gets a dividend.

976
00:47:12,617 --> 00:47:14,617
Everyone gets free money.

977
00:47:14,617 --> 00:47:17,617
You can now sell if you don't like Bitcoin Cash.

978
00:47:17,617 --> 00:47:20,617
You can sell and buy more BTC.

979
00:47:20,617 --> 00:47:24,617
So you're getting some amount of the one you prefer more.

980
00:47:24,617 --> 00:47:26,617
That's an interesting way to handle it.

981
00:47:26,617 --> 00:47:28,617
But people really hate this.

982
00:47:28,617 --> 00:47:31,617
Psychologically and socially, they hate the hard fork.

983
00:47:31,617 --> 00:47:32,617
It feels like forced.

984
00:47:32,617 --> 00:47:34,617
It feels involuntary.

985
00:47:34,617 --> 00:47:39,617
So the original Drivechains paper was put out basically during the block size wars,

986
00:47:39,617 --> 00:47:40,617
is what you're telling me.

987
00:47:40,617 --> 00:47:42,617
And that had an advantage and a disadvantage.

988
00:47:42,617 --> 00:47:45,617
The disadvantage was actually SegWit was becoming more popular.

989
00:47:45,617 --> 00:47:51,617
And I saw no reason to challenge SegWit's popularity at the time.

990
00:47:51,617 --> 00:47:54,617
And Lightning was also popular.

991
00:47:54,617 --> 00:47:55,617
You were like SegWit makes sense.

992
00:47:55,617 --> 00:47:58,617
I was very excited about Lightning at the time.

993
00:47:58,617 --> 00:47:59,617
Now I'm not.

994
00:47:59,617 --> 00:48:02,617
But at the time, I was very excited about Lightning.

995
00:48:02,617 --> 00:48:04,617
And I thought this is going to be cool.

996
00:48:04,617 --> 00:48:06,617
We're going to have instant payments.

997
00:48:06,617 --> 00:48:12,617
And this will kick off the scaling in layers idea, which actually Drivechain is part
of.

998
00:48:12,617 --> 00:48:14,617
And I guess that's what Blockstream really did.

999
00:48:14,617 --> 00:48:17,617
I mean, maybe we were being aggressively too harsh on them before.

1000
00:48:17,617 --> 00:48:18,617
They did do something.

1001
00:48:18,617 --> 00:48:19,617
They built CLN.

1002
00:48:19,617 --> 00:48:22,617
They were doing lots of different things, of course.

1003
00:48:22,617 --> 00:48:27,617
In my view, they did not really deliver on the rise in debt rate, why they were
created,

1004
00:48:27,617 --> 00:48:29,617
which is to do this sidechain thing.

1005
00:48:29,617 --> 00:48:31,617
But I don't know if people agree with that.

1006
00:48:31,617 --> 00:48:33,617
They built Lightning instead, maybe.

1007
00:48:33,617 --> 00:48:36,617
And they did help with making SegWit happen.

1008
00:48:36,617 --> 00:48:41,617
And so originally it came out and Drivechain was something like now,

1009
00:48:41,617 --> 00:48:47,617
instead of having to deal with the threat of a hard fork, we add Drivechain as a
soft fork.

1010
00:48:47,617 --> 00:48:53,617
And now actually you have an infinite number of what is essentially a hard fork,

1011
00:48:53,617 --> 00:48:56,617
where you created L2 with a larger block size.

1012
00:48:56,617 --> 00:49:01,617
You create an L2 that has ring signatures or that has Namecoin, namespace.

1013
00:49:01,617 --> 00:49:07,617
So the threat of the hard fork would be eliminated in the Drivechain world.

1014
00:49:07,617 --> 00:49:14,617
And the need for people to disagree, instead of large blockers disagreeing

1015
00:49:14,617 --> 00:49:17,617
and then trying to hard fork Bitcoin, they would just create.

1016
00:49:18,472 --> 00:49:22,152
So, yeah, so TLDR, this is actually a good opportunity for us to just like quickly
TLDR

1017
00:49:22,152 --> 00:49:26,872
Drivechains. So basically you can, people can propose, you can like write an
activation

1018
00:49:26,872 --> 00:49:32,672
client, essentially for a sidechain, propose it to miners, miners vote on it and
decide

1019
00:49:32,672 --> 00:49:35,712
if it's going to be one of the official Drivechains of Bitcoin.

1020
00:49:35,712 --> 00:49:37,832
There's a limited number that can be created.

1021
00:49:37,832 --> 00:49:39,312
I think it's what number?

1022
00:49:39,312 --> 00:49:40,312
256.

1023
00:49:40,312 --> 00:49:41,312
That's an easy number to remember.

1024
00:49:41,312 --> 00:49:44,432
There is no limit because you can have sidechains of sidechains or you could just
add Drivechain

1025
00:49:44,432 --> 00:49:45,432
again.

1026
00:49:45,432 --> 00:49:46,432
Oh, they could be like trees of...

1027
00:49:46,432 --> 00:49:47,432
So that's right.

1028
00:49:47,432 --> 00:49:48,432
Yeah.

1029
00:49:48,432 --> 00:49:49,432
Because it's just like, we'll just use one byte to count.

1030
00:49:49,432 --> 00:49:50,432
Okay.

1031
00:49:50,432 --> 00:49:51,432
And then these chains are by definition, they're mergemined, right?

1032
00:49:51,432 --> 00:49:52,432
This is a mergemining mechanism.

1033
00:49:52,432 --> 00:49:53,432
When you say Drivechain, by definition, they are, right?

1034
00:49:53,432 --> 00:49:54,432
Drivechain, excuse me.

1035
00:49:54,432 --> 00:49:55,432
So the Drivechains are mergemined.

1036
00:49:55,432 --> 00:49:56,432
This is a key thing that I talk about all the time.

1037
00:49:56,432 --> 00:49:57,432
I'm working really closely with Michael Casey.

1038
00:49:57,432 --> 00:49:58,432
He's a really good guy.

1039
00:49:58,432 --> 00:49:59,432
He's a really good guy.

1040
00:49:59,432 --> 00:50:00,432
He's a really good guy.

1041
00:50:00,432 --> 00:50:01,432
He's a really good guy.

1042
00:50:01,432 --> 00:50:02,432
He's a really good guy.

1043
00:50:02,432 --> 00:50:03,432
He's a really good guy.

1044
00:50:04,432 --> 00:50:05,432
of yours.

1045
00:50:05,432 --> 00:50:06,432
I'm a fan of his.

1046
00:50:06,432 --> 00:50:07,432
He's pretty cool, also.

1047
00:50:07,432 --> 00:50:08,432
He's great.

1048
00:50:08,432 --> 00:50:09,432
Yeah.

1049
00:50:09,432 --> 00:50:10,432
But he talks about this all the time.

1050
00:50:10,432 --> 00:50:13,052
He's like his biggest concern with the current new batch of L2s that are springing
up is

1051
00:50:13,052 --> 00:50:16,052
they don't contribute security budget, security budget.

1052
00:50:16,052 --> 00:50:30,172
And they are doomed in the long run for that reason, because all you have to do is
imagine...

1053
00:50:30,172 --> 00:50:31,172
They are?

1054
00:50:31,172 --> 00:50:37,572
Yeah, imagine that one of them gets really big and has 8 billion users.

1055
00:50:37,572 --> 00:50:40,412
And so this is best case scenario for like Fedament or something.

1056
00:50:40,412 --> 00:50:42,212
That just kills Bitcoin, or does it...

1057
00:50:42,212 --> 00:50:43,212
It's just...

1058
00:50:43,212 --> 00:50:46,932
It creates a situation where, you know, there's 8 billion people.

1059
00:50:46,932 --> 00:50:50,052
People make three transactions a day-ish.

1060
00:50:50,052 --> 00:50:52,732
I'm just making this up, but you know, there's 365 days in a year.

1061
00:50:52,732 --> 00:50:54,372
We're just talking napkin math here.

1062
00:50:54,372 --> 00:50:58,572
So we're talking like, you know, trillions of transactions per year on the earth.

1063
00:50:58,572 --> 00:50:59,572
Okay.

1064
00:50:59,572 --> 00:51:01,052
And you just take 10 cents.

1065
00:51:01,932 --> 00:51:04,932
And now we're talking hundreds of billions of dollars in revenue per year.

1066
00:51:04,932 --> 00:51:05,932
Okay.

1067
00:51:05,932 --> 00:51:10,212
So this is just napkin math, but we're just saying it's a huge amount of money every
year.

1068
00:51:10,212 --> 00:51:16,772
And I actually looked it up, and the quantity of payments doubles around every 11
years

1069
00:51:16,772 --> 00:51:19,732
as you have economic growth and wealthier people make more payments.

1070
00:51:19,732 --> 00:51:20,732
Like in the fiat system.

1071
00:51:20,732 --> 00:51:23,112
I'm just talking about on earth, all.

1072
00:51:23,112 --> 00:51:24,112
On earth.

1073
00:51:24,112 --> 00:51:25,112
Payments double every year.

1074
00:51:25,112 --> 00:51:27,412
And this is my napkin math, and it's not supposed to be taken too seriously.

1075
00:51:27,412 --> 00:51:32,812
My point is, it's a huge number that grows.

1076
00:51:32,812 --> 00:51:38,092
If that goes to the ARK supernode, or to the Fedament, or whatever, you know, the
roll-up

1077
00:51:38,092 --> 00:51:39,092
sequencer.

1078
00:51:39,092 --> 00:51:41,212
And not to the Bitcoin miners.

1079
00:51:41,212 --> 00:51:45,452
Then the miners will be in a situation where they earn like 20, 30, 40 million
dollars

1080
00:51:45,452 --> 00:51:52,612
a year, and the other people's earning a hundred billion a year, 10,000x higher.

1081
00:51:52,612 --> 00:51:54,492
So like, and what are the implications of that?

1082
00:51:54,492 --> 00:51:57,932
How does that kill the L2, and not just hurt Bitcoin L1?

1083
00:51:57,932 --> 00:52:03,012
It's very easy, because the miners at that point will be tempted to do one of two
things.

1084
00:52:03,012 --> 00:52:05,532
Both of which they can easily accomplish.

1085
00:52:05,532 --> 00:52:10,892
Number one would be to just vertically integrate, and say, well we have the ARK
supernode.

1086
00:52:10,892 --> 00:52:14,172
We have, let's call it, we'll call it the Barack ARK supernode.

1087
00:52:14,172 --> 00:52:19,172
The Barack, can we like, so we'll make an AI of like Barack as like the Pope or
something.

1088
00:52:19,172 --> 00:52:22,732
He's leading the, he has the super, the ARK super, the single ARK supernode.

1089
00:52:22,732 --> 00:52:29,132
And he's making trillions of dollars a year on his like globally adopted L2.

1090
00:52:29,132 --> 00:52:32,692
And the miners are getting their like dinky little 30 to 40 million.

1091
00:52:32,692 --> 00:52:33,692
The miners say, okay, now we have.

1092
00:52:33,692 --> 00:52:34,692
Marathon is struggling.

1093
00:52:34,692 --> 00:52:39,292
Yeah, now we're going to have Foundry ARK, or whatever, Marathon ARK.

1094
00:52:39,292 --> 00:52:42,852
So basically the miners will threaten the L2s in this situation, because the miners

1095
00:52:42,852 --> 00:52:46,412
at the end of the day do rule base settlements.

1096
00:52:46,412 --> 00:52:47,412
So like they will have leverage.

1097
00:52:47,412 --> 00:52:49,452
The second thing they can do is kill the, try to kill the L2.

1098
00:52:49,452 --> 00:52:51,612
You think, you know they'll try to like cut a deal.

1099
00:52:51,612 --> 00:52:52,612
There will be some sort of.

1100
00:52:52,612 --> 00:52:54,492
Well, that's the cutting of deals, the vertical integration.

1101
00:52:54,492 --> 00:52:55,492
The vertical.

1102
00:52:55,492 --> 00:52:58,252
They say something like, okay, we have Foundry LSP.

1103
00:52:58,252 --> 00:53:03,452
And now the end user, I would think, I would think if the end user has any brains at
all,

1104
00:53:03,452 --> 00:53:06,372
they would think, okay, wait a minute.

1105
00:53:06,372 --> 00:53:13,052
This whole lightning thing, you know, it actually relies on the 51% hash rate, like
in a few

1106
00:53:13,052 --> 00:53:14,052
crucial ways.

1107
00:53:14,052 --> 00:53:17,572
Like, you need to be able to get the justice transaction into the chain in time.

1108
00:53:17,572 --> 00:53:23,292
So you think, do I want to open with random big lightning thing, or do I want to
open

1109
00:53:23,292 --> 00:53:26,052
with the Foundry LSP?

1110
00:53:26,052 --> 00:53:31,932
The Foundry LSP actually has, is de-risked, it has an advantage, because it's
aligned

1111
00:53:31,932 --> 00:53:34,172
with the 51% hash rate.

1112
00:53:34,172 --> 00:53:36,372
So it will, it will take over, basically.

1113
00:53:36,372 --> 00:53:39,732
So you're thinking, it's so funny when you say Foundry LSP, you're thinking like.

1114
00:53:39,732 --> 00:53:40,732
I mean, why not?

1115
00:53:40,732 --> 00:53:42,172
They've already been talking about doing it.

1116
00:53:42,172 --> 00:53:46,452
But these, like these different big mining, oh, and by the way, I think that there
are

1117
00:53:46,452 --> 00:53:50,132
going to be like various mining companies that end up like getting involved in all
these

1118
00:53:50,132 --> 00:53:52,492
like weird bridges that are being created and stuff.

1119
00:53:52,492 --> 00:53:53,492
I think that's happening, for sure.

1120
00:53:53,492 --> 00:53:57,052
I mean, so the Drivechain kind of like automatically does that for them.

1121
00:53:57,052 --> 00:53:58,892
So that's why it's just better.

1122
00:53:58,892 --> 00:53:59,892
It's just better.

1123
00:53:59,892 --> 00:54:02,812
In a way, it's worse, because it's kind of confusing to them.

1124
00:54:02,812 --> 00:54:06,532
The idea that I have already done everything for them, and the code just, just does
it

1125
00:54:06,532 --> 00:54:07,532
actually.

1126
00:54:07,532 --> 00:54:12,772
Well, and it's like more, and then the users get to like decide demand also, like
they

1127
00:54:12,772 --> 00:54:16,492
get to decide which bridges are the best, as opposed to the bridges, incentives with

1128
00:54:16,492 --> 00:54:20,492
the miner, whatever incentive structure they've like, you know, unilaterally,
individually

1129
00:54:20,492 --> 00:54:22,652
decided with the miners, like impacting.

1130
00:54:22,652 --> 00:54:28,292
Yeah, competition is the, you know, the cure-all, is the one true God or whatever.

1131
00:54:28,292 --> 00:54:33,792
So since Drivechain has the 256, and they're all easier to compare with each other.

1132
00:54:33,792 --> 00:54:38,692
So you just kind of leave that to the developers, let the developers, Jeremy Rubin,
let them

1133
00:54:38,692 --> 00:54:43,852
do CTV, let them do APO, TX hash, whatever.

1134
00:54:43,852 --> 00:54:48,492
Let them do all that on their own, you know, Bitcoin liberal or something, Bitcoin,
you

1135
00:54:48,492 --> 00:54:54,972
know, Bitcoin, like experimental Bitcoin or whatever you want to call it.

1136
00:54:54,972 --> 00:55:01,092
And then let the users use whatever they find useful, they pay a transaction fee, it
goes

1137
00:55:01,092 --> 00:55:03,332
to the miners.

1138
00:55:03,332 --> 00:55:06,932
So since you brought up CTV, I have to ask.

1139
00:55:06,932 --> 00:55:10,492
So your point of view, basically, is like, okay, we just need Drivechains.

1140
00:55:10,492 --> 00:55:15,012
And then like, we don't need to do any of these other like weird opcode things that

1141
00:55:15,012 --> 00:55:17,732
enable trustless bridging, or are you?

1142
00:55:17,732 --> 00:55:22,452
Well, that's, you had a lot of statements kind of rolled up into one thing.

1143
00:55:22,452 --> 00:55:28,972
So first of all, in Bitcoin, there are many derangements have taken over.

1144
00:55:28,972 --> 00:55:32,892
So lightning is one, where people don't even know what they're talking about when
they

1145
00:55:32,892 --> 00:55:34,132
talk about lightning.

1146
00:55:34,132 --> 00:55:38,492
And they don't even really, you know, the fact that people don't even understand why

1147
00:55:38,492 --> 00:55:42,452
it is relevant, the fact that it's mostly custodial, which basically means that it
doesn't

1148
00:55:42,452 --> 00:55:44,092
work and that people aren't using it.

1149
00:55:44,092 --> 00:55:46,132
Custodial lightning means people are not using lightning.

1150
00:55:46,132 --> 00:55:47,132
Right, right, right.

1151
00:55:47,132 --> 00:55:51,732
So like, but people don't even, they don't even know that enough to figure that out.

1152
00:55:51,732 --> 00:55:53,832
So you have a huge derangement there.

1153
00:55:53,832 --> 00:55:56,892
But a second derangement is the soft fork in general.

1154
00:55:56,892 --> 00:56:02,172
The soft fork is a very, very, very safe, very useful tool.

1155
00:56:02,172 --> 00:56:03,172
It is opt-in.

1156
00:56:03,172 --> 00:56:06,812
It is mostly reversible and ignorable.

1157
00:56:06,812 --> 00:56:11,852
So the soft fork is not like a bad thing.

1158
00:56:11,852 --> 00:56:13,212
It's a very good thing.

1159
00:56:13,212 --> 00:56:18,772
And the fact that it's controversial is because it's so powerful on the upside.

1160
00:56:18,772 --> 00:56:21,532
And it has the ability to be magical.

1161
00:56:21,532 --> 00:56:30,132
But yeah, OpVault or something could maybe do a better job than Coinbase Custody or
BitGo

1162
00:56:30,132 --> 00:56:31,132
or something.

1163
00:56:31,132 --> 00:56:33,492
I'm not saying, actually, I think those companies are pretty well behaved.

1164
00:56:33,492 --> 00:56:36,932
I'm just trying to say, actually, I didn't want to say the really evil companies
because

1165
00:56:36,932 --> 00:56:37,932
they're so evil.

1166
00:56:37,932 --> 00:56:41,732
They're going to say mean things about me, even more mean things on Twitter than
they

1167
00:56:41,732 --> 00:56:42,732
normally say.

1168
00:56:42,732 --> 00:56:47,452
They're afraid of the success of these opcodes such that, like, you know, all these
amazing

1169
00:56:47,452 --> 00:56:48,452
things will happen.

1170
00:56:49,092 --> 00:56:53,452
It's just like the printing press concept where some idea is just too good.

1171
00:56:53,452 --> 00:56:55,852
And they threaten, they make other people look bad.

1172
00:56:55,852 --> 00:57:00,732
So the soft fork is, but what I want to say is, we have something like 15 or 16 soft
fork

1173
00:57:00,732 --> 00:57:05,452
proposals if you include great consensus cleanup and all this other stuff.

1174
00:57:05,452 --> 00:57:06,452
Right.

1175
00:57:06,452 --> 00:57:08,532
The less radical ones.

1176
00:57:08,532 --> 00:57:12,452
These ones that people have not heard of, you know, internal key or whatever.

1177
00:57:12,452 --> 00:57:14,412
If you make a huge list, there's like a bunch.

1178
00:57:14,412 --> 00:57:19,852
We could do them all, you know, in the next release of Bitcoin safely and then we
could

1179
00:57:19,852 --> 00:57:25,892
actually reverse them all and make it so that we had gone back in the next release
of Bitcoin.

1180
00:57:25,892 --> 00:57:27,892
It is if they had never existed.

1181
00:57:27,892 --> 00:57:31,372
So that's your point of view, is be more liberal with the soft forks and then if
like something

1182
00:57:31,372 --> 00:57:33,452
really bad happens, just reverse it.

1183
00:57:33,452 --> 00:57:34,452
Right.

1184
00:57:34,452 --> 00:57:40,092
But basically it's something bad cannot, these opcode soft forks where it's an
op-nop that

1185
00:57:40,092 --> 00:57:44,452
causes the script interpreter to fail with an error if something happens and
otherwise

1186
00:57:44,452 --> 00:57:45,452
it succeeds.

1187
00:57:45,452 --> 00:57:48,832
Like, you basically can't have a bad thing happen.

1188
00:57:48,832 --> 00:57:51,812
But people, it sounds like you're being reckless if you say that.

1189
00:57:51,812 --> 00:57:53,172
So this is the scam.

1190
00:57:53,172 --> 00:57:58,892
Everyone is doing like a kind of white knight, safety officer, politician scam and
they're

1191
00:57:58,892 --> 00:57:59,892
saying, I'm looking out for you.

1192
00:57:59,892 --> 00:58:01,292
I'm protecting the chain.

1193
00:58:01,292 --> 00:58:02,692
This is all false.

1194
00:58:02,692 --> 00:58:06,012
So that was the first part of you saying, oh, CTV.

1195
00:58:06,012 --> 00:58:08,312
I'm saying like we don't need CTV or whatever.

1196
00:58:08,312 --> 00:58:09,372
We should do CTV.

1197
00:58:09,372 --> 00:58:11,892
We should do all these other things.

1198
00:58:11,892 --> 00:58:18,772
I think OpVault is the one that adds the most non-Drivechain overlap thing because
it's

1199
00:58:18,772 --> 00:58:23,652
like an L1 cold storage thing, whereas Drivechain is like a more experimental, take
your coins

1200
00:58:23,652 --> 00:58:26,152
to a more experimental L2 zone.

1201
00:58:26,152 --> 00:58:28,932
But we should do all these soft forks.

1202
00:58:28,932 --> 00:58:34,412
The question of who makes the best bridge, I think Drivechain is the best bridge.

1203
00:58:34,412 --> 00:58:38,352
The Drivechain's weakness is that the miners can steal from it.

1204
00:58:38,352 --> 00:58:42,172
But this is not a real weakness because the miners can steal more easily from the
Lightning

1205
00:58:42,172 --> 00:58:45,732
Network or from any of the non-mined L2s even.

1206
00:58:45,732 --> 00:58:46,732
Wait, how?

1207
00:58:46,732 --> 00:58:47,732
How?

1208
00:58:47,732 --> 00:58:53,232
Well, they censor almost all of the L2s, including things like BidVM.

1209
00:58:53,232 --> 00:59:00,172
They have like a thing where if someone misbehaves, you put like what's sometimes
called the justice

1210
00:59:00,172 --> 00:59:02,412
transaction on L1.

1211
00:59:02,412 --> 00:59:07,292
This enables you, whatever dispute you were having before, let's say you had some
coins,

1212
00:59:07,312 --> 00:59:10,472
This is in all these L2s, all the federated multi-sig ones, BidVM ones?

1213
00:59:10,472 --> 00:59:14,672
Well, some have it even worse, but we'll talk about Lightning, for example.

1214
00:59:14,672 --> 00:59:16,712
Someone has eight coins, someone has seven coins.

1215
00:59:16,712 --> 00:59:20,872
There are 15 coins in this multi-sig L2.

1216
00:59:20,872 --> 00:59:28,232
And someone tries to, you really owe them nine coins, but they try to screw you over

1217
00:59:28,232 --> 00:59:30,872
a little bit.

1218
00:59:30,872 --> 00:59:36,312
You really owe them nine coins, but you try to say, oh, I only owe you three coins.

1219
00:59:36,332 --> 00:59:41,052
And when you misbehave, they get to pull the whole thing, the whole 15.

1220
00:59:41,052 --> 00:59:43,132
And almost all of them have this.

1221
00:59:43,132 --> 00:59:48,692
Their original BidVM, I know they have a new version that I haven't poured an entire
whatever

1222
00:59:48,692 --> 00:59:50,772
day into to figure out what's going on.

1223
00:59:50,772 --> 00:59:54,212
But the original version, you had to like put like a big bond up, that would always

1224
00:59:54,212 --> 00:59:59,092
be more than, and that's the thing that if you go off script, the other person takes

1225
00:59:59,092 --> 01:00:00,912
the whole thing.

1226
01:00:00,912 --> 01:00:03,452
But here's the thing, you have to put that transaction on L1.

1227
01:00:03,452 --> 01:00:09,192
So if the miners just say, if 51% hashrate says we're not allowing that transaction
in,

1228
01:00:09,192 --> 01:00:10,192
you can't do that.

1229
01:00:10,192 --> 01:00:12,912
And so the entire security model of the L2 collapses.

1230
01:00:12,912 --> 01:00:16,512
So actually, Drivechain is really not any different than those.

1231
01:00:16,512 --> 01:00:17,512
That's kind of the point.

1232
01:00:17,512 --> 01:00:20,512
You're just saying like, in theory, in any of these systems, miners could collude to

1233
01:00:20,512 --> 01:00:25,032
like stop activities, basically, like stop peg outs.

1234
01:00:25,032 --> 01:00:26,452
That is also true.

1235
01:00:26,452 --> 01:00:31,752
No matter what the L2 can be fully custodial in the sense that there is no way of
miners

1236
01:00:31,752 --> 01:00:32,752
stealing from it.

1237
01:00:33,052 --> 01:00:35,372
They can still block the on ramp and off ramp.

1238
01:00:35,372 --> 01:00:38,452
The custodial stuff is even worse because it says instead of the money being in the

1239
01:00:38,452 --> 01:00:42,952
code in the process, it just belongs to someone else.

1240
01:00:42,952 --> 01:00:46,052
You mentioned MEV earlier, and I want to just circle back to that.

1241
01:00:46,052 --> 01:00:47,052
It's another derangement.

1242
01:00:47,052 --> 01:00:48,052
These are all derangements.

1243
01:00:48,052 --> 01:00:49,172
I can make a huge list.

1244
01:00:49,172 --> 01:00:53,372
In fact, I am kind of drafting a post that I'm going to write on the blog.

1245
01:00:53,372 --> 01:00:54,372
Bitcoin derangements?

1246
01:00:54,372 --> 01:00:55,372
We have very many.

1247
01:00:55,372 --> 01:00:58,532
Well, because I was going to say, MEV is the one that I hear the most of.

1248
01:00:58,532 --> 01:01:03,232
When people fess up to this reality of like, okay, the truth is that I'm just afraid
Bitcoin

1249
01:01:03,232 --> 01:01:07,032
will be able to do too much and that it is too good to use your language.

1250
01:01:07,032 --> 01:01:08,432
They always reference MEV.

1251
01:01:08,432 --> 01:01:12,632
MEV is like the scary thing that could happen.

1252
01:01:12,632 --> 01:01:14,272
Notice it's also very vague also.

1253
01:01:14,272 --> 01:01:15,272
It is.

1254
01:01:15,272 --> 01:01:16,272
It is actually.

1255
01:01:16,272 --> 01:01:18,272
I mean, if I asked you, how do you define MEV?

1256
01:01:18,272 --> 01:01:19,872
How do you measure MEV?

1257
01:01:19,872 --> 01:01:23,072
Well, well, I mean, well, so we get into this all the time because I always tell
people

1258
01:01:23,072 --> 01:01:24,832
we already have MEV on Bitcoin.

1259
01:01:24,832 --> 01:01:25,832
Of course.

1260
01:01:25,832 --> 01:01:26,832
That's a very good point.

1261
01:01:27,132 --> 01:01:32,652
Truthfully, if I were to say, if I were to say right now, if I were to message, you
know,

1262
01:01:32,652 --> 01:01:37,492
Mike Casey and say, I will give Marathon $10 if you do a somersault.

1263
01:01:37,492 --> 01:01:39,692
Oh, we do this all the time.

1264
01:01:39,692 --> 01:01:40,692
That is technically MEV.

1265
01:01:40,692 --> 01:01:41,692
No, no.

1266
01:01:41,692 --> 01:01:43,692
Oh, Slipstream is just full MEV.

1267
01:01:43,692 --> 01:01:44,692
Yeah, exactly.

1268
01:01:44,692 --> 01:01:48,532
I mean, we'll mine transactions in all sorts of ways.

1269
01:01:48,532 --> 01:01:50,412
We are rational actors who want to get paid.

1270
01:01:50,412 --> 01:01:52,772
The point is that was always possible.

1271
01:01:52,772 --> 01:01:56,212
Like it's like the Rick and Morty meme, you know, that was always allowed or
whatever.

1272
01:01:56,592 --> 01:02:00,192
You could always say, I could always just say, listen, it is the policy of LayerTwo Labs.

1273
01:02:00,192 --> 01:02:06,192
We will pay 10 cents a year to Foundry if they run all the transactions by us first.

1274
01:02:06,192 --> 01:02:08,792
You see, but that's my laugh at the MEV thing.

1275
01:02:08,792 --> 01:02:10,592
I just think this is so stupid.

1276
01:02:10,592 --> 01:02:11,712
This is what people are worried about.

1277
01:02:11,712 --> 01:02:14,352
They're worried about a conditional payment to miners.

1278
01:02:14,352 --> 01:02:15,352
People are very specific.

1279
01:02:15,352 --> 01:02:20,352
I actually had Matt Crowell on the show and we got into like his definition of MEV
and

1280
01:02:20,352 --> 01:02:21,792
he had, you know, a broad definition.

1281
01:02:21,792 --> 01:02:23,712
His definition, I thought, I think was quite good.

1282
01:02:23,772 --> 01:02:27,972
But the thing that I think he mentioned that people are most concerned about is like
the

1283
01:02:27,972 --> 01:02:33,412
DeFi somersaults and the like really like crazy trading things that's going to make

1284
01:02:33,412 --> 01:02:37,812
it such that you need to be a high frequency trader and you need to hire like the
most

1285
01:02:37,812 --> 01:02:42,812
senior person at Goldman Sachs, you know, if you're going to survive as a miner,
right?

1286
01:02:42,812 --> 01:02:46,092
Like that's sort of the problem on Ethereum right now is that you have to...

1287
01:02:46,092 --> 01:02:47,972
This is what people do.

1288
01:02:47,972 --> 01:02:52,892
And I had this MEV derangement written down and I even called it exactly, I wish I'd
published

1289
01:02:52,892 --> 01:02:55,952
it before now as it would look like I predicted this perfectly, which I did.

1290
01:02:55,952 --> 01:03:03,312
But they will point to a problem in Ethereum and they'll say that is what I'm
worried about.

1291
01:03:03,312 --> 01:03:04,312
But they don't really...

1292
01:03:04,312 --> 01:03:05,312
So in Bitcoin...

1293
01:03:05,312 --> 01:03:07,912
Do you think that there's another just Ethereum in general is another derangement?

1294
01:03:07,912 --> 01:03:08,912
Yeah.

1295
01:03:08,912 --> 01:03:09,912
Bitcoin is bad.

1296
01:03:09,912 --> 01:03:10,912
I mean, Ethereum is badly designed.

1297
01:03:10,912 --> 01:03:16,192
Bitcoin has several processes that would intercept and error correct this thing.

1298
01:03:16,192 --> 01:03:21,712
So first of all, in the Drivechain world, the Blind Merged Mining means that
basically

1299
01:03:21,732 --> 01:03:26,852
the person assembling the block, they do it away from the L1 miners and they just
pay

1300
01:03:26,852 --> 01:03:30,092
the miners the sum of the transaction fees.

1301
01:03:30,092 --> 01:03:36,572
They just say put this hash in a L1 Coinbase, I'll pay you with L1 coins, and then
they

1302
01:03:36,572 --> 01:03:37,972
collect the L2.

1303
01:03:37,972 --> 01:03:41,332
So it's already factored out.

1304
01:03:41,332 --> 01:03:45,092
The L1 miners just could do exactly what they were doing before.

1305
01:03:45,092 --> 01:03:48,092
They earn L1 coins.

1306
01:03:48,092 --> 01:03:52,932
The whole L2 chain could be worth, you know, $100,000 of fees.

1307
01:03:52,932 --> 01:03:58,652
It could be $20,000 in overt transaction fees, plus $80,000 in MEV.

1308
01:03:58,652 --> 01:03:59,652
It makes no difference.

1309
01:03:59,652 --> 01:04:03,172
It's worth $100,000 to whoever assembles the block, they assemble it, they pay
themselves

1310
01:04:03,172 --> 01:04:07,932
$80,000 worth of indirect MEV somehow, off-chain or whatever.

1311
01:04:07,932 --> 01:04:08,932
Doesn't matter.

1312
01:04:08,932 --> 01:04:10,112
The block hasn't been found yet.

1313
01:04:10,112 --> 01:04:12,332
The block has a certain hash.

1314
01:04:12,332 --> 01:04:15,212
Under Blind Merged Mining, there's a BIP301.

1315
01:04:15,212 --> 01:04:20,092
They broadcast a message to the miners and they say, it's like Slipstream in a way,
and

1316
01:04:20,092 --> 01:04:27,532
they say put this hash into the L1 Coinbase, which just takes up a tiny little bit
of space,

1317
01:04:27,532 --> 01:04:31,052
and I will pay you, you know, one Bitcoin or whatever it is.

1318
01:04:31,052 --> 01:04:35,652
Let's say it adds up to 1.03, because I said $100,000, I don't know, you know, so
I'll

1319
01:04:35,652 --> 01:04:42,772
pay 1.03, and you can only get this 1.03 Bitcoin if you put this hash.

1320
01:04:42,772 --> 01:04:47,572
And the software interprets the hash being there as determining which L2 block is
the

1321
01:04:47,572 --> 01:04:50,932
next L2 block in the L2 chain.

1322
01:04:50,932 --> 01:04:52,492
These are the same thing.

1323
01:04:52,492 --> 01:04:53,932
So this is just one thing.

1324
01:04:53,932 --> 01:05:01,172
I think, because there's other ways in which, in Bitcoin, this MEV thing would not
even

1325
01:05:01,172 --> 01:05:02,172
happen at all.

1326
01:05:02,172 --> 01:05:08,452
So like, in Bitcoin, people switch to, the miners will switch to PPS mostly, not all

1327
01:05:08,452 --> 01:05:09,452
of them.

1328
01:05:09,452 --> 01:05:16,932
But Papershare is like, the pool does the block assembly, and then the pools compete

1329
01:05:16,932 --> 01:05:17,932
with each other.

1330
01:05:17,932 --> 01:05:18,932
That's how most of it works now.

1331
01:05:18,932 --> 01:05:19,932
Right, exactly.

1332
01:05:19,932 --> 01:05:20,932
Right, right.

1333
01:05:20,932 --> 01:05:25,612
So it's a situation where the pools compete amongst themselves, and then the hashers
compete

1334
01:05:25,612 --> 01:05:26,892
in their own universe.

1335
01:05:26,892 --> 01:05:28,052
They just compete to have cheap power.

1336
01:05:28,052 --> 01:05:29,052
Oh, so you're saying like it's kind of...

1337
01:05:29,052 --> 01:05:30,052
They don't care already.

1338
01:05:30,052 --> 01:05:31,052
Right, right, right.

1339
01:05:31,052 --> 01:05:32,052
So you're saying it's kind of a boondoggle anyway, because, yeah.

1340
01:05:32,052 --> 01:05:35,532
So we're trying to find out who do we care, who's the victim here.

1341
01:05:35,532 --> 01:05:37,372
Right, right, right, right.

1342
01:05:37,372 --> 01:05:39,852
And it imposes huge costs on the pools.

1343
01:05:39,852 --> 01:05:41,612
Well, they all have to do it, so...

1344
01:05:41,612 --> 01:05:45,372
This also just brings up the elephant in the room, which is like centralization of
Bitcoin

1345
01:05:45,372 --> 01:05:46,372
in general, right?

1346
01:05:46,372 --> 01:05:47,372
Sure.

1347
01:05:47,372 --> 01:05:49,212
Another vague concept, though.

1348
01:05:49,212 --> 01:05:53,612
I wrote a post measuring centralization in Bitcoin.

1349
01:05:53,612 --> 01:05:57,852
I concluded that it's the cost of running a full node, which later became like the
accepted

1350
01:05:57,852 --> 01:05:59,252
definition for many people.

1351
01:05:59,252 --> 01:06:00,252
Wait, that's the definition?

1352
01:06:00,252 --> 01:06:04,332
The cost of running a full node is the definition of what?

1353
01:06:04,332 --> 01:06:07,852
The cost of centralization in Bitcoin.

1354
01:06:07,852 --> 01:06:12,172
But people started sneaking in all these other random stuff about it matters how
many pools

1355
01:06:12,172 --> 01:06:15,372
there are, it matters what miners' costs are.

1356
01:06:15,372 --> 01:06:22,052
None of that can be the case, because the number of pools is based on a statistical

1357
01:06:22,052 --> 01:06:26,972
argument about how many days you can go without profit.

1358
01:06:26,972 --> 01:06:28,972
Can you go 30 days without profit?

1359
01:06:28,972 --> 01:06:33,332
In the early days of Bitcoin, let's say there's only 30 miners.

1360
01:06:33,332 --> 01:06:37,972
So now they're each going to find, you know, one out of every 30, you know, this is
like

1361
01:06:37,972 --> 01:06:38,972
30 blocks.

1362
01:06:38,972 --> 01:06:39,972
You know, there's 144 blocks a day.

1363
01:06:39,972 --> 01:06:42,092
They're going to find a few blocks a day.

1364
01:06:42,092 --> 01:06:46,812
When mining is really small, you don't need pools.

1365
01:06:46,812 --> 01:06:52,852
But when you have 1,000th or 1,000,000th of a chance of the hash rate, now you're
only

1366
01:06:52,852 --> 01:06:56,812
going to find a block 1,000,000th of the 10-minute periods.

1367
01:06:56,812 --> 01:07:03,612
So now you need a pool, because you could very easily go two, three, four, five
months,

1368
01:07:03,612 --> 01:07:09,252
two years without, or you could get lucky and hit two and then be unlucky for five
years.

1369
01:07:09,252 --> 01:07:12,652
Which means that there's going to be like, right, which means that they're, again,
this

1370
01:07:12,652 --> 01:07:13,652
is already happening.

1371
01:07:13,652 --> 01:07:16,892
There already is miner centralization just because everyone's just a member of a
pool.

1372
01:07:16,892 --> 01:07:21,292
People use this miner centralization term, but really what it means is, what that
phrase

1373
01:07:21,292 --> 01:07:26,292
actually refers to is the empowering of the small pools, empowering of the small
miners.

1374
01:07:26,772 --> 01:07:27,772
Sorry, I said the wrong word there.

1375
01:07:27,772 --> 01:07:28,772
Right.

1376
01:07:28,772 --> 01:07:29,772
The pools translate.

1377
01:07:29,772 --> 01:07:33,092
But it does also mean that there's like 10 companies who are picking all the block
time

1378
01:07:33,092 --> 01:07:34,092
miners.

1379
01:07:34,092 --> 01:07:39,852
No, because it means that there's 10 pools, but that issue should be solved in a
different

1380
01:07:39,852 --> 01:07:45,092
way by just monitoring the pools to make sure that, and this is what mempool.space
does,

1381
01:07:45,092 --> 01:07:50,852
and say that no one is censoring a transaction over the long haul.

1382
01:07:50,852 --> 01:07:52,172
And that's what mempool.space does.

1383
01:07:52,172 --> 01:07:54,812
So you think mempool.space actually plays like a key role?

1384
01:07:54,972 --> 01:07:56,772
I think we should go much further.

1385
01:07:56,772 --> 01:08:03,132
I have proposed in the past, we should have open source mining pool software, and we
should

1386
01:08:03,132 --> 01:08:09,212
also have some kind of open source tool that monitors the pools for any misbehavior.

1387
01:08:09,212 --> 01:08:14,052
So that miners can deject if they realize that they're part of a pool that's
censoring

1388
01:08:14,052 --> 01:08:15,052
transactions.

1389
01:08:15,052 --> 01:08:19,772
If you think about it, the pool charges like 1% or so, of course, they all charge
this

1390
01:08:19,772 --> 01:08:20,772
and that or whatever.

1391
01:08:20,772 --> 01:08:23,452
No one knows exactly, but there's many different fees.

1392
01:08:23,772 --> 01:08:30,732
But let's just say the pool charges 1% of the revenue as this kind of variance
reduction

1393
01:08:30,732 --> 01:08:33,172
service.

1394
01:08:33,172 --> 01:08:39,292
Then they compete against their other 14 pools, so say there's 15 pools.

1395
01:08:39,292 --> 01:08:46,092
That amount of money coming in, that is like their brand and that is like sort of
the hostage

1396
01:08:46,092 --> 01:08:47,212
that we execute.

1397
01:08:47,212 --> 01:08:49,292
If they screw up, we say, that's it.

1398
01:08:49,292 --> 01:08:53,172
Normally, you were getting for free, you're getting 1% each time, but now you
screwed

1399
01:08:53,172 --> 01:08:54,172
up.

1400
01:08:54,172 --> 01:08:55,172
You're dead now.

1401
01:08:55,172 --> 01:08:56,532
Everyone goes to the other 14 pools.

1402
01:08:56,532 --> 01:08:57,532
Someone makes a new 15th pool.

1403
01:08:57,532 --> 01:09:00,332
Well, it goes back to what you were saying about the government, right?

1404
01:09:00,332 --> 01:09:01,972
Government should be about accountability, right?

1405
01:09:01,972 --> 01:09:02,972
Right.

1406
01:09:02,972 --> 01:09:03,972
Right.

1407
01:09:03,972 --> 01:09:04,972
Accountability is superior.

1408
01:09:04,972 --> 01:09:07,492
It really just goes back to accountability being the key factor when you're dealing
with

1409
01:09:07,492 --> 01:09:11,092
like authorities or like, you know, people in power positions.

1410
01:09:11,092 --> 01:09:15,412
And so none of this stuff about the MEV is actually worth worrying about, and
especially

1411
01:09:15,412 --> 01:09:21,812
not if it means that we can't have real Bitcoin scalability, real Bitcoin privacy,
which is

1412
01:09:21,812 --> 01:09:24,292
what Drivechain would allow and other stuff would allow.

1413
01:09:24,292 --> 01:09:27,932
Well, this is the big challenge, right, is everyone's like, MEV, MEV, MEV, and then
you

1414
01:09:27,932 --> 01:09:33,172
just think about all the things that we could have if we weren't worried about MEV.

1415
01:09:33,172 --> 01:09:34,172
And it's a challenge.

1416
01:09:34,172 --> 01:09:35,172
Yeah.

1417
01:09:35,172 --> 01:09:38,892
It's become a, I don't know what the right metaphor would be, but it's like, you
know,

1418
01:09:38,892 --> 01:09:42,532
for your safety, like kind of like maybe like a COVID type of a thing.

1419
01:09:42,532 --> 01:09:43,532
Right.

1420
01:09:43,532 --> 01:09:44,532
Right.

1421
01:09:44,532 --> 01:09:48,892
We're doing, for your safety, we're going to long list of like extremely severe,
unprecedented,

1422
01:09:48,892 --> 01:09:52,412
we're going to take kids out of school for two years.

1423
01:09:52,412 --> 01:09:54,412
So let's get back to the Drivechain story.

1424
01:09:54,412 --> 01:09:59,292
I'm not in favor of school, but I'm just bringing that up as a, such an extreme
measure.

1425
01:09:59,292 --> 01:10:00,292
You're right.

1426
01:10:00,292 --> 01:10:04,492
You're saying you're like, because this like thing could happen that might not
actually

1427
01:10:04,492 --> 01:10:09,332
be a real concern, we're going to just, you know, keep you from doing all these
things

1428
01:10:09,332 --> 01:10:12,852
that you actually want to do that would like clearly, clearly and obviously benefit
your

1429
01:10:12,852 --> 01:10:13,852
life.

1430
01:10:13,852 --> 01:10:17,892
All right, guys, I want to take a quick break to thank you for watching and remind
you to

1431
01:10:17,892 --> 01:10:22,212
click the follow button on my profile if you'd like more Bitcoin technical deep
dives

1432
01:10:22,212 --> 01:10:23,212
like this.

1433
01:10:23,212 --> 01:10:27,572
I also want to give a shout out to my partners for making the show possible.

1434
01:10:27,572 --> 01:10:32,172
Best in Slot and Unisat are of course, co-maintainers of the BRC20 protocol.

1435
01:10:32,172 --> 01:10:37,932
They are working on some incredible updates to BRC20, including the BRC20
programmability

1436
01:10:37,932 --> 01:10:41,872
module designed by Best in Slot, which is currently in Testnet.

1437
01:10:41,872 --> 01:10:47,172
This will make execution of smart contracts for BRC20 possible at the indexer level,
which

1438
01:10:47,172 --> 01:10:50,452
is about as trustless and Bitcoin native as it gets.

1439
01:10:50,452 --> 01:10:55,372
Unisat is also working on a single step transfer function for BRC20, which I know
many of you

1440
01:10:55,372 --> 01:10:56,652
will be excited about.

1441
01:10:56,652 --> 01:11:00,052
That's been widely requested by the BRC20 community.

1442
01:11:00,052 --> 01:11:04,572
And last but not least, my incredible layer two partner, Citria, who I couldn't be
more

1443
01:11:04,572 --> 01:11:06,692
excited about teaming up with.

1444
01:11:06,692 --> 01:11:13,492
Citria is working on one of the leading implementations of a BitVM zero knowledge
proof style bridge,

1445
01:11:13,492 --> 01:11:15,332
an execution environment for Bitcoin.

1446
01:11:15,332 --> 01:11:20,492
So they're essentially building what I think could become the canonical Bitcoin roll
off.

1447
01:11:20,492 --> 01:11:25,092
And they have an absolutely incredible team of people backing them up and getting
really

1448
01:11:25,092 --> 01:11:28,692
creative about how to push this technology forward.

1449
01:11:28,692 --> 01:11:33,772
So my opinion, once we have a truly trust minimized bridge, anything is possible for

1450
01:11:33,772 --> 01:11:34,772
Bitcoin.

1451
01:11:34,772 --> 01:11:38,452
So very grateful to Citria for their work and for supporting the show.

1452
01:11:38,452 --> 01:11:39,892
Let's get back to it.

1453
01:11:39,892 --> 01:11:42,412
I think also the Bitcoin project will not survive.

1454
01:11:42,492 --> 01:11:51,532
If a rival coin has more users, then that will be the new number one coin.

1455
01:11:51,532 --> 01:11:54,932
And people will look back on this and they'll say, well, of course that didn't work.

1456
01:11:54,932 --> 01:11:56,492
And then they'll look into it.

1457
01:11:56,492 --> 01:12:00,812
This has happened many times where something starts off great and then loses its
way.

1458
01:12:00,812 --> 01:12:06,052
You know, I play the Star Wars episode one, like behind the scenes video for people
sometimes

1459
01:12:06,052 --> 01:12:11,492
about like when people just start to assume or the fall of Rome or the unsinkable
Titanic.

1460
01:12:11,572 --> 01:12:17,692
And people think, well, this doesn't look like it's going to fail.

1461
01:12:17,692 --> 01:12:19,612
And that's when people get complacent.

1462
01:12:19,612 --> 01:12:20,612
And then it does fail.

1463
01:12:20,612 --> 01:12:23,932
Do you feel like you get to like a certain point in understanding Bitcoin governance

1464
01:12:23,932 --> 01:12:28,092
where you actually just get to start like a little nervous about like it's...

1465
01:12:28,092 --> 01:12:31,732
Well, I think, no, there is a lot of rot, I think.

1466
01:12:31,732 --> 01:12:32,732
Rot?

1467
01:12:32,732 --> 01:12:33,732
Rot.

1468
01:12:33,732 --> 01:12:34,732
Oh, rot.

1469
01:12:34,732 --> 01:12:35,732
There's a lot of rot.

1470
01:12:35,732 --> 01:12:37,652
Something rotten in the state of Denmark.

1471
01:12:37,652 --> 01:12:39,812
That's how far the termites have spread or whatever.

1472
01:12:39,812 --> 01:12:40,812
Right.

1473
01:12:41,132 --> 01:12:44,852
I feel like your average investor is like not thinking about it, doesn't really
understand.

1474
01:12:44,852 --> 01:12:48,252
Drivechain would introduce more competition among the developers.

1475
01:12:48,252 --> 01:12:52,452
So you would say like, OK, Bitcoin Core is going to do this, they're going to do
whatever

1476
01:12:52,452 --> 01:12:53,452
you think about Operaturn.

1477
01:12:53,452 --> 01:12:57,772
Well, you have your own L2 chain, you do whatever Operaturn you want over there.

1478
01:12:57,772 --> 01:13:02,532
Of course, a lot of this is complaining from people who don't know what anyone's
talking

1479
01:13:02,532 --> 01:13:03,972
about.

1480
01:13:03,972 --> 01:13:09,612
And so as a result, those type of people, no one should, no one will listen to them

1481
01:13:09,692 --> 01:13:13,572
and no one should listen to them and they're not actually going to create, you know,
95

1482
01:13:13,572 --> 01:13:16,892
percent of the complaining is not...

1483
01:13:16,892 --> 01:13:17,892
Most of that is concern trolling.

1484
01:13:17,892 --> 01:13:21,372
Like if people complain about the energy usage of Bitcoin mining or something,
they're like,

1485
01:13:21,372 --> 01:13:25,452
oh, you can make your own proof of stake coin or whatever and get people to use
that.

1486
01:13:25,452 --> 01:13:26,452
They're not going to do that.

1487
01:13:26,452 --> 01:13:29,892
They just want to say that they care about the environment or whatever.

1488
01:13:29,892 --> 01:13:33,052
So when people say, oh, Bitcoin should have...

1489
01:13:33,052 --> 01:13:35,212
The Operaturn limit should be such and such.

1490
01:13:35,212 --> 01:13:37,452
A lot of those people really have no idea what they're talking about.

1491
01:13:37,452 --> 01:13:42,892
They're not going to like go on GitHub and fork Bitcoin Core and make a new L2 chain

1492
01:13:42,892 --> 01:13:44,852
that has their own Operaturn.

1493
01:13:44,852 --> 01:13:46,372
And if it's really important, then they will.

1494
01:13:46,372 --> 01:13:49,892
But the point is a lot of these, a lot of the complaining is insincere.

1495
01:13:49,892 --> 01:13:55,132
But a small percentage of it is very sincere and is very important.

1496
01:13:55,132 --> 01:13:59,132
So Robin, I think you may have seen this part of the episode or not, but Robin Linus
came

1497
01:13:59,132 --> 01:14:04,192
on the show and he said, you know, as a store of value, you know, Bitcoin has
already succeeded.

1498
01:14:04,192 --> 01:14:08,352
But as a payment system, you know, I'm, quote, realistic, I think is the word that
he used.

1499
01:14:08,352 --> 01:14:13,712
I'm not sure if it's actually going to ever be a truly permissionless payment system
because

1500
01:14:13,712 --> 01:14:15,672
he's concerned about ossification.

1501
01:14:15,672 --> 01:14:17,152
Do you share that concern?

1502
01:14:17,152 --> 01:14:18,152
Right.

1503
01:14:18,152 --> 01:14:20,032
Well, the soft fork we used to do to...

1504
01:14:20,319 --> 01:14:26,879
We didn't do it like once every six months, but we used to do so many that the
average was, was like twice a year.

1505
01:14:27,039 --> 01:14:27,599
Really?

1506
01:14:27,599 --> 01:14:32,279
Yeah, back in 2015, when Drivechain was published, we did three in December, I
think.

1507
01:14:32,319 --> 01:14:34,799
And they're just gonna get harder and harder and harder to push through.

1508
01:14:34,839 --> 01:14:42,839
Yeah, it was 20 months separated when SegWit was first proposed, when it was coded
and then finally

1509
01:14:42,839 --> 01:14:50,159
activated. That was 20 months. And then the only thing we've, that was back in 2017.
I mean, it seems like only

1510
01:14:50,159 --> 01:14:56,679
yesterday, but you know, you're like, in college now or something. You were like, I
don't know, like how old you were, you

1511
01:14:56,679 --> 01:15:03,039
are young, you weren't back in 2017. It seems like not that long ago. But that was,
we had lots and lots of soft forks.

1512
01:15:03,039 --> 01:15:07,879
And then we had SegWit and then we had Taproot. And do you want to guess how many
months it was separating? It was

1513
01:15:07,879 --> 01:15:18,759
January 2018, when it was Taproot was first Bitcoin dev. And then I believe it was
46 months later, in November 2021.

1514
01:15:19,079 --> 01:15:23,479
Do you think that's the likely outcome? I mean, do you think that that's like the
future that we're headed toward? Eli

1515
01:15:23,479 --> 01:15:24,959
Bensonson also said the same thing.

1516
01:15:24,999 --> 01:15:34,199
2021. And now it's 2025. So we've had four years with nothing. Now people say CTV.
Even that would be a shame because I

1517
01:15:34,199 --> 01:15:40,439
think Jeremy Rubin had coded it in 2019 or something, but I interrupted you.

1518
01:15:40,439 --> 01:15:44,519
I think 2017, maybe he even got started. No, no, you're right. Maybe something like
that.

1519
01:15:44,519 --> 01:15:50,839
I think he has like timelines of like when he had the idea, when he had the BIP
written, when he had the code written. I

1520
01:15:50,839 --> 01:15:55,359
think the code was written, maybe earlier, but I think 2019 at least.

1521
01:15:55,359 --> 01:16:01,759
I saw Antoine, Antoine put out an email to the mailing list, I think yesterday,
where he was like, let's start having a

1522
01:16:01,759 --> 01:16:08,639
serious discussion about CTV. And let's talk about the issues. Do you feel bullish
on CTV actually happening?

1523
01:16:08,679 --> 01:16:14,639
As I said, in my view that this is there, we have all these derangements. And one of
the derangements is that we can't

1524
01:16:14,679 --> 01:16:21,959
soft fork. The soft fork is this gift, you know, from God, and we should be on our
knees saying so thankful that it exists

1525
01:16:21,959 --> 01:16:28,399
at all. And it's amazing. This is one of the things that Robin Linus talks about,
about how it's actually the blockchain

1526
01:16:28,399 --> 01:16:36,399
model has this advantage that you can upgrade it without developer keys. And that
is, and he was, I think recently, he was

1527
01:16:36,399 --> 01:16:43,479
saying he's kind of frustrated with BitVM doesn't inherit, the blockchain is so
cool. BitVM does not yet have a way to

1528
01:16:43,479 --> 01:16:50,639
upgrade without, which kind of makes it less, I don't want to like misquote him or
whatever, but it kind of, it makes it

1529
01:16:50,639 --> 01:16:58,679
not as cool. Because if you, you either have to stick to one version, which in
software, this doesn't seem, anyway, that's kind of a

1530
01:16:58,679 --> 01:17:05,999
distraction. Because the CTV question is, we should be doing all these soft forks,
we should not have this attitude that they are

1531
01:17:05,999 --> 01:17:16,439
something we debate so much. The fact that we have to discuss them for so much is
just feeding the hysteria. Yeah, it's, it's

1532
01:17:16,439 --> 01:17:24,359
like we're in the Middle Ages, and people believe in witchcraft, and they're
burning, burning witches alive. And then it's kind of

1533
01:17:24,359 --> 01:17:34,519
like, should we, like, just even to debate is to give more attention and have people
thinking about, oh, what are the risks? Is Paul

1534
01:17:34,519 --> 01:17:39,679
right? Is Paul trying to mislead us about the witches? Maybe they have him under a
spell. Maybe Paul's a witch.

1535
01:17:39,719 --> 01:17:48,639
Wait, so okay, so when did this proposal become BIP300/301? And I want to
hear the whole story of the cultural, how the

1536
01:17:48,639 --> 01:17:52,879
culture responded to this proposal over time.

1537
01:17:53,879 --> 01:18:00,879
What happened was SegWit was big when I first proposed it. And I was, you know, the
block size war was very uncomfortable

1538
01:18:00,919 --> 01:18:04,359
psychologically. So of course, I, the last thing I was going to do-

1539
01:18:04,359 --> 01:18:07,639
Even though you think forks should be less psychologically uncomfortable?

1540
01:18:08,039 --> 01:18:16,119
I will get to that. I think I may have miss, I may have spoken in not the clearest
way, because the word hard fork refers to two

1541
01:18:16,119 --> 01:18:24,999
different things. And I have flipped back and forth, unfortunately, but it's, it
wasn't me who screwed up the definitions. They were

1542
01:18:24,999 --> 01:18:37,199
already screwed up when I got here. But the hard fork actually refers to having BTC,
one single coin blockchain, upgrade in a

1543
01:18:37,359 --> 01:18:44,279
non-com, you know, in a way that everyone must upgrade, upgrade their software. And
there is no actual, like a fork in the road has

1544
01:18:44,279 --> 01:18:52,319
two paths, like a culinary fork has the multiple prongs. But the real hard fork is
just a straight line with a point and like a

1545
01:18:52,319 --> 01:19:00,319
knot where the hard fork happened. But this makes no sense. What Bitcoin Cash
actually did, because BTC survived, and it didn't

1546
01:19:00,319 --> 01:19:05,719
die, and there was actually, it's more of what you might call an airdrop or a
spinoff altcoin.

1547
01:19:06,319 --> 01:19:12,999
Bitcoin Cash is a spinoff, right? Because it changed, and some people went that way,
but then pretty much everyone stayed.

1548
01:19:13,039 --> 01:19:19,959
Yeah, you needed, you need, there was no, like, philosophically, there was no way to
even find the Bitcoin Cash network unless you

1549
01:19:19,959 --> 01:19:27,319
got either the new software, or you got the new instructions, which were change a
one to an eight on August 1, 2017.

1550
01:19:27,319 --> 01:19:34,639
How was this whole situation when the block size wars were happening? How would you
describe the discomfort? Tell me about the

1551
01:19:34,639 --> 01:19:35,559
discomfort.

1552
01:19:35,599 --> 01:19:43,159
Yeah, well, you'd sign in, and you'd go to your favorite site, Reddit, or whatever
was big at the time, right? BitcoinTalk.org

1553
01:19:43,159 --> 01:19:43,879
was still very big.

1554
01:19:43,879 --> 01:19:46,039
Best friends were just like ripped apart.

1555
01:19:46,079 --> 01:19:55,079
People were saying very mean things about each other. People didn't care, very few
people. One thing I presented in September

1556
01:19:55,079 --> 01:19:55,679
2015.

1557
01:19:55,679 --> 01:19:59,399
These types of divisions are happening now. Now there's like tons of factions that
hate each other.

1558
01:19:59,399 --> 01:20:00,999
I wonder if, you know...

1559
01:20:01,919 --> 01:20:04,719
Was it a different type of warring tribalism?

1560
01:20:04,759 --> 01:20:07,799
There was so much optimism in the earlier part of Bitcoin.

1561
01:20:07,799 --> 01:20:09,839
So it was the beginning of tribalism.

1562
01:20:10,359 --> 01:20:18,239
In 2014 and earlier, the block size debate was always in the background. And it was
always like you could kind of tell people

1563
01:20:18,239 --> 01:20:26,519
had a sore spot on it. And some people thought this, some people thought that, and
it's kind of bubbling up. But overall, the

1564
01:20:26,519 --> 01:20:31,239
sense of Bitcoin was that something really new had been created, and that this was
like seeing the beginning of the

1565
01:20:31,239 --> 01:20:35,119
internet. And we were gonna see like Pets.com, we were gonna see all these scams.

1566
01:20:35,119 --> 01:20:41,559
People said, there was that guy where that guy introduces the shitcoin word, where
he's like, we're gonna see all this stuff.

1567
01:20:41,559 --> 01:20:44,599
And people said, the early days of the internet were like this.

1568
01:20:44,599 --> 01:20:50,639
And you really thought, we're gonna live in a world where there's not gonna be any
spam, because you're gonna have to pay to

1569
01:20:50,639 --> 01:20:59,759
send email. So the whole internet will get this layer of competence and economic
balance.

1570
01:20:59,759 --> 01:21:07,919
But there was like a unity, it sounds like there was a strong unity amongst
Bitcoiners, where the tribalism hadn't hit yet.

1571
01:21:07,919 --> 01:21:15,279
The strength in numbers, verus in numerous, that was on the Caucasus coins, the
physical coins you could buy, like a

1572
01:21:15,279 --> 01:21:20,719
collectible that had Bitcoin. And a lot of people were very helpful and friendly,
the newer people.

1573
01:21:20,719 --> 01:21:31,439
So there was a lot of optimism, and then the block size war created this growing
rift, and this growing, kind of like...

1574
01:21:31,439 --> 01:21:35,039
Now that's like the world we live in, though. I mean, now we have so many warring
tribes.

1575
01:21:35,039 --> 01:21:39,999
It's much worse now. But each year, I thought it can't possibly get any worse than
the year.

1576
01:21:39,999 --> 01:21:41,279
And in fact, there's a post...

1577
01:21:41,279 --> 01:21:42,079
It just keeps getting worse.

1578
01:21:42,079 --> 01:21:49,999
I think July 2015, I wrote a post about betting on a prediction market on which we
can bet on.

1579
01:21:49,999 --> 01:21:53,119
Would the exchange rate be higher with small blocks or large blocks?

1580
01:21:53,119 --> 01:21:56,639
You should be like, will CTV be activated in 2026?

1581
01:21:56,639 --> 01:21:58,399
So I think on Polymarket, there is one.

1582
01:21:58,399 --> 01:22:00,319
Is there a CTV on Polymarket?

1583
01:22:00,319 --> 01:22:10,159
Polymarket did what I always... I told Roger, you could do like oracle.bitcoin.com,
and you could just quickly make a centralized website and just do it all.

1584
01:22:10,159 --> 01:22:13,279
And my idea is... Truthcoin is slightly different from that.

1585
01:22:13,279 --> 01:22:20,319
It is like a much hardier weed that can't be destroyed, and it's supposed to attack
these very subversive questions.

1586
01:22:20,319 --> 01:22:28,159
But Polymarket is much more like... It's not as serious, which is a good thing.

1587
01:22:28,159 --> 01:22:31,199
It has more of a sense of humor, and it can do...

1588
01:22:33,599 --> 01:22:37,679
But yeah, there was this optimism, and then the block size war was very unpleasant.

1589
01:22:37,679 --> 01:22:45,679
Mike Hearn had written about Bitcoin was a failed experiment to New York Times and
stuff, and he had rage quit the project.

1590
01:22:47,199 --> 01:22:50,079
He wanted to do Bitcoin XT, which is this 8 megabyte hard fork.

1591
01:22:50,079 --> 01:22:55,199
Gavin Andreessen, who was the guy in charge, Satoshi himself had handpicked Gavin to
be in charge,

1592
01:22:55,199 --> 01:22:59,519
but Gavin wanted to be a large blocker, but other people didn't agree with him.

1593
01:22:59,519 --> 01:23:03,039
So there was this tension in that way of like, you know...

1594
01:23:03,039 --> 01:23:04,879
Where do you fall on the debate?

1595
01:23:04,879 --> 01:23:07,439
I was a small blocker the whole time.

1596
01:23:07,439 --> 01:23:12,719
One reason was I always believed that we would have these sidechains, and we would
scale in layers anyway.

1597
01:23:12,719 --> 01:23:15,279
Right, you were always layer scaling, Maxi.

1598
01:23:15,279 --> 01:23:17,919
I always thought we would have a large block L2.

1599
01:23:17,919 --> 01:23:22,799
So I thought you can put a large block L2 optionally on a mandatory small block L1.

1600
01:23:22,799 --> 01:23:24,399
That's the direction that we're headed.

1601
01:23:24,399 --> 01:23:27,439
And you cannot do... It doesn't make sense to do the reverse.

1602
01:23:27,439 --> 01:23:32,479
You have the mandatory L1 block be huge, and then a small optional L2 block that
doesn't make any sense.

1603
01:23:32,479 --> 01:23:34,079
No, that makes sense.

1604
01:23:34,079 --> 01:23:35,919
The other thing was the...

1605
01:23:35,919 --> 01:23:38,959
Did the small blockers like Drivechains more than the big blockers?

1606
01:23:38,959 --> 01:23:40,479
Well, I'll get to that.

1607
01:23:40,479 --> 01:23:44,639
The small block argument had more of an intellectual sophistication to it.

1608
01:23:44,639 --> 01:23:45,439
The small blockers?

1609
01:23:45,439 --> 01:23:45,999
Yeah.

1610
01:23:45,999 --> 01:23:49,839
The large block was just like, we'll change this small number to a larger number.

1611
01:23:49,839 --> 01:23:56,559
We'll impose these costs on everyone who runs a node, and we'll just kind of hope
for the best.

1612
01:23:56,559 --> 01:23:57,119
Okay.

1613
01:23:57,119 --> 01:23:57,679
And that approach...

1614
01:23:57,679 --> 01:23:59,119
It was like a simple argument.

1615
01:23:59,119 --> 01:24:01,599
It had much... It had a lot going for it.

1616
01:24:01,599 --> 01:24:04,959
But the fact that it was simple made it seem not as...

1617
01:24:07,119 --> 01:24:09,999
It just made it seem like you didn't want to be associated with it.

1618
01:24:09,999 --> 01:24:10,479
Okay.

1619
01:24:10,479 --> 01:24:12,239
It almost seemed embarrassing sometimes.

1620
01:24:12,239 --> 01:24:12,799
Okay.

1621
01:24:12,799 --> 01:24:15,919
Even though there was a lot of true merit behind it.

1622
01:24:15,919 --> 01:24:19,599
There is this feeling like there's some shame about being a big blocker.

1623
01:24:19,599 --> 01:24:22,479
Right. Well, that's because they...

1624
01:24:22,479 --> 01:24:23,279
That's because they lost.

1625
01:24:23,279 --> 01:24:24,159
...bet big and lost. Yeah.

1626
01:24:24,159 --> 01:24:25,519
And they didn't just lose. They really...

1627
01:24:25,519 --> 01:24:26,959
But it's not just that they lost.

1628
01:24:26,959 --> 01:24:30,239
I talked to many of them, and they were certain... Everyone was certain they would
win.

1629
01:24:30,239 --> 01:24:33,359
Throughout 2015, 2016, everyone was certain we were right and they were wrong.

1630
01:24:33,359 --> 01:24:34,799
But even before they lost...

1631
01:24:34,799 --> 01:24:35,999
Why would you even want to talk to them?

1632
01:24:35,999 --> 01:24:36,959
People would say that to me on both sides.

1633
01:24:36,959 --> 01:24:41,519
Even before they lost, there was this sense that there was something a little
simplistic

1634
01:24:41,519 --> 01:24:42,319
about the argument.

1635
01:24:43,039 --> 01:24:47,919
Certainly. Yeah. That's why the more technical people, like what were called the
Bitcoin

1636
01:24:47,919 --> 01:24:51,999
wizards, they were all small blockers.

1637
01:24:51,999 --> 01:24:53,279
The IRC.

1638
01:24:53,279 --> 01:24:54,079
Precisely, yes.

1639
01:24:54,079 --> 01:24:54,959
Yes. Okay.

1640
01:24:55,919 --> 01:25:00,159
And but it was more of like running a node is annoying.

1641
01:25:00,959 --> 01:25:03,759
I'm responsible for syncing the whole blockchain.

1642
01:25:03,759 --> 01:25:06,559
I got to download and store and then serve it back.

1643
01:25:07,279 --> 01:25:08,639
So there was this kind of like...

1644
01:25:08,639 --> 01:25:11,679
Like technical people were actually dealing with node running were...

1645
01:25:12,799 --> 01:25:15,199
Back then, of course, there weren't really...

1646
01:25:15,919 --> 01:25:18,559
Back then, the exchanges would get hacked left and right, and everyone would lose
all

1647
01:25:18,559 --> 01:25:19,279
their money.

1648
01:25:19,279 --> 01:25:21,999
So people didn't keep their money on exchanges.

1649
01:25:21,999 --> 01:25:22,879
Right, right.

1650
01:25:22,879 --> 01:25:24,239
And everyone who did lost all their money.

1651
01:25:25,839 --> 01:25:26,559
Okay, so...

1652
01:25:26,559 --> 01:25:28,959
So you were running a node, mostly.

1653
01:25:29,679 --> 01:25:30,479
You would run Electrum.

1654
01:25:30,479 --> 01:25:31,279
If you were on Bitcoin.

1655
01:25:31,279 --> 01:25:34,799
You would either run like Electrum or Bitcoin Core or like two or three other
things.

1656
01:25:35,759 --> 01:25:36,719
You had to run a node.

1657
01:25:36,719 --> 01:25:38,879
You couldn't just like have a Trezor or whatever back then.

1658
01:25:39,919 --> 01:25:41,039
That didn't exist.

1659
01:25:41,039 --> 01:25:41,759
Right.

1660
01:25:41,759 --> 01:25:43,759
When did that revolution happen?

1661
01:25:43,759 --> 01:25:47,919
When did the cold storage like Trezor ledger revolution happen?

1662
01:25:47,919 --> 01:25:48,959
I mean, I don't know.

1663
01:25:49,519 --> 01:25:50,319
I wasn't really interested.

1664
01:25:50,319 --> 01:25:52,639
I always think hardware wallets are like not a great idea.

1665
01:25:52,639 --> 01:25:53,679
No offense to them.

1666
01:25:53,999 --> 01:25:56,079
They're like way better than the exchange.

1667
01:25:56,079 --> 01:25:57,519
I mean, that feels like a significant upgrade.

1668
01:25:57,519 --> 01:26:00,319
I would say like 2018, 2019 would be like my guess.

1669
01:26:00,319 --> 01:26:00,639
Okay.

1670
01:26:00,639 --> 01:26:01,359
Is when that...

1671
01:26:01,359 --> 01:26:04,079
The ledger leak, I think, wasn't that like 2019 or something?

1672
01:26:04,079 --> 01:26:04,639
Okay.

1673
01:26:04,639 --> 01:26:05,039
All right.

1674
01:26:05,039 --> 01:26:05,679
Okay, fair.

1675
01:26:05,679 --> 01:26:06,239
Exactly.

1676
01:26:06,239 --> 01:26:07,039
So the Drivechains...

1677
01:26:07,039 --> 01:26:08,799
So Drivechains was initially...

1678
01:26:08,799 --> 01:26:09,519
So this was...

1679
01:26:10,319 --> 01:26:11,119
I'm curious.

1680
01:26:11,119 --> 01:26:13,199
So this was well-received at first.

1681
01:26:13,199 --> 01:26:14,879
Drivechains were sort of like that.

1682
01:26:14,879 --> 01:26:16,959
It made it to the top of R slash Bitcoin.

1683
01:26:16,959 --> 01:26:18,479
It was even pinned there for a while.

1684
01:26:19,119 --> 01:26:19,679
Of what?

1685
01:26:19,679 --> 01:26:20,319
Of what?

1686
01:26:20,319 --> 01:26:21,759
R, Reddit, the subreddit.

1687
01:26:21,759 --> 01:26:22,479
Oh, okay.

1688
01:26:22,479 --> 01:26:24,239
That was the biggest place for news.

1689
01:26:24,239 --> 01:26:26,239
Okay, Reddit, Bitcoin Reddit.

1690
01:26:26,799 --> 01:26:32,559
And then I got out of the way for SegWit and Lightning.

1691
01:26:32,559 --> 01:26:34,639
And so I kind of didn't really pursue the issue.

1692
01:26:34,639 --> 01:26:35,839
So you let it go for a minute.

1693
01:26:35,839 --> 01:26:38,479
But then SegWit was not...

1694
01:26:39,279 --> 01:26:41,759
I did present at Scaling 3 again because I was asked to.

1695
01:26:42,479 --> 01:26:44,399
And about scaling with sidechains.

1696
01:26:44,399 --> 01:26:47,039
And I gave what I thought was a very good presentation.

1697
01:26:47,039 --> 01:26:50,079
But SegWit still had not shipped.

1698
01:26:50,079 --> 01:26:51,679
Because you asked about the whole history of it.

1699
01:26:51,679 --> 01:26:51,999
Right.

1700
01:26:51,999 --> 01:26:55,119
And these are long, boring war stories, perhaps.

1701
01:26:55,119 --> 01:26:57,199
But SegWit, it was...

1702
01:26:57,199 --> 01:26:58,639
We had Scaling 1 in 2015.

1703
01:26:58,639 --> 01:27:03,279
Then at December 2015, Scaling 2, everyone agreed that SegWit would be...

1704
01:27:04,159 --> 01:27:05,279
You know, I say everyone agreed.

1705
01:27:05,279 --> 01:27:09,039
But the feeling of the room was that we'll do SegWit so that we can do Lightning.

1706
01:27:09,039 --> 01:27:09,599
Right.

1707
01:27:09,599 --> 01:27:11,759
And then everyone seemed in agreement on that.

1708
01:27:11,759 --> 01:27:12,259
Okay.

1709
01:27:13,919 --> 01:27:14,879
Someone said...

1710
01:27:14,879 --> 01:27:15,999
I don't know who this was.

1711
01:27:15,999 --> 01:27:16,719
Someone threw out...

1712
01:27:17,439 --> 01:27:19,439
Someone asked, when do you think SegWit will be done?

1713
01:27:19,519 --> 01:27:23,199
And someone said, like, April 1st, maybe.

1714
01:27:25,759 --> 01:27:27,439
So April 1st came and went.

1715
01:27:27,439 --> 01:27:30,079
But SegWit, the code wasn't finished.

1716
01:27:30,639 --> 01:27:31,139
Okay.

1717
01:27:31,679 --> 01:27:33,999
Software code always takes much longer than you think, of course.

1718
01:27:33,999 --> 01:27:34,719
Right.

1719
01:27:34,719 --> 01:27:40,399
And this was seen as, like, going back on an agreement or something.

1720
01:27:40,399 --> 01:27:43,279
Because by now, these two camps were paranoid.

1721
01:27:44,079 --> 01:27:45,599
You know how this is, I think.

1722
01:27:45,599 --> 01:27:50,639
Because you seem, like, you know, much smarter than the people who were around at
the time.

1723
01:27:50,639 --> 01:27:55,039
They were all, like, a bunch of weird, autistic, crazy, emotionally weird, neurotic
people,

1724
01:27:55,039 --> 01:27:55,539
of course.

1725
01:27:55,539 --> 01:27:56,039
Okay.

1726
01:27:56,039 --> 01:27:57,119
But, you know, this is what we're dealing with.

1727
01:27:57,119 --> 01:27:58,559
Right, right. This is what we're dealing with.

1728
01:27:59,599 --> 01:28:02,159
We're dealing with, like, these weird people, of course.

1729
01:28:02,159 --> 01:28:02,659
Right.

1730
01:28:02,659 --> 01:28:03,199
Which is fine.

1731
01:28:03,199 --> 01:28:06,319
Big winners do attract neurotic, paranoid people in general.

1732
01:28:06,319 --> 01:28:06,819
Yeah.

1733
01:28:06,819 --> 01:28:07,439
Exactly.

1734
01:28:07,439 --> 01:28:07,999
Yeah.

1735
01:28:07,999 --> 01:28:11,679
We're gonna, you know, fight the state.

1736
01:28:11,679 --> 01:28:12,479
And we're going to, like...

1737
01:28:12,959 --> 01:28:13,459
Right.

1738
01:28:13,919 --> 01:28:14,639
Trust no one.

1739
01:28:14,639 --> 01:28:15,139
Yeah.

1740
01:28:15,299 --> 01:28:18,259
And we're going to replace the existing financial infrastructure.

1741
01:28:18,259 --> 01:28:18,759
So...

1742
01:28:19,059 --> 01:28:19,619
Okay.

1743
01:28:19,619 --> 01:28:20,579
They were...

1744
01:28:22,899 --> 01:28:26,979
In situations like this, people have very uncharitable interpretations of each
other's

1745
01:28:26,979 --> 01:28:27,699
behavior, right?

1746
01:28:27,699 --> 01:28:28,259
Right.

1747
01:28:28,259 --> 01:28:30,179
So they were, like, complaining.

1748
01:28:30,179 --> 01:28:33,779
And then they flew these people, Matt Corallo and Adam Back and some other people.

1749
01:28:33,779 --> 01:28:35,379
They did this, like, Hong Kong agreement.

1750
01:28:35,379 --> 01:28:36,339
Mm-hmm.

1751
01:28:36,339 --> 01:28:36,839
They said...

1752
01:28:37,539 --> 01:28:38,579
Oh, actually, that might have been...

1753
01:28:38,579 --> 01:28:39,219
I might be telling a story slightly out of agreement.

1754
01:28:39,219 --> 01:28:40,419
The Hong Kong agreement.

1755
01:28:40,419 --> 01:28:42,499
Was that, like, when we're going to implement SegWit?

1756
01:28:42,499 --> 01:28:43,539
What was the Hong Kong agreement?

1757
01:28:43,539 --> 01:28:45,299
Actually, I think that might have been...

1758
01:28:45,939 --> 01:28:49,299
I don't want to say now because I can't quite remember, but people can look it up.

1759
01:28:49,299 --> 01:28:51,219
But there was a timeline that involved...

1760
01:28:52,899 --> 01:28:57,699
What I want to emphasize is that SegWit was not ready on the April 1st date.

1761
01:28:57,699 --> 01:28:58,019
Okay.

1762
01:28:58,019 --> 01:29:02,899
And, in fact, we spent all of 2016 kind of in limbo.

1763
01:29:02,899 --> 01:29:06,819
And Ethereum went from being, like, this very, very tiny nothing project to, like,

1764
01:29:06,819 --> 01:29:08,979
gaining a lot of momentum at the time.

1765
01:29:08,979 --> 01:29:14,899
So by the time Scaling 3 happened, which was in October of 2016, SegWit still hadn't
shipped.

1766
01:29:15,859 --> 01:29:18,819
And I'm, like, still just, like, waiting to give my little PowerPoint presentation.

1767
01:29:18,819 --> 01:29:20,179
There's no Drivechain code or anything.

1768
01:29:20,179 --> 01:29:22,339
And you had basically paused, like,

1769
01:29:22,339 --> 01:29:25,699
real development of Drivechains because you were waiting for SegWit to happen.

1770
01:29:25,699 --> 01:29:32,019
There's, like, a little bit of, like, tinkering for fun.

1771
01:29:32,019 --> 01:29:32,519
Sure.

1772
01:29:33,219 --> 01:29:34,819
No BIP, no...

1773
01:29:34,819 --> 01:29:35,939
This is, like, a common thing.

1774
01:29:35,939 --> 01:29:38,099
Jeremy Rubin was saying the same thing with CTV.

1775
01:29:38,099 --> 01:29:40,019
He went through, like, there was, like, a whole period where it's, like,

1776
01:29:40,019 --> 01:29:42,979
he wasn't really supposed to, like, push anything forward with CTV

1777
01:29:42,979 --> 01:29:45,059
because he was waiting for, I think it was Taproot.

1778
01:29:45,059 --> 01:29:45,859
Probably Taproot.

1779
01:29:45,859 --> 01:29:46,419
Right, yeah, exactly.

1780
01:29:46,419 --> 01:29:54,179
In fact, he did a lot of the legwork or whatever to activate Taproot, possibly
because...

1781
01:29:55,379 --> 01:29:58,259
But, you know, to get back to our little story,

1782
01:29:58,259 --> 01:30:01,619
I told you it would be a long, boring war story type situation.

1783
01:30:01,699 --> 01:30:08,499
So, SegWit is not even shipped until the hackathon after Scaling 3.

1784
01:30:09,139 --> 01:30:12,979
One of the miners, the ViyaBTC miner, with 9% of the hash rate,

1785
01:30:13,699 --> 01:30:19,219
he showed up and the schedule, if you open the program, I have a blog post about
this,

1786
01:30:19,219 --> 01:30:23,779
there's only, like, three talks in the Scaling 3 program that are actually about
scaling.

1787
01:30:24,579 --> 01:30:25,379
One of them is mine.

1788
01:30:25,939 --> 01:30:30,419
But the ones that are, they are kind of, like, there's no software out.

1789
01:30:31,059 --> 01:30:34,019
They're very academic and kind of, like, theoretical.

1790
01:30:34,019 --> 01:30:34,519
Okay.

1791
01:30:34,979 --> 01:30:38,979
So, if you thought this Scaling 3 would be like Scaling 1 and 2,

1792
01:30:39,859 --> 01:30:44,739
you were a little disappointed because Scaling 1 and 2 are kind of like a war
summit.

1793
01:30:44,739 --> 01:30:49,299
They're kind of like Zelensky and Putin are going to meet and we're going to have a
bunch of

1794
01:30:49,299 --> 01:30:52,259
UN people with guns there to make sure no one kills anyone, right?

1795
01:30:52,259 --> 01:30:56,659
And we're going to kind of, like, see if we can talk this out and we can get
something to happen.

1796
01:30:57,459 --> 01:30:59,539
But Scaling 3 is, like, this academic,

1797
01:31:00,579 --> 01:31:02,259
this, like, cryptography and stuff about privacy.

1798
01:31:02,259 --> 01:31:04,499
The whole first half of day one was about privacy.

1799
01:31:05,459 --> 01:31:06,979
So, it wasn't even about scaling.

1800
01:31:06,979 --> 01:31:11,539
So, that guy actually turned and rebooked his flight and left immediately to signal,

1801
01:31:11,539 --> 01:31:16,979
to change his client to Bitcoin Unlimited, which had 9% of the hash rate.

1802
01:31:16,979 --> 01:31:22,339
At the time, we used BIP-9 activation, which required a 95% hash rate threshold.

1803
01:31:23,299 --> 01:31:27,939
So, right as they're about to finally ship SegWit after almost a year of work,

1804
01:31:27,939 --> 01:31:28,819
They couldn't get minor contenders.

1805
01:31:28,819 --> 01:31:33,699
They now, well, my guess, I don't know if this is the case,

1806
01:31:33,699 --> 01:31:39,539
but my guess is that the ViabTC guy didn't even know about or didn't understand the
95%

1807
01:31:40,579 --> 01:31:42,499
threshold or how it would be perceived.

1808
01:31:42,499 --> 01:31:48,739
But, of course, this was psychologically traumatic to the developers who were
working on SegWit.

1809
01:31:48,739 --> 01:31:51,939
They thought, we worked on it this whole time, now what are we going to do?

1810
01:31:52,099 --> 01:31:54,899
This is when the soft fork became the political football,

1811
01:31:54,899 --> 01:31:58,179
and it's never lost that status, unfortunately.

1812
01:31:58,179 --> 01:32:03,139
We had to wait all the way from 2016 through 2017 for it to activate.

1813
01:32:03,139 --> 01:32:05,139
The miners did the New York agreement.

1814
01:32:06,339 --> 01:32:15,059
They announced that at consensus in May of 2017, which said that SegWit will
activate

1815
01:32:15,539 --> 01:32:21,619
on August 1st, and then there will be a two megabyte block size increase,

1816
01:32:21,619 --> 01:32:25,779
2XL1 megabyte block size increase, three months later in November.

1817
01:32:26,899 --> 01:32:27,859
Everyone hated all this.

1818
01:32:27,859 --> 01:32:30,339
So, this is all, why does this have to do with Drivechain?

1819
01:32:30,339 --> 01:32:31,939
Drivechain is kind of miner-centric.

1820
01:32:31,939 --> 01:32:35,299
That's how it stays decentralized, and it doesn't have any of these update keys,

1821
01:32:35,299 --> 01:32:36,659
and it doesn't have any of these gimmicks,

1822
01:32:36,659 --> 01:32:39,859
like it's not secretly multi-sig beneath the hood or whatever.

1823
01:32:39,859 --> 01:32:42,899
But it's inherently related to the miners.

1824
01:32:42,899 --> 01:32:44,739
Each block is like a vote.

1825
01:32:44,819 --> 01:32:47,299
Each block is like a cross-chain confirmation.

1826
01:32:47,859 --> 01:32:50,019
So, it's not like they literally vote.

1827
01:32:50,019 --> 01:32:53,699
But in the same way that each block confirms a Bitcoin transaction,

1828
01:32:53,699 --> 01:32:59,139
you need a lot of blocks to move the money from the L2 chain back to the L1 chain.

1829
01:33:00,579 --> 01:33:04,179
And so, it just uses miners only, and it pays the fees to the miners.

1830
01:33:04,179 --> 01:33:09,059
So, the security model is that the miners would farm up the L2 chains for money.

1831
01:33:09,059 --> 01:33:11,139
So, since my design was very miner-centric,

1832
01:33:11,699 --> 01:33:15,139
miners became unbelievably unpopular during 2017.

1833
01:33:15,859 --> 01:33:18,339
And this is also the origin of the Stratum V2.

1834
01:33:18,339 --> 01:33:19,619
That's interesting.

1835
01:33:19,619 --> 01:33:23,139
Where people say, we're so worried about miners misbehaving,

1836
01:33:23,139 --> 01:33:25,379
we're so worried about MEV, the UASF,

1837
01:33:25,379 --> 01:33:30,739
to activate SegWit on a bit more or less the same day, in spite of the miners.

1838
01:33:30,739 --> 01:33:34,659
So, you're saying that the fact that Drivechains maybe was perceived as being sort
of like,

1839
01:33:34,659 --> 01:33:36,899
you know, being miner-supportive.

1840
01:33:36,899 --> 01:33:37,859
Maybe that's not the way it should be.

1841
01:33:37,859 --> 01:33:38,979
In league with the enemy.

1842
01:33:38,979 --> 01:33:40,179
Right, in league with the enemy.

1843
01:33:40,179 --> 01:33:43,139
This was around the time that miners were becoming unpopular.

1844
01:33:43,139 --> 01:33:44,979
Which they kind of still are, right?

1845
01:33:44,979 --> 01:33:46,339
Right, they have never recovered.

1846
01:33:46,339 --> 01:33:48,419
And they are also like the large blockers.

1847
01:33:48,419 --> 01:33:50,419
Even though they have never done anything wrong, the miners.

1848
01:33:52,099 --> 01:33:56,659
The irony is SegWit activated before the UASF.

1849
01:33:56,659 --> 01:34:00,019
It was almost certainly because of the threat of the imminent UASF,

1850
01:34:00,019 --> 01:34:06,499
but miners actually kind of flinched and activated it via BIP-9 two weeks before.

1851
01:34:06,499 --> 01:34:09,299
You're saying prior to this moment, basically,

1852
01:34:09,299 --> 01:34:14,659
where this 95% threshold wasn't met by the miners when SegWit was attempting to be
activated,

1853
01:34:14,659 --> 01:34:19,779
you think that's when the minor unpopularity started?

1854
01:34:20,339 --> 01:34:20,979
Well, certainly.

1855
01:34:20,979 --> 01:34:24,979
Then they signed, the New York agreement was in May 2017.

1856
01:34:25,619 --> 01:34:28,659
And 83% of the hash rate had signed this.

1857
01:34:28,659 --> 01:34:31,219
And they said, we want SegWit to activate,

1858
01:34:31,219 --> 01:34:36,099
and then we want a hard fork from one megabyte to two megabytes on L1.

1859
01:34:37,299 --> 01:34:39,059
But this is outrageously unpopular.

1860
01:34:39,859 --> 01:34:43,619
And people thought, this is now we're hostage trading for SegWit,

1861
01:34:43,619 --> 01:34:45,779
which is something we thought we would have already had by now,

1862
01:34:46,579 --> 01:34:49,219
which we think we can get anyway with UASF, which they did.

1863
01:34:50,019 --> 01:34:52,419
And then it doesn't make any sense, the three-month delay.

1864
01:34:52,419 --> 01:34:56,179
It's like you have a hostage, you're going to exchange hostages.

1865
01:34:56,899 --> 01:34:59,539
You get all your hostages back, and then three months later,

1866
01:34:59,539 --> 01:35:02,339
you're going to release the, you know, like it was a stupid idea.

1867
01:35:02,339 --> 01:35:03,779
And that's why SegWit2x didn't work.

1868
01:35:03,779 --> 01:35:08,019
It was one of the many bad ideas of the large blockers.

1869
01:35:08,019 --> 01:35:14,579
They were not as skilled technically or, you know, politically.

1870
01:35:15,139 --> 01:35:18,179
So SegWit2x fell apart, Bitcoin Cash,

1871
01:35:18,179 --> 01:35:21,539
Roger then made a video saying that he supports Bitcoin Cash,

1872
01:35:21,539 --> 01:35:23,699
and he's going to support Bitcoin Cash with Bitcoin.com.

1873
01:35:23,699 --> 01:35:25,939
Bitcoin Cash, meanwhile, had already accidentally,

1874
01:35:25,939 --> 01:35:27,539
you know, I don't know about accidentally,

1875
01:35:27,539 --> 01:35:30,259
but it wasn't part of any BTC plan.

1876
01:35:30,259 --> 01:35:33,939
It had been created on the same day that SegWit activated,

1877
01:35:33,939 --> 01:35:36,419
coincidence or there was no particular reason.

1878
01:35:36,419 --> 01:35:38,419
But it had already been in limbo this whole time.

1879
01:35:38,419 --> 01:35:42,579
This now kicked off the block size war, which was,

1880
01:35:43,219 --> 01:35:47,059
now things got even worse, because now you have BCH versus BTC.

1881
01:35:47,059 --> 01:35:50,339
And now people can make money or lose money on Bitcoin.com.

1882
01:35:50,339 --> 01:35:52,339
Maybe people get confused about the brand.

1883
01:35:52,339 --> 01:35:54,819
So this triggered a whole new period of time.

1884
01:35:55,459 --> 01:35:59,059
But right before all this happened, there was in 2017,

1885
01:35:59,059 --> 01:36:02,659
as I mentioned to you before, someone, I believe it was

1886
01:36:04,899 --> 01:36:07,459
one of the moderators of, I think it was Thamos,

1887
01:36:09,059 --> 01:36:14,099
he revived, he had a Luke Dashjr. mailing list post about Drivechain.

1888
01:36:14,099 --> 01:36:15,059
He revived it and he said,

1889
01:36:15,059 --> 01:36:19,619
we can get small blocks on L1 and large blocks on L2.

1890
01:36:19,619 --> 01:36:23,219
And he, with the moderator's special power,

1891
01:36:23,219 --> 01:36:26,019
he stuck it on top of our Bitcoin for like,

1892
01:36:26,019 --> 01:36:27,939
I don't know, maybe like 10 days or something.

1893
01:36:28,499 --> 01:36:30,819
So they became more popular than,

1894
01:36:32,179 --> 01:36:35,779
unfortunately, after Roger Ver and the large blocker people split off,

1895
01:36:39,299 --> 01:36:41,299
those people would have been like maybe what you might say,

1896
01:36:41,299 --> 01:36:42,499
customers of Drivechain.

1897
01:36:43,139 --> 01:36:46,259
But now everyone thinks we don't need a compromise,

1898
01:36:46,259 --> 01:36:47,459
because everyone thinks they're going to win.

1899
01:36:47,459 --> 01:36:51,299
And even Roger Ver thinks Bitcoin Cash will flip BTC when the fees go up.

1900
01:36:52,019 --> 01:36:54,499
So now no one's interested in a compromise anymore.

1901
01:36:55,299 --> 01:36:57,299
Everyone just, and then even still,

1902
01:36:57,299 --> 01:37:00,259
when Bitcoin Cash was kind of defeated by BTC,

1903
01:37:01,939 --> 01:37:04,979
then people thought, well, we don't need,

1904
01:37:06,099 --> 01:37:09,139
this proves that Bitcoin is the best and we don't,

1905
01:37:09,139 --> 01:37:12,339
and that everyone else, every, all variants of it are simply wrong.

1906
01:37:13,139 --> 01:37:16,339
And that triggered this long period that lasted us all the way to Bitcoin Season 2,

1907
01:37:16,339 --> 01:37:18,499
when people finally were ready to accept

1908
01:37:18,499 --> 01:37:22,339
that it might be possible to have an improved idea over,

1909
01:37:23,059 --> 01:37:25,699
over hundreds and hundreds of people working for years

1910
01:37:25,699 --> 01:37:28,259
to like work on ZK knowledge.

1911
01:37:28,259 --> 01:37:30,899
So originally, when all the block size wars were happening,

1912
01:37:30,899 --> 01:37:32,019
you kind of took a backseat.

1913
01:37:32,019 --> 01:37:34,419
I mean, you had put out this paper, people were talking about it,

1914
01:37:34,419 --> 01:37:37,299
but you weren't like really actively, it wasn't a BIP yet.

1915
01:37:37,299 --> 01:37:40,579
Had you even, you had likely hadn't even submitted it as a BIP.

1916
01:37:40,579 --> 01:37:42,499
Right, I didn't do that until I submitted,

1917
01:37:42,499 --> 01:37:44,659
had some kind of version that was like really badly written,

1918
01:37:44,659 --> 01:37:46,019
and I'm like very ashamed of.

1919
01:37:46,019 --> 01:37:48,019
But then I think it was February 2018,

1920
01:37:48,739 --> 01:37:51,459
I had cleaned it up and assigned,

1921
01:37:51,459 --> 01:37:54,579
got the numbers assigned by Luke or something that may be correct.

1922
01:37:54,579 --> 01:37:59,219
And then did Luke help you write an activation client?

1923
01:37:59,219 --> 01:37:59,699
Did Luke work for you at one point?

1924
01:37:59,699 --> 01:38:02,339
There was a pull request in 2023,

1925
01:38:03,379 --> 01:38:06,819
Luke got like hacked and like all his Bitcoins were stolen or something.

1926
01:38:06,819 --> 01:38:07,219
That's right.

1927
01:38:07,219 --> 01:38:10,339
So then he was like asking around for work.

1928
01:38:10,339 --> 01:38:12,979
And I said, well, we have, this was the truth.

1929
01:38:13,539 --> 01:38:16,019
We had done the tinkering with,

1930
01:38:16,659 --> 01:38:18,659
as you mentioned with Jeremy Rubin,

1931
01:38:18,659 --> 01:38:20,259
you know, you kind of like, you write an idea,

1932
01:38:20,259 --> 01:38:23,859
you write a blog post informally, then you write a BIP, more formal,

1933
01:38:23,859 --> 01:38:25,619
then you write the code.

1934
01:38:25,619 --> 01:38:27,779
All the time you're kind of learning things about like,

1935
01:38:28,579 --> 01:38:30,179
it's getting a little bit more specific.

1936
01:38:30,179 --> 01:38:32,659
You don't have it all figured out on day one, it's not possible.

1937
01:38:32,659 --> 01:38:33,059
Right.

1938
01:38:33,059 --> 01:38:34,659
It's kind of like you start building a house,

1939
01:38:35,699 --> 01:38:38,099
you kind of like don't really know, like you don't even know,

1940
01:38:38,659 --> 01:38:41,699
you're not going to say, what art am I going to put on the walls?

1941
01:38:41,699 --> 01:38:44,019
Like you need to wait and see like what the house looks like.

1942
01:38:44,019 --> 01:38:45,939
Details emerge as you're building this thing.

1943
01:38:45,939 --> 01:38:46,499
Precisely.

1944
01:38:47,539 --> 01:38:48,819
What kind of couch am I going to buy?

1945
01:38:48,819 --> 01:38:52,019
Like you don't really know, like on day one, it's not possible.

1946
01:38:52,019 --> 01:38:54,099
So we're fleshing it out a little bit more.

1947
01:38:55,859 --> 01:39:01,859
But we've just been tinkering with the code on an old version of like Bitcoin 16.99,

1948
01:39:01,859 --> 01:39:03,059
which is like from 2017.

1949
01:39:03,939 --> 01:39:06,899
So I've never like rebased the code.

1950
01:39:07,459 --> 01:39:11,619
In other words, we had a version that worked with fake play money.

1951
01:39:12,179 --> 01:39:14,899
But it's a fork of Bitcoin Core from 2017.

1952
01:39:14,899 --> 01:39:17,699
And now this is 2023 that you're asking about.

1953
01:39:19,781 --> 01:39:46,781
And so I was like, well, Luke Dashjr. is an expert in Bitcoin. So maybe he can
either like help us rebase or do the pull request. And he wanted to do the pull
request. So then he did the work in progress pull requests. But like then it
became... He just wrote it, but he never like publicly like supported it or like was
like into it. He wasn't an advocate. He just wrote it. I would say that I'm not
sure. I think he's sort of against it now.

1954
01:39:46,781 --> 01:39:55,781
But actually he had supportive quotes of it. Like as I mentioned, the thing that
they most stickied back in 2017 was from Luke talking about how you can get small
and large blocks at the same time.

1955
01:39:55,781 --> 01:40:05,781
And Luke also, I think he correctly understands that there's no risk to Drivechain
because we already have, as he said, this is like his quote, more or less.

1956
01:40:05,781 --> 01:40:21,781
He says, we already have merge mining and we already have the ability to just send
coins to a group of people or into a certain... You can send your coins into the
abyss if you want. So Drivechain does not actually add any new type of risk.

1957
01:40:21,781 --> 01:40:23,781
Okay. Interesting.

1958
01:40:51,781 --> 01:40:54,781
And if there's too much SPV, it will kill the project. To me, that makes no sense at
all.

1959
01:40:54,781 --> 01:40:59,781
We're going to come back to this USF because that's like I feel like later a more
advanced part of the story.

1960
01:40:59,781 --> 01:41:10,781
Okay. So the BIP happens. The BIP is written. At what point... What's the response
to this like official formal BIP? Like what was like the height of Drivechains being
discussed and talked about and debated?

1961
01:41:11,781 --> 01:41:31,781
Well, yeah. After Luke's pull request, I think it did trigger the... Now we have...
You can see that we have people who will react like when you get close to Bitcoin
Core, there's like an immune system sort of response. You see with the up return and
with CTV.

1962
01:41:31,781 --> 01:41:35,781
Like immune system response, like a negative immune system response?

1963
01:41:35,781 --> 01:41:37,781
Just like an intense skepticism, I would call it.

1964
01:41:37,781 --> 01:41:43,781
Anytime Bitcoin Core developers get involved or make decisions or do things, there's
all of a sudden like criticisms.

1965
01:41:43,781 --> 01:41:45,781
Yeah, which is a good thing.

1966
01:41:45,781 --> 01:41:46,781
That's somewhat healthy.

1967
01:41:46,781 --> 01:41:47,781
Yeah, that is a good thing.

1968
01:41:47,781 --> 01:41:48,781
That's healthy.

1969
01:41:48,781 --> 01:41:49,781
Yeah, there's nothing wrong with that.

1970
01:41:49,781 --> 01:41:50,781
Right.

1971
01:41:50,781 --> 01:41:53,781
It's a sign of how prominent it is.

1972
01:41:53,781 --> 01:41:54,781
Right.

1973
01:41:54,781 --> 01:41:55,781
But yeah, in this case...

1974
01:41:55,781 --> 01:41:56,781
And it's a sign of, you know, I mean...

1975
01:41:56,781 --> 01:41:59,781
Then it became like incredibly talked about.

1976
01:42:00,781 --> 01:42:01,781
So after the pull request...

1977
01:42:01,781 --> 01:42:03,781
That was like late August.

1978
01:42:03,781 --> 01:42:05,781
It was like September of 2023.

1979
01:42:05,781 --> 01:42:13,781
Then it had this huge explosion of interest and controversy and just completely
fabricated nonsensical lies.

1980
01:42:13,781 --> 01:42:15,781
I was here for this part.

1981
01:42:15,781 --> 01:42:16,781
This I remember.

1982
01:42:16,781 --> 01:42:18,781
I was sort of vaguely watching this.

1983
01:42:18,781 --> 01:42:19,781
Okay, that makes sense.

1984
01:42:19,781 --> 01:42:21,781
So it was end of 2023.

1985
01:42:21,781 --> 01:42:22,781
The pull request happens.

1986
01:42:22,781 --> 01:42:24,781
This is post him getting hacked.

1987
01:42:24,781 --> 01:42:26,781
And then you basically hired him to do this.

1988
01:42:26,781 --> 01:42:27,781
And then there was a lot of...

1989
01:42:27,781 --> 01:42:33,781
This was right after because I think it was like April or something in 2023 that I
first started talking to him, Luke, about this.

1990
01:42:33,781 --> 01:42:39,781
And we had just raised LayerTwo Labs had just been created in December of 2022.

1991
01:42:39,781 --> 01:42:42,781
And was LayerTwo Labs going to be like the...

1992
01:42:42,781 --> 01:42:45,781
What was the intention behind LayerTwo Labs essentially?

1993
01:42:45,781 --> 01:42:50,781
Well, yeah, a lot of people are very concerned about the direction Bitcoin was
moving in.

1994
01:42:50,781 --> 01:42:56,781
And it's basically the fact that you can't even talk about it is a big part of the
problem.

1995
01:42:56,781 --> 01:43:00,781
It's like the culture makes it difficult to discuss all these derangements and
things.

1996
01:43:00,781 --> 01:43:07,781
But, yeah, we had a lot of, like, former lightning enthusiasts and people who are
interested in the Drivechain idea.

1997
01:43:07,781 --> 01:43:25,781
So this is a group of people to basically try to advance, create Drivechains, like
create the L2 chains and make them be very good and high quality user experience and
give people privacy, give people scale, give them the ability to do the EVM.

1998
01:43:26,781 --> 01:43:30,781
The mission of LayerTwo Labs was like broad, like we need to scale Bitcoin.

1999
01:43:30,781 --> 01:43:34,781
Basically, it wasn't necessarily dependent on Drivechains.

2000
01:43:34,781 --> 01:43:37,781
I would say that it is focused on Drivechains.

2001
01:43:37,781 --> 01:43:40,781
No, the business is not focused.

2002
01:43:40,781 --> 01:43:48,781
Was there ever a Drivechains dependency in Layer Labs' mission?

2003
01:43:48,781 --> 01:43:50,781
Like, did you need those tips to pass?

2004
01:43:50,781 --> 01:43:53,781
I wouldn't describe it like that.

2005
01:43:53,781 --> 01:43:54,781
No, we do not.

2006
01:43:54,781 --> 01:43:55,781
No, no.

2007
01:43:55,781 --> 01:44:09,781
But I still think we want – I didn't invent – it's not like I invented Drivechain in
order to make – so right now Litecoin, since – because I actually tinker with the
software and stuff, too.

2008
01:44:09,781 --> 01:44:11,781
So I'm not like Jeremy Rubin.

2009
01:44:11,781 --> 01:44:13,781
It's kind of a lot to explain.

2010
01:44:14,781 --> 01:44:24,781
But basically what I'm trying to get at is I didn't – right now Litecoin kind of
wants to activate BIP300 on their own thing and have their own Drivechains.

2011
01:44:24,781 --> 01:44:27,781
Are there any chains that have BIP300 activated?

2012
01:44:27,781 --> 01:44:28,781
No.

2013
01:44:28,781 --> 01:44:32,781
Well, that's partly because the CUSF client is new.

2014
01:44:32,781 --> 01:44:36,781
So this is where it's a little bit difficult to explain.

2015
01:44:36,781 --> 01:44:40,781
But just because something is the idea, it doesn't mean that there's activation
client.

2016
01:44:40,781 --> 01:44:47,781
So even if you write the activation client, that is like a – traditionally that
would be like a version of Bitcoin Core that has a couple lines changed.

2017
01:44:47,781 --> 01:44:48,781
Right.

2018
01:44:48,781 --> 01:44:49,781
They add CTV or something.

2019
01:44:49,781 --> 01:44:50,781
Right.

2020
01:44:50,781 --> 01:44:53,781
Bitcoin Core, however, is constantly updating their client.

2021
01:44:53,781 --> 01:44:54,781
OK.

2022
01:44:54,781 --> 01:44:57,781
This is what's called rebasing or rebase hell sometimes.

2023
01:44:57,781 --> 01:44:58,781
OK.

2024
01:44:58,781 --> 01:45:01,781
Because they are changing the Bitcoin Core.

2025
01:45:01,781 --> 01:45:02,781
Right.

2026
01:45:02,781 --> 01:45:06,781
Sometimes they have to because of these CVEs, which are secret bugs that only they
know about.

2027
01:45:06,781 --> 01:45:07,781
Right, right.

2028
01:45:07,781 --> 01:45:10,781
And so they have to fix them and they also have to lie about what they're doing.

2029
01:45:10,781 --> 01:45:11,781
Right.

2030
01:45:11,781 --> 01:45:12,781
Because they can't say –

2031
01:45:12,781 --> 01:45:13,781
Because it's like the military.

2032
01:45:13,781 --> 01:45:14,781
There is a bug here where – exactly.

2033
01:45:14,781 --> 01:45:15,781
Yeah.

2034
01:45:15,781 --> 01:45:16,781
Where someone – you can take everyone's money.

2035
01:45:16,781 --> 01:45:17,781
Right.

2036
01:45:17,781 --> 01:45:22,781
And so they have to fix it and wait for enough people to upgrade and then disclose
it two years later.

2037
01:45:22,781 --> 01:45:26,781
So you kind of have no choice but to use the latest version.

2038
01:45:26,781 --> 01:45:36,781
And you also – it's – you have to – if you make it – this is why – so we made it off
of the old 2017 version, but I never rebased it.

2039
01:45:36,781 --> 01:45:39,781
Because as soon as you rebase it, you have to keep rebasing it forever.

2040
01:45:39,781 --> 01:45:40,781
Right.

2041
01:45:40,781 --> 01:45:42,781
And you're just being drained of life vampirically by Bitcoin Core.

2042
01:45:42,781 --> 01:45:45,781
Well, and also wouldn't whatever old version inherit any of the bugs that –

2043
01:45:45,781 --> 01:45:46,781
Yeah.

2044
01:45:46,781 --> 01:45:49,781
Our old version, of course, would have had any bugs that – and, of course, it didn't
have –

2045
01:45:49,781 --> 01:45:52,781
And those bugs do eventually become public when Bitcoin Core says what they are.

2046
01:45:52,781 --> 01:45:53,781
Yes.

2047
01:45:53,781 --> 01:45:54,781
Right.

2048
01:45:54,781 --> 01:45:55,781
Of course.

2049
01:45:55,781 --> 01:45:56,781
Precisely.

2050
01:45:56,781 --> 01:45:57,781
Yeah, yeah, yeah.

2051
01:45:57,781 --> 01:45:58,781
OK.

2052
01:45:58,781 --> 01:45:59,781
So you kind of – you even need to – if you have a fork of Bitcoin Core, you need to
upgrade basically.

2053
01:45:59,781 --> 01:46:01,781
I mean if you have like a Litecoin.

2054
01:46:01,781 --> 01:46:02,781
Yes.

2055
01:46:02,781 --> 01:46:03,781
Yeah.

2056
01:46:03,781 --> 01:46:11,781
I think Litecoin was just a patch set on – and I think it's – that's very smart when
it was to say we are just Bitcoin Core plus this list of changes.

2057
01:46:11,781 --> 01:46:12,781
You know what I mean?

2058
01:46:12,781 --> 01:46:13,781
It's like we are –

2059
01:46:13,781 --> 01:46:14,781
Yeah.

2060
01:46:14,781 --> 01:46:15,781
It makes sense.

2061
01:46:15,781 --> 01:46:16,781
It makes sense.

2062
01:46:16,781 --> 01:46:17,781
OK.

2063
01:46:17,781 --> 01:46:20,781
But the point of all this is I didn't really invent Drivechain to make Litecoin be
the number one winning coin and destroy Bitcoin.

2064
01:46:20,781 --> 01:46:21,781
Well, of course.

2065
01:46:21,781 --> 01:46:22,781
Of course.

2066
01:46:22,781 --> 01:46:25,781
It would be kind of interesting to just like see it all or to see it in action.

2067
01:46:25,781 --> 01:46:26,781
Of course.

2068
01:46:26,781 --> 01:46:27,781
Yeah.

2069
01:46:27,781 --> 01:46:29,781
And I don't think it would destroy Bitcoin overnight or whatever.

2070
01:46:29,781 --> 01:46:30,781
No.

2071
01:46:31,781 --> 01:46:34,781
LayerTwo Labs was created by people who want Bitcoin to succeed.

2072
01:46:34,781 --> 01:46:38,781
So that's – we have people who believe that that would help.

2073
01:46:38,781 --> 01:46:40,781
It's sort of like Starkware and OP_CAT maybe.

2074
01:46:40,781 --> 01:46:43,781
It's like they want OP_CAT to happen but they're not dependent on OP_CAT.

2075
01:46:43,781 --> 01:46:44,781
Right.

2076
01:46:44,781 --> 01:46:46,781
They're like of course going to support OP_CAT.

2077
01:46:46,781 --> 01:46:47,781
Yeah.

2078
01:46:47,781 --> 01:46:54,781
But like I think many of the fallback plans are worse for – are maybe better for the
company but worse for Bitcoin.

2079
01:46:54,781 --> 01:46:55,781
So we don't want those.

2080
01:46:55,781 --> 01:47:01,781
So what are you like most focused on building at LayerTwo Labs or what were you
initially most focused on building?

2081
01:47:01,781 --> 01:47:13,781
Some of the things that I was determined to bring, the large block L2, which is
basically like a very simple blockchain that just has a larger block size so that we
could scale to the world.

2082
01:47:13,781 --> 01:47:15,781
We could test the performance.

2083
01:47:16,781 --> 01:47:19,781
But another thing I really wanted to do is bring privacy.

2084
01:47:19,781 --> 01:47:28,781
We have something where it's like uses the similar orchard crate from Zcash.

2085
01:47:28,781 --> 01:47:33,781
So you basically have Z addresses that hide the sender, the receiver, and the
amount.

2086
01:47:33,781 --> 01:47:38,781
That's something that was invented by a lot of people but basically Zcash.

2087
01:47:38,781 --> 01:47:42,781
So it's like protocol development of various – like in various ways.

2088
01:47:42,781 --> 01:47:45,781
I thought these are very important things.

2089
01:47:45,781 --> 01:47:50,781
We need to get people away from custodial stuff that's not good.

2090
01:47:50,781 --> 01:47:57,781
We need to get them away from multisig federation stuff that is custodial and kind
of just like pretends not to be for some reason.

2091
01:47:57,781 --> 01:48:01,781
And we need to get real privacy, a real privacy option.

2092
01:48:02,781 --> 01:48:18,781
Because actually we were losing – around the time in 2022, for the previous years,
2020 through 2022, like all this stuff that I was joking before about Bitcoin
Uncensored and the Bitcoin user being a crazed drug addict.

2093
01:48:18,781 --> 01:48:22,781
It was like they had all these funny characters on the show, like Flocka Felicia and
stuff.

2094
01:48:22,781 --> 01:48:24,781
They're like fake people and whatever.

2095
01:48:24,781 --> 01:48:26,781
It was like really incredible.

2096
01:48:26,781 --> 01:48:28,781
Are those on recording?

2097
01:48:28,781 --> 01:48:30,781
Can I go back and listen to that?

2098
01:48:30,781 --> 01:48:32,781
It's like a secret society.

2099
01:48:32,781 --> 01:48:34,781
I'll link to them.

2100
01:48:34,781 --> 01:48:36,781
I want to hear the Bitcoin user podcast.

2101
01:48:36,781 --> 01:48:39,781
It's like a big Dropbox link or something that has them all.

2102
01:48:39,781 --> 01:48:41,781
And it's incredible.

2103
01:48:41,781 --> 01:48:45,781
It's one of the greatest pieces of art ever created.

2104
01:48:45,781 --> 01:48:47,781
Okay, I need to listen.

2105
01:48:47,781 --> 01:48:48,781
I completely agree.

2106
01:48:48,781 --> 01:48:49,781
It's unbelievable.

2107
01:48:49,781 --> 01:48:50,781
I won't regret it.

2108
01:48:50,781 --> 01:48:52,781
Okay.

2109
01:48:53,781 --> 01:48:57,781
The darknet markets that were originally – I remember how I first heard about
Bitcoin.

2110
01:48:57,781 --> 01:49:00,781
I thought, oh, even I'm too late because now we have regular normal people.

2111
01:49:00,781 --> 01:49:04,781
In fact, crazed drug addicts, people who are addicted to hard drugs have gotten this
to work.

2112
01:49:04,781 --> 01:49:06,781
And they downloaded Tor.

2113
01:49:06,781 --> 01:49:08,781
So that was like back in 2011.

2114
01:49:08,781 --> 01:49:14,781
Now a lot of those darknet markets have switched to being Monero only.

2115
01:49:14,781 --> 01:49:21,781
So I was like, oh, Bitcoin is actually losing ground on like a core pillar of its –
what makes it unique.

2116
01:49:21,781 --> 01:49:22,781
That's a fair thesis.

2117
01:49:22,781 --> 01:49:23,781
It makes it special.

2118
01:49:23,781 --> 01:49:24,781
Right.

2119
01:49:24,781 --> 01:49:28,781
You're like we need privacy or we're going to lose people to Monero or Zcash.

2120
01:49:28,781 --> 01:49:37,781
And then once we open the door to, well, Bitcoin is not – I think there's like a
night and day difference between saying,

2121
01:49:37,781 --> 01:49:39,781
listen, Bitcoin is open source.

2122
01:49:39,781 --> 01:49:41,781
We know what the ideas are.

2123
01:49:41,781 --> 01:49:44,781
We will aggressively pursue the best ideas.

2124
01:49:44,781 --> 01:49:49,781
We will aggressively pursue adoption by 8 billion people as quickly as possible.

2125
01:49:49,781 --> 01:49:52,781
Whenever there are problems, we will fix the problems.

2126
01:49:52,781 --> 01:49:56,781
What we have today in Bitcoin Core is nothing like that at all.

2127
01:49:56,781 --> 01:50:04,781
We have just like basically it's like a hippie garden where people work on their
little – some people like to water their cucumbers or something.

2128
01:50:04,781 --> 01:50:15,781
And then even to the point where if you don't – it is like pure communism where you
can't even introduce a pull request unless you have reviewed other people's pull
requests, even if they're all about nothing.

2129
01:50:15,781 --> 01:50:23,781
There's no sense in which you sort the ideas based on how important they are to
Bitcoin survival.

2130
01:50:23,781 --> 01:50:25,781
It's not like – it should really be like a hospital triage.

2131
01:50:25,781 --> 01:50:27,781
It's actually much easier.

2132
01:50:27,781 --> 01:50:33,781
The take or my observation of Bitcoin Core developers is they prefer to work on
stuff that's low stakes.

2133
01:50:33,781 --> 01:50:35,781
Of course, that's part of it also.

2134
01:50:35,781 --> 01:50:37,781
Yeah, because they just don't want the criticism.

2135
01:50:37,781 --> 01:50:43,781
They don't want the attention of working on something that could actually like be
meaningfully – like a meaningful change.

2136
01:50:43,781 --> 01:50:49,781
When Taproot – the code was done, Peter Weill, who – I mean Peter Weill.

2137
01:50:49,781 --> 01:50:50,781
Peter Weill.

2138
01:50:50,781 --> 01:50:51,781
Yeah, exactly.

2139
01:50:51,781 --> 01:50:57,781
But he refused to discuss activation and he's extremely, extremely intelligent.

2140
01:50:57,781 --> 01:50:58,781
He's very popular.

2141
01:50:58,781 --> 01:50:59,781
He's very nice.

2142
01:50:59,781 --> 01:51:00,781
Beloved.

2143
01:51:00,781 --> 01:51:01,781
Everyone loves him, right?

2144
01:51:01,781 --> 01:51:02,781
Yeah.

2145
01:51:02,781 --> 01:51:04,781
But he refused to even discuss it, activation.

2146
01:51:04,781 --> 01:51:06,781
Well, I feel like he has trauma, right?

2147
01:51:06,781 --> 01:51:07,781
Of course.

2148
01:51:07,781 --> 01:51:08,781
Yeah, they all have trauma.

2149
01:51:08,781 --> 01:51:09,781
Yeah, they all have trauma.

2150
01:51:09,781 --> 01:51:10,781
Yeah, exactly.

2151
01:51:10,781 --> 01:51:11,781
They have trauma from the block size war and from SegWit activation.

2152
01:51:12,781 --> 01:51:16,781
I wonder if he'll come back and start to make comments and notes.

2153
01:51:16,781 --> 01:51:18,781
Just say this is a good idea.

2154
01:51:18,781 --> 01:51:19,781
You know what I mean?

2155
01:51:19,781 --> 01:51:20,781
Yeah, exactly, exactly.

2156
01:51:20,781 --> 01:51:21,781
That's what we need.

2157
01:51:21,781 --> 01:51:22,781
Exactly.

2158
01:51:22,781 --> 01:51:23,781
We also need the miners to do that also.

2159
01:51:23,781 --> 01:51:24,781
Jeremy Rubin said the same thing.

2160
01:51:24,781 --> 01:51:26,781
Miners just say we want more transaction fee revenue.

2161
01:51:26,781 --> 01:51:29,781
We want people using OpVault instead of Coinbase Custody.

2162
01:51:29,781 --> 01:51:30,781
Right.

2163
01:51:30,781 --> 01:51:32,781
We want on-chain.

2164
01:51:32,781 --> 01:51:40,781
We want activity that – a more reliable configuration is when you have 8 billion
people using Bitcoin every day.

2165
01:51:40,781 --> 01:51:42,781
They pay a transaction fee that goes to the miners.

2166
01:51:42,781 --> 01:51:44,781
The miners are loyal to the people.

2167
01:51:44,781 --> 01:51:49,781
This is a much more reliable configuration than Bitcoin ETF.

2168
01:51:49,781 --> 01:51:55,781
Yeah, this is sort of a good opportunity, I think, to talk about the crux of the
issue, which is this government's issue, right?

2169
01:51:55,781 --> 01:52:04,781
And a question that I ask guests all the time is sort of how do you manage the
challenge between, okay, we want decentralization.

2170
01:52:04,781 --> 01:52:06,781
We don't want centralized authority.

2171
01:52:06,781 --> 01:52:14,781
But we also want to function in governance and how do you institute that in a
decentralized way?

2172
01:52:14,781 --> 01:52:15,781
Excuse me.

2173
01:52:15,781 --> 01:52:16,781
What's your take?

2174
01:52:16,781 --> 01:52:18,781
Yeah, I have a lot of thoughts.

2175
01:52:18,781 --> 01:52:24,781
I think, first of all, Drivechain would have been better, much better than SegWit or
Taproot.

2176
01:52:24,781 --> 01:52:34,781
And if we had had it, then, again, you could have – you could afford – you could
more easily afford to have a weird L1 monopolist guild that's kind of like a
finished product and it's not moving.

2177
01:52:34,781 --> 01:52:37,781
Because you'd have different L2s.

2178
01:52:37,781 --> 01:52:43,781
So let's say Jeremy Rubin starts L2 with CTV, but he doesn't put APL or whatever.

2179
01:52:43,781 --> 01:52:46,781
So you think Drivechain is the solution to governance?

2180
01:52:46,781 --> 01:52:47,781
I do.

2181
01:52:47,781 --> 01:52:48,781
I think it would be the best solution.

2182
01:52:48,781 --> 01:52:50,781
But I have other thoughts, too, that I'm going to share in a second.

2183
01:52:50,781 --> 01:52:51,781
Okay.

2184
01:52:51,781 --> 01:52:53,781
But I just think – like let's say you want TxHash instead.

2185
01:52:53,781 --> 01:52:54,781
Okay.

2186
01:52:54,781 --> 01:52:55,781
TxHash is like a little bit of a –

2187
01:52:55,781 --> 01:52:57,781
Then you have a TxHash Drivechain.

2188
01:52:57,781 --> 01:52:59,781
Either you go to the L2 and you say add this.

2189
01:52:59,781 --> 01:53:00,781
Or?

2190
01:53:00,781 --> 01:53:02,781
And you say – now you have recourse if they say no.

2191
01:53:02,781 --> 01:53:08,781
So now they have an incentive to look into it and say, am I doing what's best for my
users?

2192
01:53:08,781 --> 01:53:10,781
And if not, they're going to leave.

2193
01:53:10,781 --> 01:53:11,781
That's interesting.

2194
01:53:11,781 --> 01:53:13,781
So now you have an incentive to rationally look at it.

2195
01:53:13,781 --> 01:53:14,781
Right.

2196
01:53:14,781 --> 01:53:15,781
So it has nothing to do with –

2197
01:53:15,781 --> 01:53:17,781
Architectures can compete.

2198
01:53:17,781 --> 01:53:27,781
The L2 – it could not be the way L1 is today, Bitcoin Core, because the L2 would be
afraid of losing its users.

2199
01:53:28,781 --> 01:53:31,781
Because, of course, most of the coins will be on L1.

2200
01:53:31,781 --> 01:53:35,781
Most people are not going to be doing this wacky CTV thing until it's more
mainstream.

2201
01:53:35,781 --> 01:53:39,781
So the first user – your chain is going to have to have some kind of purpose to
exist.

2202
01:53:39,781 --> 01:53:42,781
It has to be like the privacy chain, the Zcash privacy chain.

2203
01:53:42,781 --> 01:53:43,781
Right.

2204
01:53:43,781 --> 01:53:44,781
Payments, whatever.

2205
01:53:44,781 --> 01:53:47,781
The payments chain, the Namecoin chain, whatever.

2206
01:53:47,781 --> 01:54:02,781
So if your chain is going to be like the cool chain and you have the payments chain
and people need CTV for congestion control or something, and you don't add it, now
it opens the door to someone.

2207
01:54:02,781 --> 01:54:04,781
Some competitor will come in and make a better payments chain.

2208
01:54:04,781 --> 01:54:07,781
And it will be exactly the same as yours because it's open source, but you'll have
CTV.

2209
01:54:07,781 --> 01:54:13,781
Drivechains enables free market ability to create new governance.

2210
01:54:13,781 --> 01:54:15,781
You can basically have authentication.

2211
01:54:15,781 --> 01:54:19,781
Once you have Drivechains, you can have authentication on Bitcoin, and it doesn't
matter.

2212
01:54:19,781 --> 01:54:25,781
You could even have, as I tried to just explain, you could ossify the L2, in which
case it would be killed off by a competitor.

2213
01:54:25,781 --> 01:54:29,781
So even the ossification of the L2 would not be the worst thing.

2214
01:54:29,781 --> 01:54:30,781
You would recover from it.

2215
01:54:30,781 --> 01:54:31,781
Right.

2216
01:54:31,781 --> 01:54:38,781
Right now, Robin Linus is correct to be worried that we could reach a state where we
cannot recover from it in time.

2217
01:54:38,781 --> 01:54:44,781
Drivechains enables forever exploration without screwing up the base chain,
basically.

2218
01:54:44,781 --> 01:54:45,781
Right.

2219
01:54:45,781 --> 01:54:50,781
The base chain doesn't even necessarily know how many Drivechains there are or
what's going on over there.

2220
01:54:50,781 --> 01:54:51,781
It doesn't care.

2221
01:54:51,781 --> 01:54:52,781
Yeah.

2222
01:54:52,781 --> 01:54:53,781
Yeah.

2223
01:54:53,781 --> 01:54:54,781
Interesting.

2224
01:54:54,781 --> 01:54:55,781
But there are other ideas.

2225
01:54:55,781 --> 01:55:00,781
The other one is to rehabilitate what some people would call the hard fork.

2226
01:55:00,781 --> 01:55:03,781
It should more properly be called spin-off altcoin.

2227
01:55:03,781 --> 01:55:04,781
Okay.

2228
01:55:04,781 --> 01:55:05,781
Or the –

2229
01:55:05,781 --> 01:55:12,781
Which I think Luke – speaking of Luke – I think people are thinking maybe Luke will
create a fork for filtering.

2230
01:55:12,781 --> 01:55:13,781
Yeah.

2231
01:55:14,781 --> 01:55:17,781
I don't think – but maybe.

2232
01:55:17,781 --> 01:55:23,781
What I think we should do is – when people think of hard fork or they think of
spin-off altcoin,

2233
01:55:23,781 --> 01:55:28,781
they think of Bitcoin Cash, which was the only serious attempt at doing it and which
was a failure,

2234
01:55:28,781 --> 01:55:31,781
an embarrassing failure that led to people's careers being –

2235
01:55:31,781 --> 01:55:32,781
Destroyed.

2236
01:55:32,781 --> 01:55:33,781
Destroyed.

2237
01:55:33,781 --> 01:55:34,781
Yeah.

2238
01:55:34,781 --> 01:55:41,781
And like who knows how many – what Jihan Wu bet with Bitmain's money, like billions
of dollars.

2239
01:55:41,781 --> 01:55:46,781
I don't know the exact figure but a lot of – 80 percent of it was lost or something.

2240
01:55:46,781 --> 01:55:47,781
Yikes.

2241
01:55:47,781 --> 01:55:50,781
So huge consequences.

2242
01:55:50,781 --> 01:55:55,781
And so people just think of that failure and then they also think of like –

2243
01:55:55,781 --> 01:55:59,781
another one that people think of is Bitcoin SV, which is funny because that one is a
spin-off of Bitcoin Cash.

2244
01:55:59,781 --> 01:56:01,781
It's not even actually a spin-off of BTC.

2245
01:56:01,781 --> 01:56:02,781
It's a spin-off of Bitcoin Cash.

2246
01:56:02,781 --> 01:56:05,781
But people also think of like Bitcoin Gold, Bitcoin Diamond.

2247
01:56:05,781 --> 01:56:11,781
These are frivolities that are not serious and they were just kind of like for fun.

2248
01:56:11,781 --> 01:56:18,781
Nonetheless, we should bring – and Bitcoin Cash I think and Bitcoin SV,

2249
01:56:18,781 --> 01:56:21,781
they set the precedent that you should name it Bitcoin.

2250
01:56:21,781 --> 01:56:24,781
So I don't blame Bitcoin Gold, Bitcoin Diamond.

2251
01:56:24,781 --> 01:56:29,781
I would think that this is – again, this is what people would think to do based on
the past.

2252
01:56:29,781 --> 01:56:31,781
So I'm not advocating what you think.

2253
01:56:31,781 --> 01:56:33,781
I have a slightly new thought, everyone in the audience.

2254
01:56:33,781 --> 01:56:39,781
Please give me a tiny – because people hear a hard fork and they'll think, oh, this
is going to be like Bitcoin Cash.

2255
01:56:39,781 --> 01:56:40,781
We're going to divide the community.

2256
01:56:40,781 --> 01:56:43,781
Everyone is going to hate each other again.

2257
01:56:43,781 --> 01:56:47,781
My view is that those problems are all relatively easy to fix.

2258
01:56:47,781 --> 01:56:54,781
You can just say – it will have a new name and just say we'll give everyone – we're
giving everyone free money.

2259
01:56:54,781 --> 01:57:00,781
Every Bitcoiner is getting new coins on this new thing.

2260
01:57:00,781 --> 01:57:07,781
The smart thing to do is say, well, we wish them the best and then secretly sell a
little bit of whichever one you're more skeptical of.

2261
01:57:07,781 --> 01:57:11,781
Probably retain mostly both of the coins.

2262
01:57:11,781 --> 01:57:12,781
My assumption –

2263
01:57:12,781 --> 01:57:13,781
Now we have more competition.

2264
01:57:13,781 --> 01:57:22,781
Now the competition is back and you restore this idea that if Bitcoin Core passes on
CTV and it shouldn't, it might end up –

2265
01:57:22,781 --> 01:57:24,781
because it will be them.

2266
01:57:24,781 --> 01:57:29,781
They will really be the ones who would be humiliated if someone launches a new coin
and then it were to take over.

2267
01:57:29,781 --> 01:57:34,781
So that would inject at least a small amount of competition into what is today a
monopolist.

2268
01:57:34,781 --> 01:57:37,781
I could be wrong about this because I wasn't really there at this point.

2269
01:57:37,781 --> 01:57:47,781
But I would assume that when people talk about the pain of the block size wars and
this fork, what they were really referencing is the fact that there was major
financial –

2270
01:57:47,781 --> 01:57:50,781
people must have lost so much money.

2271
01:57:50,781 --> 01:57:57,781
What really motivates people is – this is now psychology armchair hour or whatever.

2272
01:57:58,781 --> 01:58:01,781
But really people are motivated by envy.

2273
01:58:01,781 --> 01:58:05,781
People are not motivated by greed.

2274
01:58:05,781 --> 01:58:12,781
They are motivated by envy and by status and by humiliation, relative comparisons.

2275
01:58:12,781 --> 01:58:14,781
You compare yourself – who do you compare yourself to?

2276
01:58:14,781 --> 01:58:18,781
A subsistence farmer in Ethiopia or something?

2277
01:58:18,781 --> 01:58:23,781
You could spend all day thinking about, oh, my life is so much better than theirs.

2278
01:58:23,781 --> 01:58:28,781
But you don't – you compare yourself to like someone – yeah, exactly.

2279
01:58:28,781 --> 01:58:32,781
You decided like a similarly situated person.

2280
01:58:32,781 --> 01:58:40,781
If you work as a doctor and you have – the doctor in the next office is making twice
as much money as you.

2281
01:58:40,781 --> 01:58:43,781
It doesn't matter that you're making more money than most people have ever made.

2282
01:58:43,781 --> 01:58:45,781
You think, wait a minute.

2283
01:58:45,781 --> 01:58:47,781
I'm being scammed somehow.

2284
01:58:47,781 --> 01:58:56,781
So 2017, a funny thing about that period is that actually right after – like
throughout 2017, the price was skyrocketing.

2285
01:58:56,781 --> 01:59:01,781
In fact, when Roger in November – when SegWit2x was called off and Bitcoin Cash was
like adopted as –

2286
01:59:01,781 --> 01:59:04,781
both of them skyrocketed in value in December.

2287
01:59:04,781 --> 01:59:08,781
It hit all-time high, first time past 10,000 I think.

2288
01:59:08,781 --> 01:59:17,781
So actually, tons of money was made, but more money was made by some people than
others.

2289
01:59:17,781 --> 01:59:19,781
Yeah, right, right, right, right.

2290
01:59:19,781 --> 01:59:20,781
Exactly.

2291
01:59:20,781 --> 01:59:21,781
Fair enough. OK.

2292
01:59:21,781 --> 01:59:28,781
And this caused an unquenchable rage and despair in – this is part of human nature I
think unfortunately.

2293
01:59:28,781 --> 01:59:36,781
So when Drivechains was – when this like all of this noise was happening around
Drivechains in 2023, when did that start to shift?

2294
01:59:36,781 --> 01:59:45,781
I mean like when – was there like a point where you were like, OK, are you – do you
still consider yourself an advocate of Drivechains just forever indefinitely?

2295
01:59:45,781 --> 01:59:53,781
Or are you feeling like, OK, there's like a – how do we get the conversation about
Drivechains going?

2296
01:59:53,781 --> 01:59:55,781
Is that an effort for you?

2297
01:59:55,781 --> 01:59:59,781
I still think the – we want to keep improving the software.

2298
01:59:59,781 --> 02:00:08,781
So even though we have shipped a lot of great software and we have moved completely
away from the non-starter, which would have been a version of Bitcoin Core from
2017.

2299
02:00:08,781 --> 02:00:10,781
That was always a non-starter.

2300
02:00:10,781 --> 02:00:11,781
So that was fun to play with.

2301
02:00:11,781 --> 02:00:12,781
OK.

2302
02:00:12,781 --> 02:00:15,781
But yeah, we have built a lot of software.

2303
02:00:15,781 --> 02:00:19,781
And I also switched the way BIP300, 301.

2304
02:00:19,781 --> 02:00:23,781
That is no longer reliant on changing code in Bitcoin Core.

2305
02:00:23,781 --> 02:00:27,781
I have used this new thing, the CUSF, C-U-S-F activator.

2306
02:00:27,781 --> 02:00:29,781
So I had to change all that around.

2307
02:00:29,781 --> 02:00:38,781
That is partly sort of a – partly it is a cynical look at Bitcoin Core and saying
they probably won't do any soft forks anytime soon because they can't.

2308
02:00:38,781 --> 02:00:43,781
But it's also kind of a respectful thing of saying they clearly are very bothered by
this.

2309
02:00:43,781 --> 02:00:45,781
So I just won't bother them.

2310
02:00:45,781 --> 02:00:46,781
So it's both of those things.

2311
02:00:46,781 --> 02:00:49,781
Would you say it's – I remember the first time we met.

2312
02:00:49,781 --> 02:00:51,781
I don't remember if we were talking about this on camera or not.

2313
02:00:51,781 --> 02:00:53,781
And I brought it up for the first time.

2314
02:00:53,781 --> 02:00:54,781
Exactly.

2315
02:00:54,781 --> 02:00:55,781
Yeah, you told me.

2316
02:00:55,781 --> 02:01:01,781
And you said that you were – so you were like, OK, we actually don't need to have
Bitcoin Core integrate this BIP in order to make this possible.

2317
02:01:01,781 --> 02:01:06,781
And I sort of interpreted that as – and it sounds like this is sort of what
happened.

2318
02:01:06,781 --> 02:01:13,781
I interpreted that as you were like kind of surrendering on trying to get Bitcoin
Core to adopt Drivechains or BIP300, BIP301.

2319
02:01:13,781 --> 02:01:14,781
You were going to move into this new direction.

2320
02:01:14,781 --> 02:01:15,781
Yes.

2321
02:01:15,781 --> 02:01:16,781
I don't want Bitcoin Core to do it.

2322
02:01:16,781 --> 02:01:17,781
Right.

2323
02:01:17,781 --> 02:01:18,781
I think that they don't need to do it.

2324
02:01:18,781 --> 02:01:24,781
And they are – they have this weird – I mean –

2325
02:01:25,781 --> 02:01:35,781
Unfortunately, it gives, I think, a mistaken impression that what Bitcoin Core does
is they get all these ideas and then they sort them on merit and they only pick the
best ideas.

2326
02:01:35,781 --> 02:01:38,781
And in fact, they say that they're a meritocracy.

2327
02:01:38,781 --> 02:01:44,781
Of course, most people who say they're a meritocracy are being defensive and
obviously they're probably not a meritocracy.

2328
02:01:44,781 --> 02:01:45,781
Another vague term, right?

2329
02:01:45,781 --> 02:01:50,781
Because the real meritocracy is like a 400-meter dash or something.

2330
02:01:50,781 --> 02:01:51,781
Right.

2331
02:01:51,781 --> 02:01:52,781
Or a marathon.

2332
02:01:52,781 --> 02:01:53,781
Or free market capitalism.

2333
02:01:53,781 --> 02:01:58,781
Where there's a very clear metric on who won.

2334
02:01:58,781 --> 02:01:59,781
Right.

2335
02:01:59,781 --> 02:02:06,781
You don't have to go around and saying, you know, this is – a push-up contest is a
meritocracy.

2336
02:02:06,781 --> 02:02:08,781
Everyone already knows.

2337
02:02:08,781 --> 02:02:14,781
But you laugh, correctly so, because the laugh is – we all already know that it is
like it is.

2338
02:02:14,781 --> 02:02:17,781
When you have to point it out, it's because it's actually not a meritocracy.

2339
02:02:17,781 --> 02:02:21,781
But they don't – as I said, they have this weird hippie garden type of a thing.

2340
02:02:21,781 --> 02:02:30,781
So, when the idea doesn't make it in, it looks as though they have like said there's
something wrong with it or whatever.

2341
02:02:30,781 --> 02:02:32,781
I don't think that's the case at all.

2342
02:02:32,781 --> 02:02:35,781
In fact, it's sort of the reverse.

2343
02:02:35,781 --> 02:02:41,781
By giving this impression, they have led people to propose soft forks even when we
don't even really need them.

2344
02:02:41,781 --> 02:02:46,781
Because they think – it's like another person wants to step up to the plate and try
to think.

2345
02:02:46,781 --> 02:03:00,781
And they think, oh, I think TxHash was kind of created as a misunderstanding of this
kind where you would – a rational person who's new and doesn't understand, doesn't
have a lot of history in the space.

2346
02:03:00,781 --> 02:03:05,781
They would say, oh, CTV was proposed and then considered.

2347
02:03:05,781 --> 02:03:11,781
It's not quite as good for ARC, which is a new or more popular thing.

2348
02:03:11,781 --> 02:03:18,781
So, what we need is a different version, my new TxHash version, which is slightly
souped up.

2349
02:03:18,781 --> 02:03:26,781
And TxHash will make it in where CTV did not because TxHash is better.

2350
02:03:26,781 --> 02:03:28,781
That is – all that is a mistake.

2351
02:03:28,781 --> 02:03:29,781
That is a trap.

2352
02:03:29,781 --> 02:03:32,781
Really what's happened is the soft fork process is broken down.

2353
02:03:32,781 --> 02:03:36,781
No soft forks will be merged regardless of their – they don't even care.

2354
02:03:36,781 --> 02:03:39,781
They're apathetic about the impact on the project.

2355
02:03:39,781 --> 02:03:44,781
And, in fact, as you said, they don't even – the bigger it is, the more they don't
want to get involved.

2356
02:03:44,781 --> 02:03:45,781
And so, yeah.

2357
02:03:45,781 --> 02:03:47,781
So, what explained –

2358
02:03:47,781 --> 02:03:48,781
They'll merge a bunch of tests.

2359
02:03:48,781 --> 02:03:55,781
I don't feel like we really explained this new direction that you explained to me in
Denver two years ago or whatever it was.

2360
02:03:55,781 --> 02:03:56,781
To CUSF, yeah.

2361
02:03:56,781 --> 02:03:57,781
Yeah, exactly.

2362
02:03:57,781 --> 02:04:03,781
So, you're like, OK, Core is probably not going to integrate this anytime soon, this
BIP300, BIP301.

2363
02:04:03,781 --> 02:04:05,781
So, I'm going to do what?

2364
02:04:05,781 --> 02:04:07,781
What's the alternative?

2365
02:04:07,882 --> 02:04:09,882
Yeah, I think if people understood the soft fork more, they would see why it's
harmless.

2366
02:04:09,882 --> 02:04:12,882
But, of course, we have to live – we have to take the world as we find it, right?

2367
02:04:12,882 --> 02:04:13,882
Right, right.

2368
02:04:13,882 --> 02:04:19,882
So, we can do the next best thing, which is just – I told you about the soft fork
being opt-in, reversible, etc.

2369
02:04:19,882 --> 02:04:26,882
Well, we can basically just have a second piece of software that runs right next to
Bitcoin Core that kind of like intercepts some of the messages.

2370
02:04:26,882 --> 02:04:31,882
Kind of like the Ordinal's client, which I remember you told me was an inspiration
in this design.

2371
02:04:32,882 --> 02:04:36,882
In the paper, I put like the Ordinalization of soft forks or something.

2372
02:04:36,882 --> 02:04:39,882
Yeah, yeah. Basically, you just build clients on top.

2373
02:04:39,882 --> 02:04:40,882
Yeah.

2374
02:04:40,882 --> 02:04:42,882
But the difference between Ordinal's and –

2375
02:04:42,882 --> 02:04:43,882
It is slightly different.

2376
02:04:43,882 --> 02:04:45,882
Yes, it's different. Let's talk about it.

2377
02:04:45,882 --> 02:04:49,882
There's an important difference, which is the Ordinal's is kind of more hands-off.

2378
02:04:49,882 --> 02:04:51,882
It's run by clients, not by miners.

2379
02:04:51,882 --> 02:04:56,882
And you can just kind of like run it, and it will show you which Ordinal's you own
and stuff like that.

2380
02:04:57,882 --> 02:05:05,882
But this one needs to be run by 51% hash rate, and it will kick back the invalidate
block command.

2381
02:05:05,882 --> 02:05:06,882
It has teeth.

2382
02:05:06,882 --> 02:05:16,882
It will say if someone breaks a BIP300, 301 rule, it will invalidate the whole
block and ask the miners to mine on a different block, thus orphaning that block.

2383
02:05:16,882 --> 02:05:17,882
So, it has some teeth.

2384
02:05:17,882 --> 02:05:23,882
But it does everything that a normal soft fork would do without changing a single
line of code in Bitcoin Core.

2385
02:05:23,882 --> 02:05:30,882
It's basically a way to actuate a soft fork without changing Bitcoin Core, without
changing the underlying implementations.

2386
02:05:30,882 --> 02:05:36,882
Basically, you're just asking miners to run the software that would otherwise
actuate a soft fork.

2387
02:05:36,882 --> 02:05:38,882
And they can even stop running it.

2388
02:05:38,882 --> 02:05:46,882
And this is similar to the example I gave earlier where I said we could code 15 soft
forks, activate them, and then just kind of like disable them later.

2389
02:05:46,882 --> 02:05:50,882
Do you think this is a potential solution to the governance problem?

2390
02:05:50,882 --> 02:05:51,882
I think it is.

2391
02:05:51,882 --> 02:05:55,882
Although even this I'm kind of pessimistic about overall.

2392
02:05:55,882 --> 02:06:03,882
Because miners also don't want to be unpopular, and they also don't want to run
things that don't have social consensus, whatever that means.

2393
02:06:03,882 --> 02:06:08,882
Yeah, the miners are more concerned with optics than you might think.

2394
02:06:08,882 --> 02:06:10,882
Yeah, especially the big ones.

2395
02:06:10,882 --> 02:06:11,882
Yeah, which matter.

2396
02:06:11,882 --> 02:06:17,882
And it's kind of bizarre because many of the larger ones are really hated, like
AntBull, number two.

2397
02:06:17,882 --> 02:06:19,882
Yeah, they already have bad reputations.

2398
02:06:19,882 --> 02:06:23,882
But it's not like they burst into flames as a result, right?

2399
02:06:23,882 --> 02:06:24,882
Right, right, right.

2400
02:06:24,882 --> 02:06:25,882
They make their money regardless.

2401
02:06:25,882 --> 02:06:26,882
Exactly.

2402
02:06:26,882 --> 02:06:31,882
But now they're going public, and so reputation actually does matter a little bit.

2403
02:06:31,882 --> 02:06:32,882
You're absolutely right.

2404
02:06:32,882 --> 02:06:37,882
And this happens all the time where they just think, we just don't want to be in the
press.

2405
02:06:37,882 --> 02:06:39,882
Right, yeah, they don't want to be in the press.

2406
02:06:39,882 --> 02:06:46,882
Yeah, they have very elaborate comm strategies that mostly revolve around crisis
management.

2407
02:06:46,882 --> 02:06:47,882
Yeah.

2408
02:06:48,882 --> 02:06:55,882
So the CUSF is kind of just saying, here's what would happen in a normal soft fork.

2409
02:06:55,882 --> 02:06:59,882
We'll just draw a line around it and separate it into two pieces of software or
something.

2410
02:06:59,882 --> 02:07:11,882
So it's actually not—it's as safe as—it's really bizarre because it's kind of just a
demonstration about why the soft fork is so safe and why everyone should just get
over themselves.

2411
02:07:11,882 --> 02:07:19,882
The soft fork should be very much regarded as comparable to any other pull request.

2412
02:07:19,882 --> 02:07:30,882
Because any pull request could have a horrible bug or something that messes with the
software, which is partly why you should not upgrade your Bitcoin client quickly.

2413
02:07:30,882 --> 02:07:32,882
The layperson should not.

2414
02:07:32,882 --> 02:07:37,882
The layperson should wait for a while to see if an exchange gets hacked or
something.

2415
02:07:37,882 --> 02:07:42,882
But this is in direct contrast to what Luke believes is happening.

2416
02:07:42,882 --> 02:07:45,882
But you should really not upgrade if you don't need to.

2417
02:07:45,882 --> 02:07:51,882
Don't upgrade at all, but if you do want to upgrade, just wait and let other people
be the first person through the door.

2418
02:07:51,882 --> 02:07:54,882
See if anything bad happens to them.

2419
02:07:56,882 --> 02:08:00,882
How have people responded to this idea of the ordinalization of soft forks?

2420
02:08:00,882 --> 02:08:06,882
Well, I think some people—the right type of people don't like it.

2421
02:08:06,882 --> 02:08:07,882
The right type of people?

2422
02:08:07,882 --> 02:08:09,882
Yeah, which is—I'm talking about the horrible—

2423
02:08:09,882 --> 02:08:10,882
How are you defining that?

2424
02:08:10,882 --> 02:08:13,882
These are like the gatekeepers and the dead weight in Bitcoin Core.

2425
02:08:13,882 --> 02:08:15,882
You mean like the powerful people don't like it?

2426
02:08:15,882 --> 02:08:29,882
Well, I would just say that people who have more prestige than they deserve and they
are contributing to this pointless lack of soft forks in Bitcoin and this sort of
prestige economy.

2427
02:08:29,882 --> 02:08:32,882
So obviously I knew they wouldn't like it.

2428
02:08:32,882 --> 02:08:35,882
So the fact that they didn't like it, I was like, perfect.

2429
02:08:35,882 --> 02:08:36,882
Hit the bullseye.

2430
02:08:36,882 --> 02:08:37,882
That makes sense.

2431
02:08:37,882 --> 02:08:38,882
Tracks.

2432
02:08:38,882 --> 02:08:39,882
Great.

2433
02:08:39,882 --> 02:08:41,882
And I knew Luke wouldn't like it also.

2434
02:08:41,882 --> 02:08:42,882
Luke also doesn't like it.

2435
02:08:42,882 --> 02:08:45,882
But Luke doesn't—he doesn't view the soft forks as like these plugins.

2436
02:08:45,882 --> 02:08:56,882
He has a very black and white attitude towards everything, but also this idea that
you either are running a Bitcoin node or you are like are not.

2437
02:08:57,882 --> 02:08:58,882
Maybe pun intended.

2438
02:08:58,882 --> 02:09:15,882
But you are running SPV client and that those are not only fake but harming the
network and that this is misrepresenting you, your view of the network, like your
ability to see that the blocks are accurate.

2439
02:09:15,882 --> 02:09:17,882
So—but I don't know.

2440
02:09:17,882 --> 02:09:18,882
I just think that's insane.

2441
02:09:19,882 --> 02:09:22,882
I've asked Luke many different thought experiment questions over the years.

2442
02:09:22,882 --> 02:09:28,882
Like let's say we have 10,000 full nodes and then the entire population of India
runs an SPV node for the first time.

2443
02:09:28,882 --> 02:09:29,882
But we've added.

2444
02:09:29,882 --> 02:09:31,882
We haven't subtracted any nodes.

2445
02:09:31,882 --> 02:09:33,882
We've just added a bunch of new users.

2446
02:09:33,882 --> 02:09:34,882
Then what?

2447
02:09:34,882 --> 02:09:37,882
Now the percentage has crossed his magic 80 percent threshold.

2448
02:09:38,882 --> 02:09:42,882
And he says, you know, like according to him, that would kill Bitcoin.

2449
02:09:42,882 --> 02:09:44,882
And I ask him, so how does that kill Bitcoin?

2450
02:09:44,882 --> 02:09:51,882
How is adding all these SPV nodes that were before people were using—running no node
of any kind?

2451
02:09:51,882 --> 02:09:59,882
And I never get any kind of answer out of him that I can form a kind of coherent
worldview.

2452
02:09:59,882 --> 02:10:04,882
Maybe he'll go on—maybe people post this clip and he'll post what is going on.

2453
02:10:04,882 --> 02:10:07,882
But I can't figure—I try really hard to figure him out sometimes.

2454
02:10:07,882 --> 02:10:10,882
I think he's a very interesting guy.

2455
02:10:10,882 --> 02:10:14,882
So some people don't like it, but a lot of people do like it.

2456
02:10:14,882 --> 02:10:16,882
I'm pretty sure Robin Linus likes it.

2457
02:10:16,882 --> 02:10:31,882
I don't want to, like, speak for people who—but I'm pretty sure the OpVault guy,
James, who brought the letter, he had a mailing list post about him liking it a few
days ago.

2458
02:10:31,882 --> 02:10:32,882
Okay.

2459
02:10:32,882 --> 02:10:43,882
But these are two—you could argue that Drivechains or the ordinalization of soft
forks are both, like, actual structural things that theoretically could fix the
governance issue.

2460
02:10:43,882 --> 02:10:45,882
Right, and you see that's why the existing governors don't like it.

2461
02:10:45,882 --> 02:10:46,882
Because they're real plans.

2462
02:10:46,882 --> 02:10:50,882
They're, like, actual real ways that you could potentially affect how governance
works.

2463
02:10:50,882 --> 02:10:55,882
They right now have, you know, a monopoly on Bitcoin governance.

2464
02:10:55,882 --> 02:10:57,882
They have a veto.

2465
02:10:57,882 --> 02:11:01,882
And they means Bitcoin core developers specifically?

2466
02:11:01,882 --> 02:11:04,882
Yeah, they don't really, like—it is—

2467
02:11:04,882 --> 02:11:07,882
And even that is, like, a weird they.

2468
02:11:07,882 --> 02:11:10,882
It's, like, you know, because there's, like, gradations of Bitcoin developers.

2469
02:11:10,882 --> 02:11:13,882
I mean, you can go—you can see if you want the names.

2470
02:11:13,882 --> 02:11:14,882
You can just go on.

2471
02:11:14,882 --> 02:11:15,882
The cabal.

2472
02:11:15,882 --> 02:11:16,882
The Bitcoin core cabal.

2473
02:11:16,882 --> 02:11:30,882
You can just look at who merges the pull requests, who is commenting on the—and just
look at when—who replies to the letter and says—I'm talking about the CTV plus
checkstick from Stack letter about, like, we need more time.

2474
02:11:30,882 --> 02:11:34,882
Or shouldn't those people review pull requests first?

2475
02:11:34,882 --> 02:11:36,882
What's your message to Bitcoin core developers?

2476
02:11:36,882 --> 02:11:38,882
What's your message to them?

2477
02:11:38,882 --> 02:11:42,882
I would say there are two paths.

2478
02:11:42,882 --> 02:11:46,882
A rational path, like just doing what's best for the project.

2479
02:11:46,882 --> 02:11:54,882
And then there's kind of, like, a selfish path, which is, like, what's good for
their own laziness or conflict avoidance or whatever.

2480
02:11:54,882 --> 02:12:03,882
And I would say that if they continue to go down the lazy path, which I regard as,
you know, which is what has been happening—

2481
02:12:03,882 --> 02:12:05,882
Which is probably more—I think it's—I agree.

2482
02:12:05,882 --> 02:12:07,882
It's probably more the reputation management thing.

2483
02:12:07,882 --> 02:12:08,882
It's in their own best interest.

2484
02:12:08,882 --> 02:12:09,882
Conflict avoidance.

2485
02:12:09,882 --> 02:12:10,882
Yeah.

2486
02:12:10,882 --> 02:12:23,882
But if they keep doing that, they are making the Bitcoin project worse, and they are
running the risk of actually—it will eventually accumulate so much scar tissue that
it will be possible to replace—

2487
02:12:23,882 --> 02:12:24,882
Bitcoin.

2488
02:12:24,882 --> 02:12:27,882
The Bitcoin project will go to zero.

2489
02:12:27,882 --> 02:12:32,882
Hopefully it will be, like, a hard fork or something and no investors will be
affected.

2490
02:12:32,882 --> 02:12:35,882
Do you think it could survive forever the way it is, though?

2491
02:12:35,882 --> 02:12:37,882
No, we can't—we cannot—

2492
02:12:37,882 --> 02:12:39,882
You think ossification will kill it.

2493
02:12:39,882 --> 02:12:55,882
Yeah, it has nothing to do with—it's not like—you could maybe compare it to, like,
let's have, like, a biological metaphor, you know, where we say all creatures, you
know, die of old age eventually.

2494
02:12:55,882 --> 02:13:01,882
But let's say we have a new creature that can just live, like, maybe some jellyfish
or something can, like, live forever.

2495
02:13:01,882 --> 02:13:02,882
I don't know if I heard that.

2496
02:13:02,882 --> 02:13:03,882
Didn't I hear that somewhere?

2497
02:13:03,882 --> 02:13:04,882
Who knows if that's true?

2498
02:13:04,882 --> 02:13:06,882
Like, you know, how would they—how would anyone even know that?

2499
02:13:06,882 --> 02:13:08,882
But maybe they know somehow.

2500
02:13:09,882 --> 02:13:14,882
You have a new type of organism that doesn't age.

2501
02:13:14,882 --> 02:13:19,882
So that could be a little bit like Bitcoin in the ossification conflict avoidant
world.

2502
02:13:19,882 --> 02:13:20,882
Okay.

2503
02:13:20,882 --> 02:13:23,882
So if it was left alone, it would be fine.

2504
02:13:23,882 --> 02:13:25,882
But it's not going to be left alone.

2505
02:13:25,882 --> 02:13:26,882
It lives in the jungle.

2506
02:13:26,882 --> 02:13:32,882
So if there's another organism right next to you that's evolving, it's growing
wings, it can, like, breathe fire and stuff.

2507
02:13:32,882 --> 02:13:35,882
If Bitcoin doesn't evolve, it will have a competitor.

2508
02:13:35,882 --> 02:13:38,882
Yeah, and it can, like, has teleportation and magic and stuff.

2509
02:13:38,882 --> 02:13:45,882
Eventually it will—and it's not a case where, like, you stay on the mountains, I'll
stay in the forest.

2510
02:13:45,882 --> 02:13:48,882
This is all or nothing network effect driven.

2511
02:13:48,882 --> 02:13:54,882
No one is going to want to use, like, the lowest coin on coin market cap.

2512
02:13:54,882 --> 02:13:56,882
No one is going to want to use that coin.

2513
02:13:56,882 --> 02:13:57,882
So that coin will die out.

2514
02:13:57,882 --> 02:14:02,882
Then there'll be a next lowest coin, and they're all going to die out until only one
survives.

2515
02:14:02,882 --> 02:14:12,882
Don't you think, like, the network effects of Bitcoin will be such that, like, even
if there is a more technically advanced thing that blows it out of the water and
teleports and sprouts wings, like, that won't matter?

2516
02:14:12,882 --> 02:14:16,882
I agree with you that the network effects are very important and may keep it alive.

2517
02:14:16,882 --> 02:14:21,882
In a way, that would be worse because we would be stuck with an inferior product and
no way to improve it.

2518
02:14:21,882 --> 02:14:23,882
So in a way, that might be terrible.

2519
02:14:23,882 --> 02:14:25,882
It might be good as a Bitcoin investor.

2520
02:14:25,882 --> 02:14:32,882
But we would—it would be kind of like, you know, Fed 2.0 in the sense of being
unimprovable.

2521
02:14:32,882 --> 02:14:40,882
So we wouldn't necessarily want that, even though that would be a very good outcome,
you know, Bitcoin taking over and being unkillable and being—

2522
02:14:40,882 --> 02:14:49,882
But you're right that network effects help Bitcoin a lot, especially—and, of course,
most of the altcoins are scams and terrible ideas.

2523
02:14:49,882 --> 02:14:53,882
And most ideas for Bitcoin are terrible also.

2524
02:14:53,882 --> 02:14:55,882
So all that's perfectly true.

2525
02:14:55,882 --> 02:15:11,882
However, right now, we don't have—you know, even on the store of value dimension, we
are, like, maybe whatever it is, less than 1 percent of global money even, global
broad money.

2526
02:15:11,882 --> 02:15:13,882
So we're less than 1 percent.

2527
02:15:13,882 --> 02:15:19,882
In terms of daily active users, we're nowhere near, like, 4 billion, which would be,
like, half of the planet.

2528
02:15:19,882 --> 02:15:20,882
You know what I mean?

2529
02:15:20,882 --> 02:15:23,882
Like, we don't actually have an unassailable advantage.

2530
02:15:23,882 --> 02:15:24,882
We're still a speck of dust.

2531
02:15:24,882 --> 02:15:32,882
Most normal people that, you know, that I meet, they just think Bitcoin is a scam, a
fake idea.

2532
02:15:32,882 --> 02:15:36,882
They don't—you know, Bitcoin versus Ethereum versus, you know, Ripple.

2533
02:15:36,882 --> 02:15:38,882
They have no idea, and they don't care at all.

2534
02:15:38,882 --> 02:15:43,882
So we are not—even though Bitcoin is the king, it's the king of the slums.

2535
02:15:43,882 --> 02:15:46,882
We don't have—we don't really have—

2536
02:15:46,882 --> 02:15:47,882
Big fish, small pond.

2537
02:15:47,882 --> 02:15:48,882
Right.

2538
02:15:48,882 --> 02:15:52,882
We don't really have a winning network effect yet.

2539
02:15:52,882 --> 02:15:57,882
We do have a big network effect, but we don't—I don't think we have unassailable
network effect.

2540
02:15:57,882 --> 02:16:02,882
And in particular, people have been getting, like, more deranged over time with the
stuff that they talk about, you know.

2541
02:16:02,882 --> 02:16:05,882
Even as a store of value, you're saying?

2542
02:16:05,882 --> 02:16:07,882
It's not that big.

2543
02:16:07,882 --> 02:16:11,882
It's just not—it's not inevitable even as a store of value is your take.

2544
02:16:11,882 --> 02:16:13,882
I don't think that you can separate the functions.

2545
02:16:13,882 --> 02:16:16,882
I mean, of course, I don't—you could when you analyze them.

2546
02:16:16,882 --> 02:16:19,882
It's like when you, you know, you could, like—

2547
02:16:19,882 --> 02:16:23,882
The reason I'm framing it this way is because, like, the criticism that I've heard
from others is, like,

2548
02:16:23,882 --> 02:16:30,882
ossification is the problem because that will keep us from actuating, you know,
permissionless payments and, like, you know, and then—

2549
02:16:30,882 --> 02:16:37,882
If something else is used for payments, like, imagine a world where all—Bitcoin is
worth $100 trillion.

2550
02:16:37,882 --> 02:16:42,882
So it's something like maybe half of all the broad money in the world in terms of
value.

2551
02:16:42,882 --> 02:16:46,882
So we have maybe that's, like, 50x from here.

2552
02:16:46,882 --> 02:16:48,882
I don't know exactly what the—it's, like, $2 trillion.

2553
02:16:48,882 --> 02:16:51,882
So maybe if we said $200 trillion, it would be, like, 100x from here.

2554
02:16:51,882 --> 02:16:58,882
So the price is 100 times what it is today, and that would be, like, almost—that
would be, like, almost 100% of world money.

2555
02:16:58,882 --> 02:17:03,882
I don't know the exact—no one, I think, knows the exact numbers, but all the value
of all the money in the world.

2556
02:17:03,882 --> 02:17:09,882
If we 10x-ed twice—so say we're really successful on the store of value dimension.

2557
02:17:10,882 --> 02:17:12,882
You know, we wave a magic wand, and that happens.

2558
02:17:12,882 --> 02:17:17,882
But it's like the monkey's paw or something, you know, deal with the devil.

2559
02:17:17,882 --> 02:17:26,882
Simultaneously, a different altcoin that is not Bitcoin is used for 90% of the
actual payments in the world.

2560
02:17:26,882 --> 02:17:28,882
And also—right.

2561
02:17:28,882 --> 02:17:31,882
You magically set that up, and then you press play.

2562
02:17:31,882 --> 02:17:32,882
And maybe it's not a terrible store of value.

2563
02:17:32,882 --> 02:17:34,882
Like, I could see a universe where, like—

2564
02:17:34,882 --> 02:17:36,882
It would also be open source.

2565
02:17:36,882 --> 02:17:38,882
And have decent hard money properties.

2566
02:17:38,882 --> 02:17:39,882
And they would have a fixed supply.

2567
02:17:39,882 --> 02:17:42,882
You might even have 21 million coins, although none of that would matter.

2568
02:17:42,882 --> 02:17:43,882
It would be mined.

2569
02:17:43,882 --> 02:17:46,882
You wouldn't—it's not hard to—

2570
02:17:46,882 --> 02:17:50,882
It's not impossible that it could be out-competed by something that was just better.

2571
02:17:50,882 --> 02:17:53,882
Like, that's something that just was able to be a store of value and payments.

2572
02:17:53,882 --> 02:17:57,882
So, yeah, it's not like—maybe it has, like, a very high block size or something.

2573
02:17:57,882 --> 02:17:59,882
It's harder to run a node or something.

2574
02:17:59,882 --> 02:18:04,882
But it's being used every day by 80% of the—and then you press play.

2575
02:18:04,882 --> 02:18:08,882
Well, I think in that world, the price of Bitcoin is going to start to crash.

2576
02:18:08,882 --> 02:18:09,882
You know?

2577
02:18:09,882 --> 02:18:13,882
Because people will say, what the hell is the point of Bitcoin now?

2578
02:18:13,882 --> 02:18:15,882
And they'll be right, you know?

2579
02:18:15,882 --> 02:18:17,882
Because what would be the point?

2580
02:18:17,882 --> 02:18:20,882
So I don't think that you can just say—

2581
02:18:20,882 --> 02:18:24,882
Even though these are three separate functions of money, you—

2582
02:18:24,882 --> 02:18:30,882
I don't think that you just—I don't think the conversation is like, it succeeds as a
store of value.

2583
02:18:30,882 --> 02:18:31,882
They are interrelated.

2584
02:18:31,882 --> 02:18:33,882
Yeah, they are interrelated.

2585
02:18:34,882 --> 02:18:35,882
Hot take.

2586
02:18:35,882 --> 02:18:37,882
All right, well, fascinating.

2587
02:18:37,882 --> 02:18:42,882
Okay, so, yeah, so I think—I mean, I feel like we covered, like, quite a bit today.

2588
02:18:42,882 --> 02:18:43,882
What time is it right now?

2589
02:18:43,882 --> 02:18:44,882
Oh, my gosh.

2590
02:18:44,882 --> 02:18:46,882
Yeah, we've been going for, like, an hour and a half.

2591
02:18:46,882 --> 02:18:47,882
This was awesome.

2592
02:18:47,882 --> 02:18:51,882
Any final words that you want to share about Drivechains

2593
02:18:51,882 --> 02:18:54,882
and sort of the story of how Drivechains is evolving?

2594
02:18:54,882 --> 02:18:56,882
People can try the software.

2595
02:18:56,882 --> 02:18:58,882
We have a signet, play money.

2596
02:18:58,882 --> 02:19:01,882
When you say the software, what exactly does that mean?

2597
02:19:01,882 --> 02:19:05,882
If you go to LayerTwoLabs.com slash download, you'll see exactly what it means.

2598
02:19:05,882 --> 02:19:06,882
You try it out.

2599
02:19:06,882 --> 02:19:07,882
You download this software.

2600
02:19:07,882 --> 02:19:09,882
It doesn't actually move real bitcoin.

2601
02:19:09,882 --> 02:19:11,882
It moves, like, fake signet coins.

2602
02:19:11,882 --> 02:19:15,882
Okay, so this is for people to basically test out what Drivechains would be like in
an alternate—

2603
02:19:15,882 --> 02:19:16,882
What it wouldn't be like.

2604
02:19:16,882 --> 02:19:17,882
Is it testnet?

2605
02:19:17,882 --> 02:19:18,882
Basically, yes.

2606
02:19:18,882 --> 02:19:19,882
It's basically a testnet Drivechain.

2607
02:19:19,882 --> 02:19:23,882
Okay, so if you want to experience this world, then you can go test it out on LayerTwo Labs.

2608
02:19:23,882 --> 02:19:28,882
That's a way more reliable way of learning about what it does.

2609
02:19:29,882 --> 02:19:35,882
I do think it's also reliable in the sense that a lot of people have certain
expectations,

2610
02:19:35,882 --> 02:19:40,882
or, like, if people think ARC or whatever, anything, you know, BVM,

2611
02:19:40,882 --> 02:19:45,882
they think it will be a certain way, but the design will change,

2612
02:19:45,882 --> 02:19:49,882
or maybe there will be unanticipated issues,

2613
02:19:49,882 --> 02:19:53,882
so I think that people should check the software out.

2614
02:19:53,882 --> 02:19:59,882
That's a much better way of learning about what's really happening.

2615
02:19:59,882 --> 02:20:02,882
I didn't understand how bitcoin worked until I used the software.

2616
02:20:02,882 --> 02:20:03,882
That makes sense.

2617
02:20:03,882 --> 02:20:04,882
Yeah.

2618
02:20:04,882 --> 02:20:08,882
I studied it for a while, and then I didn't understand, like, confirmations.

2619
02:20:08,882 --> 02:20:10,882
I closed—I had the thing open.

2620
02:20:10,882 --> 02:20:12,882
I thought it was, like, BitTorrent.

2621
02:20:12,882 --> 02:20:16,882
I had, like, the window open to collect six confirmations,

2622
02:20:16,882 --> 02:20:18,882
and I was like, okay, good, I have six.

2623
02:20:18,882 --> 02:20:21,882
Then I waited so I would have, like, eight or nine, a couple extra,

2624
02:20:21,882 --> 02:20:23,882
and then I closed, like, the window and went to sleep,

2625
02:20:23,882 --> 02:20:26,882
and then I opened it the next day, and then it was, like, 200 confirmations.

2626
02:20:26,882 --> 02:20:27,882
You were like, wow.

2627
02:20:27,882 --> 02:20:29,882
I was like, where are these confirmations coming from?

2628
02:20:29,882 --> 02:20:31,882
I didn't, you know.

2629
02:20:31,882 --> 02:20:34,882
Sometimes you have to get your hands dirty to, like, really learn the details.

2630
02:20:34,882 --> 02:20:35,882
Right.

2631
02:20:35,882 --> 02:20:38,882
That was how poorly I understood it when I first was using it.

2632
02:20:38,882 --> 02:20:42,882
So I would just say to do that.

2633
02:20:42,882 --> 02:20:46,882
I would also say this argument about the non-mined L2s,

2634
02:20:46,882 --> 02:20:49,882
I think it's pretty important that I don't think—

2635
02:20:49,882 --> 02:20:53,882
I think the successful L2s will be merge-mined.

2636
02:20:53,882 --> 02:20:55,882
And will contribute to the security budget of Layer 1.

2637
02:20:55,882 --> 02:20:58,882
And it's just easier to have everyone on the same team,

2638
02:20:58,882 --> 02:21:01,882
which is the users consuming a service

2639
02:21:01,882 --> 02:21:04,882
and the miners collecting a transaction fee.

2640
02:21:04,882 --> 02:21:06,882
Speaking of Mike, now we've come full circle.

2641
02:21:06,882 --> 02:21:08,882
Mike Casey is also very much on this tip,

2642
02:21:08,882 --> 02:21:10,882
and he is making a lot of noise right now

2643
02:21:10,882 --> 02:21:12,882
about the importance of merge-mining for Layer 2s,

2644
02:21:12,882 --> 02:21:16,882
and I think that that is an under-communicated point,

2645
02:21:16,882 --> 02:21:18,882
especially right now with all the L2s.

2646
02:21:18,882 --> 02:21:19,882
Yeah, people are not talking about it.

2647
02:21:19,882 --> 02:21:24,882
All the L2s, you know, like Lightning, ARK, Fediment, Rollups.

2648
02:21:24,882 --> 02:21:25,882
Right.

2649
02:21:25,882 --> 02:21:26,882
These are all—

2650
02:21:26,882 --> 02:21:27,882
They don't pay miners.

2651
02:21:27,882 --> 02:21:28,882
All of them are non-mined,

2652
02:21:28,882 --> 02:21:30,882
and I think they're all doomed for that reason alone.

2653
02:21:30,882 --> 02:21:32,882
Many of them also have other problems.

2654
02:21:32,882 --> 02:21:33,882
Hot take.

2655
02:21:33,882 --> 02:21:35,882
Okay, L2s are doomed because they don't pay miners.

2656
02:21:35,882 --> 02:21:36,882
We have to figure out how to pay miners.

2657
02:21:36,882 --> 02:21:37,882
Yeah.

2658
02:21:37,882 --> 02:21:38,882
Thank you so much, Paul.

2659
02:21:38,882 --> 02:21:39,882
This was so fun.

2660
02:21:39,882 --> 02:21:40,882
Thank you.

2661
02:21:40,882 --> 02:21:41,882
Thank you.