Hey guys, so I've got a really interesting guest today. I've probably followed him for the better

part of a decade, but he's a Bitcoin OG. As far as OGs go, he's definitely a real one.

And he's just recently come out with a really controversial announcement saying that he's going

to hard fork Bitcoin. You know, everyone's looking at Michael Saylor as sort of the chief bullhead

honcho to lead Bitcoin into the next major bull market. But I think everyone's looking at the

wrong person. I think it might be Paul Sztorc. And decentralized money, censorship resistance,

and peer-to-peer payments, basically eliminating the whole banking layer, the whole financial

system. Bitcoin was designed to be a better functioning replacement of that. So Paul

originally made a proposal for sidechains, I think it was 2013 or 14, I can't remember.

What this would do is really interesting with Bitcoin because with sidechains, it makes it

possible for Bitcoin to be sort of a gas layer for smart contracts, privacy, NFTs,

like faster transactions, experimenting, innovating, basically everything we did in crypto could be

done on Bitcoin. And that's his whole thesis. So again, I think we're about to go into a really,

really interesting, a very euphoric sort of tulip mania season for cryptocurrency and Bitcoin.

And I'm very, very excited to get into it. Anyway, here's my short interview with Paul.

Thank you so much for coming on the show. Yeah, it was a pleasure. Take care and I hope you enjoy

it. All right, everybody. Today's going to be a very interesting conversation because right now,

there's probably nobody in Bitcoin more controversial than Paul Sztorc. Did I say

Sztorc, right? It is Sztorc, but not a lot of people know. It's been pronounced Sztorc before,

but in Polish, the C is a different letter. It's a TS. Sztorc. Okay, got it. I'll try to get that

right for the rest. Okay, so it's a real controversial moment. Why? Because he's

just announced a brand new hard fork of Bitcoin called eCash. It's happening in August. So if

you hold Bitcoin, you will receive the equivalent amount of eCash. There's a lot to dive into,

but first, let's meet the man behind it all. Paul, great to have you, man. How are you doing?

I'm doing great. Thanks for having me. All right, can we just start simple for people?

You're probably tired of doing the same old intro, but for people who may not fully know

your background, can we get a quick overview of who you are and sort of how you became this season?

Yeah, okay. I joined the Bitcoin community a long time ago, like 2012 or something,

and I was always interested in prediction markets and sidechains. I'm the author of BIPS 300 and

301, which are basically drive chain. The second one, blind merge mining, has been used in a couple

other theoretical things. These are BIPS for Bitcoin. Those were from like 2015, 2017, so

they're very old. In 2022, I started this company, Layer 2 Labs, and we produced software that uses

BIPS 300 and 301 for a lot of stuff. In particular, it can bring planetary scale to Bitcoin and it can

bring Zcash-level privacy to Bitcoin. But more importantly, it lets anyone launch their own L2

that does whatever they want over there. So it kind of cuts this problem of governance

and innovation into pieces, and it flips a lot of stuff around. Now, the Bitcoin core developers have

to think about and approve every new BIP, but with this, you just have BIPS 300 and then you have

your own L2. We have competing dictatorships, basically. In my view, it can't possibly pose any

risk at all to anything. I think it's literally not possible. People have been talking for years

about it. So it has a lot of upside and zero downside. So the question is, why are we all

doing this to ourselves? Has everyone gone crazy? And unfortunately, the answer is yes. But that's,

I guess, what we're here to talk about. Yeah, that's why I wanted to have this conversation,

because it's not like you're some griff that's coming along for attention or some self-serving

capitalist that's trying to monetize some special event. Fine. People are interested in Lightning

and people are interested in this other stuff. So, yeah, I've just been waiting patiently. And,

you know, things have done very, very well in Bitcoin. You know, overall, if you had to give

Bitcoin like a pass-fail or something, you'd give it like an A++++. I know people who got

coins out of Gavin Andreessen's faucet, his free Bitcoin faucet back in the day, you know,

when it was 10 cents and they sold for $100,000. So they got literally a 99 million percent ROI.

So this is the greatest performing asset in the history of capitalism, hands down. The important

question is, is Bitcoin going to make it? Because if Bitcoin makes it, it will be $25 million per

coin and it will be used everywhere in the world, like every day by everyone. But if it doesn't

make it, it will go to zero and it will be a huge embarrassment to everyone who, you know,

threw their weight behind it. Yeah. So that's that's the question. Yeah, I see. So the intentions

are really clear to me, which is why I was very I mean, I mean, I'm never surprised. Obviously,

there's always going to be controversy around this and there's going to be people that hate it,

but it just seems a lot of people are reacting very emotionally to this fork announcement and

sort of just either not understanding or not acknowledging the sort of underlying frustrations

that sort of led here. And it's almost like it's more of a philosophical disagreement than an

engineering one these days. And I feel like that's kind of where it changed in 2017. Yeah,

absolutely. We won the block size war, but we kind of killed the goose that lays the golden egg

because what the lessons that people took from the block size war was stuff like

the people who try to change Bitcoin will be made fun of and humiliated and then suffer and then

fail. That was like the lesson that one of the cultural lessons that people learn.

So these are all the cultural lessons that were learned. All the stuff like, OK, we don't need to

like lightning will fix it. It was like a battle between large blocks and lightning. And it was

like lightning is just going to win. So you still to this day hear people saying on like on the main

stage, like on the big stages and with big platforms, they still think, you know, lightning

is going to scale Bitcoin. Then people say, you know, you have like these lines from people like

Michael Saylor, these really unbelievably silly lines or lightning and these other layer two and

layer three and layer four protocols. He's just like throwing out these like, you know,

these were like, why not layer five or why not like why not like layer like

fifty five or something? So it's like you hear this stuff. But actually,

you know, as I did this lightning debate recently, none of the actual people working on lightning,

the technical people actually believe that lightning will scale like in the general

common knowledge. This is another thing with the operatron thing. The operatron

thing is totally fake. And every single one of Luke's points is bizarrely wrong, wrong,

not only wrong, but kind of bizarre. But but there's a core truth to it, which is that Bitcoin

core is corrupt and Bitcoin core doesn't care about doing the right thing either. So this is

the this is the problem is actually really, really big. And it may be already be unfixable. It may be

too late. But I think with the hard fork announcement and with the project, it will

shine a lot of light on all this stuff, which is, again, this is like super, super, super important.

People talk about layer zero is the culture or something. The culture is in very, very bad shape.

Do you think it's sort of protect my bag bias over truth or over innovation?

People have been sold this idea that. Like being toxic is good for the asset because

it resists the spread of FUD. So, yeah, people have been trained thanks to years of bad FUD,

you know, like Greenpeace saying that Bitcoin mining is like bad for the environment or whatever.

A lot of people just parrot that. And that was kind of never really true. And it kind of didn't

wouldn't even matter, even if it was true, because it was like, you know, like how much

electricity does the regular banking system or the NFL or the cosmetics industry. It's like you

could go down the line. So all this stuff is ridiculous. But yeah, there's been like a core

of people trained to just say any criticism of BTC is FUD. And, you know, you get a lot of

extra points if you can say, oh, that person is not only wrong, but they're a liar and a scammer

as well. And, you know, there's like it's a whole little like food chain of like podcasts and stuff.

And a lot of money can be made. Like you can get a lot of like OpenSats grants or you can get

on the right stage at the right conference and you can raise money if you just say like people

just, you know, for a while people just put lightning stuff in their name and you could

raise a lot of money and then you could you have this money to spend however you like.

Yeah. So that's my bag. Yeah. I never understood the sensitivity to FUD or the sensitivity to fear.

I mean, if you if you really are a Bitcoin and you call the whole anti-fragility of the whole

asset sort of comes with the territory. So being tested or challenged should never be a problem.

But also that rolls over into, I don't know, innovation and experimentation, which is kind of

what you're up to, right? It's I want to do more with Bitcoin. It's kind of as simple as that. And

if I do, I can just experiment this way because you guys didn't want to do it. So here's my fork.

I'm going to go give it a try. What have we got to lose and why the contention?

I think one important thing to point out is that back in the day, like in 20, maybe 14 or 2015 or

so, it was possible for everyone, like everyone on Bitcoin Talk. There were plenty of people who

had read. You've been a member of the forum for a long time. And instead there wasn't a lot of

podcasts back then. So you would read the forum, which was a text medium, which is a much better

medium, you know, because it's much more serious. You're like writing for a timeless, faceless

audience. And it's text is very, very serious. But the point is, you could have read the whole

forum, like the entire history of it, because you go back and read the old Satoshi posts and you

read the whole Satoshi threads and you just catch up on it every day. And so everyone knew there

was a time when everyone knew what everyone was working on and they knew a lot about it as well.

So they knew a lot of stuff didn't work and people would make fun of certain ideas that

have been tried many times. A lot of people would like make fun of proof of stake. Everyone knew

everything. But at this point, we've reached a situation where there is so much experimentation

and there are so many people tweaking these ideas. And the world overall is a dynamic place.

No one even knows like what people, the idea that Luke Dash Jr. knows what's going on in Solana

or even that Greg Maxwell knows what's going on in whatever, like all that is zero percent

accurate. No one has any idea of which ideas will be good. So the innovation and experimentation

points have taken on enormous new relevance, I think. If we do sort of a comparison between

those two dates, it's not just how it's socially and culturally changed. It's the funding. The

venture capital funding has changed as well, which means the incentives have changed a lot as well.

It's like monetizing the information asymmetry today. We blur the waters more so we can do all

these things and capture some capital this way. It seems accurate to you. It's impossible to over

it. Tons of stuff has changed. Back in the 2013 era, I think a lot of the developers believed

that they would be thrown in jail. They thought what ultimately happened to

a Tornado Cash, a Samurai type people, to Ross Albrecht. A lot of them, I'm pretty sure,

probably people like Greg Maxwell and maybe even Peter Vuela, these other people, they kind of

thought this is a very real possibility. So not only was there no money, but there was like

a real risk. That does cause a different type of person to show up and do a different type of work

because obviously you're filtering out all the scammers at that point because there's no money

and there's enormous risk. You also added another element that I actually felt and I found quite

disturbing. If we look at a scale where as Bitcoin became more socially ossified,

it kind of started delivering its cypherpunk values along the way as well,

sort of in the same trajectory, which was kind of the most disappointing element to me.

Gosh, we could go off on a tangent here. Let me bring it back because I want to come back to

e-cash. With the big cultural shift, I don't really see why, I still don't really understand

why people are so scared to just see experiments happen because experimentation should be pursued,

especially if you want Bitcoin to exist as more of a monetary product because it's not

technically impossible to change, but it really does seem socially impossible.

So technically, drive change could work. Socially, Bitcoin is sort of rejected automatically.

Just for context, let's just quickly flip it into the tech side.

In your view, what's wrong with Bitcoin as it is today?

Just purely on the technical protocol level, you mean?

As a product and as far as survivability is concerned, because is that sort of the underlying

issue with you is that you genuinely think it's at risk?

Yes. Okay. So I think as a product, I think is a good way of phrasing it because,

yeah, I think we've had a lot of great things happen in Bitcoin, undeniably, as I said.

But really, in 2014, we had a window when we were on the beginning of financial times.

And then in 2017, we had a window where this is the highest we got on Google trends,

in December 2017, after the block size war. I think most normal people have kind of made

up their mind about Bitcoin now. You know, it had this thing before where everyone thought,

like, what is this? And people came at it with an open mind. And they were like, oh,

and people are kind of confused about it a lot. But if you tell them, if you tell them like,

oh, it's this blah, blah, blah, they won't understand about hash functions or whatever.

But if you tell them something like, hey, you know, do you really think the government or do

you really think Jamie Dimon, if you have a checking account at Chase, do you really think

Jamie Dimon's looking out for you? Or do you think he's looking out for himself? How much do you

actually know about how much the banking system works? So if you hit people with questions like

that, they would be like, oh, and then you could say, yeah, this is an open source money. Treats

everyone the same on the Internet. Doesn't matter, you know, how old you are, what race you are,

what country you're in. This is an open source piece of software. You could basically email

someone money. And then people would be like, whoa, like people kind of like be into it.

Now everyone has just decided. What has everyone decided? First of all, we totally lost the whole

like Bitcoin, not crypto thing. But really, everyone has decided that this is just like a

bunch of shady stuff that normal people don't use. And it's not for normal people. It's for

like young men who are gambling. It's for, it's like for some kind of weird, you know,

people think that it's for some kind of weird tax evasion or some kind of weird,

something nefarious, like some kind of crime. And that's what people have made up their mind.

So as a product, I think it's actually, it's really bad sign when we've had these bursts of

interest. But now I think, because it's very hard to get people to reconsider it a second time.

Yeah, I'm worried about, I'm very worried about that. I mean, so we don't have something that

scales, scale is more than just a feature. But a lot of things are like that a lot of things

have network effects, like a lot of people, they like their iPhone people, and they don't want to

switch away from an iPhone, because this is the user experience they're used to. And, you know,

people don't want to switch from like a QWERTY keyboard to something else. And so a lot are the

USB to switch from USB A to USB C, and then the versus the Apple cable. So yeah, these things have

network effects. And it's, it's really scale is the kiss of death. Yeah, it's like more than just

like a little bullet point on like a PowerPoint slide. It's pretty important. Yeah, I can actually

relate to that. So I was really driven by all the original Cypherpunk principles, I was really big

on the idea of privacy coins, was kind of my whole thesis coming into the space originally.

And when I look at Bitcoin, I treat it as I'm kind of okay with the way it is right now as a user,

I treat it as like a savings vehicle, right? And it protects me from inflation, everything else,

where I see, and I've gotten used to using stable coins, for instance, as sort of my medium of

exchange for paying bills and things like that. Where I see the issue is that Bitcoin no longer

works as an inflation hedge, if government starts taxing me every time I need to swap into

stable coins, because they capture the inflation gains they would normally get through that

transaction, and I lose it, essentially. So Bitcoin loses its quality as an inflation hedge,

if I get taxed on every time I need to port into a cash. So with what you want to like, we'll jump

into drive changes really quickly. But with what you want to solve, the underlying idea is to

pursue Bitcoin as more of a monetary product as well, and scalability.

Well, okay, I'm glad you brought up stable coins, because I have like a couple like

lists of things where we've lost. So like when Bitcoin first became big, and privacy coins,

you know, the first real customer for Bitcoin was Silk Road, the website, that was the first

like place where it was like you actually was being used like for something to achieve a task.

And then we've lost all that to Monero now. So that is like the canary in the coal mine,

it happened a long time ago. But then stable coins also like I remember when I went to,

I went in 2015 for Scaling 2 to Hong Kong, everyone was obsessed with stable coins in

like in basically in Asia, and in Japan also. So where they're just a little bit further away from

like the toxic maxi, whatever, there's like zero, like Bitcoin maxi, and they're like,

Bitcoin maxi. So there's all the stable coins were very big there. And now stable coins have

gotten super, super big tethers super big. When Trump did his Trump coin, that is that was on

Solana. So you can go down the list of like a couple things where it was like, I just speaks

to the earlier question about from a product point of view, I really think especially with

something with network effects, which money has extreme network effects, is, which is to say,

you want to be using the same money that your friends are using. And money has this property.

And for something like this, you're either growing or you're dying, I think. So when you see the

stable coins growing, and when you see darknet market of Monero growing, you know, that's it,

Bitcoin's dying. That is that is the death of Bitcoin. We can see it happening. It's happening

right now. So yeah, yeah, I see it as a threat as well. I've kind of viewed it through both lens.

I see it as a threat, but I also simultaneously see it as everyone's just taken one step away

from fiat to come on chain essentially. And that means they're one step away from realizing that

holding on chain fiat still presents the same inflation issues. So you're one step away from

going into Bitcoin. But before sort of addressing that, when you talk about stable coins and Monero

as a sort of monetary unit, do you think velocity matters for Bitcoin? Because for me,

for instance, I don't mind having Bitcoin just sitting there. I don't want to transact my Bitcoin,

you know, most of the time if I can use other ways to pay for stuff. But if I start getting

taxed, that's when it becomes an issue. Every time I need to move out of Bitcoin into cash,

it becomes like a UX hassle and a cost. So that's where I see the issue where velocity will matter.

If Bitcoin was that currency, then it wouldn't be that issue. I wouldn't have that hassle.

Well, I think it's actually a nuanced question. And you have to say the nuanced answer is that

it's sort of sometimes it matters and sometimes it doesn't. It's hard to kind of explain,

but it's kind of like, okay, what if you had like everyone's buying a car

and the car and you're in Singapore or something. So the car has air conditioning, but no heat.

But you don't really need the heat in Singapore because it's hot.

Yeah.

Now, that's one tiny facet of it. But now if this car also has network effects and it's like,

you know, one person is going to sell the same car, like we have some magic machine

where it's hard to set it up. But once you do, it makes a perfect copy of the car for free.

It's like the replicator in Star Trek or something. But we have to pick the same car for

everyone. So we'll have the people in Russia and the people in Minnesota and whatever, they're

going to want heat in the car. So the car's dead. With no heat, the car's dead. And so that's kind

of like, is it a store of value or is it a medium of exchange? We really want it to be good at

everything. It's a very interesting thing when people say this about the store of value. Well,

hey, it works as a store of value. But again, the goalposts keep moving because what it used to be

and what I absolutely signed up for and what I completely 100% endorse, and I always have

endorsed and I always will. And even the Layer 2 labs, BIP 300, all this stuff, I endorse the

scaling in layers. So everyone always said, listen, this is a new type of thing. Layer 1 can

only do a few transactions. We have to make sure we protect store of value. But then we'll get the

medium of exchange later with technology. So everyone was like, OK, we store a value.

And then BIP 300 is basically, all BIP 300 is saying is instead of using

USDT on Ethereum, you would just use like BitEthereum. You would use like a quasi thing

with no ether and all just with Bitcoin. And you would use the USDT like on that. So that's all

that BIP 300 says is that all these projects just be converted into Bitcoin projects. You know,

Solana, Ethereum, whatever, everything. So that's the idea. So it's extra bizarre and suspicious

that everyone should be out in the streets marching for BIP 300, you know, like shouting

for it at the top of their lungs. But it's, you know, I don't say that out of vanity. I just say

that I think it's more of a symptom of just like how everyone has been trained to have an opinion

that is popular instead of, you know, like one that's actually reasonable.

Yeah. So I actually believe that the current issue is really just an infancy

problem and sort of hyper Bitcoinization is inevitable. But I suppose a critic or an

opponent would say to you, using your car analogy, for instance, it's great to be sort of a jack of

all trades, but you're compromising something on some end, like you can't have everything. For

instance, with a car, you can't have a supercar that outpaces everything else if you also give

it the luxury interior and all the bells and whistles that go along with it because you

compromise on speed, right? And that's sort of core to a lot of the debate. Is that right?

Well, it's a good point, but it's actually not true because the question of which things are

traded off against which things, that is a technical question. And so it may be the case,

for example, sometimes an idea is just better. So maybe they discovered, hey, if we build the

exterior of the car out of this material, it will weigh less and have better fuel economy and it

will be safer in a crash and it will, whatever, I don't know, reflect heat or light or something.

It can be better in many ways. So sometimes an idea is just better and there is no tradeoff.

Yeah, I agree. I think the narrative, it's really similar to when, you know, war takes off,

everyone becomes like a military strategist. I agree when these sort of contentious Bitcoin

ideas come up, everyone becomes technically proficient all of a sudden.

So assuming the engineering physics is exactly as you say, and just, I want to come back to the,

I want to come back to the political side of this, to be honest, to finish up. But can we just quickly

and using your car analogy, probably the easiest way, would it be easy to say for drivechains, it's as simple as understanding, you know, Bitcoin's like the highway, drivechains would be when you want to go to a specific destination off the highway, which removes the congestion that you get if you just had one entrance and one exit. You have lots of little side streets.

Well, from a security point of view, it has a big advantage, which is that you can onboard people directly to the L2 without the person leaving L1. So with Lightning and with almost everything else, the person has to get coins on L1 and then like open a channel on L1. But a drivechain is a little more loose. So you can have one guy, like a super rich person, like a Roger Ver or whatever.

They could send with one transaction, like 50,000 coins from L1 to L2. And then those 50,000 coins, you could onboard people there and the coins could circulate over there with nothing happening on L1. And that gives it an enormous advantage.

So I don't know if that is the best, if that helps with the highway car analogy. But a lot of other stuff is dead on arrival because it cannot do that. A second thing that's much better about it is in my conception, all these L2s are merge mined. The drivechain idea is that all the fee revenue would just go to miners.

That means that there's no conflict of interest between the miners and the L2. And in fact, far from being conflict of interest, I was kind of imagining in my head like 10 years ago that maybe like miners would, they would like be funding the L2 development and stuff because they get all this money feeding back to them, like a huge amount of money in fees.

And they benefit as a result. In other cases, the fees go to different people. For Lightning, they go to like the routing nodes or the LS Lightning service provider, LSB. For Liquid, Blockstream, Sidechain. They put sidechain in quotes because it's really not a sidechain. It's just a multi-sig address controlled by them. And they get the transaction fees are hard-coded to go to them.

It's the kind of thing we would make fun of. We make fun of that in Zcash and the altcoin and other projects. We make fun of that type of thing, but that's how it would work in Liquid.

If you have a situation like that, if Liquid became super popular, then you would have miners who are supporting the L1 earning very little amounts, and then the L2, the money being collected by a different person, and this would set up a conflict of interest between the L1 miners and the L2. And none of the L2s can survive a battle with the L1 miners because the miners control the on-ramp and the off-ramp to every L2, not just the 300.

Because they control every message that appears in the L1 blockchain. So they can censor or hold anything hostage.

So with your drivechains, there isn't decentralization issue? That's the primary distinction that there's no central control that has authority over the capital that's moved from the L1?

I would say that, yeah, it's miner-centric. So it says each block, you can have messages in there that govern which sidechains are on, what name do the sidechains have, what software are they pointed at, and the deposits and the withdrawals.

So each block can do this. There's no single person deciding that. So in that way, it's much more decentralized. And in particular, decentralized development, which is a phrase that I don't think people have really wrapped their head around what it would mean because people think, oh, there's a lot of different stuff.

But it's like, yeah, Bitcoin Core is one website. There's one GitHub repository with maintainers who merge. They publish the official version. People are very, very, very hesitant, very reluctant to run any version of Bitcoin that's not the official version.

They really want to make sure the exchanges and stuff, the miners, they all want to run the same version everyone else is running. So it's extreme network effect situation. And yeah, people try to put out other clients. I don't know. I don't think they've had any real success in terms of adoption.

Although they have proven, sometimes they've proven their point. Like Bitcoin proved that you could do it all in JavaScript. And of course, Eric Voskuhl, he proved that he's a much better software engineer than everyone at Core combined. But that doesn't mean, and this is the problem. It has nothing to do with Eric. This is the problem is that you can be the best, and it doesn't matter.

So that puts us on a ticking time bomb, because it means we're not absorbing all the best ideas as quickly as we possibly can. And that means if you just add time to that equation, it means eventually there'll be something that's much, much, much, much, much better.

Something that is better ideas as quickly as possible. So that is the issue. That's the problem with you. You just say, well, innovation is not that important. But you can only say that for a short amount of time. If you fast forward 10, 15 years, suddenly it becomes the only thing that matters. And it's like the samurai getting mowed down by machine guns or something.

Yeah, lightning has become a deranged, this is really an enormous source of derangement. Because people don't, they don't want to face the fact that it, they put a lot of time into like the brand and like even all the stuff like the Nostra zaps and stuff. If you zap someone, if there's a primal to primal zap on Nostra, it uses the lightning icon.

And it, it, it, you know, purports it show it masquerades as if a lightning transaction took place, but there's absolutely zero lightning transaction, none whatsoever taking place. But this is exactly what I was talking about at the beginning about the metastasization of like the cancer, where it's very easy. Oh, should we tell the hard truth? Or should we tell a comforting lie?

And the comforting lies they breed, it's like, you know, your house getting infested with rodents or something. And they, it's not just the one, it's the termites, you know, they are eating the walls and they multiply. So it's like the broom, the broom in Fantasia, you know, with Mickey Mouse, and the broom, and he chops it up, and he makes a million brooms. I don't know, I don't know if this reference is landing.

You know, it's like, trust me, it's bad when they start to multiply. So lightning has caused all kinds of related false ideas to spread.

Doesn't that give you a lot of confidence in the success of your fork as far as engineering community rallying behind you?

Well, this is the magic of competition is that anytime anyone, anywhere makes a mistake, that is a gift competition to the competitors. So yeah, we want to maximize competition. Unfortunately, the hard fork is a very difficult venue for competition. It has a lot of late, it's laden and burdened with all these disadvantages of like, you have to have a new, because everything is kind of saying, Oh, start your own country.

And it's like, well, you know, with no, no electricity and no airports, and you know, so you need a lot of stuff. It's very, very difficult. If the sidechain world is better, because once you start it up, you can just, this is like, we're all in the same food court.

So instead of like having to walk across the Sahara Desert to get to, you know, whatever, Sbarro pizza or something, they're all like right next to each other. So you want to reduce the cost to switching to a new idea that maximizes competition.

So yeah, that does, that is exactly what makes me think is viable at all, is the fact that the mistakes are so big. But that's part of my message is that the mistakes are not just technical mistakes where people will see, oh, once everyone sees BIT300 is a good idea, they'll just turn it on in BTC.

I think like, you know, even if it will be confusing to most people, even then, even as it's happening, because it's like it's been happening with the stable coins and with all this other stuff.

So it's not like I want, but you know, the Trump and the Melania coins being on Solana, like that is supposed to be our bread and butter, like weird, absurdist corruption and bizarre, you know, like weird, weird financial transactions.

Everyone would have thought back in 2014, everyone would have thought, oh, if you said, fast forward in like a long time from now, there's going to be weird digital assets on the blockchain that like the president will be an extremely controversial, but very opinionated and effective person and kind of quasi corrupt.

But with like a kind of a cat who ate the canary grin, like a kind of like trolling level of corruption. Everyone thought, oh, this would be these would be like Bitcoin. Of course, this is going to be like he's a Bitcoiner, which is sort of it.

But it's like he's also like a Solana pump that fun meme coiner, you know, and it's like that's supposed to be our thing, really. But now everyone's just decided it's all sour grapes through and through Aesop's fable about people say, I can't reach the grapes.

We said we never wanted privacy anyway. We never wanted a lunatic dictator, quasi people to just like issue like a billion dollars of like something they just invented, like a Hayekian, like just do whatever they want on a different blockchain. We never wanted that on Bitcoin anyway. We said all this weird stuff that we would never have said.

Yeah, right. That's kind of a very interesting take on, I guess, the viability or success of this fork. And it makes it very intriguing, I guess. Do you think we're going to see a lot of public support behind it as it goes out?

I have no idea, honestly, because I can see it going several different ways. One way is there could be like a like the dam could just burst at some point where all enough of this stuff, like evidence of these huge mistakes is like collected in one place by a few people who can kind of like just keep hammering it out.

And so eventually there's like an emperor has no clothes moment where everyone kind of realizes or everyone's finally ready to accept like this has kind of happened a little bit with lightning where, but not quite. There was a time when lightning was totally infallible and you could not criticize it at all.

So it was completely uncriticizable. And then there was kind of like a little blip and then people started to talk about lightning's limitations and problems. But that kind of settled down into something where it's just you're allowed to talk like with this extreme jargon and this technical language.

And you can talk about like extremely obscure flood and luge and you can say all this weird stuff. And then you're supposed to, but the conclusion is supposed to be smart people will take care of it later or something. So it's kind of like been put in like a little bit of a box, the criticism.

So yeah, maybe the dam will just burst and there'll be this emperor's new clothes moment and everyone will just like realize that there's all this extremely serious issues. But I think it's also possible that like we'll, this project will have to like go through a similar like trial by fire that like Bitcoin because Bitcoin first came out like everyone hated it at first. So it might be the same for this. I'm not sure.

Does that also count on because the network won't be stable initially, will it?

No, it won't. The first like week or whatever, it'll just be like complete chaos. Yeah. Maybe even afterwards. It won't be stable. It'll be really weird.

I mean, that volatility is kind of fun. I feel like I'm from the traders perspective. To be honest, when you first announced, there was another reason I was so shocked by everyone because I felt a warm sense of nostalgia when you brought up a hard fork at first.

I was like, oh, that's probably so, you know, the narrative behind Bitcoin has been so dry. It's just all regulation, institutional capture. And yeah, as you said, just Michael Saylor bouting out all these buzzwords. But the idea for fork was, yeah, it was kind of, oh, here we go. We get something interesting for once. Bitcoin's moving forward, maybe.

Blood pumping through our veins and we're still alive, you know, like, yeah, it was kind of like an autopilot. And yeah, it's annoying. I don't like it at all. Well, you know, we're not this. It would be fine if it was just harmless, but it's not. This is the trade off is that you get these people in and then they're weighing in on stuff. And it's like, it's just really weird.

Again, I don't even think they know what they're saying. Like, I don't even know the pro ossification people. I don't think they actually know like how to achieve ossification. They don't, you know, it's apparently they don't realize that the Bitcoin core organization, they put out a new version every six months. So it's not like literally ossified at all, in any sense, not in the slightest.

And there's secret bugs, CVs, you know, critical vulnerabilities, and there's mistakes. So, so I don't know, like a lot of these, we have these people weighing in, and then they're supposedly like the cultural spokesperson. But yeah, that does crowd out. If you have people on stage, then other people are not on stage. So, yeah, like the free samurai should probably be more a little more important.

Versus the Bitcoin treasury companies. You know, I think these are very silly idea where you are giving away your Bitcoin, really, because you have money that you can invest in Bitcoin, you pay the opportunity costs of owning Bitcoin.

So instead of owning Bitcoin, you buy shares of stock that MicroStrategy can print at any time, or any of the rest. And what they have done is layered in all this extra complexity, where they said they have preferred shares that are even ahead of you in line.

And convertible debt that's ahead of you in line. So these people get paid before the class A shareholders get paid. So they're at the bottom of the totem pole. And, you know, when they say convertible debt, what they mean is the debt converts into a bunch of extra shares being printed.

So it's like everything that people hated about central banks rolled into this thing. And this is presented as a Bitcoin project. So it's a big, it's all a big distraction as well. Like we should be talking about improving the software, making it easier to run a full node, doing more stuff with Bitcoin, you know, whatever vaults to help protect people's, you know, every time.

So Jamison Lopp has this database of like physical attacks on Bitcoin. It's like when they like break into your house, torture you and your family, your coins. But yeah, if we had vaults, we could deter this, it would be much harder to do. They wouldn't be able to get away with it. And then of course, if they stop getting away with it, they're going to stop attempting it in the first place. So that's the ideal situation.

Where's all the conversation about a vault? Zero, absolutely zero, negative, in fact. And instead we talk about BIP 110 or this other stuff. It's all a distraction. So yeah, when we allow this stuff in, it crowds other stuff out. And there's no getting around. I think knowledge is the ultimate arbiter. It would be the ultimate like, you know, what's true and false will mean the difference between death and survival, I think.

Yeah, that's another reason I don't really understand the outrage is because, I mean, and it's what I like about what you're doing, I guess, is it's kind of more free market. I mean, we get to hold Bitcoin in eCash and just see what happens essentially from here on out as Bitcoin holders. So yeah, I really don't get it.

Everyone's getting free money. Everyone gets free money.

Yeah, if it works, it works. If it doesn't.

Like a treasury company that you have to buy. You have to buy, you know, shares of MicroStrategy. But at the hard fork, you just get all this stuff for free. So it's kind of like, why would anyone ever criticize it under any circumstances? Of course, there is like about network effects and about brand dilution and stuff.

So in the Bitcoin Cash days, one of the number one things that people hated about Bitcoin Cash, and kind of rightfully so, was that it was like reusing the Bitcoin name. And now there's two things with the name. And so people didn't like that, which I understand. But that's not the case with this.

Something else about this project was that one thing that people reacted to was the fact that Satoshi doesn't get all of his coins. And some of the support inside supporters of the company and of the software and investors, you could pre-invest in eCash, you know, before the fork happens. And then you can hit the ground running when it starts.

So a lot of people hate that. But actually, they shouldn't hate that either, because that gives people an incentive to launch more hard forks of this kind, which all of which give you more free money. So that is the key. That's like the key to the circuit. In fact, like all this stuff is like, just like, these are just like really, really good ideas. The fact that people don't like the ideas, it's just very suspicious. And I think it actually outs them as having no clue about what's going on.

Because if you think about it like this, the people who are complaining about Satoshi's coins thing, simultaneously they're saying two opposite things. They're saying, this is a terrible project and it'll go to zero. And everyone associated with it is an idiot and whatever.

But then they're saying, depriving Satoshi of his full thing of eCash will result in substantial, like financial harm to him or some kind of horrible damages, you know, he'll be in pain and suffering, because he'll only get 600,000 eCash instead of 1.1 million.

Of this token there.

It's a contradiction. They can't have it both ways. They can only complain about the theft if they think the project is really, really, really valuable. And that it's like, it's this enormous threat and it's very likely to become like the number one currency of the world and displace Bitcoin and all this stuff. So they really can't have it both ways.

And this is part of just how crazy everyone has become, that they latch on to like these weird parts of it, purely because it's like a word association game and they could just say, oh, Satoshi is good. Like theft is bad or whatever. They just stitch all these ideas together. But actually, if you look under the hood, it doesn't make the faintest bit of sense at all.

Yeah. And I find that's actually a very common pattern when you see them sort of picking and choosing which cypherpunk principles they like the most. You know, pro-decentralization, but love these big Bitcoin acquisition vehicles, whatever pumps. There's lots of contradictions in that page. And I completely agree. I saw it the same way. Like, it's weird to say, hey, this fork is shit. Don't ever buy it. But hey, make sure you save Satoshi's coins. That's not cool.

It makes no sense. You brought up a really interesting point that I in fact, because I mean, when I first heard about it, I straight away thought the Patoshi proposal would obviously trigger outrage because it kind of sets maybe, I don't know, the idea that it sets a precedent, questions the whole social principle of it all. But it does incentivize a lot of other people who will probably follow your lead after this.

Yeah, I'll give you like, there's more nuances to it that I think people are sort of grasped at like a subconscious level, which is why they're so upset, which is that the thing is, it's kind of like people don't want, they need to be able to win something. They need to be able to like humiliate innovation or something. So if the idea is a good idea, it will be very embarrassing for them for it to be tried anywhere and then succeed.

And if then all the people who supported it earliest get extra money, that's like rubbing salt in the wounds. You know what I mean? Now it's like they're really like they could have. So you see, this is like a huge like, it turns this shame machine upside down, actually, because now all these people criticizing it, it was like they could have got it at immediately at a lower price.

It could have been involved earlier. And now they are the, you know, they're like the people who are like making fun of Bitcoin when it was like 10 cents or something. So they look around and say, hey, you're going to criticize this. Now you're responsible. But if it's a pure hard fork, they can criticize it all the way up until the moment of the fork, they can drag their feet the whole way.

Then they get the same as someone who is a supporter and who stuck their neck out and sacrificed for it. So they intuitively understand that the pure fork gives an edge to the critics over the risk taking entrepreneurial innovator and that this thing upsets that.

And so they want, of course, they want to have all their free, they want to have their cake and eat it too. They want to have, they want to take all the coins and they want to say the coins suck. They don't want to, they want to be able to say, because then it might fail. Think about it. If it fails, they win because the coin, because it failed and they were right when they criticized it. But if they were wrong, they still get all the coins. So of course, they're still taking all the coins.

So the last thing they want is to be held responsible for their view. And this is because we've shut off the knowledge circuit where people, as I said, people don't look into it anymore.

Now here's the situation with the hard fork. How can anyone, why would, if you're asking people to do all the work upfront, see Satoshi is kind of a hero because he did all the things on the bot, but most people can't even do one or two of these things are not realistic.

It's like you do all the, put in all the work to make sure that the software works and exists and has pretty good user experience. You have to pay the cost upfront to do all this work.

Then at the moment of the hard fork, you're rewarded the same as, you know, one of the, one of the, someone who did nothing or someone, a critic who fought you every step of the way.

How is that desirable? And how much innovation are we really going to get in the world where that, where we rely on altruistic people who are independently wealthy to just shoulder the burden?

And well, we're just not going to get as much innovation as we would get in one where people can actually go to, there's a business model that compensates you if the idea ends up being good.

Because of course the idea is terrible and you can actually get those to zero and it was a big mistake.

But of course the value is that maybe I'm right about a lot of things I'm saying, or at least that a viable competitor to Bitcoin would actually help like everyone overall because it would get everyone focused on delivering stuff that actually matters and actually caring about stuff that people say is true.

So I'm not exactly comfortable, the relationship that we have with Satoshi, where Satoshi does all the work up front and then he mines millions of coins that he abandons and then leaves selflessly.

Well, I mean, obviously I appreciate that. Of course, we all appreciate that.

But is that really the relationship we want to have with the next Satoshi out there?

Actually, I would say no, I don't want, that's not how I would like things to run.

I think it would be better if there was some way where that person could walk into either a room with some kind of capital raising apparatus or maybe just a room full of OG Bitcoiners.

And then to say like, this is the idea. And then there's this vehicle now.

There's this process where, OK, if they do a good job and the idea is good and the execution is good and the software is good and it's all ready, then it will be ready on the day of the fork.

Because, of course, the day of the fork, this is yet another, a third facet of it all, really, which is there's lots of news every day.

And why would anyone pay attention to the fork? Why would anyone pay any attention before it's actually happened?

Because maybe it won't happen.

But people's attention is part of what makes the Bitcoin project a success because it has to be a recognisable project.

And again, I would prefer to be doing the one, a third, yet another irony is I would prefer not to be doing this at all.

The BIP300 part, that part was produced like by me for free, and that is the free and that doesn't touch any of Satoshi's anything or anyone else's.

And it's the opt-in, ignorable, reversible soft fork.

So you could do, we still do BIP300 at any time.

BIP300 actually doesn't require any lines of code to be changed in Bitcoin Core because it's encoded in the second thing, this is the activator that just runs next to Bitcoin Core.

So it doesn't even have to get through their weird pull request.

But still, I'm telling you, we will never do that because the culture is deranged because they didn't care before about how every soft, every op-nop, soft fork is 100% safe and reversible.

So they didn't care about that. So they're not going to care about this.

It's all, it's all Greek. It's all indecipherable to them anyway.

And, you know, where everyone still thinks lightning is going to save the day and all that sort of stuff, that's not true.

So that's already what everyone believes.

Yeah, I feel like that makes your fork even more compelling is that you've, this isn't something that you just like decided to do in a huff.

You've essentially had your proposal queued for like 10 years.

Right. And I was not even that unhappy about it.

I wasn't that unhappy about it.

I was just thinking like, OK, because Bitcoin was doing very well.

And so, you know, Bitcoin's doing great.

And I'm very happy about how well Bitcoin has done.

But then, yeah, like I started looking into other stuff.

Like in 2022, it was like really like the like lightning doesn't work at all.

I did a tab conf a few months ago as just another data point in this vein.

But I did this debate against the entire room of lightning devs.

And they basically all agreed with me that it would not work.

And everyone was basically just agreeing with me that they're like, yeah, it was a mistake to sell this as the thing that will scale Bitcoin to a billion people and it will not.

And so and then people wanted to try back in the day.

I pitched DriveChain informally to the large blockers.

I said, hey, you can get everything you want.

You can get large blocks.

You can get a lot of blocks.

You can get large blocks.

And they wanted to do Bitcoin Cash, which they did.

And they learned they they suffered enormously in some respects.

But also they had they got to create their project however they want.

And it's Bitcoin Cash is pretty high on the coin market cap rankings on a relative basis.

It did go to number two, like in that one November when it debuted, it was like one day.

And there's the famous Vitalik tweet.

He said, congrats on this seriously.

And people turned that into an inside joke.

And they would say, congrats on this seriously about like all kinds of stuff.

Yeah, that was like a funny little joke.

And so the Bitcoin Cash people and the Lightning people, they've had like their little bit of success.

But no one has seriously scaled Bitcoin to two billions of users every day.

And I'm not saying that we would do that overnight or even that BIP300 would do that overnight.

But this is what I'm saying, because you brought up that it's been waiting for 10 years.

And it's like, yeah, I know all about the whole lay of the land and what everyone's working on.

And this BIP300 idea is significantly better than a lot of the other ideas that get more attention.

So again, now we have this hard fork and it's sort of like there will be people using it firsthand.

And then it won't just be about whatever people say on Twitter, because any random user would just be able to be like,

post a screenshot and they'd be like, this is how it works over here.

So there it is.

I'm really interested to just see the conversations that spark from the fork,

because it's not just a fork, right?

The sidechains get deployed, your drivechains get deployed straight away.

Right, we have like seven or so that are basically finished.

They're in various states of, some are like rock solid.

So we have the one type, which is just an optimized sidechain with large blocks, basically.

So it's like very, very fast.

And it's just pared down for it's like for transacting.

So we have that's one style.

And but that if you copy and pasted that like 14 times to have like some math about this,

you could scale to the entire transaction throughput of the planet Earth.

And all the fees would go to L1 miners and it would just work.

There's no liquidity like enlightening.

You don't have to be online and sign a message with your hot wallet to receive funds.

This is like many, many, many benefits.

So that's just one type.

And then we have one that's based off of the technology and it pulls the orchard crate from zcash, the altcoin.

So we call it zside.

And so that gives you a z address.

So you have privacy, the sender, the receiver and the amount are hidden.

And you're mixed with everyone in the whole chain.

So with CoinJoin, you just mix with four other people.

You're one of five.

You have to keep doing rounds and you can you have to there's a coordinator and you have to all these are on chain transactions that you have to sign.

You have to have your computer connected and stuff.

But of course, the Zcash technology is superior, vastly superior.

But you have one reusable Z address.

No one has any idea how much you're sending and receiving, et cetera.

So and then we have others that do other stuff.

We have like one that's based on Namecoin.

We have one that's like kind of based on it's like an assets thing.

So it would do like this Ordinals, NFT, like Solana, Memecoin type.

That would be like that.

I call that bid assets.

I have one about prediction markets, which is my original interest.

And so we have we have actually a few.

And you can try if you go to layer2labs.com, you can try them with fake SIGNET testnet coins.

So you can try them all yourself.

And they're all some of them are more ambitious.

And so they're not really reliably they're not reliably working today.

But yeah, the the scaling and privacy, those are those work really, really, really well.

You're going to be so busy from August onwards.

You're going to get swamped.

It just kind of dawned on me not to be the money hungry capitalist here,

but you could be responsible for triggering quite a strong quite a strong bull run.

I hope so, honestly, because, yeah, we're paying them dividends.

And we're also like we're flipping the script on.

Oh, should you like when they came out with Solana?

It was like you got a 16 Z and then they they keep like whatever it was,

20 percent or something of the whole thing or even like Ripple.

And there's like this weird shenanigans where it's kind of like this is way better.

The you know, the the Satoshi half airdrop or Shad sometimes called or this like semi private hard fork

or it's like a hard fork, but it's like there's like insiders who are owners of the

they take responsibility for creating it and shipping it out there.

Yeah, I think that's isn't that way better?

It's way better than anything else.

Like, I don't know what everyone I think what everyone else is working on is really boring.

And what we do is really cool.

So, yeah, that's not just what you're doing either, but what you're going to invoke and other people.

Surely other people are going to copy and come up with their own folks during this period or relatively quickly,

because, I mean, it's very socially unacceptable right now.

But then when you make it real and exist and people have a pathway or roadmap to actually finance their fork,

I think you're right. Lots of people.

Yeah, yeah, because not only we could go like everyone makes money at the moment of the fork,

but with the the Satoshi half airdrop privatization, it travels back in time.

So now you can raise whatever it is, three million or something.

So you and your friends can create the forks that gets people thinking, oh, what could I create?

Yeah, what could I do?

And then so then that yeah, I think that's that's ideal.

That's we're talking we might go into a sort of era of fork wars for a period.

Essentially, I think we need some we need we've had very low competition.

So part of Bitcoin cash is it was a very feeble competitor and it did not compete.

And it was too easy for BTC to stay on top.

And same with Ethereum was a much better competitor than Bitcoin cash.

But still, it's like too weird.

You know, it's not like I don't think it's that good.

You know what I mean? Like how strong is the competition band, really?

But I think if we had more competition and then notice what would happen in this world of technical competition is,

yeah, there would be no more of this like stupid people just talking on Twitter about nothing,

because everyone would everyone would think, OK, everything is really up for grabs now and everything could have to be rethought.

So then it will reorient everyone to thinking like, well, how does all this stuff actually work anyway?

So then so yeah, that's the you know, that's exactly what I'm trying to achieve.

So, yeah, you you get it now.

I think you're absolutely right. Yeah, that's got like it.

Yeah, it's got. Yeah, that's fantastic because you're right.

It'll it'll it'll very quickly.

All the big money players, all the power structures will very quickly have to rally behind tangible mechanics or something that works because they'll lose the narrative.

They'll lose spin control, essentially, which is great for Bitcoin regardless.

Yeah, competition is the one true God.

It's cures, cures everything.

Well, it converts every mistake into a benefit for someone else or anyone paying attention.

So it gobbles up all the mistakes, all the errors.

It gobbles it all up. Really insightful, man.

Look, I feel like I've held you too long already.

Yeah, I gotta go soon. Super, super.

I'll come back, though, anytime. Yes. Great, great conversation.

I'd love to. That was great and really insightful.

And you just made me have a total eureka moment there, by the way.

I was like, holy shit, he's right.

I'm really excited to see this. Look, can I just just one closing question?

I think, like, let's just see your vision.

Like, if you're right, what does what does this all look like in 10 years?

I think 10 years. Well, Satoshi had his quote about in 20 years, there'll be high transaction volume or no transaction.

You know, if I'm actually right about like everything that I believe and suspect, then, yeah, in 10 years, we would be looking at a world where the fiat currencies are, you know, they have collapsed due to like national debt, like related stuff and just printing.

And maybe they haven't collapsed, but there's digital currency like in every country.

So everyone like knows there's like maybe two prices for everything.

I don't know if we'll be like a transitional period.

But on top of that, we would go through like this revolution in the sovereignty of computing where everyone would know how like the 12 words works, like the BIP39 word list, like how people can drive a car.

In America, almost everyone can drive a car, which is a hard thing to learn how to do.

And it's dangerous.

But people would actually know about the 12 word list.

They know about like how to make sure that they're downloading like real software and there would be real actual users of this software.

And they would actually that would change a lot of things, because I think it would change even like the way we the way we do stuff today is you like log into Twitter or you log into StreamYard or whatever.

But we could flip the whole thing could actually be flipped around where it's like you have your own files and you have like your config files for like this is how I want Twitter to work and you have your own keys.

And we could flip there's another weird is kind of a harebrained thing.

But we could flip from like this logging in client server thing to where you just sovereignty, you have your own files.

And then when you want to go when you go up to the airline, you don't have to log in.

They like look up your name on the blockchain or something like that.

This is like the name coin vision.

They look your name up and then you get a little thing on your phone and you sign in.

But there is no account like you have you have everything you have like your name, you own the name and you buy a plane ticket for the name.

I'm also a huge proponent of these prediction markets.

I've been a huge proponent of prediction markets for a really long time.

You go to BitcoinHiveMind.com and watch my little video.

I have a 20 minute video that I did in Acapulco one year.

And the prediction market utopia is it's only barely begun.

We currently have markets where you just bet on whether or not something will happen.

But I have a completely different paradigm involved where it's like you would bet on if we did this, then what would happen?

So it's like if we change the Federal Reserve policy, what would happen to inflation?

If we fired one political party, if we fired the left party and replaced it with the right party, what would happen to GDP or all this other stuff?

And that can go down in every direction.

Like if we fired the mayor or if we fired the CEO, what would happen to the stock price?

Or you can go down the line.

And so I have a huge visionary on that front as well.

And I've been a proponent of these prediction markets for a really, really, really long time.

And I have written stuff that's like made it to the top of Hacker News and stuff like 10 years ago.

And a lot of people are like it.

So people go to BitcoinHiveMind.com and they can see one of the L2s that we're shipping.

And it's a very complicated one.

So I don't know if it will be 100% ready by August.

But you can use it now.

And it's called TruthCoin DC right now.

But you can test it out with the demo software from Layer 2 Labs.

So I'm a huge prediction markets guy.

So, yeah, I think Namecoin, prediction markets, Bitcoin adoption, all these things can be really, really big.

I like that.

Yeah, that's what I'm really into.

I think if we don't, we're either going to win or lose big on this whole like sovereignty thing.

So like either people understand what the full node does and why they need to operate it or they won't.

But I think we can win that battle.

We just have to make it easier and more fun to use the full node.

So if you download our software, I have like Bitcoin Core, like running in a little box out of the way.

So when the node does a bunch of stuff and it's easy to use and it's fun and it looks sort of nice and it's fun to click on, then more people actually do it.

They'll run it to actually, you know.

So now this opens the door to like Steve Jobs type person or someone to just completely change the user experience because I don't pretend to be a great user experience.

But I think what we currently have is terrible, like Bitcoin Core and other stuff.

So we're going to have to round to this man for sure.

Yeah, I have to go.

This has been great, though.

But no, it really has.

Thanks for your time so much, man.

This is really eye opening.

I really appreciate it.

Real pleasure, Paul.

Thanks for your time.

Thanks for catching up again.

Thanks.