There I am. I made it. And as usual, I had to join and leave a few times before it would
work, but I guess no one else except for me has this problem. Anyway, here we are. I hope
it'll be another great space. A lot of news of the week. I made a tiny list. We'll wait
for our esteemed guest, Anthony Riard. I'm not exactly sure how French that is pronounced,
but we'll see. We'll get it from the horse's mouth.
We're going to have a legend, Blaise Pascal. He's going to probably try to bet against us on
whether or not God exists. No, I'm just kidding. He won't do that. But in a past life, I was a
statistician, and of course, oh, my memory is a little hazy on this, but I think he sort of
invented probability or something. Anyway, very important guy in the world of probability of one
kind or another. So we'll talk about lightning. I mean, lightning is a very important thing for
us to talk about, because I'm not exactly sure how we should, you know, we Bitcoiners should
handle it as a topic, because it does seem to be sucking all the air out of the room. Oh,
hello. Welcome. Welcome. It usually takes people when they become a speaker, they're like on a
delay, and then they get on delayed. And then you are muted. Also, keep that in mind.
Okay, do you hear me? Well, yes. Okay, cool. Perfect.
Oh, so you're super, super French. So it's really pronounced like, yes, very differently than
Anthony Riard, something like that.
No, no, no. In French, it would be like Antoine Riard, but I'm fine, Mike.
French has the best Ocarina of Time randomizer speedrunners. I'm not sure if you are aware of that.
I don't know why that is.
The colliders, like the physical colliders, like undergrounds. That's what you're mentioning.
No, the people who play, who play video games and race to complete the fastest.
that is The colliders like the physical lighters like undergrounds.
That's what you're mentioning or
Now the people who play who play video games of race to complete the
fastest
Oh, yeah, I'm not supposed be doing video game games.
Okay, well, in any event, so my thoughts on the Lightning Network
are, like, what exactly has it become?
it's... I was very supportive of it in
2015, I even wrote, anyone can look this up.
I had this peer -to -peer oracle thing, and I thought, oh, this would be great.
We'll have this Lightning Network for that.
I wrote a Lightning Network, back in 2015, long ago, was like, okay, I'll write a
version of the Lightning Network for this project.
I was very enthusiastic about it back then.
Then I
kind of didn't really pay that much attention to it for a while.
And then there's one story I've told before that I'll try to quickly say again.
But I was at, I think I was at an archipelago where there were many Bitcoiners.
This was before it was a fully large block thing.
wasn't that long.
was maybe like, it
kind of like went in waves.
No, it was after that because what had happened was it had gone like full large block
and then it had kind of like retreated back to just being like very neutral on crypto
and there was a lot of just like crazy stuff.
I like Monero there.
It's a lot of just like anti -state people were there.
a bunch of people, I think it was, I think it was wallet of Satoshi.
Or maybe it was blue wallet.
I can't remember.
think it was wallet of Satoshi, though, I should really get my story straight.
But the point of the story is this, that people are going around and they're like,
lightning is amazing.
It's great. has no, no fees.
They said no fees, none.
I was like, what?
they said, has no fees and it's like super fast and it works great.
then someone, they peer pressured me into downloading the app.
Everyone was like, you got to download this app.
I was like, should I really do this?
this app to my phone.
And I was like, without like looking into it.
I was like, whatever, I'm having a good time.
So I download the
app and then they send me Bitcoin.
And then I said something like, oh, but I didn't open the channel to anyone.
And then they were like, what?
And then I was like,
is it lightning?
Or is it custodial?
then all these groups, it's sort of like this room full of people or this
crowd of maybe like 10 or 12 people.
were like, it was clear they had no idea what I was talking about.
And that was the first moment when I was like, I don't know like
where this road is going to lead because, and you see this now where people,
know, they use the word lightning to refer to something that is just a client server
type thing.
Anyway, fast forward to now, where I kind of think that it is like become
almost a menace to Bitcoin even where I don't
know,
you know, but I do think like people are just so stuck on it.
You even have people like Taj, Dreyja, who are just kind of trying to say like, we
can like do many, many other different things at once.
Yeah. don't know.
It's hard to What do you think?
Yeah, I think we should go
back in time and like, if you are like very OG, like you might remember about something
called BitcoinJ, like the Bitcoin Java library.
I do remember it,
Yes, so it was a great one.
It's been used by a lot of like early service in the Bitcoin space, being like user
friendly wallets.
I think around 2012 or 2013, had some kind of implementation of micro -payment
channels.
It was very rudimentary or very basic payment
channel. was one way.
It no, Yes.
Yeah.
was like, you know, there was not like infinite lifetime of channel in sense
of it was expiring after like, I don't know, some one week or month or something like
this. like, so they were at this.
back, back around 2013, 2014, no one
was really interested in In that kind of very simple, very basic
payment channel technology.
mean, micro payment channel stays to sleep in the corner of
BitVentistry. in 2015, we stopped to have Lightning, like you were seeing.
and Lightning was just like a lot of my tuning term of payment channels kind of
technology. In between there was some interesting ideas, if I remember correctly,
Adam Spark, where everyone does have a payment channel with some trusted parties, and
trusted parties doing the cross payments across all
the users of the app.
2015, have like many papers published for the first time, if
I get the date correctly.
know, suddenly we have like this network of payment channels,
trustless, multi
-op payments with a Chelsea, all that kind things.
People were excited.
think every time, the first time you read the liking papers, it's very brilliant
from a distributed systems perspective.
but like
2016,
people were working on implementation, and 18, started to have first maintenance usage
of Lightning,
and then we started to encounter a lot of low -level and users
issues. like you say,
one of the fundamental issues people start to realize is all the liquidity
kind of management you have to do on Lightning to keep your trend balanced, or to
have in -bound or outbound liquidity, function of which way you're trying to do payments
in the network, or like being
connected to some kind of like always online,
peers or contemporaries to get access to the current networks and not being too far
from like other people.
So that's more like users kind of issues and on the other end we started to have like a
lot of like more security
and robustness issues in terms of key management, in terms of how lightning
is integrating with the base layers, how your transactions are related on
base layer of Bitcoin.
And all this is not necessarily secure and so so
the thing is like, like, sounds like
we have like this, we're trying to build a rocket to go to the moon, but we
have like, we have done things which is like, brilliant, but sounds like very
complex, and like, instead of something which has been
like, instead of some different cycles where people could have used
micro payment channels or could have used Eman's box and we would have learned a lot as
a community in terms of signal layers designs, terms of signal layers operations and
all that kind things.
So you were asking me like
is my sentiment and where we stand right now in terms of Bitcoin's regulators?
think we start to be more in this phase of,
you know, there is no silver bullet in engineering.
There is no
no perfect systems and everyone of them does have kind of
limitations. And people start to be far more aware about limitations now.
that's, in my sense, that's where we start right now.
right.
think, of course, what people are pretty interested in is the
email that you wrote, and I am going to just give you my understanding of it,
should probably have spent more time making sure that it's right.
But it goes something like this.
The
idea behind Lightning is there's the hash pathway,
is that the payment goes through and then there's the timeout, which is that something
has gone wrong and we need to hit Ctrl Z and undo everything.
So the idea is that the hash,
when the timeout,
know, until a certain point, you use the hash, and then after that, you use the
timeout.
the flaw that you have pointed out is that someone can just wait
for the timeout, and at that point, they can either, they can cause either of
the two to
happen at will by just increasing the fee with some kind of like any kind of thing.
It doesn't even matter.
It could be child -paced for parent.
could be anything.
could just be them paying it in some kind of multi -input thing.
So they have total control over whether the hash...
It seems as though it's one or the other.
but they have total controllable, happens.
since the Lightning Network has made these people sitting in the middle, that is brutal
for the intermediary who can be like surrounded and like they can do the hash, pulling
the money away from them and the time lock pulling the refund away.
they lose someone who's just sitting in the middle will just
lose all of their money basically.
it's very, it's quite a rational attack.
Yes. You do have an upper bound on like, you know, when you do open a channel, you're
negotiating pre -series, pre -series partners with your contemporaries.
And one of them is like max, ICS in flight.
hashrate in flight.
there is
some like in conditions are very conservative because I think it's like 20 or 10 % of
the chain capacity.
But like some of them it's like 100%.
So yes,
practice, in the worst case, depending
depending on the implementation default, you might use all your money.
Yes, and this is the poor, innocent third party who's not even buying or selling
anything, they're just routing the payments, which is of rough.
then even if the inflight amount is low, the channels are themselves
kind of
lot of
are get a lot
of lot of money money money to to to to of
money to
work out, if the people are just determined to be very mean to you, you have to
uncooperative close. then when you uncooperative close, it's your money that is locked
for the two weeks or whatever it is.
And they get the money immediately.
sort of adds insult to injury.
Yeah. Which is kind of wrong.
Yeah, that's
one of the most...
I think you were underliking one of the worst
issues of flagging from a routing, now it's
perspective, which is like, you know, how do you know that this random guy opening
a channel with
you is going to be like,
not even like doing security attacks, even like being, do a lot of payments
or use liquidity in a way which is like interesting to you compared
to the more global liquidity market in a sense of, know,
how can you ensure that the scarce liquidity you executing is
like allocated on part or enterprise, which are going to guarantee
you or at least like at least yield
to a high rate of fees, option fees.
these options, the routing fees, have to be high, like, unshaved fees, the worst
case, if you have two first -class.
Yes. know, thing that, you know, Joff,
of mine, Fiatjof, creator of an hostel, not like the literal creator,
but big... But anyway,
he pointed out to me for the first time that if people just disagree over what the fee
rate is, they will be on cooperative close because the channel won't be able
I think that's a very
interesting question.
I that's that's a
and then the reaction I thought was very disappointing where there was a lot of like
cope and even like Peter Todd, for example,
Peter Todd is sort of rival of mine.
he started to say like, well, this doesn't matter because you can like, just be careful
about who you open a channel
with or something?
I thought there was a very disappointing answer that is maybe anti -SipherPunk, kind of
like anti the point of the lightning, like why have all these HTLCs, why have all this
stuff at all if you're going to be like, take that out of the industry?
mean, yeah, here are some
Some of ecosystem elements and sense of we have done like this whole like we've read
the works of designing this whole like decentralized network of main channels like and
what like in partition are quite complex and self you know you need to make of the
older blocks when
there is like some transactions, some one of what like when you're opening your
channels, need to monitor the funding transactions, need to monitor there is no reorg,
you need to monitor there is no non -copyrightive or like Revocate closed by your
contemporary, if there is one of them, you should be able to finish
this, rewocate stakes, timely fations.
For doing so, need keep like, you need keep key bumping values, you need to keep keys
on a hot server, you need to be on like 24 hours, 24 hours, seven days, on seven days.
We have put like this crazy amount of engineering at the end of the day to say,
in the worst case, let's just assume you trust your companies, let's just assume
open chains with people in your web of friends
or social side circles.
But we are completely moving away from, like you were saying, cyberpunk kind of hit us.
And then you did kind of a very, you did certainly one of the most interesting things
anyone has ever done.
You probably should been on the most influential crypto list instead of me,
maybe. mean, maybe not that, I don't know how interesting, but what you did is you said
that you were going to sort
of step back from working on Lightning.
sort of leave the...
Because to me, I think this is kind of a tangential issue, but there does seem to be
like this. There's this kind of cult -like psychodrama that's happening
in Bitcoin, where I think there are these different people, and some of them are
just like the marketing department or if you prefer you could call it a kind of weird
death cult which is kind of also what I kind of think that it is.
what I'm getting at is you have these people who are like the priests and like
these sort of enforcers and they are just like
for any kind of nonconformity.
to have someone who is a technical person, a developer, leave is honestly
a shocking thing, I think, to people.
It's very, very unusual.
And some might say inspiring.
Some might say just like
some other word, I don't know, but I'm not sure.
That's not really what I'm trying convey.
What I'm trying convey is it's very notable and unusual that and it's like it's you've
broken from the herd to some extent.
What a lot of people do is they just stay in Lightning, they farm up their cred,
and then they can go to like a VC
and start like a lightning startup or something and you have done a very completely
different thing. Seemingly to know direct benefit to you and it does make it, it
gives you an enormous amount of credibility in some way and I just think, and then
my friend messaged you about coming on the
show and I was like, well, this is great.
guy's got to be one of the most interesting people in Bitcoin.
that's just so I was wondering if you had any thoughts on that and what the last part
of the email where you say that, well, you're sort of stepping back from Lightning
Development or however you prefer to phrase it.
yeah. Well, thanks for your work, for your words.
well, I would take a point here to say like, you know, my peers working on
NG, Eclair, collecting,
LDK, I respect those people, They are like technically competent,
do a sense of dedication,
they're working hard on it.
on the other hand,
it's not the major secret issue I've been here, found unliking and
it sounds like we
do have all the issues with challenge timing.
We do have issues with food and food, and do have issues
with eclipse and time deletion attacks.
we have all those ping attacks that we're trying to fix in Bitcoin Core.
know and we do have like key management is very
hard on writing because you need that kind of intermediary between cold and hot
wallets. And we have also all liquidity graphing that people are
starting to talk this year more the amenities but that we were aware of like
already years ago and you
you know at some point you're like that's where like few of the people
might diverge from other developers where are we doing the work of like
trying to have like these peer -to -peer or cypher -prone kind of network and
like why are we working so hard you know
Why are we working like, I think I've been working on liking since five years now, like
since 2018?
you are like, why are we working so hard?
Why are we like spending nights reading cards and sharing like, software works, users
can like deploy it smoothly and like,
you know, people's
funds are secure and they can do experiment with it and they can run like in us and go
to sleep at night with other funds being like stolen in the middle, you know, in the
middle of the night.
it's more at some point where like, okay, guys, I appreciate you.
I appreciate the hacking community, but this is not risky to me, you
I fully understand people, they do have
instant dives. It's very...
as like this mark where it's conventional wisdom
and
And if you're a VC, you're a Bitcoin or even more a
VC and you're this and you're startups,
you're going to be fired by your LPs for doing this.
You're buying EBM.
No one has been fired to buy EDM,
like we say, more markets, traditional markets.
it sounds to me like we have reached these points where some truth or
saying some technical statements
that will cost a lot of money for people who like invade
their investment TVs or write down their investments.
so people are just like, well,
I mean, well, let's just say, okay, we might have security issues.
it's not great, but that's fine.
can deal with it.
let's just take the bag of shit and give it to
future generations, like 5, 10, 15 years from now.
very sadly, we have seen this with internet already in a sense of mass of security
issues which are plugging internet today in terms of notifications, terms
of user credentials, in terms of dinner of service.
We're
So, yeah,
I made the joke.
It's quite, this is sort of like the darkest side of like the
capitalist corporate model of like the company has
direct source of knowledge of something not working out and then they just decide to
obscure that information?
No, think markets are great.
mean, we're... Who overall?
Yeah, overall, are like...
I think we're key to...
most of the people today are in the world of, it's not very true, but
if you the key to be born in a liberal democracy, we'd like to...
course, I agree with that.
I have a vision that involves Kayekean prediction markets taking over
the
I'm very pro -market.
mean, moment ago you just said people worried about invalidating the
investment thesis might not want to speak honestly
about what they believe, which I'm just saying that definitely is.
That's actually
a problem that we don't have competing, we should have real markets for goods
or capital goods and we should also have prediction markets on what will work out and
if we did then the prediction markets would have revealed the truth long ago which is
like kind of a tangential point.
markets for like, like
least like, different ideas or like, this culture about like,
constantly and very thawky about like, keep questioning your investment it is.
it's very good to have an investment it is.
Yeah, it's very good every day to test it and like, Well, I think a lot of people will
want, mean, there's
a couple of different directions that we could take the conversation.
But I think what a lot of people would wonder is they would say, well, he's going to
quit and then do what?
And did you have like something else in mind, or were you just going to like take some
time and kind of gather some thoughts?
Like when you say, we have this big long list of problems,
You don't really feel it's too loose of time.
Yes.
do think we do have more general issue in Bitcoin developments and
infrastructure's We have small
number of, I would
would say, good reviewers, or like very adversarial mindsets.
Like, you are coaching Peter Todd, which is like a very good one, incompetent one.
But we do have like, in my test, two small crores
of like adversarial thinkers and people like
very trying to break big consistence for our own goods and keep our money safe
at on the other hand, do have a lot
of developers who just want to develop cards, deploy it, develop more cards, add
more cards, add more complexity in we are unlike
like, we are, you know, it's an unstable balance.
And some point you like, you have like an increasing surface of cards and you have like
an increasing, you have an increasing complex systems for
like, for like, nearly constants or even decreasing numbers of
adjustable thinkers and people like
doing their security maintenance and working on the patch and fix at night.
Yes, spending more time, but how can we have more security talents working on Bitcoin
and adjustable thinkers?
Yeah. I've actually suspected for a while that it's becoming a
make -work program because what do you want if you're a developer, you want
the problems to get worse and you want them to be something that only an expert who's
been working on the problem for years can solve.
So you kind of like want it to be digging a huge hole that you want to be digging
it and then
you're the expert on the hole and then blah, blah, blah.
But I was thinking more about what you personally, mean, say that you, at the end of
the email where you pointed this out, you said that you were sort of going to
stop focusing on the Lightning Network.
I was wondering, in particular,
do you actually have
something else you are interested in?
you have anything look around?
Even I don't have any big investment to do,
I've been working on liking and Bitcoin Core at the time.
Bouncing from liking, implementation, multi -g
back to Bitcoin Core, bringing a lot of things back in terms of mempool design,
transaction delay, still involving some peers in Bitcoin Core.
But even Bitcoin Core, it's a lot of work.
Things are moving slowly.
yeah, still like doing kind of...
Yeah, I mean like...
I mean Bitcoin Core is enough.
my god. It's a very interesting system, it's a very interesting system, but I've done
quite the wrong sense of even into
you're like, okay, I know every subsystem.
So yeah, it's more like taking a bit of time off.
You have other things to study in engineering.
Machine learning is eating the word.
you're like, okay, it's a good time to like,
is great. When you're already like, practicing Bitcoins, can afford the time to look
like some alts and look on the others like, evolving landscape, technical landscapes
and like, like, you know, like, you were seeing like, some
experts are like making a system more and more complex, to be sure to
get a job or keep being paid to keep digging the hole.
more like, I always mean more like you want to keep system simple and
more learned different matters and different
types of knowledge than browsers keep digging the hole.
sorry, questions.
There's plenty of other things.
A couple of things come to mind.
If someone else made some complaints about whatever, a
flood and loot or whatever, I would imagine some people on Twitter would be like,
you know, it worked for me.
Or they would say like, oh, just use Phoenix or something like that.
And I'm just wondering if you have a kind of a reaction to what this is like, what you
would hear on Twitter.
know, it's not necessarily even what most people believe, but it's just like, this
would be the canned response.
Oh, are saying something like that.
Your question
But just in general if you complain it doesn't have anything to do like any particular
lightning complaint It's just if anyone has a failed Routing or they just say
they they can't get it to work people just say oh, you know use Phoenix or something
And sometimes
people are never sure if it's an issue with the wallets or if it's an with the
protocol. like and loot, what you're cutting is an issue with a protocol and that's not
like I think Phonic is one of the best liking wallet on the market if you're like
looking for something which is non -custodial, but
they cannot solve like fluid and loot.
uh... Yeah, of course.
mean, my favorite is the onboarding problem, enlightening, which is like the least
solvable of all and like the most, like, sort of, uh,
you might say.
things. mentioned Peter Todd.
And if had Jaffa and I, were talking online, and then I said you can't use the
Lightning Network beneath the dust limit, because it doesn't really use the HTLCs,
which I'm of like speaking a little bit.
know,
have to compress it to fit into a tweet.
then Peter Todd replied by like screenshotting a bunch of payments he had made
on the lighting network that were one single Satoshi.
And he just has a screenshot.
I was like, okay,
those didn't use the HTLCs.
And then Fiatjaf and I went
on invited me on his podcast where I was like, there's no H and
then he said, there's no time lock either.
so then we were just kind of baffled by why is Peter Todd replying to me with a
screenshot of one Satoshi payments, that he has quote, made over the Lightning Network
end quote. So I don't know.
That's just
kind like another thing that.
Yeah, think you have like, so you're talking about the issue about one set of sheet
payments on the Nike Newfraer, like, correct.
Yeah. Like someone just forwards those like kind of like for free, just kind of like
hoping that they will get, they don't really use the, the security model of the
Lightning Network. Yes.
all need to use
and the time locks and things yeah That's even like when you're doing like one such
a she likes payments on the night unit works the you are she's parent is not going to
be add as a tangible and as a tangible output on the liking current
transactions because like because
so will create an output which is non -economic variable, and these
types of outputs are going to be rejected by Bitcoin Chrome and Pulse
because it's under the DAS limits,
is not the same for every type of scriptup keys.
it's not the same for pay2tapflood, it's not the same for pay2witness script hash, it's
not the same for pay2witness public key hash, but there is like one which is fixed,
it's like an absolute amount of Satoshi.
And what does it mean?
It means like if you go on chain
with these kind of transactions,
and you already reveal a preimage to your company, they are not going to able to claim
this ex -Josie on chain.
So they are going to be at last.
mean, they might be in situations where they might get lost.
In practice, we do have like mitigations deployed by all implementation
to avoid this being a vector of attack.
But, we're just like keeping, we just have to introduce a cap, which is like
not the same for all implementations.
It's not even standard.
that's sad to say, but this security mechanism to the protocol is not even standard
between presentations.
And things like now, you're you know, we are talking about like operating a big liking,
rocking apps, and if you're operating that types of liking nodes and you have lot of,
rocking a lot of one's satoshi payments, like you're
quite exposed.
That's a security risk.
you're not able to claim one or five percent of your lagging channels, which has been
completed as does hashchains.
Yeah, right. Interesting.
I think
Interesting.
I mean, I think one thing, one topic that I think is of enormous importance, like one
thing I started to notice, I mean, I told this story before also, but it's like the difference
between the lay people and the people working on lightning.
So I first noticed it in San Francisco in 2019 and then 2019, I think it was also that
same thing when it was like San Francisco versus people in Mexico.
But I think I also noticed it when like, so like Matt Corallo gave a talk to tab comps
ago and they're like, the title was like lightning is broken.
And it was just like full of all this information is for all this information.
But then it's like, so at TABConf, it's like, so there's like what regular people know,
like they know about the lightning network, which is like on a different planet.
And then there's even like the technical community.
It's like the lead lightning people are allowed to kind of take a negative attitude sort of
towards it.
But even then immediately downstream, it's like, it's like it goes in one, everyone pays
attention and then they clap and then it's just, everyone just keeps going out.
They just go about their year as if they hadn't seen it or they're even more, they just are
all the more enthralled by the allure of the lightning network or something.
And I, it's, so I don't know if you, I mean, like, okay, yes, no, no, I mean, go to finish
your point.
I mean, I was just going to say something like, if you had on a scale of one to 10,
like the, you know, Twitter or X's understanding of the lightning network, like how similar
is it to like someone like a Rene Picard or something?
I think it's like, I mean, Rene is a great lightning researcher, but I do think that
the number of people who understand all the parts of lightning in terms of, you know,
we have done change in all the major subsystems of lightning plantations and we have like
written new parts of the protocols or do research in all areas of lightning are very small.
And it's, it's, it's small. I think 10, 10 or 15 people, I would say, have very good understanding of lightning, but I don't think, I don't think more.
And, you know, what is sad is like, I remember Matt's talk in TAPCON one or two years ago and I was there and it's like, you know, you're like, okay, at some point you are like in the lightning community, you are like, okay, we know all the issues or we think to have like lightning protocols taken under control, or at least like, you know, being like, okay, now we have all the major issues and we just have to fix them.
And then you find like a new remedy or, or you find like some kind of weird interactions between like the lightning layers and the base layers and you're like, okay, now we are like, we are back to like two or three years ago, or like, we're like, okay, technical debt is like, technical debt is increasing faster than we are like fixing issues.
And that's, that's, yeah, that's one kind of I'm like, okay, I prefer to take a step back from lightning and like, work on something more conservative.
Well, yeah, that makes sense. I mean, I just want to maybe mention one random story, which is that this was about a little more than a year ago. Yep. When I was, I did a little pitch deck for this company LayerTwo Labs. And I had a bunch of stuff, tons of stuff on there. And you know, it's mostly great. But I had one slide that I had like a couple slides about like, you know, problems in Bitcoin or whatever.
Just kind of motivate the whole thing, kick the thing off. And one of them was about light lightning problems with lightning, just one, that's the only just one slide. And just people just absolutely hated this slide. And all kinds of people tried to, they put enormous pressure on me to just cut this slide.
Some people don't want to hear anything about this.
people like, you know, it's like negative or something.
It's funny because like, I think like the slide right before I had something about like
taproot adoption and I had like SegWit with the graph going up a lot and then taproot
it was like 0.303 % or
something. was like some tiny thing.
I was like, oh, we worked on this Taproot thing that people weren't really using
because it was before Taproot Wizards and Ordinals were like hacking it.
but I just, I just really stuck out to me as this memory that just people really just
did not want to, they had a very strong reaction
reaction to like just like any criticism of lightning or something like that.
I'm not exactly sure how to piece it together myself but you know you really did get
the impression that a lot of people had invested in the lightning network like not only
just financially but also like kind of spiritually and psychologically and that they
didn't even want to hear anything about.
Yeah.
I mostly had, I had stuff on there that was just like quoting, like, you know, people like Matt Corral, or like experts I had, like, it wasn't even coming from me. I had linked to the synonym spaces that John Carvalho had done. I had like the math on the onboarding problem. Anyway, what do you have? I don't know. I just thought that was a very curious thing.
Yeah, but you know, like, I'm still like, lightning, as I would say, is a protocol paradigm. And this whole idea about like, you know, doing trustless, or trust minimized, off-chain, private contracts, based on public UTXO in the blockchain, and doing this, like, with someone else, like, you know, in Singapore, or Chile, or like, South Korea, like, that you have never met before, and being able, like, to do like financial transactions.
That is still like a fascinating paradigm, and very powerful paradigm. But, you know, when you study lightning for years, like I've done, and we're like, when you come back, like, it's very interesting, but it might take 10 to 20 years to fix. People don't like, don't like this, that kind of statement.
I'm lucky to be young, in the sense of, I can say, hey, like, I can wait 10 or 20 years for lightning to mature, and all this off-chain paradigm to mature, but other people, they're like, I mean, we have to deliver next semester, or we have to, you know, there is like quarter returns, or like, all that kind of things, or we do have, we're VC-funded, and LP of like, are thinking on five or seven years timelines, all that kind of things.
So, yeah, people generally don't like, like you were saying, when you show up and say, this is same as a lot of issues and drawbacks, they might not like these statements.
Yeah, they certainly did not.
Yeah.
Well, we have Satoshi and Joyers up here, so.
I might take some questions.
Yeah, let's see if anyone wants to come up. Just come up. Feel free to come up, and here we are.
Cool. Hey, what's up, guys?
Hello.
I have some questions on a little bit about lightning from the experts. Basically, I have like this way I'm looking at it, and I'm wondering if it's correct.
So, I was looking at lightning in a way where, basically, people would eventually get priced out from the base layer, and they would have their self-custody, or non-custodial on lightning.
But it seems like, to me, that doesn't really scale in a sense of because they still have to open and close channels, and they have to still do that on chain.
So, if they can afford on chain, like there might be like a middle ground of people that can really have fully non-custodial on lightning.
But if they're really fully priced out on chain, then lightning becomes custodial to them. Do you think that?
Yeah. So, you're saying like, you know, we're talking about like one Satoshi Payments, a while back. We might have this issue about like trustless lightning payments.
The bound might be far too high for a lot of people, and there might be price of lightning itself, like you're saying. Yes.
I see. So, right. So, would that say then lightning would trend towards more like institutional players that can, you know, afford on chain, but they would rather do high velocity on lightning and then just like, you know, settle every once in a while.
Does that seem like where it would benefit, basically?
So, I do think as a Bitcoin community, I do think we have a lot of like design margin in terms of what some consensus change, which could improve this issue.
A sense of new mechanisms, more like delaying the claim or like automatic aggregations of low value payments that could improve on these fronts and like maintaining some kind of, like maintaining lightning as affordable systems for a lot of people in this world.
But that's a lot of work, low level work in Bitcoin consensus.
So, just in short, would it be fair to say that in a higher fee environment, lightning doesn't really solve the average user's non-custodial take?
With today's Bitcoin consensus rules, Bitcoin today is mempool and transactionally designed in lightning today state of lightning rotations. That's going to be hard. Yes.
Great, thanks. I was also wondering, another question if I may, if you had a chance to look into drivechains, BIP300 and 301, and if you have, if you feel like you researched it enough, what is your takes on it? What is like your general thoughts on it? But if you haven't, that's okay too.
No, I understand sidechain, but I understand the sidechain 2014 paper that like most of people have read and like a bunch of like, but I do think drivechain and sidechain might share a lot of issues with lightning.
Or like, there is like some of them, there are some of them, which are like, you know, issues we do have about interactivity or being 24 hours, seven days, or the orgs, or like mempool shooting.
I don't think anyone has done like a demonstration there apart of Peter Todd, but they might, they might share some issues.
Okay. So if I was to say, what do you think would be the best way to scale in a non-custodial way for, you know, let's say millions or even, you know, hundreds of millions of users to use Bitcoin in a non-custodial way?
What would be your best way? Do you think, is there any specific op codes or any specific type of way that you think would be the best for you?
So I work a while back, I work on payment tools and like a bit of chain factories. And I think Paul has written like some interesting blog posts, like one or two years ago, something like this.
I do, like, I do think like payment tools and payment channels are the most interesting way forward. If you want to have like billions of users and those billions of users have multiple accounts or like off-chain balance, Bitcoin balance.
But it's, it's decades. It's not, it's decades. And it's like a lot of like change in Bitcoin consensus or like, I don't know, between like five or 10 software, like we had like dark roots.
So, well, yeah, I was thinking that those probably would be difficult, like the coin pool and channel factories stuff. I think that'd be very difficult to do because you seem to be.
I wrote an article about this in detail and always the writing is more reliable than, but, but I really did write it with my own. So let's see if I can remember that there was like a fundamental issue where either a majority of people can like evict someone.
So either you have like total, people have like total sovereignty where like you can't be evicted or you have the problem. So you choose one or the other, you know what I mean?
Someone like falls asleep and then they're not responding and they have to drag the whole thing on chain and like refresh it, which is horrible.
Yeah, I think you're pointing the correct issue. That's a liveliness of that type of systems. Like let's imagine you go to the payment channels or payment pool with 1000 users. If any of them like go offline, you cannot evict the states anymore.
So you might solve these issues with like smart governance where like, you might like someone might be evict or like partitions of the pool and like without, without its own like, you might kick out someone out of the pool without like the whole consensus of people with like pre-signed transactions.
Or you might have like sub-partitions of the pool in off-chain kind of subgroup of peoples. But any solutions I know, at some point, you need to go on chains and like sub-segregate the pool or like re-aggregate the pool in function of liveliness participants.
In theory, it works. And, you know, with smart cryptography like ZK Proof or like, or even with like empty curve based cryptography, you might do interesting things. But I don't know the math, to be honest. I don't know the math in the sense of what would be the average cost, on-chain fee cost of 10,000 payment pools users, that kind of questions.
Yeah, I think the channel factory of like 10 people is something like, when you have to bring it on stage, it's much more than 10 times what it would have been if it was like 10 different L1, 2, 1 input, 2 output transactions there. So it's like, it's like very big to bring the channel on.
Yeah, you have this issue if you have like 100 people trying to exist at the same time, they might pay worst average, they might pay worst fee, like fee cost than if they would have like stayed in the pool or like have done like two of two payment channels.
So it's, that's, that's where like, we don't have like, you know, people are like proposed a lot of like secondary, second layers ideas, a lot of second layers design. But as of today, I don't think we know enough as a community on like, how do you measure economic efficiency and like, yeah, economic efficiency of multiple channels.
Um, what do you think you would say? Oh, you kind of cut out there? Maybe?
Yeah, I have to cut out.
We have five more minutes.
For me, you are cutting out a little bit.
Oh, okay. So I will say again, you know, people have talked about sidechain, people have talked about drivechains, people have talked about federations and eCash, people have talked about payment pools, payment channels, whales, state chains, whales, ark, whales, tumblebeats like years ago.
So we have like all those ideas and all to scale bitcoins, but we don't know as a community how to measure and compare the economic efficiency of those constructions, like in terms of bandwidth, in terms of requirements on the end users, in terms of average on-chain fee cost, in terms of average off-chain fee cost, all that kind of metrics.
Okay, we have a body up here also, but first I like to ask one random thing, which is like, some people would say it doesn't actually matter, like those things you say, because it doesn't matter if people use bitcoin at all, because it's just going to be like a settlement bank or a bunch of other custodial stuff, or it'll only be for the very rich or it'll be for institutions or something.
I'm just wondering if you have a, like, some people say, well, it doesn't, the same people who cheer Lightning on, of course, and they say, like, we love Lightning, and then someone says, well, Lightning has this problem, and then they say, well, actually, it doesn't matter if anyone ever spends bitcoin, because.
Yes, it's a settlement layer.
Yeah, I think we will always have that kind of like, in sometimes conflict in like bitcoin use cases and stuff, you know, like, what might be great for Lightning might be less great for vaults or ordinals, or ordinals might like provoke that kind of like, enforcing mempool cycles and like, completely destroy, you know, the whole system.
So it's, it's, and people might say, we don't care, like you say, we don't care about like, secondary use case, because it's just a settlement layer.
You know, it's, I don't have like strong opinions on like, it's great if bitcoin can work without Lightning, if you do have like, enough transaction fees from other use case to pay the miners.
But some more like, like, you know, so like, you know, other payment systems, decentralized payment systems off of Lightning, like, make the whole things like, having like people using in real world economy, in El Salvador, in Kenya, in Israel, a lot of developing countries that, you know, have more like, real world economic traffic, being relying on bitcoin, I think it's a good thing.
It's making things stronger.
Okay, cool. We have a body and then yes.
Hey, thanks for taking my question.
So in a one thing that I've sort of conceptualized, and maybe I can correct me if I'm wrong.
One of the problems that Lightning Network has in the security model is that it's inherently an optimistic system.
So you, you depend on someone posting on chain to say, okay, here's, here's the state of the closure.
And then you have this window of opportunity to contest that.
And obviously that that runs into problems in crowded block space.
So my question then is about BitVM.
That's kind of one of the latest things we've heard people, you know, a lot of excitement about.
But BitVM is inherently an optimistic system, just like Lightning Network.
So does it suffer from potentially the same kind of drawbacks and security complications as Lightning Network?
And just what are your thoughts on that?
Well, it's using time locks.
It's using time locks a lot.
And it's like share UTXO like Lightning.
So I think yes, but I've not done like any advanced research work on this.
But intuitively, I think.
Cool. Thanks.
I think that was really my only question at the moment.
Okay, Bitcoin 00000 is here.
Yeah.
If you have like one last thoughts or if you want to digest the conversation.
We have to go, but.
Hello.
Hello, guys.
Yes.
I want to know what is the future of Bitcoin blockchain?
Sorry?
Well, that's kind of a vague, maybe.
The future of Bitcoin.
The future of Bitcoin.
Hmm.
Probably we'll find another block 10 minutes from now.
And then we probably find another one around 10 minutes after that.
That's probability.
There's no certainty.
You know, that's one of the funny things about.
I think I could never have done what Satoshi did because I would have just thinking in my head, even though I'm I was literally a professional statistician in academia.
But I would be thinking, oh, there's some likelihood that it will just go like eight hours without a block.
And that's it's only a matter of time before that happens.
And then I would just be like, then the project will just die or something.
I don't know. It's just like kind of a funny.
It's just like really just having the difficulty just to set it to the average like that.
He's just really, really confident that miners will continue to have a lot of noise and a lot of improvement over time.
I was just like such a bizarre equilibrium thing.
It's like playing it really close to the.
Yeah, yeah. It's causing just as I say, no, like you say, like the 10 year average, like this design choice and Satoshi has made, I'm like, like, you know, if we if we start to never found a block for 24 hours or 48 hours or like 72 hours or like a week, what we do, I'm curious.
I mean, it's like it's like very negligible and we're making the same types of assumptions where we're designing cryptosystems and cryptographic protocols.
But yeah, it's underpinning the whole thing.
OK, well, great. Well, if you can, if you have to go, then you have to go.
But this is a fantastic conversation.
Thanks very much for having me and my peer.
See you. Cool.
See you.
Well, how about that? What an interesting guy.
Of course, we can hang out here if people want to have any questions for me or just want to talk about anything.
One thing that I did do earlier this week was I published this giant image or I replied to Peter Todd's post.
So Peter Todd is like the number one hater of the Drivechain idea.
And in many ways, before even Drivechain existed, he was he sort of killed the.
I think I'm dying to know this.
This is one of the things I plan to ask him when we do the actual podcast on Stefan Levera's show, which I think is Tuesday.
But I'm just dying to know, like, what did Blockstream hear that made them kind of like back off of this idea?
Because they really backed off on it in a major where they were full speed ahead and then they backed off.
And I don't know, I'm just dying to know exactly what that is.
We had Adam back.
On this on the space, I think in the summer or not that long ago, and that was a great conversation also.
And he was talking about like miner costs, but then he seemed to accept my explanation that that's not it doesn't make any sense.
So, yeah, Peter wrote this long article and it's like a really terrible article.
And but there's no people who are like, why did you write it this way?
Replying in that one giant image, that is the only way that you could reply to it because it's so complex and all the different ways it was self-contradictory and just terrible.
And you just really didn't get a sense of like.
Like the part where there's eight different definitions of mining centralization.
None of which are consistent with each other anyway, so that's that's one thing I'd like to show, which is.
I think that's great, because this is the this is the absolute cutting edge of the debate on this topic, and he's the number one opponent.
And this is the best he could do after we paid him and then he'd spend months and months.
We already been like June on his own terms, he picked the amount of time he picked the amount of money and then it was only because he.
Was dragged onto for the TABConf debate and for the Amsterdam debate that I think he even like finished it at all, I think he would just have never written it, and this is what he could come up with itself.
Anyway, if anyone has any other questions or things that we can talk about, we can talk about ocean, we can talk about all kinds of funny events.
I actually had a question on that on ocean, so I heard some people talk about like the game theory behind it and I'm sure that you might have a really good take.
So I heard, I think, post post Capone say that like he gave the example of the year before there was a block of block space utilization was maybe like 30, 35 percent.
Let's just give that a number. Right. So let's say block space was utilized.
Thirty five percent. There was definitely empty blocks or, you know, half empty blocks, et cetera.
So what if they do not include, you know, certain type of transactions in their blocks, so they create two different type of basically categories for people that are bidding on block space and all things the same.
Then eventually, if they were to reach, let's say, 36 percent or 37 percent of hash rate, then they would eventually reach a certain threshold where they have extra space in their blocks.
And because they have extra space in their blocks, there would be people that would realize that and pay less than current current fee rates, because the way the estimation goes, people just pay current fee rates.
So like they might not really be losing, you know, until they reach a certain threshold.
OK, can we like we have to slow down a little bit here.
Are you referring to the idea that they would divide the block into a zone that is like for normal transactions and then like for ordinals, inscriptions or something like that?
And then they charge a different block.
No, I'm referring to let's say they just do not include certain transactions in their blocks completely.
Yeah, so, OK, if they do that, though, then what they're doing is normally like you can you can model it like this.
Let's say just for the sake of simplicity, this is inaccurate, but it's simplification.
That every block has like that every 10 minutes, there's like let's just say it's two dollars worth of ordinals come in, which would fill half the block.
And the next in the mempool would be one dollar worth of what you might call regular transactions.
And that happens every that's flowing in from the universe, you know, from the world every 10 minutes.
So what most people do is they just they take the ordinals first and then the regular transactions.
And then there's like a let's say there's a long backlog or whatever.
But the point is, everyone's getting three dollars a block in this incredibly simplified model of the world.
If you pass on the ordinals, then you're going to get one.
You take the one dollar of real and then you take whatever else you can rummage around and find.
But, you know, it's not going to add up to three dollars.
And then what you've done is you've left the juicy two dollars on the table for the next guy.
The next guy is going to get four dollars.
The next guy who is not censoring the ordinal censoring, you know, who is the word censoring?
They've just we've decided to use that word to describe this phenomenon of just intentionally not taking the ordinals.
So so it is a transfer of money from the pool that from ocean to the other pools.
So ironically, if you are the ideal thing, actually, for like foundry or someone big would be that ocean rises and becomes like.
A huge, you know, the ideal, actually, the ideal outcome would be for them to even be more than 50 percent.
But what certainly is ideal is if they're 49 percent, if they're 49 percent, then they're they're mining and they can only get the dregs.
You know, the. The lesser paying transactions and as a result, they cannot even hash very much, so they're keeping the difficulty lower.
And they're leaving all the juicy stuff for for for foundry.
So economically, it is a transfer from ocean to the other pools.
I have no idea why I think like a couple of people, Brad and some other people were trying to say that it transfers money to ocean.
And Alp and I sort of engaged with him sort of on Twitter to try to figure out what he was talking about.
But I don't think I think he's like, there's no idea what he's saying.
Yeah, there's this one phenomenon that happens is because most of the fee estimation is coming from Bitcoin Core or mempool.space, which is like basically the fee
estimation is basically coming from both block space buyers.
So it seems like like they're really not missing out, even like currently by just completely ignoring these transactions.
But that's only because of the fee estimation and like because people are paying the similar fee.
So it looks like they're really not missing out or possibly not at all.
But that's what I was thinking of. If there's a certain threshold or once people start realizing there's actually two camps and I don't have to pay as much because, you know, these block producers will include me eventually
anyways. This is a very good point about fee estimation is currently my view is that fee estimation is actually irrational and broken and that is a game theoretic situation where what you do depends on what the other people do.
But in the in the you know what they call the the equilibrium or since John Forbes Nash was the guy who described it as an equilibrium.
It's called the Nash equilibrium, of course, which is like the what I'm saying is in the eventually there will be a rational fee estimation.
And what I think that would look like is you just take the total fees and you divide it by the total fees paid in the last block and you divide it by the blocks, the maximum blocks or whatever the whatever you think the average block size, the total size of the block is.
So the blocks half empty, you're adding a bunch of zeros in there. Anyway, if you just do this simple division step, it's kind of like block weight kind of messes this up.
But block weight is also it also produced things like taproot ordinals for megabyte block that's discounted improperly.
So I think weight is a huge mistake.
There's a lot that gets thrown in there because of like, you know, because of like, you know, these BRC 20 or, you know, ordinal mints that happen that are very, very high time preference because like you have to get in first versus first.
You know, it throws like huge volatility in the fee estimation as well.
Right. Well, I think the fee estimation would be very easy to just say, well, you take the previous blocks fee outcome, and then you just use some kind of exponential smoothing or something that I would redo it completely.
I would jettison everything.
And the only thing that I would keep is we do people do examine the mempool and see, well, what would it take to make it into the next block?
take to make it into the next block.
I think that's another thing is have you used a lot of software where it gives you all
these options like in the next block, in two blocks, and then there's all these other
options and it's like who cares about these other options.
You either care about I'd
to get it in the block sometime this week, or you care, like I didn't really expect it
to go through very soon, as quickly as possible.
So I don't know why there's, but I'm just trying to zero in on your question about the,
I think that the fee estimation will eventually be rational, and then it will
eventually be the same for everyone, because there just be an objective rule
that and it'll just be literally like a formula that everyone knows and everyone will
get the same answer.
So everyone will have the same fee estimation.
That is not only that's rational for the end -users so they know that they don't overpay
and that's also rational for the for every miner so that they know
how to assemble the blocks to maximize their revenue.
So I just think that will happen and I don't know it like sort of just hasn't happened
for a while.
I'm not sure if that helps at all with answering your question but eventually the fee
estimation I think will work itself out.
will be well you know if you it's kind of like
I mean just imagine asking the miners to lose money and then saying oh but you're not
including you're including only the...
good transactions, not the bad ones.
And it's like, well, they're losing money, so it's kind of baffling.
know, like they're not going to...
They shouldn't care and they won't care.
Yeah, basically, the optimization will just become more optimized over time.
Right, I think so.
I have another one.
Okay, but we should grant we have a new person, RJ.
Then we'll go in a line, I think.
Hey, can you guys hear me?
Well?
Hello. Yes.
Great. Hey, hello, everyone. My best wishes GM GM. Hey, Paul. Love your work, man, especially on VIP 3001301. Also, the way you present your ideas in your videos and presentations, they have a good humor. So kudos.
My question is on drivechain. I have been a student of right change for a while now. And when I imagine a word running on blockchains, drivechains actually makes sense to me. And when I say imagine I'm an engineer, hence, it is very hard for me to imagine impractical stuff. But drivechain do make sense to me for a word running on blockchains.
Now, my question is on the currency peg between the mother chain, which is BTC and the child chains. If I'm locking certain BTC on mother chain, and take an example that right now BTC price is 45k, for example.
And after a period of time, the child chain out of utility community or because of some black swan event experience huge demand. How will influence how will it you know, influence the peg?
If there is any such arrangement. And yes, and Paul in your blogs, you rapidly knock off bad questions. And I like that. So you can do that to her. But if you think the time is enough in this space, I think it's a good question. Yeah, this is a good question. I think it, um, it gets one thing.
There's an important fact about the peg that I think is overlooked, which is that when you have the blockstream originally had this, this idea of sidechains, it was kind of, I think, based on Namecoin, where it was like, they called it symmetric. And like, neither chain was kind of like, above the other, and they either one of them could just go away at any time, and the other would continue. But that's not what I did. I did the fully 100% asymmetric.
Which is more like the lightning network, whereas there's the lightning node, the lightning node requires there to be. And as you said, there's like a child chain and like a mother chain. So the advantage of this is that in one direction, the peg is has the perfect attributes, it always works, it always works immediately. And it always works one to one. And it's awesome. It has all the throughput that you have on one, which is the max amount.
And so the deposits, if the if the child chain is doing much better, the then just more and more people will deposit. And so the one to one peg really can never be. It's the ceiling is, is excellent. It's only the floor that can, that can potentially collapse and not and not work. So if the sidechain is the reverse situation, aside, you have some kind of problem and everyone wants to leave.
And then not probably maybe not everyone will be able to get out. Although even in that situation, people will be able to buy and sell on the on the chain, and then there should be one or two or like even as many as five or 6000 people over there who will buy up all the L2 coins and then try to walk them back. So even in that case, the pay, even in the disaster scenario, the page should still do sort of okay.
But as for the sidechain becoming more popular, that is the direction in which we don't have to worry as much because imagine what it would be like if the if someone was paying on the free market, you know, they thought that one side coin, you know, one of the L2 coins is worth 1.1 L1 coins, or someone can just do that trade, and then move the 1.1 coins in immediately and make them
mean L2 coins. So so that's really not going to happen in that direction. It's going to be just fine. But I think a lot of people miss that this. This is kind of the part of the thing because it's the withdrawal is the biggest problem. The withdrawal is will never be perfectly secure. It's not possible. And it's not possible without making a much worse mistake of infecting the L1 with the L2.
So the withdrawal is a problem. That's why the withdrawal is slow, the withdrawal is inconvenient. And that is why we hope that people atomic swap back and forth and do it rarely. But the deposit is not a problem at all. deposit always works. So the deposit always works. And that that's great. Because when you have a situation where people can instantly do the swap, swap out to one on the free market at any price, and you have
the deposit being instant and one to one peg.
Well, that's very, very helpful.
You just keeps all the problematic parts, just bottled up in the one withdrawal zone, where we can keep an eye on them, I guess. And so that that would not be an issue. That is just what would happen in that case is just a tire total quantity of coins would flow into the sidechain.
So out of the 19 million, or 21 million BTC, just more of them would flow into the sidechains became more popular, I think.
Oh, thanks. Thanks, Paul. I would be honest, I would say that not a eureka moment, but I definitely a good direction for me to learn more and get it here. Thanks. Thanks a lot.
Okay, great. Yeah, we'll have a new we have a new version coming out. I'm very excited about it. We've switched from registers to signet. So everyone will be able to use play money to get together. So this is be a good test. And before it was just you just test it out by yourself. But after this update, everyone will be on the same network as everyone else. And we'll have a Z cash sidechain coins and we can send them to each other. And we can figure out if anything breaks or whatever, which
I'm sure there are various bugs, you know, because even when we like clone, like a clone Z cash, the bug is never like, like they have it all figured out in Z cash, but we have like something like linked to wrong or something. So it's usually like something
kind of important to where it's like, there's no problem with. Well, it's kind of a technical detail, but it's like, we'll, we'll find those bugs and kill them all. So we have a new
new version is coming out. And then maybe I think that would make it much more clear when people actually use it. I mean, when I first learned about Bitcoin, I read I did a ton of reading and background research. And I kind of really thought that I understood it. And then when I actually used it,
I realized that I, my previous understanding was wrong in very many ways. Just one example of many is that I had, I thought it was like BitTorrent, where you had to keep it open and collect collect six confirmations. So I had like collected six confirmations. Then I closed the software. And then I opened it like the next day, or, and then it had like, like 150 confirmations. And I was like,
why? I was like, where did these come from? I really didn't understand what I was talking about. So I think I'm optimistic that more people will understand it when they have the test software to use.
Okay, looking forward to it, Paul.
Okay, so you had another question.
Yeah, I think Andreas also just came up. So if he has a question.
Oh, great. Hello.
All right. Hi, Paul.
So I was wondering, is there like a long term roadmap that you have or LayerTwo Labs has for activating sidechains?
So I get that right now, you're having these kind of spaces.
But is there a point where you start talking to miners? Or is there like a master plan for secret secret evil master plan for eventually activating BIP300?
Well, there definitely is a master plan.
And definitely, you know, parts of it are secret.
Declaring it that way is kind of like, wouldn't that be funny if I just said like, I just said no.
And then I just took the next question. I think the there certainly is a plan.
I think, you know, one thing is that in one sense, I kind of understand where people are coming from.
Because they have this kind of like fear, even though it is very unfounded.
There's another sense, though, in which so I have been talking to miners, for example.
And one thing is that the miners are their own specialists.
So so imagine someone who's like a chess prodigy.
You know, Thomas Sol used to talk about this type of thing.
You have someone who's like a chess prodigy or someone who is there.
They're very excellent at their narrow thing that they do.
Right. Like they're a great Olympic rower or something.
Now, this this person already has this type of person who has a lot of prestige.
And they that what I'm getting at is a chess player who's a chess prodigy.
No one challenges them on chess, but people don't really go to them and say, oh,
what do you think we should do about the situation in Gaza or whatever?
You know what I mean? And that's because the world is made up of specialists.
So what I'm getting at is what are you like? What the hell am I talking about?
The miners, some of the the mining pool, big mining pool people told me that they
they asked their clients about taproot activation.
They were like, what should we should we activate taproot?
What should we do? Should we do speedy trial?
And all of their clients, the people who are members of the pool,
the people who contribute, they point their hash rate at the pool.
All those people said the same thing, which is.
What is taproot?
So so they don't so they don't know.
That's the thing is they're mercenaries. Their job is to get cheap power.
They're the chess prodigy. You know what I mean?
Their job is to get the cheap power, get the right machines.
They're interested in like hash price. They're interested in like paper share.
They're interested in all this stuff that has very, very little to do with actual
Bitcoin development or even Bitcoin usage or adoption.
And, you know, just kind of like the power company,
they're going to be obsessed with things like, you know, watts, joules,
whatever regulations,
like environmental impact review for their hydroelectric dam or something.
So the world is full of these specialists.
And and so they don't really know.
And also the people on Twitter who tweet about these things,
people who tweet about one 19 don't know.
I mean, we have many smoking guns, right? There's many one 18.
It's non-controversial. It's been around for a while.
Everyone likes it. No one really dislikes it.
It was coded by a prestigious person. And yet.
Years go by. No one wants to touch activation.
Similar thing with one 19, except Jeremy Rubin decided, well,
I don't want to just sit around. I'll try to activate it.
Horrible reaction. And then he quits Bitcoin.
And there are other things as well, like just like kind of confusing things,
like about the public likes the public loves BIP 39,
but Bitcoin Core doesn't support it, which is a pointless mistake.
BIP 47. Many people like it, but Bitcoin Core doesn't support it.
So this is weird mismatch.
And the miners are sort of specialists.
So anyways, I'm just trying to say, like, I,
I kind of understand where people are coming from, but yeah,
I think the plan is to make the software.
Excellent first. And the.
We have to have a very good.
Like version of the software where there's like a code to diff minimal code
to diff with Bitcoin Core before that question can even come up.
So it's kind of on me really, because.
I have to make the, or we have to make the.
The version that miners could actually run before that, you know,
could really actually be a topic that comes up.
And so Luke had that request, but it was incomplete.
But that's a good start. And we wanted to see.
What other thoughts people had. So, yeah, there is a plan,
but it certainly has to get to the point where like,
because right now the test network is the fork of Bitcoin 16, 16.99.
So it's that's far too old.
That can't be that one. So you have to wait for me to.
To finish the rebasing process, which is.
Very slow.
So after that, unless you want to, Hey, do you want to help? Do you know,
are you very good with C plus plus and Bitcoin Core?
Do you want to do this? Help with the thankless task of rebasing all the.
Anyone wants to.
Anyone wants to.
It was a job doing that.
It's a very difficult job though.
And it is brought with.
It's been done very carefully.
So, yeah, the answer of course is that, yes, of course there's a master plan.
Right. Okay.
Yeah.
I was wondering maybe in the future,
miners will have like a consensus department if they want to optimize
their revenues.
Yeah.
The problem is it's collective action problem where all of the miners
benefit.
And then you see if it was an individual benefit, then this would be.
This would have been done long ago.
You know what I mean? Because it would be like inventing a better ASIC.
So then I would just have gone right to the miners.
And if 1%.
Adopted the thing, they would have more money.
So this is a collective action problem, but you know,
that humanity has built ways to deal with such problems, but, you know,
They have conferences, they have media.
People have meetings.
People understand that something should be done for the collective good.
I think that.
The consensus thing.
I actually wonder about the.
I have a lot of weird thoughts on this, which hopefully.
I don't bore you guys too much, but one is that there's the system called
the West minister system.
Which is basically the UK system of like.
Winner take all 51%.
And I kind of wonder if that is actually the optimal form of governance
because it's really just like minimizing the amount of.
It's like, if you get vetoed.
We don't have time to get into all the details of this,
but one thought that I would like to share is that maybe back in the day,
if only.
Because SegWit blockade was defeated by UASF.
But it could also have been defeated by the miners themselves.
The miners could have just decided.
Like a few days or a few weeks into the blockade, which was.
One pool that was mining Bitcoin unlimited with 9%.
The miners could have took it upon themselves to just orphan all those
blocks from that pool.
And then they would have just activated SegWit with the quote,
95% unquote threshold.
And then there would never have been a UASF.
And that would have been before the New York agreement or SegWit 2X or
Bitcoin Cash ever existed.
And if they had done that, we would be living in a very,
very different world.
And I just think that was kind of a missed opportunity.
If we could go back in time and have that happen instead,
that probably would have been a lot better in many ways.
So I can elaborate on that thought if anyone cares,
but we do have new people who want to,
who came up and want to ask maybe a question.
So, yes, there is a master plan.
But it can't,
nothing can happen at all until there is something for people to actually.
Professor Ian Shapiro, who's written a lot about the Westminster system.
He has a saying in politics, you can't beat something with nothing.
And that is right now I have nothing because we don't have a version that it
would be acceptable to even persuade miners to run.
So we have nothing, but,
but we should still do the education and we have the test network.
So, so we're doing that.
But now we had a Phillip Zach.
Hello, if you had a question or comment.
Hi, Paul.
Thank you very much for let me speak.
I really appreciate it.
Your name came up in conversation when I was at the ocean mining event.
I did have a question for you on proof of work.
I understand the coin and where it is on its spectrum.
But after reading some of your articles on your truth page,
do you still believe that there is some room for other algorithms in the space
that there's still use case like see a coin and others?
Yes.
So I think I wrote this article.
I wrote an article called that.
This was my big break back in the day.
And I think December, 2014, Adam,
back linked to an article I wrote about this auction.
It was called long live proof of work.
And then that turned into a bigger essay.
I got a few months after that called nothing is cheaper than proof of work.
And the people really liked that essay a lot,
but not everyone totally 100% understood it because the point of the essay was
that proof of work and proof of stake are really just very,
very similar to each other, actually.
And that to some extent they're all interchangeable
and they will all be wasting effort and resources of some kind or another.
And the nice thing about proof of work is that this rolls all of this up
into one hash that anyone can easily verify.
So it's very easy, transparent,
and it's very easy for everyone to see exactly how much work has been done.
But it's kind of just it's all going to be competitive struggle over the next block
because the blocks will be worth a certain amount.
Whatever it is, if the blocks have high inflation, high subsidy, high fees,
if the network is successful, these blocks will be worth a lot.
They have what you might call MEV now.
Each block will be worth a ton,
and it will be a competitive struggle over who owns the next block,
the ownership and control of the next block.
And this will make no matter what it is, if it's proof of work or proof of stake
or proof of space and time or proof of whatever, it will basically the struggle will happen
and it will just bring everything out.
The resources used in the struggle will basically be equal to the value of the block.
And so and hence the title, the title, which is very good title,
the best part of the essay, maybe nothing is cheaper than proof of work.
Is that is the meaning is that you can't you can't improve on it.
But also, but the people didn't maybe 100 percent understand is it meant that kind of like it's
you're also kind of limited in your ability to do worse than it.
Also, it's kind of like all this stuff is kind of just the same
and to the point where you just shouldn't bother toying with it.
And so that's my answer to your question, is that I still believe in that, that core.
But definitely a lot of interesting stuff has happened since then.
A lot of people have pushed the boundaries of proof of stake.
And what a lot of people do is they kind of cheat somewhat where they anchor things into Bitcoin proof of work
and they or they skate around.
They skate around certain things that will they perform very well in the short term,
but they leave it open to like catastrophic, huge reorg or catastrophic.
Like Black Swan type event that proof of work would like basically never have.
So instead of it being like a smooth.
Malleable.
Thing of steel, it's kind of like this, it's funneled into like sections that are really tough,
but could be brittle and kind of break.
So I don't know, this is a very long and metaphorical answer.
But am I getting kind of close to what you are asking about at all,
which is like people have done these other things, proof of space and time.
So like proof of space and time is a good example where it doesn't eat up a bunch of hard drives and destroy them.
At first, the answer was yes.
Then they changed it a little.
So the answer is no.
But what will happen is eventually someone will be able to monetize unused hard drive resources
and then it will it will flip back or it will flip like people tried to tie it.
Like at the time when I think Graham Cohen was sort of inventing that.
It was still like 2014 or something, and people had not completed the shift from.
People used hard disks and people didn't use solid state drives and they really didn't.
They hadn't switched from even from desktop laptop to phones.
But now everyone has got a phone.
And so.
And people use AWS.
So that was an attempt to try.
These are all these like attempts to try.
It's like a whack-a-mole thing where people are trying to like make it something that it would be very difficult for an adversary to get 51 percent of.
But a lot of these things that are only advantages for like a certain time and then they switch to being disadvantages.
And I kind of just think it's not.
I really do stand by my overall position, which is that it's really not worth it to mess with messing with the proof of work.
It doesn't really bring about some kind of big, sustainable, significant advantage.
So I don't know if that's answering your question or not.
I'll reiterate.
Is proof of work other than Bitcoin still viable?
Is there other algorithms out there that could or would have some kind of advantage or use case other than the Bitcoin network?
Oh, well, that's different than the networks are different than the proof of work aspects.
I mean, are you referring to like something that uses SHA-3 or like Litecoin uses a script or whatever?
Are you referring to that or are you just referring to other blockchain designs?
Because I think other blockchain designs.
Is Bitcoin one size fits all or is there room for others?
No, no, no.
It's certainly not the case.
I mean, the sidechain thesis is that is basically that the answer is no.
And I think in particular, the block size dispute is only the tip of the iceberg.
It was only the first big dispute.
But really, you see that people want to do lots of other things.
I think SIA is a great project.
So, yeah.
Now, the whole point of sidechains is to copy the other blockchain designs and keep them on one proof of work system and in one set of 21 million coins.
There's no inflation.
There's no counterfeiting, basically.
And the like, OK, so we have Monero, which Bitcoin led the way in darknet markets.
But now Monero is on there.
The block size dispute.
Clearly, people are very sincere in what they wanted.
Large blockers wanted large blocks.
Small blockers wanted small blocks.
So it's just difficult for you to have a big group of people without some people disagreeing.
Now, Ethereum turned complete.
Scripps, and even in Ethereum, of course, Ethereum also began a process that is ongoing of splitting themselves into other networks.
They have Solana, which just drops the – Solana is just – we will use trial and error and huge amounts of money of R&D to try and make a very, very, very big, high throughput, high performance node.
And we don't really care about the cost, although they have in fact gotten that cost down to something that is merely a few thousand dollars a year, which is a lot for the average person.
But this is the other thing about this clever thing about Solana is, of course, it's a lot now, but everything is expensive when it first comes out.
So the first car costs – the prototype for – the first Tesla sports car prototype costs millions and millions of dollars.
And then the sports car itself could retail for whatever, a couple hundred thousand dollars.
And then when you produce it at scale – the first iPhone, the first prototype costs a fortune.
And then when you make it at scale, the price comes down.
So the Solana people have just decided to sacrifice decentralization and then hopefully get it back later, but it is basically just Ethereum with larger blocks.
So then we have a whole universe of stuff, and we don't know who is going to invent what.
I think – and you know what's really bad for invention is to have this bureaucracy and Bitcoin Core and a weird cult that rejects all change in the hopes of discrediting altcoins, which is all this is misguided and terrible.
So we don't even have a good way for people to invent new blockchains.
Sidechains is that way, which we don't have.
So you can see already that tons of people have tried to invent things, or they're very close.
Tad Streisand did UTreeXO, which would be much better if you had a soft fork, let alone what you could do with a hard fork.
UTXO commitments and fraud proofs and other things.
And then you have a situation where – excuse me.
You have a situation where people really want OP_CAT, which is like a simple opcode.
But it's going to take years to get. And even stuff like – so we just heard from
Riyad, who was just here, and he said about how he was very interested in coin pools,
and he thought that this would take five or six or even ten soft forks, and it would take
just five or six or ten years or something. I'm paraphrasing slightly.
So you have a lot of stuff where people with extremely deep technical knowledge,
they would like the ability to flexibly alter the software. And just think about the other
contexts of software, where it's like Microsoft, Windows 95, Windows 98, Windows 2000,
Windows XP. It changes a lot. So I think the one-size-fits-all is totally doomed.
I mean, it's a rambling answer, but the one-size-fits-all is a completely doomed thing,
because people will never disagree. And I think what a lot of people believe mistakenly is that
it's like that XKCD comic where the person is like, there's 14 different standards, and it's
like, okay, we just need one that everyone will like, and then there's 15 different standards.
Everyone just thinks, well, if we could just get everyone under my chain, then
this chain would be the one that is perfect. I don't know. It just doesn't really seem like
it. That won't work until... That might work if that was, for some reason, that chain was the
only one that could have sidechains itself. And then in that way, it was the only one that would
eventually be able to satisfy everyone's mutually contradicting desires. So I don't know. It's a
very long and rambling answer. But yeah, I think ASEA is great. It had a very interesting
origin and development. And it was getting to the point where you could stream video and
back up an entire hard drive to the cloud with 12 words. So all that stuff is great.
Namecoin, I think, also could be excellent. And even just the idea of moving the ordinals,
the assets and stuff onto a different chain that has its own Uniswap and its own whatever,
its own market maker, its own order book, all of that would be great.
Prediction markets would be great. And again, we don't even really see...
There's no way for people to invent good things right now. The entire invention
pipeline has been built around the rubric of just raising a ton of money and then
abandoning the project. So all the forces of the world have teamed up to prevent
competitive innovation in blockchains. And nonetheless, we see a lot of innovation anyway,
even though it's horribly tortured. So I think the one size fits all is doomed. It will only
survive in some kind of weird scenario where the QWERTY keyboard... Something weird where it's like...
I'm continuing to ramble here, but part of the problem is that all of this stuff is so
new that in any given year, more than half of the people are brand new and they've only been
here for a year. And that makes it very difficult for them to accumulate knowledge about what they
should want or what's a good idea. And that will eventually fade. It will be like the early days of
the internet or the early days of pets.com or something, early days of computers,
the early days of computer games where it's all very indie. And then eventually it will become
more standardized and around this common knowledge of stuff.
And when that happens, it will be much easier to see where innovation is going.
Thank you very much for your response and your time. I greatly appreciate it and look forward
to reading more of your articles. Okay, cool. Hey, great. Thanks. Okay, Morgan. Hello.
Hello. So I have like two ideas I'd like to talk to you about and maybe I'll try to find a
coherent question in there. I am curious on if companies like Layer 2 or even Bitcoin Core
is... I always look at a BIP as kind of like a bill in Congress. And I remember when Amir made
the first BIP to say, this is how BIPs should be made. And I'm curious if we have in the industry
like a BIP lobbying effort where we have lobbyists that go lobby bills to Congress for their industry
and they basically bribe them and say, hey, I'll give you some money if you support this bill.
They bring the bill up, they rally everyone to support the bill and then someone signs it
and it becomes law. So I always compared a BIP to that. And I'm wondering if there's an effort to
actually take up BIPs to miners and to node operators and to these companies that
could potentially push things like a user authenticated software and things like that.
And if there's anyone actually putting like an incentive, like literally lobbying like bribe
around BIPs. So that's like my first most important question. And then I'd like to talk
to you about what happened in the past with segregated witness, since you brought up some
of those game theory on what could have happened if miners acted a different way. And I'm curious
on if that scenario could have played out, what would have happened to the...
If you could ponder this, what would happen to the transaction malleability and the ASICBoost
thing that Greg Maxwell found? And what kind of world would we be in if some of that maybe was
not discovered? So those are kind of two different things, but I'm wondering on how in the future we
can pretty much push changes and how we can gain theory if changes happens, what outcomes would be
there? Okay. Yes. Those are some very good questions. They're very complicated. I'm sorry.
No, they're great. I like them a lot, but I'm just trying to figure out what to say. So I think the,
what I would say is that the BIP process, it was working just fine and there was nothing
controversial really about it. And there was nothing like until the... I think the BIP process
was fine. And then a failure somewhere else, there was a governance failure with respect to
the block size dispute. And that spilled over and it destroyed a large number of things
of which the BIP process was only one casualty among many. And we would be, you know, Bitcoin
would be in a completely different place if it had just been handled in a slightly different way.
And to be honest with you, you just have to look at the, look at research, what the agenda was,
like the schedule for scaling one and two and the dates, and then just look at scaling three. And
you see that scaling three is when, I mean, I was there and scaling three, it went, it went off,
that's where it went off the rails and people were upset and people wanted to redo the conference.
In fact, this is a long story, but my view is that the, you know, what we have here is a failure
to communicate. But this block size thing wasn't good. And bizarrely enough, the failure was
actually, it was something else, I think, actually, because the sidechain idea had already picked up
steam as of 2013, and then Blockstream being funded in 2014. So I actually think it was the
failure to deliver. So this is my own conjecture that I'm, you know, I'm not 100% certain about
this. But whereas I am, I am more certain of what I just said before, but I think we had this thing,
and then no one, you know, Blockstream failed to deliver sidechains. And if we had sidechains,
we would have large block version of Bitcoin, a small block version of Bitcoin. This all would
have been sorted out by the engineers long before the laypeople could get their hands on it and
turn it into like a political football. And so my view is that the bit process was working just fine
before it was inadvertently destroyed by the scaling war, and that the scaling war was mostly
caused by failure to invent or work on or just advocate, articulate a vision for sidechains.
And, you know, intriguingly, since I could tell you, you looked at the image I made with
responding to Peter Todd's article, I kind of say that he is the one, maybe not, you know,
intentionally, but he poured a lot of cold water on this sidechains idea. But I don't,
you can't really blame him either. Because I kind of also blame like, how could, you know,
like I say at the end, question nine or something, I say like, how, why did,
is this what he told, is this what Peter told Blockstream? Or is this what they,
they also agreed with? And it's like, how could they, you know, sort of fall for this or believe
this? Because I just think it's actually, it's just not very, it's just very, it's not very
engineering type of a thing either. It's just like this vague complaining. And there's no like,
it is the problem because of the, whatever, the rotation of gear three or something. So,
so that's kind of my view on it. I don't know if that answers the first part of your question.
But I think that it was broken, it was broken by the scaling war, and it will be fixed by
sidechains anyway, which will was just to say, a lot of the stuff will get factored out into L2s,
which will compete. So you'd have like, you will have like two different versions of like,
you would have like Bitcoin Cash and Bitcoin SV as sidechains, and they would like be competing
in a very healthy way on features, you know, they would be like shipping code.
And, you know, they'll be shipping wallets and Jeremy Rubin would ship
119 chain, and maybe that would be the one that has ARK and Barak and they'd be hanging out over
there and everyone would compete, it would be like how you know, LND and declare and whatever
could be where it's kind of like rival risks, which is healthy, but it's, but it's not like
the toxicity of just like, like the intercoin competition, which is just not as healthy,
because it's weighed down by all this other stuff. Marketing and whatever network effects,
and you can't leave, you're locked in. So I'm not sure if that's a totally helping,
but I can try to elaborate more on what I think should happen instead. But I think we're missing
the bigger picture, which is that it was, it did work just fine. And it wasn't controversial.
After sidechains, or just even after any kind of decision, like any kind of closure on this,
which we still don't have, Tadge Dredge is 100% correct. Tadge Dredge is a creator of
Lightning Network. For those of you who don't know, he had an earlier comment about,
or can we talk about, are we allowed to talk about the forbidden scaling topics? So,
yet or no? And I think the answer is still no, unfortunately. But once all we have closure on
that, and one way would be sidechains, then not only will there be a lot of healthy development
and experimentation on L2, but there won't be as much, people won't care as much about
these trivial backward compatible modifications to L1, partly because it won't matter as much if
they happen or not, because you'll have them on L2. So, for that exact reason, the drama will go
away. So, that's not really an answer to part one, but that's all I got. And now I already forgot
what you said in the second part. Well, really, just the last little piece of that first question
is, is there an incentive structure, like how people are getting paid to go lobby for certain
bills to pass? Is there evidence, or is the BIP getting pushed? Is there a financial incentive
around any of them in a way that like, you know, in the past we didn't need it, but maybe we need
it now or something? I actually think that's probably smart. You could have a Salesforce
or something and a commissioned sales team because they have to sell the idea and everyone's
busy. And this is now, it went from being a small industry to being a huge industry. So,
if you're not going to be able to, you don't have specialist people who are going to go around and
explain the idea. Yeah, that's exactly what I mean. I think that's a good, I think that's
probably a good idea. People have, they're fools. I know, I know, but like, you know,
incentives have changed and there weren't lobbyists in 1780, but we obviously have them now, you know?
Yeah. And people don't really like, you know, of course lobbyists is a sign of a disconnect between
the voter and the representative, which is some people interpret as sort of like a friction.
But it's also hard because the voters are not informed, you know, something like whatever,
75% of the voters cannot name their, whatever, representative, senator of which they're.
And maybe Bitcoin is not like best comparable to the U.S. Congress. Like we didn't have,
you know, James Madison and we don't have amendments and we don't have all of those
things. But like, that's just a metaphor. I try to understand it. But my second thing was basically,
since you understand some of the history and you kind of pontificated this scenario in another
multiverse of what would happen if the miners would have orphaned blocks. I'm curious on,
if something like that would have happened, what would have happened with transaction
malleability and the ASICBoost that Greg Maxwell found in the Antminer chips?
Right. Okay. So first ASICBoost, my view is that even though Greg, I don't doubt that he
reverse engineered the chip and found the covert ASICBoost. But what I do doubt is that it was
being deployed on an enormous scale such that this affected the block size decision. I mean,
Greg's story, I don't buy it. You know, I think Greg is super smart, but I don't buy all his
stories. Sometimes he becomes very paranoid in my humble opinion. And so what he's trying to say is
that no one really, Bitmain never really cared about, like they don't care about the block size
debate. They just wanted to maintain their advantage, their competitive advantage with
ASICBoost. And that is why they rejected SegWit. But to me, it's clear that all the large blockers
were very sincere. They really wanted their large block thing and they were eyeing Bitmain activation
of SegWit. And because of the history of Bitcoin, SegWit is a very, very unusual soft fork,
because it happened to also be, it was really kind of a hard fork. It was not, as I may have
explained a few times, hard fork and soft fork, they have two different definitions that sometimes
are the same, sometimes are unrelated, and in some ways are exact opposites of each other.
So, but in terms of, SegWit loosened the rules because it was a four megabyte,
it was a block size increase. So, but it was fully backward compatible. So,
this is a complicated point that I could re-explain if anyone's interested, but
the point is, from the point of view of the large blockers, they were told we can never increase
the block size because that would be a hard fork. Hard fork bad, hard fork bad, hard fork bad,
block size limit is, it's like the speed of light, we can't break it. And then all of a sudden,
at scaling two, you know, Peter Wilde comes out and pulls this rabbit out of a hat,
really was sort of Luke Dashjr's idea, I think, at first. But the point is, this idea shows up,
oh, we can actually increase the block size with a soft fork.
So, this is, it's like, it's just very confusing to the large blockers. It makes it look like
there's a group of people who can do whatever they want, and then the technical people,
and then we cannot do anything. We, the large blockers, we never get our way.
They said this was impossible, but now it's possible. They wanted, Mike Kern wanted eight
megabytes with Bitcoin XT, then they wanted this Bitcoin Classic two megabyte hard fork,
and then they can't get, but they could get it if they get SegWit. So, the whole thing had become
confusing, and just the way all the different chess pieces had fallen. I think that I would
just like to be clear with everyone that I'm not 100% certain that my version is the right version
of, but all I can do is tell you my honest opinion of what happened, the way it looks from
my point of view. And a historian can assemble all this later, but from my point of view,
it really looked like a bunch of chess pieces had fallen down. It's kind of like you woke up,
and someone has a gun, and someone has a shield, and so the person grabs the gun,
and the person grabs the shield, and the next thing you know, bullets are colliding with the
shield. You know what I mean? It just sort of happened that the miners fell in with the
large block group, the small block people were the technical people that invented SegWit,
and BIP9, it had always activated with 95% hash rate signal. So, they thought,
oh, we have the large blockers thought, oh, we have this thing we can withhold to get what we
want. So, I'm kind of rambling again, and I apologize for that, but it's kind of like the
story is ASICBoost is so important, but there's really no reason to. It's really not. The ASIC
boost, one of the smoking guns is that when SegWit actually did activate, which was not that long
after this whole covert ASICBoost thing was discovered, you know, less than a year,
six months, maybe, probably less than that. Someone can look it up, and maybe it was like...
I don't know, like winter to August 1st or less.
So, it wasn't that long, SegWit activates.
This is supposedly going to brick all of the ASICBoost.
So, the hash rate should at least fall by some amount, right?
It should be like whatever percent bit mains is,
and whatever percent they lose by not doing ASICBoost,
or maybe they had specialized chips
that were relying on that, or...
So, the hash rate should fall,
but the hash rate doesn't fall at all.
It seems to be totally and completely unaffected.
So, I don't know, I just don't buy the story
that it had anything to do with covert ASICBoost.
I think they were just researching a lot of stuff.
There's the overt ASICBoost and covert.
Only covert ASICBoost was affected by SegWit.
I don't think they were technical enough
to even uncover this,
or really understand how to exploit it.
So, I don't know, this is just my opinion
that I think it was unrelated.
I think that's very valid.
My view from the whole situation,
because I got to talk with Eric Lambroso a lot
about what was happening when it was happening,
and he did some work there.
I come from a military intelligence house,
so I'm not a statistician like you.
I think about all of the people trying to kill each other
and the New World Order stuff.
Who's spying on who?
And I was very curious on who was funding the things.
I found the patents around all that stuff interesting,
and who was getting VC money and who wasn't.
And so, I wonder about the incentives a lot,
since we have fees, Coinbase, we have replaced by fee.
Bitcoin's very incentive structured.
So, I wonder about the people incentives,
and who's getting incentivized and who's not,
and why are we not incentivizing?
If they're incentivizing, because if it's like chess
and a game theory kind of situation,
if that's why all that chaos happened,
because people were getting paid by other people
to promote certain things,
which is kind of what I thought was happening back then,
why are us engineering, Bitcoin loving people
not playing that incentives game?
Why aren't we?
Is it like a moral thing, or is it we just wanna lose
because incentives always win over non-incentives?
So, I'm just wondering BIPs and changes
and promoting these technical ideas,
if they're not being funded,
like how Square and Block is funding
Lightning and core developers,
they're like incentivizing a development this direction.
I'm wondering, are we missing an incentive route
to incentivize things like BIP300 and OP_CAT
and all of the other stuff?
Yeah, it's kind of like a NATO,
like what Eisenhower said about,
if the free nations don't stand together,
they'll be destroyed at one by one.
I was the British guy who said the one by one line.
Yeah.
But he was like, one by one,
that was the evil stratagem or something
of Hitler and Stalin in Eastern Europe.
So yeah, like something like that.
I don't know, such things are very,
I think we're already very close, honestly.
We just need to get this one,
we just need to escape
and get like some critical amount of functionality.
And then it will all be more like ordinals
where it's like you can't stop people from doing it
and people complain, but it kind of won't matter
because it should all be based on the fee.
It should not be based on the color of your skin
or what you had in mind for the transaction
or what other stuff the transaction is going to be a part of.
Should just matter if it takes up the fee.
And I think we're very close to,
but yeah, it's a very good question.
Well, that's all I wanted to ask.
So I'll step down, but thanks for honoring that with me.
Yes, what I had in mind was that the,
for 2017 was that the miners, the other,
because there was more,
it seemed to be like more than half the miners
supported SegWit and there was only Bitmain
and the other Bitmain people who were trying to withhold.
They were trying to block SegWit
and it was unclear if they would have,
maybe they were only a vocal minority.
So instead of what we, what you could have done
is just had the majority outvote the minority
and they would then have just activated SegWit
and they would have just,
these people would have just been sore losers.
You know, because it's like,
does Jihan Wu's opinion represent all of Bitcoin?
Well, if you have 95% hash rate threshold,
then anyone with 6% can, it's really a 6%,
it's a rule of the 6%.
And so, but instead of that, we did this UASF thing
and we created this completely different thing,
which is like a Twitter governance,
which I think has been way worse.
At least the miners have skin in the game.
So I think that would have been much better.
Anyway, now we have a Justin75IQ.
Yeah, I totally agree with you.
Like, can you hear me?
Yes, I can hear you, yes.
Okay, sorry.
We got to get the personalities out
and get the egos out and the politics
and just focus on the ideas.
Do the ideas rise to the level of,
okay, is this objectively a good idea?
Yeah.
Yeah, I agree with that.
Yeah, I agree with that.
That would be the ideal thing.
Of course, everyone always says,
I am being objective, you know, when they're not.
So it's a trickier thing.
But I think that this idea of having the miners,
having the threshold be 51%,
that was this Westminster thing
that I was alluding to before,
where it's kind of like,
you just, you have a competitive struggle
in a healthy way because trying to get to 95,
I think has kind of messed us up a little bit.
And now it's become this battle over consensus.
I don't know.
I just think, if I could choose,
I would rather live in the world
where SegWit activated via miners,
simply activating it like in early,
it would be like spring 2017.
And then what would have happened then
would have been there could not have possibly
been a SegWit2x agreement.
And if there was going to be a Bitcoin Cash,
it would have probably been later than August 1,
because people would have tried out
the extra two megabytes worth of 2.1,
the 1.3 megabytes of space that were added.
And then they would have,
I don't know.
I just think the whole thing would have worked out
a lot better because you'd be in a situation
where people are competing on the right things
for the right reasons.
And you have this big movement.
I think it was Joseph Schumpeter who said,
the people can only express their opinion
as a stampede or something.
So if that's all you have,
then you need to have all these fine-tuned things
stepping out in front of that
to present people with like two options.
Anyway, I don't know if I'm gonna be able
to explain that very clearly,
but that's kind of my thought.
I'm still going through the Block Size War
and reading through it.
And it's really a fascinating book.
I think everyone should read it
who's interested in Bitcoin.
Certainly its importance cannot be understated.
It determines today what can be spoken about
and which things get how much funding and attention,
which is very irrational.
And people still care so much.
Even you have someone like Tadge Dreija
who is one of the two inventors of the Lightning Network.
Do you think they'd be so prestigious
that anything they say would be held?
On a throne or a pedestal.
But no, it's still because they only test the waters
and it's like, are we ever going to get out from under this?
And just the, so many people reacted
in such a vicious and terrible way
where they were like emotionally involved.
And then they were like,
I'm gonna get revenge on such and such.
And it's all very, very, very bad
for making Bitcoin a success
and defeat the banks and take over the world.
It's just really, really terrible.
And almost everyone started directing all their firepower
at other Bitcoiners.
And it's completely different.
It used to be a very, very fun atmosphere.
It was very loose.
It had really no political connotations either.
Bitcoin, there wasn't like a right thing necessarily
just for what's that worth, for what that's worth.
I tried to just bring that up because that is,
it just speaks to the totalitarian character
of like the cult that emerged
from the winning small blocker side.
I think too, the book really showed the importance.
Oh, when I meant politics, I didn't mean like,
left, right, vote this, vote that,
just the politics of Bitcoin.
I think the point of the book is that if an idea is really,
the importance of really listening to people,
I think is brought out in the book.
That to kind of, to get people to actually listen to you,
like to me personally,
I have to be a good listener to others.
And that was something that you can see breaking down.
And then you see people's true nature.
Like you see Roger Ver,
and certainly he did a lot of great things for Bitcoin
in the early days in promoting it,
but you see his true nature kind of come out.
And the overarching part of the book,
I think is that the,
it's not just should an idea be good,
or technically have good fundamentals,
but is it like a really, really good idea?
Is it something that makes sense?
Like, something I'm curious about,
because you know a lot about the early history of Bitcoin.
No one can find, like, is there any comment
on Satoshi making that change, or did he leave?
Like when he checks the code into,
specifically to SourceForge, CVS,
because I don't think we can find that commit history
anymore on SourceForge,
when he made the one megabyte limit way back.
And obviously Satoshi is someone who,
he wouldn't just be rigid.
He would have changed.
He would have tested his ideas
and made changes as he went along.
Yeah, I haven't looked into this in enormous detail,
and you can make like two columns,
and you can see like Satoshi was a small blocker,
Satoshi was a large blocker.
He made many comments that would indicate
that he is a large block.
Obviously, I hope I don't need to tell you,
all the small blockers are convinced
that Satoshi is a small blocker,
and all the large blockers are convinced
that Satoshi is a large blocker.
So often you get nowhere by talking to these poor people,
but you can make columns, as I have.
And he has made many, many large blocker comments,
and he certainly seemed to be a large blocker at first.
The intriguing thing is that he is the one
who himself inserted the one megabyte block size limit.
And he wrote, it's true that after he did that,
people asked him about it,
and he said he wrote about a way of phasing it out.
So of course it goes back and forth,
this is what I'm trying to tell you,
is it really does go back and forth,
like it's right down the line.
And he explains we could phase the limit out later,
but then what he does is he intentionally leaves the project
and he does not give any,
he doesn't like add the phase out and then leave,
or he doesn't like leave a comment,
oh, be sure to phase that out.
So it's totally ambiguous as to whether or not,
you can interpret however you like,
you can say he never wanted it to phase out,
and he was just telling people that to get rid of them,
knowing that the limit would stay.
Or you can say that he wanted to phase the limit out,
but he was like hit by a car or something
before he could get to it.
Or you could say anything in between.
But it's very, very,
but there's quite a lot of evidence on the difference
on in both columns.
It's kind of just like the Bible in a way,
where you can, if you want something on love,
you can go into the New Testament
and find something on forgiveness and love.
And then if you want something on justice
and sternly obeying rules,
then you can go into the Old Testament
and you can just kind of fish out of that book,
whatever you like, you know?
And then as people do,
and as people certainly also do with the Quran, et cetera.
So they just, unfortunately it's not,
it's far from clear.
In my opinion, it's very ambiguous.
He certainly seemed, he definitely,
this was pro-merge mining though.
And he thought that there would just be many blockchains.
That's what's very funny,
is one thing that he seems to take completely for granted
is something that later everyone hates, except for me.
Yeah, I'd like to block sizes.
Obviously in the early days,
Satoshi paid attention to the network very closely.
And to the block sizes, and isn't that correct?
Like in the original, before he enacted the one megabyte
limit, and he really didn't tell anyone.
He just kind of made the commit
and then other people noticed it.
But before he made that commit,
what were the block sizes?
Oh, they were never above,
they weren't anywhere close to one megabyte.
So you did not have the, I don't know,
it's an intriguing question as to why this is,
but the block sizes really, they rose more or less linearly.
So they started very low and then they, you kind of grew,
the graph was just a diagonal line up.
And of course it had different spikes and noise.
But it was not,
it's not like there were all these different block sizes.
It was like, you know, one 10th of a megabyte,
two 10ths of a megabyte, kind of creeping up.
That was back in 2010.
He added the limit in 2010, when it was still very small.
Interesting.
Was there some kind of limit or was it just my memory?
I seem to remember some discussion about-
Well, there was a limited, but this was not,
there was a 32, I believe, megabyte limit
in terms of how many, the size of the message
you could pass to the software to have it interpret
that as just a message.
I don't think that was even specific to blocks though.
I think that was just like kind of any message.
So again, it's a little muddy,
but there was an implied limit that was,
but you see there's a very big difference
between an implied limit and an implied limit.
Big difference between an implied limit
and one that is hard-coded
into the validation rules of the protocol.
It says the block can never be,
you understand what I'm trying to say?
It's kind of like if there was no speed limit,
but no one had made a car that could go
above a hundred miles an hour, you know,
in 19 whatever, 50 or something.
So it's kind of like there was no speed limit,
but there was indirectly a speed limit.
So, and then later on.
It was like a unspoken sort of rule.
Like there would have been no reason to put in a,
when the limit was 32 megabytes
and the actual blocks are, were literally, you know,
I don't know, like a hundred, you know,
much thousands, a hundred times smaller than that.
That would not have been on anyone's mind.
You know what I mean?
That would be like having a speed limit
of like 8,000 miles an hour or something.
You'd just be like, what?
So there was none.
There was a period where there was,
but that was the only limit.
And of course, intriguingly,
there would be other limits
that would just cause the software to crash.
Of course, if you stress tested it,
there would eventually be something
that just caused the software to just like, you know,
hit some kind of like performance issue and crash.
And of course there is always the case
that if the block takes more than 10 minutes to download,
that will destroy the network basically.
I mean, if that happens repeatedly,
that it will be,
it would be impossible for anyone to get it,
collect the blocks at a rate that is as fast
as they are being produced.
And then it will sort of not work out
for the people who are trying to do that.
But that you can see that,
you know, at the time they would propagate.
And of course, only a few.
A hundredths of a second at most back then.
So versus 600, 10 minutes to 600 seconds.
So that's, so again, it was off by orders of magnitude.
Anyway, I thought we had someone up here before.
Did we lose them?
I thought we had another person up.
Maybe they are down now.
Yeah, I think they dropped.
They dropped back down.
Okay.
I forgot what I was going to say.
Oh, they're back.
Hello.
Octavio.
Yeah.
So, yeah, I guess just going back a little bit
to your proposal.
So just one of the things that I get a little bit confused
is about the,
the main downsides of your proposal, I guess,
because everybody kind of gets, you know,
rejecting about this, this part specifically.
And I would like to know if there is any other kind
of a better way to do this peg out thing.
And if something like, for example,
like a meta op code, for example,
like the previous hash block or the previous transaction
would help in any way in that sense.
Yeah, that's my question.
For me, you cut out a little bit at the very beginning.
So, and you cut out right when you said something like,
and this is the part that people dislike, but you cut out.
So we're referring to the withdrawal, I assume,
or the peg out, I don't know.
Could you repeat some of what you said?
I mean, I didn't hear it, hopefully.
Maybe it was just me.
Is that what you're talking about?
Oh, can you hear me?
Is the app gonna crash?
The stupid app.
Elon.
I don't hear anyone now.
Oh no.
Well, now I dropped back down again,
but I will try to answer his question anyway.
I think the question is, can Drivechain be improved?
Personally, I really don't think it can.
And my position is that the people who don't like it
really just, there's something about it
that they just don't understand.
And I wish that they did understand it.
And I feel like if they put more time
into understanding how it worked, they would like it
because the withdrawal, people think that
they're trying to make it so that maybe miners
cannot steal from the withdrawal,
but self-interest and greed is a better ally
than most other things.
You know, if you're living in a situation
where the miners want the chain to be a success
because they want those juicy, juicy transaction fees,
that is actually much better
than even like a cryptographically secure algorithm.
Because what that points to is that
even if there's the event of some kind of bug
or some kind of unexpected thing,
that would point to the miners wanting to cooperate
to fix the issue.
Whereas if it's instead something like the Ethereum DAO hack
where everyone is nature red in tooth and claw,
and it's like, you just steal the money and then you escape,
that is actually scarier.
In that world, you have to have everything coded perfectly.
So what people don't like is I think
that there's some discretion.
The miners are your cooperative allies in mind,
and they want it to be a thing where
no one is allied with no one or something like that.
I don't know.
But I think all that's just a big mistake.
The people who try to improve it,
they want to make it so that maybe 51% hashrate
cannot steal from the escrow, the sidechain.
However, they are going to fail because 51%
can always censor messages from L1,
and it's just not worth it.
It's just really not worth it.
So for example, the Ethereum DAO,
it's not worth it.
So for example, the attack that Riyadh was explaining
earlier in this very space,
that is something that what makes the attack interesting
is that anyone can do it and make money.
But if the miners just decided to,
they could have already done that attack.
They could have just said, we won't let anything be spent,
and then we will spend the hash pathway for half of these
and the timelock pathway for half of these.
They can already do that attack and make money
just by poking their head in and paying some attention.
So the only interesting thing was that
the attacker can now bribe the miners
and cut them in on it, and now the whole thing.
So everyone is relying on the miners
to a very significant degree,
and it's just better to get the miners on your side.
And so I really don't think that it can be improved.
I mean, the other thing is the withdrawal is very slow,
but it would be nice if it were faster,
but it's also not that important
because regular people will just swap out.
They will have, it's kind of like how,
you know, it's like if you play chess
and you very rarely play to the checkmate,
someone will resign, you know, because they can't win.
So if you have the L2 coins,
it's only a matter of time before you get them on L1.
The miners are indifferent between F300 L2 coins
and L1 coins.
So the miners are
going to buy them at 99 cents on the dollar always.
It's exactly as I wrote in the original November 2015 post.
So everyone, I think it's very interesting.
People should go back and read,
read the original November 2015 post.
It honestly thought of everything already.
And it's just,
people are just struggling to comprehend it
for some reason that I don't fully understand.
But I don't think there's anything
that would actually improve it a lot.
CTV would make it much easier
so that instead of being able to withdraw
to 15,000 people or something like that,
you could withdraw to like whatever, tens of millions,
but that already isn't an issue
because you can already aggregate on L2.
But that is one small improvement that would happen.
I think I had to, yeah,
I actually had to drop off and join again the call
because I couldn't listen to you.
And I think I have missed some part
of what I was saying as well.
But part of my question was also like,
if some kind of meta op code
would improve the bag out process.
So for example,
just bagging out with a transaction
that has been seen in a specific block
or even like from a previous transaction,
hash or something like that, you know?
Yeah, that would not really improve it
because already BIP300 requires people
to put the TXID into the Coinbase months in advance.
So you put it out already,
and then that is the only one.
It's only after it's in the Coinbase
and then it gets votes.
That is the only one that can be withdrawn later
and included in a block.
And so it kind of already does that.
I really don't think there is a way
to improve upon the drivechain design.
You know, maybe there is, but I just don't.
A lot of people just don't understand it.
And what they think an improvement might be
is something that's either pointless
or would actually break it maybe.
So I think that that's a very weird situation to be in,
but I mean, you have to look at it from my point of view.
You know, people should read the original November, 2015 post
and they also should look at what Peter Todd came up with
like in October of this year
and really just how kind of terrible it is.
And it's, so I don't know.
But yeah, everyone's got an opinion about it.
So I don't know.
But yeah, everyone's got an opinion about drivechain.
Yeah, plenty of people think it's about bringing
shit coins to Bitcoin, even though it doesn't do that at all.
Was that your motivation to bring Bitcoin to everyone?
Well, yeah, I think that we're faced with the reality
that people disagree enormously.
So how do we handle that?
Do we just say, oh, the winning team will always be right.
Like what we have Greg Maxwell and he's never wrong.
Well, to me, that seems like a bad idea.
I think being wrong is a part of life.
It's a good part of life.
And it means that you are sprinting ahead
to tackle the tough questions.
And it's very easy to never be wrong.
You just never say anything.
And that's worse.
And so I think betting on infallibility is a dead end to me.
And I think also just trying to stick your head in the sand
and just say, oh, it doesn't matter that people disagree
because plenty of people say this type of thing
where they say the status quo is the best.
So they say anyone proposing a change is bad.
Even if that change is a fully opt-in,
ignorable soft fork that's can barely be regarded
as a change.
But if people will say something like the old is the best
and that argument is sometimes called positivism
and it's been used time and again and it's always wrong.
And it says that we should be using outhouses
instead of plumbing and that we should just,
we should die, our teeth should kill us
when we're 25, 26 years old, painfully.
And people try to make an analogy to like TCPIP
but the analogy doesn't work
because TCPIP already worked for,
it already solved the problem that it needed to solve
which was connect every device in the world,
8 billion devices and this does not yet so.
So yeah, that's my thought, Abadi is back, hello.
Hey, you were talking a little bit earlier about SegWit
and I'm a little bit behind, I guess,
but you were talking about how it's weird
that they were like,
no, you can't raise the box size, impossible,
but let's raise it three megabytes.
And they never really acknowledged that.
I find it very interesting that what seems to be happening
right here with the Ordinal situation
is a complete misincentive and mispricing
of arbitrary blockchain storage.
And obviously storage is one of the most precious resources
and for example, like Ethereum,
not promoting Ethereum at the moment right now,
but Ethereum prices arbitrary storage
or they price storage as one of like
the highest compute resources.
It's one of the most expensive compute resources
you can access on their network.
And so when they released SegWit and Taproot,
they gave three times more space for arbitrary storage
at like one quarter of the price
of the base transaction data.
And it seems to me like a lot of the problems
could be alleviated, they can't be solved,
you can always put arbitrary data
into really any blockchain,
but it's a question of incentives and how easy can you do it?
How, what's the cost of doing that?
It seems like it's maybe a foregone conclusion
that they just won't be able to make any movement here
because there's too many inscriptors at this moment,
but I don't know, what do you think about just in general
about the pricing of arbitrary storage
and in a technical sense, the ability to reduce that problem
or maybe it's not really a problem,
maybe you don't see it as being a problem.
I don't know, I was just wondering if you could comment
on those, on that kind of line of thinking.
Sure, I'd be happy to.
The distorted pricing was introduced.
People thought, back in 2015,
it was observed that you could do a,
you could do SegWit by putting the signatures
into an extension, a mandatory extension block.
And you could have this extension block be 100 gigabytes,
and that would be pricing it at like one,
100 billionth or something.
And they set this constant, as far as I'm aware,
you know, I was participating in technical discussion
at the time, but who really even knows.
But I think it was something like this.
The input is usually like 100 bytes
because there's a 71 byte signature plus more stuff.
The input, selecting the input is 32 bytes.
So it's like 115 something bytes is the each input.
And each output is only like whatever,
like 30, whatever, 40 bytes.
So it's roughly a four to one ratio.
And when people make outputs,
they were trying to deter output spam.
Because it's like, you make a bunch of outputs.
So it was like, they were probably thinking
of Satoshi Dice, which produced all these outputs
that were dust or that were not used for,
they were used for notification.
They were probably thinking of BIP-47.
So they're thinking, we don't want to store these UTXOs
because we have to store them in memory.
So it is a great irony that they wanted to discourage,
they wanted to encourage people
cleaning up the dust outputs
by making it so that creating an output
hit for the full amount,
but an input was only cost one quarter.
So perhaps that makes, hope that makes some sense,
which is that was the intent.
And it was, I think it was the ratio
of the size of an input to an output was around four.
But it was also the case that they had looked
into the historical data and calculated
that if they picked this factor of four,
it would, if the past patterns continued,
it would be effectively a block size increase
from one megabyte to about 2.3.
And this was, you know, buying people some time,
basically buying some time of getting the block size.
You know, it was like, if you could plot
like the size of the blocks
and then you could plot the block size limit
as a horizontal line at one megabyte.
And you could see we're gonna like,
so we're sort of like hitting the limit.
And they thought, okay, we can,
this would be a good compromise.
So that was how it originated.
And now you see that it has flipped around,
as you rightly say.
It is used in a different way than it was intended.
And now it is storing data that must,
storing blocks, the blocks must be served on demand.
So it's not, it's not looked up in RAM per se,
but it's still something that whenever anyone,
if someone asks Luke Dashjr's node for a certain block,
it either has to say that it doesn't have the block
and then it will get disconnected from,
or it has to serve the whole block,
including the, you know, JPEGs.
So I think that they, this is a little tiny experiment
that was run in central planning
that should just be unwound.
And we should just delete the,
we can go back and delete the discount
and restore the original unadulterated one megabyte
block size in all its sincerity.
It's kind of what I would prefer at this point,
because I think that it,
this idea that it will,
I mean, who out there is like being,
like when people make a transaction,
are they really thinking about,
oh, I should clean up these?
I don't know.
I don't think people really are responding to the incentive
in that particular way.
And I kind of just think a byte is a byte.
The RAM, I think the RAM thing will fix itself also
because, you know, back in the day,
I mean, there used to be a huge difference between RAM.
I mean, I remember when you had like a one megabyte RAM
and then you could have like the ratio.
I mean, someone should plot that.
I wonder about this.
Maybe I'm totally mistaken here,
but the,
it used to be that you'd have like,
you could have like a one gigabyte
or like a 100 gigabyte hard drive.
Like in the 2000s,
you could have like a 100 gigabyte hard drive
and you would have like a very small amount of RAM.
And I want to like say I completely am wrong,
but I'm saying the ratio has changed, I think.
Now you can get a super, super high performance computer.
It still only has like, what,
three terabytes in like the highest performance,
but they can have like 64 gigabytes of RAM.
They can have like a huge amount.
So I kind of think the ratio has caught up on the one side
and it doesn't, who cares about it?
You know, and anything you store in RAM,
you can all store on, you could flip them around.
You know, you could, you know, you could,
you could hack the software
and you could write caches and things to convert them all.
So it's like, I don't know, who cares?
Now everyone has a three terabyte solid state drive.
It's like, maybe not everyone, but some people.
So that's my, does that give you any kind of...
Does that help answer your question at all?
Yeah, definitely. I really just wanted to hear your thoughts on that. And that's good.
That's good information on the background about like how they arrived at
the numbers that they arrived at and what the problem they were trying to solve.
It's interesting to me that through this entire conversation, I just, I never,
I hardly hear anybody discussing like the fundamental issue at the protocol level that
was changed. It's always like, well, we need to censor or we shouldn't censor. We need to
implement pools or, you know, Bitcoin, like this assumption that Bitcoin is not a designed network
and that it's like economics, it's pure economics itself. You say, well, people can just pay for
whatever they want and, you know, Bitcoin does what it wants. It's like, it's not this separate
entity. It's not a separate thing that like, that has its own mind. Like people set parameters into
the network for specific purposes. And if those aren't working as intended after the fact, then
we need to go and change the network. If you can't do that, like it's impossible to release
any software, any protocol, any code that's going to get it right the first time, every time,
like no matter how much modeling you want to put into it, the real world shows you things that you
just didn't expect. So to me, it's like Bitcoin needs the ability, if it's ever going to upgrade,
it needs the ability to revisit the situation after the fact and say, okay, we kind of messed
up some of these parameters. We didn't, we didn't foresee this. Let's change the dynamics and the
incentives. And right now I just see very little of that happening as a conversation.
But yeah, that's really all I wanted to say about that. I appreciate your ideas there.
Yeah. And I mean, as you almost certainly can guess, people, this is another thing where it was
like, in the SegWit era and previously, everyone would talk about like how this is a big experiment.
Don't put any more money in than you can afford to lose. And then it kind of, it is the block size
war. I mean, I repeat this so much, but I just really believe that it's the case. I beseech
everyone, please, you know, hear my plea or whatever. But it's like, if the community split
into the two camps, and then the, you know, and the camps got further and further apart,
and they started hating each other. By scaling three, they had already started to hate each
other a lot. And then SegWit2x further drove this wedge, and then Bitcoin Cash, they split
off completely. And it's because the community split that both of them decided to try to claim
that they had all the answers. So no one wanted to say, oh, we're still figuring it out. This is an
experiment. Instead, they said, this is the total final solution. This is perfection. The Bitcoin
Core, latest version is perfect, and can never be improved. And anyone who talks about improving
it is a troublemaker. And all of this started, this was not the case before the block size
war, the tox, this is the toxicity, you know, there was no, there was some, but the toxicity
was very different back then, because it was completely different thing when you compare
something like Bitcoin to like Litecoin, which is like a copy paste that has like no, at the time,
had really no purpose. The great irony is that now Litecoin, you know, actually kind of looks like,
it is, it's nice because Lightning is the extension block of Bitcoin. It's the low fee
version of Bitcoin. This is ironic, it's the horizontal scaling, as they say.
But in the early days of Bitcoin, it was like Bitcoin 99%
dominance index, everything else was a distraction. Everything else was get rich quick scheme.
And so, but it's only after the split that people tried to say like Bitcoin is finished.
I don't know. It's, it's rough.
It's too bad that an enormous amount of damage was caused, I think, by the way, that event was
handled, as I said before, it, it broke the BIP process, because you can see why, because now if
you have, if there is a BIP on the before when it's, previously, the BIPs were like, we'll add a
BIP, so that when the unused OPNOP2, which puts the current block time, like on the stack and
like fails, if it doesn't equal something. So that was like check lock time verify is like,
you know, that was a oversimplification, but it's like, a BIP would be like, we will put
the Coinbase must, the Coinbase transaction must include the current block height.
And that was because if you didn't do that, and the miner reuse the address,
you had two UTXOs that would have the exact same
hash. And people just thought, well, that's kind of annoying. So when the BIPs, and then you had
a BIP to add pay the script hash, add multi-sig, that's kind of a big change, if you really think
about it. But, but back then, no one cared. But then as soon as you have this block size dispute,
that makes everyone very, very angry. Now, when someone puts a SegWit BIP on the table,
SegWit is now it's a political football because it has a block size. Well, why four megabytes and
not something else? Why can Peter Weil increase the block size, but whatever, you know, Roger
Veer can't. I think Roger, Roger is a very nice guy, very polite, and he really cared about Bitcoin.
I think he, he really overestimated. Well, as you say, there became a time when it was very hard to
get the impression that people are really listening to each other. The listening is the key.
And the empathy, which was, unfortunately, it was, I remember it as being a very full tank
in, in 2015, but that tank ran out. And I think you alluded to this in the book,
points this out that it just, people's had a tank of gasoline that eventually just ran out and
for some people faster than others. And then they just thought, well,
these people aren't listening to me. So why say anything?
But also they had like agreements that were behind closed doors with very few people too.
Like in Hong Kong, but the Hong Kong one was, that one was supposed to be like a compromise.
That one was a very intriguing case. I don't know what the, what the book, I assume you're referring
to Jonathan's book. I don't know. I'm not sure what exactly what he says in there. I think he's
mostly great, but, but that one, the Hong Kong one was like, you had a bunch of small blockers and
large blockers meet and try to continue to talk to each other. And it sort of backfired because it
ended up being like, why are these people the anointed ones who can talk? And then there was
that silly little kerfuffle. Is this in the book about, is Adam Beck signing on behalf of Blockstream
or just as an individual, this became like a huge issue that went for like at least a week, two
weeks maybe. And then it was like, does this represent Blockstream's opinion? People really
cared about Blockstream's opinion for some reason, which I always, I always defended Blockstream and
said, who cares? Like, this is such a stupid thing to care about. Can we just talk about if the idea
is right or not? But yeah, people were convinced that yeah, Blockstream was like funded by like
the devil or whatever. And, and then people were obsessed. There was, you know, I don't want to say
racist per se, but people were, you know, they were really annoyed that so much mining was in China.
And this is a big issue for people, which I also said, this is so dumb. Why do we care? Why are
people talking about this? Yeah, it wasn't racist. In my view, it was, yeah, it was like a CCP will
destroy us. It was like people were saying, oh, you're, you're not listening to us because you
are racist. It wasn't like they were being racist and to the, the language also they had to go
through an interpreter. Right. And you know how well that goes. I recommend this very often,
but I'm going to recommend it again. I'm pretty sure you can easily find scaling Bitcoin too,
which was in Hong Kong, unrelated to the Hong Kong agreement, which was like, what was it like
two months later or something? But maybe it was April even, but whatever it was, that was December.
You can get the miner panel and just watch, just click play and just watch. And you'll,
you'll get a sense of how the miners were not like, in my view, they were not like these
Machiavellian schemers. They were just like very confused, very annoyed, very frustrated.
And they were just trying to figure out what to do. And they were very annoyed and they just
wanted to go back to making money, which is, but the, the miners, if I miners cannot
outsource responsibility for their thoughts, it would be nice if you could do that. But
responsibility is the one thing that you just cannot outsource. And they have to take responsibility
for the soft forks, because if they upgrade the soft fork happens, and if they don't, then it,
it really doesn't. You can have the UASF, like force them to upgrade, but they still have to
actually do it at the end of the day. And it is in fact possible for every, almost, just almost
every soft fork, every soft fork that is message based, like transaction based, and a whole lot
more besides. Miners can always upgrade to a version that filters the soft fork out and then
stops it from activating. So, so they just tried to, but yeah, we're all still learning here. I'm
sure historians of the future will have a field day picking all this apart and listening to this
space, who knows, maybe hello, greetings from the past, if you are listening from a hundred years
from now. And I think perhaps what do you think about the potential? So, you know, going into
the future here, it seems like in the present moment, we've seen a little bit of softening
from some of the hardcore Bitcoin or maximalist types, where they're a little bit more willing
to admit some of the shortcomings of lightning network. They're a little bit more open to the
possibilities. Do you foresee potentially, or like, how do you think the social landscape looks
for Bitcoin going into the next couple of years? Assume we have another bull market and fees are,
I mean, I can't see any way that in the present state of things, fees don't hit a hundred,
$200 consistently for months on end. Do you think that that will soften up, like the ability of the
Bitcoin community as a whole to embrace some kind of change that could be beneficial? Or is in some
ways, I think like we need a significant change. There needs to be something big that happens.
It can't just be like tweaking our way, like tweaking a couple of things to making it work.
Like you really need a software that enables drivechains and or CTV and or other cool things like
maybe that we haven't thought of. Do you think that's like reasonably possible in Bitcoin? Like
I know it's everything's in the realm of possibility, but with so many people, having been
so hardened, can people come out of that state in time so that Bitcoin can actually keep those
shelling, those network effects, Schelling point kind of thing? Well, I got it. I had a question
that also might answer that. And that is perhaps with enough time, people will forget about these
current squabbles. And it'll be, it'll just, it'll be a new generation of. I do hope that. I mean,
weirdly, though, you still see the echoes of it constantly. And I think that when people are new,
they do a good job of like, you know, you show up and it's your first day of whatever, college,
I don't know, just making this up the first day of work. You know, people are good at knowing
they're new. And they kind of like took, they look around and they get a grasp of like the queues
of like the little norms and things. So, so I'm not, that's a neat idea. I wish that would happen.
I mean, you can kind of see it a little bit. I do think there are some people who are new
and they do seem much more just open-minded and they're just like,
liberated from the chaos of this horrible event. I think socially,
like one thing is I think the cult will ultimately destroy itself. I don't know how long it will
take or what form, but you see it today with, you know, it's like kind of like, like woke and
whatever SJW type stuff. It goes far beyond what it, you know, it had maybe at the very beginnings
of its history, some useful knowledge. And then it, like most things, it goes too far and then
it self-destructs. And the only question is how long and what else will they take down with them?
And so I think that, but that's just kind of true of just about everything.
That was also true of like, like Ayn Rand accidentally started a cult around herself
that sort of persisted even after she died. And so things like this happen.
It's a well-known thing. And then they eventually become so unreasonable. Unfortunately, I say this
with a, with a regret that I think Austrian economics kind of is like that, or at least it
was until Bitcoin came around where it was just determined to be niche. And it just enjoyed being
misunderstood and self-pityed. And it just stayed, it's like to stay small. And one of the ways it
stayed small was by violently ejecting people who didn't totally conform to the extreme format.
And then indirectly Bitcoin has breathed some life into it, maybe even more life than it deserves
since the Austrians all hated Bitcoin when it first came out. I remember it. They're not going
to, I'm not going to let them get away with this either. They're going to try, everyone's trying
to say, oh, Austrian economics, Bitcoin. Everyone hated it. Peter Schiff still hates it. People
didn't like it. Bitcoin practically went mainstream before the Austrians. Then afterwards, Austrian
economics tried to take credit for Bitcoin after they hated it for so long. So Peter Schiff has
even admitted that he should have bought more Bitcoin on the podcast. So socially the cult
will destroy itself eventually, or it will just become irrelevant and mocked. I don't know how
long that'll take. The good thing about high fees is they do represent a problem. So you have high
fees. If the fees are a hundred dollars per transaction consistently, then it does open the
door for someone to say, well, what's, what is, oh, I have a new idea. Oh, what is it? Oh, it's called
Litecoin. Imagine that Litecoin had never been invented. You say, well, okay, Litecoin, what is that?
And then they say, well, it's like Bitcoin, but you don't have to pay the hundred dollar fee.
And then the regular person is like, oh, that makes sense. Yeah, that saves a hundred dollars
every time. So this whole thing about, it creates a problem and then that, you know, that just,
it focuses everyone on solving the problem. And you could say the same for just, you know,
Litecoin is just an example. Anything that would do that would, that would include, you know, like
a drivechain type thing. It might include, it probably doesn't include the Lightning Network,
but it might include ARK. It might include Bitcoin SV, et cetera, type things, you know,
Bitcoin Cash type things. Or just other L2s, state chains, whatever. So that's the good thing
about the high fees. It's bad that they are a problem because problems are bad. But at least
it takes what is a nebulous, something that would be like a nebulous, arcane, abstract problem that
we'd have to take in theory today. We're all like kind of theorists now. Transform this theoretical
problem into just a very tangible problem that you can just point at and say, this is the problem
that I'm solving. So that would help. As anyone who listens, who's been listening for a while,
there's this guy, Alex Kravitz, who shows up in our space sometimes, and he talks about the
feepocalypse. And his view is that fees will continue to increase for a while, and that
this will eventually destroy the credibility of the current generation of like media personality,
which he calls like the priests. So people will turn to whatever, like Peter McCormick,
for answers or something, and then they won't get the answers. And then next time,
they'll pick up technical podcast hosts or something like that, where people will think,
what do I do? I've been dollar cost averaging, and I've been buying $200 of Bitcoin every month,
and now each of these is a dust UTXO. So, you know what I mean? Like if the fees go to,
they go to $200 a transaction, then all that person's money has been wiped out,
will cost them $200 to spend each of those $200 inputs, or just about. So yeah, social landscape,
I don't know. Usually, like when the price goes up, everyone just feels good. So they think,
let the good times, laissez les bons temps rouler, it would have been nice for
Riyadh to hear my Creole attempt at French there. But let the good times roll, baby,
when we have number go up, everyone is very happy. So they're not in like a problem-solving mood.
What would certainly stimulate a creative search for new ideas would be if like Ethereum flip
into BTC. But I don't think that's, that seems actually less likely to happen than ever, because
Ethereum is being devoured by its own variants, such as Solana and these other things.
And they may emerge from that stronger than ever, or they may not, I don't know.
So it sounds like what we need then, we need, I say we need, but you know, in order to encourage
I say we need, but you know, in order to encourage some kind of like impetus for a social
shift in the landscape, we need fees to go up, the bull market to happen or whatever.
And then when the bear market comes, we need fees to still be really high. Maybe that's because
Bitcoin is now valued over $100,000 consistently, even at the bear market low, but everyone thinking,
okay, I'll just wait it out and I'll get my money back. I'll get above the dust threshold.
People will still find themselves in problems, even in the bear market. And suddenly you'll
have like a double whammy reason for trying to like change your mental model to, you know,
to have both the high fees and the bear market price hurt, price pain happening. I don't know,
that's just kind of like a whimsical speculation on my part. Yeah, people shouldn't want to,
if there's no problem, then they shouldn't do anything. So if people, they need a problem to
solve, you know, if there's no big problem, then no one should care. One thing that I do think,
I have been thinking about recently is that Elon Musk said that he started Tesla in just in order
to move the transition to electric vehicles forward by a few years. And by starting the
company, he hoped just to kind of shock the big automakers into doing electric vehicles.
But what happened instead? I mean, they have, he had succeeded in that, but now Tesla is worth
unbelievably more, you know, then. So that is an interesting case of like starting up something
as like a demo of what to do instead, and then just accidentally taking over. Because I think
certainly we have a lot of like scar tissue in Bitcoin of like all this like junk has accumulated.
And it's just, I don't know, maybe it will be, maybe it will be that something new is created
that is, provides a competitive, competitive threat, you know, that would be a real problem
that would, that's the type of thing that would, but then it could just be also that people just
get over themselves. I don't know, like, you know, it's also like, the funny thing is,
software activation is just at this point, like a few pools upgrade their software. So
it's actually on paper, it's not asking for very much. And only
the details are a big ask. So I don't know. It's a tough question.
Do you know what the pool, like the people that run the pools, what their current predilections
are? Like, are they interested in forking? Are they kind of still agnostic? What are their,
like, do you have any visibility?
They mostly don't know a lot about these technical issues. And like,
so like, for example, like, so you take a pool, like, like Foundry didn't even exist
a few years ago. And Foundry was like, we are going to too much mining is in China,
we're going to have a US pool. And then you think about it, these miners, if they want to go public,
they have to jump all these hoops, you know, jump all these hurdles, jump through all these hoops.
And one of them is that they can't have money at, you know, like, you're a miner, like,
say, you're a miner, you're whatever, you're a great American mining, you're whoever, you know.
Foundry produces these, like, SOC reports that show how much money everyone has,
because the funds are all commingled. So there's this like, commingling issue.
When you have that happening, then there's something where it's like, for legal reasons,
you want to have you want to know, like, who, who, where is my money right now? Who owns it? And
where is my money right now? Who owns it? And who else owns it? Who else has a claim on it?
So I do all this stuff. And they put all this stuff to be like compliant. And that's why
Foundry is KYC. And then so like, their priorities are completely different than like,
they are in the same position today that the 2015 scaling to panel miners I mentioned before,
are in where they don't really know what to do. And they know that people have strong opinions,
but they don't know. I think they mostly like they don't want to disturb anything.
And so it won't be but I, the weird thing is before, just before this bull market started,
all the miners were probably set to lose. You know, they were losing like hundreds of millions
of dollars a year, you can look up publicly the financial statements of for example, like marathon,
which had like, I just browse through anyone can do this easily. I just kind of browse through all
this. And it's like they had like $300 million of cash on hand one year, and then there was
200 million and then it was like 91 million. And so the so
and so the that's a situation where they're, they would want to find new ideas, you know.
So that's another type of thing. So it's like problems here and necessity is the mother of
invention, as they say. And so if everyone's making a ton of money, then and you know,
I include myself in that, which is kind of like people say, Oh, Paul, you've been doing this for
a long time. You have this idea in 2015. Like, why has it taken so long? Or why do you still
work on it? Or why do you and it's kind of like, well, Bitcoin has been doing great since 2015.
So I myself, I don't feel any kind of like urgency to like declare war over between 100 when it's
like the greatest performing asset in the history of capitalism. So it's kind of like, yeah, I kind
of just like work on it in my spare time. In like 2018. It's like if things are things are kind of
going just fine. So it's, it's necessity is the mother of invention type of thing. But I do think
that we will. Yeah, this the the social climate will will continue to change. And I think that I
think the call is the big thing that is inevitable is that eventually the cult will just destroy
itself. The cult is the no true Bitcoin or cult. And it's, it's very annoying. And the idea that
something that has network effects, it doesn't matter if people use it is false.
One intriguing thing is that the rise of stuff like the stable coins,
USDT, and like, will they get obliterate? Will they get nuked?
From orbit by one regulator will just destroy tether? Is that going to happen?
Does tether have like, I bet they do some extremely sophisticated plan with involving
like lots of like shadow banking and like euro dollars and like dollar equivalents.
To like make it impossible for people to like stop them from paying us dollars out to people
who want them like that would be so cool if they did.
Doesn't matter. I don't know. But the USDT is one thing that seems to be getting more and
more popular among actual users. People love they just love this USDT thing.
Regular people, if I go around the world, or even around the United States,
it's kind of popular. It sounds crazy to us. But especially to people in different countries,
they love the US dollar. And the USDT is just like, they just download an app,
and then they can just send and receive it immediately. So it's kind of like
they get a huge number of they get a lot of benefits from this, from this thing, which they
really like. They you know, many of them live in a place where they're all their money can be seized
or inflated away, you know, Argentina, Africa, whatever. So
so having USDT is a big upgrade. I don't know. Not sure if that answers anyone's questions or
if. Why don't we? We've been going for a little while. So why don't we just
put it in for last opportunity to ask a question. Come on up.
Ask a question. Don't ask a question.
Leave a comment.
Or don't last chance.
I have a funny contest where I'm paying a tiny amount of money like $20 to anyone who can guess
when it is that ocean will mine their third block, they've got to.
But it's funny people giving ocean so much attention complaining about it, praising it.
And yet, only two blocks, which I kind of think like speaks to like, do we want to have Twitter
run the world? Or do we want or is there something to be said for proof of work,
as kind of giving us an objective view? On one hand, Bitcoin or say,
we don't want the miners to control Bitcoin, or whatever that means. But on the other hand,
people say like, proof of work is the only reliable indicator of objective, you know,
reality or something or objectivity. So maybe there's a little bit of a contradiction. But
in any event, it seems like no one else wants to come up. So thanks, everyone.
For a great space. As usual, so thanks very much. See everyone next week.
And we'll see Peter Todd next week, right?
I think on Stefan Levera on Tuesday. But it gets rescheduled a lot. So hopefully
will happen. See if he responds to any of my 10 questions that I put in the image.
Yeah, we'll see.