Hello there and welcome to the Bitcoin takeover podcast
We are here at the nice hash X conference in Slovenia and right next to me is Jameson Lop
This is season 15 episode 60 something by the time I publish it and we're gonna talk about some controversial opinions about Bitcoin
Because we do like that. We do like getting cancelled on Twitter and we do not like Michael Saylor
Well, let's just say that I'll agree with Saylor on some things and disagree on some things and that's okay
That's perfectly fine as long as he does not jeopardize the future of this project
Because he is playing a political game
We do have to understand that and he's pushing a narrative about what Bitcoin is to which someone like you and someone like me does not agree
Yeah, I mean we all have our own incentives, right?
I think in one of Saylor's recent interviews
He definitely differentiated himself from the paranoid crypto anarchists
Well, are you a paranoid crypto anarchist is Casa a company for paranoid crypto anarchists? I mean
I would call myself a paranoid crypto anarchist
Casa is somewhere in the middle, right? It's like we don't require KYC. We certainly
Have the ability for people to work with us anonymously
But if people want to disclose more information about themselves to us as a part of you know
Authentication protocols and we support that as well. So we're flexible as a company
Okay, so do you serve people who are not paranoid crypto anarchists?
Absolutely, you know Casa is
Really here to help people help themselves and you're especially the the non-technical people
The folks who they want better security, but maybe they just don't have the time and efforts to
Climb the mountain that is required to understand all of the different decisions and trade-offs around self-custody
I've read a Bitcoin magazine article from like eight years ago, and you're saying that Bitcoin needs like 128 megabyte blocks or something
Do you still believe that is it still possible?
Well, if if I ever mentioned something like that because I think I actually mentioned it in my talk a few weeks ago
Usually it that's the number I pull from the Lightning Network quite paper right to the 133 megabyte blocks required for
Global adoption of the Lightning Network if we assume I think two channel opens and closes per year per person
Yeah, there are assumptions there and there are things that we could do to improve the Bitcoin protocol
That would actually drastically decrease the the need for that much block space
You know if we had for example the ability to do shared UTXOs multi-party channels
You know we could get orders of magnitude improvement on you know
How many people it could be using a lightning channel, which is of course, you know one
On-chain transaction to open and one to close so
The future is not set in stone or at least it might not be if we haven't ossified already. Oh
I like that word
What do you think about ossification should Bitcoin just stop and say you know go to Ethereum if you want to do contracts
Go to Litecoin or whatever if you want low fees use Monero for privacy
You think we're heading towards this multi-coin world because I see people building bridges
And there are a couple of them right now that our operation will be between Bitcoin and Ethereum and I assume
Unless we're going to scale and add more features to it
We're not really going to maximize what Bitcoin does and that's what Bitcoin maximism was about not
Rejecting everything and saying this is already perfect. So I think the question is about ossification or do you stand on that?
Well, yeah, it's kind of funny because I I would say probably most of the hardcore
ossification
proponents would not say
Go build on Ethereum or use other networks because they tend to be purists and think that you know people should only be using Bitcoin
So that's kind of stuck between a rock and a hard place there
like if we can't continue to improve Bitcoin and add more functionality and utility and
The ability to create more layers that offer other things to people
Then I think that you should expect that people are going to go use other networks other protocols that fit those use cases
so, you know for me though, I see it more as
It's a it's a
decision tree and path finding type of issue
and basically what I mean is you know if we're trying to
Continue to explore the ways that we can make Bitcoin the best network that it can be
You know serve the most people
Preferably give people the most sovereignty and security and privacy and you know other
Attributes that a lot of us find quite valuable
Then it's going to be a lot more difficult to do that if we can't
Have any
improvements at the base layer, you know
This is a common trope in the space of oh, we don't need to change the base layer because we can just do everything on other layers and
That's technically true with enough mental gymnastics, you know it with enough
Ingenuity, but I think that what we're seeing happening now is that it's it's so difficult to create a
Permissionless second layer on top of Bitcoin that the things that are happening most often are either the second layer is fully
Custodial, I think you could probably throw a lot of the e-cash mints into that and you know e-cash is not terrible
You know there's pros and cons there
or it is a federated peg system, so you know semi trusted you're trusting some group of
entities to maintain it or
You're coming up with really
Complicated and convoluted game theory to try to create a more trustworthy peg so you could
For example, you could look at lightning network and how it works
And it's fairly complicated in the sort of game theory and transaction construction that allows it to work or you could look at
for example botanics and their spider chain concepts where they've created this kind of
rolling series of multi-sig wallets that are
controlled by different sets of
Stakers and you're essentially trying to create a game theory for that pegging mechanism where there's no single point of failure and it gets
Really complicated and with complexity can
You know come difficulty in ensuring security and stability and so
For that particular example, I think it's it's gonna be a really long process of trying to
tease out the optimal like economic and other parameters of the game theory
So what's the name of that system again botanics or something?
Yes, botanics is the company that is developing it and the the actual
The architecture is called the spider chain, which is this series of multi-sigs
Where people are pegging in and pegging out the funds and so
Or even on a related node just this week
the release of the
Covenants white paper
which basically involved doing hash collisions and
You know I start wearing eats and and repulse. Yeah. Yeah, and so like if you dig into it like it's
fascinating
Concepts and an application of the existing tooling that is available to Bitcoin developers
But I don't think it's actually gonna get used at least not anytime soon
It's you know incredibly expensive and impractical. I think the current
iteration of it
Basically requires tens of millions of dollars worth of electricity to be expended in order to find a
colliding hash that can allow you to
Recreate this covenant functionality. So point being, you know, we've we're at the point now where
While you can theoretically do almost anything with enough
Thinking through and and creating, you know crazy different theories of how to accomplish something
The practicality of doing a lot of these things is just not there
And so it's like we're having developers spend so much of their time and mental energy coming up with what I consider to be
impractical solutions that
Probably aren't gonna get adopted
And this is all happening. I believe mainly because
People or developers are so pessimistic about even being able to like soft fork in a new opcode that could add powerful functionality
Yeah, I agree with you on that one
You mentioned the lightning network and I was thinking what do you think about it?
Because so far the adoption has been
Underwhelming to say the least it was launched on the main net back in 2017
It's been about seven years since then. I think the adoption peaked in
2021 and since then the number of nodes hasn't really increased the number of channels hasn't really increased
They say it's efficiency and they're closing smaller channels to enable bigger ones
But that's just coded language for centralization. It's not as decentralized as it used to be. I used to be a node operator
I used to try to route transactions. I failed miserably because I was doing it under tour and
there are lots of quirks and
Design I wouldn't call them flaws, but you have to be aware that they're there and they're not great and so far
I did not see much action with lightning except for these custodial solutions, which I think sort of defeat the purpose
Of course the purpose of custodial solutions was in the beginning just to get people to get a taste of how lightning is and
Then teach them how to be sovereign
But then it turned into well, you should use an LSP and if you don't want to use that
You should just download wallet of Satoshi and use cashew for privacy if you're into that
It it feels like it drifted too far away from its initial purpose. I do remember atomic swaps being a
Goal on the road map somewhere. They were talking about it building decentralized exchanges with atomic swaps
I haven't seen much in this direction. There's portal a project from I
Think they're based in San Francisco
It's built by
No, I don't think Eric Martindale works there anymore, but it's built by these guys and
To me it was interesting, but once again, I haven't heard too much from it
It seems like lightning is getting abandoned right now in favor of arc and other ideas. What do you think about this whole?
Story of the lightning that network which was supposed to be dissolution for scaling the only one that matters
Yeah, I mean, I think that it's clear that there's not going to be like one ultimate scaling solution
I think we need a lot of different solutions
You know Casa was an early adopter of lightning network
we actually had one of the first like lightning node in a box and
We only did that for a few years
Because it was so challenging to support. It was just like the support costs were through the roof and
I think that the explanation for
What we've seen happen with lightning so far is we saw you first few several years of
Adoption and just interest in experimentation by hobbyists who had you know grandiose vision and hopes for the future
I was one of those myself and I spent a lot of time
you know carefully maintaining my node and trying to optimize my liquidity in order to you know convince other people to route
through me and
Suffice to say, you know almost nobody who's operating a node on the lightning network is actually profitable
it's probably like one to five percent of node operators that are
Collecting enough fees to offset the things for like force channel closures that can be very expensive
so, you know, we have seen I think a bit of waning
enthusiasm for being a sovereign lightning user
But
With Nostr, I think that has helped bring out a use case for you know actual like lightning
Usage on a daily basis like we we see people zapping each other, but you know, you look into the statistics, and I think
80% of zaps are happening through custodial wallets. So, you know the
The takeaway is that it's still too complicated and so most people are outsourcing
the liquidity management aspect of it aka running a node to third parties if possible now I
gave a talk in
2018 or 2019 at the lightning conference in Berlin in which I
Made the argument that one of the most important things for
Lightning adoption would in fact be for all of the exchanges to get onboarded into lightning and so far. I think we've only seen two or three
So from that perspective, I think we still have a ways to go
If all of the exchanges were onboarded into lightning that would do several things first of all if they implemented like the unified
Payment codes that were like both on-chain and off-chain for their deposits and withdrawals
I bet that that would significantly decrease the demand for on-chain transactions because
About 50% of on-chain transactions are just people sending from one exchange to the other those should really be going through lightning network channels
Also that would greatly increase the liquidity just in general
I think that if people could be running their lightning nodes and they could be connecting them, you know to their exchange accounts to basically have the exchange
coming in and fixing liquidity imbalances and
Automating that I think that would also greatly improve the ability for someone to run a sovereign lightning node
And but this is also why like LSPs are a thing right now. It's kind of just like a
Hockey workaround but liquidity management. I think remains the biggest challenge in this space
And so it's it's gonna remain like this until there's better tooling to automate all of that. I
Very much agree with you
I sympathize with the fact that you haven't made much money running a lightning node
In fact, I think I lost more money than I actually made and
It's a bit painful when you think about it, but this is the cost of trying to be a pioneer in this field
So I was curious if you look into other L2's because I've interviewed via Jeff the creator of no stirred this year
He said I'm not exaggerating
He said in terms of lightning and stuff just burn it all to the ground
Adopt drive chains use that for a zapping have this side chain where all you do is just send tips from one to the other
Prove that every six months so you don't have to store all of the transactions
To make it scalable and easy for people to validate
What do you think about drive chains this show is sponsored by layer two labs?
Yeah, I'm not against drive chains. I've I've never been convinced by some of the
the
Fears that people have said that drive chains could totally upset like the balance and game theory of
Mining on the main chain
Hmm. It seems unlikely that like pips 300 or 301 in particular are going to get consensus
But it may be possible for the sort of roundabout way of
Implementing drive chains if we can restore some of the other op codes on the Bitcoin network
so this this kind of ties into
my my push for us to enable more
Building blocks more more of these primitives on Bitcoin because I think that that will ultimately drive more
Permissionless innovation and development of layer twos that are real layer twos and not just like bullshit multi-six
Yeah, I'm not sure if you're aware, but Paul is working on something that's called see you SF
Which is core untouched soft fork it basically involves talking to miners to activate and he's hoping that
Very soon, I mean, he's very optimistic about it
But I hope in a couple of years or something
Miners will realize that they're not really making much money and they could be making much more if they're
If they enable this just to exist out there in the wild for people to be able to I don't know why we're so obsessed with pegs
pigging
anyway, bad joke, but for
users to be able to
Tap into these features like on an Ethereum side chain or a ZCAS side chain or something that only has
assets on it
There is a lot of potential there it's just that our culture and I think that's the biggest issue our culture
Has become complacent the fact that we haven't improved Bitcoin in any way has not cost us anything because
We went to the regulators not regulators to the institutions and Bitcoin has become more regulated
afterwards and privacy has become more taboo and
In spite of all this everyone's happy because now the number went up, but they forget that we did go to 69,000 without
ETFs and without a lot of this institutional stuff and
Right now the old-time high which we are witnessing today. I think is 77,000 adjusted to inflation. I think that's less than
2021 69,000 so it's not like we made great progress by
being in bed with bankers and
These institutions so we paid a high price for it and we don't see the benefits and we're not really making Bitcoin
You know, I think the white paper is aspirational the peer-to-peer electronic cash
We should aim to reach that
I think we have become also complacent with the story value narrative and we say you should only save in Bitcoin whatever that means
Huddle used to mean don't day trade now. It means never sell Michael Saylor says he will die with his bitcoins
Cool. I guess we'll get to see that and how it turns out
But he did not buy the bitcoins under his name. They're owned by a publicly traded company that has to pay employees and stuff like that
So we're gonna see how how much of a hudler micro strategy turns out to be
but what do you think about this whole cultural landscape where
We're so against change and it seems like every
Attempts to improve Bitcoin is regarded as an attack or scam
Well, it's also hard to quantify, you know, I do think it's the issue of a very local vocal minority
Especially, you know, OGs or just people who have their entire net worth invested in Bitcoin who are
Afraid they're pessimistic, you know, it's a if it ain't broke and don't touch it type of attitude and
You know my my pushback to that is of course that
If you can't adapt the protocol to the world as it's changing around it
There are a number of things that can go wrong. So let's just you know, look at the the landscape today
and you know put aside the cultural issues and
Look at, you know, we're at a
Nominal all-time high
whether you adjust it for inflation or not we are
in a bull market at least the beginning of a bull market and
Yet if you look at pretty much any of the other metrics of the network, it's very much a bear market
Like nobody is transacting like the the the fee rate. I think is like two Satoshi's provider right now
It's basically at the floor. So
What seems to be happening?
You know, the institutions and ETFs and stuff have have opened up new liquidity flows into
Bitcoin through the traditional financial system
And so what does that mean? Well, nobody who's buying those are actually doing self-custody
If you're not doing self-custody, you're not doing on-chain transactions
I think that's one of the reasons why demand for block space is so low
Also, we're just seeing billions and billions of dollars being funneled into the hands of a couple of custodians
And so you I think you should ask yourself, you know
At what point do we start to get worried about the sort of systemic risk of having too much Bitcoin in too few hands?
There's not really much that we can do to stop it at this point
so I think we
Prefer to sort of take the opposite approach and
Well, just do what I've been doing for ten years, which is promoting self-custody and like owning actual Bitcoin
That's the only way to keep Bitcoin, you know out of the hands of these few custodians
And it's gonna be a very interesting
next few years to see how this all plays out because it's entirely possible that
you know, the institutions and and sailor and
You know, Treadfy and whatever
May decide to start to play a role in the governance of the Bitcoin protocol. I
Know that you often describe yourself as a cypherpunk and in terms of US politics
You're not a fan of Donald Trump and you actually believe that it Trump doesn't win and the industry does not get this boost and this
How should I put it this free pass to do whatever and continue doing business?
We could actually develop more cypherpunk stuff to circumvent a regime that is against what Bitcoin is and what it's trying to accomplish
But now that we are in bed with the regime and the regime is in favor of Bitcoin
I've interviewed David Bailey last week by the time I published this maybe it will be two weeks ago or something, but
He was different because I've interviewed him twice throughout the year the first time it was before
The national conference and then I interviewed him two nights before the election night and he was a different person
He was saying, you know, we shouldn't just expect to receive stuff from the Trump administration
We should always give back to the Trump administration and keep him happy because he's a businessman
He likes to get praise and feel important and this as long as we feed them and we pump money into his
Projects and whatever and we do something for America is gonna be great for the industry and to me
It sounds a bit like Mafia extortion
Quid pro quo. All right, I
Mean, I think that's one of the
The upsides to Trump is that you know, a lot of people look at him and see him as it kind of unpredictable because
Sometimes he can have verbal diarrhea, but he is incentives driven, right?
So if you incentivize him in the right way, then you may get him, you know, you scratch his back
He scratches your back so I can I can certainly understand that but also
Look we've got Trump for four years and then that's it. Nobody knows what's happening after Trump
We could very easily swing back in the opposite direction and be back under, you know, Democrat controlled administration and
Congress, so I I think I prefer to look at things in the very long term
Like I want to look at Bitcoin as a multi-generational project not as a like four-year election cycle project
Well, that's very diplomatic of you
You could say much nest your stuff which you tweeted already, but you can check out his tweets anyway
I was gonna ask you a sponsored question. What would you do if someone offers to pay you unstable coins?
So I actually I get reimbursed and stable coins
For a lot of the conference travel that I do and I highly prefer that to
Wire transfers, it's extremely convenient. So I have I have nothing against stable coins
But I don't I don't store my money in stable coins. I just think that stable coins are a
Superior way to transfer value and you know, just medium of exchange
But would you swap them for BTC on site shift?
So, you know, I would either swap them for Bitcoin or just turn them into dollars and send them directly to my bank account
You know, usually in the case so pretty much all the time that I get stable coins
It's as a reimbursement
So I just immediately dump it for USD and transfer to my bank account because my bank account is going to be getting
Debted eminently to pay for you know flights and hotels and stuff
Okay, so no buying BTC
usually not
for it for me
my position is mostly to avoid having to sell Bitcoin at all costs
So I have almost no fiat in my bank account at any given time and it's kind of a tricky thing to manage sometimes I
Think we're all in the same position
We try to minimize the amount of exposure to banks because it comes from the don't trust verify ideology and
years of banks closing down your account just because
You bought some Bitcoin on a peer-to-peer exchange and someone
Was an idiot your counterparty during the trade just put Bitcoin in the description and
You're screwed. You don't have access to banking anymore. I think Bitcoin has done a much better job on
Banking the bank then actually banking the unbanked which used to be the slogan for
Advocacy for the project back in 2014 or something
Yeah, unfortunately the vast majority of both my personal bills and our service providers at Casa
Only accept fiat. So we're still tethered to the fiat system
Did you try silent payments on Bitcoin? I think they're available with cake wallet and also I
Think ledger integrated that but it's a good way to do stealth addresses and by the way cake wallet
They're also sponsoring this so it's sort of a question just to see what you think about a product
That's out there and it's also BIP. It's 300 something
No, I haven't played around with it myself
Well, we'll see how it goes, but you know, I'm
Generally bearish on privacy on Bitcoin
I mean, I'm generally bearish on privacy everywhere because so few people care about it
it is hard to get meaningful adoption of any privacy related stuff and
most
most privacy tools
You know, they're
Related to network effects. So like you you have more privacy when more people are using privacy tools
And so the fact that so few people use privacy tools in the first place is almost like a self-defeating thing
It's tough
Yeah, I get that but if you want to receive donations or whatever you put a silent payment
Address and it's a lot harder for someone watching the public blockchain to see what transactions you've got
So it's a good way to protect yourself because honestly
Why would you let everyone around the world to see what you're doing there to see your UTXOs?
Just accept lightning
Ideally just accept lightning
So what else should I ask you about do you like BitVM and the stuff that's being built with it?
It's the hackiest idea it came out last year and this is another perfect example of just how
convoluted and you know, the
sort of mental gymnastics that developers have to go through in order to achieve the functionality that they're looking for because they're basically hamstrung
Such limitations on
Scripting capabilities of the Bitcoin protocol. So, I mean, yeah, once again, I think it's the level of ingenuity is very interesting
I think still needs a fair amount more efficiency gains to be practical and
It would actually be improved if we re-enabled some op codes
There are two trends right now. You have the roll-ups the ZK roll-ups
And these are not two distinct ones all roll-ups on Bitcoin are supposedly using ZK technology zero knowledge
And there's also the bridges which are trying to use the features of other networks with your BTC
For example, there is BOB, which is built on Bitcoin and that one is basically a bridge to Ethereum
You can use the Ethereum smart contracts with the Bitcoin
You already have on this roll-up that they created and there's also Citrea Alpen labs
So do you think that and this is a big claim from the roll-up people that roll-ups are
Superior to site chains and for the longest time the site chain has been considered this holy grail of scaling Bitcoin
Now there seems to be this obsession from investors and also developers to build roll-ups. And what do you think about these?
I mean, I think it's it's too complicated to make an assertion
That's that broad
If we're just talking about the state of things today then it that may be possible in the sense that side
Sidechains of today are generally all federations. So then the question comes down to like how is the actual roll-up or like the sequencer or whenever?
run and so
It always comes down to the details, right? But
Sidechains, yeah, we've never achieved. I think what we really wanted to with them
Roll-ups aren't perfect either, but
That these days so I'm all for continuing to experiment and push forward with innovation
Can you name free coins which you consider are not scams or shitcoins? Oh
Well, I've always been a fan of Monero
It does what it says it does
Other than that
Well, we could trigger a lot of people by saying grin, but you know grins basically dead at this point
There's grin on light coin right now, you know
Wimble extension blocks on light coin
It works
You know, memble wimble is not like the perfect privacy solution either. It's better than nothing
but
Other than that, I mostly use stable coins tether's the best shit coin
Yeah
One more oh
That's tough
I mean, I think you can make a strong case that light coin is not a scam it does
It does what it says it does it wasn't pre-mined
Charlie leave and dumped all his light coins. So you don't have to worry about, you know, light toshi anymore
But you know, I don't find it particularly
Interesting other than like the memble wimble extension blocks
It was light coin played a key role, I think in the Segwit
Proving that as a thing. Oh
Yeah, lightning as well. So I think it will be interesting to see if any of these other
Bitcoin proposed developments get adopted by light coin as a proving ground as I think one of the one of the many
Problems with activating stuff on Bitcoin is that people are always like well
We don't know how the economics and the game theory will play out and you can't do it on a test network because the test network's not worth anything
So, you know light light coin as an a test network with actual economic value
I think continues to be an interesting
Tool to just keep in our back pocket
You know what I think is interesting is that
Segwit was activated about three months after it came to the main net of light coin
It was enough of a proof to
Demonstrate that it's safe and you cannot steal from Segwit addresses, which was the FUD at the time
I think Charlie leave actually put one million dollars worth of light coin in one address in
One Segwit address and said if you can break this you can actually collect the bounty and then they activated on Bitcoin three months later
But in the case of Mimble Wimble, this one has been on light coin for two years right now. They're rolling out the mobile wallets
They have been able to make this in a way that does not require a server
So you actually sink in a neutrino type of way to download block filters to your wallet
But still I don't see any conversation in Bitcoin about this
It's almost like I've even asked Andrew Polstrup is the guy who first thought about putting Mimble Wimble on an extension block
Like six years ago and he said he moved on from that. He doesn't think about it too much
But it's still cool. It's better than nothing in terms of privacy
You can coin join into it and out of it to make sure that there is not
any
Of course, you can mess it up by let's say you peg in one coin and you get out one coin
It's sort of obvious or if you're the whale in that liquidity pool that's
Anonymized of course when you take the same amount of coins out, it's obvious that it's you
But you can still do some tricks to make it pretty good
And it has confidential transactions within the extension block and the extension block
Is prunable and you can increase the block size in a way that you incentivize transactions to happen there
So basically it solves scaling in a pretty elegant way that only requires one soft work
And to me, it's a pity that we talk about ctv or whatever when we could think bigger we could do something that
Makes an impact to many more users. I'm not saying ctv is not great or upcaps
But it's just that there are tools for builders to build something niche that is not going to scale anyway
We're gonna hit another wall in terms of okay, we built this but users can't really use it
Well, I mean, that's also just the nature of scaling, right?
I think actually andreus antanapolis had a great
presentation many years ago about
How bitcoin fails to scale how all technology fails to scale like you
You're going you you get more adoption and then you hit a wall
And and then you have to figure out how to overcome it and you scale past it and then you hit a wall
And so I think that's what we should expect to happen in bitcoin as well
The only problem is like, you know, if we ossify and we literally cannot continue innovating then
My fear is that the way that we scale is by everybody basically having i or u is at trusted third parties
But that's not really scaling. It's just
You can argue that lightning is that right you can always scale
Via making more trade-offs and and allowing certain attributes of the network to degrade
That's how email scaled
Right, but it all comes down to who's gonna pay the miners if that happens
Who's gonna want to actually pay for unchain transactions to pay for this
Diminishing reward that gets halved every four years
Yeah, no that is an ongoing issue and is also kind of ties into one of my other recent presentations around block space economics
So we'll see how many people get triggered by that
What do you think about ordinals by the way, because it seems like they're the ones paying more fees lately
Yeah, I mean I
don't
Invest or trade into myself
But I'm not against using bitcoin block space for non financial things. I think that's
Something that you can't feasibly stop. It's not really worth us arguing about and trying to
Change the bitcoin protocol to stop arbitrary data
The whole spam argument I think really comes down to the question of
Do do you take the perspective that?
Spam is this subjective thing and you have your own criteria for what you consider to be spam and not spam
Or do you take a more objective?
straightforward path of defining spam, which is the economic path and I think that's what's more logical of
Spam is just stuff that is not really economical for for people to pay much for so
People may not like inscriptions, but I think if inscriptions are in the people behind them who are
Menting tokens and doing whatever they want on the network
Like if they're willing to pay more to use bitcoin block space then people are to make an on-chain transaction
Then they should get prioritized for that and we don't really know
What the long-term?
um
You know sustainable path for having
High fees to offset the declining block subsidy is going to be like we don't know what use cases of block space
are going to drive
That necessary high fee environment
it it could be
Large institutions that are making large high value settlements with each other on a regular basis
It could be
Layer two is like zk roll-ups that are are paying for a lot of block space because they have a ton of economic activity
Happening on the other layer and they need to settle into the main chain
I think the more experimentation and different functionality
That is out there being tested
Is going to give us a better chance at finding the highest value and use cases
Peter Todd came up with this idea of tail emission
He went to a monero conference and he became inspired and then came and wrote a paper that says that tail emission is not inflation
Assuming that a lot of bitcoin has been lost if you add a certain percentage of tail emission
You're not going to think that you got inflation
Until like a hundred years and this can then pay for the miners to keep going to have a more predictable source of income
Do you think this would be the end of bitcoin if we get some sort of inflation?
Is bitcoin just the 21 million coins or is it much more than this?
Yeah, I mean, I think that's problematic because 21 million is I would say one of the strongest and most fundamental
Memes and rules of the protocol
Um, it's obviously it's one option
But I think that there are many other options that we should explore and of course
I'm biased towards my block space economics research that I've been doing
Where I I think really this is a supply and demand issue for block space
And there are many many different variables at play
And I don't think that we have to resign ourselves to the current market for block space and the current
set of use cases of why people might want block space so
There is a lot of different ways that this could go and
We should I think just discuss them and try to figure out, you know, what we want to make available to people
I'm going to get killed for saying this but the bitcoin cash people were not idiots when they capped the block size at 32 megabytes
And I did interview a mari sachet who is
The main developer or used to be the main developer of bitcoin cash and the guy who forked bitcoin to create that
That chain and he said he used a metaphor for
Roads that it doesn't matter if you use a faster car. You're still using that road infrastructure
And you should have limits in terms of how fast you can go and that's the block size for him
And he explained why he believes that 32 megabytes is a sweet spot
for having a certain
Certainly reasonable trade-off between
Scalability and also decentralization
Do you think that with startling today and also cheap storage and greater accessibility to
Rattle relatively powerful computers
It's the right time or a much better time than seven years ago to increase the block size
I mean, I think that's a truism that you know hardware and technology
Continues to improve. Um, I had a number of charts in my presentation around block space
of you know
There are many different
technological laws, whether that's um
if things like morse law with cpu power or
Nielsen's law or criders law these things are do around like bandwidth and and disk storage and so on and so forth like all of these
Computational resources are deflationary and which means they become cheaper over time
and so I think the point being that over time the
The this maximum supported like safe block size that could
Potentially be used on the network continues to increase because because these resources become cheaper
You should be able to run a node at the same cost that is able to process more data
um
This is a complicated thing in and of itself and you can argue about which of the things are the most important
I would say is probably bandwidth is the one that is the biggest bottleneck and constraint
I've done a fair amount of research into like the network as a whole and the sort of bandwidths that
Other peers out there seem to be making available to people and upstream bandwidth
Remains a pretty limited resource just due to the nature of residential internet connections
They tend to be asymmetric in nature, but you know the short version is like yes, it's
if if
If block size always remains the same
Then it's pretty much guaranteed that the cost of running a node will continue to go down
So then the question becomes do we want to allow
The there to be more block space if we can keep the cost of the node around the same and you know
That's going to be a very contentious debate
I know that you're in the kind of nerd who does benchmarks and publishes the results and you do something
I think every year in which you sync a full node with the latest version of bitcoin core and see if there's any
Improvement you have this monster computer with a lot of ram and a very fast processor and bandwidth
A lot of bandwidth. I think you have broadband internet
And it seems like there's an improvement, but recently I saw something from eric vaskill
The maintainer of lipp bitcoin. He bought this three hundred dollar computer from temu.com this chinese website
And he used that one to synchronize his implementation of the bitcoin client
Which is lipp bitcoin in only a couple of hours
And he said that with some optimizations bitcoin core can also do that
Did you get to try that or what do you think about this idea of having
You know parallel
Different implementations of the same client
Yeah, so lipp bitcoin node is just fundamentally architected differently and how it processes and stores the blockchain data
If I recall correctly like one of the big improvements is that it doesn't try to maintain a separate utxo
data structure
And so that's how you you save a lot of like discreet and writes right there by not having to
Write separate utxo and then delete it, you know when it gets spent and so on and so forth
So I think that's one of the big improvements. It also just
It I think it's a lot more greedy when it reaches out to peers on the network and just downloads as much data
as possible in parallel
So yeah, I mean I I haven't run v4 myself
I've been talking to eric of course every year like when you're gonna officially release v4
Hopefully I don't think it's gonna happen this year, but maybe in 2025. We'll see a v4 release. But yes, it's
Uh, I think it's good to have people try and completely different architectures to find optimizations
Because and we've already seen some of the bitcoin core developers looking at this and saying okay
Actually, I think we can implement some of these in bitcoin core. So hopefully we'll see that happen
Yeah, there's also the option to use zero knowledge proofs for
sync within a couple of seconds
It could be good for mobile wallets
But for some reason we're not there yet. Anyway, the question that I have for you is
Basically, you are one of the poster boys of bitcoin maximum wisdom
There's that legendary picture of you with the make bitcoin great again hat with the guns
And people use that to describe what a bitcoiner is
But at the same time you don't really speak like
Someone would expect you to speak you don't have the opinions of someone who is
Totally unreasonable and says that everything that is trying to change bitcoin is a scam
So how do you mitigate with this difference between the image and the rhetoric?
Ah
Well, I mean, I think a lot of you know that cultural shift happened
During the scaling wars and I I was definitely a lot more toxic during the scaling wars
And I felt like it was appropriate at the time because we were basically in an existential crisis
Uh, and then I kind of cooled off became a bit more moderate after that had all died down and
You know, what does it come down to? I mean it comes down to I'm a technologist. I
Experiment with things I I want us in general to be experimenting more
Um, I think it's you know fundamentally kind of against the nature of how
Bitcoin itself came into existence to be you know, anti trying new things
You know bitcoin didn't just appear out of thin air
It happened because a lot of people dedicated many years to trying different forms of
electronic cash systems. So
Uh, if we're if we're going to you know, continue progressing this thing forward without
giving up on some of the fundamental
Valuable attributes of the system. I think we need to continue
Experimenting and innovating. So I'm gonna be all for that
Regardless of how much it may piss some people off
Is there any interesting experiment that you tried lately and made you realize? Okay, they do this differently
Just you know running a different wallet or whatever. No endorsements. This is no advice to buy anything
Oh, uh, well, I mean I I had
I had some research actually that I presented today that was
Fairly new and that was like looking at mem pool data and basically I discovered how difficult it was
To have an archive of mem pool data that you could query against
Um, but you know, I I have a number of projects running in parallel
And they're not they're not even all bitcoin or crypto or privacy related projects
Like I've got a few health related projects that I'm doing where I'm trying out
different types of peptides and trying to see like how that affects my body and so
Um, I guess that's just my nature of experimenting and wanting your continual improvement
You know, not just within bitcoin, but within as many different aspects of my life as possible
Have you heard of huddling dot c8?
No, I don't think so. There's sort of like kasa, but based in switzerland
Except that they don't hold your keys. They actually advise you on how to set up your multi sig
This is sort of an advertisement, but i'm actually curious how you
compare to this sort of service
Well, there's a number of different bitcoin self custody consulting services out there
Where they basically help you set up, you know, sparrow or electrum or whatever and um, you know, that's great. Um
That is like one aspect of what we do at kasa is consulting
It's just that we happen to also have our own software and our own
Set of predefined architectures that we get people into because we think that you know, those are the optimal ways to do it
So I you know, i'm not against people helping other people get into self custody
I think that's kind of the natural
progression for a lot of this is sort of a viral effect, uh, whether it's friends helping friends and family or whether it's
You know individuals or smaller groups of people becoming somewhat more professional in going about
Taking their own expertise that they've developed and and and helping you spread the knowledge
Something else about your research. Can you name your favorite hardware wallets and your favorite metal backups?
Oh, uh, well, I mean my favorite metal backups are just going to be the
simple like
single steel plates
So whether that's like, I think seed plate is one of them, but there's like half a dozen of them
And they all work great
Hardware wallets, I I don't really have
One that I think is the absolute best because they all have different trade-offs in general
I really I I am a fan of the new trezor safe three and safe five. They did really well on my
performance signing tests
Which basically means if you have a really large complex transaction, they can sign it in like one minute. Whereas like
Ledger devices I have seen take hours to sign incredibly complex transactions
Now the the new ledger devices are nicer like on the ux side
I like the the screens and hopefully those screens will have better longevity than the nano screens
Which we saw fairly high failure rates for after several years
You know the if you want the the hardcore crypto anarchists
Wallet then you're probably going to go a cold card. The q1 is also pretty nice
But you know all of all of these hardware wallets like I don't hate any of them
It's just none of them. I think are the best in absolutely every aspect of how they operate and once again
That's like another reason why at kasa. We recommend
Doing multi-vendor multi-sig, you know having
Different devices so that if you hit some sort of edge case with one
manufacturer's device, then it's unlikely to affect the others in your key set
Now my issue with cold card and I'm going to be controversial again is that they're not open source
They claim to be open source. They try to redefine what open source means, but they put some
Fences around their software and said no you cannot sell a product that's forked from our code base
And considering that they started out as this treasure clone that was using treasure code
And they renamed the files to make sure that that nobody looking at their code understands that they're a treasured clone
But they had to update their firmware according to the latest version of treasure
That's pretty insane and they
They're not quite honest in their marketing. That's my issue with them. I'm not saying the devices aren't great
But I'm not a fan of what they're doing, but I do have some
questions about their
multiple security chip setup
Because those are also not open source. So I would rather
So you mentioned the treasure. I like it because it's simple. It does what it says it does and
Even if it doesn't have a security element and I'm speaking about the first one the one
You can just use it and wipe it after you use it and then you restore from seed
You don't have to keep in that flash memory the information about your wallet
You wipe it after you use it you install it once again, especially if you're hardling. It's practical
But you do need to have a good backup because if you don't and you don't find your 12 or 24 words you're screwed
But there's also a joke about ledger and they'll also want about treasure
I've heard some guys who said that they washed their jeans and they had their treasure in their pocket and it still works
And the ledger guys sometimes they like to say and I read this on some french forum that you know, I have this sophisticated device. It has
High security with this chip that is unbreakable and this advanced cryptography
That would take you millions of years to be able to brute force my seed phrase and you can't take my coins
And then someone takes his ledger and types the pin which is his birthday and unlocks it
So that's another joke because ledger discourages people from using passphrases because they see their security chip is good enough
So it's a crazy world out there where with hardware wallets. There's no perfect device, but
There are trade-offs and you have to understand why you need a hardware wallet in the first place
So what do you do these days jameson? What should people look forward to?
In terms of your work, I know you're also talking about quantum computing and the dangerous that it might pose for bitcoin
Can you make a short summary?
uh, the short version is that you know a number of different organizations out there, uh, like
I think the national institute for standards and technology are
Saying that you know, we need to be preparing for quantum computers that are sufficiently powerful
that they can implement shore's algorithm, which is basically a way to
Get a private key from a public key, uh, which you know breaks a lot of cryptography
It could potentially break elliptic curve, uh
That is used for bitcoin
And they're saying, you know, maybe in the next 10 to 20 years
This is where things get really controversial because there are various there are many variables at play and you have to make certain assumptions
But um, my my main point the reason I started talking about it is because a we have this whole bitcoin ossification thing going on
B we know that even if you can upgrade bitcoin, it tends to take a long time to get through the consensus process
I did a bunch of calculations of how long would it take in terms of block space to actually migrate to everyone to a post quantum
And that would be years
So, um, I think we just need to get ahead of it. We need to start discussing
You know, what are our options that are available to us and then there's also going to be a controversial
discussion around
What we do with all of the bitcoin that is in the quantum vulnerable, uh, utxos
I mean, I can only think of two options one is we do nothing and we
Resign ourselves to the fact that eventually quantum attackers are going to steal that money and potentially have a big
impact on the market
Or two we
Say we're going to make them unspendable after some point in time
So, you know, either one of those breaks some
Important properties that a lot of the coiners hold very dear either the fact that, you know
Not your keys not your coins the inverse of of which is your keys your coins
If we allow quantum attackers to to steal people's money that kind of breaks the first one and then if we if we freeze
People's money and then that also breaks a sort of violation of of sovereignty
That's going to be our ethereum deal dao moment could be
But it's inevitable that we're going to have a hard fork, right? It's because of the time stamping process
Yeah, though, I mean, you know, that's that's not for
Decades and I think that we're going to have your critical issues come up long before them
Is the hardcore still taboo like do you think it's this hard to tell people, you know
Update to this new version of the software. It's important
Uh, you know, this kind of ties into ossification and the fact that there is no authority or controller or even way to reach out
And communicate with everyone who is using bitcoin
Um, and so I see it as kind of like it's a it's it's an issue of
of time preference
And I also had some research where I was looking at node operators and their timelines for upgrading
node software and that
The latency or lag time to update your node software has been increasing over the years and right now. I think
it takes
About three years for 95 percent of node operators to upgrade off of any given version of bitcoin core or whatever
and and so point being
I think that
You know, if it's a non controversial hard fork, I think that it is feasible to do that
if you implement the hard fork far enough in the future such that just due to the nature of software and
you know security support, uh, generally it's not recommended to run, uh, node versions that are more than two years old
I think that if you have a hard fork that activates far enough in the future like five six ten years
Whatever that it is possible to do that, you know with a really really low risk of chain split
If someone is looking at this and feels jaded and doesn't find anything exciting about bitcoin
What would you tell them to look into to feel excited once again?
I mean, you know that that's tough because everybody has different things that they're interested in right?
So if you're in into privacy, there are plenty of projects that, uh,
Can help improve your privacy on bitcoin, you know, whether that's the the e-cash
minting fedimint
Stealth addresses like you were talking about
Pay join, uh, is you know a coin join protocol that I wish would be
adopted more widely and lots of stuff out there. Um,
Or you know, if you care about scalability, you know, there's a number of different projects that are trying to tackle that but
You know, this is a
permissionless environment
So if there is something that you think is missing then you can certainly try to build it though
hopefully you won't run into
Roadblocks where you find that you don't have the basic functionality that you desire to do that
Thank you very much jameson
And I hope we do this again and you proved to have been right about some of your assumptions
Thanks