Welcome to the Advanced Tech Podcast.
Joining us today is Jameson Lopp, cypherpunk, infrastructure engineer at CASA, and Bitcoin
philosopher.
Welcome, Jameson.
Hi, great to be here.
So I'm really curious, being a cypherpunk, how did you get into that?
And what are some of the core ethics involved in being a cypherpunk?
Well, from a philosophical standpoint, when I got into Bitcoin, I was really considering
myself a libertarian.
There were some privacy issues that were related to that and wanting small government and whatnot.
But it was really after I had been in Bitcoin for a few years that I started looking more
into the history of how Bitcoin came about.
And that's when I really learned more about the cypherpunk movement and realized that
I felt like the philosophy really aligned with my own ideals.
And ever since then, I've really come to believe that I want to devote my resources and my
skills to trying to expand the efforts of the cypherpunks by spreading strong privacy
technology throughout the world in order to increase people's privacy and as a result
to increase their freedom.
And this is something that I think I am particularly well suited to do from my own skill set.
And it just so happens to be in alignment with my own ideology.
Awesome.
So I guess a follow-up question is what motivated you to get into Bitcoin?
It was a combination of both the ideological stuff and the technical side.
And so I'm a computer science major and had been basically building web apps for about
eight years at the time.
And I think that I just found Bitcoin on a Slashdot article and immediately dismissed
it as some new system that was going to get hacked and everybody was going to lose a lot
of money.
But over time, this Bitcoin thing just kept coming back and back and back and it wouldn't
die.
And eventually, I decided maybe I had missed something, maybe the system was actually more
robust than I had originally anticipated.
And that's when I started reading the white paper and digging into forums and basically
diving headfirst down the rabbit hole.
It's interesting.
The people that are seriously into Bitcoin, a common thread is that at first Bitcoin sounds
like a ridiculous idea.
And then the more you look into it, the more you realize, oh, there's actually something
interesting and compelling here.
And I think the fact that it's been around for nearly a decade, I mean, that's pretty
good.
That stands the test of time.
Yeah.
Maybe explain a bit about what that means for regular folks that may not realize the benefit
of it being around for so long and the growth of the chain, what that means for average
person out there.
Well, it's really a measure of robustness and also, I think, the ability to retain its
network effect against all of these other competitors.
And so some of the early and even today, some of the main criticisms are that there's no
guarantee that Bitcoin will remain the best thing and something else even better might
come along.
And that's certainly true, though the fact that it has this great network effect and
from my perspective, has the most talented resources of people that are building and
improving upon it in many different ways.
It's going to be hard for something else to surpass that.
And also just the reliability of the software itself, where a lot of people don't really
understand building robust software like this and how brittle the protocols can actually
be.
You know, there have been a few consensus failures in Bitcoin over the years and they've
gotten fixed pretty quickly.
But we've gone, I think, three or four years at this point without any consensus failures.
And that's actually a testament to the engineering prowess of the folks that are working on the
different protocol implementations.
So it really goes to show that there are some very smart people that are maintaining the
system.
And this is not obvious to the vast majority of people because it just works and it just
keeps on working behind the scenes.
And anyone who has worked in the internet engineering space knows how difficult it is
to have several nines of uptime because there are a million different things that can go
wrong.
And of course, Murphy's law says that anything that can go wrong will go wrong.
So it's very, very hard to build systems that don't break.
All right.
One of the interesting things about Bitcoin is something that I was involved in, which
is Zero MQ.
Have you had any experience with some of the underlying technologies behind Bitcoin directly?
You know, I was never really dealing with any of those things of like the cryptography
or distributed networking stuff.
Actually the closest thing that I would say I had experience with was before I got into
Bitcoin, I was doing distributed data processing, but that was only distributed in the sense
that we had a huge server farm and we were processing petabytes and petabytes of information
doing analytics on online marketing data.
Right.
Okay.
So let's switch over to CASA.
Now how did CASA get started?
Well, the history of the couple of guys who ended up coming up with the idea and then
pulling me onto the team was that they were actually building a decentralized Airbnb
a little over a year ago, and they were building that on the block stack platform, which is
basically a new type of distributed internet application platform.
So you can build these applications that don't actually require a server to run.
They don't require a centralized database to run and don't require centralized identity
for the users.
But after they built that for several months, they kept coming back to this fundamental
problem, which was the actual management of the private keys themselves.
And they realized that they didn't really have a good way to allow the users to secure
their private keys in a way that was robust enough that they would be sure that the users
wouldn't just lose them and, you know, completely permanently lock themselves out of their accounts.
And so that's actually when they decided, after looking around the ecosystem, that they
should probably build a key management solution.
And that's when they came up with this idea of a multi-signature, multi-device, multi-location
vault product, because there doesn't really seem to be anything quite like that on the
market.
There seems to be a gap in the market for that.
And when Jeremy Welch just came to me and cold emailed me and asked me to meet up for
a drink, and we started talking about just general philosophy and technical issues in
the ecosystem, I realized that what he was pitching to me was something, a product that
I myself wanted.
And I felt like, you know, if this was a personal problem for me, it's probably a problem for
a lot of people.
And it would be something that I would be willing to work on.
Very cool.
So what are some of the features that will be available on the platform?
So our first service that we're offering is a very user-friendly three of five multi-sig
vault product.
And the whole idea here is that we're trying to merge the usability that you get with a
mobile app with the security properties that you get from a hardware key management devices
like Ledger and Trezor.
And when you create a new wallet with CASA, then you are installing the app currently
on iPhone, eventually on Android.
It's creating a key on the phone.
You are then taking three different hardware devices, and each one of those has a set of
keys.
And then the fifth key is going to be created and held by CASA as a disaster recovery mechanism.
And the idea is that you're going to get a lot of robustness against both attacks and
various failure scenarios by A, having all of these keys, except for, of course, the
phone key offline on hardware devices, and B, by distributing them geographically.
So that will protect you against all kinds of attackers because they're going to have
to A, find all of the places that you have these hardware devices and find like the pins
to actually access them.
And then you'll also be protected against all kinds of loss like disaster scenarios,
house fires, natural disasters, what have you, because once again, you're not going
to be keeping multiple keys in a single location that might go up in flames or have something
bad happen.
And the interesting thing that we get when we build this system is that it's actually
possible for us to remove the need for the user to manage their recovery phrases.
So there's like 12 or 24 word recovery seeds that you normally get when you create a wallet.
We're actually telling the user to throw these away.
And that may sound outrageous, but we have a thesis that if users shouldn't be required
to manage their private keys, then why would you require them to manage the root of all
of these private keys, this recovery data?
And it just becomes an IT nightmare and the average person doesn't have the expertise
or in many cases, even if they do have the expertise, they don't want to put the time
into doing it.
And I can speak to this from experiences.
It's very hard for me to just do general IT janitorial type practices.
And so the reason that that's not required is because we were then able to build a key
rotation wizard into the app itself.
So if you lose a device or a device stops working or gets stolen or anything happens
to it, then all you have to do is go buy a new Trezor or a new ledger, plug it into the
app and go through our wizard that we set up.
And basically what that will do is in just one easy like six step wizard, move all of
your funds into the new set of public keys, just removing the old set that we're lost
adding the new set and that's like your wallet integrity gets restored.
And we're building a lot of those things into the UI as well so that you can actually get
a sense for what the integrity of your security setup is.
And there's just a number of other best practices that we're also building into it.
So the whole idea is we want someone to be able to have a secure vault product basically
to be their own bank without having to learn all of these best practices that are required
in order to be a secure bank.
I think that's a great idea.
And that's oftentimes one of the biggest criticisms of Bitcoin from the average person
that doesn't really understand it is it seems like it's a lot of work.
I think the people that get more into it realize the work is there for a reason much like proof
of work is there for a reason.
It's expensive because it needs to be.
Well, yeah.
I mean, there's a reason why we have banks and there's a reason why our society has
basically evolved into all of these different hierarchical structures and it's due to specialization.
And that's what allows our economy to evolve so quickly and for us to have such a strong
economy that is allowing people to focus on doing a few things really well is because
they're then able to outsource all of these other aspects of their life to other specialists.
But of course, obviously that creates a lot of issues of trust.
You're trusting a lot of different entities not to screw with those aspects of your life.
And so there's a reason we have banks and it's because people don't want to have to
think about all of those intricacies of security and data management and both physical and
digital security.
And so we're hoping that as CASA, we can provide bank-like services without us actually being
a bank.
Right.
So you mentioned some interesting things that are very important to me, such as privacy
and open nature of certain things and protocols.
One of the things that you said is that your platform is available on the iPhone only coming
to Android soon.
Maybe you can sort of shed some light on some of the news that has impacted the crypto space
with Apple removing wallets and other blockchain-related apps from the store and being at the mercy
of centralized power for a decentralized concept kind of seems ironic, but it's what everyone
has in their hands.
So maybe shed some light on what your thoughts are on those types of issues.
Yeah.
It's funny that you should mention that because we've already deployed and had multiple app
reviews with our iPhone app, but we actually just got our first rejection today where they
started asking us questions about being a cryptocurrency wallet and blah, blah, blah.
So we're actually going to have to go through jumping through the hoops with Apple to basically
explain to them that we are not holding keys or being a bank ourselves.
We are just providing a service that happens to interact with cryptocurrency networks.
But it was kind of weird for me because I'm not an iPhone user.
I've always been an Android guy.
But going with the iPhone first, the primary reason was that it's going to be a more consistent
user experience for folks, and that is because of how locked down the Apple app quality guidelines
are.
The other thing that was actually security is that we knew that if we required you to
be running like an iPhone 5 or later and an OS whatever version or later, we knew that
we would be able to do certain operations where we were storing the iPhone key securely
in your key ring.
And there's a much less consistent experience on Android because it's a much more diverse
ecosystem with all of these different hardware devices.
Not all of them have secure elements that you can use to perform various cryptographic
operations securely.
So that's why Android is going to be trickier from a security standpoint, but that's the
trade off is I think we'll get less pushback on actually having an app that doesn't get
taken down.
Right.
What about some of these initiatives like the Purism phone that are kind of built around
privacy and with actual hardware switches to turn off radios and other things like that?
Is that something that you see on the horizon as being something that will get into the
market for having some of these standards that are currently centralized, but also maybe
have a decentralized standard way of assuring quality with such things?
Purism is just the initial one, right?
But there may be others.
I sure hope so.
Yeah.
So I'm actually speaking to you right now through my Purism laptop and I'm going to
be one of the first people to get one of those Purism phones.
And I forget-
I paid for mine and Bitcoin, just so you know.
I forget what the specs on it.
Is it just like a web-based operating system that they're running?
There's been rumors that some people think that, I don't think this is true, but I
guess some people thought it was going just to run Replicant, but I think it is going
to be its own system and that they've been criticized for that, meaning that they have
to build up everything more or less from scratch, but they argue that they're reusing some standard
things and it won't be such an onerous task.
So I guess they're divided.
People are divided that they can do it and some people say, yes, they can't, it's just
going to be another failure like with Ubuntu phone four years ago.
So who knows?
Well, it'll be interesting to see how much they lock down the actual hardware data ports
on there.
So like one of the other pros and cons between iPhone and Android is that iPhone locks down
what you can do with the lightning port.
This becomes a problem because you can't actually just plug in a ledger or a trezor directly
into the phone.
Like that would be the optimal user experience, but Apple does not let you talk to devices
that are connected.
So for that at the moment, we just have a really, really lightweight web app that you
have to use with either the trezor bridge or the ledger bridge in order to actually
do the signatures for the transactions.
Now on Android, you're going to be able to just directly plug it in and that'll be a
more seamless user experience.
And hopefully for purism and other types of phones, they will also allow us to just directly
plug it in.
There was a talk of, I think it was John McAfee that wanted to make a phone that would mine
different cryptocurrencies as you were holding it and using it during the day.
I don't think that's happening anymore.
It sounds like a great way to kill the game.
Yeah, that's what I was thinking, but anyway, just interesting what's going on with the
whole space in terms of hardware around wallets and entire phones being changed for this purpose.
Thanks for sharing your thoughts on this.
So with that said, what are some of the emerging trends that you're seeing in Bitcoin and
what companies or groups are exploring interesting ideas in engineering and security?
Well, I did mention the block stack folks.
I think that that's a very interesting and of course, ambitious endeavor, basically trying
to re-decentralize the internet to get rid of these single points of failure where we're
creating these massive data silos that are then getting hacked and resulting in massive
harm to large sets of people that are using popular services.
That's the type of stuff that I really like to see.
That's also why I'm very interested in lightning and second layer networks, because those are
going to allow engineers to build more decentralized apps and while I don't think we'll call them
DAPs, some people are calling them LAPs, but just the idea of I think one of the biggest
promises there is to get rid of the systemic risk that the ecosystem is still seeing from
centralized exchanges.
And this was a surprise to me from working at BitGo for three years and we worked with
a lot of the exchanges to help them because we felt like it was extremely important to
try to prevent further Mt. Gox type activities from happening and yet it still keeps happening.
These multi like hundred million dollar hacks happen because I think new entrants come into
the system and don't learn from the mistakes of the past and so it's really weird to see
people keep making these mistakes of like keeping all of their money for other people
on a hot wallet that's connected to the internet and inevitably gets hacked.
Yeah, some of the security practices and measures are pretty frightening.
There's also a big incentive because there's a lot of money to be made right now.
It's kind of the Wild West so people are really throwing a lot of caution to the wind
just to get a product out there and be first to market to capture the users.
So a lot of that is not happening.
I myself fell victim to Mt. Gox.
I don't know about you, but a lot of us have scars from that day and yeah, so hopefully
edge networks and more reliable distributed systems continue to flourish.
Yeah, thankfully I saw how terrible Gox was like when I was using it and never kept anything
on there, but I knew a lot of people who for whatever reason did not.
Yeah, I think it was bad timing on my part.
It was just one more day before I get that wallet printed and I literally had the wallets
printed in my wallet and missed it by that much.
And I'm not sure if they ended up paying out in, they didn't, they weren't required to
pay out in Bitcoin, they were just required to pay out what Bitcoin was at during that
time.
Is that correct?
Do you remember what happened with the payouts?
Yeah, I mean the bankruptcy is denominated in Japanese Yen if I recall correctly.
It's kind of unfair.
Yeah, but it does highlight the importance that so many times people make sacrifices
for convenience and it's I think much like the centralized banking system, I think it's
time that we start not doing that and start putting more thought into security and things
like that.
So I did want to ask you a little bit more about Lightning Network.
So this is something that is quite controversial these days.
People are saying it's scaling, but it's a centralized scaling measure, whereas others
say it's not.
I'm a big supporter of Lightning Network and I think there are a number of us that are,
but I wanted to get your thoughts on where it's going and some of the challenges that
you see potentially ahead for it and some of the ways that it's really benefiting Bitcoin.
There's still going to be a lot of usability challenges because really if the Lightning
Network requires the user to know anything about channels or peers or really any of the
stuff under the hood, then it's never going to get mainstream adoption.
So there's a lot of complexities that still need to have like additional layers of interfaces
built on top of them and basically automation.
I had an article I wrote I think two years ago about the challenges of Lightning Network
and a lot of the stuff in that article still has yet to be addressed mainly because we're
not going to know how the network responds to certain events until we actually have a
large scale network with real money to see how like the real game theory works out and
how the real technical aspects of like the liquidity on the network working out.
And so I think that one of the biggest challenges is going to be figuring out how to make channel
opens and closes work seamlessly and in the best way possible, mainly from an aspect of
funding the channels and figuring out what the like optimal balance of value for funding
them will be.
And then after that point, how to optimally rebalance the channels to keep them open as
long as possible because the longer that you can keep the channels open, the more transactions
you can do the more back and forth value transfer can happen and the more money you save on
transaction fees because you don't have to create an on-chain transaction to close that
channel.
Now, some of the things that are going to come into play here are ideas such as basically
multi-party channel creation and closing and the ability to splice in and splice out value
from channels.
So there's basically a lot of dynamic situations that could potentially happen that the software
itself does not handle at the moment, though there's a lot of ideas for how to make it
do that.
So right now we're still in a very early days situation where you can do some basic transactions
on the network, but these more complex management issues are what's going to be very important
for the long-term scalability so that we can maintain and grow the network, not just create
this very early version of it.
Right.
Is there any ways that you see existing networks, be it social networks or other connections
within society that can be used as a leverage to accelerate how you see the channels and
other concepts in the Lightning Network?
Yeah.
I mean, I think there probably will be like reputational aspects that come into play of,
there are various reasons why you may not want to open a channel with someone who you
don't know or who has no reputation because they could potentially get you into a situation
where the channel is frozen for a while and you enter into some of the worst game theory
scenarios of channel maintenance.
And so as a result, there may be some semi-automated coordination of basically looking at what
entities you are economically interacting with the most that you have created relationships
with and then building off of that historical relationship to then factor that into your
maintenance of your channels as you open and close them in the future.
And so it's really, I think there's just going to be a lot to learn from an economic
perspective of trying to figure out how does money actually flow on this network and how
can we ingest some of that information and use it to make more informed decisions about
how to best maintain the network.
Right.
I guess we'll see in the coming years.
Yeah, fair enough.
So we touched on privacy a little while back.
I'd be curious to see what some advice you have for listeners as far as what they should
do if they wanted to start addressing privacy and where they might start.
It's funny you should mention that I'm going to have about a 4,000 word blog post that
I publish probably early August.
I've been working on this for months and this is really a result of my own journey trying
to improve my real world privacy.
And it's just an extremely complicated subject because there's so many different facets of
your life that you have to consider.
And it's also just something that it's very hard to find comprehensive guides to because
the people who do go to the links of doing extreme privacy often don't talk about it
or don't publicly write guides and information to it.
So I'm going to try to distill basically the past six months of my very slow and arduous
education in this space to a single article that will be as comprehensive as possible.
That's awesome.
And one of the things that you're well known for is your Bitcoin resource list, which I
think if listeners don't already know, it's at your website, so lopp.net forward
slash bitcoin.
Probably one of the best resource lists that we've seen out there.
Thanks.
And actually there's a new easier to remember domain now.
If you just go to bitcoin.cc, that will basically open up a redirect directly to that page.
Awesome.
What are some of the highlights for the listeners that they can expect on that resource page
or your favorite resources on there?
Let's just say.
Because it's such a complex and diverse ecosystem, I try to cover every major aspect of it.
And also because people are going to be interested in Bitcoin from a variety of different perspectives,
I try to have different sections.
So obviously I've got a getting started section for the newbies, and then I've got a deeper
technical section for the programmers who want to really look under the hood.
I've got privacy sections, security section, news, blogs, trading information, and of course
a new section on the lightning network and what's going on there.
And so I really just try to cover all of the bases because I know that very few people
are going to be interested in everything.
But the tricky thing about this space is because there's no real authority, there's no such
thing as like an authoritative data source.
And all I would really say that my site is, is it's just kind of like a Wiki but curated
mainly by me, though it is open source.
And so I have a number of contributors that will basically ask to have links added.
And if I think that they're quality content, then I'll add them.
Cool.
And people can contribute on GitHub.
Is that still correct?
Yeah, the GitHub is linked there on the website.
I think that's a really great idea.
We often talk about best practices, but it's nice to have one comprehensive resource page
there.
One of the other things that you talk about quite extensively is running a full node and
why it's important to run a full node.
Yes, it's a complicated subject if you get into the technicals, but the very high level
explanation is that in order to have the best security and the best privacy while you're
using Bitcoin, you need to use a full node.
If you're using a lightweight wallet or a wallet like blockchain.info where it's just
hitting a centralized server, then you have basically no privacy because there's some
counterparty on the other end who knows what addresses belong to you.
They know exactly how much Bitcoin you have.
But if you're running a full node, you're downloading all of the data and just querying
it locally.
So only you know, at least from a network perspective.
And then from a security perspective, it's actually important because you are operating
in a trustless environment because you're validating all of the data that has ever occurred.
Like every transaction that's ever happened in Bitcoin, you're downloading it, you're
checking it against the rules.
And if anything breaks the rules, then you reject the transaction, you reject the block.
And this is important if you know what software you're running and you know what the rules
are that are being enforced.
So it's probably something that's more for the more technical folks who dig in to actually
check to see what are the rules of this network versus that network or do I actually care
about these rules being enforced.
But from like an individual sovereignty level, it is the way that you prevent people from
defrauding you by making sure that they're not breaking the rules of the protocol.
And so for people out there that are considering it that are maybe a little bit geeky or just
want to spend their weekends doing something interesting, what are those system requirements
now to run a full node?
Well for Bitcoin, it's not that bad.
And this is because there are a number of different options.
And of course, I have several blog posts that I wrote about this and I even have a software
project that makes it easy for you to configure your node.
So if you're running a full archive node with like all default settings, then you're going
to need about 200 gigabytes of hard drive space and a fairly decent internet connection.
Probably at least, I would recommend like 30 megabits per second or higher.
And just from a computational standpoint, pretty much any computer that has been created
in the past four or five years will be fine, obviously newer is going to be faster.
But once you get that initial sync done, which can take anywhere from a few hours to a few
days depending on how fast the computer is, the resources required are actually pretty
minimal.
It doesn't use much CPU.
It doesn't use a ton of bandwidth.
And you can actually check out the resources that my own node uses if you go to statoshi.info.
I've got a bunch of charts on there that show like the bandwidth and disk usage and all
that stuff.
And I would say that my node that is powering that particular website is highly connected
and uses a lot more bandwidth than your average node.
And that's because I'm serving a ton of data to a lot of nodes because it has a fairly
high reputation, if you will, on the Bitcoin network, and so a lot of nodes connect to
it.
Oh, that's great.
So I guess if a computer club members gather some money, they can make a computer that
they can share and just swap hard drives to see this for themselves.
Yeah.
So I mentioned my config project earlier.
And if you search for the Bitcoin Core config generator, that's another GitHub project that
I have.
And there are some preset templates I have on there where you can go in and you can basically
click a template that says like low bandwidth or another template that says low disk usage.
And those will automatically spit out the configuration that you need that will decrease
the resource requirements by changing things like the number of peers or turning pruning
on or off.
And so pruning basically allows you to like delete old blockchain data.
There are a ton of options that are out there and I'm just trying to make it easier for
the less technical people to get in and make use of these things.
Awesome.
That's great.
I'm happy to hear that you're doing that.
I'm hoping that the community at large also is contributing other tools and things.
And so is there a good central point besides the articles that you have for looking at
helper projects or are you sort of the only one that's putting together these configs?
Well, I know there was a website that was like what can I do for bitcoin.info or something.
I'm sure it's something different than that.
There's a lot of information on bitcoin.org.
There's also the Bitcoin Wiki, but that is not always kept extremely up to date.
It's tricky like I said that there are very few like single centralized sources of information
and really I get a lot of it from social media and that's what I'm really doing is kind of
keep my ear to the ground and try to ingest as much data from Twitter and Reddit and Slack
and IRC and just telegram like a dozen different communications channels because this ecosystem
is so distributed and when something really interesting comes in, I just pop it up on
my website or some other resource to try to make it easier for other people to find.
Right.
And there's also in-person communities right in Vancouver.
We have Decontrol, which is a large gathering of multiple people that care about blockchain
related things.
So I'm guessing all over the world, you'll find similar spots where you can meet people
in person.
Yeah.
I mean, I've run local meetups for a number of years and really any decently sized city
is probably going to have a meetup.
They usually use meetup.com to coordinate that and it's usually just a Google search
away or I shouldn't even say that.
Don't use Google.
Use something like DuckDuckGum.
That's awesome.
Yeah.
Yeah.
We have a really good local one here, Bitcoin and Beers.
So shout out to those guys.
They do so much for the community and really focus on promoting knowledge as well, which
is really cool.
Yeah.
It seemed to be growing quite a bit.
I mean, just throw the word beer in there and a lot of people sign up.
Yeah, absolutely.
So I wanted to ask you about your pinned tweet.
Now, a lot of people refer to this essentially.
It's welcome to Bitcoin newcomers, some FAQs.
So you say, who should I trust?
Nobody.
When should I sell?
Never.
Is Bitcoin dying because with a blank and a question, no.
What have I gotten myself into?
Nobody knows.
And then how do I learn more with a link to your Bitcoin resource sheet?
So what prompted you to put that up there?
Basically, I was trying to dispel a number of the FUD questions that keep coming up over
and over.
And this is really, I guess, the simplest explanation for most of the stuff that I do
is that I get the same question 500 times and inevitably I end up just like writing
a blog post or writing a tweet or doing something so that I can just refer to that in the future.
And that was the entire impetus behind my Bitcoin resources page is that I got tired
of having to go dig up resources multiple times a day for everybody who wanted to know.
And so now I say, oh, you can just go find it on this website.
So education is one of the more important things for growing this system.
And it really does take a community.
It takes an open and welcoming community in order to onboard new users.
And that's kind of, in my opinion, that's all of our jobs.
That's awesome.
And that's one of the things that I personally like so much about Bitcoin is it focuses on
quality but also community.
And that's something that I think we're so used to just trusting a vendor or trusting
people to handle it and not really being fully involved as well.
There's also a bit of an exclusive club mentality, usually with traditional software.
So it's nice to see so much community engagement, really.
Yeah.
I mean, it can definitely be weird.
It may be less weird than it was in the early days because, of course, the earliest adopters
tended to be very extremist in whatever views they held.
And you have to be kind of crazy to get into a project where you're trying to recreate
money and you're basically competing with all of the major governments and banks in
the world.
I mean, it's kind of crazy to say, yeah, yeah, we can do that.
So the communities, I would say they actually have their own personalities across the different
cryptocurrencies.
And then, of course, you get into some very interesting social dynamics when a community
basically has a conflict.
And so we get to see how the ungovernance works in these systems and see how people
use basically the voice versus the exit, like the ability to leave and create your own network
if you cannot come to a resolution over a particular issue.
Yeah.
I'm guessing also the hard forks and other things that happen.
And it's interesting to see all the different cryptocurrencies and blockchain technologies
go through their growing pains.
And I'm guessing Ethereum had a few issues along the way, but they've been resolved.
So any other interesting sort of hard fork stories and corrections that you can think
of from your experience that kind of highlights?
Well, other than Ethereum, the main one, of course, has been the Bitcoin split.
The most interesting thing about that was that it was always possible for someone to
do a hard fork of Bitcoin, but for some reason, nobody ever did.
And then once we had the first one, we had dozens of copycats after that.
And it was really, from my perspective, just a twist on something that we had seen happen
before, which was the altcoin craze of 2012, 2013, where everybody was forking Bitcoin
core the software, but then starting new genesis blocks, starting their own networks.
And I think that this is a pattern that we're going to see happen over and over again, where
some people inevitably either get frustrated and want to leave the system, or they get
greedy and decide that the best course of action they can do is to leave the system,
create a new system.
And if they find some way to innovate on some aspect, even if it's just like purely marketing,
then they're going to be able to capture a decent market share of attention and thus
value.
But then immediately when the rest of the world sees them do that, a lot of other people
who think similarly are going to say like, oh, I should do that.
That's easy money.
And so then we end up with all these copycats.
But of course, you can only capture so much attention, so much market, and you end up
with this long tail distribution where the vast majority of these projects are worthless.
And so I think that we have not seen the end of that and that it's going to continue to
happen in cycles and it's just going to be slightly different takes on what spurs each
one of these cycles of creating some new network and then getting a lot of copycats.
Right, so one of the interesting things is that Bitcoin is the one that's kind of survived
all these thrashings around and kind of leads into the next question.
And I like to ask this from a lot of people is their thoughts on proof of work.
A lot of people have negative connotations, a lot of people see it as an absolute necessity.
Maybe give the listeners your take on proof of work.
Yeah, it's the worst form of distributed security except for all of the other things.
I mean, it seems to be the most egalitarian form.
If you start talking about like proof of work versus proof of stake or what have you, then
a lot of those types of systems, the main difference is using external resources to
secure the system or using internal resources to secure the system.
And I think that using external resources is more egalitarian and more quote unquote
fair if you want to call it that because then if some outsider wants to compete, then in
the case of proof of work, they just need to go and get some hardware and get some electricity
and start competing with all the various variables that are involved in proof of work mining.
But if you're using a resource that's internal to the system of like having to buy tokens
and use those as stake, then in order for someone to compete, you actually have to buy
a bunch of those resources.
You may buy them from existing miners.
You may buy them from just other holders.
But when you do that, you're actually in a way giving money to the existing stakeholders
in the system.
You're going to make the value of what they're holding go up.
And in order to compete more and more and more, you have to pump more and more value
into the system and basically into the pockets of your competitors.
So there's some marginal returns there where it can very easily create a sort of system
of nobility where it's very hard to displace the early entrance of the system.
Right.
So if there's a good analogy that you would have for someone, it's really hard to explain
proof of stake versus proof of work to someone off the street.
What's your go-to analogy if you do have one?
Yeah, I'm not sure that I have a go-to.
But in general, I think that it's not important that the average user understand that aspect
of the system.
And even the folks that do, they don't really think about it.
But the easiest way that I describe it is that proof of work is actually just proof
of energy expenditure.
And we use a bunch of fancy math in order to prove it from a cryptographic standpoint.
But all you're really doing is saying, you know, I burned somewhere around this many
joules of energy and everyone else in the world can very easily verify that.
And really, all you're trying to do is to make it very expensive for an entity to rewind
the history of the blockchain.
And so it can very easily seem like it's an inefficient thing or like you're just wasting
a bunch of energy.
But the waste of energy is the entire point, because that means that an attacker has to
waste even more energy in order to reverse transactions and undo recent history.
Right.
So yeah, a lot of people have been comparing that amount of energy to running a small country.
So what are the metrics on that?
People are throwing out all sorts of numbers out there, whether exaggerated one way or
the other.
What's the truth?
Well, yeah, it depends on various assumptions that you make.
But my general retort to that is that it doesn't matter if you're offended by how much energy
is being expended.
The economics of the system have decided, the market has basically decided that it's
worth paying that much money to the miners to secure the system.
So if it's worth the equivalent energy expenditure of Denmark to create a censorship resistant
money, then it seems to me that the market has spoken.
Nice way to put it.
Yeah, I agree.
And that's one of the things that people don't realize is how much money does it take to
keep operational traditional financial systems?
That's something that people tend to not factor in.
Well, it's a lot harder to actually measure.
The only reason that people get pissed off about this is because it's somewhat easier
to measure the energy expenditure that's going into Bitcoin.
Trying to measure the energy expenditure of traditional banking is going to take a lot
more work, a lot more research to try to estimate.
Well, absolutely.
It's all of these indirect expenditures of time by people that could have been doing
other things, such as cleaning up beaches from pollution, but instead they're sitting
there behind the desk facilitating swift transfers or whatever they're doing.
Yeah.
So you had a really interesting tweet a while back earlier this year saying that it's a
caterer intuitive, but Bitcoin leads by being conservative.
Hodlers value predictable monetary policy.
Developers value stable platforms.
Few folks appreciate having the rug grip from beneath their feet.
And in the rush to overtake Bitcoin, competitors recklessly risk it all.
I'd love to hear a little more about that.
Sure.
So a lot of people get frustrated and blame Bitcoin because it's not evolving fast enough,
which is, it's a kind of weird thing to complain about because this is an open project and
if you're going to complain, you should just take that energy and put it into contributing
rather than complaining.
But that's kind of an aside.
Let's say if we look at some of the other systems like Ethereum or Bitcoin Cash, or
my favorite is probably EOS lately, they're going more with the like move fast and break
things approach where they're changing stuff on a fairly regular basis because people are
finding problems in their system and this can result in people getting disenfranchised
or realizing that their view of the system is not what is actually being delivered.
So one example is with EOS, they basically went in and like froze a bunch of accounts
and that caused a bunch of outrage or with Bitcoin Cash doing regular hard forks to try
to fix things like their difficulty adjustment algorithm that actually resulted in a bunch
of nodes getting dropped off of the network and you could argue that, well, maybe those
nodes don't care enough to keep up with it, but one of my other tweets was actually to
the StatoCash service, which is a, I don't maintain it, but it's basically my Satoshi
project but for Bitcoin Cash and the guy who runs that service, I guess he was just busy
with his life and he did not upgrade it in time for the hard fork and his service just
died.
It was dead for about two weeks before he finally got around to fixing it.
Yeah.
It's funny how people are so quick to criticize, but yet, you know, there's been only one
coin that stood the test of time and that's Bitcoin.
I think it's something like what, 60 attacks a day or is it an hour on Bitcoin these days?
Well, I mean, it's hard to even measure.
I think I put a statistic up there recently with just some logs from my Bitcoin node that
was showing like all of the rejected fake blocks and rejected double spin transactions
and even rejected transaction where someone was trying to create money out of thin air.
It's an adversarial network and there's, I think, $125 billion bounty out there.
You know, the entire value of the system, pretty much if you can compromise it and you
can figure out a way to create money out of thin air or steal other people's money, then
it can be extremely lucrative and so there's a lot of people who are constantly trying
to do that.
Should that ever happen?
What's the recourse?
I mean, it has to be timed exactly, you know, in between some blocks, et cetera.
Have you wondered what would happen if several countries got together to put enough pressure
on the network to be able to sneak something?
It really depends.
There's so many different attacks.
It's going to be different for each situation, but in general, I think the best thing to
look at is actually the, I believe it was the 2013 accidental consensus failure.
This was actually just a very low level database inconsistency issue between different operating
systems, if I recall correctly, but it resulted in there being a fork in the chain that was
not getting resolved.
And because there are a lot of people out there like myself who are constantly monitoring
the network for abnormal activity, it was caught within a few blocks, like people, some
developers started getting on the IRC and they're like, Hey, does anybody see what's
happening here with these blocks?
And they very quickly figured out that something had gone horribly wrong.
And then the developers start looking at the code, figure out what it is and managed to
coordinate with other ecosystem participants, in particular the miners to figure out like
which ones were running on which chain and what the best way was to deal with it.
And so they actually got the situation resolved in I think like five hours or so.
And of course that was back when Bitcoin was a lot smaller.
So if anything particularly abnormal happens, then I expect that a lot of people within
the ecosystem are going to come together and start talking about it very quickly and try
to form a consensus around what the best way to act in that particular emergency is.
I think it's interesting to consider now second layer technologies like Lightning Network
and how a similar situation will be helped by the existence of second layers as to have
more parties that are trusted to be able to say, well, if we have to go back to another
chain that we weren't part of, we can replay that and get those transactions reinstated,
the valid ones anyway.
Yeah, it's just, it's going to be such a case by case basis.
You know, I think you'll find that in the vast majority of situations, as much effort
as possible will be taken to try to avoid making changes that would require everybody
in the system to upgrade.
But it really depends.
I mean, you can definitely think up certain adversarial scenarios where perhaps the Chinese
government comes in and commandeers all of the the mines and starts 51% attacking the
network.
And you know, that's going to require a very different type of response.
Yeah, interesting to see.
Yeah, absolutely.
And I think as Bitcoin grows in value, things like that, I mean, it's all speculation what
could happen and may happen.
But I think for now, the decade that Bitcoin's been around, there's certainly lots and lots
of security precedent.
So that's awesome.
So you mentioned your articles, and I know they're available on your website.
But where else can people find your writings?
Yeah, I mean, I mainly collate all of my different sources on my website.
Most of it is on Medium.
Sometimes it's on CoinDesk.
Sometimes it's a random blog here or there.
But really, I am most active on Twitter.
It's where I am pretty much every day tweeting at least a few times a day about current events
or just whatever is on my mind.
And then, let's see, you were recently at the BuildBitcoin conference in Lisbon, Portugal.
How was that?
And what insights did you did you learn there?
Yeah, that was my type of tech conference, nobody really trying to sell anything to each
other except really cool ideas.
And I think that it really went to show that there is a lot of innovation happening in
Bitcoin, and it's really the opposite of like what I was talking about before, where there
are a lot of people who will tell you that Bitcoin is not innovating, and it's stagnating
and dying and blah, blah, blah.
But really, there are a lot of people that are doing a lot of very deep thinking about
very low level issues.
And we also have more people that are now working on the higher level stuff.
And so it was really ran the whole gamut.
I saw some very interesting privacy talks about how to improve privacy on Bitcoin because
privacy is pretty terrible on Bitcoin right now.
But then there were also a number of talks from Lightning developers and even user interface
designers talking about how we make these systems more usable so that we can hopefully
get that mainstream adoption.
And then what upcoming speaking engagements and conferences are you going to be at that
you're looking forward to?
The big ones this year are going to be the Baltic Honey Badger Conference in Latvia,
and then Scaling Bitcoin in Tokyo.
I'm speaking at Baltic Honey Badger.
I'm not speaking at Scaling Bitcoin.
That's really far more academic than my skill set, but I'm on the program committee.
So I'll be reviewing the submissions.
Awesome.
And then finally, is there anything else that you wanted to talk about before we close out
the show?
I think we've pretty much run the whole gamut.
Cool.
All right.
Awesome.
So finally, do you have any questions for our listeners?
And if so, how should they reach out to you?
My main questions for people are once you get into Bitcoin, the most important thing
that you can do is contribute and give your feedback.
And so I really want to know what do you think the optimal attributes of a monetary system
should be?
And that's how we get into a lot of these contentious debates.
But that's kind of the result of us working in a system where there are no authorities
is that we have to butt heads a lot to try to find rough consensus.
But the theory is that this should ultimately lead us to a system that is maybe not the
best for everyone, but hopefully at least the least harmful for most everyone.
Trying to find the system that is as optimal as possible for the diverse group of humans
that we're trying to serve here.
Awesome.
That's great.
Well, Jameson, thanks so much for joining us today.
We really appreciated your insight.
And thanks for being on the show.
Yeah.
We'll see you on Twitter, I guess.
Yeah, most likely.
Thank you.