Hi, how are you all? I hope you've all had a good week. Welcome to the What Bitcoin Did
podcast. This week I have my first ever returning guest, which is Jameson Lopp, who if you've
heard it was the third guest I had on the podcast, and that still remains the most downloaded
episode to date. I still get emails and I still see tweets where people have listened
to the show and they tell me how much they enjoy it. So I was really glad to get Jameson
back on the show and he agreed to meet up with me when we were both in New York for
consensus to record this. And there is also a video of the episode, which is up on my
YouTube page, which is youtube.com forward slash what bitcoin did. So you can head over
there if you just want to watch us and listen to us at the same time. I do want to say a
massive thanks to Jameson as well because he has been a huge support for the show. He
was, like I said, he was the third ever guest and replied to me after I'd only ever recorded
one episode. I emailed him and asked if he would come on and he did. I went over to Rayleigh
and saw him in North Carolina. We did the podcast. He also took me to shoot guns for
the first time and you know, it was just really hospitable. And also since then he's helped
me with a whole bunch of other things. You know, I drop him an email every now and again
with some help I might want with an interview or some questions and he always gets back
to me. So yeah, he's been, he's probably had more of an influence on the show than
he realizes. And yeah, just a massive thanks to him. And since we last spoke, Jameson has
also left BitGo and he's now working at CASA, which is a custody solution for people who
hold serious amounts of crypto. So yes, we talk about that a lot. He explains how it
works. He explains his role at the company and the different kinds of things that keep
him awake at night that he has to worry about. And it's very, very interesting. We also,
with the interviews I've been doing recently, we do cover more stuff on scaling and talk
about Lightning Network. And the way Jameson asks things and replies to things is very
different from everyone else. Whilst he has a personal opinion, he does tend to be quite
impartial or quite fair to the other side and respect why people may have a different
opinion. So it's really interesting to hear him talk about this. And I think it's a lesson
probably for me and myself trying to do these interviews on how I should consider things.
So yeah, I hope you enjoy it. It's, I think it's a really cool interview. You know, I
do this every week. I ask you to support the show and it's important because I do want
to increase downloads. I do want to get regular sponsors at some point and that will help
continue to pay for the show and allow me to do these interviews. So please don't just
skip over this. Please do help me out here. There's just a few things that you can do.
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that out. And also please share the show out on social media with your friends and family
because it really does help. Okay, so over to Jameson. I hope you enjoy this show. We
recorded this in a pro studio in New York. So the sound quality is probably one of the
best I've had. And as I've mentioned, it's also up on YouTube. So you can go over there
and watch it too. As ever, if you have any questions, do reach out to me. You can email
me on hello at whatbitcoindid.com and I do try and respond to everyone. So yeah, please
reach out. Okay, hope you enjoy the show.
Jameson, hi. Hello, good to be back. My first repeat guest. Our first interview was probably
one of the most popular I've had. So thank you for that. And it's probably set up a lot
of the other things I've done. So thank you. A few changes for you since I've seen you
last. A little bit. So I think whilst I do want to talk to you a bit about scaling and
all those things that happen, actually, it'd be good to hear about. You've moved from Bitgo
to Casa Hoddle. Yes, just Casa. We're trying to get the Casa Twitter handle since somebody
is squatting it and not using it. Casa Hoddle on Twitter for now, but Casa pretty much everywhere
else. So how did that come about? What happened? Well, I was approached by Jeremy Welch late
last year and just cold email said, Hey, want to grab a drink? Talk about Bitcoin. And we
hit it off. It was pretty clear that we both had a similar perspective on these systems.
And we both agreed that just general private key management is a problem that has not yet
been solved for the average person. And this is why I've been at Bitgo for three years.
And despite all of the really cool innovations and stuff that's happening in this space,
I'm still pretty focused on plain old boring private key management stuff. I just think
that there's a lot of issues that the average person still has to overcome if they want
to be their own bank. And this is something that Bitcoin has really fallen short on its
promise. And I'm hoping that we can fill in the gap here and really lower the learning
curve for people and what they have to actually do in order to be sovereign unto themselves
and hold their own money. So what are the main issues you identify with being your own
bank and holding your private keys? It really mostly comes down to it stuff like boring
data practices, which pretty much nobody actually wants to do like even technical people like
myself often are just too lazy to actually go through routine maintenance type stuff
and making sure that that you have basically decent redundancy and that you think through
and can cover all kinds of different disaster scenarios. And really what we want to do at
Casa is provide software and hardware solution that has already thought through all of these
different edge cases. And then we'll also provide support services if the user gets
into certain edge cases where they do need help from us.
And Bitgo are also working on their own custody solution, right?
Well, so yeah, this is sort of two sides of the same coin where Bitgo is working on
a institutional custody solution, but Casa is going the other direction and we are specifically
building non-custodial multisig. So it's a three of five multisig. Casa will hold one
of those keys as a recovery service for certain disaster scenarios. But in general, the user
is going to have custody of their own keys and of their money. And we want to facilitate
that because I'm just looking at the ecosystem in general, I feel like it is moving in a
direction that I don't really like towards more people putting their funds in trusted
third parties, which is really, that's why we're here in the first place is try to avoid
doing that and avoid the systemic issues that result from that.
So where did the other four keys go? If it's five keys on a multi, it's three or five on
a multisig, right?
Yes.
So where did the other four go to me?
So yes, so the default setup will be that you'll have one key on your phone in the secure
element and then you will have three other hardware devices. Now you can either bring
your own or we'll probably be a reseller for the popular ones as well. So Trezor, Ledger,
eventually maybe KeepKey. Really, we want to support any popular key hardware device
because what we're trying to do is pull in and merge the ease of use of a mobile app,
but also have the security properties that you get from these hardware key management
solutions.
So the CASA app is currently iOS. We're going to have an Android version and that's how
the user is generally going to interface with the wallet. But all of the high security stuff,
the actual key management storage and signing is going to be done by your various hardware
signing devices.
Okay. So if I had four Trezors, sorry, I would have three Trezors or three Ledgers. What
would be the recommendations for where I would store them? Because if I just keep all three
at home, it's not really...
Yes, that would be terrible. And we're also going to recommend a diversity of devices.
We want to eliminate every possible single point of failure, which includes if you're
being super paranoid, potentially hardware issues. I mean, we're still in such early
days that Trezor and Ledger are having vulnerabilities found within their own firmware and hardware.
And so you would hopefully have like a Trezor, a Ledger and a KeepKey, for example. But we're
recommending that you have one hardware device at home, perhaps one at an office or a friend's
house or some other semi access control place. And then a third one at perhaps an even higher
access control place, like perhaps a bank vault or something.
And so the idea is that you already get great security by just using a single SIG hardware
wallet. That makes it really hard for someone to actually hack you and steal your money.
But there's still other types of loss, of course, natural disasters, your house burns
down.
Gun to your head.
Yeah, you lose it. So then physical attackers. So the idea of taking this hardware key security
to the next level by having multiple geographically distributed keys just makes it that much more
difficult to lose enough private key data or to have enough private key data rounded
up and stolen and taken from you.
So if you followed the best advice and best practice, your maximum exposure probably in
any single location is two keys with your phone and your hardware device, say if you're
at home.
Right.
And if you wanted to go and move some funds, you would have to go to one of the other locations.
That sounds sensible. And you would probably also then want another device for you as almost
like a hot version of your cold wallet in that if you had significant savings, you would
keep them in the CASA wallet. You know, you don't want to be going to work or to your
bank every time you want to move, you know, half a Bitcoin or something.
Yeah. So, you know, it may even be a poor description to call CASA a wallet. It's probably
more accurate to call it a vaulting solution. Okay, because we are intentionally making
it very difficult to spend money out of this particular set of keys.
Okay. Is there a scenario whereby, say they lose two keys, is that a disaster scenario
or is there a recovery option?
Yeah. So if you lost two keys, then you would end up having to go through a CASA aided recovery
where you would have to go get your other two keys and then reach out to CASA, have
us get the key that we're holding for you. And, you know, we'll basically walk you through
an authentication process to make sure that it's actually you and then sign a transaction
with our key that you can sign with your other keys and then basically rebuild your wallet.
So the interesting thing that's fairly unique to what we've designed at CASA is that we're
actually telling the user not to store their recovery seeds. And the reason for this is
that we have a thesis that requiring users to keep any digital information secure is
basically a nightmare scenario unto itself. And we go back to the whole IT best practices
thing where it's not reasonable to expect users to do that. And so by removing the need
for them to secure this data and encrypt it and back it up and basically manage it, we
get a couple of interesting things, one of which is that now we're only dealing with
really physical devices, which are, you know, tangible. They're much easier to reason about
about, you know, where they are located and what the access control to them is. And also
now if you lose one or more of your hardware devices, we have basically a key rotation
mechanism in the software app. So you can basically go into your app and say, you know,
I lost this device or it's compromised or I don't know what happened to it. I need to
replace it. And we will basically have a wizard in the app that walks you through recreating
your wallet with the new, the existing four set of public keys and then a new one from
your new device and then transferring your money to that. And we want to make that a
seamless experience. And we're really just trying to build other best practices into
the software as well, such as reminders of saying, you know, on on every every so often,
we're going to actually ask you to prove that you still have these keys and basically do
health checkups. And this is kind of coming back to the whole IT practices again, is that
we need to do what we can to ensure that the user is keeping track of their keys and that
they're safe. And so really the main thing that you're going to see in the CASA app is
what we call the key shield. And it's really going to basically show you a health status
check of what's going on. And you know, if if that security starts to degrade, we're
going to annoy you more and more and more. And and this is one of the learning experiences
that I think is what we're really going to be working on figuring out over the coming
year or so is how much of these best practices and sort of guide rails can we build into
the software itself in order to prevent the user from shooting themselves in the foot
and getting into backed into a corner. And also just to try to reduce the level of touch
that the user has to come and basically get hand holding from us the experts. So it sounds
like to me the biggest risk is the user themselves following best practices and not signing up
to your service and then taking all keys and putting all their hardware devices in a drawer
home. Yeah. And you know, we can't obviously we can't force the user to do anything, but
we can do stuff like with regard to that. What I want to and I have an open ticket for
this is for the app itself to to actually make note locally of like general area of
you know, where the signing is done with a given device and like if the radius is too
close together, then we might throw up a warning for that and be like, you know, we've detected
you might be keeping your keys too closely together and you should probably spread them
out more stuff like that. Wow. So and what is your role within all this? Are you heading
up the engineering? Are you part of a team? Yeah, so there's there's at the moment, we've
got like three different engineers. My role is primarily back end infrastructure and just
general security practices, thinking about the architecture of the application. So I'm
kind of all over the place. I am helping out to do some low level technical stuff. But
I'm also just trying to think both adversarially of what all the failure conditions are and
think about just best practices and how we can help the user in an automated fashion.
And what keeps you up at night? What are your deep fears with this? Because I remember seeing
a tweet you put out actually to do with a theorem smart contracts that need to think
more like aerospace engineers because they are disaster scenarios when things go wrong.
You know, the parity multi SIG wallet was obviously a quite a scary thing. What kind
of keeps you up at night? What worries you? Well, that is something that I'm worried about
once again, because, you know, we've already received a ton of interest in, you know, having
this type of vault solution for Ethereum ERC 20. And, you know, everything under the sun.
And so I wrote a blog post about this about my journey of helping build the Ethereum infrastructure
at BitGo. And it really was a nightmare because whenever you're trying to do multi signature
functionality on one of these blockchain protocols that does not natively support multi SIG and
Ethereum is the main case I can think of. Monero didn't have multi SIG until recently.
But most of the other popular chains do have it. So when when it's not a native function
to the protocol, you have to basically write your own. So you have to write a smart contract
that simulates multi signature multi signature operations. And so this is not that far removed
from your quote unquote, rolling your own crypto. And that is like the worst thing that
you can do and like the cryptographic space, because now you have to go through audits
and rigorous processes to basically stress test it and do as much as you can to ensure
that the code is actually doing what you think it's doing. And we found, you know, having
three different audits on our multi SIG smart contract, they just kept finding more things
and finding more things. And interestingly, like you referenced the parody bug, the first
version of the BitGo multi SIG smart contract had that same bug. And it got caught in an
audit and we fixed it. And then when it happened to parody, like six months later, we were
like, oh, smack, you know, this, this is actually a really common mistake that's easy to make.
And I'm sure there are plenty of other mistakes that are easy to make. And that's one of the
problems with solidity is that, you know, it's very developer developer friendly, but
it's also easy to make a script that looks perfectly innocuous. But because you miss
like one little declaration, or because you don't understand how the solidity code is
getting compiled down and then interpreted by the Ethereum virtual machine, something
might be actually going on on the back end that it's not obvious from just looking at
the code. So it's a smart contract development is kind of in a scary place right now from
a security perspective. Wow. Okay, so who's this target? What kind of is it? Is it a retail
customer? Or is it institutional? Or is it high net worth individuals? Where are you
talking? Initially, this is going to be targeted high net worth individuals, we're starting
out as a very like boutique solution. And entry price point is around $10,000 a year.
Okay, so you can extrapolate from that, you know, unless you've probably got a few million
dollars worth of crypto, it's not worth it. It may or may not be worth it. It depends
on what you value your time at. So one example I use like with my own solution, and I basically
put a calendar event in on an annual basis, I reevaluate my own cold storage solutions,
update them and whatnot. And I end up spending at least a full day each year going through
and updating all my stuff and geographically distributing data around the world basically,
to make it robust. And and so that is a pain. And I don't enjoy doing that. But I guess,
you know, I'm so far on like the edge of paranoia with regards to security that that I am willing
to do that. And I don't know that many other people are willing to put like a full day
every year into doing like a comprehensive evaluation and refresh of their security setup.
I've also seen your guns that are part of the process. Okay, so what is the onboarding
process then for a customer say I was to sign up, how do you onboard? Is it a an experience
where they come to you? Or is it experience they set up back at say their home or office
or something?
Yeah, so we'll definitely support anyone who wants to come to us and over the long term,
you know, we hope to have locations all over the place where people can get face to face
support. But otherwise, you know, we're happy to do video or audio conference to help walk
people through it. The more technically sophisticated people I anticipate will not need hand holding
and actually setting it up. It'll just be, you know, a more manual account opening process
of us actually creating your account and getting some authentication information from you.
Because you know, we are going to be very security conscious and not allow you to do
a number of standard things that most web apps do, like change your password or change
your email address or stuff like that, like any of those sensitive operations, we're actually
going to require some sort of like video authentication for us to allow that type of thing to happen
simply because that's where you know, a lot of the social engineering and phishing and
stuff happens in the crypto space and we want to avoid that as well.
And even at the point of onboarding, I'm guessing you wouldn't be recommending they set all
four of their keys up at the same time because then they are at that point, that's a single
point of failure then because they have them, would you set up one, go and distribute it,
set up the second, go and distribute it?
That would be preferable, yes, for each step you're moving around and this is another reason
why I think it's great that this is a mobile app is because then you know, you can have
the software itself be moving around to the different locations where your offline keys
are being stored on hardware.
And if a customer did do something stupid and they lost their three hardware devices
and they only had their mobile and you, is that a...
Yeah, that would be a game over scenario.
Game over.
Are there any kind of insurance scenarios that you guys are looking at?
No, the thing about insurance is that we actually did that at BitGo and what you basically end
up doing is buying a cyber insurance policy and we just found that the amount of money
that you have to pay for it does not meet the like demand that you get from customers.
Right, okay, I understand.
And there are a number of competitors in this space, Coinbase, they've got their vault,
you've got the Zappo vault.
Though actually, Coinbase is deprecating their vault solution last time.
Are they really?
Mm-hmm.
I think they were telling everyone to move their funds out of it.
Interesting.
I actually don't mind their vault because even though you are entrusting custody to
them, I thought it was a very good solution and for some people, that is better than managing
your own funds and I trust them quite a bit.
I didn't know about that, but Ledger are doing a vault.
So there's a lot of competition in this space.
Is what you're doing unique?
Is anybody approaching it similar ways to you?
I am not aware of any others that are doing multi-sig with off-the-shelf consumer key
signing devices.
Okay.
Well, that's pretty cool.
Are there any internal attack vectors you have to look at, like considerations for
your team?
What are you doing with regards to that?
Yeah, thankfully not from the private key standpoint since CASA will only ever have one of five.
The main thing that we have to worry about is making sure that when a transaction is
initially constructed, that nobody goes in and tries to swap out addresses or anything.
Now this is actually an easier problem to solve with a cold storage solution than with
hot wallets because you have so much time between each step of the process.
So basically what we do is then each step of the process when you are re-signing, we
re-display the details of the transaction to you.
And so without getting too deep into the protocol, once you construct a Bitcoin transaction and
sign it once, it's not possible for someone to modify aspects of it and then ask you to
sign it a second time.
It would break because the signature covers the whole transaction and all the details.
What about a bad actor who's not interested in theft, but more interested in creating
some kind of technical time bomb that just destroys the infrastructure?
Is that a possibility that you guys are looking at?
Is it something that's under consideration?
Yeah, so I guess a worst case scenario would be if CASA servers got completely blown up.
And in that case, you would get some failures from actually trying to communicate with our
server.
And your wallet would still be safe, you just wouldn't be able to spend out of it.
And that is a scenario where we're going to have to develop basically an offline recovery
tool that uses other open APIs.
And I'm pretty sure that the work has already started on that.
BitGo has a tool like that where it's just hosted on GitHub.
That's a lot to think about.
But that is just one of those very edge case scenarios.
And the nice thing is that just due to the key distribution, it's not a safety or security
issue, it's a convenience issue.
And if that did happen, then even if CASA, say all of the CASA employees had something
terrible happen to them, they could no longer work on CASA anymore for whatever reason,
you could still hire another developer to then write and basically simulate the transaction
signing and collection process.
And are your servers distributed as well?
So there's no single point of failure on say the data center or anything?
So we're using Amazon Web Services, which is, they have some levels of redundancy there.
A lot of other big services use various virtualized cloud services.
And you can argue about how decentralized it is.
Obviously it is controlled by one company.
But what I found over the years is that the downtime on these big providers is extremely
minimal.
And also, I think I heard you say you can build, sometimes you have to build centralized
things on top of decentralized infrastructures.
It doesn't work the other way.
Right.
Yeah.
How much?
So we are basically ready right now.
We've got HD support, SegWit support, fee estimates, pretty much all of the basic stuff
that you want from a decent Bitcoin wallet.
And so I expect us to start slowly onboarding.
We've got a very long list of interested people.
We're going to start onboarding a few early customers, get feedback from them, see what
we need to tweak to improve the experience before we really just go head first into it.
And you're launching with just Bitcoin?
Yes.
And we are a Bitcoin first company, so we are prioritizing Bitcoin generally.
But like I said, we've already had so much interest in basically any other valuable chain
that it's just a matter of time, I think, before we add others.
But doing the Ethereum stuff is tricky because I want to avoid doing smart contracts.
We actually just hired a guy, Nick Newman, who was in the, I think, ETH Denver hackathon
and won some awards for his key splitting stuff.
So that's what I would like to see is actually a sort of Shamir secret sharing type of more
flexible off-chain multisig where you're still doing single sig on chain for Ethereum ERC-20.
The only downside is that the hardware key signing stuff doesn't seem to support that.
That's to be determined.
We are talking with hardware vendors about that, but I'm not sure it's going to work
out.
I completed the form on the website and it asked you which other ones you wanted because
you listed the ones.
So that kind of gave me an idea of your roadmap and I think I added Monero and Dash.
Yeah.
Cool.
Sounds very cool.
Very interesting.
So you're obviously aware of the interviews I've been doing recently.
I met with Craig Wright, very interesting experience.
I went over to Tokyo to see Roger.
I've interviewed Samson, I've interviewed yourself and Charlie.
And whilst I have my own bias, I'm starting to try and take more of an impartial view
because of the toxicity around even my choice of interviewing guests.
Sure.
Yeah.
I've been told you're given a platform to a scammer or a criminal and I don't agree
with it, but I think it's better to try and look neutrally impartially to try and understand
everything that's going on.
And I've got a bunch of questions for you.
I've listened to your interview with Roger, the debate, I think four times now, because
it is a real eye-opener on both sides.
But I'm going to go through a few kind of steps on this.
So I asked, I listened to a really interesting interview with Adam back the other day and
he was asked a question which I asked Samson, but I think it would be a good one to ask
you.
I can't even remember he covered this in our first interview, but what is Bitcoin to you?
Well to me, Bitcoin is an open collaborative project where we are trying to organically
determine what the optimal form of money is or at least subjectively amongst anyone who
is interested enough in participating in the discussion of what money should be like, we
now have this new form of basically automating consensus now with machine algorithms.
So it is this result of cypherpunk ethos and ideology and now kind of moving into a crypto
anarchy or voluntary society.
And so there's a lot of different things that are going on with it, which is what makes
it so confusing for people, especially just the fact that there is no authority can be
very confusing for people who are trying to seek the source of truth.
And that's a really good point.
So as I've tried to, you know, I've got limited technical experience, but if we're trying
to create a new form of money, it's for everybody and everyone's encouraged to do their research.
There's a lot of people like me who don't understand the technical details.
There's so much, but they're encouraged to do their own research and there sometimes
is some elitism with trying to find the truth.
And my fear is for a new user who might come to Coinbase, they will see Bitcoin and Bitcoin
Cash and might not know what they are.
And one friend might say Bitcoin Cash is the real Bitcoin because it's X, Y, Z, and others
will say, no, that's bullshit, it's Bitcoin.
And then you can go onto Reddit and suddenly, I have really struggled to find an impartial
source to say, this is A, this is B, these are the pros and the cons.
And it's very tribal and very toxic.
So I think the technical stuff is really important.
Yeah.
And the thing is, though, that when we're creating this voluntary network, that truth
becomes subjective because it is you, if you are operating from the standpoint of running
a fully validating node, which means that you are checking all of the rules and checking
all of the data that's coming in and making sure nobody's breaking the rules, this becomes
tricky because then you have to ask, what are the rules?
Well, the rules are the rules that you decide that you agree to and you want to verify.
And so what you're trying to do is check all of these rules to ensure that the data on
your machine is a verified source of truth.
But that truth is now subjective based upon what you agree to.
So that's why if someone believes that Bitcoin cash is the real Bitcoin, it doesn't so much
matter that they say that.
What matters is that they are using software and basically using the protocol that is enforcing
the rules that they have decided is the real Bitcoin.
So from their perspective, this is the real Bitcoin because they're validating this particular
set of rules.
And you, you are a big proponent of full nodes and we did discuss that before, but not everyone's
going to have heard the first interview.
So tell me why you find full nodes are so important for what is being done with Bitcoin.
It's the only way that you can get the strongest available security model and the strongest
available privacy within Bitcoin.
And that's because you are receiving and ingesting all of the data from a variety of other nodes
on the network and then you are checking it yourself.
So this means that if anyone out on the network is trying to send you invalid data and fool
you, they can't do that.
You cannot be defrauded in the sense that someone is breaking the rules to which you
are agreeing.
And also from the privacy standpoint, because you are not going out onto the network and
querying for like specific addresses or specific transactions, but rather you're getting everything
and then looking at it locally and determining which ones are relevant to your wallet and
your activity.
There's no way that, you know, network observers who are out on the network and then there
are plenty of them, believe me, there are plenty of companies out there that are observing
this activity because you're just not making those specific queries, they can't possibly
know what you're interested in, therefore makes it more private because people don't
know specifically which parts of the blockchain may be related to your own transactions.
But not everybody does create a full node, right, but you encourage people to look into
it.
So I think I'm going to try this, right?
I'm thinking I'm going to have a go as just part of my experience.
Where would somebody stop?
I have a number of blog posts that I've written that outline how to do this.
It really depends on your level of technical expertise.
And so if you're comfortable with downloading software and running it, there are a lot of
good guys out there.
Bitcoin.org has a whole guide on how to run a full node.
It also talks about more advanced stuff like network configuration of if you want to help
the network and allow extra connections to come in so that you can help propagate data.
That's one way to do it that's a little bit more involved because you have to decide what
machine do I want to run this on and preferably it's going to be a machine that's connected
to the internet and online most of the time.
From an easier standpoint that requires less work, plug and play nodes are the way to go.
Though the only one that I'm aware of that's still shipping on a regular basis is the bit
seed.
And so that's, I want to say a few hundred dollars and you plug it in, it turns on, it
automatically boots up all the software and everything.
And then all you would really need to do to take advantage of it is to figure out which
wallet you want to use because there are not all wallets support connecting directly to
your own trusted node.
But I cover all that in some of my articles.
So I'll take some of that and put that into the show notes and as I've researched things
and I've been trying to get my head around everything, it seems to me that it's the argument
about this scaling debate is really about two different views on what Bitcoin should
be today, not what it should be in the future, what it should be today and the trade-offs
which are associated with that.
It feels like some people, one side said this is money and it should operate like money
in peer-to-peer, quick, fast payments.
And the other side is a belief that that can come in the future, but right now it's digital
gold and there are trade-offs with that.
I've heard you talk about these trade-offs, but I think it'd be really nice for you to
talk about it here.
Well, yeah, I mean, I think a very simple way to put it is we're talking about some
people who are prioritizing the current user experience versus some other group of people
that are prioritizing a long-term view of the security of the network itself and the
ability for people to maintain their autonomy within the system.
And to get more specific and technical, what we're really talking about is prioritizing
low transaction fees at the expense of potentially high cost of full node operation, which means
high cost of validating the entire history of the blockchain versus people who are prioritizing
low cost of full validation and node operation at the expense of potentially high transaction
fees.
There's no common ground in this debate today, which kind of feels like to me actually, therefore,
this is kind of a fair split test we're seeing.
Yeah, I think so.
And I can't see that either side can, with 100% certainty, say where they're going to
be in 10 years.
So therefore, what are your overriding thoughts about the existence of Bitcoin Cash?
You know, it's interesting.
We're sitting here today and I think about two hours from now Bitcoin Cash is doing another
hard fork to increase their block size to 32.
Yeah, even though the average Bitcoin Cash block size is about 50 kilobytes.
So they're not even anywhere close to the eight megabyte block size they currently have.
But you know, this is just, you know, their perspective and their narrative of wanting
to have as much headroom as possible in order to avoid creating a fee market and avoid ever
having backlogs on the network.
And I guess the weird thing is that a lot of the stuff that Bitcoin fans will say, you
know, against Bitcoin Cash in terms of like long term costs of operating nodes and being
self-sufficient within the system, that can't possibly come true unless Bitcoin Cash actually
becomes popular.
It's this kind of weird paradox and like as long as Bitcoin Cash is less popular than
Bitcoin, then it's never going to even have a chance to test the changes that it's made
to its own network.
And we're not ever going to actually see what happens when you have a popular blockchain
with very large blocks.
Do you have any fundamental issues with it existing though?
No, I mean, not from a perspective of like, this is a permissionless system, and anyone
should be allowed to create forks and change whatever they want to.
You can get into the argument of well, you know, some of those people that are saying,
you know, Bitcoin Cash is the real Bitcoin, or they're just saying, oh, Bitcoin, and they
mean Bitcoin Cash.
And sometimes they put BCH in parentheses, you know, there's definitely some questionable
marketing stuff.
Back when I was actually a big proponent of Bitcoin XT, I really I felt like it is certainly
possible for a protocol blockchain, whatever network to to change and for the new version
of it to become that same name, and that my current project, my current Gavin Andreson.
Yeah.
But you know, we saw that happen with Ethereum is the Ethereum protocol is no longer compatible
with the original Ethereum protocol.
There's actually a very strong argument to be made that Ethereum classic is the original
Ethereum.
But due to the events around the Dow and all that, the consensus changed to say, you know,
what, we are going to abandon the current protocol and all migrate to the new protocol.
And this is now Ethereum.
And I think that that could have happened theoretically with Bitcoin Cash.
They could have gotten enough consensus to say, you know, this is the real Bitcoin.
And the old thing is like Bitcoin Classic or whatever.
But it didn't.
And now we're like seven or eight months later, and they're still just repeating the same
thing.
They're still trying to cover that gap where the consensus just isn't there.
And you know, I question whether or not it's possible to pivot an entire network many months
after the fact.
I think it's definitely possible if you have an inflection point at which, you know, the
sort of the shelling point of consensus pivots and says, you know, this is the new one and
there's consensus and it's obvious, I really think that that type of thing has to happen
within a matter of hours or days in order for an entire network to change like that.
And so I'm I'm highly skeptical that it's something that you can do months or years
after the fact, though the Bitcoin Cash folks are definitely trying.
So why were you a proponent of XT?
What was it about it you liked at the time?
And why has your position changed on that?
Well, it was for many of the same reasons that people are in favor of Bitcoin Cash,
which was that, you know, transactions started getting slower, fees started going up and
the user experience was degrading.
And that was actually right around the time when I went full time Bitcoin.
So before then, I had just been an enthusiast and had some side projects.
And so I was a user, I felt like the user experience was degrading.
And from my own experience working with big data cloud computing type stuff, I was looking
at it from a capacity planning standpoint.
And in capacity planning for large scale systems, you always want to have a lot of room, headroom
for growth.
You never want to be running at like 90% or 100% capacity.
You want to be running at like 60 70% capacity so that you can handle spikes, ebbs and flows
and whatnot.
And I basically changed my mind that capacity planning was the correct perspective for this
type of system.
I think I was I was taking a very centralized, like authoritarian top down view of capacity
and planning the future of a system.
But instead, once I actually got to BitGo, and I started doing backend infrastructure,
basically indexing and ingesting information from these blockchains over and over and over
again, I mean, I indexed the Bitcoin blockchain, probably hundreds of times during my tenure
at BitGo.
And it was a constant struggle to continually try to squeeze more performance out of my
software so that I could index the blockchain in the same amount of time because, you know,
these blockchains only add data, they only get larger and larger, it becomes a greater
and greater challenge to then start from nothing and ingest the whole set of blockchain data.
So what I was spending a lot of my time doing was saying, oh, crap, it takes a whole day
for me to index the Bitcoin blockchain.
And then, you know, a few months later, it might take two days.
And a few months after that might take three days, and then get to the point where it takes
a whole week to run this indexing service.
And so it was a constant battle for me to try to find more performance that I could
squeeze out of it to get it back down.
That was when I started realizing that, yeah, you know, the Bitcoin blockchain is still
only like 100 to 150 gigabytes back then.
Now it's like 170 or 180.
And that doesn't sound like a lot.
But when you're having to actually ingest and validate the whole thing, it is a lot.
And so if you are taking a extremely long term view of these systems like I am, I'm
trying to think, you know, extrapolate, you know, 10 years from now, what's it going to
be like if someone is just getting into Bitcoin and they want to ingest and analyze and validate
the whole Bitcoin blockchain?
You know, if it's a few hundred gigs, then I think it should be doable.
But if it's terabytes, then it's going to be a real nightmare.
And so that's why I ended up kind of flipping and becoming a lot more conservative about
how much data we allow to go into this shared resource.
And that's a hell of a journey to go through.
I mean, that's a lot of practical steps you've had to go through to realize that.
So does that make, does that give you a little bit more empathy to people therefore who do
support Bitcoin?
I get it.
I've been there.
I fully understand it.
I feel the pain.
I've had to deal with support tickets of many users over the years who don't understand,
you know, why is my transaction not confirming or why is the fee so much higher today than
it was on Sunday?
Yeah, the user experience, we have a lot of work to do.
And I am very optimistic that second layer networks are going to allow us to fix a lot
of those things.
So what would be a better way to educate this to people than the, what seems to me the toxic
shaming and tribalist insults, which by the way, I put a post up yesterday on Bitcoin
and our BTC and our Bitcoin, I don't like Reddit, by the way, I think it's horrible.
But I put it up on both just to both sides say, I'm interviewing people from both sides.
I'm trying to be impartial.
This is the journey I'm going.
So I'm trying to learn.
This is my audience, just to put it out for both sides.
And there's a handful of people on both sides who would say, yeah, support your thing.
That's great.
And then you've got, you're a fucking idiot.
You know what you're doing?
Have you set up a node?
Have you read the white paper?
And each side, you just get tribal insults.
What do you think is a good way then to try and educate people on the best way for us
to get away from this war that's not doing anyone any good?
Well, we can't stop anyone from doing that.
I mean, you can't stop people from trolling or being negative and pessimistic and what
have you.
You can only control yourself.
And so that's why I just try to be optimistic and educational and answer as many people's
questions as I can with my limited time.
But this is all part of the experiment.
So the experiment is not only technical, I think it's also social.
And it also is tricky.
And it gets tricky, though, because so many people seem to believe that Reddit is the
Bitcoin community.
And that could not be further from the truth.
I think it's, you know, when Roger made the offer to buy, I wish someone would make the
offer just to close it down.
Yeah, yeah.
I think it doesn't do any purpose.
It's interesting you say it's a social experiment as well.
What do you mean by that?
Well, I mean, in terms of the like the governance aspects, you know, this crypto anarchy, voluntary
network, what we see happen as a result of it is that people get frustrated because Bitcoin
is not doing what they expected Bitcoin to be doing.
And because there is no like real definition or authoritative roadmap for what Bitcoin
is, people come in with different perspectives, and they they have different visions.
And then sometimes the user experience changes.
And they're like, oh, Bitcoin is not Bitcoin anymore, and they get really frustrated and
they try to change Bitcoin.
And like like I said, I was in that camp.
I did that, been there, done that.
It was it was a learning experience and it was very frustrating.
And I was a very negative person for probably close to a year, you know, around like the
2015 time.
I was very frustrated.
Did you get involved in the battles?
Yeah, some of it.
So you know, actually, I was a moderator of the Bitcoin XT subreddit.
Wow.
And and this is why our BTC is so funny to me, how they're they're like, oh, we don't
censor or do anything like that.
I did that before our BTC.
I was I got so fed up with like the most and and and people getting silenced on the Bitcoin
subreddit that I I didn't create it.
It already existed, but I basically directed a bunch of people to go to our Bitcoin XT.
And I was like, you know what?
I'm going to be the moderator of this and I'm not going to do anything.
And so we'll have, you know, no censorship on there.
And you know what?
Within a few months, it devolved into just complete crap.
And then a few months after that, Roger came along and he pulled a bunch of people and
said, you know what, we're going to do our BTC.
And and then he has moderators and and you know, he keeps activity going on that.
And so that's where the sort of one of the shelling points for Bitcoin cash is now on
our BTC.
And Bitcoin XT is pretty much dead.
There's just like spam posts every once in a while.
So what happened to Bitcoin XT?
It's because I read a post by Mike Kern, essentially his departure.
Yeah, he I felt quite sad reading it.
I felt sorry for him.
Yeah, technically, it still exists.
I think there are one or two developers.
But last I checked, there's only a few dozen Bitcoin XT nodes that are running.
So I mean, it exists.
And what do you think when people say, Pete, you shouldn't interview Roger, you're given
a platform to a scammer.
What's your opinion on that?
That is a very hard thing to evaluate, because, you know, scam can be in the eye of the beholder.
Now Roger is a businessman, he's an entrepreneur, and, and he's definitely a marketer.
And you know, he was one of the earliest marketers for Bitcoin.
And so now, you know, he has changed what he thinks Bitcoin should be like.
So he's marketing a different network, a different brand.
And you know, he definitely does things on the marketing side that piss a lot of people
off and may have resulted in confusion happening.
Of course, it's really hard to actually get a gauge on how good or bad that has been.
I mean, it is what it is.
I personally don't like hold any ill will against him.
I completely understand where he's coming from and what he's trying to do.
It's just, I think that he's fighting an uphill battle.
And so it's really hard on him to do this because, and once again, it's hard to get
metrics, but my like general gauge of consensus amongst these different networks is that like
around 80% of people are, are pro Bitcoin and the conservative sort of vision for its
future and doing scaling on other layers.
And then maybe 10 to 20% are more on the Bitcoin cash, like large blocks, you good user experience
now, low fees, don't worry about cost and validation type of thing.
And so it gets especially odd when the minority group makes arguments like, well, most people
would actually be on our side if it wasn't for censorship.
And that could make sense if Reddit was the only place where discussions around these
protocols happen.
But there's so many other places where there isn't moderation, especially like on Twitter.
There's also, you know, telegrams and Slack groups and IRC and, and WeChat.
And so it's, there's such a diversity of discussion in the ecosystem that I don't think the censorship
argument really works anymore.
But what about the view that Roger shouldn't, people shouldn't interview him and he shouldn't
be talked to?
I mean, that's freedom of association.
It's like you, you should, nobody should be telling any, anybody else like who they can
associate with.
I thought you'd say that.
I think I agree with you in that there does seem to be a lot more people on supporting
the Bitcoin route, I'm not going to call it Bitcoin call, of course.
But there does also, there is a certain amount of coercion and shaming if you ever question
block size.
And I've experienced that there's almost, there was almost the times I feared having
an opinion on or having some empathy towards what Bitcoin Cash is doing for fear of shame.
Yeah.
And I think, are you, are you aware of this?
Oh, yeah.
This kind of goes once again back to the fact that like you can't police people within this
type of community.
And so some people basically devolve into making fallacious arguments or just trying
to make others feel bad, like rather than spending time to make a rational long drawn
out arguments, because this is a very sophisticated argument.
And it's also, it's not a, it's not a black and white thing.
I mean, it's about trade offs.
And so it's an opinion and it's almost ideological.
So I think one of the things I've noticed, and I'm probably a hypocrite, and people could
find examples, but when Roger makes the point about dying babies is we all, a lot of us
would agree it's ridiculous, but I believe in some ways he believes that's right.
I think he needs a connection.
But when almost every, well, a large number of opinion leaders will say, go on Twitter
and take a photo of the bitcoin.com booth and say, can't find any dying babies here.
Right.
You're almost being, you're almost being taken into a tribe where if you exit from it, you
will be humiliated.
And I wonder how useful that is.
Because I, what I'm finding is actually by being impartial, I'm learning a lot more and
I'm definitely swaying more swayed towards what bitcoin is trying to achieve off chain,
but I have some empathy for what's trying to be achieved on chain as well.
And well, by being impartial, you will get attacked by both sides.
And I was like that.
And attacked for being impartial and told you're not impartial.
I think in 20, so like I said, like around 2015, I was very pro Bitcoin XT and then I
think around 2016, I was neutral and I was being impartial and saying, you know what,
I see both sides and I got attacked probably the most during that period.
And you know, I had a lot of, I guess, high profile people in the community attacking
me for like going too easy on this person or that person or whatever.
And then these days I'm more defensive, I guess, of my own perspective.
And well, I guess I don't really try to come out and say that like the Bitcoin cash perspective
is wrong.
I just say, you know, I disagree with it and for a variety of reasons.
And a lot of people I think say stuff like, oh, it won't work.
And that's also kind of loaded term is like, I think that it'll definitely work if you're
willing to make the right trade offs.
That's what we're all talking about here is trade offs.
So in some ways, could it be good that it exists because I've heard you say that a block
size increase on Bitcoin is inevitable at some point if the network expands enough.
Therefore, if it's inevitable at some point, is it quite good that Bitcoin cash happens
because you can observe from far the challenges they're facing?
If they actually get popular enough that we can observe it.
Yeah, yeah.
So that is, I guess, one sort of Bitcoin maximalist view of, you know, all other networks are
test networks for us to observe and then potentially make changes as a result of though.
If I recall correctly, there have been very few cases where Bitcoin has implemented changes
as a result of something that it saw on another network.
Remind me, do you consider yourself a Bitcoin maximalist?
Actually, that's mostly from an economic standpoint of, you know, if we really are trying to create
the best form of money, then it makes sense to converge on one form because that's the
whole point of money is to get rid of having to hop through all kinds of other assets.
And it's kind of weird though, now with the tokenize all the things perspectives and the
blossoming of many blockchains is that I don't think that it's possible to have thousands
and thousands of tokens or a world where like everyone has their own token that they issue
because there's a level of mental friction that is involved just in trying to keep all
track of all this stuff like personally, I don't want to keep track of more than maybe
10 different assets because it becomes like a technical nightmare.
But on the flip side, I'm starting to wonder if the advent of second layer networks could
actually swing us back in the other direction of being able to support both a diversity
of thousands of crypto tokens, but get rid of that friction by being able to use the
second layer networks to seamlessly switch between them.
So if I could foresee a future where if someone wants to get paid in basic attention token
and you only have litecoin, but we've abstracted away all the complexities of decentralized
exchange like permissionless peer to peer exchange, and so you can open up your litecoin
wallet and pay somebody in basic attention token, I could potentially see that being
a scenario where crypto becomes like one sort of amorphous thing because we just abstracted
all away.
Whether or not that actually ends up happening, I don't know.
I'm just saying I could potentially see that as a future.
So let's talk about second layer and you talk about it in plural.
Most people are aware of obviously lightning network.
Are there any other second layer technologies that you're interested in at the moment or
you primarily focus on lightning?
Primarily lightning though, I think the sort of semi equivalent on Ethereum is Raiden.
I'm not sure how far along that is.
Lightning seems to be well in the lead and has the most adoption, most development behind
it.
What exposure do you have to yourself and is it something you have to be aware of working
on CASA?
So, you know, since CASA is a cold basically vaulting solution, I don't foresee us having
any lightning implementation.
So you just have a personal interest then because of what it means?
Yeah, yeah.
I'm just, you know, I'm trying to keep track of the developer activity and the general
adoption.
Okay, so how would you, I've read a lot about lightning network.
How would you explain it and what the benefit of it is and why that is the root scale Bitcoin?
So the easiest way that I've been able to describe lightning network is actually by
looking at the internet itself.
And if you look at the infrastructure of the internet itself, it's actually this seven
layer model.
The very low level like layer zero is the ethernet layer and that is the actual physical
wires that are connected together and you put electrons onto those wires and that's
how the data then gets sent over them and people are able to get the packets.
Now the thing about the ethernet layer is it is a global like broadcast to the entire
network type of mechanism.
So if the entire internet was only the ethernet layer, we wouldn't be able to stream this
podcast, for example, because everyone else who is streaming a podcast would also have
to go through our computer and it very quickly blows up and gets well past the like even
like 100 gigabit bandwidth speeds that most computer internet hardware is able to handle.
So what did they do to make the internet scale?
Well they built layers and the really important layers are the TCPIP layers which are these
routing layers and they basically say, okay, we're going to connect all of these wires
together but instead of broadcasting and flooding the entire network, now we're going to use
another protocol to basically find the shortest route so that the data only has to go through
the fewest number of people on the network in order to get to the final destination.
Now you can make an argument that this quote unquote like centralizes the usage of the
protocol but it's still censorship resistant because you can very easily route around any
nodes on the network that decide not to forward your data.
So this is why the internet was developed by governments because they wanted a communications
network where you could have nuclear bombs drop and take out large portions of the network
and still be able to route data around.
Basically self-repairing, self-healing type of network.
Now how does this relate to Bitcoin?
Well Bitcoin and really every other blockchain protocol right now, if you create a transaction
and then it goes out globally and floods the entire network and gets stored by every computer
that's on that network.
This once again is totally not scalable if you want to do anything more than a few transactions
per second.
Everybody's hard drive is going to fill up if you're pumping gigabytes of data through
it on like a minute or hourly basis.
So what do we do to fix that?
Well we actually do the same type of thing.
We build routing layers on top of the base protocol.
So what Lightning does is it allows you to anchor into a blockchain.
It could be Bitcoin, Litecoin, any blockchain protocol that has some basic primitive attributes
around multi-signature and time locking.
And once you anchor in and you get that transaction in the chain, now you've basically established
a channel, a route between yourself and one other person on that network.
And this payment channel technology has existed since I want to say 2012 or 2013, but only
been used by a few different pieces of software.
Lightning takes that idea of payment channels and turns it into a whole network by adding
routing capabilities so that now you can push value to the other person at the end of your
channel and then they can actually route it through other channels to eventually get to
the final destination, much like how the internet itself works, though it is a bit more complicated
and there's a lot of game theory involved.
I've read there's still issues with routing, problems to be solved.
There's plenty of problems to be solved, yeah.
Do you ever foresee, is this just a time thing?
Is it just going to take time to get it done or are there real challenges that might not
be able to be solved?
I really think that it is a time and resources and the fact that no one has done this particular
type of network before that there are unknown unknowns.
So we can't positively 100% say these are all the capabilities of what we'll be able
to do on date X.
It's also why I push back against there's a lot of people are like, well, when is the
lightning network going to be active and I'm like, well, it's not a binary thing.
Technically it already is active.
It's just in a beta state where you probably don't want to commit much money to it because
there are almost assuredly some edge case bugs that are still out there that could cause
you to lose money.
So over time, confidence will grow as?
As there's more activity, as there's more value in it with these adversarial networks,
you can never be 100% sure how strong they are from a security standpoint until you commit
real value to them.
So that's how we know that the Bitcoin blockchain, it has at least 100 something billion dollars
worth of security behind it because there is a huge bug bounty if anyone can completely
break the protocol, then they're a billionaire and believe me, there are plenty of people
who have tried.
I never thought of it like that as a bug bounty, but yeah, it is like all of these things are
bug bounties and that's why doing security in this space is so crazy because once you
start to put real value behind things, that's when the real test begins.
Like you can write all the unit tests you want and do all the code audits you want,
but it's not until there's real value sitting out there waiting to be attacked and stolen.
Quite interestingly, as it grows, there's a whole honey pot of Bitcoin that's essentially
taken off chain and put into the Lightning Network.
Does that worry you at all in some ways?
It's just going to open up new types of attacks that they're going to have to defend against.
So it'll be a new form of antifragility, it's like a whole another layer of antifragility
for the network.
Yeah, and so there's also there's multiple ways to look at it, but there are multiple
types of attacks and of course, Lightning Network is going to be less secure than having
your funds stored on chain, preferably in a cold wallet if we're talking about a lot
of money, because it's not possible to build a more secure layer on top of a given layer.
You can only have the same or less security when you're building layers on top of each
other.
Right.
Okay.
So when I've looked at it, I initially had a bunch of questions and thoughts and I kind
of honed them down to a couple of things that stand out for me.
I'm not too worried about the tech, you know, give it time to see what happens.
Yes, it seems to be taking a long time, which is obviously frustrating.
I'm sure frustrating everyone involved, but I understand it's hard.
You saw a tweet I put out about the private keys are essentially exposed.
And you rightfully said, treat it like a hot wallet, like a wallet you carry around with
you don't have more than you should.
My slight concern with that is your Lightning wallet will still need to have a relationship
with the main chain.
If you are from a, I don't know, say you're in Venezuela, which has a great use case of
Bitcoin at the moment.
Say you're in Venezuela, say you're only putting 10 pound, $10 a month into of Bitcoin.
That's all you can afford.
If the fees on the main chain are too high, you're going to have to keep all your funds
in the Lightning network and for what might be $10 for them might be $10,000 for us.
It feels like potentially the main chain will become a tool of the wealthy.
So in terms of the on chain transactions that are required for opening and closing channels,
there's actually also a lot of work being done there because now basically what you're
saying is there's going to be a huge incentive to try to figure out how to make it cheaper
to get into and out of the Lightning network, especially if fees end up plateauing at a
high level.
And this is actually something that I then I put a tweet out I think a day or two ago
about some of the technologies that are being developed around here.
And one of them was channel factories, which I was actually just talking about right here.
Yeah, I was just talking to Christian Decker Sunday and he was like, oh, channel factories
are actually deprecated.
Now, if you look at L2 ELTOO software, what they've actually built in there is kind of
like channel factories on steroids.
But the idea is making it possible for a multitude of parties to come together and share in the
opening and closing of these lightning channels.
Now, it's also possible that not everyone is going to be using lightning in like their
own device wallet.
They can still actually be using lightning from a custodial solution.
Like a lot of these people at Coinbase, for example, they already have their private keys
with a trusted third party.
Coinbase could very easily facilitate lightning transactions and let people make their Bitcoin
transactions but over the lightning network.
And Coinbase would handle all of the complexities on the back end with regard to channel opening
and closing and maintenance.
But that's almost certainly not going to happen from what I've read about the KYC AML issues
with lightning network.
It won't be possible for regulated exchanges to be able to use lightning network.
I don't know if you know about this.
I mean, I've heard these arguments and I'm not sure whether or not that's actually going
to hold up.
I think it's actually very important for exchanges to support lightning network.
This article I wrote two or three years ago actually showed some simulations around like
general channel rebalancing stuff.
And I think that exchanges are going to play a pretty key role in that.
Now, maybe it won't end up being centralized exchanges.
Maybe it'll end up being decentralized exchanges.
There are certainly a lot of questions that are going to be around that.
But I know that like BitGo, for example, when I was leaving, they had already started working
on lightning support and BitGo provides back in for a lot of Bitcoin exchanges.
So I don't think that BitGo would be going to that trouble unless they thought that their
customers were going to be wanting to use it.
I guess we'll have to wait and see.
I read quite an interesting article from Andreas where he said it's very unlikely that the
likes of Coinbase will be able to because of the KYC issues.
But I guess we'll have to see.
I mean, people also thought it was unlikely we would ever see regulated exchange trade
Zcash.
But then just yesterday, Jim and I announced it.
Why do you think that?
I assume because it's got optional privacy?
Yeah, maybe they're only going to support the non-shielded transactions.
I don't think it really matters.
So that would be bad for Zcash then because that would just increase the number of non-shielded
transactions and make it less secure.
Yeah.
I was on the privacy panel at the conference and we talked about this and I made the argument
that even if you're making a shielded transaction deposit to Jim and I, they still know who
you are.
They're being protected against other people on the network, maybe not knowing that.
But privacy issues are a whole other fun thing.
I am interested in Lightning not just from the scalability but also from the privacy
standpoint.
Okay.
So I just want to get back to one point.
Going back to the main chain, with a very busy network, a very successful network and
still small block sizes, is there a fee for using the main chain that would concern you?
Or do you just don't care if it was $100, if it got to $1,000?
Is that no issue?
I think it's more about sustained fees.
So we did see some spikes due to a variety of different issues at the end of last year
where fees were going up pretty insane amounts.
It's a complex thing, both with how fee estimation works across the system and with the incentives
for customers, users and large enterprises and wallets in general to be better at how
they use a block space.
So I'm in favor of high fees happening when people are using block space inefficiently.
And this becomes an incentive for companies to do better to optimize their software.
If we get to the point where we see SegWit adoption is pretty much maxed out, like right
now we're around 40%, if it got up well past 50%, and so pretty much everyone was using
that.
And it looked like we had pretty much maxed out what we could do with Lightning Network
and we were getting sustained high fees.
That's when I think it's worth talking about maybe we are at the point where we should
look into increasing block size because there's not much more efficiency that we can gain.
Now you're going to get some pushback from people.
So they're going to tell you, well, we can still do like Schnorr signatures and other
aggregation stuff and do more efficiency improvements.
And I expect that to happen over the next year or so.
I think the real question comes down to if we get to the point where no one has any more
proposals for how to squeeze more efficiency out of the system.
And there's so much demand that the fees are higher than they need to be to sustain miners
and keep the security of the system intact, then that seems to be like your back's against
the wall.
You should really start to seriously talking about solutions for increasing block size
at a rate that is manageable.
Okay, because the interesting thing there is the block size down to fees at that point
or because a fee market is like a standard open economy, right?
And if we had a successful lightning network, then people have a choice whether to pay the
fees or not.
My worry is that the main chain will become a tool of the wealthy.
And I think I looked at something like if that $10, it eliminates something like a fifth
of the global population, I'm guessing, but I'll try and get the accurate figures to share.
But at $100, it's something like the majority of the world would not be able to use the
main chain.
And is that something that would bother you or do you think Bitcoin is...
Well, I guess what I'm saying is I'm not asking us to be socialists, but do you think Bitcoin
should be developed in a way that it should be open to anyone and everyone to use?
Or should it be just follow what happens with the economy and just be an open economic fair
value system?
Well, yeah, I mean, I think that the ultimate goal is for everyone to be able to use Bitcoin.
The problem you run into is then whether or not you're willing to make security tradeoffs.
So if we really get to a mainstream adoption level, and there's no other obvious path forward
than allowing more data to go into the blockchain, then people start having arguments about costs.
And once again, it's like cost of transaction fee versus cost of node operation.
And there is no number that you can definitively settle on to say, this is too high or this
is too low.
It's all subjective.
Yeah, of course.
Yeah.
Okay.
Well, I think we've done a lot.
I know you've had a few interviews this week, so thanks again, Jameson.
Any closing thoughts you want to add?
What do you got going on the rest of this week?
Well, you know, I'm at consensus and yet I'm not at consensus.
There's a lot of us like that.
Yeah.
It's...
The space has changed so much in the past few months.
One of the main differences that's happened for me is that I am getting contacted by like
wealth management companies and institutional investors and stuff.
And that's actually what I'm spending a lot of my time here doing is speaking to people
who, you know, they have a lot of money and they're trying to figure out whether or not
they want to participate in these new systems.
So I'm just kind of continuing my educational quest.
But now I have a slightly different audience.
And I do think that this could very well be the year of the like institutional money coming
into Bitcoin.
I know there have been various projects and interests over the past few years, and I'm
hoping that some of those are starting to come to fruition.
It's funny because I'm starting just, I don't know if this has happened to you, or it probably
has, but I'm just starting to see natural use cases that work for me.
I was using Medium the other day, and it's, do you want to sign up and you can get paid
for your content?
I looked and then it asked me to put my bank account in, I was like, I can't be bothered.
But if it had been Bitcoin based, it would have been, here's my wallet, it would have
been a lot easier.
I'm starting to feel like in all different directions, we are very much approaching a
real tipping point that isn't just about speculation.
You have that feeling?
It is, it's all about the use cases and getting more companies to start making it an option.
But I am, you know, once again, really more excited about lightning.
And once I see that started to be integrated at places, I think that'll potentially get
me actually like spending Bitcoin on a regular basis, because I very rarely touch any of
my like hardware devices.
And that's mostly because the first world financial system is pretty good for me.
I have very few cases where I need a level of privacy that I would want to use crypto
assets for.
That's a whole other conversation and something that I've been working on for a few months
with regard to like my privacy in the real world and from a legal standpoint, you know,
due to me becoming more high profile figure who's getting new types of attacks against
myself.
Right.
Okay.
All right.
Well, listen, look, tell people how to get hold of you.
It's lop.net.
You'll find everything you need lop.net.
And do you want to say any final thing about CASA?
Well, CASA, we are starting out, you know, really high tier boutique solution.
But I am hopeful that, you know, as we learn a lot over the next year or two, that we will
be able to lower our price point, make ourselves more available to the common person.
And really, the ultimate goal is to help the average person be their own bank without having
to go through all the hassle that you have to do today.
Excellent.
I hope one day I will have enough money to be able to use it.
Thanks again.
Always a pleasure.
Enjoy the rest of your week.
Thanks.
So what did you make of that?
I hope you enjoyed it.
It was a good second interview following the first one we did a few months back.
Always great to catch up with Jameson.
Like I said, I just, I really like the guy.
I really like the way he approaches things.
I love his Twitter.
His tweets are always helpful, always informative.
So if you don't follow him, I suggest you follow him.
And yeah, I just really enjoyed catching up with him.
And I always feel like when I'm with him, I learn a bunch more.
And I also leave those interviews, you know, really thinking about some of the things he's
said and yeah, they just ponder them for a while.
So I hope you all enjoyed it as much as I do.
Please do support the show.
Please do leave us a review on iTunes.
Follow me on social media and share this out with your friends and please do check out
my website.
It all really, really helps.
In other news, I've got a few other interviews also in the bag.
I've got the interview I recorded with Alejandro Mercado about what's going on in Venezuela.
We did record that a few weeks back, but that's going to be coming out next week.
So hope you enjoy that.
And I also have an interview with Trevor Koverko from Polymath.
And I also recently recorded with Jill Carson while she was here in London.
So all those are coming soon.
If anyone's in London and they want to do an interview, it does save me a trip.
So yeah, do feel free to reach out if you think it's something that will suit the show.
Okay, well listen, I hope you all have a great week.
Feel free to get in touch and yeah, hope to see you soon.