I see ossification as an inevitability and we're not going to know if Bitcoin has ossified until
we have a lot of hindsight. I kind of see it as a race against time where we should want to continue
improving Bitcoin as much as we can while we still can and hopefully we still can. For all I know
we'll never be able to make any consensus changes to Bitcoin again and everything that we're doing
right now is for naught but like I said we'll never know if we don't try.
Jameson Lopp how are you doing? Not bad I'm in Bitcoin country at the moment.
Nice I've still not got out to El Salvador I'm very jealous how has it been? There's a lot of
people here a lot of excitement and you know this is my first time back in the country for about three
years now and I'm seeing massive improvements and changes and you know a lot of optimism a lot of
infrastructure building and it's I think a good place to be hanging out and talking about continuing
to fix the world with Bitcoin. I love it are you in El Zante? We're in San Salvador basically the
downtown capital city. I need to get out there I'll make I'll make it happen this year at some point I
think. But there was a couple of reasons that I wanted to have you on the show but the place I
think we should start I recently did a show with Alex Leishman who kind of posited this idea that most
Bitcoiners shouldn't be self-custodying and it seems like a very obvious place to start with someone who's
built a company specifically to address that need. So just like a very high level overview broad
question but what do you think about the current like state of self-custody in Bitcoin and what most
Bitcoiners should be doing? It's confusing and I think that's one of the big problems you know there's
so many options to choose from and you know the vast majority of the basically free wallet software
that's out there or even you know the hardware wallets pretty much any option that you go with
it's not going to have a lot of guardrails and by that I mean you know you get the software you get the
hardware maybe there's some very high level instructions of how to set it up but there's
always going to be this iceberg of knowledge of you know how to actually follow all of the best
practices how to avoid all of the foot guns that the vast majority of people are not going to see
because they're not going to do deep dives into your self-custody best practices and so basically the
result of that is that if you jump into self-custody and you don't spend much time learning about it
you're probably going to have weaknesses in your setup and over a long enough time frame one of those
weaknesses is going to get hit and you're either going to have your Bitcoin stolen or you're just
going to lock yourself out of it and effectively same thing you're going to lose your access to your
coins one way or another yeah I think it's um I'm sympathetic to what Alex is saying because I do
understand that a lot of people are probably self-custody that haven't done the work to fully
understand what they're doing and it's like Matt O'Dell says it's it like the idea of watching an hour-long
Bitcoin sessions video to secure your Bitcoin just doesn't scale to everyone um so how like how much of
this do you think is a UX issue rather than a Bitcoin issue I think that a lot of it can be solved with
UX and and that's really one of our primary theses at Casa it which is we have to understand that nobody
but maybe the nerdiest of nerds are ever going to read the manual um AK which is just another way of
saying uh you know do a lot of deep research to fully understand the problem space and so the question is
how do you build your software such that it basically forces the user to follow best practices uh and to
read the manual uh in a sort of way so that they are are doing the fundamental things that will protect
them in the long term and so that's really our goal at Casa is you should be able to install the app get your
hardware and you know follow the instructions in the app and once you get through all those steps
you're in a really good position where you're you know top one percent of uh Bitcoin security models
for people self-custody out there yeah it's it's in that show I actually brought up the fact that I had
a terrible in um inheritance plan so previous to well yesterday I fixed this but before that my
inheritance plan was literally uh documents in folders in different places with like a treasure
map for my wife to go through and then once you'd collected these things it was like speak to these
people and we'll figure out how to get your Bitcoin uh but after the show I did with Alex Nick text me
being like why aren't you using Casa so I actually went through and set that up yesterday and it was
incredibly easy so fingers crossed I'm in a much better state right now yeah and I mean we've heard
plenty of horror stories of treasure map style plans gone wrong and I think the major reason for that is
that if you're setting up your own inheritance uh plan with you know keys and instructions and uh you know
perhaps even people who can help guide you need to actually run through it you need to actually test it
you need to have your beneficiaries go through the whole plan while you're still alive so that you
can find out whether or not they can actually follow the instructions and you know this I think a lot of
people don't really think about that because they're like oh it's not that difficult um you know I wrote
my instructions very clearly and I think the the best way to demonstrate why that's a naive approach is um
have you ever heard of the the game of uh writing instructions for creating a peanut butter and jelly
sandwich no okay so I would recommend that people go on YouTube and basically google like peanut butter
jelly sandwich instructions and look at some of the videos and and you can basically see from that it's
it's very hilarious to watch but it becomes very apparent that even trying to give someone the precise
instructions that cannot be screwed up or misinterpreted for how to correctly uh construct
a peanut butter and jelly sandwich is incredibly difficult yeah that's scary um but so previously we
had run through it before um and I had a like some amount of confidence that she would have been able to
do it but I think realistically if this like if I died in five years time and we'd not run through it
again I would put the odds of her recovering that bitcoin at like 70 maybe so I feel like that number's
gone up now which is very cool um but the other reason I want to speak to you is another number that's
going up which is terrifying which is physical attacks on bitcoiners and again this actually did come
up in the Alex the show I did with Alex I heard a terrifying story recently which I know you're also aware
of which was a guy in the UK who had got off the train uh was kidnapped but basically beat into a pulp
and forced to send a large amount of bitcoin um again like his security practice was terrible it was
like first thing in the book that you don't do but it still is just another thing that highlights
how real this threat is it was pretty close to home I guess yeah um so how and also I was looking
through your um your list of physical attacks on bitcoiners there's been a lot this year there's
already eight or nine I think so how how closely are tracking this and how big an issue do you think
this is going to be going forward yeah I mean I have a number of different projects uh but you know this
is one where I'm updating it on a weekly basis um my prediction in my my annual uh bitcoin metrics post
at the end of last year my prediction was we're going to have an all-time high in wrench attacks
and there there's going to be at least an average of one per week and here we are we're at the end of
month one so you know five weeks in and we have eight publicly reported attacks and uh I'm aware
of two or three unreported attacks and I'm sure there's plenty more than that that you know haven't
even made it uh in in my sort of sphere of understanding so this is an unfortunate metric but
it is expected because what we've seen in in prior market cycles is that the physical attacks
tend to be roughly correlated with the exchange rate it's very easy to explain why this is the case
it's because when the exchange rate goes to the moon general public interest increases and of course while
the vast majority of people are good upstanding citizens who don't want to hurt others there's
always some tiny minority of sociopathic criminally minded people who are also going to suddenly be
paying attention to it and they're going to be trying to figure out you know how do I use my skills and my
ability to um hurt other people without caring about them in order to maximize the return and so that's why
we're seeing a variety of different attacks um especially more of them that seem to be happening
in an organized fashion with groups of perpetrators that are coming together to pull off the heist
yeah why do you think like a decent chunk of these go unreported it's just simply fear um you know once
someone has been attacked they're afraid that a if they go to law enforcement um you know that will start
creating records the media might pick up on it and then it might become a highly publicized thing where
that basically just invites more scrutiny and creates a target for them yet again um i'm only aware of one
case in this whole space where uh someone has been targeted multiple times or like there was one case
uh actually in a place that i lived for a long time in north carolina where uh a couple i think had been
hacked and ended up in some sort of data leak and and that actually resulted in them getting on the
target list for this uh gang of criminals that went all in up up and down the east coast of the united
united states uh hitting numerous people and uh and they happened to be you know one of those targets
it's pretty terrifying one of the interesting things when i was looking through your uh your repo on on
these attacks is where these are happening so i was looking back sort of historically and there was
the us was kind of like pretty high up on the list but this year it seems to have been sort of france
and southeast asia where most of these attacks have been happening do you have any idea why that is
so i think you have to take uh my archive with a very big grain of salt because we you know we don't
know what we don't know and um i'm not sure you know how many attacks are happening in non-english
speaking countries where perhaps a local media picks up on it but it never gets syndicated it never gets
translated and for whatever reason it just never gets on my radar uh so it may simply be that you know
uh europe and uh thailand and philippines just uh happen to have you know more uh english translations
of their media and so they get picked up but um
i think at least in in southeast asia uh especially thailand we've been seeing a lot more of these
attacks and a decent amount of the ones in southeast asia appear to be occurring by organized crime that's
coming in from a different country and specifically some patterns that i've seen are uh russian expats
getting hit by russian organized crime you know in southeast asian countries uh and then also chinese
expats getting hit by chinese criminals uh in these countries and i i think one of the explanations there
is that these organized crime elements are learning about those wealthy crypto owners however that may be
you know maybe they have inroads to various financial or other intelligence uh agencies in those countries
that you know leak data to them and then they figure hey if we go commit this crime in a different country
and then immediately come back then that will be safer for us and you know in several of those cases
they have gotten away with it and in other in some of the cases like uh some of the criminals were
basically caught at the airport trying to get back to their home country
interesting so i think we should probably talk about the ledger co-founder the story that came out a week
or so ago can you give a background of what happened there um just for so the audience is aware
yeah so uh one of the co-founders uh david balland uh he is pretty low-key
uh he and his wife were kidnapped taken hostage and as far as we're aware the attackers were not trying to
extract bitcoin from him rather what they did was they used him as a hostage to demand i think a 10 million
uh ransom from one of the other co-founders uh eric and uh as a part of that to kind of prove how serious
they were they actually uh cut off david's pinky finger from one of his hands so um this was definitely
a pretty horrific attack i think the whole ordeal lasted nearly two days but thankfully due to
quick thinking by people at ledger and by local law enforcement they were able to rescue both of them
and they were able to uh seize i think the vast majority of the ransom payment and get it back
so so the ransom payment was sent yeah i'm not sure exactly how much they sent and i think they they may
have sent some in bitcoin and some in tether but uh however that ended up uh a lot of the funds
apparently ended up in tether and you know with um basically the the work of i think it was the seal
911 uh team that does a lot of tracking of crypto thefts and of course uh with uh tether's help they
were able to freeze the vast majority of those funds i see so they froze the tether but i assume they
managed to keep the bitcoin yeah i don't know the specifics of like the the breakdown of like how much
was paid in in each uh style but uh i think one figure i heard was that they got at least 90 percent
of the funds back okay well that's a positive and one of the really interesting things on on this um
is this like like you said a little earlier is the status of the people being targeted because it doesn't
like when i look through the list it's not a list of names that i know um it's generally people who are
flying a little more under the radar and i've spoken to peter a lot about this because he's been
very concerned um just as someone who's high profile in the space so why do you think is that we're not
seeing these kind of attacks on really well-known bitcoiners uh well some very well-known bitcoiners
have been attacked but they have not disclosed it uh so it's not it's not uh zero um though
you know i i am also somewhat surprised by how low it is and and i think part of the reason for that
is that perhaps the criminals figure out that these super high profile people may have better
security uh and better precautions now uh i can tell you from my own experience that at least in
america a lot of the fairly well-known bitcoiners don't have great privacy like you can find where
a lot of them are because i've looked into it what bitcoin did is brought to you by our lead sponsor
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forward slash wbd which is r-i-v-e-r dot com forward slash w-b-d it would be good to go through
the kind of things that you can actually do to protect yourself from this because like i say it's not just
high profile people i think anyone who is known as like the bitcoiner in their group has to probably
consider this at least to some degree um so if we try and go sort of from the start where what do you
think is like the easiest lift that all bitcoiners should should do and part of that is to do with
like how you're custodian your bitcoin but in a way that almost doesn't matter because you can have
the best bitcoin custody setup possible it doesn't mean you're not going to get kidnapped so so can we go
through kind of from the start what you think people should be doing yeah well i mean uh privacy
i think is the top thing um don't make yourself a target so you should consider privacy to be the
outermost layer of your security and you know any security whether it's physical digital whatever
should be a multi-layered system um you know only having a single layer of security is a single point
a failure it means if someone breaches that then it's game over so you always want to you think of
it as ring fencing uh you want as many borders and perimeters and fences and and and basically
defensive mechanisms that an attacker will have to somehow bypass get through breakthrough uh in order
to finally get to you know whatever it is that you're trying to protect and then that's true like
whether it's your physical body or your actual assets and and you know keys that are protecting
them so uh shut up about your actual wealth uh you know don't talk and i think one of the quips that
i've had for many years is uh you know the first rule of bitcoin is always talk about bitcoin but the
second rule of bitcoin is never talk about your bitcoin so you know people can assume whatever
they want but you shouldn't give any specifics about your actual assets and related to that you shouldn't
be flaunting your wealth really in any way especially on social media uh that is a great way to get yourself
targeted if you're like showing off your lambos or your uh six figure watch collection or whatever it is
um there's also there's high risk activities that uh show up as a pattern in these wrench attacks
and one of them is trading just don't do high value face-to-face trades in the real world um if you
are going to do that then you need to take a much higher level of precautions um you know a lot of these
attacks especially in um southeast asia are the the mo of the criminals is that they might reel you
in by doing a few small trades with you to kind of build up a reputation and then they'll say okay we
want to do several hundred thousand dollars you know we want to trade several bitcoin with you and that's
when they'll just have you show up at a hotel room and once you come in you know that's when the
rich attack happens so um obviously if you're going to be doing high value transfers like that you should
only be doing them in highly physically secure spaces you know where there's lots of surveillance
preferably armed guards you know people a lot of people should be watching that can intervene if
anything goes south you should not be doing these privately in a hotel room or a parking garage or
whatever um and you know beyond that you start to go down the whole rabbit hole of just operational
security and uh key management and really a lot of the things that we help people think through
at casa but yeah so the primary thing is just don't make yourself a target let's get into the
key management side of it then um what do you think the kind of perfect key management solution is for
most people do you think most people should be looking at having collaborative custody style services
or do you think like hardware wallet with good protocol around your backups is is acceptable well
i think it really comes down to how much value we're talking about really um you know if it's only a
small investment like if it's not a huge amount of your portfolio and it wouldn't ruin your life by
by losing it then you're having a single signature hardware wallet and and then uh you know a good backup
preferably multiple backups you know distributed um i think is gonna work fine for most people
but if a significant portion of your net worth is in bitcoin if it would be you know catastrophic
for you to lose all of it then i think the goal should be to eliminate single points of failure and the
only way to really do that is to have you know multiple keys multiple um you know geographic
locations with different physical and digital security mechanisms around them basically building up
a level of robustness and redundancy and resilience and you know the idea here is to protect you not only
against hackers or wrench attack folks but just loss in general um you know keys can get destroyed or
lost in any number of different ways okay one of the things that i would like to talk to you about
because i don't know enough about it is the kind of technical things that you can do in terms of like
decoy wallets or duress pins um can we go through these one by one and just explain what they are what
they do and if they're something people should be considering so maybe we'll start with like decoy wallets
sure uh so um there's an easy way to do a decoy wallet i mean you can have really any wallet that
you set aside that's just a different wallet with only a tiny amount of money in it but i think the
general way when people are thinking of decoy wallet is usually with a passphrase some people call
it the 26th word you know essentially you create your bitcoin wallet and then you add some sort of passphrase
on top of it which effectively generates a totally distinct wallet so you know you can have the same
piece of hardware or the same seed phrase and have essentially an unlimited number of wallets uh you
know each one with its own distinct passphrase so the idea here is you know attacker comes in says give me
your bitcoin and you open up uh instead of your main wallet your decoy wallet now there's a number of things i think that
can go wrong here and people make assumptions about or don't think about the first thing i'll say is we're
not aware of any real world instance where someone successfully used a decoy wallet against a wrench
attacker i think there simply haven't been enough wrench attacks that have taken place or if there have
been one where they successfully just gave a decoy wallet then they haven't admitted to it so we don't know
um but there's other things that i think could become problematic like if that situation actually
arises the first one is that look this is like potential life or death scenario you're going to be
all hopped up on adrenaline you don't know how you're going to be thinking um if you don't regularly use your
decoy wallet what happens if you forget your decoy wallet passphrase because you only ever open your main
wallet passphrase uh even if you are calm collected and remember your decoy wallet passphrase and you open
it up the next thing is that you're really speculating about the knowledge and motivation
and uh sophistication of the person who is attacking you you have no idea about this ahead of time and so
you're hoping that they have sufficient like lack of knowledge and sophistication that a decoy wallet
will um be good enough for them so you know first of all perhaps the amount in the wallet is way too
small and uh the attacker has some level of knowledge and is expecting far more and they say you know this
isn't your real wallet and they just keep beating you with a wrench now i will say that there has been at
least one scenario uh that's in my logs my archive where um a guy got attacked and he handed over his
real bitcoin wallet immediately and the attacker thought it was a decoy wallet and just kept beating
him kept beating him for quite a while even though it was his real wallet so you never know uh how the
attacker is going to react um another issue is that you know how how well are you maintaining this decoy wallet
right um if you're just setting it up and putting a tiny amount of bitcoin in there and then never doing
anything with it an attacker opens it up and sees okay you had one small deposit three years ago or
five years ago and then there's no other activity that's kind of suspicious uh because you know i think
most bitcoiners are fairly regularly stacking sats or having some sort of activity um
um and and and then you know like i said um the attacker may or may not be uh happy with the
amount and it it it could go well for you it could go poorly like it could just piss them off more
and so my my general take on these things is that um it's better for the attacker to get nothing
okay that's interesting and so in terms of like everything you just described how important
then is on-chain privacy because if it's harder to kind of track you at the history on chain then i
guess the better your decoy wallet is going to work yeah so um i actually met with a guy here in el
salvador a couple days ago who is on the rich attack list and he told me that in his case
what had happened was um he had been engaging in you know the otc uh face-to-face transactions
with people and they they had uh essentially been surveilling him and doing trades small trades with him
for months and that uh he screwed up because he was sending them the bitcoin directly from his primary
wallet so they had a really good idea of how much he had so you know when the attack went down and and
they demanded a certain amount and he said oh i don't have anywhere near that amount they said look
you know don't screw with us we know how much you have so um on-chain privacy is important you know
depending on who you're dealing with uh if if you're dealing with anyone um that you you don't fully trust
then you know you're you can potentially be exposing a lot of information to them that can be
used against you in the future so one of the projects i think is very cool that's coming out
recently is anchor watch um and this seems like one of the better defenses for um physical attacks
because obviously you can just give them everything and you know that within 30 days of lodging a claim
you get paid out in the dollar denominated amount um how big a step do you think that is um you know
we're basically talking about a a new variation of uh you know hybrid or collaborative multi-sig
setup uh you know the main difference is now that it's also paired with an insurance product
so i think it it is something that there is going to be demand for on the market and uh i i hate to say
it but we're i'm going to be you know waiting to see uh you know what happens uh when some people
actually get their claims uh you know they get attacked and then they file claims you know i don't
want to be like the first adopter of anything um because you want to see whether or not systems work
or or can potentially fail or whatever but um you know as far as i can tell this is a it's a very well
thought out system so i don't have any expectation of failure but it's it's one of those things where
you know and until someone actually gets attacked or uh or has the loss and they go through the whole
process and we see it play out you know there's there's it's a theoretical thing until it actually
becomes a practical thing yeah that makes sense the other thing i can't quite figure out is the
kind of game theory of it whether it increases your chance of getting wrench tapped because they know
you're just going to send it uh i don't know um you know that's something that i had not considered
you know maybe you don't want to broadcast to the world that you have insured self-custody um
uh but uh this is like so far down the rabbit hole that i don't think any criminals are even
thinking about it yet yeah fair enough um okay so we should talk about casa's private client option
because i remember being a dinner that you guys put on in uh nashville and you kind of presented
the whole service of casa as lop as a service which i thought was really good um but so how much of
all of everything we've spoken about here is kind of baked into the private client option
uh yeah that and more so you know we have a number of different tiers of memberships at casa and you can
think of our uh standard tier as being the generally do-it-yourself route you know it's effectively um
you know 20 a month uh though annualized and uh you get your basic email support and your two of three
setup and then you have your premium tier where you're you're bumping it up to a three of five
key set that you can still do two of three if you want and you're getting a higher level of support
you know you're you're getting uh client advisors that'll actually get on the phone or video call
with you and you walk you through any questions or issues that you have related to your setup and
the various decisions around uh key management of that setup but then the primary difference between
those levels and the private client is think of our our lower levels as you know security for your bitcoin
and the private client level is your security for bitcoiners and so that means it's not only helping
you think through and manage your actual keys and and vault setup but thinking through really every other
aspect of your life that is going to be related to the privacy and operational security of you yourself
because ultimately that all does impact the security model for your bitcoin so you know this is where it
gets really bespoke and um there's no specific you know standard path that we have people follow down
because each person's priorities are going to be different than their situation is going to be
different so the the things that they're worried about are not going to be the same as what a different
client is worried about so you really it's best to think of this as a um bespoke security consultation
service where you know whatever it is that is the most uh worrying for you at the time we will help you
think through and uh you know research solutions that may be specific to your situation your jurisdiction
uh you know help you um potentially connect with other you know specialized parties to help you do other
things that may or may not be directly related to the actual keys themselves okay so i want to change gears
a little bit um the but before we do is there anything there that you think i've missed that people should
seriously be considering uh well you know you mentioned uh lop as a service and i think that's really
the ultimate goal here is that you know i've done a lot of crazy extreme stuff and experimented with a
variety of different privacy and security protocols for myself um but of course everything that i'm i
have done is not directly applicable to everyone else especially if you don't live in the united states
but the goal is to get you as close as possible to the setup that you know i consider sufficient for
myself which is fairly extreme um and you can also think of it as implementing a number of recommendations
that are uh sort of in the michael uh basil playbook who is he's another you know very well-known
privacy and operational security guy so like i said this is more than just about your keys
it even has to do with um improving your own uh security and privacy with other devices whether it's your
your phone your laptop so on and so forth i also just before we do move on i did watch the presentation
that you've got at the link on your github repo but i i can't remember his name a guy from new
zealand uh that's brilliant i think it's rigel walsh that's right i thought that was really good
so people should watch that as well this episode is brought to you by casa for those of you out there
who want to protect your bitcoin i want to tell you about casa the leading bitcoin self-custody solution
if you're serious about protecting your bitcoin then you need a rock solid security plan and casa gives
you just that with their multi-signature security and key management services casa makes it easier
than ever to take control of your bitcoin without the risk of a single point of failure casa also now
has a private client option which gives you a purpose-built security program with ongoing advisory
advanced verification inheritance a 24 7 security emergency line and lots more to find out more
about casa's private client solution go to casa.io which is c-a-s-a dot i-o this episode is brought to
you by ledger if you're serious about protecting your bitcoin ledger has the solution you need their
hardware wallets give you complete control over your private keys ensuring that your bitcoin stays safe
from hacks phishing and malware with ledger's easy to use devices and the ledger live app managing your
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ledger makes it simple to keep your assets protected if you want to find out more visit ledger.com and
secure your bitcoin today that is ledger.com um but the thing that i want to talk to you about next
is ossification so you at the end of last year wrote a piece about this um it's something that i i find
really interesting because personally sort of from my perspective um i've been kind of surprised how
prevalent the ossification narrative has become like for me i would love to see covenants i'd love
to see up vault come into bitcoin um but i'm just curious should we just start maybe by you giving a
high level overview of of what you think this current state of upgrading bitcoin is right now yeah so i
believe that bitcoin is currently facing the innovators dilemma and this is a fairly well-known issue uh that
a lot of companies organizations and even network protocols run into and essentially um you think of
like the s curve of adoption this applies to the innovators dilemma where in the very early beginning
you have no adoption and so you're innovating you're innovating you're innovating and then if you
successfully innovate and you find some product market fit you start getting adoption you know you start going
up that s curve and then uh you reach at some point a peak you've and you've you've got a lot of adoption
and now you're faced with this dilemma the dilemma is do i continue innovating try to get even more
adoption or do i stop innovating because any change that i make is a risk in and of itself that may somehow
you know break the system or cause me to lose market share and go backwards and you know lose a lot of
the the momentum that we've made so far and so the dilemma is of course that if you don't innovate
then you're essentially opening up the door to competition to come and out innovate you and basically
bring a better product or service to market and and you may then lose market share anyway so i think that
we're definitely in a place now where bitcoin has been so successful uh a lot of people have the vast
majority of their net worth in bitcoin because they've been holding for so long and so now rather than
being you know optimistic and uh interested and uh taking risks and innovating to continue pushing the
protocol forward to do new things we're saying oh we have to stop making any changes because it's just
too risky and then there's too much money at stake so this is something i've been talking about for
a year or two now um you know it feels like we're kind of stalling out uh progress at the base protocol
layer and i think that's concerning for a multiple different reasons um my my main issue being that
you know a lot of pushback we get these days is oh you don't need to change anything at the base
layer because you can do everything at second layers however we simply do not have all of the um
functionality at the base layer that we would like in order to be able to innovate on second layers
and so you know there there's a number of different projects out there that are
working on cool second layer technology and a number of them are in fairly rough consensus of saying like
if we had a few new op codes that would massively improve our ability to do permissionless innovation
and to offer you know stronger security uh for people who you might want to move their bitcoin
from you know the main chain into a second layer and be able to take advantage of different functionality
there whether it's um you know stronger privacy or more you know financial like defy type of stuff uh
really you know the the ability uh to do crazy new stuff on second layers where you don't have to worry
about layer one consensus is only really restricted by people's imaginations however where it stands
right now we have very few uh well you could even argue that like the only truly permissionless second
layer is lightning network and that all of the other ones are making you know massive trade-offs
with the security mechanisms for getting the bitcoins transferred between the different layers
yeah i i kind of think of ossification as almost being selfish like i think this narrative
really seems to pop up last bull market sort of 2020 onwards i ossification before them and this
is again just from my perspective seemed like it was something everyone always thought was inevitable
eventually but we weren't ready for yet and then 2020 onwards i i feel like probably partly because
michael sayler kind of pushed this narrative it's become really prevalent and how much of it do you
think comes down to what you actually think bitcoin is like whether you think it's purely this store
value asset that never needs to change or you think it's money that can be innovated on yeah um you know the
narratives of what bitcoin is has changed multiple times over the past uh 15 16 years and it wasn't
really until the fork wars and after the fork wars that i would say the store of value narrative became the
dominant narrative and um you know i think bitcoin is many things and the the really dangerous thing i find
about the store of value narrative being the dominant thing is that um people can follow that narrative
while not even taking advantage of most of bitcoin's other properties like especially
censorship resistance i felt like that was always one of the most uh prominent ones but you know if
someone is for example buying a bitcoin etf and they're just buying into the store of value narrative
they're throwing all of the other properties of bitcoin out the window and saying you know i only care
about having financial exposure to this store of value narrative yeah they've got no interest on what
happens on chain because they're not on chain exactly so you know if we're pushing a lot of people
to really only to really only have exposure to the financial aspect of bitcoin through trusted third
parties that is potentially changing the game theory um like the the short version of
incentives around improving bitcoin at a protocol level is like the only reason you would ever want to
improve bitcoin at a protocol level is if you're actually using like self-custody bitcoin where
you're actually holding your own keys and you're directly interacting with the protocol on the network
if you're never directly interacting with the network and you're just you know playing with bitcoin ious
through a trusted third party you don't have any incentive for anyone to make changes to the bitcoin
protocol so i think it would make sense that you would be more fearful than optimistic about people
proposing changes to the protocol so you know this is this is why i find the number go up narrative to
not only be a distraction but potentially a dangerous thing in the long run uh for the the overall
health and continued evolution of this protocol you know i i do see bitcoin as money but i see it as
much more than money it's programmable money it's a programmable database it's a very you know crappy
database from a variety of different performance uh metrics but it has as a database with very
interesting properties you know mostly around availability and reliability uh that the data is
not going to get overwritten and so from that perspective you know building other systems that anchor
into the bitcoin blockchain i think are also very interesting there are a number of different projects
that have done so and have you know improved their own security and auditability as a result so you know
i'm all in favor of continuing to innovate on bitcoin i think that um the really tricky thing here is that
it's completely possible for a number to continue going up even while a variety of the different
fundamental properties of bitcoin go down and get degraded if the network continues to centralize in a
number of different vectors yeah and i mean i totally agree with that one of the things that like one of the
arguments that the ossifiers often use is you you never want to have unintended consequences from any of these
changes and obviously with taproot i know taproot didn't necessarily allow um all the stuff that's
happened on chain but it made it easier and cheaper um do you think that bitcoin is still have some kind of
ptsd from that uh yeah well i mean there's still ptsd from the actual fork wars in 2017 um yeah um
you know a number of people got triggered by the you know usage of bitcoin to store large amounts of
non-financial data though to be honest that has been going on since almost the very beginning of
bitcoin just in different ways and that it will always happen in bitcoin like there's really no
fundamental way to prevent people from storing arbitrary data on bitcoin without vastly hobbling the
protocol and destroying a lot of other use cases um i think the um the unintended consequences thing is a
non-argument and the reason for that is that there are always unintended and unforeseen and unknown
consequences and and what i mean is there are unknown unknowns for making changes and there are unknown
unknowns for not making changes and so you know you can look at a number of of other examples in history
but you know this also this comes down once again to the innovators dilemma that i talked about
the unknown unknown the unknown unknown of essentially ceasing innovation stopping uh work to improve
a project is that someone else could come along with something better or uh take for example smtp the
email protocol it essentially stopped being changed in the 90s and however a lot of new problems arose as
the internet became more mainstream as email became mass adopted and the the main problem that arose was spam
and because it wasn't really feasible to implement uh spam protection at the protocol level because it had
effectively ossified what happened is um solutions got bolted on essentially these meta protocols
they were created by uh various you know parties the essentially the the major email infrastructure
operators at the time coming together and saying you know we need to fix this they tried a number of
different things eventually they settled on a variety of different reputation mechanism systems
and those reputation systems were highly centralized and so resulted in a system with just a handful of
gatekeepers who were keeping blacklists and white lists and uh you know essentially reputation scores for all of the email traffic
and that over a period of several decades increased and increased the cost of operating your own email node your own email
server your own email infrastructure so we went over the course of like 30 or 40 years from anyone being
able to run their own email server just by running the software and following the protocol to the point today where
oh you can certainly download uh email server software and run it and you might even be able to get
a number of emails out and through to their delivery uh recipients but over a long enough period of time
you're most likely going to end up on blacklists you're most likely going to get a reputation hit and you're going to get excluded
unless you are a very large organization that can dedicate teams of people to managing these reputation
issues and i know this problem uh very closely because i spent the first decade of my career
running uh email infrastructure for a company that was sending out you know 100 million emails a day so i saw
all of the the dirty stuff that was happening uh outside of the protocol the all of these sort of meta
protocols that uh have gotten us to where we are today which is that like 90 of email users are
captured by 10 companies so you kind of take that metaphor figure how does that happen to bitcoin well it's
not that hard to imagine if we keep going down this path where basically everybody is just uh
using bitcoin through etfs or through exchanges or basically trusted third parties once again you know
those folks are all going to be doing their aml their kyc their financial uh regulatory compliance
and we can very easily end up in a system where 90 percent of bitcoin users are captured by a handful of
companies that are gatekeepers now it's entirely possible that it would still be feasible for an
individual to be you know a sovereign bitcoin user but i expect it would become you know an incredibly
rare and potentially very expensive thing to do one of the other arguments that i i'd like to hear your
kind of response to is this idea that if it's not broken then why are you trying to fix it um and
obviously right now mempools are relatively empty like i've just had a look that to get a high price
transactions two sats a bike so if if you're trying to implement sort of scaling changes to bitcoin and and
ossifiers would probably trying to steal man their argument would be like why now when we don't need it
yeah well uh a because it takes a really really long time to make consensus changes to bitcoin so if you
wait until it is needed then a lot of people are going to be freaking out and emotions are going to
be high and it's going to be like the block size wars all over again that people still have ptsd about
so i'm actually interested in talking about scalability when it's not an imminent and critical danger
because hopefully it's more likely that we can have calm rational discussions with each other rather than
people who are uh really upset because they have to deal with a thousand support tickets from customers
whose transactions aren't getting confirmed for example um so i think it's always a good time to talk
about scaling because also we you have to ask yourself if we wait until bitcoin um is totally overloaded
you know what's going to happen um obviously people people are still going to have problems
that need to be solved and if they can't be solved with bitcoin they will go use some other solution
so i think that that is also once again that's kind of a part of the innovators dilemma
if if it's too hard for people to use bitcoin or lightning or you know any bitcoin layer two if it's too
difficult too expensive whatever and they find that they can go use tron uh and it's faster cheaper and
easier than i i suspect most people are going to do that and this is just because it's human nature to
do whatever the path of least resistance is whatever the most convenient thing is and so i think we should
desire for us to be able to offer the best user experience so that we can um gain the most users
retain the most users and not lose as many users due to friction or other problems totally and one thing
that i would really like your opinion on is so i've spoken to rusty russell a few times i think he's brilliant
um but he has a pretty extreme approach to this and he wants to essentially just turn everything on and
let the market decide what is useful and what isn't yeah while i'm definitely not an ossifier like i i i
there's some very clear changes that i would like to see come to bitcoin that seems scary and i i just
like to know where you kind of fall on that no i'm a big fan of the great script restoration project
uh essentially the idea is we want to empower our developers and give them as much of the you know
primitive tools you know the op codes uh as we can safely uh the reason why a lot of these op codes
were disabled were because you know various edge cases uh were found where they could potentially be
used to you perform denial of service attacks on the network and use too much resources and you crash
nodes or cause other issues so the the thing about uh great script restoration with rusty russell he
doesn't just want to turn them back on he wants to implement a a safety framework to go along with it
that's um kind of analogous to like uh you know gas counting on ethereum except it's more that you know
we're we're roughly counting up the the resource costs of executing and validating the uh
uh bitcoin transactions based upon uh exactly what each op code does like at a hardware level uh on a node
so i'm a big fan of that uh and i i think that actually that type of resource accounting system
is going to be pretty important if we want to continue talking about uh scaling throughput
uh on bitcoin uh safely uh safely so do you but in terms of the actual likelihood of any of these changes
happening covenants or up vault seem like one step turning everything back on seems like a huge step
we'll we'll never know if we don't try right so i think that's kind of the mindset that you have to
uh if you're going down the path of doing a bitcoin improvement proposal is that um all you can really
do when it comes to uh changing bitcoin is offer the improvement to the world make your case for it
uh you know try to provide as much data as much use cases to build support you know go you go around and
you really uh actually drum up support from people uh you know talk to different stakeholders in the
industry to understand their perspective on this issue and whether or not they care about it and
try to convince them they should care about it um this building rough consensus is it's a very difficult
thing there's no manual for it there's no playbook like even if you if you look at like the the the
technical activation parameters for different soft forks over the past decade um almost every soft fork
has been activated in a different way and that's only from the technical perspective like the actual uh you
know meatspace consensus of of things is far more complicated and definitely not written down it's
it's hard to replicate and the major players who have been responsible for a lot of the previous soft
forks are out of the game like they don't want anything to do with it anymore because it's it's a
thankless job um you know it is very difficult it uh it will get a lot of anger and hate sent your way uh
you know making any sort of proposal to change bitcoin even with the greatest of intentions is almost
guaranteed to uh result in backlash and people being very mean to you so you have to have a very thick skin
and you have to really be invested in trying to see it through to the end uh with the understanding
that you could potentially spend years advocating for and trying to build support for something only
to have it uh just not go anymore yeah that's a really funny thing in bitcoin isn't it and so i like
obviously jeremy rubin proposed his his covenant update and um he's gone out and he's tried to draw
support and then and like the reaction he gets like dude why are you pushing so hard you need to chill
but like that's the only thing he can really go out and do and so there's a real like that sort of
social backlash is really hard and that seems like one of the most challenging things to overcome on the
ossification narrative pretty much um but you know then uh there was actually there was a paper i think
that was put out recently um that was trying to go through the governance uh process uh of bitcoin
like all the major stakeholders and it was it was it was interesting looking at the game theory they
were they were essentially trying to like draw it out kind of like chess moves of like if player x does
this and player y can do this um and it's uh it's a very difficult thing to reason about and i don't
think any of us can really say that we fully understand it but you know no one can stop you from
making proposals um i would say it's probably paul stork is like the most long-lived dedicated uh
advocate of a proposal that looks unlikely to ever go through but he is he's still going for it yeah
it's almost as if the person that proposes the uh improvement can't be the same person trying to
push it to actually be implemented it seems like they almost need to be bifurcated yeah that's something
that i've uh brought up with several people um you know it does look kind of bad i guess from an
incentive perspective um but you know this is why really what you want to do is you want to build a
coalition uh you want to build um interested parties that are stakeholders in bitcoin in a number of
different ways and um i think that's the best way of trying to convince people that you have rough
consensus because rough consensus can't really be quantified right it is kind of like a gut feeling
um then there's also just the issue of i would say a lot of people on social media who are happy to
weigh in on things about bitcoin um you know they're not they're not really participating in the consensus
process like they might not even be running nodes they they might not be running businesses or have
any sort of economic weight within the bitcoin network they're literally just you know yelling on social media
and you know that can't have an effect uh especially if enough people listen to you
then you know you you you have reputation you might be able to change people's minds or or get them to
accept or reject things but um that's just the name of the game um you have to be willing to put up with all
all sorts of vitriol you basically have to care about bitcoin so much that you're you're willing to go
through this gauntlet and like i said uh it seems like most people who have even have successfully gone
through the gauntlet don't want to do it again yeah the the funny thing with paul um he's and drive
chain like so drive chains aren't something that i personally necessarily i'm desperate to see in bitcoin like
i think i would be on the sort of against side of that argument although i don't know enough about
it so i i don't feel have that opinion very very strongly but what i don't understand is why and
people are going to hate me saying this but why doesn't he just go and do it on litecoin and see
what happens there yeah i mean i can't uh speak for him uh so i'm not sure whether or not he's tried
to do that but um that's another i guess issue uh when it comes to kind of like proving out any major
change to bitcoin is that once again there's no playbook and it seems like the goal posts are
constantly moving of like do you need to prove it out on a signet uh do you need to prove it out you know
on um testnet uh do you need to prove it but then something you know even that's not good enough for
some people and they're like well no you need to prove it out on a network that has actual economic
value so you need to go do it on litecoin or something um but the thing is like there's no
authoritative rule book to say like you have to do these things and if you actually look at the bitcoin
improvement uh proposal process um it's intentionally vague and and that's like by design uh because even
even this is kind of the crazy thing is like even the bitcoin improvement uh proposal process is not
enforceable in any way like you know bitcoin itself doesn't have any idea like what a bit is
uh the bips are just for humans so it's entirely feasible to uh make changes to bitcoin without
going through the bitcoin improvement process um and it that you know that was done several times back
in the day basically when satoshi was unilaterally doing stuff and it's theoretically possible that it
could happen again um but as it stands the that process seems to be the best thing that we have
since there's not really anything else yeah all right so one sort of last big question to close out
there's obviously a chance we get something like a strategic bitcoin reserve whether that's bitcoin or
bitcoin and others will find out maybe it'll never happen but with something like that happening
do you think that again increases the chance of falsification i know um lola leets has written
about this a little bit talking about if we have a strategic bitcoin reserve any changes to the bitcoin
protocol becomes like a national security issue so what would your take on that be yeah well look
anyone who is involved in bitcoin has the right to voice their opinion and so uh this is something that
i've been monitoring like as institutional adoption has been happening over the past year as far as i can
tell at least so far you know none of the major institutional players have even bothered or tried to get
involved in the actual bitcoin development process but no one can stop them from doing that if they decide
that it's in their vested interest and the same thing uh applies to nation states and i mean i think
that bitcoin is for everyone and that includes you know companies states nation states uh central banks you
know anyone who wants to own bitcoin can do so and uh if they want to get involved in the development and
improvement of bitcoin then they should also be allowed to participate so you know if there's a lot of
people out there who will because a lot of us of course are sort of libertarians and anarchists uh and
you know we don't want the state involved in things um you know i think that you know if if the government
designated certain uh people to essentially uh you know dedicate themselves to working on bitcoin and
contributing to it uh you know that should be allowed you know if the government wants to create
grants to fund bitcoin developers preferably those grants are like no strings attached grants but
you know no one can force that but as it is you know when it comes to developing bitcoin we should not
care who is proposing stuff we should care about the actual merit of the idea and how that will affect
everyone else who's using bitcoin i think that's a good place to close out um is there anything that
we've not spoken about on the ossification side that you'd like to touch on i mean i mostly i i see
ossification as an inevitability i think almost everyone agrees upon that and we're not going to
know if bitcoin has ossified until we have a lot of hindsight and so i kind of see it as a race against time
where i think for network protocols whether it's a financial protocol or or just any sort of communication
protocol ossification is almost like a law of physics you know the network continues to grow to the
point that it essentially gets crushed under its own weight that it becomes too difficult to coordinate
changes in the protocol amongst the wider and wider diversity of actors who all have their own incentives
and timelines and and interests and so from that perspective you know we should want to continue
improving bitcoin as much as we can while we still can and hopefully we still can for all i know uh we'll never
be able to make any consensus changes to bitcoin again and everything that we're doing right now
is for naught but like i said uh we'll never know uh if we don't try love it thank you jameson i really
appreciate that that was great um is there any way you want to send anyone before we close out well if you're
interested in improving the security of your self-custody check out casa it's c-a-s-a dot i-o if you
want to go down the bitcoin rabbit hole you can check out my educational resources at bitcoin dot page
perfect all right thank you jameson i uh i hope you have fun in el salvador thanks for having me
Thank you.