Adam Back on Bitcoin Adoption and Innovation - Freedom Footprint Show 50

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you know, prospect of 10 million Bitcoins being bought, it may not be possible for

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at all, like, for any amount of money because, you know, as more people try to

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do that, the price will go up and then they won't be able to afford to do it.

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I, uh, went to some kind of private meeting, like a bunch of like investors

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and a few tech people just like general discussion some years ago.

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And like a question I asked for the, in like Bitcoin holder investor or fund

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manager type of people is like, well, what features would you value most?

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Mm-hmm.

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From the technical side for Bitcoin?

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And their answer was surprising, which was like, Just don't break it.

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Yeah.

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Welcome back to the Freedom Footprint show, the Bitcoin

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philosophy show with Knut Svanholm and me, Luke the Pseudo Finn.

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For those of you who've been in the Bitcoin space for a while, our

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guest today needs no introduction.

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Joining us is none other than Dr.

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Adam Back, co founder and CEO of Blockstream, the mind behind

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Hashcash and a true OG Bitcoiner.

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In today's in person interview, recorded at Baltic Cottony Badger

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2023, shout out Hoddle Hoddle, we dive into plenty of important topics.

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We discover Blockstream's current projects, we explore the developments

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of Bitcoin's second layer solutions, and we debate their use

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cases after hyperbitcoinization.

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We even touch on the drive chain debate.

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You'll want to hear what Adam has to say about that.

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But before we jump in, a quick reminder that the best way to support the show

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lightning address, freedom at getalby.

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com.

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And if you want to exchange your dirty fiat, you can support us on Patreon.

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All our links are in the description.

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If you're watching on YouTube, don't forget to like the episode

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It would be a big help.

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And finally, we want to thank today's sponsors, Wasabi Wallet, Orange Pill App,

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The Bitcoin Way, Zelonks, and bitcoinbook.

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shop.

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All their information is in the description.

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We'll be talking a bit more about them later.

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And now, without further ado, here is Adam Back on the Freedom Footprint Show.

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Yeah.

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So a man that needs no introduction, sat, I mean Dr.

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Adam back, welcome to the Freedom, freedom Freedom

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Footprint show.

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That's the name of a show, right?

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Yeah, that's correct.

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Welcome.

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Um, yeah, the c e o of Blockstream and mentioned in the white

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paper and all this stuff.

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Great.

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Um, I saw your panel, uh, yesterday with, uh, about, yeah, about things we

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don't usually talk about, like price.

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And it was a, a couple of takeaways.

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Uh, There was a question during the panel like, do we have to

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end the Fed before Bitcoin hits?

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A hundred K, which I think is slightly oxymoronic because if you end the fed,

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there's, there are no more dollars.

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But there was also this, this am amazing observation, uh, that you made that

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there are now, um, a million addresses with one Bitcoin or more in them, or

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like with around one Bitcoin, right?

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In, in each one of them.

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Yeah.

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So that's 1 21 of, uh, 21, is that a word?

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Uh, of the entire Bitcoin supply.

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So, uh, well, what happens when the next million people.

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Want to do that and yeah.

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That's good.

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Starting.

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Well, yeah.

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I mean, it was a statistic put out a few months ago, probably from Glass,

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no, or one of the analyst companies who are looking at on chain deer.

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And I thought it was like positive rate because there are people like develop

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a target so the, you know, the dollar cost averaging or they're buying as

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they sell things or get some money together and they're trying to get

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to a target of one Bitcoin another.

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There are a million people who've got there or, or more I think is the metric

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and say, you know, my initial thought was, well, 1 million is good, but that's

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bullish, but maybe we can do better.

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Like maybe we can get to 10 million in the future.

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And I was like, wait a minute, that's probably not possible because

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there are only 21 million Bitcoin.

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And many of them are not on the market, right?

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They've been cold bought and cold stored by people who've

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already held them for years.

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They're probably not selling.

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And the people who just, you know, saved up and managed to buy a whole

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Bitcoin, they're not gonna sell it because that was the target

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they took some years to achieve.

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Right?

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Yeah.

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So, you know, prospect of 10 million Bitcoins being bought, it may not

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be possible for at all, like, for any amount of money because, you

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know, as more people try to do that, the price will go up and then they

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won't be able to afford to do it.

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No,

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that's, uh, yeah.

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That's fascinating because like, the way I see the volatility in, in Bitcoin,

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it's, it's mainly because the, the, uh, What Raheem said rest yesterday.

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Like the, it it comes from the existing stock and not from the flow part of it.

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So not from the newly minted or newly mine Bitcoins.

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Uh, so the hard thing to to know though is what is that ratio like, how much of the

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liquidity comes from the existing stock and how much is the newly mined bitcoins?

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Hmm.

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Yeah.

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I mean there are a few like.

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Positive reinforcements.

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So one is, well, they could be negative in a down sense as

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well, is the, uh, the miners.

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So, you know, many of the miners are like prop miners, people mining for themselves

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with a, with a company, uh, either public company or private company or individuals

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with, you know, a garage full of miners.

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They're trying to actually keep the coins right.

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But they're having to pay the power bills.

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And typically what they do is to spend all their money on miners and then

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they sell a portion of the Bitcoin to pay for the power bill mm-hmm.

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On their operation costs.

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And in a bull market, you know, maybe they can keep 50, 70% of the

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coins they mine and that's good.

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But in a, in a bear market, Uh, they never have to sell 70% of the

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coins just to pay the power bill.

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So they're not keeping much, right?

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But as soon as the price starts to go up faster than the hash rate can grow, then

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they stop sell, they start selling less.

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And so they, they take coins that were like regularly being sold on the market.

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They take them off the market.

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And so it's kind of an effect, a bit like a halving sort of a boost to, you know,

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it creates some price momentum, right?

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So price goes up for some random reasons, some good news, or

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like a string of positive media coverage or something like that.

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Then the miners will stop selling as much and you'll, and

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it'll boost the price further.

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'cause now suddenly less coins will sale rate.

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So that's a kind of positive, uh, reinforcement.

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So, so do you expect a a, a like Heinz catchup type moment, uh,

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during the next cycle where, where there's not as much of a selloff

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because there's just too few coins?

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Like, is there going to be a well gradually then suddenly type moment?

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I mean,

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it looks a bit like it because the, uh, dollar cost average army is

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just gradually, you know, it's like a tug of war game where they, they

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keep buying every day and like the coins on exchange are just shrinking

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and shrinking and shrinking and like, if it gets too low, something

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explosive is gonna happen somewhere.

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Right.

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'cause you know, yeah, you can't, like if there are no, if a coin,

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if an exchange gets out of coins, you can't buy coins for any money.

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You've gotta temp somebody to deposit some coins that they intentionally

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took off exchange to cold store.

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Yeah.

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Like an intent for that to be some time.

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So the price might have to be quite high before they would do that.

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So, you know, I, it is interesting, like also the.

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It seems like, you know, there are different types of trading activity.

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One is what I call price formation.

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So it's people who are, you know, buying for the long term mm-hmm.

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Or selling for tactical reasons where they, they don't have

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the money to buy them back.

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Right.

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Like they're minor and they need to pay off some debts, or they have to

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cover their power bills so they're not buying 'em back tomorrow.

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And then, but then there's a lot of speculation and that's zero sum game

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and doesn't really change the price.

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It just adds liquidity.

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And apparently, um, the, like, the price volume is, is more in a

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derivative, like in the, I mean, in the sort of perpetual futures, so in

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the high leverage area these days.

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Right.

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So that's, that's actually relatively zero sum, uh, I would say typically.

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Right.

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'cause it's high leverage.

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Hmm.

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So, um, Hmm.

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Yeah, I've, I've heard a statistic from, from glass node that the, not only are

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the, the addresses with one coin or less in them growing in numbers, but also

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the, uh, addresses with 10,000 bitcoins or more are shrinking in numbers.

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Hmm.

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Uh, so the, the way I see that it is, this is a redistribution of wealth, really.

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Yeah.

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That sounds like the genie coefficient is improving, huh?

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Yeah.

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Yeah.

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It's, it's a little hard to know for sure because, you know, some

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of the bigger wallets turn out to be, Exchange balances or mm-hmm.

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Funds or custodians that represent many users.

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And also some of the more privacy conscious users will store their

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coins and break them up into, you know, hundreds of parts.

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Right.

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So, yeah.

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Yeah.

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They've got a hundred Bitcoin, they store like one Bitcoin a

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hundred times in different UT XOs.

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So there's, there's error on both sides, but still, I think the

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public data is useful because it's a indication of a generalized defect.

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Yeah.

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It's hinting at something.

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Right.

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So if you try to extrapolate this far ahead into the futures, like

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two generations from now, like how big is the how, how, how big of a.

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Portion of the total amounts of bitcoins are gonna be squandered away by this,

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you know, reckless first generation of Bitcoiners that we are like, are we gonna

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be able to make up inheritance plans?

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Or like, how many bitcoins will there actually be available in say, 2050 or 20?

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A hundred?

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Like 20?

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Well, I mean, if they spend them, it's uh, I mean, it's redistribution rate

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because they'll spend them at a business.

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It will either keep them or sell them on the market, which, you know, gives

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somebody else an opportunity to buy.

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So I'm thinking more

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in boating accident terms.

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Like how, how

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reckless are people?

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Oh, actual, actual, like backup failure, inheritance mechanism failure.

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Yeah.

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I mean, probably some.

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I, I think, you know, the technology's improving slowly.

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Um, but yeah, I mean, key management is, you know, not that easy, right?

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I mean, the mechanism's easy enough.

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You know, you write down the words, you do it on some kind of fireproof thing.

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Maybe you make multiple, like, so there's redundant backup

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or two or three or something.

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Put 'em in different locations.

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But I think what's harder is, um, intuition about where

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is a good place to store it.

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That's still gonna be there in like, 50 years or 20 years,

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depending on how old you are, right?

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Mm-hmm.

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Um, like the physical world suffers bit raw.

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People's memory is not as good as they imagine it is, so.

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Mm-hmm.

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You know, and some people actually have accidents, you know, like they have a

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car crash or a boating, like literally they lose the, the backup or they forget

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the extra good password they made and didn't use for five years or something.

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So there can be losses too.

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Yeah, for sure.

243
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Yeah.

244
00:12:05,141 --> 00:12:08,051
So, uh, from one thing to another, what is, what is

245
00:12:08,081 --> 00:12:10,121
Blockstream working on right now?

246
00:12:10,121 --> 00:12:11,531
What is the current projects

247
00:12:11,531 --> 00:12:11,831
there?

248
00:12:12,311 --> 00:12:13,301
Uh, lots of things.

249
00:12:13,301 --> 00:12:15,641
So we're working on, um, lightning.

250
00:12:15,671 --> 00:12:20,921
So we have this, um, protocol called Greenlight, which is a kind of client.

251
00:12:21,251 --> 00:12:27,221
So, so when a, a Lightning Wallet interacts with the Lightning

252
00:12:27,221 --> 00:12:34,076
Network, it, um, You know, it, it does certain network things, right?

253
00:12:34,076 --> 00:12:38,066
It, it, it syncs with a gossip network, which gives it a map of the network.

254
00:12:38,066 --> 00:12:39,626
It is a source row protocol.

255
00:12:39,626 --> 00:12:43,436
So each client needs to know the full map of how to route to other people,

256
00:12:43,826 --> 00:12:48,176
and it, it does various kinds of network information and to keep up with

257
00:12:48,181 --> 00:12:52,406
the network, understand which routes are reliable and things like that.

258
00:12:52,406 --> 00:12:55,136
So there's a certain amount of overhead and you can think about that

259
00:12:55,136 --> 00:13:01,796
as the kind of analog of a, um, a full node wallet like bitcoin core.

260
00:13:01,796 --> 00:13:02,066
Right.

261
00:13:02,589 --> 00:13:06,348
so yeah, you, you've got a full node, kind of Bitcoin wallet and

262
00:13:06,348 --> 00:13:07,518
a full node lightning wallet.

263
00:13:07,818 --> 00:13:14,468
And then there are sort of client server modes where, you know, you, you trust a

264
00:13:14,468 --> 00:13:19,208
custodian and it, it runs the node, or you have remote control wallets where

265
00:13:19,208 --> 00:13:22,478
you run a node and then your, your phone wallet actually remote controls it.

266
00:13:22,478 --> 00:13:23,478
The remote control.

267
00:13:24,803 --> 00:13:29,003
But, um, so Greenlight is a, is another kind of protocol,

268
00:13:29,633 --> 00:13:32,153
which is still self custodial.

269
00:13:32,153 --> 00:13:35,903
You have your keys and you, you know, you verify the information you get from

270
00:13:35,903 --> 00:13:39,263
the network and so you know, you know you have a good degree of security that

271
00:13:39,263 --> 00:13:42,953
somebody can't trick you into spending the money in a way you didn't expect.

272
00:13:43,913 --> 00:13:49,013
But it's sort of server assisted and so it makes a much lighter client.

273
00:13:49,073 --> 00:13:51,323
The client doesn't need to sync as much data.

274
00:13:51,328 --> 00:13:52,703
It doesn't need as much storage.

275
00:13:53,063 --> 00:13:55,463
It can connect to the network, reconnect to the network after being

276
00:13:55,463 --> 00:13:59,663
offline for a few days and immediately transact with high reliability and

277
00:13:59,663 --> 00:14:02,363
normal, like full node type of line.

278
00:14:02,513 --> 00:14:06,203
Lightning wallet will sync a lot of data and analyze it before it can do that.

279
00:14:06,383 --> 00:14:11,423
So it makes a sort of lower bandwidth flow of storage faster, more reliable.

280
00:14:11,423 --> 00:14:12,743
Lightning wallet basically.

281
00:14:13,013 --> 00:14:17,918
Um, And so we've, uh, you know, worked with a few companies.

282
00:14:17,918 --> 00:14:22,508
So Breeze is adopting that as a protocol and we're integrating

283
00:14:22,508 --> 00:14:24,278
it into the Green Wallet too.

284
00:14:24,278 --> 00:14:28,238
And that's available in, uh, kind of early access beta program.

285
00:14:28,268 --> 00:14:30,458
And it should be live as well soon.

286
00:14:30,458 --> 00:14:37,448
So that's, uh, interesting for, uh, like recent developments in Lightning,

287
00:14:37,718 --> 00:14:42,968
um, and from a Core Lightning, which is the implementation of Blockstream

288
00:14:42,968 --> 00:14:45,578
works on, and there are lots of open source contributors as well.

289
00:14:45,668 --> 00:14:45,758
Mm-hmm.

290
00:14:46,003 --> 00:14:53,228
Um, we have, um, some kind of, uh, user interface to control a node.

291
00:14:53,228 --> 00:14:56,378
So if you do run a Core Lightning node, there's a user interface to,

292
00:14:56,798 --> 00:14:59,738
you know, so you'd have to like come online, change the configurations

293
00:14:59,828 --> 00:15:00,878
as the user interface for it.

294
00:15:00,938 --> 00:15:05,768
And that's been, uh, it was already on Unreel and now it's available

295
00:15:05,768 --> 00:15:08,228
on Start nine as well, which is another kind of Bitcoin full

296
00:15:08,228 --> 00:15:09,758
node where you can install apps.

297
00:15:10,913 --> 00:15:14,363
Uh, so there's a new app, which is Core Lightning with the user interface.

298
00:15:14,543 --> 00:15:23,453
Um, and so there are a number of, um, interesting developments

299
00:15:23,458 --> 00:15:29,543
between sort of this evolution of lightning becoming a bridging

300
00:15:29,543 --> 00:15:31,313
protocol between other layer twos.

301
00:15:31,373 --> 00:15:39,533
So there's another company called Bolt uh, bolts, which is doing submarine swaps.

302
00:15:39,533 --> 00:15:44,933
So a kind of trustless swap historically between a Bitcoin U T X

303
00:15:44,938 --> 00:15:47,303
O and a lightning Challenge balance.

304
00:15:47,783 --> 00:15:50,903
So if you're a merchant and you're selling a lot of things and

305
00:15:50,903 --> 00:15:52,073
you've got, you know, a lot of.

306
00:15:52,868 --> 00:15:54,488
Bitcoin stacked up on a lightning channel.

307
00:15:55,088 --> 00:15:58,118
You can swap it with bolts who will give you a U T X O.

308
00:15:58,118 --> 00:15:58,208
Mm-hmm.

309
00:15:58,668 --> 00:15:59,028
On chain.

310
00:15:59,438 --> 00:16:02,588
And then you'll get your capacity back so you're ready to accept more payments.

311
00:16:03,098 --> 00:16:05,768
So you can use it to take capacity out or you can do the opposite as a

312
00:16:05,768 --> 00:16:07,988
user, you can use it to buy capacity.

313
00:16:08,348 --> 00:16:11,888
And so you pay them A U T X O and they add balance.

314
00:16:12,698 --> 00:16:20,708
And with the, uh, sort of rapid increase in on chain fees from, you know, the orals

315
00:16:20,708 --> 00:16:24,818
and the descriptors and all that stuff, it created a natural problem for them.

316
00:16:24,908 --> 00:16:28,178
You know, they were having trouble making these transactions complete.

317
00:16:28,298 --> 00:16:28,478
Yeah.

318
00:16:28,478 --> 00:16:29,408
And reliability.

319
00:16:30,308 --> 00:16:33,368
And then a very short period of time, like in a week or two, they implemented.

320
00:16:34,358 --> 00:16:37,538
A submarine swap between liquid Bitcoin, so on a liquid side

321
00:16:37,538 --> 00:16:39,488
chain layer two and lightning.

322
00:16:39,698 --> 00:16:43,658
So now you could rebalance an on chain lightning channel using a

323
00:16:43,658 --> 00:16:48,488
different layer two Bitcoin, liquid Bitcoin, and it's, it's cheaper.

324
00:16:48,493 --> 00:16:52,298
Like the liquid is not as congested as the main chain, and it's

325
00:16:52,298 --> 00:16:55,958
faster because the blocks are one minute and two blocks is final.

326
00:16:56,618 --> 00:17:00,278
And so then they had a way for you to basically rebalance

327
00:17:00,283 --> 00:17:00,908
your lightning channel.

328
00:17:00,908 --> 00:17:02,798
So the same kind of behavior, but using liquid.

329
00:17:03,158 --> 00:17:07,909
And even after the fees, you know, the orals and the scripters, mm-hmm.

330
00:17:08,478 --> 00:17:13,418
Phase like that fad faded, I guess when the feed fell to normal levels.

331
00:17:14,198 --> 00:17:18,158
Apparently they were saying that the, uh, liquid Bitcoin swap remained

332
00:17:18,158 --> 00:17:21,638
like a significant proportion of their ongoing swap traffic.

333
00:17:21,638 --> 00:17:25,808
So people found that a convenient and faster way to rebalance channels

334
00:17:26,318 --> 00:17:27,758
once they got used to it, basically.

335
00:17:27,878 --> 00:17:32,438
So, so when the wizards broke Bitcoin, so to speak, they they actually helped.

336
00:17:32,948 --> 00:17:33,398
Yeah.

337
00:17:33,428 --> 00:17:39,668
Well it, it's, it is interesting 'cause like it seems that, um, there's

338
00:17:39,668 --> 00:17:47,138
not so much proactive sort of work by service companies in Bitcoin like

339
00:17:47,138 --> 00:17:50,498
exchanges and wallets and payment providers and swap suppliers.

340
00:17:50,978 --> 00:17:53,648
They don't necessarily like proactively plan for what would

341
00:17:53,648 --> 00:17:56,078
happen if the fees increase in the future, but when they increase.

342
00:17:57,128 --> 00:18:02,018
They take some, uh, sort of disaster avoiding action quickly.

343
00:18:02,023 --> 00:18:02,358
Uhhuh, right?

344
00:18:02,358 --> 00:18:02,598
Yeah.

345
00:18:02,738 --> 00:18:07,358
And so they just look around for what, what's the quickest, the quickest fix.

346
00:18:07,448 --> 00:18:10,448
And they'll look at, you know, recent technology developments

347
00:18:10,448 --> 00:18:11,708
or things they can do quickly.

348
00:18:11,798 --> 00:18:12,578
And this is one of them.

349
00:18:12,578 --> 00:18:16,898
So, yeah, I mean actually, you know, we can thank the, uh, inscriptions

350
00:18:16,898 --> 00:18:21,518
for that, which is they created a fees spike, which made Bitcoin

351
00:18:21,518 --> 00:18:23,858
more robust and, uh, scalable.

352
00:18:23,858 --> 00:18:24,068
Right?

353
00:18:24,098 --> 00:18:26,828
'cause people adopted another kind of technology that

354
00:18:26,828 --> 00:18:29,288
offloads capacity draw on a

355
00:18:29,318 --> 00:18:29,858
main chain.

356
00:18:30,458 --> 00:18:33,818
It's, it's, uh, akin to the lockdowns driving the development

357
00:18:33,818 --> 00:18:35,048
of video conferencing apps.

358
00:18:35,048 --> 00:18:35,138
Mm-hmm.

359
00:18:35,378 --> 00:18:35,678
Like,

360
00:18:37,118 --> 00:18:41,693
well, here it's good because, you know, it means that, Now there's more U T X

361
00:18:41,693 --> 00:18:44,783
O space for cold storage and censorship resistant payments on the main chain.

362
00:18:44,783 --> 00:18:44,873
Mm-hmm.

363
00:18:45,113 --> 00:18:47,783
Because, you know, if there're the same number of lightning channels,

364
00:18:47,783 --> 00:18:50,783
you can rebalance 'em without touching the main chain, which is great.

365
00:18:50,783 --> 00:18:51,053
Right?

366
00:18:51,223 --> 00:18:51,513
Yeah.

367
00:18:51,683 --> 00:18:52,103
Yeah.

368
00:18:52,553 --> 00:18:56,813
And, uh, so what about the latest fad, this BIP 300 debate?

369
00:18:56,873 --> 00:19:01,643
And like, I, I won't go to, into the details of that very thing, but there's,

370
00:19:01,673 --> 00:19:08,003
there seems to be this eternal battle between, uh, Bitcoin conservatism, if

371
00:19:08,003 --> 00:19:10,553
you will, and, uh, Bitcoin progressivism.

372
00:19:10,583 --> 00:19:10,673
Mm-hmm.

373
00:19:10,913 --> 00:19:14,873
Like, so, uh, have we already oscillated like what, what,

374
00:19:14,873 --> 00:19:17,003
what's, what's your angle on that?

375
00:19:17,183 --> 00:19:22,343
Uh, is it worth, like, how much should we resist change and how

376
00:19:22,553 --> 00:19:26,003
much should we push for change and how hard is it to change it?

377
00:19:26,003 --> 00:19:28,793
Like, do you see bitcoin ever hard forking again?

378
00:19:28,793 --> 00:19:32,873
I know there are some issues that need to be resolved, but

379
00:19:32,878 --> 00:19:33,323
Yeah.

380
00:19:33,353 --> 00:19:36,413
I mean, I think technically most of these are soft forks

381
00:19:36,413 --> 00:19:38,543
and, and there's a surprising.

382
00:19:39,623 --> 00:19:40,973
Amount you can do with a software.

383
00:19:41,033 --> 00:19:44,813
Like it turns out to be more powerful than people originally thought.

384
00:19:44,873 --> 00:19:49,973
But I think nevertheless, the question is like, historically

385
00:19:50,153 --> 00:19:57,023
Bitcoin has resisted any change that has not got widespread technical

386
00:19:57,053 --> 00:20:00,053
Konsensus, like all the technical people agree it's the best approach

387
00:20:00,053 --> 00:20:02,693
to a given like problem or mm-hmm.

388
00:20:03,533 --> 00:20:04,433
A new feature.

389
00:20:05,303 --> 00:20:09,023
And that, you know, the ecosystem like it, i e the Bitcoin investors.

390
00:20:09,023 --> 00:20:15,803
Like it, 'cause the way I look at the, the fork was, is, you know, I

391
00:20:15,803 --> 00:20:18,713
think a lot of people, everybody from different viewpoints learned from it.

392
00:20:18,743 --> 00:20:21,473
I think, um, weren't sure how that was gonna resolve.

393
00:20:21,473 --> 00:20:24,533
Some people thought miners had a lot of control, and so they lobbied miners.

394
00:20:24,533 --> 00:20:26,033
It turned out they had very little control.

395
00:20:26,333 --> 00:20:28,823
Other people thought developers had control, but, you know, the solution

396
00:20:28,823 --> 00:20:29,933
didn't involve the developers.

397
00:20:30,443 --> 00:20:33,323
And really it turned out that the market won.

398
00:20:33,443 --> 00:20:37,283
You know, so the people that, I mean, I, I look at it like the.

399
00:20:38,078 --> 00:20:39,968
Labor theory of value fallacy, right?

400
00:20:39,998 --> 00:20:45,758
If, if I'm a Goldberg and I'm buying gold and some miners have a revolt over there

401
00:20:45,758 --> 00:20:48,698
and decide they're gonna dig up some lead and expect me to pay for it for,

402
00:20:49,088 --> 00:20:51,578
because it costs money to dig outta the ground, I'm like, I don't, I don't care.

403
00:20:51,578 --> 00:20:52,778
I don't, I want gold.

404
00:20:53,318 --> 00:20:55,688
I don't care how expensive it was to wind the lead, I don't want it.

405
00:20:56,288 --> 00:20:58,568
And they're either gonna go bankrupt or they're gonna stop, right?

406
00:20:59,018 --> 00:21:05,438
So I think that is ultimately what happened with, you know, with this

407
00:21:05,438 --> 00:21:09,248
fork drummer, which is that, you know, the miners and the people lobbying

408
00:21:09,248 --> 00:21:13,118
them were philosophically wanting to make a different trade off of

409
00:21:13,123 --> 00:21:18,158
bitcoins, sort of dilute Bitcoins immutability and sensate resistance

410
00:21:18,158 --> 00:21:20,588
and like decentralized robustness.

411
00:21:21,308 --> 00:21:23,858
Trade that off for some cheaper, like on chain transactions.

412
00:21:24,218 --> 00:21:24,278
Yeah.

413
00:21:24,338 --> 00:21:26,708
And the investors said, no, we don't, we don't want that.

414
00:21:26,798 --> 00:21:32,018
And they have a way to usay the digital gold, which they run a full node, and

415
00:21:32,018 --> 00:21:35,138
if you mind something they don't like, it's automatic, they don't even see it.

416
00:21:35,138 --> 00:21:35,408
Right.

417
00:21:35,468 --> 00:21:36,608
And they certainly won't accept it.

418
00:21:36,668 --> 00:21:38,978
So, and they set the price.

419
00:21:39,038 --> 00:21:43,268
So, you know, the miners will just, it turn out, will mine whatever

420
00:21:43,268 --> 00:21:46,208
is, uh, more profitable to mine when it comes to the crunch.

421
00:21:46,208 --> 00:21:46,388
Right.

422
00:21:46,388 --> 00:21:46,448
Hmm.

423
00:21:47,078 --> 00:21:52,568
So now, um, I do think the.

424
00:21:53,528 --> 00:21:59,888
The concept of Bitcoin immutability or ossification is important for long

425
00:21:59,888 --> 00:22:02,918
term because change implies risk.

426
00:22:03,188 --> 00:22:09,248
And you know, you want to like reduce risk as more value piles up on Bitcoin.

427
00:22:09,548 --> 00:22:13,688
And um, I mean if you look at, let's say other internet things like T C

428
00:22:13,693 --> 00:22:18,368
P I P, basic T C P I P version four hasn't changed materially in decades.

429
00:22:18,638 --> 00:22:18,968
Right.

430
00:22:18,968 --> 00:22:20,078
And like it still interoperates.

431
00:22:20,298 --> 00:22:20,718
Mm-hmm.

432
00:22:20,798 --> 00:22:22,178
It's essentially the same protocol.

433
00:22:22,658 --> 00:22:27,968
Um, and so, you know, ideally you'd want bitcoin layer one to

434
00:22:27,968 --> 00:22:29,978
be like that after, you know.

435
00:22:29,978 --> 00:22:30,248
Yeah, yeah.

436
00:22:30,278 --> 00:22:32,798
Various limitations are, are improved.

437
00:22:32,858 --> 00:22:39,248
So the question is what changes minimally need to be there to get to that point?

438
00:22:39,818 --> 00:22:42,879
And that's like not so clear 'cause it's still in a bit of r and d.

439
00:22:43,388 --> 00:22:46,959
So, you know, um, I think.

440
00:22:48,713 --> 00:22:55,643
You know, like recent op codes that's been discussed are like, uh, a p

441
00:22:55,643 --> 00:23:00,473
o, so something to make, um, a more efficient variant of lightning possible

442
00:23:00,623 --> 00:23:03,803
l symmetry and APOs any previous sale.

443
00:23:04,163 --> 00:23:06,923
Um, another one is covenants.

444
00:23:06,928 --> 00:23:10,643
So they're sort of a attached to use cases that people think are useful.

445
00:23:10,643 --> 00:23:16,133
So, um, and that the, the second one, the sort of covenant use

446
00:23:16,133 --> 00:23:18,413
case is attached to vaults.

447
00:23:18,623 --> 00:23:18,713
Mm-hmm.

448
00:23:18,953 --> 00:23:25,343
So I think, and I think that is a, uh, a significant improvement in cold storage

449
00:23:25,343 --> 00:23:34,493
security, which means that if you have some Bitcoin in a safe and, you know,

450
00:23:34,493 --> 00:23:37,223
you go away for a few days and when you come back, the safe's not there anymore.

451
00:23:37,553 --> 00:23:40,103
You know, somebody's taking it away and like cut it open or something.

452
00:23:40,103 --> 00:23:40,163
Yeah.

453
00:23:40,943 --> 00:23:43,103
Now you need to be able to undo that transaction.

454
00:23:43,898 --> 00:23:46,208
Like send a coin somewhere even colder.

455
00:23:46,508 --> 00:23:46,898
Right?

456
00:23:47,168 --> 00:23:49,118
And so a vault enables you to do that.

457
00:23:49,268 --> 00:23:49,358
Mm-hmm.

458
00:23:49,748 --> 00:23:52,538
And to share the undo transaction with other people.

459
00:23:52,748 --> 00:23:57,188
So you could give it, you know, to your friends, it'd be kind of like a anti

460
00:23:57,188 --> 00:23:59,108
kidnapping possibility also, right?

461
00:23:59,108 --> 00:23:59,109
Mm-hmm.

462
00:23:59,115 --> 00:24:03,698
Because, you know, if, if the, if you can give the cancellation instructions and

463
00:24:03,698 --> 00:24:09,068
pre-sign transactions to third parties, they can say, well, uh, you know, I

464
00:24:09,068 --> 00:24:10,808
can't reach the guy for a couple of days.

465
00:24:11,018 --> 00:24:12,008
I'm getting nervous.

466
00:24:12,013 --> 00:24:13,388
None of his friends have heard from him.

467
00:24:13,388 --> 00:24:16,538
So we're gonna cancel all these transactions, and that will kind

468
00:24:16,538 --> 00:24:18,278
of, so that's the vault concept.

469
00:24:18,283 --> 00:24:22,578
So I think that is quite hard to do properly without, you know,

470
00:24:22,718 --> 00:24:23,888
like a covenant, like op code

471
00:24:23,888 --> 00:24:24,248
or something.

472
00:24:24,253 --> 00:24:26,618
Couldn't, couldn't it be done with time locks?

473
00:24:27,668 --> 00:24:34,418
Um, well, the thing is you need to sort of, I mean the, the, you

474
00:24:34,423 --> 00:24:36,098
need another variable, like Yeah.

475
00:24:36,098 --> 00:24:40,448
I mean, the effect you want is that, You can devolt.

476
00:24:40,478 --> 00:24:44,198
So I can take some coins out of a vault and they're kind of stuck

477
00:24:44,198 --> 00:24:48,458
in a time lock situation where I can spend them with a key, I have

478
00:24:48,458 --> 00:24:50,288
access to after a week, let's say.

479
00:24:51,068 --> 00:24:55,029
Um, and, you know, if I have the keys, I could spend 'em in a different way, right?

480
00:24:55,034 --> 00:24:55,128
Mm-hmm.

481
00:24:55,588 --> 00:24:56,588
In the meantime.

482
00:24:56,678 --> 00:25:01,298
And so I need, I need to like pre-sign it with some keys I don't have anymore.

483
00:25:01,418 --> 00:25:04,628
So then you have to kind of, the, the be, I think the best you can do to simulate it

484
00:25:04,628 --> 00:25:10,148
is, you know, I have my cold wallet and I pre-sign all the ut XOs and then I delete

485
00:25:10,148 --> 00:25:12,728
the keys, which is kinda scary right now.

486
00:25:12,728 --> 00:25:15,968
Now my cold, now my wallet is a bunch of pre-sign transactions

487
00:25:16,808 --> 00:25:17,858
and I have to back those up.

488
00:25:18,218 --> 00:25:20,378
So that's, that's hard to do with a seed.

489
00:25:20,378 --> 00:25:25,148
I have to like back up a lot of, so it's, it adds its own risk.

490
00:25:26,123 --> 00:25:31,043
It's a bit of a difficult trade off because you are, on the one

491
00:25:31,043 --> 00:25:33,593
hand, trying to have a good backup of the keys until you use them.

492
00:25:34,193 --> 00:25:38,153
On the other hand, trying to be very sure you've deleted them so that you

493
00:25:38,153 --> 00:25:40,283
can't override your vault mechanism.

494
00:25:40,283 --> 00:25:41,783
So it's kind of a bit of a conflict.

495
00:25:41,873 --> 00:25:41,963
Mm-hmm.

496
00:25:42,263 --> 00:25:46,163
So it's hard to get to do it in a robust and like reliable way,

497
00:25:46,493 --> 00:25:47,663
whereas the vault can do it.

498
00:25:47,783 --> 00:25:51,623
'cause you can, you know, write a covenant allows you to write a sort of

499
00:25:51,628 --> 00:25:56,093
restriction, which is to say, well I have the keys, but you know, the coins

500
00:25:56,093 --> 00:26:00,053
are set so that I'm not able to spend them unless I spend 'em like this.

501
00:26:00,653 --> 00:26:05,033
And so you can add the, the vault, the de vaulting as a restriction on the coins.

502
00:26:05,753 --> 00:26:07,913
And then you don't need to delete keys basically.

503
00:26:07,913 --> 00:26:09,473
So that's the, okay.

504
00:26:09,563 --> 00:26:09,863
Yeah.

505
00:26:10,493 --> 00:26:13,943
So you can simulate here, but not, not that well.

506
00:26:14,708 --> 00:26:18,518
And like covenants also, I mean, most Bitcoin op codes are very low level.

507
00:26:18,548 --> 00:26:21,548
It's kinda like a machine instructions in A C P U.

508
00:26:21,548 --> 00:26:25,238
It doesn't do very much like each op code is like, you know, push a

509
00:26:25,238 --> 00:26:30,038
number on a stack or add two numbers together, or verify signature.

510
00:26:30,043 --> 00:26:32,228
They're like very low level things.

511
00:26:32,228 --> 00:26:32,738
Mm-hmm.

512
00:26:32,748 --> 00:26:37,418
Um, and so a volt is like the, sorry, the, the covenants are a bit like that,

513
00:26:37,448 --> 00:26:41,258
you know, it, it requires a certain structure in the output transaction.

514
00:26:41,528 --> 00:26:42,788
So it's a relatively simple thing.

515
00:26:42,788 --> 00:26:45,278
And so of course once you have it, you can, you can do

516
00:26:45,278 --> 00:26:46,358
other things with it as well.

517
00:26:46,358 --> 00:26:46,598
Right.

518
00:26:47,108 --> 00:26:47,528
Alright.

519
00:26:48,098 --> 00:26:49,178
So yeah.

520
00:26:50,138 --> 00:26:54,938
So what separates, um, liquid from, from these other proposed side

521
00:26:54,938 --> 00:26:56,468
chains and drive chains and whatnot?

522
00:26:56,468 --> 00:26:58,448
Like what, what's the, what's the key difference?

523
00:26:58,868 --> 00:27:03,188
Yeah, so liquid is the sort of side chain you can build without.

524
00:27:03,638 --> 00:27:04,238
New op codes.

525
00:27:05,108 --> 00:27:12,278
So, and the way, the way it works is there's a federation, so a number of

526
00:27:12,278 --> 00:27:18,818
exchanges and service providers operating a hardware security module that is, you

527
00:27:18,818 --> 00:27:20,498
know, participating in a liquid network.

528
00:27:20,798 --> 00:27:24,608
So they're running a liquid full node, which is a kind of extended

529
00:27:24,608 --> 00:27:26,378
version of Bitcoin protocol.

530
00:27:26,408 --> 00:27:30,368
So like liquid side chain is Bitcoin plus some extensions, basically.

531
00:27:30,373 --> 00:27:30,698
Right.

532
00:27:31,178 --> 00:27:36,518
And then they, and, and from the Bitcoin's perspective, the coins

533
00:27:36,518 --> 00:27:37,838
look like they're in a big multisig.

534
00:27:38,288 --> 00:27:43,643
Um, And these hardware security modules will, you know, accept

535
00:27:43,643 --> 00:27:46,793
coins in and let people claim them on liquid as liquid Bitcoin.

536
00:27:46,793 --> 00:27:47,663
Mm-hmm.

537
00:27:47,723 --> 00:27:52,973
And if on the liquid side somebody requests to peg them out or like freeze

538
00:27:52,973 --> 00:27:57,083
them or burn them on liquid and request them back on the Bitcoin side, then

539
00:27:57,083 --> 00:28:01,883
the, uh, the hardware security modules will sign to follow that instruction

540
00:28:01,883 --> 00:28:03,203
and give it back to somebody on Bitcoin.

541
00:28:03,803 --> 00:28:12,623
So it has, um, you know, it's not as censorship resistant or.

542
00:28:13,478 --> 00:28:17,168
Like, and, and not as good a place to do cold storage as Bitcoin, but

543
00:28:17,168 --> 00:28:21,218
for its kind of general purpose of like medium sized transactions,

544
00:28:21,878 --> 00:28:23,828
short term trading or transacting.

545
00:28:24,158 --> 00:28:25,448
But it has some advantages.

546
00:28:25,453 --> 00:28:32,198
So, uh, for example, one of the extensions is, uh, stable coins.

547
00:28:32,318 --> 00:28:32,438
Mm-hmm.

548
00:28:32,444 --> 00:28:35,708
So you could have other assets and so that's convenient because now you can

549
00:28:36,398 --> 00:28:42,818
do kind of limit orders and atomic swaps between, you know, different assets.

550
00:28:42,823 --> 00:28:44,838
Whereas on Bitcoin, there's only one asset is Bitcoin, right?

551
00:28:44,858 --> 00:28:44,948
Mm-hmm.

552
00:28:45,578 --> 00:28:46,448
So you get that.

553
00:28:46,868 --> 00:28:50,708
Um, and so the difference is really that, you know, if something goes

554
00:28:50,708 --> 00:28:54,098
wrong on liquid, Bitcoin doesn't really know or care about it.

555
00:28:54,128 --> 00:28:55,688
All it sees is a multisig.

556
00:28:55,693 --> 00:28:56,038
Mm-hmm.

557
00:28:56,123 --> 00:28:56,408
Right?

558
00:28:56,468 --> 00:29:01,733
Whereas I think there are a few different types of, Um,

559
00:29:02,213 --> 00:29:04,283
merge mine, side chain ideas.

560
00:29:04,283 --> 00:29:06,743
The original one evolved fraud proofs.

561
00:29:07,193 --> 00:29:11,843
So the idea there was with the merge mining there would be, you know, the

562
00:29:11,848 --> 00:29:19,013
Bitcoin miners would be also hashing the, uh, the side chain, so they wouldn't

563
00:29:19,013 --> 00:29:23,423
like look at the side chain and see if it's valid necessarily, but they would

564
00:29:24,053 --> 00:29:25,793
like put a timestamp on it or something.

565
00:29:25,793 --> 00:29:26,123
Right.

566
00:29:26,123 --> 00:29:28,283
So dedicate hashing power to it.

567
00:29:28,793 --> 00:29:28,973
Yeah.

568
00:29:28,973 --> 00:29:31,403
I mean, it's merged mines, so, you know, they mine bitcoin and then

569
00:29:31,403 --> 00:29:34,193
they put the checks on off the most recent side chain block mm-hmm.

570
00:29:34,613 --> 00:29:35,873
Into the main Bitcoin block.

571
00:29:36,413 --> 00:29:39,803
But it doesn't, you know, if, if the side chain like has a bug and

572
00:29:39,803 --> 00:29:41,693
forks like experimental or something.

573
00:29:41,753 --> 00:29:42,053
Yeah.

574
00:29:42,203 --> 00:29:45,953
It won't fork the Bitcoin network, you know, they can ignore it and

575
00:29:47,003 --> 00:29:52,433
uh, typically the side chain could be, you know, the Bitcoin chain can

576
00:29:52,433 --> 00:29:56,933
be progressing forwards, processing transactions, adding new blocks.

577
00:29:57,728 --> 00:30:01,268
While the merge mining is doing a reorg, you know, like undoing

578
00:30:01,268 --> 00:30:05,078
a transaction or oring something that was a mistake on a side chain.

579
00:30:05,078 --> 00:30:09,128
So there's not really any pressure on a side chain to want to undo

580
00:30:09,308 --> 00:30:12,668
Bitcoin blocks just to undo something on a side chain, because that's,

581
00:30:12,673 --> 00:30:13,778
that's one of the concerns, right?

582
00:30:13,778 --> 00:30:13,779
Mm-hmm.

583
00:30:13,785 --> 00:30:17,468
It's like you get a lot of economic activity on a side chain and something

584
00:30:17,468 --> 00:30:20,108
goes wrong and then they desperately wanna undo it, and then they come and

585
00:30:20,108 --> 00:30:23,798
try to plead with the miners to okay, pay them to undo the whole chain.

586
00:30:23,798 --> 00:30:24,008
Right?

587
00:30:24,008 --> 00:30:27,278
And you, you want Bitcoin to like never go backwards.

588
00:30:27,398 --> 00:30:29,948
Um, you don't want people

589
00:30:29,948 --> 00:30:31,598
to shit Bitcoin on Bitcoin, right?

590
00:30:32,108 --> 00:30:32,438
Yeah.

591
00:30:32,438 --> 00:30:36,188
Well, I mean, you don't want to import the, the incentive

592
00:30:36,188 --> 00:30:37,538
to undo mistakes onto Bitcoin.

593
00:30:37,538 --> 00:30:38,768
It's just kinda like Ethereum, right?

594
00:30:38,768 --> 00:30:41,288
They, they made some god awful mess.

595
00:30:41,288 --> 00:30:45,578
They like screwed something up big time and the people affected

596
00:30:45,583 --> 00:30:49,823
financially were the insiders and so they like, Undid a bunch of stuff.

597
00:30:49,883 --> 00:30:50,093
Yeah.

598
00:30:50,363 --> 00:30:52,043
And now there are two Ethereums.

599
00:30:52,103 --> 00:30:52,403
Right.

600
00:30:52,523 --> 00:30:57,953
And uh, so you know, if that was a Bitcoin side chain and not Ethereum, you

601
00:30:57,953 --> 00:31:01,793
know, what would they have come and, and one that's tied to Bitcoin, like Yeah.

602
00:31:01,823 --> 00:31:02,453
Block height.

603
00:31:02,513 --> 00:31:05,363
Now would they, and they want to undo it, would they do come to the miners?

604
00:31:05,368 --> 00:31:06,503
Is like, could you please undo that?

605
00:31:07,043 --> 00:31:10,073
I mean, I think it's very difficult in Bitcoin, you know, people have tried that,

606
00:31:10,073 --> 00:31:12,383
like a number of exchanges have got hacks.

607
00:31:12,893 --> 00:31:16,703
For large amounts of money like Bitfinex back in 2015.

608
00:31:16,763 --> 00:31:16,973
Mm-hmm.

609
00:31:17,273 --> 00:31:19,823
They, they, you know, they resolved it now, uh, they got, you know,

610
00:31:19,823 --> 00:31:22,733
they raised the money like long time ago, so it's long resolved.

611
00:31:22,733 --> 00:31:26,243
But, you know, at the time people were wondering, and more recently, I

612
00:31:26,243 --> 00:31:30,383
think last year or two, Binance had some hack and they came and talked

613
00:31:30,383 --> 00:31:34,313
to you, tried to talk to developers or miners, like, could you undo it?

614
00:31:34,553 --> 00:31:36,063
Like, I mean, not really, no.

615
00:31:36,243 --> 00:31:39,443
You know, I mean, just, just imagine the chaos if it was undone,

616
00:31:39,443 --> 00:31:40,623
you know, like the Yeah, yeah.

617
00:31:41,093 --> 00:31:42,383
Just the accounting costs.

618
00:31:42,413 --> 00:31:46,793
Like, 'cause other things could get replayed or double spent if something was

619
00:31:46,793 --> 00:31:49,403
redone, it's, it's not remotely worth it.

620
00:31:49,483 --> 00:31:49,863
No, no.

621
00:31:49,863 --> 00:31:50,813
So it doesn't make any

622
00:31:50,813 --> 00:31:51,173
sense.

623
00:31:51,563 --> 00:31:54,323
So, so it would mess with the incentive structures basically.

624
00:31:54,323 --> 00:31:54,683
Yeah.

625
00:31:54,983 --> 00:31:55,703
So that's one concern.

626
00:31:55,703 --> 00:31:56,873
And, and then the drive chain.

627
00:31:57,053 --> 00:32:00,353
So the, the original side chain is like merge mind and it, and it

628
00:32:00,353 --> 00:32:04,493
presents a compact proof to Bitcoin, so it adds a soft hook to bitcoin.

629
00:32:04,913 --> 00:32:06,023
This is the concept, right?

630
00:32:06,203 --> 00:32:06,293
Mm-hmm.

631
00:32:06,533 --> 00:32:12,473
To, to verify a proof that most of the merge mining work like that

632
00:32:12,473 --> 00:32:14,813
there's a certain amount of merge mine work on the side chain that

633
00:32:14,813 --> 00:32:16,523
approves this withdrawal request.

634
00:32:16,643 --> 00:32:16,763
Mm-hmm.

635
00:32:17,003 --> 00:32:21,173
So it doesn't verify the whole side chain, but it can see that, you know, there's

636
00:32:21,178 --> 00:32:25,583
a lot of merge mining that seems to be saying that the miners agree that this

637
00:32:25,583 --> 00:32:27,473
guy should be able to withdraw this coin.

638
00:32:27,923 --> 00:32:31,643
And then there's a time lock, kinda like with lightning, where somebody else

639
00:32:31,643 --> 00:32:35,483
can sort of provide an even more work, like a, a higher block height mm-hmm.

640
00:32:35,783 --> 00:32:39,173
With something that contradicts the first one and then they can cancel the withdraw.

641
00:32:39,623 --> 00:32:42,263
It's kinda like a reactive security, like lightning.

642
00:32:43,163 --> 00:32:44,993
So that was one version.

643
00:32:44,993 --> 00:32:50,993
And a drive chain is a simplified version, so it uh, has no fraud proofs.

644
00:32:51,083 --> 00:32:58,493
It just says, well, they make the peg out slow and so, If the users see

645
00:32:58,973 --> 00:33:03,263
coins being stolen by a big conspiracy of miners, they have three months or

646
00:33:03,263 --> 00:33:05,633
six months to do something about it.

647
00:33:05,813 --> 00:33:09,563
And if you think about it, the, the scenario is that there's a

648
00:33:09,563 --> 00:33:11,213
conspiracy between most of the miners.

649
00:33:11,453 --> 00:33:15,683
So now the users, you know, Bitcoin users and investors can't really get the

650
00:33:15,683 --> 00:33:19,013
miners to help prevent that because the miner's already in the conspiracy, right?

651
00:33:19,018 --> 00:33:19,073
Mm-hmm.

652
00:33:19,158 --> 00:33:25,283
So now Bitcoin basically has to undertake a U A S F like situation.

653
00:33:25,288 --> 00:33:25,393
Mm-hmm.

654
00:33:26,468 --> 00:33:30,458
To say, to like, sort of, you know, save that to the miners.

655
00:33:30,458 --> 00:33:34,868
Look, we're gonna block this, this theft, and if you try to do it

656
00:33:34,868 --> 00:33:36,938
anyway, you know, we changed the code.

657
00:33:36,938 --> 00:33:39,908
If you change that, if you do it anyway, you're gonna fork off

658
00:33:39,908 --> 00:33:42,638
the network and we're not gonna honor your coins, so don't do it.

659
00:33:43,178 --> 00:33:46,748
And that, that was kind of like what happened with the Segway activation.

660
00:33:46,898 --> 00:33:47,048
Mm-hmm.

661
00:33:47,288 --> 00:33:52,178
And it was a very dramatic and kind of scary thing with some, a fair bit of risk.

662
00:33:53,108 --> 00:33:54,698
So people don't want that kinda risk.

663
00:33:54,698 --> 00:33:55,028
Right.

664
00:33:56,078 --> 00:33:59,138
And so that's, that's the challenge for drive change.

665
00:33:59,138 --> 00:34:06,638
Like the, the sort of disincentive to steal is kind of, uh, an expensive

666
00:34:06,638 --> 00:34:08,618
exercise in risk terms mm-hmm.

667
00:34:08,863 --> 00:34:09,308
For the main chain.

668
00:34:09,308 --> 00:34:10,688
And people don't like risk on the main chain.

669
00:34:10,693 --> 00:34:12,068
So that's, that's the problem.

670
00:34:12,068 --> 00:34:16,358
I think, uh, like people wanting to opt into things is generally fine, but if

671
00:34:16,363 --> 00:34:18,128
it, if it creates a cost or a risk, then.

672
00:34:19,283 --> 00:34:20,483
It starts to be undesirable.

673
00:34:20,488 --> 00:34:20,603
Yeah.

674
00:34:21,173 --> 00:34:21,413
Sounds

675
00:34:21,413 --> 00:34:23,093
way easier to just not temper with it.

676
00:34:24,053 --> 00:34:25,823
Well, I mean it, it's interesting.

677
00:34:25,828 --> 00:34:30,143
I mean, I think it's always interesting to discuss ideas because by discussing

678
00:34:30,143 --> 00:34:37,163
them, people like invent new things or change their perspective.

679
00:34:37,583 --> 00:34:40,853
Because I think before, like the last few weeks of Drivechain

680
00:34:40,853 --> 00:34:46,883
discussion, people would've said they prefer hash rate controlled

681
00:34:46,883 --> 00:34:48,803
side chains to federate side chains.

682
00:34:48,803 --> 00:34:49,013
Mm-hmm.

683
00:34:49,883 --> 00:34:51,413
Liquid and rootstock.

684
00:34:51,503 --> 00:34:55,643
But I think if you ask them now, they'll change their, they will swap their view.

685
00:34:55,823 --> 00:34:59,633
So now they're like, actually the federated side chain is much less

686
00:34:59,633 --> 00:35:01,253
likely to create a problem for Bitcoin.

687
00:35:01,283 --> 00:35:05,423
And it's much less likely that the, you know, the collection of dozens

688
00:35:05,428 --> 00:35:10,043
of exchanges would have a conspiracy and try to steal the pegged coins.

689
00:35:10,133 --> 00:35:11,273
'cause we know who they are.

690
00:35:11,363 --> 00:35:11,453
Mm-hmm.

691
00:35:11,453 --> 00:35:13,553
I don't involve a massive conspiracy and there'd be legal

692
00:35:13,553 --> 00:35:14,663
problems and stuff like that.

693
00:35:14,663 --> 00:35:14,873
Right.

694
00:35:14,963 --> 00:35:18,503
Whereas if miners do it, it is kind of anonymous.

695
00:35:18,773 --> 00:35:19,583
Um mm-hmm.

696
00:35:20,693 --> 00:35:22,673
And it's more difficult to do anything about it.

697
00:35:22,823 --> 00:35:25,343
So you don't know who to blame, for example.

698
00:35:25,343 --> 00:35:25,673
Right.

699
00:35:25,793 --> 00:35:32,723
Um, so I think even the discussion changed the perception and like,

700
00:35:33,173 --> 00:35:37,943
it's instructed to look at what people don't like about it and why.

701
00:35:38,183 --> 00:35:40,103
'cause maybe there's a way to.

702
00:35:40,478 --> 00:35:42,008
Like make a safer mm-hmm.

703
00:35:42,248 --> 00:35:42,968
Type of supply chain.

704
00:35:43,628 --> 00:35:48,458
So, so how big a part of the discussion and how much influence does the

705
00:35:49,028 --> 00:35:54,278
infighting on Twitter have on Bitcoin's development, like the A T I Q people

706
00:35:54,278 --> 00:35:58,508
and all this stuff, uh, that we're talk, we talk about and like, uh,

707
00:35:58,718 --> 00:36:02,408
um, well, I mean, I think there's like a mixture of people so.

708
00:36:02,768 --> 00:36:06,518
You know, some people will just react, like, don't change Bitcoin.

709
00:36:06,518 --> 00:36:08,408
It's like so morph as a philosophical, right?

710
00:36:08,408 --> 00:36:08,798
Like Yeah.

711
00:36:08,858 --> 00:36:12,338
Based on conservative, uh, you know, well, I mean, it's, it's true actually.

712
00:36:12,338 --> 00:36:19,418
I, I, uh, went to some kind of like private meeting, like a bunch of

713
00:36:19,423 --> 00:36:23,888
like investors and a few tech people just like general discussion for a

714
00:36:23,888 --> 00:36:25,988
weekend kind of thing some years ago.

715
00:36:26,528 --> 00:36:32,408
And like a question I asked for the, in like Bitcoin holder investor or fund

716
00:36:32,408 --> 00:36:36,638
manager type of people is like, well, what features would you value most?

717
00:36:36,878 --> 00:36:37,058
Mm-hmm.

718
00:36:37,358 --> 00:36:40,818
From the technical side for Bitcoin?

719
00:36:41,378 --> 00:36:44,633
And their answer was surprising, which was like, Just don't break it.

720
00:36:44,638 --> 00:36:44,873
Yeah.

721
00:36:44,878 --> 00:36:45,263
Yeah.

722
00:36:45,293 --> 00:36:46,343
That was the number one feature.

723
00:36:46,343 --> 00:36:46,673
Right.

724
00:36:47,063 --> 00:36:48,173
And so that's very interesting.

725
00:36:48,173 --> 00:36:48,353
Right.

726
00:36:48,353 --> 00:36:50,633
'cause like they didn't even care about lightning actually.

727
00:36:50,638 --> 00:36:52,823
It's like, it is like payments.

728
00:36:52,883 --> 00:36:53,993
No, they care about investment.

729
00:36:54,053 --> 00:36:54,983
Oh, that's good to hear.

730
00:36:55,403 --> 00:36:58,043
So like if, if there's something like about key management or vaults

731
00:36:58,048 --> 00:37:01,523
like, okay, like now I'm listening, but it's like about micropayments,

732
00:37:01,523 --> 00:37:02,393
I don't really care about it.

733
00:37:02,753 --> 00:37:08,093
So, no, I think like really you want a bit of both because, you know,

734
00:37:08,093 --> 00:37:11,813
ultimately the value proposition of Bitcoin is the ability to, you know,

735
00:37:11,813 --> 00:37:13,463
do the censorship resistant payments.

736
00:37:13,553 --> 00:37:15,863
And we can get more of those by using something like lightning.

737
00:37:15,863 --> 00:37:21,263
So if we can make lightning better, that also helps the kind of value proposition.

738
00:37:21,293 --> 00:37:21,473
Mm-hmm.

739
00:37:21,953 --> 00:37:25,793
And it also frees up space for cold storage, which is good too.

740
00:37:25,883 --> 00:37:26,273
So,

741
00:37:27,083 --> 00:37:27,323
yeah.

742
00:37:27,383 --> 00:37:32,288
Alright, so, so what's this, uh, This unavoidable bug that is in

743
00:37:32,288 --> 00:37:36,638
the code that needs to be fixed for the hard fork in like 2050 or 2090.

744
00:37:36,638 --> 00:37:38,338
Or, I mean, what is that called?

745
00:37:38,618 --> 00:37:42,608
I, I for, I think the name escapes 6 21 0 6.

746
00:37:42,608 --> 00:37:42,758
Yeah.

747
00:37:42,763 --> 00:37:43,028
Yeah.

748
00:37:43,028 --> 00:37:43,328
That's the

749
00:37:43,328 --> 00:37:43,568
one.

750
00:37:44,138 --> 00:37:49,778
Uh, yeah, I think, I think it's kind of like, you know, the year 2000 bug.

751
00:37:50,138 --> 00:37:50,228
Yeah.

752
00:37:50,228 --> 00:37:51,518
Like some counter wraps around.

753
00:37:51,518 --> 00:37:54,728
'cause it's a 31, it's a 32 sign, 32 bit integer.

754
00:37:54,728 --> 00:37:55,028
Right.

755
00:37:55,033 --> 00:37:59,738
So, so like, but I don't think it's an issue because it's like, you know,

756
00:37:59,798 --> 00:38:04,598
so many decades away that you can just make a technical hard fork that was

757
00:38:04,598 --> 00:38:07,868
fixed, you know, like five decades before it could become an issue.

758
00:38:08,288 --> 00:38:11,798
And then nobody's running like five decades old code and nobody notices.

759
00:38:11,798 --> 00:38:12,098
Right.

760
00:38:12,098 --> 00:38:12,788
Or something like that.

761
00:38:12,788 --> 00:38:14,078
So think it's very simple to fix.

762
00:38:14,228 --> 00:38:14,648
Okay.

763
00:38:15,128 --> 00:38:18,218
But it's like a technical curiosity that like, whoa, we can't fix that without,

764
00:38:18,553 --> 00:38:18,818
okay.

765
00:38:19,238 --> 00:38:22,148
So everyone's sort of relying that we will fix that just

766
00:38:22,148 --> 00:38:24,248
because the sheer amount of time

767
00:38:24,278 --> 00:38:25,178
that we have to fix it.

768
00:38:25,568 --> 00:38:29,378
I mean, I think, I think the thing is if you make some in pop change,

769
00:38:29,888 --> 00:38:31,148
It's very hard to coordinate that.

770
00:38:31,148 --> 00:38:33,698
Everybody would upgrade and then nobody would accidentally like get

771
00:38:33,698 --> 00:38:35,138
left off the network or something.

772
00:38:35,228 --> 00:38:38,918
But you know, if it's coming in like a hundred years, okay.

773
00:38:38,918 --> 00:38:40,508
Like they're not even in a rush to fix it.

774
00:38:40,513 --> 00:38:40,838
Right.

775
00:38:40,838 --> 00:38:46,628
Because you know, as long as you can fix it so far ahead that it's

776
00:38:46,633 --> 00:38:49,358
implausible, anybody would still be running that old software.

777
00:38:49,718 --> 00:38:49,838
Mm-hmm.

778
00:38:50,078 --> 00:38:51,308
Then it's pretty easy to fix.

779
00:38:52,053 --> 00:38:53,963
So how are you enjoying this episode so far?

780
00:38:54,413 --> 00:38:57,433
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823
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Don't forget to like, subscribe, and brush your teeth.

824
00:41:13,702 --> 00:41:15,652
So, so how is Liquid doing?

825
00:41:15,652 --> 00:41:17,392
Like how is liquid adoption doing?

826
00:41:17,392 --> 00:41:20,062
Like how, how, what's the developments like?

827
00:41:20,062 --> 00:41:22,102
What, what do you see there and what do you

828
00:41:22,107 --> 00:41:23,062
predict in the future?

829
00:41:23,122 --> 00:41:27,442
Yeah, so I mean, unlike, uh, it's, it's mostly kind of organic.

830
00:41:27,442 --> 00:41:30,532
So I guess like a little bit analogous to Lightning.

831
00:41:30,532 --> 00:41:32,542
There are different types of startups involved, right?

832
00:41:32,542 --> 00:41:36,712
So people who are building like the Lightning protocol and then the LSPs

833
00:41:36,717 --> 00:41:39,502
and then, you know, applications and games and things like that.

834
00:41:39,502 --> 00:41:42,742
So there's that kind of thing happening with liquid, with multiple startups

835
00:41:42,742 --> 00:41:47,362
building on it and you know, some of them more organic and just, you, you never hear

836
00:41:47,362 --> 00:41:51,232
about them and then they have a products, nobody new and it's in market and now

837
00:41:51,232 --> 00:41:52,642
people are talking about it and using it.

838
00:41:52,762 --> 00:41:55,732
So a number of things like that have happened over the last year.

839
00:41:55,732 --> 00:41:59,422
So, I mean, one is, uh, site swap, which is mm-hmm a liquid

840
00:41:59,422 --> 00:42:08,393
wallet, uh, and um, a kind of, uh, non-custodial central order book.

841
00:42:09,262 --> 00:42:10,342
So you can.

842
00:42:11,647 --> 00:42:15,577
From your wallet, you can, uh, place a limit order to buy

843
00:42:15,577 --> 00:42:18,487
Bitcoin, like below this price.

844
00:42:18,967 --> 00:42:22,627
And you, you sort of sign part of the transaction and you give

845
00:42:22,632 --> 00:42:24,727
it to the server through the app.

846
00:42:25,147 --> 00:42:30,817
And now, um, you can switch your phone off for your desktop app or what have

847
00:42:30,817 --> 00:42:34,477
you, and somebody can come along and decide they wanna sell it to you.

848
00:42:35,257 --> 00:42:39,127
And they'll give their partly signed part to the server, and a server just

849
00:42:39,132 --> 00:42:43,657
combines them, takes its commission and sends it to liquid chain to sell.

850
00:42:44,257 --> 00:42:46,957
And it's a kind of a trustless limit order.

851
00:42:48,097 --> 00:42:55,027
So it's a way to do trading or buying or selling without custodial risk.

852
00:42:55,387 --> 00:42:56,977
And actually they're integrating.

853
00:42:57,832 --> 00:42:59,092
Hardware wallet support.

854
00:42:59,092 --> 00:43:03,202
So you could even, you know, you could use a web experience to like click on the

855
00:43:03,202 --> 00:43:07,282
prices you want and you scan a QR code and then you approve the transaction on your

856
00:43:07,287 --> 00:43:10,522
hardware wallet saying, you know, yeah, I wanna buy Bitcoin at that price, and

857
00:43:10,522 --> 00:43:15,352
I have some liquid tether in my hardware wallet and when it, when it transact.

858
00:43:15,352 --> 00:43:18,442
So basically funds move between two hard or wallets.

859
00:43:18,922 --> 00:43:22,642
So it's an extremely safe way to do trade without the kind of, you

860
00:43:22,647 --> 00:43:27,412
know, tgo, uh, F G X, uh, quadri, all that kind of exchange custody risk.

861
00:43:28,012 --> 00:43:29,272
So that's very interesting.

862
00:43:29,452 --> 00:43:35,812
And you know, they even have, um, so on liquid, there are two types of assets.

863
00:43:35,812 --> 00:43:38,302
There are like liquid Bitcoin and liquid tether things that are

864
00:43:38,302 --> 00:43:40,072
just peer-to-peer transferable.

865
00:43:40,072 --> 00:43:46,522
And then there are sort of, there's an option to make an asset, a security,

866
00:43:46,582 --> 00:43:49,432
it's called amp, uh, a managed asset.

867
00:43:49,432 --> 00:43:57,592
And so, um, The, the thing there is you can't, like, receive it or send it to

868
00:43:57,592 --> 00:44:00,442
somebody who is not like whitelisted.

869
00:44:00,952 --> 00:44:03,562
And a way you get whitelist is your role, like, uh, with an

870
00:44:03,562 --> 00:44:04,552
exchange or something, right?

871
00:44:04,612 --> 00:44:04,732
Mm-hmm.

872
00:44:05,462 --> 00:44:09,692
so yeah, the, the, the way that you, you interact with it is, is like that.

873
00:44:09,692 --> 00:44:13,502
But once you are whitelisted, it's curious because now you are transacting

874
00:44:13,502 --> 00:44:16,592
something which is like a licensed registered security, but you're

875
00:44:16,592 --> 00:44:18,452
transacting in a very pi feel, right?

876
00:44:18,457 --> 00:44:24,542
Like, You know, send somebody 100th of a share as a gift or they can like,

877
00:44:24,542 --> 00:44:27,392
you know, give me 10 euros for it in person, I can send it to 'em or I

878
00:44:27,392 --> 00:44:30,122
can like agree an O OTC price mm-hmm.

879
00:44:30,392 --> 00:44:31,562
And swap it with side swap.

880
00:44:31,562 --> 00:44:35,792
Or I can put it on a market, on side swap all in a sort permissionless way,

881
00:44:36,302 --> 00:44:39,062
but still like compliant with securities laws 'cause of the white listing.

882
00:44:39,122 --> 00:44:43,742
So it's a kind of novel kind of merge of unlikely things.

883
00:44:43,742 --> 00:44:44,042
Right.

884
00:44:44,042 --> 00:44:47,372
Which feels like very permissionless, but like behind the scenes permissions.

885
00:44:47,372 --> 00:44:50,492
And it's very simple from the blockchain, like from a liquid blockchain point of

886
00:44:50,492 --> 00:44:52,412
view because all it sees as a multisig.

887
00:44:53,432 --> 00:44:57,512
But, but, but all these things aren't, they like the, these are sort of bridges

888
00:44:57,512 --> 00:44:58,712
between the Bitcoin world and the

889
00:44:58,712 --> 00:44:59,852
fiat world as I see.

890
00:44:59,852 --> 00:45:00,002
Yeah.

891
00:45:00,002 --> 00:45:03,002
That one is, I mean another, another example is, I mean there are, there

892
00:45:03,002 --> 00:45:06,782
are lots of, there are some like startup derived things and there are

893
00:45:06,782 --> 00:45:08,582
some user behavior derived things.

894
00:45:08,582 --> 00:45:12,542
So one user behavior derived thing is dollar cost averaging.

895
00:45:12,542 --> 00:45:16,982
So we came across users who were, uh, dollar cost averaging on liquid.

896
00:45:17,507 --> 00:45:18,887
Because the fees are low.

897
00:45:18,917 --> 00:45:19,247
Mm-hmm.

898
00:45:19,487 --> 00:45:22,067
And if they're, you know, buying $5 at a time, like if you withdraw from

899
00:45:22,067 --> 00:45:23,357
an exchange, is expensive, right?

900
00:45:23,387 --> 00:45:23,477
Mm-hmm.

901
00:45:23,807 --> 00:45:26,537
And so their dollar cost averaging on liquid and then they'll get to a, to a

902
00:45:26,537 --> 00:45:29,807
target, you know, like 10th of a Bitcoin or whatever the threshold is, and they'll,

903
00:45:30,407 --> 00:45:33,797
they'll take it off onto cold storage on the main chain and they'll do it again.

904
00:45:33,857 --> 00:45:39,317
So it's a kind of way to do something frequently and like amortize

905
00:45:39,322 --> 00:45:41,777
the cost of going to A U T X A.

906
00:45:42,347 --> 00:45:43,787
So that's one kind of use case.

907
00:45:43,787 --> 00:45:48,452
And the other one was the, um, The bolts, like liquid atomic swaps, so

908
00:45:48,482 --> 00:45:52,322
sort of connecting liquid and lightning, which was also like organic, right?

909
00:45:53,642 --> 00:45:56,132
I mean, a startup decided they had a problem and like within a

910
00:45:56,132 --> 00:45:57,392
week or two they had a solution.

911
00:45:57,482 --> 00:45:57,872
So.

912
00:45:58,032 --> 00:45:58,112
Hmm.

913
00:45:58,532 --> 00:45:59,822
It's quite interesting things.

914
00:45:59,912 --> 00:46:06,122
Um, and, you know, they're continuing sort of people issuing different assets on it.

915
00:46:07,142 --> 00:46:10,322
Um, more wallets, adding liquid support.

916
00:46:10,322 --> 00:46:13,502
So there's a new one that was announced at this conference called, uh, wbe,

917
00:46:13,532 --> 00:46:16,352
which is a kind of a super app.

918
00:46:16,352 --> 00:46:20,282
So it's a Bitcoin wallet and it's a liquid wallet and it's a root stock wallet.

919
00:46:20,287 --> 00:46:20,312
Mm-hmm.

920
00:46:20,972 --> 00:46:22,472
And I think they're adding lightning too.

921
00:46:22,472 --> 00:46:27,092
So it's kind of all Bitcoin related layer twos and, and maintain in a single wallet.

922
00:46:27,632 --> 00:46:29,672
Uh, green is a bit like that because it has.

923
00:46:30,872 --> 00:46:34,802
You know, it has liquid Bitcoin and Bitcoin and more recently we have the

924
00:46:34,802 --> 00:46:36,992
beta integration of lightning as well.

925
00:46:36,992 --> 00:46:38,342
So kind of all three.

926
00:46:38,522 --> 00:46:38,612
Mm-hmm.

927
00:46:38,882 --> 00:46:40,772
But the wall be super app is even more, right?

928
00:46:40,772 --> 00:46:43,682
'cause it includes root stock and plans to go between them.

929
00:46:44,102 --> 00:46:48,992
But, but all of these, these things, like do they, do they

930
00:46:48,992 --> 00:46:51,152
exist post hyperbitcoinization?

931
00:46:51,182 --> 00:46:55,082
Like if in a, in a fully colonized world, is there a use

932
00:46:55,082 --> 00:46:56,762
case for these things still?

933
00:46:57,002 --> 00:46:58,352
Uh, yeah, potentially.

934
00:46:58,352 --> 00:47:05,132
I mean, I think that, you know, the layer twos are sort of

935
00:47:05,137 --> 00:47:07,682
a bit like T C P I P, right?

936
00:47:07,682 --> 00:47:10,412
So they're sort of specialized protocols on top for different,

937
00:47:10,412 --> 00:47:11,552
like application domains.

938
00:47:11,557 --> 00:47:11,762
Mm-hmm.

939
00:47:12,092 --> 00:47:14,792
So I think, you know, if, if lightning is specialized for retail

940
00:47:14,792 --> 00:47:19,202
payments, then liquid is specialized for like maybe trading has some

941
00:47:19,207 --> 00:47:22,292
additional confidentiality because of confidential transactions.

942
00:47:22,802 --> 00:47:26,672
And I think another configuration that might come about in the future, I.

943
00:47:27,347 --> 00:47:31,127
Is because Core Lightning works on top of liquid as well, so you can

944
00:47:31,127 --> 00:47:36,212
have like liquid Bitcoin channels and then instead of rebalancing, Bitcoin

945
00:47:36,212 --> 00:47:42,152
lightning channels with liquid, you can have liquid Bitcoin channels, right?

946
00:47:42,152 --> 00:47:42,242
Mm-hmm.

947
00:47:42,242 --> 00:47:48,992
And so, you know, for the risk, if, if the amounts are that are involved

948
00:47:48,997 --> 00:47:52,892
in lightning are very retail, like not, not huge amounts of money, right?

949
00:47:52,892 --> 00:47:56,762
Like maybe, you know, the phone is more expensive than the, than the

950
00:47:56,792 --> 00:47:58,472
Bitcoin on it kind of situation.

951
00:47:58,562 --> 00:47:58,742
Yeah.

952
00:47:58,892 --> 00:48:05,852
Then maybe it makes a good deal of sense to anchor lightning channels in liquid,

953
00:48:05,852 --> 00:48:09,362
which is kinda layer 1.5 and then that frees up even more space from the main

954
00:48:09,367 --> 00:48:13,922
chain for cold storage because you don't get all of the lightning, you know,

955
00:48:13,922 --> 00:48:15,662
transaction anchors and stuff like that.

956
00:48:15,722 --> 00:48:20,912
And I think liquid, you know, liquid's, uh, capacity is sort

957
00:48:20,912 --> 00:48:22,562
of similar to bitcoins because.

958
00:48:23,457 --> 00:48:25,367
You know, the blocks are 10 times as fast.

959
00:48:25,397 --> 00:48:28,337
'cause they're every minute they're the same size, but the confidential

960
00:48:28,337 --> 00:48:31,637
transactions are about 10 times bigger 'cause of all the mm-hmm.

961
00:48:31,817 --> 00:48:32,987
Uh, crypto stuff.

962
00:48:33,077 --> 00:48:39,077
Um, but, you know, I think that would be, uh, an interesting trade off and

963
00:48:39,077 --> 00:48:44,057
the sort of thing that somebody might, you know, like s did, somebody might

964
00:48:44,057 --> 00:48:49,247
adopt and, you know, a, a future prolonged fee spike or something.

965
00:48:49,247 --> 00:48:49,577
Right.

966
00:48:50,467 --> 00:48:55,867
Yeah, you, you, your panel about, uh, when 100 k, you know, the nice provocative,

967
00:48:55,927 --> 00:49:01,897
uh, title, lots of bullish energy in there in terms of, uh, the timeframe and, uh,

968
00:49:01,927 --> 00:49:03,787
when the fiat price is going to go up.

969
00:49:03,787 --> 00:49:07,387
But what do you see at the moment as the biggest long-term threat to

970
00:49:07,387 --> 00:49:07,597
bitcoin?

971
00:49:09,607 --> 00:49:11,677
Um, I'm not sure.

972
00:49:11,677 --> 00:49:18,907
I mean, you know, for people who were involved, you know, 20 13,

973
00:49:18,907 --> 00:49:23,227
14, 15, you know, banks didn't want to hear about Bitcoin.

974
00:49:23,232 --> 00:49:26,737
Like if, if you were a business development person since talk to banks,

975
00:49:26,737 --> 00:49:29,647
they would tell you before you go into the room, don't use the word Bitcoin, right?

976
00:49:29,647 --> 00:49:29,927
Yeah.

977
00:49:30,097 --> 00:49:33,427
And that all changed, you know, then every bank on the planet had

978
00:49:33,427 --> 00:49:35,317
a blockchain r and d lab, right?

979
00:49:35,387 --> 00:49:35,807
Mm-hmm.

980
00:49:35,892 --> 00:49:40,507
And, you know, come forward a few more years and they're all vying to provide

981
00:49:40,747 --> 00:49:42,607
Bitcoin related financial products.

982
00:49:42,667 --> 00:49:47,767
And like, so I think in that same kind of timeframe, like 2013 to 2015, a lot

983
00:49:47,767 --> 00:49:53,857
of people were quite worried and even before about, you know, regulatory bans

984
00:49:53,862 --> 00:49:57,817
like, you know, China bans Bitcoin, but like thinking well maybe Europe

985
00:49:57,817 --> 00:50:02,767
and the US or also ban Bitcoin and that, that would be a risk, right?

986
00:50:02,767 --> 00:50:03,637
But I think I.

987
00:50:04,747 --> 00:50:08,527
You know, that risk has receded a lot because, you know, the

988
00:50:08,527 --> 00:50:12,487
regulators have regularized, you know, Bitcoin is property legally.

989
00:50:13,297 --> 00:50:17,137
Um, I think a lot of technical risk has receded, like, you know, Bitcoin's

990
00:50:17,137 --> 00:50:18,607
quality assurance has improved.

991
00:50:18,612 --> 00:50:21,787
The re, you know, the, the changes have become more conservative and it got

992
00:50:21,787 --> 00:50:27,487
through to block size wars and showed that, you know, the investors ultimately

993
00:50:27,877 --> 00:50:33,157
were able to enforce immutability despite like, you know, a lot, a big array of

994
00:50:33,157 --> 00:50:37,627
financial interests, wanting to change it for like, you know, uh, the economic

995
00:50:37,627 --> 00:50:40,027
benefit of startups, I guess ultimately.

996
00:50:40,567 --> 00:50:45,427
Um, so I'm not sure, like, I think the risks have receded on, on most

997
00:50:45,427 --> 00:50:51,442
fronts, so I'm not really seeing like, You know, a big threat.

998
00:50:52,192 --> 00:50:53,992
Um, so I'm not sure.

999
00:50:54,082 --> 00:50:59,122
Yeah, it seems, it seems like, you know, I mean, of course, uh, a different

1000
00:50:59,122 --> 00:51:03,562
kind of threat I think, or risk could be that Bitcoin succeeds, but

1001
00:51:05,032 --> 00:51:12,832
emphasizing the investment asset use case and losing some sort of momentum

1002
00:51:12,862 --> 00:51:16,342
on various censorship resistant mm-hmm.

1003
00:51:16,582 --> 00:51:17,752
Soft ownership of keys.

1004
00:51:18,292 --> 00:51:23,932
And I do think it's like potentially a problem if too big a proportion

1005
00:51:23,932 --> 00:51:29,182
of Bitcoin's economic base is held by ETFs with like mm-hmm.

1006
00:51:29,452 --> 00:51:32,812
Corporate lawyers and fund managers reduce duties and stuff like that.

1007
00:51:32,812 --> 00:51:36,532
So, you know, I mean, ultimately the value is.

1008
00:51:37,457 --> 00:51:41,047
The, the use case, like the digital gold, the cold storage,

1009
00:51:41,527 --> 00:51:45,127
the ability to spend, that's the thing that banks can't compete with.

1010
00:51:45,397 --> 00:51:49,207
So, you know, the banks offering financial products is kind of

1011
00:51:49,207 --> 00:51:54,367
like, you know, VCs buying, or investors buying internet stocks.

1012
00:51:54,397 --> 00:51:56,887
'cause they thought mm-hmm the internet, the permissionless chaos

1013
00:51:56,887 --> 00:51:58,357
of the internet would be popular.

1014
00:51:58,867 --> 00:52:01,447
You know, they may not have liked the permissionless chaos, but they could

1015
00:52:01,447 --> 00:52:02,527
see they could make money from it.

1016
00:52:02,527 --> 00:52:02,797
Right?

1017
00:52:02,797 --> 00:52:06,157
So you don't want the guys that are writing a trend to.

1018
00:52:07,012 --> 00:52:10,102
Like break the trend or like erode the permission.

1019
00:52:10,552 --> 00:52:10,822
Right.

1020
00:52:11,122 --> 00:52:14,302
But this is a slightly more philosophical question.

1021
00:52:14,302 --> 00:52:17,542
Does we, can institutions actually own Bitcoin though?

1022
00:52:17,542 --> 00:52:23,032
Because like, not your case, not your coins and custodial, like the real

1023
00:52:23,032 --> 00:52:29,062
possessor of the Bitcoins is some guy or some guys with a multisig thing.

1024
00:52:29,062 --> 00:52:29,422
Yeah.

1025
00:52:29,872 --> 00:52:34,012
So, so how, how do you see that, like the relationship with between

1026
00:52:34,012 --> 00:52:35,872
ownership and possession in the future?

1027
00:52:35,877 --> 00:52:41,092
And like is, is Bitcoin, is owning Bitcoin more than just keeping a secret?

1028
00:52:41,872 --> 00:52:43,882
Like how do you see

1029
00:52:43,882 --> 00:52:44,312
that coming up?

1030
00:52:44,312 --> 00:52:49,132
I mean, certainly an indirect and more fragile ownership claim, right?

1031
00:52:49,137 --> 00:52:49,232
Yeah.

1032
00:52:49,252 --> 00:52:55,612
So, you know, if you, if you assume there are, um, very much more

1033
00:52:55,612 --> 00:53:01,222
credible like custodians, like, I mean already Fidelity is a, I think

1034
00:53:01,222 --> 00:53:03,772
has a custodian service that's probably the one of the highest tier.

1035
00:53:03,772 --> 00:53:05,482
But there are other like fairly high tier.

1036
00:53:06,547 --> 00:53:09,487
Uh, established financial players and provide Bitcoin custody

1037
00:53:09,487 --> 00:53:12,037
for a fee to corporations, but it's still indirect, right?

1038
00:53:12,037 --> 00:53:15,877
Because, you know, if you are an individual and you can get access if they

1039
00:53:16,027 --> 00:53:20,497
sell to individuals, or you're a company and something happens, like a court makes

1040
00:53:20,502 --> 00:53:24,787
a judgment against you, or law enforcement makes a judgment against you, then the

1041
00:53:24,787 --> 00:53:26,257
custodian doesn't listen to you anymore.

1042
00:53:26,317 --> 00:53:27,937
They listen to the third party.

1043
00:53:27,937 --> 00:53:27,938
Yeah.

1044
00:53:27,943 --> 00:53:28,027
Yeah.

1045
00:53:28,027 --> 00:53:28,867
It freezes your assets.

1046
00:53:28,867 --> 00:53:29,077
Right?

1047
00:53:29,077 --> 00:53:31,327
So then well, did you really own them?

1048
00:53:31,357 --> 00:53:31,717
Mm-hmm.

1049
00:53:31,962 --> 00:53:36,907
Well, kind of, you, you know, you, you had a a right to request them, which

1050
00:53:36,907 --> 00:53:41,587
they have this question to refuse if there's some overriding claim, right?

1051
00:53:41,587 --> 00:53:44,497
So yeah, you don't really have full possession of them anymore.

1052
00:53:44,497 --> 00:53:45,547
That's, that's the,

1053
00:53:45,552 --> 00:53:45,907
the risk.

1054
00:53:45,907 --> 00:53:46,087
Yeah.

1055
00:53:46,087 --> 00:53:51,307
And, and, and also if, if a custodian feels threatened by a government or

1056
00:53:51,307 --> 00:53:56,707
whatever, uh, I mean the, the one guy or the three out of five guys can, can just

1057
00:53:57,457 --> 00:54:01,887
bus off and go somewhere else and live their lives without them ever knowing.

1058
00:54:03,262 --> 00:54:09,532
Yeah, I mean, I guess the, um, probably the big custodians have,

1059
00:54:10,612 --> 00:54:15,892
you know, because they are custodying other things which are hard to undo.

1060
00:54:16,012 --> 00:54:16,162
Mm-hmm.

1061
00:54:16,402 --> 00:54:20,422
Like maybe artwork or like physical vaults for valuables.

1062
00:54:20,427 --> 00:54:27,202
And they have developed over, you know, centuries, like quite good, uh, what

1063
00:54:27,202 --> 00:54:30,352
do you call it, like cross checks and governance and procedures to make sure

1064
00:54:30,352 --> 00:54:34,732
that it's difficult for like, A small group of insiders who get corrupt 'cause

1065
00:54:34,732 --> 00:54:37,852
it, 'cause banks do have like tellers that go rogue and like Yeah, yeah.

1066
00:54:37,882 --> 00:54:41,542
People that try to steal, so they try to make a lot of, uh, cross checks and

1067
00:54:41,547 --> 00:54:45,892
controls in there to catch it early or to prevent it without like a huge

1068
00:54:46,072 --> 00:54:47,302
collusion or something like that.

1069
00:54:47,992 --> 00:54:52,492
Still, if, if this, um, you know, catch catchup effect thing

1070
00:54:52,492 --> 00:54:55,042
happens and Bitcoin a hundred Xs.

1071
00:54:55,102 --> 00:54:55,522
Yeah.

1072
00:54:55,582 --> 00:54:59,152
Like, so all of a sudden those 10 bitcoins are worth more than that.

1073
00:54:59,542 --> 00:54:59,842
Right.

1074
00:54:59,842 --> 00:55:01,462
Mona Lisa type pen look.

1075
00:55:01,492 --> 00:55:05,392
Well, I mean that's, that's a case for, for like the vault situ, I

1076
00:55:05,392 --> 00:55:09,412
mean the, the smart contract kinda script vault, which is that, you

1077
00:55:09,412 --> 00:55:11,332
know, the day-to-day operations.

1078
00:55:12,137 --> 00:55:16,217
The people operationally in control, you know, can DeVol and then

1079
00:55:16,307 --> 00:55:20,447
spend money out of the devolt or maybe manage a kinda warm wallet.

1080
00:55:20,807 --> 00:55:20,957
Mm-hmm.

1081
00:55:21,317 --> 00:55:25,967
But you know, there will be other people, a much wide array of people potentially

1082
00:55:25,967 --> 00:55:29,657
including people with coins in the custody who can like blow the whistle,

1083
00:55:29,657 --> 00:55:33,707
like, Hey, these coins are moving and nobody approved them and have like a

1084
00:55:33,707 --> 00:55:35,387
week's time or something to cancel it.

1085
00:55:35,392 --> 00:55:35,517
Mm-hmm.

1086
00:55:35,602 --> 00:55:36,407
And send it.

1087
00:55:36,932 --> 00:55:40,112
You know, somewhere much colder, which is like maybe extremely inconvenient to

1088
00:55:40,112 --> 00:55:47,882
access and you know, that that would be impractical for a day-to-day service, but

1089
00:55:47,882 --> 00:55:49,772
is a fallback if something weird happens.

1090
00:55:49,772 --> 00:55:50,042
Right.

1091
00:55:50,462 --> 00:55:51,482
But, but that's not in

1092
00:55:51,482 --> 00:55:52,262
place now.

1093
00:55:52,267 --> 00:55:53,822
Like No, I, it isn't.

1094
00:55:53,882 --> 00:55:57,632
I mean, but I think that's one of the reasons you, we probably should try

1095
00:55:57,632 --> 00:56:02,282
to build them, like either using the pre-sign transactions or with some

1096
00:56:02,282 --> 00:56:05,132
kind of vol, I mean, some kind of covenant technology to build them.

1097
00:56:05,342 --> 00:56:09,482
But we, as in, well, I mean like people who build stuff like

1098
00:56:09,482 --> 00:56:11,852
startups, technologists, companies.

1099
00:56:11,852 --> 00:56:12,182
Yeah.

1100
00:56:12,272 --> 00:56:13,532
So there's a mar Yeah.

1101
00:56:13,622 --> 00:56:15,782
You foresee a market for that, those kind of

1102
00:56:16,212 --> 00:56:16,292
services.

1103
00:56:16,292 --> 00:56:19,622
Well, I mean, as, as somebody who's like, you know, been involved in like the

1104
00:56:19,622 --> 00:56:23,912
technical part of custody and thinking, so if you actually do something, then

1105
00:56:23,912 --> 00:56:27,482
you start to think much more clearly and pragmatically about the risks.

1106
00:56:27,482 --> 00:56:27,542
Yeah.

1107
00:56:28,067 --> 00:56:31,457
You know, so if you think, even on a personal case, you know, you, you

1108
00:56:31,457 --> 00:56:34,697
make steel backup and you put it in a home safe, and then you think, well,

1109
00:56:35,207 --> 00:56:38,027
you know, what if I went away for the weekend and somebody swapped the safe?

1110
00:56:38,117 --> 00:56:38,177
Yeah.

1111
00:56:38,507 --> 00:56:42,707
For one that looks the same and I don't notice for a while, and then I find

1112
00:56:42,707 --> 00:56:45,287
I don't know the code and I'm pretty sure I haven't forgotten the code.

1113
00:56:45,287 --> 00:56:46,997
And then I realize they've swapped the,

1114
00:56:47,237 --> 00:56:48,977
or they just open the safe and look at

1115
00:56:48,977 --> 00:56:51,797
the words like, yeah, well, I mean, like, let's assuming they cut.

1116
00:56:51,857 --> 00:56:55,157
I mean, I think typically consumer safes are actually not that good.

1117
00:56:55,157 --> 00:56:59,177
So a, a skilled safe bracket can open them anyway, like bypass it.

1118
00:56:59,507 --> 00:57:02,087
But even if you assume it's good quality and they can't bypass it,

1119
00:57:02,087 --> 00:57:04,907
it could, you just take it and swap it and maybe you don't notice.

1120
00:57:04,912 --> 00:57:05,177
Right?

1121
00:57:05,177 --> 00:57:11,957
So if you start thinking about some of those things, then it's, uh, you

1122
00:57:11,957 --> 00:57:14,662
know, The physical backup can be taken.

1123
00:57:14,872 --> 00:57:15,862
That's the problem, right?

1124
00:57:15,867 --> 00:57:15,912
Mm-hmm.

1125
00:57:15,997 --> 00:57:17,182
So what would you do about that?

1126
00:57:17,242 --> 00:57:19,372
Well, you need to be able to cancel it, and then you need

1127
00:57:19,372 --> 00:57:20,512
this kind of digital vault.

1128
00:57:20,542 --> 00:57:24,112
And then if you have that extra technology, you would have an answer.

1129
00:57:24,142 --> 00:57:26,352
You know, obviously got security cameras everywhere and you,

1130
00:57:26,542 --> 00:57:27,832
and you see that it happened.

1131
00:57:28,672 --> 00:57:32,182
Now if it, if it was today, it is too late, you saw them get stolen.

1132
00:57:32,182 --> 00:57:32,662
So what?

1133
00:57:32,662 --> 00:57:34,612
They've cleared on a chain and they're gone, right?

1134
00:57:34,612 --> 00:57:34,672
Yeah.

1135
00:57:34,852 --> 00:57:35,812
And you can't undo them.

1136
00:57:35,812 --> 00:57:39,022
But if you have a, a vol process, yeah, you can undo it.

1137
00:57:39,022 --> 00:57:41,362
You have a week to like take it back.

1138
00:57:41,362 --> 00:57:41,662
Right?

1139
00:57:42,592 --> 00:57:45,892
So, but, but like, I mean, steel plates and all whatnot are.

1140
00:57:47,272 --> 00:57:50,452
The, the, there's sort of the normies now, but, but really what?

1141
00:57:51,262 --> 00:57:54,862
It's just your imagination that, that counts when come, when it

1142
00:57:54,862 --> 00:57:56,422
comes to, uh, storing Bitcoin.

1143
00:57:56,427 --> 00:58:01,582
I mean, a private key is a, a, a set of characters and, uh, a

1144
00:58:01,582 --> 00:58:03,022
seed phrase is a couple of words.

1145
00:58:03,022 --> 00:58:08,092
So say you hide the, in a poem, uh, and you store that poem in three different

1146
00:58:08,092 --> 00:58:12,142
locations, in three different countries, and nobody even knows that it is a seed

1147
00:58:12,142 --> 00:58:13,672
phrase, and it's impossible to tell.

1148
00:58:13,672 --> 00:58:16,852
I mean, there it is literally just your imagination, setting these

1149
00:58:16,852 --> 00:58:18,352
boundaries for what's possible.

1150
00:58:18,352 --> 00:58:23,242
And yeah, I think we, the, the bitcoin space is sort of like,

1151
00:58:23,332 --> 00:58:24,592
okay, this is the normies.

1152
00:58:24,592 --> 00:58:29,212
Now we're, we're doing steel plates and we're, where it's blatantly obvious that

1153
00:58:29,212 --> 00:58:32,902
the Bitcoin are there because it's a steel plate with seed, seed phrase on it.

1154
00:58:32,902 --> 00:58:33,322
So like, right.

1155
00:58:33,322 --> 00:58:33,482
Yeah.

1156
00:58:33,622 --> 00:58:34,702
It's not hidden at all.

1157
00:58:34,702 --> 00:58:36,682
It's like, it's like a gold bar,

1158
00:58:37,192 --> 00:58:37,552
right?

1159
00:58:37,557 --> 00:58:37,562
Yeah.

1160
00:58:37,642 --> 00:58:38,162
I mean, it is.

1161
00:58:38,162 --> 00:58:38,322
Yeah.

1162
00:58:39,022 --> 00:58:40,702
So, uh, so how do you see that?

1163
00:58:40,852 --> 00:58:47,422
Do you see like, uh, Other developments in the, like Bitcoin storage space?

1164
00:58:47,422 --> 00:58:50,302
Like are people using their imaginations enough?

1165
00:58:51,352 --> 00:58:55,252
Yeah, I mean, I think it's, um, I mean, certainly people have tried lots of

1166
00:58:55,257 --> 00:58:59,422
different strategies including, you know, having a password and memorizing

1167
00:58:59,422 --> 00:59:03,202
it or splitting things up and storing 'em in different locations or trying

1168
00:59:03,202 --> 00:59:04,792
to hide things very effectively.

1169
00:59:05,392 --> 00:59:11,242
Um, and I guess there's always a trade off between, you know, hiding it too well.

1170
00:59:11,452 --> 00:59:11,542
Mm-hmm.

1171
00:59:11,782 --> 00:59:13,672
So that, you know, if you have an accident, then people

1172
00:59:13,677 --> 00:59:15,142
can't find them or something.

1173
00:59:15,202 --> 00:59:15,292
Mm-hmm.

1174
00:59:15,562 --> 00:59:18,922
And that's probably happened a couple times and like in the last few years

1175
00:59:18,922 --> 00:59:22,132
to people who unfortunately had an accident and people couldn't figure out

1176
00:59:22,132 --> 00:59:26,182
like the backup strategy or, I think the other thing that could happen is

1177
00:59:26,182 --> 00:59:28,312
people can get like very creative.

1178
00:59:29,272 --> 00:59:33,802
And make some kind of complicated trail to solve for themselves and then forget

1179
00:59:34,432 --> 00:59:36,112
parts of it 'cause they didn't try it.

1180
00:59:36,142 --> 00:59:40,012
So I think it turns out that people's memory is a little bit

1181
00:59:40,012 --> 00:59:43,552
fallible if they don't frequently exercise it for a few years.

1182
00:59:44,062 --> 00:59:45,562
So I think that's, that's a trade off.

1183
00:59:45,562 --> 00:59:45,802
Right?

1184
00:59:45,952 --> 00:59:49,072
And, and I think for companies like somebody doing like a custodial

1185
00:59:49,072 --> 00:59:52,822
service, it's a little bit more complicated because they have to,

1186
00:59:53,872 --> 00:59:56,242
uh, manage the change of stuff.

1187
00:59:56,332 --> 00:59:59,812
So somebody leaves for another job and you need the security to remain.

1188
01:00:00,142 --> 01:00:03,232
So you can't, you can't like place, you have to make it somehow physical

1189
01:00:03,237 --> 01:00:07,552
so that, you know, not control that you can like, have somebody leave as

1190
01:00:07,552 --> 01:00:11,152
a documented standard and that person doesn't take part of the secret with

1191
01:00:11,152 --> 01:00:12,322
them sort of thing or something.

1192
01:00:12,322 --> 01:00:12,592
Right?

1193
01:00:12,892 --> 01:00:13,132
Mm-hmm.

1194
01:00:16,612 --> 01:00:17,332
Well, I think the only

1195
01:00:17,332 --> 01:00:21,652
other thing I've kind of got on my mind is, is with some talks about threats

1196
01:00:21,657 --> 01:00:24,142
and, and, uh, things that could go wrong.

1197
01:00:24,712 --> 01:00:26,272
Uh, what are you seeing.

1198
01:00:26,737 --> 01:00:29,647
Positively about how Bitcoin is doing in the world.

1199
01:00:29,647 --> 01:00:34,987
Is it, is it, is it doing the thing that you thought when you first heard about it?

1200
01:00:35,047 --> 01:00:35,827
Does that make sense?

1201
01:00:35,887 --> 01:00:36,307
Yeah.

1202
01:00:36,307 --> 01:00:40,957
Has your, how much has your view changed over the years of what this thing

1203
01:00:40,957 --> 01:00:41,347
is?

1204
01:00:41,827 --> 01:00:46,147
I mean, um, my view is, is is basically the same sense, like, I don't know, 1995

1205
01:00:46,147 --> 01:00:47,887
or something with electronic cash, right?

1206
01:00:47,887 --> 01:00:52,747
So, you know, David Chaum had developed this kind of cryptography for electronic

1207
01:00:52,752 --> 01:00:55,297
cash in 1985 in his PhD thesis.

1208
01:00:55,867 --> 01:00:58,897
And he's still around in the crypto space, but a older guy now, right.

1209
01:00:59,077 --> 01:01:00,397
He's a very clever cryptographer.

1210
01:01:00,397 --> 01:01:04,327
But I think in the mid nineties, there was a startup in the Netherlands that

1211
01:01:04,327 --> 01:01:09,247
David Schumer started to, you know, commercialize and make available

1212
01:01:09,307 --> 01:01:11,197
electronic cash using this technology.

1213
01:01:11,197 --> 01:01:14,617
And effectively in today's terminology, you would call it like a stable coin.

1214
01:01:14,707 --> 01:01:18,667
'cause that was like, you know, not dollar denominated, but euro or something, right?

1215
01:01:18,667 --> 01:01:18,757
Mm-hmm.

1216
01:01:18,897 --> 01:01:24,817
And, um, But yeah, so I think the thing that like, at least the Cipher punks

1217
01:01:24,817 --> 01:01:30,847
thought was exciting about that kind of technology was the bearer finality of it.

1218
01:01:30,847 --> 01:01:30,937
Mm-hmm.

1219
01:01:31,177 --> 01:01:31,567
Right?

1220
01:01:31,567 --> 01:01:34,417
That it's, you know, it's digital, but it's physical too.

1221
01:01:34,422 --> 01:01:37,537
Like, I, I own it and own it, I own it and nobody can take it off me.

1222
01:01:37,957 --> 01:01:40,627
Nobody can sense to me, nobody can prevent me transacting.

1223
01:01:41,047 --> 01:01:44,707
Uh, maybe nobody can even kind of detect of who paid who 'cause it, 'cause

1224
01:01:44,707 --> 01:01:46,327
that technology was extremely private.

1225
01:01:46,327 --> 01:01:46,567
Right.

1226
01:01:46,567 --> 01:01:50,197
And so to, to those people, that was extremely exciting.

1227
01:01:50,197 --> 01:01:55,507
And then the concept of smart contracts involving bearer finality

1228
01:01:55,507 --> 01:02:01,477
was extra interesting because it meant that a contract was final.

1229
01:02:01,987 --> 01:02:04,927
You know, if, if there's a, if there's a smart contract that says,

1230
01:02:04,927 --> 01:02:06,547
you know, you get paid when this.

1231
01:02:07,087 --> 01:02:11,677
Event happens, or when this task is completed and it's ver like it's machine

1232
01:02:11,677 --> 01:02:17,467
verifiable, then the fact that the payment is ve final means the contract's final.

1233
01:02:17,497 --> 01:02:19,237
So you can't, you know, you can't dispute it.

1234
01:02:19,242 --> 01:02:19,337
Mm-hmm.

1235
01:02:19,422 --> 01:02:27,367
So it's sort of extremely efficient, low cost, sort of, um, centralized reputation

1236
01:02:27,367 --> 01:02:32,017
based commerce on the internet, kind of in a, you know, in a gray market, fully

1237
01:02:32,017 --> 01:02:33,637
permissionless and global and anonymous.

1238
01:02:33,642 --> 01:02:33,967
Right.

1239
01:02:33,967 --> 01:02:37,837
So we thought that was really interesting for, we like the

1240
01:02:37,867 --> 01:02:39,217
people on the cyberpunks list.

1241
01:02:39,247 --> 01:02:39,997
Really interesting.

1242
01:02:39,997 --> 01:02:42,457
And like Bitcoin realized it.

1243
01:02:42,487 --> 01:02:42,847
Right.

1244
01:02:42,847 --> 01:02:45,397
So, you know, here we are and it's, it's working.

1245
01:02:45,427 --> 01:02:47,827
I mean, it's not quite as private as that tech was.

1246
01:02:48,847 --> 01:02:54,217
It's, um, that was, that had a, a side effect of being centralized and mm-hmm.

1247
01:02:54,397 --> 01:02:57,187
Vulnerable to that company shutting down, and then the central database

1248
01:02:57,187 --> 01:02:58,777
was lost and it was all gone.

1249
01:02:58,777 --> 01:02:59,107
Right.

1250
01:02:59,107 --> 01:03:06,187
So, yeah, I mean, I think the reaction to digit cash winding down and

1251
01:03:06,187 --> 01:03:10,537
seeing that fail if you held some of the coins was, wow, that central

1252
01:03:10,537 --> 01:03:11,677
point of failure is really bad.

1253
01:03:11,677 --> 01:03:12,967
It needs to be decentralized.

1254
01:03:12,967 --> 01:03:13,767
Like, how would you do that?

1255
01:03:13,767 --> 01:03:14,167
Mm-hmm.

1256
01:03:14,257 --> 01:03:18,637
And then, you know, there's all the discussions in the, I guess late

1257
01:03:18,642 --> 01:03:22,237
nineties, early two thousands about, you know, how, how could you possibly

1258
01:03:22,237 --> 01:03:24,277
build a decentralized electronic cash?

1259
01:03:24,277 --> 01:03:27,847
And I'm like, there were, there were things that sound like vaguely similar

1260
01:03:27,847 --> 01:03:31,927
to Bitcoin, like about mining and proof of work and smart contracts

1261
01:03:31,927 --> 01:03:35,257
and, you know, bynine in general's problem, all these discussions, but

1262
01:03:35,257 --> 01:03:36,307
nobody figured out how to do it.

1263
01:03:36,427 --> 01:03:37,747
And so Bitcoin.

1264
01:03:39,352 --> 01:03:40,672
Really, uh, made it happen.

1265
01:03:40,672 --> 01:03:41,872
So, yeah, I think it's great.

1266
01:03:41,932 --> 01:03:47,032
Like, you know, and like, I think that it, uh, changes people's viewpoint who

1267
01:03:47,032 --> 01:03:54,622
come in like, you know, the attraction of the kind of pure mathematical elegance of

1268
01:03:54,622 --> 01:03:59,632
having piece of digital property that's yours and can't be taken from you, can't

1269
01:03:59,632 --> 01:04:03,922
be eroded, can't be seized, can't be, you know, frozen, canceled or undone.

1270
01:04:04,672 --> 01:04:06,982
It's like super cool, right?

1271
01:04:07,282 --> 01:04:08,122
People get their head around now.

1272
01:04:08,127 --> 01:04:09,532
Of course we wouldn't be here if it wasn't.

1273
01:04:09,537 --> 01:04:10,192
That's amazing.

1274
01:04:10,192 --> 01:04:10,552
Right?

1275
01:04:10,882 --> 01:04:12,892
And so people are just like, it's quite interesting.

1276
01:04:12,892 --> 01:04:16,282
I went to PNI PS Oh yeah.

1277
01:04:16,672 --> 01:04:21,592
You know, in Prague and, um, They have a coffee shop in

1278
01:04:21,592 --> 01:04:23,782
the, uh, in the grand floor.

1279
01:04:24,022 --> 01:04:24,352
Yeah.

1280
01:04:24,412 --> 01:04:25,702
And you have to buy with Bitcoin.

1281
01:04:25,912 --> 01:04:29,482
And so, you know, we were talking to some people after the event, they

1282
01:04:29,482 --> 01:04:31,012
organized and they were like, yeah.

1283
01:04:31,012 --> 01:04:33,232
Their first interaction with Bitcoin was they came into the

1284
01:04:33,237 --> 01:04:35,632
coffee shop to buy a coffee and they knew nothing about Bitcoin.

1285
01:04:35,632 --> 01:04:39,442
They wanted a coffee rate, but after they learned about it, they got like

1286
01:04:39,442 --> 01:04:40,942
very philosophically interested.

1287
01:04:41,272 --> 01:04:45,412
So it, so basically it doesn't matter what angle you came from it, like whether

1288
01:04:45,412 --> 01:04:49,882
it's a friend or as an investment or it was a, you know, casual payment.

1289
01:04:50,482 --> 01:04:55,222
Like just how it works is super interesting and like, you know, the

1290
01:04:55,227 --> 01:05:00,232
wine virus that keeps everybody super enthusiastic for years and years.

1291
01:05:00,262 --> 01:05:00,652
Yeah.

1292
01:05:00,652 --> 01:05:00,892
Yeah.

1293
01:05:00,892 --> 01:05:01,642
Tell me about it.

1294
01:05:03,772 --> 01:05:03,982
Yeah.

1295
01:05:04,012 --> 01:05:05,452
Uh, yeah.

1296
01:05:05,452 --> 01:05:05,722
So.

1297
01:05:07,102 --> 01:05:07,642
What was that?

1298
01:05:07,642 --> 01:05:09,262
I, I just had something on my tongue.

1299
01:05:09,292 --> 01:05:09,772
Yeah, yeah.

1300
01:05:10,072 --> 01:05:11,182
About ownership.

1301
01:05:11,602 --> 01:05:17,752
I mean, since, since we've established that owning Bitcoin is nothing but keeping

1302
01:05:17,752 --> 01:05:21,532
a secret, how do you prove ownership?

1303
01:05:21,532 --> 01:05:24,532
Like in, in a ethical sense?

1304
01:05:24,532 --> 01:05:28,162
I mean, of course the legal systems are flawed and whatnot, and they can

1305
01:05:28,162 --> 01:05:32,572
prove all, quote unquote, prove all sorts of things that aren't necessarily

1306
01:05:32,572 --> 01:05:34,312
true, but like from a strict.

1307
01:05:36,052 --> 01:05:40,072
You know, information technology perspective, how do you really

1308
01:05:40,072 --> 01:05:42,622
prove that someone owns a Bitcoin?

1309
01:05:42,622 --> 01:05:46,102
Since it's just information in someone's head at the end of the day?

1310
01:05:46,732 --> 01:05:47,962
Is it, is it even possible?

1311
01:05:48,022 --> 01:05:48,382
Well,

1312
01:05:48,382 --> 01:05:54,412
I mean, I suppose the close analog is if, if they're willingly proving they could

1313
01:05:54,412 --> 01:05:56,782
sign a message or spend to themselves.

1314
01:05:56,782 --> 01:05:56,842
Yeah.

1315
01:05:56,842 --> 01:05:58,672
And that would be pretty convincing, right?

1316
01:05:58,972 --> 01:05:59,212
Yeah.

1317
01:05:59,212 --> 01:05:59,542
I can

1318
01:05:59,542 --> 01:06:03,922
think of a case where that would've been, uh, the right thing to do

1319
01:06:03,922 --> 01:06:07,492
to prove you're a certain person, but, but it never happened.

1320
01:06:07,822 --> 01:06:14,212
Uh, but, but still, if they refuse to and, and just use the boating

1321
01:06:14,212 --> 01:06:15,862
accident excuse or whatnot, like

1322
01:06:15,862 --> 01:06:16,402
how, yeah.

1323
01:06:16,462 --> 01:06:18,832
I mean, there's nothing you can do to prove it, right?

1324
01:06:18,832 --> 01:06:26,782
I mean, it, it even happens in some unrelated to Bitcoin court cases where I.

1325
01:06:27,442 --> 01:06:29,362
People have encrypted hard drives.

1326
01:06:29,662 --> 01:06:30,082
Yeah.

1327
01:06:30,172 --> 01:06:35,032
And you know, there's some investigation, uh, their equipment

1328
01:06:35,032 --> 01:06:40,012
is seized and the court demands that they decrypted data and they refuse.

1329
01:06:40,522 --> 01:06:40,792
Yeah.

1330
01:06:40,882 --> 01:06:44,512
And like basically after some kind of prescribed legal limit, they have to

1331
01:06:44,512 --> 01:06:51,262
let 'em go because no decryption, no evidence, presumption of innocence and

1332
01:06:51,262 --> 01:06:55,042
like some kind of prescribed legal limit on holding people for contempt of court.

1333
01:06:55,582 --> 01:06:57,112
If they refuse, you have to let 'em go.

1334
01:06:57,112 --> 01:06:57,412
Right.

1335
01:06:57,412 --> 01:07:00,322
So I think that's, that's kind of a precedent, right?

1336
01:07:00,322 --> 01:07:03,742
If you, if you can't prove it, like what are you gonna do?

1337
01:07:03,742 --> 01:07:04,102
Right?

1338
01:07:04,792 --> 01:07:05,212
Yeah.

1339
01:07:05,362 --> 01:07:10,162
And even like if I, if I do an non-chain transaction to obviously

1340
01:07:10,162 --> 01:07:13,282
buy a cup of coffee and there's a note in it saying, well, you bought a

1341
01:07:13,282 --> 01:07:14,782
cup of coffee and you bought it here.

1342
01:07:14,782 --> 01:07:20,332
And at this point, like still to me, even that is impossible to actually

1343
01:07:20,337 --> 01:07:23,002
prove that, that I made that transaction.

1344
01:07:23,092 --> 01:07:25,432
It could have been anyone else keeping the same secret.

1345
01:07:25,702 --> 01:07:26,062
Right.

1346
01:07:26,062 --> 01:07:26,152
Right.

1347
01:07:26,152 --> 01:07:26,422
Yeah.

1348
01:07:27,292 --> 01:07:27,892
Yeah, it's true.

1349
01:07:27,892 --> 01:07:27,952
Yeah.

1350
01:07:28,882 --> 01:07:29,362
Yeah.

1351
01:07:29,482 --> 01:07:35,212
So, well, I think it's important to keep identity out of the blockchain.

1352
01:07:35,632 --> 01:07:35,872
Yeah.

1353
01:07:35,962 --> 01:07:41,782
And you know, some people got excited about, uh, digital IDs and like having

1354
01:07:43,582 --> 01:07:50,332
kind of KY c certificates on chain and Ethereum even got on the train.

1355
01:07:50,332 --> 01:07:50,962
What was this?

1356
01:07:50,962 --> 01:07:53,392
The, uh, soul bound tokens.

1357
01:07:53,692 --> 01:07:53,782
Mm-hmm.

1358
01:07:54,022 --> 01:07:58,042
Another word for a digital certificate basically make a lot of sense to me.

1359
01:07:58,042 --> 01:08:01,012
But I think you wanna keep that stuff as far away from the blockchain as

1360
01:08:01,012 --> 01:08:05,812
possible because banks particularly, you know, the technologists that come

1361
01:08:05,812 --> 01:08:11,722
from the banking world, they're used to the concept that the, um, you know,

1362
01:08:11,722 --> 01:08:13,312
people could lose their online login.

1363
01:08:13,612 --> 01:08:17,902
And so as long as they have, you know, their passport and utility bill, that

1364
01:08:17,907 --> 01:08:20,332
individual is the owner of the asset.

1365
01:08:20,422 --> 01:08:24,532
Uh, so they, they kind of just gravitate by.

1366
01:08:25,252 --> 01:08:30,652
Instinct and momentum to wanting to like put identity stuff a blockchain and make

1367
01:08:30,652 --> 01:08:32,182
it a condition of the spending, right?

1368
01:08:32,182 --> 01:08:35,422
It's like, well, the guy with this passport or the guy with this fingerprint

1369
01:08:35,422 --> 01:08:37,132
or something, I'm like, no, no.

1370
01:08:37,132 --> 01:08:39,532
Like it should be, it's bearer.

1371
01:08:39,592 --> 01:08:40,702
It's a bearer asset.

1372
01:08:40,702 --> 01:08:45,052
Like it's, it's a bad idea to put identity anywhere near the blockchain.

1373
01:08:45,052 --> 01:08:48,412
And I like, so I don't even like people making decentralized.

1374
01:08:48,412 --> 01:08:51,712
Itd 'cause if they're in a blockchain, then sooner or later somebody's

1375
01:08:51,712 --> 01:08:53,272
gonna use it as a spending condition.

1376
01:08:53,277 --> 01:08:55,762
So like, keep it away from the blockchain if you ask me.

1377
01:08:56,242 --> 01:09:00,352
So in the same vein, like, uh, do you think we'll see cbdc

1378
01:09:00,832 --> 01:09:02,752
playing out, like as a real thing?

1379
01:09:02,752 --> 01:09:06,322
I mean, are are they already, like, what are we living in

1380
01:09:06,322 --> 01:09:07,372
and what are we looking forward

1381
01:09:07,372 --> 01:09:07,492
to?

1382
01:09:07,492 --> 01:09:10,432
I mean, that is, um, dystopian dark stuff, isn't it?

1383
01:09:10,642 --> 01:09:11,392
It seems like the.

1384
01:09:12,922 --> 01:09:18,892
The sort of Europeans and the American, like central bankers are getting FOMO

1385
01:09:18,892 --> 01:09:22,822
for, you know, the dystopian Chinese Yeah.

1386
01:09:22,852 --> 01:09:24,772
Kind of social credit score.

1387
01:09:24,772 --> 01:09:30,322
Freeze your money like, you know, uh, disfavor you financially if you

1388
01:09:30,352 --> 01:09:32,992
don't like conform kind of thinking.

1389
01:09:33,652 --> 01:09:43,462
And you know, I think they kind of want the, um, microeconomic control, right.

1390
01:09:43,462 --> 01:09:47,782
So, you know, they printed so much money and it kinda lost control of inflation.

1391
01:09:47,787 --> 01:09:51,442
And, and you like the levers they have to influence inflation

1392
01:09:51,442 --> 01:09:52,552
are super indirect, right?

1393
01:09:52,557 --> 01:09:52,612
Yeah.

1394
01:09:52,617 --> 01:09:55,342
So they, they put money into the system and it just flows into

1395
01:09:55,342 --> 01:09:56,782
banks that lend less or something.

1396
01:09:56,962 --> 01:09:57,142
Yeah.

1397
01:09:57,202 --> 01:10:00,232
And say, you know, if they could reach into your pocket and say, well you've

1398
01:10:00,232 --> 01:10:03,772
gotta spend this money in a week, or we're gonna take it back, you know, or you're

1399
01:10:03,772 --> 01:10:04,762
only allowed to spend it in this way.

1400
01:10:04,767 --> 01:10:05,512
They would love that.

1401
01:10:05,542 --> 01:10:10,252
'cause it'd be kind of like microeconomic control, but it's like extremely dark, uh.

1402
01:10:10,822 --> 01:10:11,632
Kind of concept.

1403
01:10:11,632 --> 01:10:16,342
So I'm just hopeful that democracies will just like say no.

1404
01:10:17,152 --> 01:10:17,242
Yeah.

1405
01:10:17,242 --> 01:10:19,582
The term programmable money is wrong.

1406
01:10:19,587 --> 01:10:23,242
Like pro programmable money is the same thing as programmable people.

1407
01:10:23,962 --> 01:10:25,192
That's what it is, right?

1408
01:10:25,312 --> 01:10:26,512
Because people use money.

1409
01:10:26,572 --> 01:10:28,102
Like it's just us.

1410
01:10:28,162 --> 01:10:31,522
At the end of the day, it's Bitcoin going to help

1411
01:10:31,522 --> 01:10:32,182
us avoid

1412
01:10:32,182 --> 01:10:32,422
that.

1413
01:10:33,712 --> 01:10:34,102
Yeah.

1414
01:10:34,107 --> 01:10:38,962
Well, I mean, I think there are some countries which have tried to phase out

1415
01:10:38,962 --> 01:10:43,132
cash, like to go cashless or even some European countries that have placed

1416
01:10:43,132 --> 01:10:44,902
legal limits on cash transactions.

1417
01:10:45,022 --> 01:10:45,112
Mm-hmm.

1418
01:10:45,352 --> 01:10:48,142
Or taken like 500 euro notes out of circulation.

1419
01:10:48,262 --> 01:10:50,632
And other countries that are still heavily cashed, like

1420
01:10:50,632 --> 01:10:51,892
Maltra is very heavily cashed.

1421
01:10:51,892 --> 01:10:54,472
Switzerland is very heavy cash, but Switzerland has like a

1422
01:10:54,472 --> 01:10:57,262
thousand frank note, which is worth like double that or something.

1423
01:10:57,742 --> 01:11:01,672
And they use it, you know, like Switzerland has, I think so many

1424
01:11:01,672 --> 01:11:05,182
thousand frank notes that there is like about six or 7,000.

1425
01:11:06,472 --> 01:11:10,162
Frank's worth a thousand frank notes or like six or seven notes per man,

1426
01:11:10,162 --> 01:11:11,392
woman, and child in the whole country.

1427
01:11:11,392 --> 01:11:14,662
So just imagine the amount of like high denomination currency

1428
01:11:14,667 --> 01:11:17,152
they have, uh, floating around nice companies and individuals.

1429
01:11:17,152 --> 01:11:18,952
It's very cash like Outlook.

1430
01:11:19,642 --> 01:11:26,332
Um, but yeah, so if they try to outlaw cash, like by policy and regulations,

1431
01:11:26,332 --> 01:11:28,492
then Bitcoin is a natural outlet, right?

1432
01:11:28,492 --> 01:11:28,612
Mm-hmm.

1433
01:11:28,852 --> 01:11:31,762
Well, we have global bearer bitcoin, electronic cash.

1434
01:11:31,762 --> 01:11:33,232
So what do we care?

1435
01:11:33,262 --> 01:11:39,202
I mean, we still care that you don't like make, uh, money a dystopian,

1436
01:11:39,207 --> 01:11:43,912
like fear money, a dystopian control point, but we have a, an outlet,

1437
01:11:43,912 --> 01:11:47,602
a safety valve, which is we can use the bearer Bitcoin and there's

1438
01:11:47,902 --> 01:11:49,402
basically nothing they can do about it.

1439
01:11:50,152 --> 01:11:50,392
Yeah.

1440
01:11:50,602 --> 01:11:56,242
Like the, um, banning of cash in, in Sweden or like going cashless was at

1441
01:11:56,247 --> 01:11:59,213
least played a part in why I made the decision to leave and like mm-hmm.

1442
01:11:59,302 --> 01:12:03,142
The, the cash is much, much more common in Spain and then, Yeah.

1443
01:12:03,142 --> 01:12:04,042
In, in, yeah.

1444
01:12:04,042 --> 01:12:04,792
The Mediterranean

1445
01:12:04,792 --> 01:12:05,482
countries in general.

1446
01:12:05,482 --> 01:12:05,632
Yeah.

1447
01:12:05,632 --> 01:12:09,562
I mean, I was always, uh, thinking like even before like Bitcoin

1448
01:12:09,562 --> 01:12:12,022
existed that you should really, I.

1449
01:12:12,262 --> 01:12:17,632
Use cash, even if it's inconvenient on principle, any way you can,

1450
01:12:18,292 --> 01:12:21,952
just so that, you know, governments don't get the idea that, well,

1451
01:12:21,952 --> 01:12:23,782
everybody's using debit cards anyway.

1452
01:12:23,782 --> 01:12:24,922
We could probably phase it out.

1453
01:12:24,922 --> 01:12:25,132
Right?

1454
01:12:25,132 --> 01:12:30,112
So if, you know, if I use cash for like hotel, for taxi, for train, for anything,

1455
01:12:30,202 --> 01:12:35,122
um, for a lot of people do that, it becomes difficult for them to, uh, change.

1456
01:12:35,692 --> 01:12:39,022
Uh, another thing about Sweden that I brought up with all the other

1457
01:12:39,022 --> 01:12:44,302
guests this, uh, this weekend is, is that I, I, uh, talked to Christiana,

1458
01:12:44,302 --> 01:12:47,782
the, the C E O of B T C X, if you're familiar with that exchange.

1459
01:12:47,782 --> 01:12:50,872
It's the oldest Swedish exchange and one of the oldest in the world.

1460
01:12:51,232 --> 01:12:57,832
Uh, so, uh, uh, overall, the, um, over the years they've had over 300,000 customers

1461
01:12:58,642 --> 01:13:00,652
and there's another big exchange as well.

1462
01:13:00,652 --> 01:13:03,742
And of course there's some overlap and, but then there's also like people

1463
01:13:03,742 --> 01:13:08,182
buying from international exchanges and getting their Bitcoin some other way.

1464
01:13:08,632 --> 01:13:15,917
So if you assume that, Uh, half a million Swedes have Bitcoin or

1465
01:13:15,917 --> 01:13:17,417
have access to Bitcoin somehow.

1466
01:13:17,717 --> 01:13:18,527
That's, it's quite a lot.

1467
01:13:18,527 --> 01:13:18,737
Right.

1468
01:13:19,032 --> 01:13:21,077
That's quite, that's 5% of the population.

1469
01:13:21,082 --> 01:13:22,697
It's 10 million people in the country.

1470
01:13:22,702 --> 01:13:22,757
Yeah.

1471
01:13:23,027 --> 01:13:28,217
So, so when I think about that, it's like, okay, so 5% of the population

1472
01:13:28,217 --> 01:13:33,407
have the, uh, ability to pay other people in Bitcoin right now.

1473
01:13:34,007 --> 01:13:39,077
And the entire population has the ability to receive them because, right.

1474
01:13:39,107 --> 01:13:39,437
Yeah.

1475
01:13:39,557 --> 01:13:40,517
Within the minutes.

1476
01:13:40,967 --> 01:13:41,207
Yeah.

1477
01:13:41,207 --> 01:13:47,867
So, uh, to me, the conclusion I draw is like, this economy is already here,

1478
01:13:47,897 --> 01:13:53,677
it's just below the surface, and it's just, If shit hits, hits the fan even

1479
01:13:53,677 --> 01:13:57,877
harder than it has, like, then it's just bound to pop out and just happen.

1480
01:13:57,877 --> 01:13:58,537
Like, yeah.

1481
01:13:58,567 --> 01:13:59,167
How do you see that?

1482
01:13:59,347 --> 01:14:01,987
Is there are, are we close to the boiling points

1483
01:14:01,987 --> 01:14:07,777
or like Yeah, I mean, I was, I was describing it as, um, a bootstrap

1484
01:14:07,777 --> 01:14:14,017
threshold where even like where there's enough people that own Bitcoin, that

1485
01:14:14,047 --> 01:14:20,437
even if all of the sort of k y c official businesses had to stop immediately mm-hmm.

1486
01:14:20,887 --> 01:14:24,997
That it would keep going with a gray market because, you know, it's

1487
01:14:24,997 --> 01:14:27,637
kinda like marijuana or something.

1488
01:14:27,697 --> 01:14:34,897
Now, you know, if, if, if enough people do that you can, you know,

1489
01:14:34,902 --> 01:14:37,627
ask a friend of a friend, like within a social network mm-hmm.

1490
01:14:37,867 --> 01:14:39,397
You can find somebody to trade Bitcoin.

1491
01:14:39,757 --> 01:14:40,027
Right.

1492
01:14:40,027 --> 01:14:40,087
Yeah.

1493
01:14:40,117 --> 01:14:42,127
So, and that's, that's clearly the case now.

1494
01:14:42,127 --> 01:14:42,367
Right.

1495
01:14:42,367 --> 01:14:42,607
You know?

1496
01:14:43,432 --> 01:14:46,252
You know, you are, you are in Bitcoin, but if you are not in Bitcoin,

1497
01:14:46,702 --> 01:14:49,432
you probably know who to ask for, who might know somebody who you

1498
01:14:49,432 --> 01:14:50,842
could trade some Bitcoin for cash.

1499
01:14:50,902 --> 01:14:51,322
Yeah.

1500
01:14:51,502 --> 01:14:53,482
It's the Kevin Bacon number equivalent.

1501
01:14:53,487 --> 01:14:53,722
Like,

1502
01:14:53,932 --> 01:14:56,782
so I think like clearly it's boost wrapped and like potentially

1503
01:14:56,782 --> 01:14:57,982
even internationally, right?

1504
01:14:57,987 --> 01:15:03,502
Because yeah, there are like unofficial international swap markets Yeah.

1505
01:15:03,502 --> 01:15:04,942
For delivering cash rate.

1506
01:15:05,542 --> 01:15:08,602
And that's the experience I have with traveling around to all these conferences

1507
01:15:08,602 --> 01:15:10,102
and meetups and stuff is like that.

1508
01:15:10,222 --> 01:15:11,962
It's, it's still small everywhere.

1509
01:15:12,382 --> 01:15:16,372
Then you have to take into account that not every Bitcoin wants to go to a

1510
01:15:16,372 --> 01:15:18,322
Bitcoin meetup or a Bitcoin conference.

1511
01:15:18,327 --> 01:15:20,722
It's just a small portion of us that do these things.

1512
01:15:20,722 --> 01:15:20,812
Right.

1513
01:15:21,262 --> 01:15:27,052
So, and, but even those things are, they're small, but they're everywhere.

1514
01:15:27,052 --> 01:15:28,072
Literally everywhere.

1515
01:15:28,612 --> 01:15:29,542
So, yeah.

1516
01:15:29,932 --> 01:15:30,742
Insanely bullish.

1517
01:15:31,402 --> 01:15:31,702
Yeah.

1518
01:15:32,902 --> 01:15:38,812
Well, I mean, I think the, the million, uh, U T x like full corner situation is

1519
01:15:38,817 --> 01:15:43,432
like insanely bullish because you're think like, well, could we get to 10 million?

1520
01:15:43,462 --> 01:15:46,042
It's probably not like economically possible.

1521
01:15:46,102 --> 01:15:46,402
No.

1522
01:15:46,432 --> 01:15:47,662
Like, could we get to 2 million?

1523
01:15:47,752 --> 01:15:48,412
I don't know.

1524
01:15:48,412 --> 01:15:50,602
Like the price might get pretty high before that could happen.

1525
01:15:50,602 --> 01:15:50,842
Right?

1526
01:15:50,842 --> 01:15:50,902
Yeah.

1527
01:15:50,932 --> 01:15:55,642
So like, it seems like we're not that much more adoption without

1528
01:15:55,647 --> 01:16:00,292
any like institutional buying or us spot ETFs or anything for just,

1529
01:16:00,742 --> 01:16:03,322
you know, things to get crazy.

1530
01:16:03,322 --> 01:16:03,592
Right.

1531
01:16:03,622 --> 01:16:03,982
Weird.

1532
01:16:03,982 --> 01:16:04,272
Yeah.

1533
01:16:04,277 --> 01:16:08,842
Yeah, because it's not, it's not that you double amount, the doub, the amount

1534
01:16:08,842 --> 01:16:11,362
of whole corners and price doubles.

1535
01:16:11,902 --> 01:16:12,112
Yeah.

1536
01:16:12,112 --> 01:16:12,202
It's

1537
01:16:12,202 --> 01:16:13,162
exponential, right?

1538
01:16:13,162 --> 01:16:13,252
Yeah.

1539
01:16:13,252 --> 01:16:13,912
It's much worse.

1540
01:16:13,912 --> 01:16:14,242
Yeah.

1541
01:16:14,332 --> 01:16:17,947
And, and it's getting worse over time because, The, um,

1542
01:16:17,977 --> 01:16:19,237
by worse, you mean better?

1543
01:16:19,447 --> 01:16:20,007
Yeah, yeah, better.

1544
01:16:20,007 --> 01:16:24,007
Like, like, I mean the, the uh, the liquidity, like the number of coins

1545
01:16:24,007 --> 01:16:27,037
that are available to get bought on exchange are like shrinking and

1546
01:16:27,042 --> 01:16:27,877
shrinking and shrinking, right?

1547
01:16:27,882 --> 01:16:28,087
Yeah.

1548
01:16:28,092 --> 01:16:28,127
Yeah.

1549
01:16:28,132 --> 01:16:32,347
So, you know, that means, you know, 'cause there's some kind of metric people

1550
01:16:32,347 --> 01:16:37,087
try to put like, well, you know, if a hundred million dollars of Bitcoin are

1551
01:16:37,087 --> 01:16:39,787
bought, how much does it put the price up?

1552
01:16:40,237 --> 01:16:44,647
And like, it's gonna put the price up a lot more if there are very few coins Yes.

1553
01:16:44,647 --> 01:16:45,547
Left on exchanges.

1554
01:16:45,547 --> 01:16:45,787
Right.

1555
01:17:46,299 --> 01:17:50,139
I, I think this has been a great talk, great discussion.

1556
01:17:50,139 --> 01:17:54,669
Talked about some, uh, kind of downsides, you know, things that

1557
01:17:54,669 --> 01:17:58,179
are risky going on right now, but also incredibly bullish at the end.

1558
01:17:58,179 --> 01:18:02,679
So, uh, is there anything else on your, your mind in the Bitcoin space these days?

1559
01:18:03,609 --> 01:18:07,029
Um, well, I mean, we're like a blockstream, we're interested

1560
01:18:07,029 --> 01:18:12,354
in like, Anything that, uh, has potential to improve Bitcoin.

1561
01:18:12,354 --> 01:18:15,354
So we're kind of got our fingers in lots of stuff, you know, like layer

1562
01:18:15,354 --> 01:18:22,614
two and manufacturing miners, but also simplicity, which is a kind of, sort of

1563
01:18:22,614 --> 01:18:27,774
long-term ossification technology, if you like it start the kind of technology

1564
01:18:27,779 --> 01:18:32,394
arc started in like before blockstream in like 2012 i r c discussions.

1565
01:18:32,934 --> 01:18:41,514
And so that, that is a sort of low level micro code self extensibility for Bitcoin.

1566
01:18:42,114 --> 01:18:47,604
And the idea is because of the formal semantics and formal proofs

1567
01:18:47,604 --> 01:18:51,774
that it could be a more secure, dependable kind of script than

1568
01:18:51,774 --> 01:18:53,124
the current Bitcoin script even.

1569
01:18:53,424 --> 01:18:53,904
And.

1570
01:18:54,204 --> 01:18:57,564
It's not fable by, you know, I think something like that is like, you know,

1571
01:18:57,564 --> 01:18:59,154
probably five years out at least.

1572
01:18:59,844 --> 01:19:05,994
But it is interesting to consider that there is, you know, a very credible,

1573
01:19:06,504 --> 01:19:11,634
serious engineering effort that could, you know, as a strong contender to get us to

1574
01:19:12,354 --> 01:19:14,244
ossification and, and like mean it, right?

1575
01:19:14,244 --> 01:19:15,204
Like the last soft fork.

1576
01:19:15,204 --> 01:19:19,284
We don't need to do like the kind of soft forks we do today after that.

1577
01:19:19,374 --> 01:19:25,344
Um, that's, that's like to me an extra bit of comfort because I feel that,

1578
01:19:26,154 --> 01:19:31,764
you know, the drip drip of ongoing soft forks is like a little bit of persistent

1579
01:19:31,764 --> 01:19:36,954
risk that mm-hmm would sooner like, you know, find a way to either modularize

1580
01:19:36,954 --> 01:19:42,594
like, so people can do things in like safe, you know, safe contained areas or.

1581
01:19:43,389 --> 01:19:44,679
Finalized bitcoin script.

1582
01:19:44,679 --> 01:19:47,289
So like it does what it does and you don't need to change it anymore.

1583
01:19:47,349 --> 01:19:48,489
And simplicity could do that.

1584
01:19:48,939 --> 01:19:53,229
Is it, is it inevitable to that you, uh, change the incentive structure

1585
01:19:53,229 --> 01:19:55,239
somewhat when introducing any soft

1586
01:19:55,239 --> 01:19:55,659
fork?

1587
01:19:55,719 --> 01:19:58,029
Like Yeah, I think so slightly.

1588
01:19:58,119 --> 01:20:03,279
You know, because I mean, even the fact that it, you know, like the, any previous

1589
01:20:03,279 --> 01:20:05,439
sound enables more efficient lightning.

1590
01:20:05,559 --> 01:20:06,099
Okay.

1591
01:20:06,099 --> 01:20:10,239
So maybe lightning uses less block space per mm-hmm.

1592
01:20:10,839 --> 01:20:13,719
Transaction or change changes, like I said, they, they're all gonna

1593
01:20:13,719 --> 01:20:14,949
change something a little bit.

1594
01:20:14,949 --> 01:20:18,969
Like maybe vaults change to cause storage behavior or maybe probably like

1595
01:20:18,969 --> 01:20:21,259
sell small things of course, but yeah.

1596
01:20:22,299 --> 01:20:22,599
Yeah.

1597
01:20:22,659 --> 01:20:23,319
Always a risk.

1598
01:20:23,859 --> 01:20:28,599
Adam, thank you so much for coming on and, uh, have a good, whatever

1599
01:20:28,604 --> 01:20:29,919
the rest of the conference is.

1600
01:20:30,369 --> 01:20:30,519
Yeah.

1601
01:20:30,519 --> 01:20:30,969
Thank you.

1602
01:20:30,999 --> 01:20:31,659
Thanks for having me on.

1603
01:20:32,636 --> 01:20:34,836
So what did you think of that episode with Adam Back?

1604
01:20:35,386 --> 01:20:36,686
We really enjoyed this one.

1605
01:20:36,746 --> 01:20:40,466
Adam clearly understands everything he's talking about, even if he's not Satoshi.

1606
01:20:41,066 --> 01:20:43,076
Can't blame us for thinking he's a likely candidate.

1607
01:20:43,576 --> 01:20:45,776
Anyway, let us know what you thought about this episode.

1608
01:20:45,796 --> 01:20:48,886
You can send us a boostergram on Fountain, leave us a comment on YouTube,

1609
01:20:48,926 --> 01:20:50,516
or get in touch on Noster or Twitter.

1610
01:20:51,016 --> 01:20:53,166
If you're watching on YouTube, don't forget to like the episode

1611
01:20:53,166 --> 01:20:54,256
and subscribe to the channel.

1612
01:20:54,806 --> 01:20:58,096
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1613
01:20:58,096 --> 01:21:00,806
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1614
01:21:00,826 --> 01:21:01,226
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1615
01:21:01,646 --> 01:21:03,246
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1616
01:21:04,011 --> 01:21:07,981
That's all for now, see you next time, and thanks for listening.