Bitcoin Core Has Been Compromised | Matthew Kratter | BIS #203

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Matthew Cratter, a warm welcome to the Bitcoin Infinity Show.

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Lovely to have you here.

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I've been wanting to do this for a long time.

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Likewise.

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It's great to be here, Knut.

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Thanks for inviting me.

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Yes.

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You are one of those Bitcoiners that, to me, is made out of the real material, like a true

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Bitcoiner, acting the part and doing whatever is necessary and not worrying about, you know,

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reputation among certain circles or whatever, just speaking your mind. And I truly respect that.

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Well, I appreciate that. I think I've gotten lucky to sort of falling in with some really

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good Bitcoiners who have guided me and sort of showed me the ropes over the years.

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yeah uh anyway for for for those of our listeners who don't know who you are i mean you you run a

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daily show on youtube and x called the bitcoin bitcoin university uh there's no v there it's

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just bitcoin university but it's technically uh technically called matthew cratters bitcoin

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university which um which is done which is done sort of consciously because i feel like only

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satoshi could run or probably in a decentralized protocol even satoshi shouldn't be running the

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university, but it's my take on a Bitcoin university. Yeah. So tell our listeners a

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little more about yourself. Where did you come from? How did you find Bitcoin? Who are you,

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basically? And why are you doing, we'll get into why you're doing the things you're doing later,

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but first a little introduction, please. Yeah. So I think there've been sort of three epochs

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in my life. And the first one, I really started off as an academic. And that's served me

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well over the last couple of years too, just the ability to read lots of material and do deep

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research and synthesize it. So I studied music and English literature, music composition, English

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literature at Stanford University. It was a bad job market in the early nineties. So,

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and my interest sort of shifted to doing a PhD. So I did a PhD in English literature

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at UC Berkeley. And as part of that, I had a very, a really wonderful mentor named

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Professor René Girard, who is a Stanford professor. He was eventually inducted into the

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Académie Francaise, but just a wonderful philosopher. And it's been interesting to

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see some of his work infiltrate Bitcoin circles. And so I focused, sort of hung out with that

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group. Simultaneously, I became interested. I was living in the Bay Area, obviously.

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A lot of my friends had gotten into trading and investing, and this was sort of the

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beginning of the internet boom and then the internet bubble. And so I started playing around

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in my free time with trading. I was a graduate student. I was working on my dissertation.

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I had a $15,000 Mellon grant. And so there's this progression where I gradually, and this was the

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beginning of online brokerages. There were platforms like Daytech and MB Trading and various

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things that people who were around back then would know about. I became very interested in trading.

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It sort of began to take over my life, the markets, just reading about them, participating in online forums.

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And so there's this confluence of events where I was very into these Girard circles, attending a weekly chat with Girard and his disciples, essentially.

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And one of the guys who was there was a guy named Peter Thiel, who Noah knew who he was back then.

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He was running a small macro fund and he sort of pivoted that macro fund into, I think he invested all of it into PayPal.

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And then obviously people know who Peter Thiel is now.

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But we share these sort of common circles.

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And as part of these weekly or biweekly Girard meetings, Peter and I just were hanging out.

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This was before, I like to say, it was the last time I had more money than him, though we both had no money whatsoever.

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we started hanging out and I slowly figured out that he was running this macro fund and we began

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to compare notes, et cetera. And I showed him what I was doing. I was doing mainly systematic trading.

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There were a lot of market inefficiencies back then that one could exploit. And so it was a very

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interesting time when a lot of trading systems still work. And so when Peter sold PayPal in 2002,

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sold it to eBay and basically took home about $50 million in his Roth IRA. He rebooted his hedge

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fund, which had been called Teal Macro, and he rebooted it under a different name, which was

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called Clarium, Clarium Capital. And I was lucky enough, he basically hired a lot of his friends,

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and he and I had already been trading notes about macro and systems trading for about

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five years at that point. And so I did end up finishing my PhD in English literature. I never

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went on the job market. I was basically making so much money trading, especially in the late 90s,

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that there wasn't, I sort of got distracted. And so basically Peter took me under his wing

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and it was a real hodgepodge group of people. We had math professors, we had physics PhD dropouts.

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it was a lot like Bitcoin circles, actually, just a lot of weird people, weird, really smart people.

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And so it was kind of a continuation of it almost felt like grad school, but getting paid because I

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got to sit around and talk about cool things. So that was sort of how I made the transition

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from aspiring professor academic to trader in the hedge fund business. And I was basically very

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involved in TradFi up until I just, there, there've been some accusations that I'm somehow a Peter Thiel

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puppet. Uh, so I, I should probably add the, the, the, the, the, the footnote here that, um, I was

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last on Peter's payroll in, in 2006. And, um, I've spent a lot of the last few years fighting against

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Peter Thiel projects, for example, like Ethereum, which, uh, I believe Peter funded Vitalik with one

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of his, um, drop out of college, get a hundred K, uh, fellowships. And that's, that's the money that

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Vitalik Hughes to support himself while he was developing Ethereum. And I've also been attacking

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various teal investments like Palantir and of course Citra, which figures into the story.

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I played around with Bitcoin. I first knew about it in 2011. I sort of moved in some libertarian

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circles in the Bay Area. And one of my friends, it wasn't Peter, told me about Bitcoin in 2011.

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I took a look at it. I saw it was trading for about a dollar a coin. And I remember telling

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my friend, I could, you know, I could put $10,000 towards this, which would be 10,000 Bitcoin,

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obviously, but I don't think it would really move the needle on my net worth. And I,

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what's Mt. Gox and how do I even buy this stuff? And it's, it looks like a, it looks like some sort

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of Ponzi or, or too low bubble to me. And so I basically ignored Bitcoin. I traded it a little

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bit. I think you can still find old videos on YouTube of me trading Bitcoin, you know, buying

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at 15,000, selling at 15,500.

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But it was really the third quarter of 2019 when I was already running the precursor, the

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predecessor to Bitcoin University, which was Trader University.

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And I just began to, this was a time of the repo crisis, the third quarter of 2019.

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And it finally occurred to me, I finally saw that this was actually a macro instrument

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that could be used to hedge against monetary debasement.

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the whole store value use case. And so I began to, I really began buying and holding, hodling

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in the third quarter of 2019. And then my channel really was a fairly small channel.

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Even at that point, it was probably 7,000 subscribers. And then COVID hit the lockdowns.

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Everyone was trading GameStop and watching YouTube videos about trading. And that's when

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my subscriber growth began to, it really went from like 7,000 in 2020, went from 7,000 subs to

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probably 150,000 subs, something like that. And then ever since then, it's really sort of taken

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over my life and it's a labor of love. And it's my main focus now making these daily videos

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on YouTube. So really been class of 2019 for Bitcoin.

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What was the name of the philosopher, Ian? René Girard.

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My very poor French actor.

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Yeah. And what's his main philosophy? Like what's the TLDR on his philosophy?

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So he is one of these kind of old school intellectuals who was synthesized a lot of

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different fields. So he works, he basically began analyzing desire, what he calls mimetic desire

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in all the famous French novelists like Proust and Dostoevsky, et cetera. And this idea of mimetic

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desires that we don't only imitate other people's behavior, but we also imitate their desires. And

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so you have a convergence of desires on the same object, on the same girl. This is the plot of

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every movie or novel. And this leads to conflict. And then he sort of pivoted into anthropology and

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did some deconstructions of Claude Levy Strauss and came up with something called the mimetic

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theory, which is a synthesis. It's almost like a 19th century project where people still believed

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that you could synthesize the various fields in the human sciences or the humanities.

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And so his writings encompass violence in the sacred is a famous work that really

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catapulted him to fame.

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But he writes about human culture, which I think the stuff I've learned about him has

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been very helpful in that.

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He writes about scapegoating and how scapegoating is a generative mechanism that leads to religion,

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basically, that leads to primitive religion, and that you can trace the origin of myths,

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rituals, and various things like this to these generative, through scapegoating,

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which gradually became more ritualized. Yeah, I love that kind of stuff. I mean,

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Richard Dawkins, The Selfish Gene, had a big impact on me. And the word meme, I believe,

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originates from that book written back in 1976, the year of my birth. And his observation is that

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ideas propagate just like genes do. So whatever idea survives, survives, or the most adaptable one

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where it's not survival of the fittest, it's sort of more like survival of whatever survives.

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But if you are fit for your environment, that you have a higher likelihood of doing so,

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which is how genes work too.

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And I just find the whole thing fascinating

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because you mentioned religions and stuff.

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It doesn't really matter how good the idea is

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if it has the properties required to propagate and survive.

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So suicidal bombing, for instance,

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can be a very detrimental idea to the individual subject

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holding the idea, but it can still propagate

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because it can inspire others to do the same stupid,

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thing. Yeah, I'm very fascinated by that stuff because I think that's how in Bitcoin too,

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of course, you see all these bad ideas propagate, not because they're the best ideas, but because

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they have other ways of attracting people and especially gullible people. I mean, that's why

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we have these NFTs and monkey JPEGs and stuff. So I think there's a parallel there somewhere.

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Yeah, there's one further note to that, which makes it especially interesting, is that Girard was a traditional Catholic. So his critique of religion is, you know, it's not some Christian triumphalism, but it basically, his idea was the reason we understand what a scapegoat is.

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because if you read, you know, you read a lot of the Greek philosophers or you read stuff before the time of Christ,

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this idea of the scapegoat doesn't really exist.

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And we know what a scapegoat is.

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Scapegoat is usually it's someone who's innocent whom the crowd thinks is guilty.

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And so his idea was this.

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There's this was all sort of revealed at Christ's crucifixion.

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And so this idea, the reason we can say, oh, he's being scapegoated or, you know, that guy's innocent.

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and he's just a scapegoat, that this is a very modern Western thing

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that is a derivative of the Christian revelation.

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And this is one of the things that made Girard so interesting is because he,

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and this is one of the reasons that Bitcoin is so interesting too,

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because it just goes across so many fields.

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So Girard, we spent a lot of time on Christian theology as well,

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as well as studying more traditional sort of anthropological religions,

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you know, primitive people religions.

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Yeah. So there are no examples of scapegoats before Christ, like in anything?

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Well, there are. And one of Girard's hypotheses is that at the center of every myth is a human being, or most myths, you have things like Orpheus and, you know, is torn apart, is an actual human being.

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At the origin of every myth is an actual human being who is lynched by a crowd.

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And the way they tell this story is they tell it in a very particular way where they don't say, they say basically there was a societal crisis, what Gerard calls a mimetic crisis.

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There's this tribal crisis.

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And then we realized there was this old woman who was putting a curse on everyone in the tribe.

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And so we all got together as a village and we all murdered her.

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And then there was peace and prosperity in our village And so from their perspective the woman really is guilty She actually a witch And we seen we obviously seen modern versions of this in Salem et cetera But the more modern basically derived from the Christian scriptures version of that is

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she was just an old lady who was kind of weird and she wasn't casting. And magic doesn't,

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magic doesn't really exist. She wasn't casting spells on that. And so Sherrard has this whole

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take on the history of science. And it's once you, once you understand that it's not the witches that

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are behind the weather, etc., then you can end up with people like Francis Bacon and

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the scientific method and various things like that.

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I've actually experienced similar phenomena in group psychology situations.

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I think you know a bit about my background, that I used to be in the shipping industry.

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So I've been in a lot of crews on ships, a part of a crew, and you're maybe 20 people

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or even less than that, maybe 10 people in the base crew

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living together for a couple of months.

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And I've been through that over and over again

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through like half of my career.

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Oftentimes, I found it very interesting

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that whenever there was an obvious person to blame

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for like everything in the crew,

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because you had a person who was worthless

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at basically everything and who just nobody liked,

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then that sort of welded the rest of the team together

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more than if that person hadn't been there.

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Because if there was no such person,

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everyone was blaming everyone for everything.

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But when we had a scapegoat, for lack of a better term,

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then that actually made the rest of the team stronger in a sense.

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And I found it kind of disgusting,

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but very fascinating at the same time that that was the case.

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I don't know. Have you experienced something similar?

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Oh, definitely.

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This is a common human dynamic where we...

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it's almost like a shelling point where you unite ourselves around a common enemy.

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But, but what doesn't happen in modern times, you had these experiences on these ships.

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It didn't lead to a new religion.

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You didn't, you didn't tell the, you didn't, you're not still telling the story of this,

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this cabin rat who you guys threw overboard and then the, the, the sea was no longer rough.

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And, but we, we have lots of, we have lots of versions like this.

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And what's very interesting, there's some versions, there's some sort of transitional versions

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where the illusion begins to wear off.

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In 100 AD, 200 AD, some of these texts where you can see this guy is being lynched

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and there's still some sort of magical properties ascribed to him,

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but the veil is beginning to wear thin.

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And people are saying, oh, it's just some poor old man that the crowd is lynching.

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So these human dynamics remain the same.

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But what I think Girard did a really good job of was showing this path, how desire leads to rivalry, can lead to actual conflict, and then the relationship to what the anthropologist described in a fairly different way.

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Yeah, heavy stuff. Very interesting, though. I'm thinking, how do we segue this into core versus knots and BIP-110 and all of that?

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One obvious connection was just, I mean, what I've always had is this sort of love of people who deal in interdisciplinary ways with things and are not dogmatic and they just don't want to do economics like Keynesians or they don't want to.

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they're just focused on software development and they don't understand economics. Like this is

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obviously a problem, a problem in Bitcoin. But I think that's one of Bitcoiners' great strengths

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is they're just a lot of people like the Nick Zablos of the world who are just polymaths.

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And I've always been attracted to people like this. And that's why I hung out in Girardian

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circles. And I felt very at home once I began to meet Bitcoiners, you know, like yourself,

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who just dabble in a lot of different areas and are not afraid to, you know, Bitcoiners were very

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good during COVID, for example. Like we weren't intimidated by the fact that we didn't have MDs,

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that we could actually just look at the data and decide things for ourselves. And maybe this is

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something that Bitcoin, Bitcoin may have lost a little bit in the last, in the last three years,

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people willing to trust, willing to trust the experts. And I've actually felt, I was thinking

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about this this morning, this whole situation we're in really, at least for me, feels a little

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bit like COVID where there are these really obvious, there are these obvious lies out there.

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People are repeating them. People are unwilling to, people say, you know, trust the experts,

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trust Adam Back, trust Greg Maxwell. You know, who are you to criticize them? And, you know,

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they were right about all the, you know, they're great guys. They contributed a lot to Bitcoin,

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but they've gone wrong. Just this willingness to question authority, I think is so important. So

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Maybe there's a connection there.

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Absolutely.

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And I mean, I think that Bitcoiners still question authority.

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Maybe the Bitcoiners you see on the internet don't do that as much.

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But that doesn't mean that the ones that were on the internet back in 2017 don't exist anymore.

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I think they're still out there.

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And this is what gives me hope that we will still be resilient enough to resist more sneaky attacks on the system than just blatant attempts at trying to copy it and creating the new shitcoin and stuff.

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But there is more dangerous stuff for sure.

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I mean, this is why I fell in love with this community in the first place.

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Not only Bitcoin as the technology or the idea of absolutely finite money.

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And I fell in love with that, of course.

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But I fell in love with the community because no one was safe.

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We were always ready to slay our heroes if they fell out of line and said something stupid or something inappropriate in the context of we're trying to save the world with absolutely sound money here.

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Like, why are you falling out of line?

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No one was safe.

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Except there's a small anecdote from Baltic Honeybadger in Riga 2019.

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I noticed how no one was saying anything about Andreas Antonokoulos,

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and he had just released Mastering Ethereum.

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But sort of everyone at the conference was orange-pilled by Andreas

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because he was really the only person on Earth doing orange-pilling back then.

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Maybe a handful more like Max Keiser and Trace Mayer and people like that.

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But Andreas was by far the biggest one, especially here in Europe.

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I still think he's the greatest.

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I still think he's in spite of the eventual path he took, his early videos.

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I learned a lot from him just watching him on YouTube.

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Yeah, I absolutely agree.

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And he had a huge impact on me and not only about Bitcoin, but I also saw a potential future.

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Maybe I can do this.

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Maybe I can travel the world and talk about this stuff.

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So he was a great inspiration, and that's why it was so disappointing when he released this book about Ethereum.

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Because to me, Ethereum was like, it was obvious from the get-go that this was a scam, a copycat thing at best.

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But 70% pre-mine and all of that, it was all there.

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The signs were on the wall.

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But no one at the conference dared to touch him, even though everyone was proud of having slayed whoever else that got into Bitcoin.

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Was he at that particular conference?

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He wasn't. I've never met him except online. So, yeah, he was the teacher in a class I took in 2016 about digital currencies.

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Amazing.

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Plural.

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Yeah. Well.

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University of Nicosia online course.

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Oh, interesting.

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This is a little bit more forgivable in 2016. It's like the same thing in 2026 is like a whole different story.

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Yeah, but this was 2019 when he released the book. So at that point, it's sort of not forgivable or not as forgivable anyway. But it's just an interesting, to me, that the phenomenon was interesting that we were willing to slay a lot of people, but Andreas was sort of untouchable, sort of like Saylor is now.

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I mean, I think there are a lot of Bitcoiners that don't dare say what they think about it.

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I mean, he's doing his thing.

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It's not the thing I would do in Bitcoin, maybe.

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I have my views on that.

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You know, paper Bitcoin is paper Bitcoin and so on and so forth.

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I have no grudge or beef with him.

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I think he's been a very kind guy the few times I've met him.

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But I do think that people are self-censoring in a sense.

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not not only sailor but other prominent names and they they don't as you say they they say how dare

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you question this or that guy and there's there are large amounts of like andreas wasn't uh i i

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don't think he was ever a billionaire and he he wasn't uh he wasn't giving people jobs and he

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wasn't funding startups and in in the same sense that some people like you know if you uh you don't

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maybe you don't want to offend some of these fairly wealthy people in Bitcoin today.

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So it's that added thing.

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And also, if you're an influencer too, I think there's this calculus.

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If you're a Bitcoin influencer, there's this calculus, which is unfortunate.

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There are a lot of Bitcoin influencers now who do this calculus in their head.

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like if I cover this topic, will the engagement be worth it?

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The clicks, the social media engagement be worth it?

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Or will it cause, you know, will I not get invited to this conference?

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And there's, there's some sort of, rather than what is, what's the absolutely right thing for Bitcoin?

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And what's the right thing for my life savings?

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Because I have all my life savings or almost all my life savings in Bitcoin.

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And sometimes worry about some of these inflow.

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It's just like, do you really own any Bitcoin?

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Because you don't seem too concerned about what's happening.

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No, it's definitely a problem.

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And I see a lot of this, of course, because I do a lot of conferences.

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I travel around a lot.

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And I'm sort of doing this for a living.

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So I feel the incentives.

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Oh, yeah, they're hard.

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And I'm thinking, like, I just hope that my integrity is still intact after all these years.

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I think it is.

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I think I haven't fallen out of line.

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There's this dilemma between being 100% cypherpunk values and never touching toxic stuff with a 21-foot pole.

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And on the opposite side of the spectrum, you have a full diplomat that talks to everyone.

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And I think you have to find your specific position between the two, especially if you're doing a podcast like I am.

294
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I can't just be rude to people.

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I wouldn't get much information out of them in that case.

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No, that's true.

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And I think it is important to talk to the quote-unquote enemy or, you know, people on other sides of the Civil War.

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Because ultimately, you know, I would have the back of most of these people if the U.S. government, for example, starts putting all of us in jail.

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And, you know, it's where we really are on the same team. And from an outsider, when outsiders look at us, they sort of wonder what these squabbles are about because we have so much in common.

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But that being said, you still have to, there are, I would have to say like in the Bitcoin space, I've met the best people that, the best human beings that I've ever met. And I've also encountered the worst human beings that I've ever met.

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So it attracts just really great people, but also sociopaths and psychopaths who see an opportunity because there is a lot of money here.

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There's people trying to make a name in Bitcoin.

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And so it's this weird paradox of all the best and all the worst people.

304
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I've experienced exactly the same thing.

305
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This has been my observation since day one.

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The thing that comforts me is that it seems to be the ratio of good people to bad people seems to be higher at the Bitcoin conferences these years than not all the Bitcoin conferences.

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Some conferences, let's not name them, but some conferences go the other direction.

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Some of them American.

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Yeah, it's interesting.

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And these dynamics, I bet they will always exist because of how powerful Bitcoin is.

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It will attract psychopaths. Money has always attracted psychopaths.

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And deciding about money, that's where the psychopaths on top come from.

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They urge to want to do that. We wouldn't have money printers if that was not the case.

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Of course, it's going to attract those kinds of people.

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And it's just something we're going to have to live with and weed them out continuously.

316
00:27:09,541 --> 00:27:10,621
Yeah, it's very true.

317
00:27:10,621 --> 00:27:20,621
You should check out firefish.io The open market for bitcoin backed loans

318
00:27:20,621 --> 00:27:29,621
Where every single user stays in control Cause their security is all in the code

319
00:27:29,621 --> 00:27:41,061
While you're at it, go to bitbox.swiss The hardware wallet, cypherpunks cannot diss

320
00:27:41,061 --> 00:27:56,522
The Nano 2 is something you cannot miss Knowing that your sats are safe is a bliss Bobecoin is a non exchange

321
00:27:56,522 --> 00:28:00,882
Their wallet's pretty based even though it's half French

322
00:28:00,882 --> 00:28:05,342
Francis, Dave and Madix and I are good friends

323
00:28:05,342 --> 00:28:09,562
So check them out, they're cool and super not gay

324
00:28:11,482 --> 00:28:16,402
And the Bitcoin Advisor is great.

325
00:28:16,922 --> 00:28:20,822
Go secure your funds before it's too late.

326
00:28:21,542 --> 00:28:25,182
Multi-sig inheritance planning can't wait.

327
00:28:25,642 --> 00:28:29,622
When you got some shrimp on the barbecue, mate.

328
00:28:38,562 --> 00:28:41,142
So go check out firefish.io.

329
00:28:41,482 --> 00:28:45,822
bitbox.swiss, bullbitcoin.com, and the Bitcoin Advisor.

330
00:28:46,162 --> 00:28:48,102
And use code INFINITY everywhere.

331
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Brush your teeth.

332
00:28:49,702 --> 00:28:52,022
Yeah, so let's get into this.

333
00:28:52,202 --> 00:28:56,282
I mean, I've been following your Bitcoin,

334
00:28:56,542 --> 00:28:58,462
Matthew Kratus, Bitcoin University,

335
00:28:58,742 --> 00:29:01,382
religiously for at least the last year.

336
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I watch it every day, and I really like what you do.

337
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And pointing out stuff.

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The whole thing, the things you've been talking about

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the last year is, of course, the core versus not fight and now lately BIP 110 and why people

340
00:29:18,082 --> 00:29:24,902
should signal for BIP 110. So in short, where to begin here? So in your words, because people are

341
00:29:24,902 --> 00:29:29,702
bored of mine, why is spam on Bitcoin a problem and why should we do something about it?

342
00:29:31,502 --> 00:29:39,662
Well, spam is a problem in many areas, especially in online areas. So spam is a huge problem in

343
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email for cell phones. And spam has been a problem since the dawn of the internet. And certainly,

344
00:29:49,142 --> 00:29:56,042
spam has been a controversial issue since the original spam wars, which were called the

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Opperturn Wars in 2014. And at that point, the Bitcoin community was much smaller. And there was

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this consensus. I made a video called Bitcoin Culture Has Always Been Against Spam. There was

347
00:30:09,262 --> 00:30:15,002
this general consensus that what various meta protocols like counterparty and omni colored

348
00:30:15,002 --> 00:30:24,302
coins were doing was um was degrading bitcoin as a monetary network and you had um you had uh eric

349
00:30:24,302 --> 00:30:30,202
vorhees satoshi dice spamming the chain with this these these small dust outputs and basically the

350
00:30:30,202 --> 00:30:34,942
community came together bitcoin core was really leading the charge at that point which is the the

351
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main node software, or at least was back then. And they basically said, this is abuse of the

352
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blockchain. The blockchain is this sort of commons. We've all heard of tragedy of the commons where

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people, everyone can pursue their own self-interest. But if you're letting all the cows

354
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graze in the commons and there's no more grass and it gets overgrazed or whatever the metaphor is,

355
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then it ends up hurting everyone. And spam is a similar problem. It's a problem of the tragedy

356
00:31:02,742 --> 00:31:09,182
of the commons, spam interferes with spam, which is basically non-monetary transactions

357
00:31:09,182 --> 00:31:09,782
on Bitcoin.

358
00:31:10,202 --> 00:31:14,602
It competes with monetary transactions when it comes to transaction fees, when it comes

359
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to block space.

360
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It fills up our storage.

361
00:31:18,802 --> 00:31:26,822
It bloats the UTXO set, bloats our, you know, makes the RAM requirements for running a node

362
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much higher.

363
00:31:27,342 --> 00:31:33,162
And so what basically happened in 2014 is this thing called OpReturn was introduced.

364
00:31:33,922 --> 00:31:41,622
And it was basically designated by the community and by Bitcoin Core as the place to put a small amount of non-monetary data.

365
00:31:42,182 --> 00:31:45,742
So, for example, the hash of a much larger amount of data.

366
00:31:45,742 --> 00:31:58,002
You could take the Declaration of Independence and run it through a SHA-256 hash and end up with a 256-bit output, which is sort of the fingerprint of the data.

367
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That's about something like 32 bytes.

368
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32 bytes, so they set up Opperturn to be 40 bytes.

369
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So you could put some sort of hash in there that would function as proof of existence for a certain amount of a certain piece of data at a certain point of time.

370
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So if I put it, these hashes are very unique.

371
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They are like fingerprints.

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And so it's a way of proving that I had something.

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I had a certain thing at a certain point in time that produced this hash.

374
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And then you just put the hash in the OperaTurn.

375
00:32:24,462 --> 00:32:28,522
So OperaTurn was designated as, and this is what a lot of people miss,

376
00:32:28,522 --> 00:32:35,822
is that there are infinite ways of embedding data in Bitcoin or non-monetary data.

377
00:32:35,902 --> 00:32:40,582
But there's one way that's been there really since the beginning or since the early year, since 2014,

378
00:32:40,582 --> 00:32:46,222
that was the designated place to just put a small amount of arbitrary data or non-monetary data.

379
00:32:47,182 --> 00:32:51,722
And then like all things, this is a little bit like the U.S. income tax, which started off at

380
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1% for just the wealthiest people. And now I don't think there are any Americans paying such a low

381
00:32:58,262 --> 00:33:02,842
income tax. So then it moved up. And the same happened with op return. So it started off at 40

382
00:33:02,842 --> 00:33:09,682
bytes. And then about a year later, it was moved up to 80 bytes. And then where our story really

383
00:33:09,682 --> 00:33:15,982
takes off was in last year when Bitcoin Core decided to basically remove the cap on data

384
00:33:15,982 --> 00:33:25,882
carrier size, which had been at 80 bytes. And the result was the maximum amount of non-monetary

385
00:33:25,882 --> 00:33:32,742
data you could put in this designated space that everyone agreed. You can go to ChatGBT or Grok

386
00:33:32,742 --> 00:33:37,562
and say, you know, what's the designated space for non-monetary data? And it's opportun. So this

387
00:33:37,562 --> 00:33:42,002
I want to emphasize this is a special space, just given the sort of precedent.

388
00:33:42,582 --> 00:33:53,482
And so what Bitcoin Core did is they blew it open from 80 bytes, not to 160 bytes or 200 bytes, but to 100,000 bytes, effectively capped by the cap on transaction size.

389
00:33:54,082 --> 00:34:00,662
Yeah. And if I may interrupt, just filling in the blanks here, you can just add some information to this.

390
00:34:00,662 --> 00:34:04,842
you can store all the information in the world in one hash

391
00:34:04,842 --> 00:34:09,722
if you just make a tree of hashes and hash that.

392
00:34:09,982 --> 00:34:12,422
So you can make a hash of a hash of a hash.

393
00:34:12,422 --> 00:34:15,022
You can just put it as the input and hash it.

394
00:34:15,362 --> 00:34:16,462
Yeah, exactly.

395
00:34:17,382 --> 00:34:20,422
So the point is that the only thing you can prove

396
00:34:20,422 --> 00:34:22,422
by putting something in a Bitcoin transaction

397
00:34:22,422 --> 00:34:26,002
is that that information existed at that point in time

398
00:34:26,002 --> 00:34:27,802
or rather at that block height.

399
00:34:28,062 --> 00:34:29,722
So that's all you can do.

400
00:34:29,722 --> 00:34:31,202
You cannot own information.

401
00:34:31,382 --> 00:34:36,222
You cannot really do anything else with it in any real way.

402
00:34:36,802 --> 00:34:38,802
But the scammers tell you you can.

403
00:34:38,802 --> 00:34:55,262
And now, for some odd reason, they changed the Mempool policy to 100,000 bytes, which is just inviting spammers to use Bitcoin for other things than monetary transactions, in other ways, interfering with Bitcoin's original purpose.

404
00:34:55,262 --> 00:35:13,982
And they did this under the shadow of Bitcoin affinity scam companies like Citra. So we had a certain Bitcoin core dev who was actively talking to the people at Citra. And Citra was saying, well, we might need to put fake pub keys into the blockchain.

405
00:35:13,982 --> 00:35:25,882
And so part of the reason for uncapping Op return was a dialogue happening, I believe, in New York City, sort of these same social circles, people moving the same social circles, crypto and Bitcoin people.

406
00:35:26,602 --> 00:35:29,302
And so that's another disturbing part of it.

407
00:35:29,842 --> 00:35:34,302
But the really disturbing part is Citray, all they really needed was, I believe, 160 bytes.

408
00:35:34,302 --> 00:35:50,642
My impression is Bitcoin Core has gotten a lot lazier over the past few years. And so I think that was one reason they just decided to rip off the Band-Aid, as maybe Gloria's outputed. And just instead of raising up return the need to raise it again, they did it all in one fell swoop.

409
00:35:50,642 --> 00:35:55,342
and they did it in the face, the significant things they did in the face of really significant

410
00:35:55,342 --> 00:36:02,482
community opposition. And there was a lot of funny business around the GitHub repo where they would

411
00:36:02,482 --> 00:36:07,882
let people approve the proposal. Then they would close the repo when people tried to disapprove it,

412
00:36:08,102 --> 00:36:12,442
et cetera. Various people like Bitcoin Mechanic were banned from the repo. So there's a lot of

413
00:36:12,442 --> 00:36:20,622
political engineering going along with it. And it's still not really clear. We tried to

414
00:36:20,622 --> 00:36:25,062
be as adversarial when it comes to thinking as possible. One of the problems with doing this

415
00:36:25,062 --> 00:36:29,982
is basically, as they put it, opening or increasing the size of the garbage can.

416
00:36:30,581 --> 00:36:36,422
Maybe we shouldn't have any garbage cans on Bitcoin, but the idea was give people a garbage

417
00:36:36,422 --> 00:36:42,042
can where they can put stuff and then they won't put it in places that can be more harmful to the

418
00:36:42,042 --> 00:36:48,402
protocol and end up in the UTXO set. The problem with this is they opened wide and one big attack

419
00:36:48,402 --> 00:36:53,022
surface, namely op return, moving it from 80 bytes to 100,000 bytes. And they didn't close

420
00:36:53,022 --> 00:36:59,982
an attack surface, which was much cheaper, which was 75% cheaper, which was the inscriptions bug

421
00:36:59,982 --> 00:37:06,242
or the inscriptions exploit, where you could put, and this is, people have probably seen Bitcoin

422
00:37:06,242 --> 00:37:13,762
NFTs called inscriptions. There were tokens on Bitcoin called BRC20s, and these were all,

423
00:37:14,222 --> 00:37:16,182
These never used op return to begin with.

424
00:37:16,581 --> 00:37:30,562
And so the weird, the sort of weird thing is they closed, they opened up, they made one garbage can much larger without closing or narrowing the other garbage can and doing something about the inscription's exploit.

425
00:37:30,562 --> 00:37:34,982
And so it's basically any of these things taken by themselves are not suspicious.

426
00:37:35,322 --> 00:37:43,522
But when you take them, when you put the whole thing together and then you see how certain people are behaving these days, defending the changes, you don't have to be too adversarial to realize that there's a problem.

427
00:37:43,762 --> 00:37:48,102
And that we may be, I think we're almost certainly under attack.

428
00:37:48,402 --> 00:37:49,962
Bitcoin is under attack by this.

429
00:37:51,162 --> 00:37:56,382
Yeah, so it's hard to know what forces led up to this point.

430
00:37:56,642 --> 00:38:02,081
And I mean, BIP-110 is trying to fix the problem at least temporarily.

431
00:38:02,081 --> 00:38:06,402
I mean, the reason I like it is just its temporary nature.

432
00:38:06,402 --> 00:38:14,782
I probably wouldn't have been pro-Bip 110 if it had been a permanent thing, since it's controversial.

433
00:38:16,402 --> 00:38:25,722
But its temporary nature makes me like it, because I like the whole notion of giving a middle finger to these people that are doing the damage.

434
00:38:25,902 --> 00:38:33,762
Was Bip 110 just a reaction to Core V30, or do you think it would have happened anyway?

435
00:38:33,762 --> 00:38:38,662
What are your thoughts there on the root causes of Bit.1.10, why it's now on the table?

436
00:38:39,081 --> 00:38:41,162
I think it's basically an escalation.

437
00:38:41,422 --> 00:38:47,182
So to go back to 2014, we had a situation where we had these spammers attacking Bitcoin.

438
00:38:47,642 --> 00:38:53,382
But fortunately, back then, we had sane Bitcoin Core devs who were willing to fight it.

439
00:38:54,022 --> 00:38:59,142
This time around, we had a problem, though, because Bitcoin Core was basically in 2025,

440
00:38:59,142 --> 00:39:04,662
has been siding really since 2023 when the inscriptions exploit was opened up.

441
00:39:05,081 --> 00:39:10,662
Has Bitcoin Core itself, the reference implementation, the node software implementation

442
00:39:10,662 --> 00:39:15,282
that still has the largest market share was siding with the spammers.

443
00:39:16,081 --> 00:39:20,862
And so you have this situation where there are a number of factors.

444
00:39:20,862 --> 00:39:25,402
You have, and probably the biggest structural factor is just mining pool centralization.

445
00:39:26,222 --> 00:39:34,522
So currently, there are only five or six companies that get to decide what goes into 90% of Bitcoin blocks.

446
00:39:35,342 --> 00:39:39,662
And what this means is most of the blocks, 90% of the blocks are mined by these small groups.

447
00:39:39,662 --> 00:39:52,882
And so what you can do is you can, if you have a really well-connected node and you're a bad actor, you can collect spam transactions and you can send them directly to one of these mining pools.

448
00:39:52,882 --> 00:40:05,362
Now, the reason this works is because these mining pools are highly centralized. They produce a lot of blocks, like Foundry, for example, produces, they have about 30% of the hash rate, so they produce about two blocks per hour.

449
00:40:05,362 --> 00:40:14,302
And so if you submit your spam or if one of these bad actors, for example, the people, in my opinion, running Libre Relay, Peter Todd's creation are bad actors.

450
00:40:14,682 --> 00:40:23,262
Basically, you have these highly connected nodes and then you have nodes running node software like Libre Relay, which really doesn't have any mempool filters.

451
00:40:23,522 --> 00:40:28,242
If it's consensus valid, it will send it, it'll pass it on to other nodes and pass it on to miners.

452
00:40:28,962 --> 00:40:34,622
And so you have this situation where you have Bitcoin Core siding with the spammers and scammers.

453
00:40:35,362 --> 00:40:49,002
You have a number of bad actors, some of whom are closely aligned with Bitcoin Core, running these highly connected nodes, what's called preferential peering or using Libre Relay, and creating these superhighways for spam directly to the miners.

454
00:40:49,182 --> 00:40:57,362
None of this would be possible if every miner had 0.1% of the hash rate.

455
00:40:57,522 --> 00:41:00,102
And so there'd be no way to direct it to one of these pools.

456
00:41:00,102 --> 00:41:03,682
are, you know, there have also been these direct submission services.

457
00:41:03,842 --> 00:41:09,162
For example, the American miner, Mara, has been, they had a direct submit, they basically

458
00:41:09,162 --> 00:41:12,202
had a website where you could upload your spam and they would put it in a block.

459
00:41:12,702 --> 00:41:16,382
Now, Mara wouldn't be able to offer this if they didn't have so much of the, they had

460
00:41:16,382 --> 00:41:18,042
something like 5% of the hash or so.

461
00:41:19,102 --> 00:41:21,362
And so this is the context.

462
00:41:21,362 --> 00:41:25,042
We were able to fight spam at the mempool level with filters.

463
00:41:25,662 --> 00:41:27,542
Mempool level is just what nodes relay.

464
00:41:27,542 --> 00:41:32,542
And mempool policy is always much, it's always much tighter than consensus.

465
00:41:32,542 --> 00:41:45,023
Consensus is what ends up in Bitcoin blocks And so we were able to fight it at the mempool level in 2014 But when in 2023 to 2025 and to the present

466
00:41:45,722 --> 00:41:48,302
we have a hostile Bitcoin core

467
00:41:48,302 --> 00:41:49,402
has basically gone rogue.

468
00:41:49,823 --> 00:41:51,142
They're siding with the spammers

469
00:41:51,142 --> 00:41:52,843
by doing nothing about this

470
00:41:52,843 --> 00:41:54,702
and by actually opening up new attack surfaces

471
00:41:54,702 --> 00:41:56,563
by raising the op return limit,

472
00:41:56,742 --> 00:41:57,862
raising data carrier size.

473
00:41:58,762 --> 00:41:59,782
And so the problem is we have

474
00:41:59,782 --> 00:42:01,782
the mining pools are not responsive.

475
00:42:02,122 --> 00:42:04,662
They're putting all this junk in the chain

476
00:42:04,662 --> 00:42:10,262
And one of the most ancient Bitcoin principles is you put as little on the chain as possible.

477
00:42:10,602 --> 00:42:11,882
Bitcoin's a monetary network.

478
00:42:12,122 --> 00:42:13,482
It's not a data storage network.

479
00:42:14,302 --> 00:42:16,602
And this is what Bitcoin Core used to argue.

480
00:42:16,742 --> 00:42:17,662
People like Peter Woollah.

481
00:42:18,122 --> 00:42:25,142
Peter Woollah used to say, there's a famous quote that Ghost of Unhosted Marcellus has pinned to his Twitter, to his ex,

482
00:42:25,502 --> 00:42:33,082
where Peter Woollah is saying, we should use compressed pub keys for this, not uncompressed pub keys.

483
00:42:33,082 --> 00:42:35,962
because uncompressed pub keys take up more block space

484
00:42:35,962 --> 00:42:37,202
and there's no benefit to that.

485
00:42:38,402 --> 00:42:39,582
But fast forward to the present,

486
00:42:39,802 --> 00:42:41,642
we have all this block space.

487
00:42:41,802 --> 00:42:43,563
Currently about 40% of block space

488
00:42:43,563 --> 00:42:46,843
is going to non-monetary uses, going to spam.

489
00:42:47,902 --> 00:42:49,823
And Bitcoin Core doesn't seem to care about this.

490
00:42:50,102 --> 00:42:51,782
The big mining pools don't care about this.

491
00:42:52,343 --> 00:42:55,142
And then you have these hostile node runners,

492
00:42:55,302 --> 00:42:57,622
these bad actors that are willing to create a pipeline

493
00:42:57,622 --> 00:43:01,023
of spam directly to these miners.

494
00:43:01,122 --> 00:43:02,162
So it's very complicated.

495
00:43:02,162 --> 00:43:06,982
there are many factors here. And so in the context of that, if you're a Bitcoin node runner and you

496
00:43:06,982 --> 00:43:11,343
don't approve of this, and there are quite a few of us, there's at least 20% of the network that

497
00:43:11,343 --> 00:43:18,462
doesn't approve of this. What exactly do you do? Mempool policy breaks down because you have what's

498
00:43:18,462 --> 00:43:26,762
called the tolerant minority. So if something like 5% or 10% of node runners are okay with spam,

499
00:43:26,982 --> 00:43:31,543
it's very, very difficult to stop it. And then mining pool centralization exacerbates this.

500
00:43:32,162 --> 00:43:48,982
And so node runners who want to abide by traditional Bitcoin culture, which is anti-spam, which is trying to have the smallest on-chain footprint possible, we're basically left with no choices except the functionality of being able to soft fork.

501
00:43:48,982 --> 00:43:55,122
And soft forking is one of the powers that node runners, that node operators have.

502
00:43:55,662 --> 00:44:02,982
And it's not something that is invoked very frequently, but it's the next level of escalation.

503
00:44:03,242 --> 00:44:06,182
And so spam is best dealt with using manpool policy.

504
00:44:06,662 --> 00:44:15,622
But if you have mining pool centralization and you have a hostile reference implementation, namely Bitcoin core, the next step is to contemplate some sort of soft fork.

505
00:44:15,622 --> 00:44:22,382
and the milder version of a quote-unquote permanent soft fork would be a temporary

506
00:44:22,382 --> 00:44:27,882
soft fork which is what BIP-110 is so it's temporary because it automatically expires

507
00:44:27,882 --> 00:44:33,622
at a certain block height so it will activate BIP-110 will activate at the latest

508
00:44:33,622 --> 00:44:40,442
in September probably around Labor Day of this of this year and then when it activates there'll

509
00:44:40,442 --> 00:44:47,462
be a certain block height approximately one year after that when the soft fork will expire and the

510
00:44:47,462 --> 00:44:53,002
rules and basically everything will revert to where it is now. So it's a fairly conservative

511
00:44:53,002 --> 00:44:58,282
way of doing things if it causes various problems, which I don't expect it to do,

512
00:44:58,402 --> 00:45:03,682
because basically what BIP-110 is doing is basically just returning us to those pristine

513
00:45:03,682 --> 00:45:11,563
days of 2022 before the inscriptions exploit, before BRC20 tokens, before this whole runaway

514
00:45:11,563 --> 00:45:16,662
train just got started, being promoted by Bitcoin conferences, being funded by the same Bitcoin VCs

515
00:45:16,662 --> 00:45:22,182
and crypto VCs who fund these spam companies and then promote them at their conferences.

516
00:45:22,762 --> 00:45:27,043
This thing has been a runaway spam train. And so what this does is it presses the pause button.

517
00:45:27,043 --> 00:45:43,782
And it also, it's a reminder to people that, I guess if there's one takeaway I would like listeners to take away is that culture, and given my background, my humanities background, you might expect this from me, but culture is very, very important.

518
00:45:44,642 --> 00:45:49,382
And in Bitcoin, I would say that culture is upstream from consensus.

519
00:45:49,382 --> 00:45:54,282
So consensus are the rules of Bitcoin, what can end up in a block, what can be mined.

520
00:45:54,282 --> 00:45:58,162
But there's something more fundamental than consensus, which is culture.

521
00:45:59,323 --> 00:46:02,682
Culture, I would say, is a leading indicator for consensus.

522
00:46:03,563 --> 00:46:07,802
So if you want to know where consensus is heading, you can look at the culture.

523
00:46:07,902 --> 00:46:09,582
And Bitcoin culture right now is very sick.

524
00:46:09,682 --> 00:46:11,922
It's focused on Bitcoin treasury companies.

525
00:46:12,402 --> 00:46:20,842
It's focused on turning Bitcoin into Ethereum and introducing smart contracts and adding a lot more bigger on-chain footprint.

526
00:46:20,842 --> 00:46:27,382
Bitcoin treasury companies, spam companies, and then of course, this huge emphasis on fiat and stable coins.

527
00:46:27,543 --> 00:46:34,102
And so Bitcoin culture is being infected by fiat culture, which is inevitable because fiat culture has the money printer.

528
00:46:34,222 --> 00:46:35,402
So it's very hard to fight against.

529
00:46:36,582 --> 00:46:41,043
And so the escalation here is from mempool policy to temporary soft fork.

530
00:46:41,543 --> 00:46:47,122
But the most important thing is, and the takeaway I would like everyone to have, is that culture matters.

531
00:46:47,122 --> 00:47:10,942
And so if you want to fight spam, you have to have a cultural attitude that is against spam. And so that's another thing that BIP110 does, is it basically puts on notice all these people who are spamming the chain and bloating the chain with NFTs and scammy tokens, puts them on notice that this is not welcome.

532
00:47:10,942 --> 00:47:13,702
The last couple of years have been an anomaly.

533
00:47:14,063 --> 00:47:15,602
We're returning to fundamental principles.

534
00:47:16,342 --> 00:47:18,662
Bitcoin culture has always been against spam.

535
00:47:19,262 --> 00:47:21,862
And so now we're willing to put some teeth into it.

536
00:47:22,382 --> 00:47:29,563
And so that would be – so that's why I think it's the next logical step in making it temporary.

537
00:47:30,162 --> 00:47:32,563
There are a couple of technical reasons to make it temporary as well.

538
00:47:33,142 --> 00:47:40,323
One of them is that if you make it permanent, to undo some of this stuff would possibly require a hard fork.

539
00:47:40,942 --> 00:47:42,102
And so it's much better.

540
00:47:42,722 --> 00:47:46,862
The one rule in Bitcoin is you don't want a hard fork because you split the network.

541
00:47:47,582 --> 00:47:50,862
And it's a very hostile thing to do.

542
00:47:51,162 --> 00:47:53,722
It's important to recognize this is a BIP-110 is a soft fork.

543
00:47:54,043 --> 00:47:55,842
It narrows the rules.

544
00:47:56,242 --> 00:48:04,302
And it basically closes all these holes that spammer's been using, the most common holes, inscriptions, BRC-20 tokens, large op returns.

545
00:48:04,302 --> 00:48:16,202
And then it also forbids at this consensus level, at the level of mind blocks, a couple other holes that attackers haven't used yet, but will begin to use.

546
00:48:16,302 --> 00:48:26,162
I sort of rambled there, but I guess the fundamental thing is you have to show the best way to fight spam is to be against it, not to lay down and be defeatist like Bitcoin core devs.

547
00:48:26,342 --> 00:48:31,582
Obviously, we can't expect the crypto VCs to police themselves because they're basically funding scams.

548
00:48:32,242 --> 00:48:38,262
But one way we can do this is we can drive the crypto VCs and their startups to other chains.

549
00:48:38,722 --> 00:48:40,882
So that's the great thing about the Operaturn Wars.

550
00:48:41,043 --> 00:48:45,662
We basically, Bitcoin Core's hostility to spam drove Vitalik out of Bitcoin.

551
00:48:46,122 --> 00:48:47,262
He went to his own chain.

552
00:48:47,482 --> 00:48:48,563
He started Ethereum.

553
00:48:49,202 --> 00:48:51,282
And he basically scammed there for a decade.

554
00:48:51,282 --> 00:48:59,902
And in retrospect, it was very nice to have this as sort of an idiot container for people like Vitalik who don't understand Bitcoin.

555
00:49:00,842 --> 00:49:06,682
Unfortunately, a lot of these scammers were brought back to Bitcoin starting in 2023 by some of these crypto VCs.

556
00:49:07,842 --> 00:49:12,543
And so the most important thing is to fight spam at the cultural, at the social level.

557
00:49:13,762 --> 00:49:15,342
I think this is such a crucial point.

558
00:49:15,342 --> 00:49:27,043
There was one video you made mentioning this Vitalik himself tweeting about being treated, quote unquote, badly by Bitcoin Core and then voluntarily leaving.

559
00:49:27,043 --> 00:49:48,122
And there was also this other interview with some guy, I can't remember his name or the name of the company, but it was an interview by Isabel Fox and Duke, I think is her name. She is a lady who is quote unquote technical and funded by a lot of spam companies to interview other technical people in Bitcoin.

560
00:49:48,922 --> 00:49:51,162
And all of her sponsors are like spam companies too.

561
00:49:51,162 --> 00:50:08,543
Yeah, I know. I know. It's hilarious when you look at it from that. But people who don't know that are at risk of falling for all the bullshit, right? Because it's technical. So therefore, it must be intelligent. Like, it's so obvious when you see it.

562
00:50:08,543 --> 00:50:12,623
But anyway, your video there comments on this.

563
00:50:12,742 --> 00:50:23,043
And there's this guy admitting that he wanted to build some smart contract platform or whatever tokenization crypto bullshitty thing on Bitcoin.

564
00:50:23,362 --> 00:50:27,563
But he chose to start his own chain instead because of the way he was treated.

565
00:50:27,702 --> 00:50:28,762
So the same as Vitalik.

566
00:50:28,822 --> 00:50:30,802
Do you remember the name of the guy or the company?

567
00:50:31,702 --> 00:50:32,043
I don't.

568
00:50:33,422 --> 00:50:37,942
Anyway, you'll find it if you look at all of Matthew's videos here.

569
00:50:37,942 --> 00:50:38,702
I have to.

570
00:50:40,162 --> 00:50:52,302
So this is the argument against people saying that this is all for nothing because the spammers will just find other ways.

571
00:50:52,462 --> 00:51:00,082
Yeah, but the whole point is we are forcing them to rethink their whole business models and forcing them to...

572
00:51:00,082 --> 00:51:02,563
This will come with a cost to the spammers.

573
00:51:02,563 --> 00:51:07,702
It's not trivial to just start fooling people in different ways.

574
00:51:07,942 --> 00:51:17,802
If we put it in context to imagine if Google came to you for your Gmail and said, basically, you know, we don't really know what spam is.

575
00:51:17,802 --> 00:51:24,902
These spam emails you've been getting, they conform to SMTP, they conform to the protocol.

576
00:51:25,262 --> 00:51:26,642
And so we're not going to.

577
00:51:26,962 --> 00:51:32,702
And the problem is, if we try to stop this form of spam, the spammers are just going to come up with a different form of spam email.

578
00:51:32,982 --> 00:51:34,063
So we're just going to do nothing.

579
00:51:34,902 --> 00:51:37,842
That's basically Bitcoin core in 2020.

580
00:51:37,942 --> 00:51:48,942
It's absurd. It's absurd. And spam is much worse on Bitcoin because it has to be stored forever, which is not true for your email inbox. I mean, it's like Google saying...

581
00:51:49,722 --> 00:51:53,782
You can pay like 20 cents to have your spam stored on Bitcoin for the next thousand years.

582
00:51:54,202 --> 00:51:54,422
Yeah.

583
00:51:54,422 --> 00:52:02,002
Yeah. But it's a really dumb idea if you think about it, because spam is parasitical. So we've

584
00:52:02,002 --> 00:52:05,523
all seen these trees, for example, where there's not much of the tree left. It's just completely

585
00:52:05,523 --> 00:52:09,842
covered with ivy because the ivy has choked it. And so the tree doesn't have leaves and the tree

586
00:52:09,842 --> 00:52:15,742
is dead. This is what spam does on Bitcoin. It's not just some aesthetic problem. The reason,

587
00:52:16,063 --> 00:52:21,523
basically, if you, so where it's something like 40, 45% of Bitcoin block space is non-monetary

588
00:52:21,523 --> 00:52:26,902
right now, there's a certain point at which that's going to break and where miners are no longer going

589
00:52:26,902 --> 00:52:32,382
to want to mine on Bitcoin simply because the block rewards with the Bitcoin they're being paid

590
00:52:32,382 --> 00:52:37,382
for mining is not going to be worth very much because the entire chain has become a non-monetary

591
00:52:37,382 --> 00:52:43,982
chain. And so Bitcoin as data storage fails as good data storage because when it becomes data

592
00:52:43,982 --> 00:52:48,362
storage, it's no longer good money, so you can't pay the miners. And so the system becomes insecure

593
00:52:48,362 --> 00:52:51,502
and there's no one to stop people from rewriting the chain.

594
00:52:51,623 --> 00:52:55,282
So people don't really even game it out what this looks like.

595
00:52:55,422 --> 00:53:00,922
It is good storage, but ultimately if it becomes cloud storage,

596
00:53:01,102 --> 00:53:02,502
then it's not good storage either

597
00:53:02,502 --> 00:53:05,442
because there's no money to secure the storage.

598
00:53:06,602 --> 00:53:08,582
No, so it's so ironic.

599
00:53:08,942 --> 00:53:13,602
The more it's used for storage, the worse it becomes at being storage.

600
00:53:13,602 --> 00:53:14,202
Yeah.

601
00:53:14,202 --> 00:53:20,342
Yeah. And the opposite is true for it being used as money. The more it's used as money,

602
00:53:20,422 --> 00:53:27,182
the better it becomes as money. Anyway, the other thing that you've been talking about lately,

603
00:53:27,182 --> 00:53:33,902
and we had Hodlnod's wonderful second article here just yesterday, is about the rotting core.

604
00:53:34,123 --> 00:53:41,182
And I'm super interested in how these things connect. So like, is core being more and more

605
00:53:41,182 --> 00:53:50,543
quote-unquote woke, how is that connected to them being more easier to influence into making

606
00:53:50,543 --> 00:53:55,043
decisions that are good for spammers? Like, what's the connection there? Like, yeah,

607
00:53:55,202 --> 00:54:00,902
do you have any ideas? I'm struggling formulating this sentence or this question, but like...

608
00:54:00,902 --> 00:54:06,922
Yeah, no, it's a good question. I think one piece of it that Hathalnot has done a good job of

609
00:54:06,922 --> 00:54:13,142
covering is there was this push, which in itself was admirable, this push to get more

610
00:54:13,142 --> 00:54:14,802
younger Bitcoin core devs.

611
00:54:15,462 --> 00:54:20,063
Because normal people, they don't dream of growing up to become a Bitcoin core dev.

612
00:54:20,222 --> 00:54:23,922
It's just not even on, even Bitcoiners, it's just not even, it's a very small subset of

613
00:54:23,922 --> 00:54:24,202
people.

614
00:54:24,862 --> 00:54:30,063
And so there was this sort of push for diversity to get more women in the space and stuff,

615
00:54:30,063 --> 00:54:35,382
which, you know, I guess it's admirable at a certain level.

616
00:54:35,382 --> 00:54:41,402
There's nothing wrong with it, though you can ask yourself if there's not a lot of people in a space, certain kind of people in a space.

617
00:54:41,502 --> 00:54:44,043
Maybe it's just because they just don't want to work in that space.

618
00:54:44,942 --> 00:54:53,882
But Gloria Zhao is a great example of someone who is essentially groomed to become a Bitcoin core dev and then a Bitcoin core maintainer who actually had right access.

619
00:54:54,582 --> 00:54:59,462
Bitcoin core maintainers have right access to the repo and they can actually post these changes.

620
00:54:59,462 --> 00:55:07,422
which is, and Gloria was the one, I believe she was the one who merged blowing open data carrier

621
00:55:07,422 --> 00:55:12,023
size last year. And she herself came from UC Berkeley, which is where I did my PhD. So it was

622
00:55:12,023 --> 00:55:22,502
a very woke place in the 1990s. And I sort of, I saw the origins of a lot of these places were

623
00:55:22,502 --> 00:55:27,902
sort of ground zero for the woke pandemic. You could already see it back then. And so when you

624
00:55:27,902 --> 00:55:32,922
bring people who are not organically interested in this, like I think that the

625
00:55:32,963 --> 00:55:36,763
path for Bitcoiners used to be more something like they've, I don't know who they read.

626
00:55:36,823 --> 00:55:42,423
They read Austrian economics or they read Ayn Rand and, you know, they're hacking code

627
00:55:42,423 --> 00:55:46,463
in their basement and they want to overthrow the government and they own gold and they

628
00:55:46,463 --> 00:55:49,343
know the story of the forming, the founding of the Fed.

629
00:55:50,643 --> 00:55:51,923
Gloria Zhao was very different.

630
00:55:51,923 --> 00:55:59,843
She was a very mid developer, mid programmer who studied, I guess she studied computer

631
00:55:59,843 --> 00:56:01,403
science at Berkeley.

632
00:56:01,403 --> 00:56:05,243
But she was interested in Ethereum and she was teaching people how to do ICO scams.

633
00:56:06,083 --> 00:56:12,003
And so to bring someone like that in and the guy who brought her in was also dating her, which I will not.

634
00:56:12,563 --> 00:56:14,843
I don't know if he talks about that, but I've talked about that in videos.

635
00:56:14,943 --> 00:56:16,663
So there's some weird interpersonal stuff here.

636
00:56:16,883 --> 00:56:18,723
And there's just some conflicts of interest.

637
00:56:18,863 --> 00:56:23,903
Like the irony is leftists always talk about power imbalances and, you know, in the office, et cetera.

638
00:56:23,983 --> 00:56:30,683
And here we had a leftist in the form of John Newberry, who was basically he seemed to like young female devs.

639
00:56:30,683 --> 00:56:33,243
And he dated them and then tried to get them into Bitcoin Core.

640
00:56:34,143 --> 00:56:40,483
And so there may be a connection there where you're bringing in someone like Gloria, who basically always looked down on Bitcoiners.

641
00:56:40,583 --> 00:56:42,543
She called them nutty Bitcoin maximalists.

642
00:56:42,923 --> 00:56:44,683
She said they're just a bunch of dumb carnivores.

643
00:56:44,863 --> 00:56:45,923
She had this sort of contempt.

644
00:56:47,023 --> 00:56:54,823
And so it's very inorganic to bring people like that into Bitcoin just to make it more into Bitcoin Core, just to make it more diverse, whatever that means.

645
00:56:54,823 --> 00:56:56,563
there's

646
00:56:56,563 --> 00:56:59,543
there's its own kind of diversity

647
00:56:59,543 --> 00:57:00,983
which I would like to see

648
00:57:00,983 --> 00:57:03,483
Bitcoin software, Bitcoin node

649
00:57:03,483 --> 00:57:04,683
software implementations

650
00:57:04,683 --> 00:57:07,463
return to which is just

651
00:57:07,463 --> 00:57:09,403
a bunch of really disagreeable people

652
00:57:09,403 --> 00:57:11,523
who have

653
00:57:11,523 --> 00:57:13,263
lots of different ideas and fight with each other

654
00:57:13,263 --> 00:57:15,243
this is the Bitcoin I know and love

655
00:57:15,243 --> 00:57:17,143
not people who

656
00:57:17,143 --> 00:57:19,863
are conformists, who are normies

657
00:57:19,863 --> 00:57:21,483
part of

658
00:57:21,483 --> 00:57:23,143
working at these offices

659
00:57:23,143 --> 00:57:25,423
and getting a job in Bitcoin Core and being funded,

660
00:57:25,663 --> 00:57:26,663
the two main offices,

661
00:57:27,103 --> 00:57:28,483
well, there are three, I guess, three offices,

662
00:57:28,663 --> 00:57:30,143
London, New York City, and San Francisco.

663
00:57:31,703 --> 00:57:34,723
That selects, as people like John Attack have talked about,

664
00:57:34,803 --> 00:57:36,183
that selects for a certain type of person

665
00:57:36,183 --> 00:57:37,823
who's willing to live in a big blue city.

666
00:57:38,803 --> 00:57:40,143
And nothing against blue cities.

667
00:57:40,423 --> 00:57:42,203
They have great food and it's a great place

668
00:57:42,203 --> 00:57:43,723
if you're young for dating, et cetera.

669
00:57:44,023 --> 00:57:45,463
But there's a certain, you know,

670
00:57:45,503 --> 00:57:47,743
John Attack specifically said in one of his interviews

671
00:57:47,743 --> 00:57:50,163
that, you know, he's not interested in that

672
00:57:50,163 --> 00:57:51,023
and he's a little older.

673
00:57:51,023 --> 00:58:09,283
And so one of the things that comes with blue cities is you, and during COVID, you know, all these core devs got vaxxed and boosted and they had to go work in their offices. But this is very, you know, this is not what Bitcoin looked like in 2014, which admittedly was before my time.

674
00:58:09,283 --> 00:58:22,583
But I think that that'd be one connection between wokeness and I guess there's a certain permissiveness that comes with it to sort of there are there is the libertarian view of, you know, in praise of open borders.

675
00:58:22,983 --> 00:58:32,583
Then there's the more kind of I don't know, there's more of a conservative idea that you if you if you allow if you allow everything.

676
00:58:32,583 --> 00:58:37,983
So, for example, if you're playing a game of chess and you let people play this, Kanza has this great analogy.

677
00:58:38,423 --> 00:58:44,163
If you're playing a game of chess and you let the checkers people play on your board, it ruins your game of chess.

678
00:58:44,603 --> 00:58:57,803
And so it seems like some of these people on the Bitcoin core side have this view of Bitcoin as just being this open, agnostic platform that you can do whatever you want to do on if you don't pay the fees.

679
00:58:57,803 --> 00:59:20,143
This is very different from the understanding Bitcoin is here to separate money and state and that it's a monetary network. And so I can see analogies between sort of open borders and a certain permissiveness and not understanding that it's not fascist to keep drug addicts out of your children's playground park.

680
00:59:20,143 --> 00:59:24,003
basically, and you shouldn't let the free market decide it either. If you want your kids to be able

681
00:59:24,003 --> 00:59:27,503
to play there, you don't want needles all over the ground. You don't want people passed out.

682
00:59:28,163 --> 00:59:33,143
And a lot of the critique from the Bitcoin core side is very sort of amorphous like this, like,

683
00:59:33,223 --> 00:59:37,283
oh, let the free markets decide what Bitcoin is for. Let the free markets decide what your

684
00:59:37,283 --> 00:59:43,883
neighborhood park is for. And it's a kind of naive idealism that younger people have. And I was

685
00:59:43,883 --> 00:59:49,263
probably guilty of it myself in a certain age. That's another thing. Maybe you don't want all

686
00:59:49,263 --> 00:59:53,563
the maintainers to be from the same. You don't want them to all be under 30 and from the same

687
00:59:53,563 --> 00:59:58,743
funding organization. This is just common sense. Yeah, I think the people you refer to are more

688
00:59:58,743 --> 01:00:04,903
LARP-Bitarians than actual libertarians if you're against borders. I think libertarians are the

689
01:00:04,903 --> 01:00:11,403
Rothbardian view at least is that, yes, of course there should be borders and they should be enforced,

690
01:00:11,563 --> 01:00:16,803
but they should be private borders and not natural borders, or at least the nation states should be

691
01:00:16,803 --> 01:00:21,223
smaller and preferably city states and so on and so forth. But I don't think there's anything

692
01:00:21,223 --> 01:00:28,163
against borders in general. What I'm sort of fishing for here is like, is there an a priori

693
01:00:28,163 --> 01:00:35,563
thing here? Even I have this theory that the lower your time preference, the more utilitarian

694
01:00:35,563 --> 01:00:44,203
your principled view becomes. So if you're 100% principled, that means you have an infinitely

695
01:00:44,203 --> 01:00:49,683
low time preference and then being principled is utilitarian because it's good for your descendants

696
01:00:49,683 --> 01:01:01,523
and in in into forever um so i i think that there's something there i i the more principled

697
01:01:01,523 --> 01:01:09,203
people are are more untouchable and harder to bribe so i do think there's a connection

698
01:01:09,203 --> 01:01:14,203
that left-wingers are more corruptible in general

699
01:01:14,203 --> 01:01:17,203
because they tend to be less principled.

700
01:01:17,203 --> 01:01:21,203
I mean, left and right is sort of a weird scale, I would say.

701
01:01:21,203 --> 01:01:23,203
It's a weird thing. It moves around a lot too.

702
01:01:23,203 --> 01:01:27,203
Like you have the left in the US hating working class people now,

703
01:01:27,203 --> 01:01:40,289
which has been this kind of strange political alignment Yeah and I mean the so right here in Europe is all about making the state bigger and employing more police officers

704
01:01:40,289 --> 01:01:43,509
And that's not really what I view as right wing.

705
01:01:44,269 --> 01:01:52,349
It's about basically no political party anywhere wants to reduce the size of the state, which says something about democracy in general.

706
01:01:52,509 --> 01:01:53,849
No, that's very true.

707
01:01:54,149 --> 01:01:54,629
That's very true.

708
01:01:54,629 --> 01:02:05,289
Yeah, I mean, all of this and this stuff that has surfaced just the last couple of months here, it's truly concerning.

709
01:02:06,629 --> 01:02:12,769
And I'm just happy that Bitcoiners are not lazy.

710
01:02:12,769 --> 01:02:17,589
We are doing something about it and that we are reacting.

711
01:02:18,069 --> 01:02:20,049
To me, that is the immune system.

712
01:02:20,049 --> 01:02:30,189
I mean, proof of work is the mechanism we use to enforce the rules, but we set the rules like you're proving the work to us.

713
01:02:30,429 --> 01:02:32,189
That's the whole point of proof of work.

714
01:02:32,969 --> 01:02:33,429
That's very true.

715
01:02:33,829 --> 01:02:38,849
And yeah, it's been very gratifying to see so many people dump Bitcoin Core and move to Bitcoin Noughts.

716
01:02:39,529 --> 01:02:47,429
So Bitcoin Noughts went from being 1% of the network early last year to 20, 25% of the network now.

717
01:02:47,429 --> 01:03:06,629
And it's really being driven by real people, mostly by family men figuring out how to run nodes at home. And it's a very grassroots organic thing, whereas I feel like the opposition is much more astroturfed as a result of groups that have a lot of funding and a lot of influence.

718
01:03:06,629 --> 01:03:26,969
And so there's sort of a populist or what we would call pleb uprising as part of this. And I think it's very good for Bitcoin to have plebs running nodes and plebs mining with those nodes and plebs following Bitcoin core politics and Bitcoin not's politics and understanding these things.

719
01:03:26,969 --> 01:03:36,029
Because none of this, there are technical aspects, but with LLMs now, Bitcoin is just difficult because there's lots of different moving parts.

720
01:03:36,269 --> 01:03:38,629
Like a hash function is not that difficult to understand.

721
01:03:38,769 --> 01:03:39,289
You just have to.

722
01:03:39,869 --> 01:03:50,869
So I'd encourage everyone, everyone should be running a node, mining with it, and also learning how Bitcoin works, especially if you have a large percentage of your life savings in it.

723
01:03:50,869 --> 01:03:56,309
And there's been a push from the other side to look down on Bitcoin plebs and say, you know, leave it to that trust.

724
01:03:56,489 --> 01:03:58,329
You know, it's just like COVID, trust the experts.

725
01:03:58,529 --> 01:04:00,449
You're not qualified to weigh in on this.

726
01:04:00,569 --> 01:04:04,309
And that's part of the that's part of the capture.

727
01:04:04,389 --> 01:04:12,329
And it's it's it's worked against Bitcoin Core, because if you if you're a software maker and you despise your users, you expect to lose a lot of the users.

728
01:04:12,329 --> 01:04:13,789
And that's what's happened to Bitcoin Core.

729
01:04:15,409 --> 01:04:15,969
Yeah.

730
01:04:15,969 --> 01:04:21,049
I urge everyone to

731
01:04:21,049 --> 01:04:23,169
go follow Matthew and

732
01:04:23,169 --> 01:04:25,609
go follow Hodlonaught

733
01:04:25,609 --> 01:04:27,089
go follow Daniel Prince

734
01:04:27,089 --> 01:04:29,449
follow Logan Mechanic of course

735
01:04:29,449 --> 01:04:31,329
listen to what

736
01:04:31,329 --> 01:04:32,429
these people have to say

737
01:04:32,429 --> 01:04:35,189
it's at least interesting

738
01:04:35,189 --> 01:04:39,469
I think the last couple days I've showed a really good test

739
01:04:39,469 --> 01:04:41,049
go go I'm sure

740
01:04:41,049 --> 01:04:43,149
Knut can put a link to Hodlonaught's

741
01:04:43,149 --> 01:04:43,749
articles

742
01:04:43,749 --> 01:04:45,369
to this pod

743
01:04:45,369 --> 01:04:48,309
and go read those two articles,

744
01:04:48,529 --> 01:04:50,309
the Capture and the Lever,

745
01:04:50,509 --> 01:04:51,209
whatever they're called,

746
01:04:51,609 --> 01:04:53,089
about what's happened in Bitcoin Core.

747
01:04:53,449 --> 01:04:57,649
And then go take a look at how people like Shinobi,

748
01:04:57,849 --> 01:04:59,349
Mr. Hoddle, Adam Back,

749
01:04:59,669 --> 01:05:00,909
especially look at how Adam Back

750
01:05:00,909 --> 01:05:03,649
has been treating Hoddle Not on X

751
01:05:03,649 --> 01:05:05,649
and make up your own mind.

752
01:05:05,809 --> 01:05:08,289
Read the articles and then see if they're as bad

753
01:05:08,289 --> 01:05:11,809
as Adam Back or as full of pleb slop

754
01:05:11,809 --> 01:05:13,769
as Adam Back would leave you to believe.

755
01:05:13,849 --> 01:05:15,229
I think this is a very interesting exercise.

756
01:05:15,369 --> 01:05:41,209
And then you have to ask yourself the question, why is Adam Back, who's really one of the great guys in Bitcoin, has contributed so much and was in the white paper, why is he behaving this way now? And I honestly don't have an answer. It makes me really sad to see because in Bitcoin, we're supposed to slay our heroes. But you hate to slay people like Adam Back and Greg Maxwell, but they're clearly not the same people for whatever reason.

757
01:05:41,209 --> 01:05:59,649
Maybe they've been compromised. Maybe it's hard to know when you're already quite rich as both of them must be. I guess intel agencies could threaten your life or your wife and children. So I have more compassion than anything else for these people. And it's bewildering to me what's happened.

758
01:05:59,649 --> 01:06:13,649
Yeah, that's a really dark theory. And that's a super scary thought that some of the erratic behavior is because people are actually threatened and their families threatened.

759
01:06:13,649 --> 01:06:22,569
I hope it's not true, but we had Greg Maxwell recently on the Bitcoin dev mailing list last year, basically saying UTXO set bloat doesn't matter.

760
01:06:22,569 --> 01:06:38,449
And he's one of the guys for the past 10 years who has always been, there's a quote, I can't remember it exactly from Greg Maxwell from 2015 or 2016, saying basically demand for distributed perpetual data storage on Bitcoin is infinite.

761
01:06:38,449 --> 01:06:50,969
And so why is Greg Maxwell in 2025 and 2026 calling it distributed authoritarianism if we don't want to allow Bitcoin to fill up with all this arbitrary data?

762
01:06:51,569 --> 01:06:55,549
It just doesn't make sense how these people have changed their opinions.

763
01:06:55,689 --> 01:07:06,269
And so I come up with theories, which I hope they're not true, that they've somehow been compromised or maybe they're just not really paying attention or certain business deals are social.

764
01:07:06,269 --> 01:07:14,749
It may just be a social, so much comes down to tribalism and social cliques where you don't want to attack your friends.

765
01:07:14,949 --> 01:07:16,869
And, you know, I don't want to attack my friends either.

766
01:07:18,429 --> 01:07:22,009
But I find myself in the weird position where I have my life savings in Bitcoin.

767
01:07:22,989 --> 01:07:26,189
Adam Back is doing very, very bad things, in my opinion, for Bitcoin.

768
01:07:26,369 --> 01:07:44,375
And so I attacking someone who always treated me very nicely in person a couple of times I met him And so it certainly nothing personal on my side But Bitcoin is I think there this misconception that Bitcoin is just magically constructed

769
01:07:44,375 --> 01:07:48,315
and it will always be anti-fragile and nothing can break it.

770
01:07:48,476 --> 01:07:50,836
And this is just simply not true.

771
01:07:51,196 --> 01:07:52,916
Bitcoin is only as strong as Bitcoiners.

772
01:07:52,916 --> 01:07:59,796
and um you know bitcoiners get together and decide to raise the the max supply from 21 million to 22

773
01:07:59,796 --> 01:08:04,156
million that's the death of bitcoin anyone you know the bitcoin community could do it at any

774
01:08:04,156 --> 01:08:09,836
point in time they'll probably only do it if the cultures become completely corrupted um but this

775
01:08:09,836 --> 01:08:14,476
is the this is i worry when i see people and i think my early videos contributed to this idea

776
01:08:14,476 --> 01:08:18,256
that there's something sort of magical or this sort of magical thinking about bitcoin where

777
01:08:18,256 --> 01:08:28,315
it can defend itself while we let very influential Bitcoin devs from yesteryear attack it and

778
01:08:28,315 --> 01:08:31,296
contradict their own take on blockchain bloat, et cetera.

779
01:08:31,856 --> 01:08:38,636
So it's very important for Bitcoiners to understand this, that Bitcoin can die.

780
01:08:38,636 --> 01:08:42,995
I don't want to be one of those unethical people who's trying to like the quantum computing

781
01:08:42,995 --> 01:08:47,976
guys who are like, you know, if you don't fund my startup or, you know, move to this,

782
01:08:48,136 --> 01:08:50,196
do this fork, that Bitcoin's going to die.

783
01:08:50,776 --> 01:08:56,935
But Bitcoin clearly can, it can die by, it can die a death by a thousand cuts.

784
01:08:56,935 --> 01:09:05,355
And if we're at 40% block space is non-monetary data, at what point will the additional straw

785
01:09:05,355 --> 01:09:06,696
break the camel's back?

786
01:09:06,836 --> 01:09:07,875
I'm not really sure.

787
01:09:07,956 --> 01:09:09,016
I don't really want to find out.

788
01:09:09,016 --> 01:09:17,696
We're already in a point with Bitcoin mining pool centralization, where if the U.S. and China ever decide to get together, they can easily attack Bitcoin.

789
01:09:17,796 --> 01:09:21,456
They have more than 60% of the hash rate between Foundry and Antpool.

790
01:09:21,995 --> 01:09:27,576
So we have these structural things that are huge problems.

791
01:09:28,055 --> 01:09:29,796
And there's a similar problem with large op returns.

792
01:09:30,456 --> 01:09:32,516
Illegal data can end up in large op returns.

793
01:09:32,516 --> 01:09:42,396
And just because something hasn't, I would expect at least this from Bitcoiners to be able to think two steps ahead, two moves or five moves ahead, just because something hasn't happened yet.

794
01:09:42,896 --> 01:09:45,896
You know, 2028, Trump has alienated a lot of people.

795
01:09:46,555 --> 01:09:47,855
Maybe the Dems come back in.

796
01:09:47,916 --> 01:09:50,836
Maybe Elizabeth Warren is in charge of a lot of this stuff.

797
01:09:50,836 --> 01:09:54,976
And miners are being, you know, Bitcoin industry is being attacked, et cetera.

798
01:09:55,196 --> 01:09:55,916
This can happen.

799
01:09:56,016 --> 01:09:59,296
And so we have to prepare when times are easier here.

800
01:09:59,375 --> 01:10:00,756
And so that's one thing BIP 110 does.

801
01:10:00,756 --> 01:10:08,836
sort of it buys us some time buys us some time in part to attack Bitcoin mining pool centralization.

802
01:10:08,836 --> 01:10:12,976
And that's one of the things I've been trying to take the lead on here is getting more and more

803
01:10:12,976 --> 01:10:19,696
plebs to mine using rented hash rate. Bitcoin mining was always something that I neglected

804
01:10:19,696 --> 01:10:24,815
on my channel simply because I'm not super handy. I don't like playing around with machines in my

805
01:10:24,815 --> 01:10:30,355
garage. And Bitcoin mining rigs are quite noisy. I have made some videos about the BitX project,

806
01:10:30,355 --> 01:10:34,355
which I do like a lot with these little mining rigs that you can put on your desk, and they're

807
01:10:34,355 --> 01:10:40,256
very low power. The other reason I never really got into Bitcoin mining was because I've always

808
01:10:40,256 --> 01:10:46,136
lived in places that have very high residential electricity rates. And so you can't mine Bitcoin.

809
01:10:47,156 --> 01:10:54,136
I mean, you can mine at a very, very steep loss. But there have been two innovations in the last

810
01:10:54,136 --> 01:11:00,036
in the last couple of years that have made something very, very, something possible that's

811
01:11:00,036 --> 01:11:05,716
very, very interesting from the perspective of plebs sort of taking back Bitcoin. And that is

812
01:11:05,716 --> 01:11:12,696
this combination of this protocol called Datum Gateway, which allows anyone to run a node and

813
01:11:12,696 --> 01:11:18,516
build their own block templates. And then you can submit these block templates to, you can basically

814
01:11:18,516 --> 01:11:24,096
pool mine with them using, right now, the only pool you can do it with is ocean mining, though

815
01:11:24,096 --> 01:11:29,976
I hope to see other competitors. You can basically do pooled mining, build your own blocks, decide

816
01:11:29,976 --> 01:11:34,296
what goes into those blocks, which is nice. You can mine your own transactions. You can make them

817
01:11:34,296 --> 01:11:40,796
spam-free. You can mine slightly smaller blocks, for example. If you think the block size is too

818
01:11:40,796 --> 01:11:45,296
high, those blocks will still be accepted. You can decide on the composition of your blocks,

819
01:11:45,296 --> 01:11:54,176
And then you can still mine in a pooled context where you don't have to go for 6,000 years without finding a block with your BitAx.

820
01:11:54,956 --> 01:12:02,196
And so that's the first development, Datum Gateway, which is an open source, free and open source protocol that allows you to build your own Bitcoin block templates.

821
01:12:02,875 --> 01:12:03,956
You can pool mine with Ocean.

822
01:12:04,475 --> 01:12:06,136
And where do you get the hash rate from?

823
01:12:06,136 --> 01:12:19,636
It's really impractical to build hash at home if you live in just kind of a normal place and you don't want a lot of buzzing machines in your garage and you don't want to have $5,000 electricity bills every month.

824
01:12:19,916 --> 01:12:24,176
What you can do instead is you can rent hash from these hash power or hash rate markets.

825
01:12:24,975 --> 01:12:33,115
So that's one thing I've been teaching on my channel, how to mine Bitcoin from home at an industrial scale using rented hash.

826
01:12:33,115 --> 01:12:52,875
And I'm currently, I'm going to make a video about this probably tomorrow or Monday. I'm currently renting at five petahash per second. To put that in perspective, that's, if I'm doing the math right, that's like 5,000 bit axes. And it's costing me, one petahash is about 35.

827
01:12:52,875 --> 01:12:59,536
it's cost me about, yeah, it's cost me about $200 a day to do this. But the really nice thing

828
01:12:59,536 --> 01:13:06,595
is that I get, if I do this sort of steadily, I should earn back about 95 cents on the dollar.

829
01:13:07,156 --> 01:13:12,255
And so the real cost, mining at five petahash, which is, it's hard to, basically,

830
01:13:12,615 --> 01:13:18,135
the entire Bitcoin network is a million petahash. I'm mining at five petahash,

831
01:13:18,135 --> 01:13:23,056
just some guy at home, I'm losing $10 a day to do it.

832
01:13:23,056 --> 01:13:26,455
And I'm mining at an industrial scale level.

833
01:13:27,255 --> 01:13:41,642
And so I think this is a huge this is definitely gonna figure in the upcoming soft fork because we now have access to hash rate and hash rate is extremely cheap per day per petahash and you earn back a day or so

834
01:13:42,762 --> 01:13:44,982
And so this is something I'm really excited about.

835
01:13:45,142 --> 01:13:49,822
And I think it's the next step if you're a Bitcoiner who's running his or her own node.

836
01:13:49,822 --> 01:13:57,942
The next step is to turn that into, I don't really like the term economic node, but if you're mining with a node, you are building block templates.

837
01:13:58,042 --> 01:14:01,082
you are receiving block reward payouts

838
01:14:01,082 --> 01:14:03,522
and you're verifying those with your own node.

839
01:14:04,062 --> 01:14:07,922
And this is really what Satoshi envisioned.

840
01:14:08,062 --> 01:14:09,882
He envisioned individual hodlers

841
01:14:09,882 --> 01:14:12,462
running their own nodes and mining with nodes.

842
01:14:12,562 --> 01:14:16,762
He did not foresee the rise of Bitcoin mining pools.

843
01:14:16,902 --> 01:14:18,382
I think this was a blind spot he had.

844
01:14:19,542 --> 01:14:22,022
But fortunately now, this is a way, I believe,

845
01:14:22,102 --> 01:14:25,022
to take back mining for Bitcoin plebs

846
01:14:25,022 --> 01:14:29,822
and to basically take hash away from the large mining pools

847
01:14:29,822 --> 01:14:31,782
who have not been very good stewards of it.

848
01:14:32,682 --> 01:14:33,742
No, it's fantastic.

849
01:14:34,102 --> 01:14:37,842
A couple of weeks back, I did an interview with Unhosted Marcellus

850
01:14:37,842 --> 01:14:39,742
about this and how to do this.

851
01:14:40,222 --> 01:14:40,942
I know you have a...

852
01:14:40,942 --> 01:14:43,482
That interview, I listened to it twice, actually.

853
01:14:43,642 --> 01:14:44,622
That's fantastic.

854
01:14:44,622 --> 01:14:44,942
Oh, fantastic.

855
01:14:45,502 --> 01:14:47,662
And you did one with Daniel Prince as well.

856
01:14:47,842 --> 01:14:50,562
So listen to Knuths and Daniels.

857
01:14:51,282 --> 01:14:54,982
Ghost of Unhosted Marcellus, really smart Bitcoiner.

858
01:14:55,022 --> 01:14:56,642
I've learned a ton from him.

859
01:14:57,262 --> 01:14:57,942
Yeah, fantastic.

860
01:14:58,302 --> 01:15:02,582
And you did a video about, several videos about this as well,

861
01:15:02,862 --> 01:15:06,262
including one where you go through each step,

862
01:15:06,342 --> 01:15:07,822
what you have to do to get this going.

863
01:15:08,302 --> 01:15:10,242
So I highly recommend that too.

864
01:15:10,842 --> 01:15:13,842
I mean, I actually made a dedicated resource for that.

865
01:15:13,902 --> 01:15:14,462
That's free.

866
01:15:14,722 --> 01:15:19,382
If you just go to bitcoinuniversity.com forward slash mining.

867
01:15:19,882 --> 01:15:21,482
I took one of my YouTube videos.

868
01:15:21,582 --> 01:15:22,042
I put it there.

869
01:15:22,102 --> 01:15:22,822
There's no paywall.

870
01:15:22,822 --> 01:15:25,022
You don't have to provide an email address or anything.

871
01:15:25,202 --> 01:15:26,882
And at the very bottom, there's a link to my channel.

872
01:15:27,442 --> 01:15:30,022
But I wanted just an easy place to point people to.

873
01:15:30,202 --> 01:15:33,382
So this will allow you to mine Bitcoin at home at industrial scale level.

874
01:15:33,542 --> 01:15:36,982
The tutorial, bitcoinuniversity.com forward slash mining.

875
01:15:38,222 --> 01:15:45,082
And if we fix minor decentralization, it doesn't matter how many Libre relay nodes Peter Todd fires up.

876
01:15:45,442 --> 01:15:47,842
Like he wants to get the spam into the blocks anyway.

877
01:15:48,442 --> 01:15:50,262
And yeah, mempool policy will work.

878
01:15:50,262 --> 01:15:53,922
So the mind pull policy will be much, much stronger if we can.

879
01:15:54,842 --> 01:15:58,482
Bitcoin mind pull centralization is just, it's a huge, it's a huge problem.

880
01:15:59,662 --> 01:16:04,422
No, but this is what I love about your videos and about people like you,

881
01:16:04,502 --> 01:16:10,342
that despite being aware of all the problems and all the risks and all the hurdles,

882
01:16:10,522 --> 01:16:13,502
you're still an optimist and still very hopeful about this.

883
01:16:13,502 --> 01:16:19,582
And just like me, you've realized that if there's any hill worth dying on, it's this one.

884
01:16:19,582 --> 01:16:23,982
because it's humanity's last hope, you know, in a sense.

885
01:16:24,642 --> 01:16:27,362
I think it was Winston Churchill who said,

886
01:16:27,462 --> 01:16:30,242
like, Americans always do the right thing eventually

887
01:16:30,242 --> 01:16:32,982
after trying all the alternatives and failing at them.

888
01:16:33,462 --> 01:16:35,442
And I feel like Bitcoiners are the same way.

889
01:16:35,902 --> 01:16:36,062
Yeah.

890
01:16:36,182 --> 01:16:37,902
They're fundamentally good people.

891
01:16:38,182 --> 01:16:41,802
And a lot of this is just the product of education.

892
01:16:42,742 --> 01:16:44,622
And I've been running this channel for, you know,

893
01:16:44,622 --> 01:16:49,042
five years before I had any interest or any care about Bitcoin mining.

894
01:16:49,582 --> 01:16:54,722
Um, whereas it's this, it's a sort of Damocles hanging over all of us, this, this centralization.

895
01:16:54,942 --> 01:16:56,042
It's a huge problem.

896
01:16:56,042 --> 01:16:59,962
Just basically, if you want to censor Bitcoin transactions, you just have to get the five

897
01:16:59,962 --> 01:17:01,502
pools, not to include it in a block.

898
01:17:01,662 --> 01:17:05,162
There'll still be that sort of 10% that, that might be able to mine it for you.

899
01:17:05,402 --> 01:17:06,902
Mining, mining pool centralization.

900
01:17:07,602 --> 01:17:11,422
It's the backdrop for all the problems we have and all Bitcoin core solutions.

901
01:17:11,842 --> 01:17:15,382
It just assumed that as the status quo that we'll be here forever, that we're always going

902
01:17:15,382 --> 01:17:16,702
to have mining pool centralization.

903
01:17:16,702 --> 01:17:21,082
So they're optimizing for a very dysfunctional state of the network.

904
01:17:21,982 --> 01:17:29,462
And so part of this movement, this PLEB movement, is taking back node running, taking back mining, and fixing these problems at the grassroots level.

905
01:17:29,702 --> 01:17:31,102
Politicians aren't going to solve it.

906
01:17:31,402 --> 01:17:33,142
Bitcoin conferences aren't going to solve it.

907
01:17:33,502 --> 01:17:34,822
The experts aren't going to solve it.

908
01:17:34,842 --> 01:17:38,782
We just all have to mine Bitcoin ourselves.

909
01:17:40,662 --> 01:17:43,622
That's a fantastic note to end this on.

910
01:17:43,622 --> 01:17:48,462
And I think that, thank you very much for this conversation, Matt.

911
01:17:49,382 --> 01:17:50,342
Yeah, thank you, Cade.

912
01:17:50,482 --> 01:17:51,582
This was really cool.

913
01:17:51,982 --> 01:17:52,542
We should do this again.

914
01:17:53,022 --> 01:17:53,302
Yeah.

915
01:17:53,442 --> 01:17:59,162
And you've already directed people to bitcoinuniversity.com slash mining.

916
01:17:59,482 --> 01:18:00,322
Very good resource.

917
01:18:00,702 --> 01:18:02,622
Where can people follow you other than that?

918
01:18:03,582 --> 01:18:09,402
You can follow me on X at Matt Cratter, M-A-T-T-K-R-A-T-T-E-R.

919
01:18:09,402 --> 01:18:12,642
or you can just type Bitcoin University into YouTube

920
01:18:12,642 --> 01:18:14,122
and you'll see my channel there.

921
01:18:14,622 --> 01:18:17,762
I try to do a video every day and almost every day.

922
01:18:18,382 --> 01:18:20,602
And so if there's something you'd like me to cover as well,

923
01:18:20,922 --> 01:18:25,662
let me know on Twitter or let me know in the YouTube comments

924
01:18:25,662 --> 01:18:28,682
because I like covering things, tutorials,

925
01:18:28,842 --> 01:18:30,002
things that people want to hear about.

926
01:18:30,902 --> 01:18:34,462
Yeah, for those of you that have listened to me for a while now,

927
01:18:34,542 --> 01:18:38,422
you know that I literally think that we literally are our Satoshis

928
01:18:38,422 --> 01:18:43,062
because controlling the keys

929
01:18:43,062 --> 01:18:45,122
is controlling the ability to move them,

930
01:18:45,262 --> 01:18:46,902
which is really the essence of the Satoshi,

931
01:18:47,042 --> 01:18:49,342
and that's why they cannot be copied.

932
01:18:49,482 --> 01:18:51,022
It's because they live within our heads.

933
01:18:51,402 --> 01:18:53,122
So you are your Satoshis.

934
01:18:53,322 --> 01:18:57,082
It's time to act the part and do the things.

935
01:18:57,762 --> 01:19:01,442
Rent some hash and start signaling for Bit.10.

936
01:19:02,862 --> 01:19:03,222
I agree.

937
01:19:03,222 --> 01:19:06,482
Thank you very much, Matt.

938
01:19:07,042 --> 01:19:08,082
Thanks, dude. It was a pleasure.

939
01:19:08,422 --> 01:19:11,882
This has been the Bitcoin Infinity Show.

940
01:19:12,722 --> 01:19:14,842
Like, subscribe, and brush your teeth and all of that.

941
01:19:15,082 --> 01:19:16,102
And see you in the next one.

942
01:19:16,422 --> 01:19:16,822
Thank you.