Max Hillebrand on Bitcoin and Praxeology - Bitcoin Infinity Show #129

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Welcome to the Bitcoin Infinity Show, brought to you by BitBox Stampseed,

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the Bitcoin Advisor and ShopInBit.

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Go to BitcoinInfinity.com for books, merch and more.

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Enjoy the conversation.

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Max, welcome for the first time to the Bitcoin Infinity Show.

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Incredible.

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Yeah, so one of the first things, um, you have made the best book recommendations

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to me that I've ever gotten from anyone.

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And one was The Ethics of Liberty by Murray Rothbard, and the other

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one was Economic Science and the Austrian Method by Hans Hermann Hoppe.

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And now you recommended another book, which I haven't read yet, called

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the, which Grafton from Wechsel also recommended to me, which is

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called The Lodging of Wayfaring Men.

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And what is that book about and why do you recommend it so much?

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It's a beautiful book.

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It's, it's really, it's, it's incredible.

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And it's written for, it's written for us and for Bitcoiners,

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but it's over 20 years old.

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Um, it was written in like 1997 to 2002 and that time period.

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And it's loosely based on real events, um, which is fascinating.

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And the book is crazy.

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Like, uh, it, it, it goes about a group of cypherpunks who are, uh, Building

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an anonymous marketplace, and the first attempts of an anonymous digital currency.

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And again, this shit really happened.

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And the story is quite wild.

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With, you know, the freedom tech being built for very good reasons.

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And people who understood the philosophical impact.

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Uh, and, and the deep reasons for why freedom is important.

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So they were very motivated, uh, and, uh, dedicated to make the world

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a better place in their lifetime.

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And so they got their shit together and got organized and

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built something incredible, right?

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And it took them a couple attempts.

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Um, and eventually they, they rolled it out and enabled people to trade

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right, to do their business, uh, online in cyberspace, um, and encrypt it.

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And so that made a lot of people very happy because, you know, you get

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to live life free and undisturbed, so it got adopted by many users.

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So much so that eventually the government started to notice that somehow they're

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making less tax revenue than before.

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And something's a bit fishy, you know.

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And then they started to investigate and You know, the NSA and FBI put a

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decent amount of people on the topic and tried to de anonymize the users

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of these services and infiltrate them.

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And yeah, so the story is about this whole clash between the first and second realm,

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you know, people who built FreedomTag.

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And people who enslave others and how those two worlds kind of clash.

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So it's quite fascinating and it's a book that's very inspiring.

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What was the website called?

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So, uh, this is the, the author's name is Paul Rosenberg.

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Um, originally this book was published anonymously, right?

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Um, and, uh, years later, uh, when it was a bit safe to, to talk

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about, uh, this or associate their actual name with this, he did.

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And he was, he's like a teacher, basically, an

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electrical engineer's teacher.

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He wrote like 30 books or something on that subject, and is a very eloquent

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and practiced writer, but also a hardcore cypherpunk and freedom lover,

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and very well read, and very well writing, or he can write extremely well.

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So he has the freemansperspective.

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com.

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This is a newsletter.

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You can go back.

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It's going for, I don't know, 10, 20 years or something.

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And every week there's one or two short pieces of articles that he writes.

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And this book is actually also includes some writings that he

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did in the past and published.

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And so it's somewhat a collection of his thought.

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Um, and so The Lodging of Wayfaring Men is a fiction book, right?

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Like, in essence, right?

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It's basically a fictionalized story with, you know, character arcs and such.

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So it's not a technical book, but the author is very

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technical, and he understands cryptography and how to apply it.

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He understands distributed networks and like laying fiber

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optic cables and stuff like this.

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So there's, uh, there's a lot of real computer science in this fictional world.

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And that makes it quite applicable to today where we're surrounded with

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cryptography much more than at the time when this book was written.

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Super cool.

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So, uh, all right.

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Uh, bit, bit of a jump here, but why is, uh, avoiding paying taxes the most

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altruistic thing you can do in life?

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This is, this is actually one, one thing that gets covered

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in the book, right, where,

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that was the case.

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um, because there's, um, and this is also why this book is so interesting

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to recommend to, to newcomers, uh, to, to this philosophy, uh, because at the

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beginning, not, not, not everyone is convinced that this is a good idea.

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Even the creators of this technology don't know the end result and how

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other people will use this tech.

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There's a lot of ambiguity there.

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And so this book follows characters who reason through

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these very difficult questions.

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For example, I'm going to spoil this book a bit, but everyone should read it anyway.

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So, um, you, there's one character who was a lawyer, right?

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And, um, uh, he, uh, He works together with an ex FBI agent, you know, who

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both of them share this common, um, like seeking of justice, like real justice,

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you know, to stop bad guys from doing bad things, uh, to, to good people.

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And, um, and, uh, the ex FBI guy is somewhat disillusioned.

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With the institution of, uh, of, of the FBI to, to actually provide

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and, and, and establish justice.

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Uh, so now he is somewhat like, um, like walking this line in

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between the, the institution and, and, and the, the actual like free

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realm, vigilant justice basically.

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Um, uh, and here then when, when thinking of.

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this case.

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And like, should I, like, is there a wrong being done by the

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FBI trying to stop this project?

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Right.

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Or is this project actually good?

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Right.

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Do they have justice in, in doing what they do?

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Um, uh, then, uh, he, uh, reasoned of, uh, is the avoidance of

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tax, uh, of, of taxation evil.

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And, and, uh, of course then walks through the reasonable steps of thinking.

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No, if, if, uh, two people transact voluntarily.

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Um, both people are better off after the trade than before, right?

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Both people are happy, both say thank you and shake hands.

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Um, that's trade.

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That's the market, right?

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Uh, and, and then you have coercion, right?

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Where one guy says, give me that, and the other says, no, actually, I

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don't want to give you that, but the guy hits him and takes it anyway.

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And so that means afterwards that the guy who stole it is obviously better off.

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He's happy, right?

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He got the thing, but the guy who was the victim was being stolen from is worse off.

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And so humans have the capacity to do mutually beneficial things, right?

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To literally create value, make both of us better off than we were before.

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And we also have the potential to destroy value and take from others.

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Um, and one is beneficial and fosters the growth of civilization

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and the other destroys it.

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And so, you know, avoiding being stolen from is a good thing.

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Yeah.

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Reminds me of one thing we go into in the new book, uh, about the

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difference between lawful and illegal.

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I don't remember the name of the guy now, but some Dutch libertarian thinker,

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who emphasized on the terms, made the point that something being lawful is

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like lawful in an ethical sense, like the basis in Don't Steal, whereas legal

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is the top down government imposed legal framework, and how the two don't always

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align, or rather, they almost never align.

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Yeah, this is the difference between natural law and man made law.

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A natural law is one that is universal across time and space.

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It's always present, and it's immutable.

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It cannot be changed, at least not by us.

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And, you know, physics, for example, is a natural law.

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And arguably there is a natural law to ethics as well.

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Specifically, as morality increases, freedom increases.

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And as morality decreases, freedom decreases.

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That's the law of gravity in the ethical realm.

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Um, and, uh, that man didn't make it, right?

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We just realize it because it is what it is.

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And then we have man made law on the other hand.

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Uh, this is depends on a certain territory, right?

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The law in the U.

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S.

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is different from the law in Russia.

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And it also depends on time.

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I think the American law in the 1700s is very different from what it is today.

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Um, and so there are these imaginary lines where these, these rules

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apply and there's Other places or times where they do not apply.

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So they're arbitrary, right?

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And on a whim.

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And so they can be designed, um, you know, to the benefit of some

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and at the expense of others.

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And that is ultimately what, you know, politics is about.

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Yeah, I think this is one of the key points that that quote

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unquote normies have such a hard time wrapping their head around.

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Natural law and like what, what makes don't steal a natural law?

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Like what, what is the, the very foundation of, uh, of, uh,

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libertarianism or anarcho capitalism or absolute property rights or whatever

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you may call it, consensualism?

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And to my understanding, it has to do with homesteading.

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If you're the first person that, that acquired something, then no other person

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has a right to take that away from you.

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And you can logically deduct your way to that being true.

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Like, what's your view on that?

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And what's your understanding of that?

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And how would you explain that to a layman?

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Well, the reality is such that we have limited scarce resources.

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If we have one piece of steak on the table and three guys who are

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hungry, like some are gonna go home on an empty stomach, right?

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We literally don't have enough food to feed us all, right?

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And one piece of something can only be used by one person at one time, right?

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We cannot duplicate one piece of steak into many and satisfy everyone.

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So this is a natural form part of reality, right?

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That's just how things are, you know?

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Um, but So there's a potential of conflict over who gets to

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allocate these scarce resources.

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And there's a couple solutions to it, right, that have been proposed.

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Like one would be like, nobody owns it, right?

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Nobody gets to eat it because it's natural and it's not part of your

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body, so don't touch it, right?

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But then we die, you know, all

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that's the problem with that.

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That's kind of a problem.

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Yeah.

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Um, so

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view that as a problem.

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Yeah.

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So let's, let's rule that option out.

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Um, another solution is, of course, we all own it.

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Right?

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And we all, like, get to use it.

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But, I mean, that doesn't really work either, right?

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Because, so, like, sure, we all own it, but who actually gets to eat it?

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Right?

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Because there's three different mouths and the food only goes into one of them.

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So, uh, you know, they're, like, we can't all actually own

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something if we cannot all use it.

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Right?

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It is limited and only a few can use it.

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So, everyone owns it isn't the solution to the problem.

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Because everyone cannot own it, because there's not enough for everyone.

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So again, that's an issue.

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Ultimately, again, we all starve.

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We can't really make decisions on this.

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And another option would be, we vote.

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We somehow pick who gets to allocate these resources.

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But then, I mean, we're 8 billion people.

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How are we all going to vote on who gets to stake?

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Right?

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Like That's, that's going to be impractical.

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Like, how are we even going to communicate, all 8 billion of

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us, to get together in a vote?

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So again, until we have the result of the vote, nobody eats the

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steak, so we all starve again.

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It's not really a good solution either.

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And then we have one option that, like, Like some, a small subset of the

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people gets to make the choice of, you know, how to allocate these resources.

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And we can just pick them, you know, vote for them, for example.

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But here again, now other people are allocating the

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resources for others, right?

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Like, and some bureaucrat, a hundred kilometers away, is not

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gonna know, like, who of us is vegetarian and doesn't want the meat.

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Right?

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Um, and that just means that someone who's far off doesn't have

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the knowledge to actually allocate the resources in a proper manner.

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And that leads to misallocations, right?

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We starve, again.

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Because the guy who doesn't want the meat gets it and then it rots.

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00:13:18,513 --> 00:13:21,843
And the guys who would actually like it never get access to it and they starve.

240
00:13:22,853 --> 00:13:28,403
So that's the fundamental problem of socialism, basically, of some priest

241
00:13:28,413 --> 00:13:30,333
class allocating the resources for others.

242
00:13:31,733 --> 00:13:33,713
So again, the solution doesn't work either.

243
00:13:34,203 --> 00:13:35,763
So we're not left with much.

244
00:13:36,383 --> 00:13:40,933
But one thing that seems to work is private property rights.

245
00:13:43,153 --> 00:13:46,663
Again, as you said, the person who creates something, the butcher,

246
00:13:47,313 --> 00:13:52,043
or the farmer who raised the cow, can now decide what to do with it.

247
00:13:52,693 --> 00:13:53,933
Does he butcher it himself?

248
00:13:54,593 --> 00:13:55,823
Does he sell it to a butcher?

249
00:13:56,183 --> 00:14:02,028
Um, and, uh, then So the person who created something gets to own it,

250
00:14:02,128 --> 00:14:05,838
and gets to decide how to allocate this, and then he has the right to

251
00:14:05,838 --> 00:14:09,818
either consume it himself, or to abdicate the consumption of this good.

252
00:14:09,818 --> 00:14:13,338
So to say, I won't use it, I will trade it, I will give it to you, right?

253
00:14:14,668 --> 00:14:15,688
And he can make it a gift.

254
00:14:16,123 --> 00:14:20,343
Just say here, half the entire cow, like, I like you, I like your family, you,

255
00:14:20,423 --> 00:14:22,993
like, I'm happy that you're happy, right?

256
00:14:23,293 --> 00:14:24,723
Great, that's possible, right?

257
00:14:25,103 --> 00:14:28,103
Or, of course, he would want something from you in return, like, give me

258
00:14:28,103 --> 00:14:33,613
a bar of gold, um, or, you know, a bushel of wheat, or something else.

259
00:14:33,863 --> 00:14:38,883
Um, and this, so, meaning, you know, we now have a way that we

260
00:14:38,883 --> 00:14:42,943
can allocate resources in a, in a clear, simple rule set, right?

261
00:14:42,943 --> 00:14:44,073
To the person who created it.

262
00:14:44,613 --> 00:14:48,933
can decide what to do and he can have a contractual agreement to transfer

263
00:14:48,933 --> 00:14:50,173
this ownership to someone else.

264
00:14:50,583 --> 00:14:54,153
And so the people who actually have the problem now have the power to

265
00:14:54,213 --> 00:14:57,653
allocate the resources to solve those problems and not some guy far away,

266
00:14:57,653 --> 00:14:59,803
but just you and me who created stuff.

267
00:15:01,038 --> 00:15:04,368
And as you said, this only applies to scarce resources.

268
00:15:04,668 --> 00:15:10,148
So what, what would be, uh, um, what would, would be an example of

269
00:15:10,148 --> 00:15:14,678
a resource where you could eat the steak, but I could have it too.

270
00:15:14,798 --> 00:15:19,298
And, uh, the, the thing that comes to mind, uh, is information, of course.

271
00:15:20,088 --> 00:15:22,168
So, can you own information?

272
00:15:22,843 --> 00:15:26,533
No, like, because that, that doesn't really make sense, right?

273
00:15:26,533 --> 00:15:30,263
To own means to, to allocate, how to allocate these, uh, to decide

274
00:15:30,263 --> 00:15:31,563
how to allocate these resources.

275
00:15:32,023 --> 00:15:32,293
All right.

276
00:15:32,323 --> 00:15:36,928
And then, uh, Um, that's a solution to a problem of a lack

277
00:15:36,928 --> 00:15:38,428
of resource allocation, right?

278
00:15:38,788 --> 00:15:43,528
Um, uh, or for a lack of resources that that need to be allocated rather.

279
00:15:44,278 --> 00:15:47,398
But with information, there is no lack.

280
00:15:47,778 --> 00:15:52,758
Like if I have a PDF, I can copy it to you and I can send it to you, and I can send

281
00:15:52,758 --> 00:15:57,198
it to a hundred other people, and I still have the exact same high fidelity version.

282
00:15:57,658 --> 00:16:00,238
Of the information that I shared with others, and of course it's

283
00:16:00,238 --> 00:16:01,348
the same with words, right?

284
00:16:01,348 --> 00:16:04,768
The words that I speak, they're not lost on me, right?

285
00:16:04,768 --> 00:16:07,258
I still retain them and the information that they represent.

286
00:16:07,768 --> 00:16:13,888
Um, and that that means we don't need to like, be, uh, stingy with information.

287
00:16:13,888 --> 00:16:14,998
We can give it to everyone.

288
00:16:15,388 --> 00:16:18,358
Um, and it doesn't degrade the quality quite on the contrary, right?

289
00:16:18,358 --> 00:16:22,738
If, um, without information there is no, uh, there, there is no production.

290
00:16:23,203 --> 00:16:27,453
Right, like imagine yourself on an island, and you have all the raw materials, all

291
00:16:27,453 --> 00:16:33,223
the machinery, like everything there, but you don't know anything about physics,

292
00:16:33,293 --> 00:16:39,423
right, or material science, or just like production stages of how to build things.

293
00:16:39,923 --> 00:16:43,163
If you don't know any of that, the raw material is worth nothing to you.

294
00:16:43,253 --> 00:16:43,713
Nothing.

295
00:16:44,273 --> 00:16:47,773
Because you don't know how to allocate, how to shape this raw material into

296
00:16:47,773 --> 00:16:50,673
other things so that it actually solves your problems in the end.

297
00:16:51,223 --> 00:16:54,953
And so, that's, uh, we need information in order to produce things.

298
00:16:55,183 --> 00:16:57,173
That's the theory behind it.

299
00:16:57,623 --> 00:16:58,933
The blueprints, so to say.

300
00:16:59,303 --> 00:17:01,843
But the cool thing is, we don't have to be stingy with the blueprints.

301
00:17:02,093 --> 00:17:05,893
We can give every human on this planet Equal access to all of the

302
00:17:05,893 --> 00:17:10,743
information that we as humans have accumulated, and now all of a sudden

303
00:17:10,753 --> 00:17:13,713
you will never be stranded on an island not knowing how to do something,

304
00:17:13,713 --> 00:17:14,873
because you can just look it up.

305
00:17:15,193 --> 00:17:19,743
In the grand database of accumulated human knowledge, and of course, of

306
00:17:19,743 --> 00:17:24,393
course, technology has made that much more possible and low cost.

307
00:17:24,883 --> 00:17:27,223
Back in the day, in order to share an information, you needed

308
00:17:27,223 --> 00:17:29,463
to speak verbally to it, right?

309
00:17:29,463 --> 00:17:32,353
So you're limited to time and space, or you need to scratch it on some

310
00:17:32,353 --> 00:17:36,163
stone or clay or write it on a piece of paper, but it's all quite expensive.

311
00:17:36,173 --> 00:17:40,153
And then still, you have the scarcity of the paper, right?

312
00:17:40,153 --> 00:17:41,203
There's only one book.

313
00:17:41,698 --> 00:17:43,188
And there's a hundred people who want to read it.

314
00:17:44,068 --> 00:17:45,808
So again, information is limited.

315
00:17:46,328 --> 00:17:47,608
And it is a scarce resource.

316
00:17:47,608 --> 00:17:51,068
Not because the information itself is limited, but because the medium

317
00:17:51,368 --> 00:17:53,678
of the information is scarce.

318
00:17:53,948 --> 00:17:57,728
And that was a big tragedy that we were never able to communicate at

319
00:17:57,728 --> 00:18:01,418
a large scale, and remember these conversations and easily access them.

320
00:18:02,278 --> 00:18:04,898
Until the cypherpunks who came up with computers, right?

321
00:18:05,358 --> 00:18:10,273
And realized that we can build this realm of information That is so cheap

322
00:18:10,613 --> 00:18:14,983
to transfer and store information, that we can just basically do it for free,

323
00:18:14,993 --> 00:18:16,653
for anybody, for 8 billion people.

324
00:18:16,963 --> 00:18:21,383
And all they need is a rather cheap form of silicon, and like, nicely arranged.

325
00:18:21,793 --> 00:18:28,813
Um, but of course people try to hold on to the protection schemes that extract money

326
00:18:28,813 --> 00:18:32,548
from others, and capital from others, and You know, nation states have enforced

327
00:18:32,878 --> 00:18:39,738
intellectual property rights and patents and such, um, and that just harms people.

328
00:18:39,748 --> 00:18:42,748
It doesn't bring forward the best out of humanity.

329
00:18:42,778 --> 00:18:43,978
And that's a big shame.

330
00:18:44,668 --> 00:18:46,238
Now, uh, very well put.

331
00:18:46,238 --> 00:18:49,158
This, this has been Praxeology 101 with Max Hillebrand.

332
00:19:49,456 --> 00:19:54,456
where I want to follow on, uh, follow up here is, um, Uh, how

333
00:19:54,456 --> 00:19:56,236
does this apply to Bitcoin?

334
00:19:56,236 --> 00:19:59,826
Because Bitcoin is only information, so how can anyone

335
00:19:59,936 --> 00:20:02,086
theoretically ever own a Satoshi?

336
00:20:02,096 --> 00:20:04,386
Do you really own it, or what is it?

337
00:20:04,686 --> 00:20:04,876
Yeah.

338
00:20:04,876 --> 00:20:05,906
What is it like?

339
00:20:05,906 --> 00:20:07,556
What is actually a Satoshi?

340
00:20:07,766 --> 00:20:09,096
Look into the Bitcoin code base.

341
00:20:09,096 --> 00:20:11,876
There is no such thing as Satoshi, right?

342
00:20:11,876 --> 00:20:14,206
The transaction has a field that is an integer.

343
00:20:14,946 --> 00:20:16,096
But it's just an integer.

344
00:20:16,106 --> 00:20:18,296
It doesn't even have a unit associated to it, right?

345
00:20:18,696 --> 00:20:20,066
So, it's just a number.

346
00:20:20,076 --> 00:20:22,046
Satoshis are just numbers in a database.

347
00:20:22,316 --> 00:20:27,686
And you don't own the number 270, 000 just because you have 270, 000 bitcoin.

348
00:20:28,276 --> 00:20:30,586
The actual number of satoshis, no, you don't control them.

349
00:20:30,866 --> 00:20:31,516
You don't own them.

350
00:20:32,966 --> 00:20:36,506
But information has another interesting thing that cypherpunks realized, right?

351
00:20:36,846 --> 00:20:43,846
That, um, uh, once, like, when you have a secret, then you can

352
00:20:43,846 --> 00:20:45,206
choose to share it with others.

353
00:20:45,222 --> 00:20:49,541
And then once you've shared it with one person, however, you cannot

354
00:20:49,561 --> 00:20:52,881
control how that person, what that person does with the information.

355
00:20:53,141 --> 00:20:57,281
He can keep it secret for himself, or he can tell it to the entire world.

356
00:20:57,721 --> 00:21:03,306
And so, um, there is such a thing as giving access rights to information.

357
00:21:04,036 --> 00:21:08,826
And this is an important part in Bitcoin, of course, right?

358
00:21:08,826 --> 00:21:14,226
Our secret keys should be secret, privately kept just for us, because if

359
00:21:14,226 --> 00:21:19,276
you do share your secret key publicly, then all of a sudden anyone can, you

360
00:21:19,276 --> 00:21:23,006
know, you know, Signed messages, um, uh, with, with this private key and

361
00:21:23,756 --> 00:21:27,056
therefore spent Bitcoin in, in the transaction chain of, of Bitcoin.

362
00:21:27,486 --> 00:21:31,156
Um, and well, that's, yeah, that's a critical part of it.

363
00:21:31,156 --> 00:21:36,126
So Bitcoin basically relies on keeping information, uh, occulted, hidden from

364
00:21:36,126 --> 00:21:43,156
others, uh, in order to ensure that we, uh, again, solve, like, basically Bitcoin.

365
00:21:44,386 --> 00:21:45,926
It's just a piece of software, right?

366
00:21:45,926 --> 00:21:49,396
So it is non scarce information, but it wants to be money.

367
00:21:49,666 --> 00:21:51,746
And money needs to be scarce, right?

368
00:21:51,806 --> 00:21:54,696
Because if I can spend a bar of gold first to you, and then the

369
00:21:54,696 --> 00:21:57,876
same bar of gold later to you, we have infinite inflation, right?

370
00:21:57,876 --> 00:21:59,086
The money system just dies.

371
00:21:59,516 --> 00:22:01,686
Um, so scarcity is required.

372
00:22:01,686 --> 00:22:04,776
It's a required feature for money and digital money therefore

373
00:22:04,776 --> 00:22:06,096
requires digital scarcity.

374
00:22:06,426 --> 00:22:10,826
And so what Bitcoin does is it establishes a set of computer code

375
00:22:10,826 --> 00:22:12,406
that defines the access, right?

376
00:22:12,776 --> 00:22:16,146
Two certain chunks of money, so to say, right?

377
00:22:16,176 --> 00:22:20,396
And the chunks of money are Bitcoin UTXOs, unspent transaction outputs,

378
00:22:21,056 --> 00:22:26,676
and the spending condition, so to say, or like the rule how to allocate

379
00:22:26,946 --> 00:22:29,346
this money, who gets to decide it.

380
00:22:29,681 --> 00:22:35,351
Where this money goes next is defined by a script and a small computer program

381
00:22:35,351 --> 00:22:40,591
that evaluates either to true or to false, depending what input you provide.

382
00:22:41,031 --> 00:22:44,731
And so the script is the lock, and usually it's a single public key.

383
00:22:46,201 --> 00:22:52,206
And then the way to prove that You're actually authorized to spend this

384
00:22:52,206 --> 00:22:55,276
coin is by creating a valid witness.

385
00:22:55,666 --> 00:23:00,316
You know, the input to the script, to the program that returns it

386
00:23:00,376 --> 00:23:02,046
to true rather than to false.

387
00:23:02,636 --> 00:23:06,396
And usually, again, that's a signature of a single private key

388
00:23:06,986 --> 00:23:10,786
over the transaction structure that you're actually spending the money.

389
00:23:11,286 --> 00:23:14,706
Um, so, and, and Bitcoin's genius realization is that.

390
00:23:15,131 --> 00:23:17,981
We just all have to check every transaction of everyone else.

391
00:23:18,301 --> 00:23:22,081
And when we do that, then we can be sure that, that for one,

392
00:23:22,281 --> 00:23:24,261
nobody's being stolen from, right?

393
00:23:24,261 --> 00:23:27,941
That nobody is, is like losing access to his money, that someone is spending

394
00:23:27,941 --> 00:23:30,191
the money with a wrong signature.

395
00:23:30,221 --> 00:23:31,941
You know, he doesn't have the private key.

396
00:23:31,941 --> 00:23:33,471
He cannot produce a valid signature.

397
00:23:34,381 --> 00:23:37,211
So what we have to make sure that such a transaction does never make

398
00:23:37,211 --> 00:23:38,761
it into the blockchain, right?

399
00:23:39,201 --> 00:23:40,721
That's, that's the first important aspect.

400
00:23:40,961 --> 00:23:43,271
And the second is we want to ensure that there's no inflation.

401
00:23:43,271 --> 00:23:48,136
And that's Because if we can just create as many tokens as we want, then the

402
00:23:48,136 --> 00:23:52,056
marginal, like the value of the token goes to the marginal cost of production.

403
00:23:52,426 --> 00:23:57,076
If we can produce a token with the click of a button, then the marginal

404
00:23:57,096 --> 00:24:00,556
cost of that token, or the value of that token, will be zero, right?

405
00:24:01,876 --> 00:24:05,821
So we need to make it, well Difficult, or in fact, in Bitcoin, impossible to

406
00:24:05,821 --> 00:24:09,861
create additional like units, you know, there's 21 million and that's it, right?

407
00:24:09,901 --> 00:24:10,931
That's the set of rules.

408
00:24:11,621 --> 00:24:15,171
And therefore, when we check each transactions, we also ensure that

409
00:24:15,171 --> 00:24:17,951
there is no transaction that has one Bitcoin on the input side and 10

410
00:24:17,951 --> 00:24:21,621
Bitcoin on the output side, therefore increasing the total supply of Bitcoin.

411
00:24:22,121 --> 00:24:26,101
And so Bitcoin is a massive verification machine to ensure that

412
00:24:26,101 --> 00:24:30,711
this computer system is this way of speaking to each other, uh, actually

413
00:24:30,971 --> 00:24:32,426
balances the books of the system.

414
00:24:32,616 --> 00:24:36,716
of how many units of money are there, and who has the right to allocate

415
00:24:36,716 --> 00:24:40,166
these, and so it's, it's basically a system that creates a natural

416
00:24:40,166 --> 00:24:44,996
resource, and then also manages the allocation of this natural resource.

417
00:24:45,336 --> 00:24:49,486
Um, so Bitcoin is almost a parallel universe where, in fact, you do own

418
00:24:49,706 --> 00:24:54,301
the, the, the Bitcoin, basically, right, in, in this specific, bubble,

419
00:24:54,401 --> 00:24:57,971
so to say, um, but the ownership is, is not defined by you as a person.

420
00:24:58,281 --> 00:25:00,111
It's defined by the knowledge of a secret.

421
00:25:00,112 --> 00:25:01,301
Yes.

422
00:25:01,301 --> 00:25:02,491
Um,

423
00:25:02,956 --> 00:25:07,826
so you prove that you have access to it by, by having access to the

424
00:25:07,826 --> 00:25:10,506
private key, which unlocks it.

425
00:25:11,106 --> 00:25:13,356
So, is there anyone else?

426
00:25:13,731 --> 00:25:18,281
On earth that can prove that you own a Bitcoin except you,

427
00:25:18,291 --> 00:25:19,921
the holder of the private key.

428
00:25:22,661 --> 00:25:23,351
In theory.

429
00:25:23,351 --> 00:25:23,951
yes.

430
00:25:23,991 --> 00:25:27,201
If the holder of the private key reveals information to others

431
00:25:27,481 --> 00:25:29,111
that indicates such, right.

432
00:25:29,651 --> 00:25:33,611
Um, and like one very common way that this would be is you have a mobile

433
00:25:33,641 --> 00:25:37,971
wallet, you know, um, that it does not run a Bitcoin full node, right.

434
00:25:37,971 --> 00:25:40,941
That connects to someone else's full node to check if that,

435
00:25:40,951 --> 00:25:42,181
if you have Bitcoin, right.

436
00:25:42,611 --> 00:25:43,391
Um, and.

437
00:25:43,731 --> 00:25:50,081
You don't use Tor, right, so there's an IP address linked from you to the server, and

438
00:25:50,081 --> 00:25:55,131
so the server operator knows that this IP address just asked that this money, that

439
00:25:55,131 --> 00:25:59,871
this, how much money is on this address, and so we have, well, a very strong

440
00:25:59,871 --> 00:26:04,371
indication, right, that this address owns, that this IP address owner owns

441
00:26:04,411 --> 00:26:06,601
is at the core of the question.

442
00:26:07,191 --> 00:26:13,331
It can be a very strong indication, but in my mind it can never be proof.

443
00:26:13,611 --> 00:26:16,881
Because you need to sign with the actual private key to prove.

444
00:26:16,921 --> 00:26:19,231
Otherwise it's boating accident time.

445
00:26:19,881 --> 00:26:24,411
guy with the gun doesn't need proof, right, he just needs a good enough guess.

446
00:26:24,561 --> 00:26:27,741
For him, he needs, like, there is a praxeology to violence.

447
00:26:27,757 --> 00:26:31,196
Um, uh, uh, thieves are, are actors.

448
00:26:32,001 --> 00:26:34,441
They live in a state of uneasiness, they have problems, and they try

449
00:26:34,441 --> 00:26:35,831
to find a solution to that problem.

450
00:26:36,571 --> 00:26:39,091
They don't have ethics, they don't have morals, and so their solution

451
00:26:39,091 --> 00:26:40,531
to the problem harms other people.

452
00:26:41,431 --> 00:26:43,331
But nevertheless, they are still actors.

453
00:26:43,611 --> 00:26:49,031
And so they think that they will be better off after the action of theft than before.

454
00:26:49,281 --> 00:26:50,431
That's a value judgment.

455
00:26:51,101 --> 00:26:52,351
And it's an entrepreneurial one.

456
00:26:52,731 --> 00:26:54,321
So they might be correct, they might not.

457
00:26:54,941 --> 00:26:57,801
They break into a house, hoping that there is a bar of gold

458
00:26:57,801 --> 00:26:59,161
hidden under the couch, right?

459
00:26:59,541 --> 00:27:01,021
Turns out there's not, right?

460
00:27:01,331 --> 00:27:05,111
So, if they spend a lot of money breaking into the house, and there's no

461
00:27:05,111 --> 00:27:07,411
loot, they're not profitable thieves.

462
00:27:07,831 --> 00:27:10,131
And this means that they destroyed their capital, right?

463
00:27:10,461 --> 00:27:14,351
They spent 10 Bitcoin on getting the equipment, and they got 0 Bitcoin back.

464
00:27:15,021 --> 00:27:18,051
So, that means they're 10 Bitcoin poorer, and eventually they will

465
00:27:18,051 --> 00:27:19,191
run out of money and starve.

466
00:27:19,971 --> 00:27:25,041
So, thieves need to be profitable in order to do their thieving, and that's

467
00:27:25,051 --> 00:27:26,831
the genius that cypherpunks realized.

468
00:27:27,391 --> 00:27:32,721
If we exponentially increase the cost of attack, and exponentially

469
00:27:32,721 --> 00:27:36,651
decrease the cost of defense, then we make thievery unprofitable.

470
00:27:38,446 --> 00:27:42,816
And that's the genius of private public key cryptography and encryption, right?

471
00:27:42,896 --> 00:27:46,266
It's trivial to generate a private key and then generate a

472
00:27:46,296 --> 00:27:47,666
public key or a signature, right?

473
00:27:48,066 --> 00:27:50,996
Nano compute, like second compute, like nothing, right?

474
00:27:51,556 --> 00:27:55,166
But to brute force a private key or to forge a signature without it,

475
00:27:55,506 --> 00:27:59,016
like, requires more energy that would collapse into a black hole, you know?

476
00:27:59,386 --> 00:28:00,736
So that's kind of a problem.

477
00:28:01,046 --> 00:28:02,856
And for thieves, right?

478
00:28:02,996 --> 00:28:05,046
It's really good for the people who want to defend themselves.

479
00:28:05,386 --> 00:28:08,776
Because they can very cheaply do it, and it just doesn't make

480
00:28:08,776 --> 00:28:11,666
sense to actually break, uh, like, attempt to break the encryption.

481
00:28:12,386 --> 00:28:17,166
But nevertheless, computer systems are very complex, and there's

482
00:28:17,166 --> 00:28:21,316
a lot of metadata associated with, with, like, computing and

483
00:28:21,356 --> 00:28:23,126
communicating between computers.

484
00:28:23,436 --> 00:28:28,956
And so, like, I don't know, there are, like, microphones and like radio frequency

485
00:28:28,956 --> 00:28:33,296
scanners that you can point on computers and you see the computation that's that's

486
00:28:33,296 --> 00:28:36,916
happening in the machine right because there's a lot of radiation outside of

487
00:28:36,916 --> 00:28:40,526
the computer that can be correlated to which bits are being flipped here

488
00:28:40,866 --> 00:28:45,166
um and then you can have all types of side channel attacks to extract secrets

489
00:28:45,436 --> 00:28:49,586
from a computer while it's running and so um the the problem is that the

490
00:28:49,586 --> 00:28:54,346
technologies the the holistic technology stack that we have is quite susceptible

491
00:28:54,356 --> 00:28:57,486
to this to revealing information that should have been kept secret.

492
00:28:57,886 --> 00:29:01,726
And again, that is a critical part, of course, to communication encryption,

493
00:29:01,726 --> 00:29:03,596
but even more so for Bitcoin.

494
00:29:03,676 --> 00:29:07,066
If we lose the assurance that only we know the private key,

495
00:29:07,526 --> 00:29:08,886
the money system is broken.

496
00:29:09,246 --> 00:29:12,456
And that's why Bitcoiners were so paranoid and started this whole thing of

497
00:29:12,466 --> 00:29:18,406
hardware wallets and secure elements to Really ensure that we don't leak private

498
00:29:18,406 --> 00:29:23,556
key material, but it's an extremely difficult task, um, because, well, this

499
00:29:23,556 --> 00:29:27,746
reality is very observable, and the cards are, to some extent, quite in

500
00:29:27,746 --> 00:29:29,546
favor of surveillance, unfortunately.

501
00:29:31,056 --> 00:29:35,246
the guy with the gun in this case could be the government,

502
00:29:35,256 --> 00:29:36,766
doesn't necessarily have to be.

503
00:29:36,996 --> 00:29:41,486
Yeah, exactly, it can just be like a poor guy who needs to provide for his children,

504
00:29:41,596 --> 00:29:47,456
you know, and, like, he sees a way for feeding his family for the next two years,

505
00:29:48,036 --> 00:29:49,626
and that's a good trade off for him.

506
00:29:50,066 --> 00:29:51,236
Yeah, momentarily.

507
00:29:51,586 --> 00:29:53,206
Momentarily, exactly, right?

508
00:29:53,681 --> 00:29:55,291
So, so, uh,

509
00:29:57,351 --> 00:30:00,931
if we manage to do this, though, on a, on a grand scale, and if people in

510
00:30:00,931 --> 00:30:03,921
general manage to do it, to, to have the,

511
00:30:06,256 --> 00:30:10,596
To exponentially increase the cost of the attack while simultaneously

512
00:30:12,316 --> 00:30:15,176
decreasing the cost of defense.

513
00:30:16,216 --> 00:30:20,466
Does that lead to world peace at one point?

514
00:30:20,636 --> 00:30:22,006
Is that like the end goal?

515
00:30:23,146 --> 00:30:23,776
Yeah, I think so.

516
00:30:24,516 --> 00:30:26,226
Oh, I mean, that makes sense.

517
00:30:26,227 --> 00:30:33,446
If every economically rational thief will realize that he is worse off

518
00:30:33,466 --> 00:30:35,076
if he does this stealing, right?

519
00:30:35,646 --> 00:30:39,346
Like, actually, because he needs to spend much more money in an attempted theft,

520
00:30:39,346 --> 00:30:41,116
and most likely he's not going to succeed.

521
00:30:42,756 --> 00:30:47,626
And, I mean, this exponential difference has to be huge, though, right?

522
00:30:47,626 --> 00:30:50,416
Because, like, we had castles, you know?

523
00:30:50,416 --> 00:30:55,026
Like, castles are quite, like, quite extreme asymmetric protection.

524
00:30:55,806 --> 00:30:59,996
Like, if you're behind castle walls, with a well staffed militia that actually

525
00:30:59,996 --> 00:31:04,491
defends the walls, It's quite difficult to get to you if you just have, you know,

526
00:31:04,541 --> 00:31:06,601
like, humans and swords and ladders.

527
00:31:06,981 --> 00:31:11,891
Um, that's, like, sieges are, are quite in the favor of, of the defender.

528
00:31:12,261 --> 00:31:14,411
But still, they happened a lot, right?

529
00:31:14,411 --> 00:31:16,741
And people were able to overcome these defenses.

530
00:31:17,051 --> 00:31:20,631
Because, I guess they weren't never holistically secure, you know?

531
00:31:20,631 --> 00:31:23,991
There was always some backdoor that enabled the attacker to go

532
00:31:23,991 --> 00:31:25,271
through, to get through, right?

533
00:31:25,681 --> 00:31:27,741
Um, and that might just be brute force, right?

534
00:31:27,781 --> 00:31:32,291
You just bring a huge army and You're fine with tens of thousands of your own

535
00:31:32,311 --> 00:31:35,511
guys getting killed, but eventually, you know, after you throw a couple

536
00:31:35,511 --> 00:31:38,131
hundred thousand people at the problem, someone will succeed to break through.

537
00:31:38,891 --> 00:31:41,331
Quite a brutal tactic, obviously, but it worked.

538
00:31:41,381 --> 00:31:41,641
Yeah,

539
00:31:41,746 --> 00:31:43,696
You upgrade your RAM and you get in.

540
00:31:44,091 --> 00:31:44,391
yeah.

541
00:31:44,951 --> 00:31:49,901
But then cryptographers came around and were like, well, but there's math.

542
00:31:50,266 --> 00:31:51,906
Yeah, we can use RAM in another way.

543
00:31:52,744 --> 00:31:55,406
Yeah,

544
00:31:55,991 --> 00:31:57,291
1 plus 1 is 2.

545
00:31:57,301 --> 00:31:57,821
Like.

546
00:31:58,676 --> 00:31:58,976
What?

547
00:32:00,361 --> 00:32:00,881
Are you sure?

548
00:32:03,386 --> 00:32:05,096
that might be offensive.

549
00:32:05,441 --> 00:32:06,581
That's a different kind of worms.

550
00:32:06,626 --> 00:32:06,916
Yeah.

551
00:32:07,626 --> 00:32:07,916
. Yeah.

552
00:32:08,261 --> 00:32:14,531
So, so, uh, uh, the, so Bitcoin being this perfect defense mechanism, because

553
00:32:14,861 --> 00:32:19,541
all it does is increase the cost of the attack, can, can Bitcoin ever

554
00:32:19,541 --> 00:32:21,701
be used for attack in your opinion?

555
00:32:21,731 --> 00:32:24,771
Like, can it be used in an aggressive way?

556
00:32:26,483 --> 00:32:32,863
I think directly not, um, because again, it, it is just, uh, speech and

557
00:32:33,023 --> 00:32:34,963
such, but on the other hand, maybe yes.

558
00:32:36,953 --> 00:32:41,043
Because, let's say, like, if someone hacked your machine, right, and

559
00:32:41,043 --> 00:32:46,373
got access to your private key, and spends the Bitcoin, like, in

560
00:32:46,373 --> 00:32:50,163
the context of Bitcoin itself, it's a valid signature, it's a valid

561
00:32:50,163 --> 00:32:52,093
transaction, and it will be included.

562
00:32:52,113 --> 00:32:56,933
So, in the legalities of Bitcoin, it is no theft, right?

563
00:32:57,043 --> 00:32:58,783
It is a valid transaction.

564
00:32:59,173 --> 00:33:06,883
Um, but, let's say on On the ethical realm, you worked hard to get these

565
00:33:06,883 --> 00:33:10,503
Bitcoin and you didn't want to send them to the attacker, so he is

566
00:33:10,503 --> 00:33:11,853
definitely stealing them from you.

567
00:33:12,213 --> 00:33:19,253
So, let's say Bitcoin can be stolen, certainly, in the human analysis.

568
00:33:19,613 --> 00:33:23,103
Not on a technical level, we've never seen a transaction confirmed with an

569
00:33:23,103 --> 00:33:27,108
invalid signature, but on the human level, There have been a lot of people that

570
00:33:27,128 --> 00:33:30,488
got separated from their Bitcoin against their will, right, against their consent.

571
00:33:30,948 --> 00:33:32,878
Um, and, and that is theft.

572
00:33:33,138 --> 00:33:38,488
So, thieves can use Bitcoin, thieves can get paid in Bitcoin, thieves can take your

573
00:33:38,488 --> 00:33:40,458
Bitcoin and pay them to themselves, right?

574
00:33:40,828 --> 00:33:43,618
Um, that's, that's a fact of reality too.

575
00:33:45,048 --> 00:33:51,778
Yeah, so what if, say for instance, uh, this is an example out of thin air, but if

576
00:33:51,778 --> 00:33:57,828
you had a money printer and you were able to, uh, store arbitrary data next to this

577
00:33:57,858 --> 00:34:06,448
unitless, uh, Satoshis, uh, and thereby increasing the cost to, to starting up a

578
00:34:06,448 --> 00:34:13,978
node for everyone, And thereby decreasing decentralization and finally breaking the

579
00:34:13,978 --> 00:34:15,778
network when there aren't enough nodes.

580
00:34:17,278 --> 00:34:19,118
Could that be used in an aggressive way?

581
00:34:21,618 --> 00:34:25,198
Well, that's, that's difficult to say, right?

582
00:34:25,198 --> 00:34:30,488
Because again, um, it is just the writing of bits and bytes, right?

583
00:34:30,488 --> 00:34:31,758
It's just speaking words.

584
00:34:32,008 --> 00:34:36,528
So there's, um, however, again, a limited amount of resources that are

585
00:34:36,528 --> 00:34:38,238
available specifically in Bitcoin.

586
00:34:38,528 --> 00:34:42,618
And not just do we have 21 million Bitcoin, we also have like, Two and a

587
00:34:42,618 --> 00:34:45,018
half slash four megabyte blocks, right?

588
00:34:45,018 --> 00:34:49,498
And so this, this means there's only a certain number of, of transactions that,

589
00:34:49,588 --> 00:34:51,548
that can be fit into a single block.

590
00:34:51,938 --> 00:34:54,468
And that, that means we have, again, a scarce resource and,

591
00:34:54,508 --> 00:34:55,688
and we need to allocate it.

592
00:34:56,028 --> 00:34:59,528
Uh, so this is why there is a price for, for Bitcoin transactions,

593
00:34:59,848 --> 00:35:03,888
because that's how we solve the, the, the scarcity problem, right?

594
00:35:04,188 --> 00:35:06,668
Um, by whoever pays the most gets in.

595
00:35:07,058 --> 00:35:11,058
Um, that's a, or it's not even whoever pays the most.

596
00:35:11,068 --> 00:35:11,528
It's like.

597
00:35:12,343 --> 00:35:15,433
You can choose who goes in by mining a block, right?

598
00:35:15,483 --> 00:35:18,603
You have full freedom of choice of which transaction do

599
00:35:18,603 --> 00:35:19,833
you include into your block.

600
00:35:19,833 --> 00:35:27,243
And if you don't mine, then you can propose to someone else, say, please

601
00:35:27,243 --> 00:35:28,633
include my transaction into a block.

602
00:35:28,633 --> 00:35:32,303
But again, there's a large demand and a limited supply.

603
00:35:32,473 --> 00:35:36,583
Uh, so most likely people will start bribing each other and it's like,

604
00:35:36,593 --> 00:35:40,493
yeah, if you include my transaction in your block, I'll give you sats.

605
00:35:40,673 --> 00:35:45,373
And in fact, Bitcoin, the Bitcoin software launched with a anonymous

606
00:35:45,383 --> 00:35:49,073
peer to peer marketplace for the scarce good, which is Blockspace.

607
00:35:49,533 --> 00:35:54,623
And it had a payment mechanism integrated into the Bitcoin

608
00:35:55,253 --> 00:35:59,043
transaction system itself, which by the way, was not a requirement.

609
00:35:59,418 --> 00:36:01,098
Satoshi didn't have to do that, right?

610
00:36:01,128 --> 00:36:05,658
Bitcoin would have totally worked, uh, if, if you could not, like, uh,

611
00:36:05,658 --> 00:36:10,298
if every input sum has to be exactly equal to every output sum, right?

612
00:36:10,298 --> 00:36:13,568
There cannot be that outputs are smaller than inputs and the leftover

613
00:36:13,568 --> 00:36:17,018
goes to the miners, but that could have been a consensus rule, right?

614
00:36:17,018 --> 00:36:22,478
But then most likely we would have seen some third party external marketplace.

615
00:36:22,793 --> 00:36:25,273
Where people would do the bidding on please include my

616
00:36:25,273 --> 00:36:26,583
transaction into the block.

617
00:36:26,883 --> 00:36:29,903
And then of course they would have to figure out how do we actually pay the

618
00:36:29,903 --> 00:36:31,873
miner to get our transaction in the block.

619
00:36:32,103 --> 00:36:35,863
When the payment transaction will again have to be included in the block, right?

620
00:36:35,863 --> 00:36:37,953
So it would be quite difficult.

621
00:36:37,963 --> 00:36:41,573
So Satoshi had the genius to embed an anonymous marketplace.

622
00:36:41,943 --> 00:36:49,083
Into the core essence of the protocol, right, with the rule that outputs can

623
00:36:49,083 --> 00:36:52,893
be smaller than inputs, and the rule that we have this gossip peer to peer

624
00:36:52,893 --> 00:36:56,143
network, which like the whole peer to peer network is kind of optional, by

625
00:36:56,143 --> 00:37:00,443
the way, but it's just there to kind of make it easier so that we have this

626
00:37:00,443 --> 00:37:04,943
anonymous marketplace for Blockspace that we can propagate offers, right,

627
00:37:04,943 --> 00:37:07,983
and one person sends the offer and gets spread to the entire network.

628
00:37:08,213 --> 00:37:12,153
So the demand side is no monopoly.

629
00:37:12,393 --> 00:37:16,723
Anyone can broadcast a message to the peer to peer network hoping to be included.

630
00:37:17,373 --> 00:37:21,243
And then on the supply side, the actual miners, there's also no monopoly.

631
00:37:21,463 --> 00:37:24,963
Anyone can spin up his computer and start SHA 256 hashing.

632
00:37:25,298 --> 00:37:28,828
On the most recent chain, right, with his own candidate block.

633
00:37:29,058 --> 00:37:30,388
And nobody can stop you, right?

634
00:37:30,418 --> 00:37:31,968
That's the definition of no monopoly.

635
00:37:32,178 --> 00:37:34,988
New market participants are not hindered to enter the system.

636
00:37:35,428 --> 00:37:41,378
And so this is the most radical free market that we've seen probably ever.

637
00:37:41,808 --> 00:37:45,158
And it's been kind of hidden inside Bitcoin since the very beginning.

638
00:37:45,833 --> 00:37:50,183
Yeah, you can of course also pay the miner in something else than

639
00:37:50,183 --> 00:37:52,353
sats to get included into a block.

640
00:37:53,163 --> 00:37:59,573
And if a mining pool does this, the individual miners doesn't necessarily

641
00:37:59,583 --> 00:38:06,253
have a claim to a piece of the pie of whatever money was paid to

642
00:38:06,253 --> 00:38:10,463
the mining pool owner under the table and not on the system, right?

643
00:38:10,463 --> 00:38:11,603
They can't even see it.

644
00:38:12,313 --> 00:38:17,463
So how big of a problem is that, and can you really, the core of the question

645
00:38:17,463 --> 00:38:22,203
is, can you really call yourself a miner if you're just selling hash power to

646
00:38:22,203 --> 00:38:24,293
a pool and the pool isn't transparent?

647
00:38:25,860 --> 00:38:32,705
I mean, it's actually true that we, like, there could be in the future, A

648
00:38:32,745 --> 00:38:36,315
alternative marketplace for block space that's not inside the Bitcoin Core client.

649
00:38:37,435 --> 00:38:41,875
And by the way, arguably that's better, because we have a piece of software

650
00:38:41,875 --> 00:38:45,345
that does one thing really well, and then, you know, we just specialize

651
00:38:45,345 --> 00:38:47,405
and put the two modules together.

652
00:38:47,725 --> 00:38:50,045
Um, architecturally speaking, this might be better.

653
00:38:50,325 --> 00:38:53,385
Um, we see things like, for example, the mempool.

654
00:38:53,385 --> 00:38:57,170
space explorer, or accelerator, right, is one.

655
00:38:57,320 --> 00:39:01,690
Marketplace that is now establishing that that seems to work now quite well.

656
00:39:01,910 --> 00:39:05,850
Of course, it has the issue of there's a central, like, order

657
00:39:05,850 --> 00:39:09,660
book, so to say, um, and probably custodian for the money as well.

658
00:39:09,950 --> 00:39:15,050
And so, um, I'm not sure, but like, it's, it's one approach of doing

659
00:39:15,050 --> 00:39:17,950
such an alternative marketplace and there can be downsides.

660
00:39:17,950 --> 00:39:22,270
Like here, it's not really public of how much Volume is going through here, right?

661
00:39:22,270 --> 00:39:25,480
Like how much are people speeding up their transactions, right?

662
00:39:25,740 --> 00:39:28,570
And I guess the same goes to too much earlier where, where we just had

663
00:39:28,580 --> 00:39:32,100
mining pools offering this in their own API, you know, or, or a webpage.

664
00:39:32,810 --> 00:39:36,590
Um, so at least now, like we, we have a dedicated service provider.

665
00:39:36,590 --> 00:39:40,210
That's not a mining pool doing this, which I think is, is, is an improvement.

666
00:39:40,510 --> 00:39:43,160
Um, but we could also, you know, build.

667
00:39:43,855 --> 00:39:48,915
A, like, off chain peer to peer network, so to say, that's not related to Bitcoin

668
00:39:48,915 --> 00:39:54,055
per se, but that has all of the aspects that we want just dedicated for an

669
00:39:54,085 --> 00:39:56,665
optimized market book for this resource.

670
00:39:57,415 --> 00:39:59,865
And Bitcoin should still work, I think.

671
00:39:59,915 --> 00:40:05,995
Like, the marketplace inside Bitcoin Core is not essential in the long run.

672
00:40:06,245 --> 00:40:08,525
It was just very convenient to bootstrap it.

673
00:40:08,825 --> 00:40:12,375
But, you know, in 50, 100 years, I wouldn't be surprised if we have

674
00:40:12,915 --> 00:40:17,465
Dedicated systems for, for these things that potentially are in different

675
00:40:17,465 --> 00:40:19,265
repositories and such different softwares.

676
00:40:20,675 --> 00:40:26,675
So, in your opinion, how damaging is a temporary fee spike over a weekend

677
00:40:26,675 --> 00:40:30,925
or something where it goes up to like, 2000 SATs per transaction.

678
00:40:30,925 --> 00:40:33,835
What, what impact does it have on lightning channels and

679
00:40:34,045 --> 00:40:35,575
lightning providers and so on?

680
00:40:35,575 --> 00:40:40,285
Like is, do you, do you consider it an attack or what is it?

681
00:40:40,945 --> 00:40:45,835
Um, it's, it's, uh, it's an inevitability almost, right?

682
00:40:45,835 --> 00:40:50,035
If you have a hard, extremely limited supply, right?

683
00:40:50,115 --> 00:40:53,845
Of, there is only two and a half megabytes in the usual block, right?

684
00:40:54,225 --> 00:41:00,265
Um, that, and you have extremely fluctuating demand, and there is no

685
00:41:00,265 --> 00:41:02,075
way to speed up production of the good.

686
00:41:02,700 --> 00:41:10,030
And so there is bound to be extreme, um, like, uh, differences of,

687
00:41:10,050 --> 00:41:13,820
of we have way more demand than supply or way, way less, right?

688
00:41:13,820 --> 00:41:18,420
But it will be very rare that we will fill just exactly

689
00:41:18,420 --> 00:41:19,730
everyone who wanted to gets in.

690
00:41:20,100 --> 00:41:21,500
That's, that's quite rare, I think.

691
00:41:21,520 --> 00:41:25,135
So that's why we've seen in, uh, I don't know since how long is the

692
00:41:25,135 --> 00:41:28,965
mempool full now, like probably a couple months at least, right?

693
00:41:28,965 --> 00:41:33,105
So to actually clean out every transaction that wanted to be made

694
00:41:33,625 --> 00:41:38,655
is quite rare already now and in the future, if Bitcoin continues to be

695
00:41:38,655 --> 00:41:40,625
used, this is even more unlikely, right?

696
00:41:42,425 --> 00:41:48,115
So then the question is just how, like, do you get into the top, like, the top

697
00:41:48,145 --> 00:41:51,025
payers to get included in the block still?

698
00:41:51,075 --> 00:41:54,535
And this is where just the technology is quite difficult, because this

699
00:41:54,535 --> 00:41:58,675
is like, you're, you're, you're, it's an order book, right?

700
00:41:58,675 --> 00:42:00,675
You're trading, basically, and you don't know if the price

701
00:42:00,675 --> 00:42:01,915
goes up or price goes down.

702
00:42:02,645 --> 00:42:05,915
And this is all at least supposed to be automated.

703
00:42:06,265 --> 00:42:10,675
And so like Bitcoin wallet developers are basically building trading bots, right?

704
00:42:10,675 --> 00:42:14,015
They're, they're, they're block space accountants charged to purchase

705
00:42:14,015 --> 00:42:15,625
block space on behalf of the user.

706
00:42:16,045 --> 00:42:18,265
And then the user just clicks send and that's it.

707
00:42:18,285 --> 00:42:21,555
And, and the software does all of the complexities of, of

708
00:42:21,555 --> 00:42:25,975
constructing a transaction that is of a size acceptable, right?

709
00:42:25,975 --> 00:42:28,445
Because if fees are super high, you don't want to build a transaction with

710
00:42:28,445 --> 00:42:30,115
a hundred inputs and one output, right?

711
00:42:30,115 --> 00:42:32,685
That's, that's quite big, quite expensive.

712
00:42:32,685 --> 00:42:34,695
You would want to have a transaction with one input, one output.

713
00:42:35,240 --> 00:42:37,980
It would be way cheaper if the fee spike is currently high.

714
00:42:38,270 --> 00:42:43,330
And so a smart robot should build a different structured transaction with more

715
00:42:43,330 --> 00:42:49,570
or fewer inputs and outputs to accommodate the current fluctuation of the market.

716
00:42:50,400 --> 00:42:53,980
And of course, the fee rate is another, like what's actually your bid

717
00:42:54,180 --> 00:42:55,750
that you put into this marketplace?

718
00:42:56,140 --> 00:42:57,930
And that's, again, that's trading like.

719
00:42:58,255 --> 00:42:59,675
How much are you going to pay for the stock?

720
00:42:59,715 --> 00:43:01,335
Nobody really knows, right?

721
00:43:01,335 --> 00:43:04,745
And so it's, it's kind of good luck and you don't know if it goes up or goes down.

722
00:43:04,935 --> 00:43:06,795
And sometimes you overpay, right?

723
00:43:06,805 --> 00:43:10,045
And you pay way more than was actually needed to get into that block.

724
00:43:10,065 --> 00:43:11,815
And so you lose money, you lose capital.

725
00:43:12,135 --> 00:43:15,675
And sometimes you don't pay enough and you don't get included for, for months, right?

726
00:43:16,145 --> 00:43:20,535
Um, but there's better software that can alleviate a lot of these problems.

727
00:45:17,372 --> 00:45:20,842
Well, so I guess I guess another side to this question, because everything

728
00:45:20,842 --> 00:45:23,832
you're saying makes makes total sense from the perspective of that this

729
00:45:23,832 --> 00:45:28,182
stuff is definitely going to happen from from hyperbitcoinization side.

730
00:45:28,232 --> 00:45:31,612
There's just going to be more demand than there is supply of block space.

731
00:45:31,882 --> 00:45:34,842
But I think the issue that we've been exploring a lot.

732
00:45:35,072 --> 00:45:40,562
Lately, uh, is, is that when there are transactions that aren't really being

733
00:45:40,562 --> 00:45:44,992
made for the purpose of moving value from one person to another in the form

734
00:45:44,992 --> 00:45:50,372
of Satoshis, they're, they're another form of value, subjective value that is

735
00:45:50,372 --> 00:45:55,362
communicated through arbitrary data, or at least some other type of, of data.

736
00:45:55,762 --> 00:46:01,512
Does that change the property of Bitcoin as money?

737
00:46:02,267 --> 00:46:06,497
That's essentially, I think the, the root of the, the argument any, anyone talking

738
00:46:06,777 --> 00:46:08,127
functionality as money.

739
00:46:08,127 --> 00:46:08,637
Yeah, exactly.

740
00:46:08,817 --> 00:46:10,737
the, the functionality of, of Bitcoin is

741
00:46:12,179 --> 00:46:13,589
Well, I think.

742
00:46:14,399 --> 00:46:15,909
There's a couple aspects to this, right?

743
00:46:16,629 --> 00:46:20,299
We have again a scarce resource block space, and there's the problem of

744
00:46:20,299 --> 00:46:22,279
how do we allocate this block space.

745
00:46:23,039 --> 00:46:26,689
And there are very stringent rules on this, right?

746
00:46:26,689 --> 00:46:30,009
You cannot have arbitrary data in blocks, right?

747
00:46:30,009 --> 00:46:33,139
There needs to be, for example, the transaction structure.

748
00:46:33,699 --> 00:46:36,419
There needs to be inputs that point to previous outputs, and there need to

749
00:46:36,419 --> 00:46:39,529
be outputs, the sum of the inputs, sum of outputs, blah, blah, blah, hashes,

750
00:46:39,529 --> 00:46:43,549
transaction headers, all of the stuff needs to be followed in order for

751
00:46:43,549 --> 00:46:44,969
this to be considered a valid block.

752
00:46:45,219 --> 00:46:50,649
So the Bitcoin developers have, from the very beginning, had a very, I guess,

753
00:46:50,689 --> 00:46:58,589
authoritarian regime to, to, to allocating these resources, which makes sense.

754
00:46:59,839 --> 00:47:05,529
If you don't put stringent, like, structure in a protocol, then

755
00:47:05,719 --> 00:47:09,099
people just fill it with garbage and every software breaks, right?

756
00:47:09,099 --> 00:47:12,419
So it's like a practicality thing that we need to have a

757
00:47:12,419 --> 00:47:13,789
very opinionated, kind of thing.

758
00:47:13,789 --> 00:47:13,994
Bye bye.

759
00:47:14,164 --> 00:47:18,614
Set of rules and we need to pick one of them and and like just do it

760
00:47:18,894 --> 00:47:23,424
because if we don't pick any then it won't work and also if we pick

761
00:47:23,494 --> 00:47:25,024
the wrong one it won't work either.

762
00:47:25,944 --> 00:47:30,534
Like, I don't know, imagine the rules would have been like a broken hashing

763
00:47:30,544 --> 00:47:34,804
algorithm, for example, not SHA 256 but SHA 1 or something that's broken.

764
00:47:34,804 --> 00:47:36,564
People can create collisions, right?

765
00:47:36,564 --> 00:47:39,774
So there could be two transactions that have the exact same transaction ID.

766
00:47:40,239 --> 00:47:41,689
breaks the system, right?

767
00:47:41,689 --> 00:47:45,069
So if that would have been the set of rules, Bitcoin would have broken, right?

768
00:47:45,359 --> 00:47:51,399
And now also, again, if we allow arbitrary things to be built, then people will just

769
00:47:51,399 --> 00:47:55,669
use it as data storage, for example, and just fill it up with megabytes of images.

770
00:47:56,149 --> 00:47:58,379
And again, limited amount of resources.

771
00:47:58,379 --> 00:48:02,129
If all of it is used for, for pictures, then none of it can be

772
00:48:02,129 --> 00:48:03,359
used for money transfer, right?

773
00:48:04,029 --> 00:48:06,379
So this is again, an inherent conflict.

774
00:48:06,389 --> 00:48:09,439
And so the, the, the tricky thing though is, now we have this.

775
00:48:10,189 --> 00:48:13,079
Like, established set of rules in the Bitcoin consensus and

776
00:48:13,359 --> 00:48:15,639
how do we change it, right?

777
00:48:15,919 --> 00:48:21,159
And that's, that's the really tricky part of, you know, making up man made rules.

778
00:48:21,419 --> 00:48:26,154
Like, Bitcoin is not Natural in the sense, right?

779
00:48:26,494 --> 00:48:28,404
Like, humans came up with this shit.

780
00:48:29,384 --> 00:48:32,094
Like, this is our creativity that that made this happen.

781
00:48:33,474 --> 00:48:37,734
And, and so, like, it's not, like, it's not nature made, right?

782
00:48:37,734 --> 00:48:38,474
It's man made.

783
00:48:38,944 --> 00:48:40,934
Of course, men are part of nature and such.

784
00:48:40,934 --> 00:48:45,624
So it's a bit, wishy washy here, but ultimately, we made it, we

785
00:48:45,624 --> 00:48:48,184
can change it, we can make it better, and we can break it.

786
00:48:48,924 --> 00:48:52,484
And that's a really scary position, because I think we all realize

787
00:48:52,514 --> 00:48:55,494
that this is quite an important project, and we definitely have it

788
00:48:55,494 --> 00:48:56,824
in our power to break this thing.

789
00:48:57,384 --> 00:49:00,564
Um, so, I hope we do our best effort.

790
00:49:01,719 --> 00:49:06,219
just a, uh, I I guess, uh, my interpretation of that is, is that,

791
00:49:06,549 --> 00:49:11,119
uh, caution when making changes to Bitcoin is, is paramount.

792
00:49:11,179 --> 00:49:11,664
Would you agree with that?

793
00:49:12,214 --> 00:49:14,974
Well, inaction is an action too, right?

794
00:49:15,004 --> 00:49:16,664
And that might be even more dangerous.

795
00:49:16,874 --> 00:49:21,764
So, there might be critical bugs in the protocol that if not addressed will

796
00:49:21,764 --> 00:49:27,244
break the system and potentially they are currently being exploited, right?

797
00:49:27,584 --> 00:49:33,234
Um, And so, in such a case, we should do our best to fix it as soon as possible.

798
00:49:33,474 --> 00:49:38,194
Um, again, changing the protocol is, by design, extremely difficult.

799
00:49:38,204 --> 00:49:40,164
Satoshi knew that from the very beginning, right?

800
00:49:40,484 --> 00:49:41,994
So, how exactly we do that?

801
00:49:42,924 --> 00:49:43,454
Who knows?

802
00:49:43,729 --> 00:49:47,539
Well, if it's, if it's up to the individual miners, which

803
00:49:47,579 --> 00:49:51,309
it is, what blocks they want to mine, what transactions they

804
00:49:51,309 --> 00:49:52,469
want to include in a block.

805
00:49:53,399 --> 00:49:57,079
And it can be fixed that way, a sly roundabout way, if you will.

806
00:49:57,784 --> 00:50:01,864
Well, if we could trust the miners with stuff like this, then

807
00:50:01,864 --> 00:50:05,134
we could trust the miners with enforcing the 21 million, right?

808
00:50:05,174 --> 00:50:07,274
But we can't, right?

809
00:50:07,394 --> 00:50:08,454
We don't rely on anyone.

810
00:50:08,464 --> 00:50:10,184
We verify it ourselves, right?

811
00:50:10,424 --> 00:50:14,724
And so the reason why we don't have actual JPEGs in Bitcoin blocks is

812
00:50:14,724 --> 00:50:19,374
because your node says no to any block that actually has a JPEG in it, right?

813
00:50:19,384 --> 00:50:20,894
Blocks have to have transaction in it.

814
00:50:21,294 --> 00:50:23,504
If not, you kick them out, right?

815
00:50:23,624 --> 00:50:29,524
So even if there's valid proof of work And so Proof of Work doesn't solve the problem

816
00:50:29,794 --> 00:50:34,044
of, of integrity of the block, right?

817
00:50:34,044 --> 00:50:35,744
This has nothing to do with Proof of Work.

818
00:50:36,054 --> 00:50:39,484
In fact, Proof of Work is one part of the rules of the integrity of the

819
00:50:39,484 --> 00:50:44,544
block that is defined, enforced, and verified by the full nodes itself, right?

820
00:50:44,864 --> 00:50:48,714
So, so your full node makes up the full set of rules of what is a

821
00:50:48,714 --> 00:50:50,504
valid Bitcoin block or not, right?

822
00:50:50,564 --> 00:50:51,974
And you can change it, right?

823
00:50:52,014 --> 00:50:52,994
Very easily, in fact.

824
00:50:53,709 --> 00:50:56,439
Just the question is, will you convince others to use the

825
00:50:56,439 --> 00:50:57,929
same changes that you applied?

826
00:50:58,834 --> 00:51:02,864
And there's many millions of people using this thing now.

827
00:51:03,494 --> 00:51:07,164
It's quite hard to get people on a consensus for such drastic

828
00:51:07,164 --> 00:51:11,704
things, especially to ensure that no one else is still using the old

829
00:51:11,704 --> 00:51:12,984
rules that are currently valid.

830
00:51:13,944 --> 00:51:16,054
Specifically, if you want to get rid of inscriptions,

831
00:51:16,234 --> 00:51:17,704
that's certainly a hard fork.

832
00:51:18,644 --> 00:51:23,334
Like, taproot transactions are currently valid, and if we make these

833
00:51:23,374 --> 00:51:27,054
taproot transactions in the future invalid, that's a hard fork, right?

834
00:51:27,374 --> 00:51:31,324
So, like, technically speaking, like, it's not that nobody

835
00:51:31,324 --> 00:51:32,384
would want to have a hard fork.

836
00:51:32,384 --> 00:51:33,864
It would be great to hard fork Bitcoin.

837
00:51:33,874 --> 00:51:35,514
We could clean so much stuff.

838
00:51:35,824 --> 00:51:41,304
It's just a practical reality that breaking the hard fork use of a

839
00:51:41,304 --> 00:51:45,149
running protocol is extremely difficult and arguably, like, unethical.

840
00:51:45,639 --> 00:51:49,509
Because people have signed up to the previous system, right, and built

841
00:51:49,539 --> 00:51:53,049
businesses and, you know, stored their money in these types of scripts.

842
00:51:53,329 --> 00:51:56,509
If we now make them unspendable, like, what is that?

843
00:51:56,649 --> 00:51:56,969
No?

844
00:51:58,299 --> 00:52:08,959
so, so, um, when it comes to mining, I mean, there's, um, minor incentives,

845
00:52:08,979 --> 00:52:12,999
like, uh, the thing we talked about before, about, um, under the table

846
00:52:12,999 --> 00:52:19,324
payments to big mining pools, like, uh, To me, the obvious fix to this

847
00:52:19,344 --> 00:52:26,204
problem is to just make, um, get it into the brains of the hash salesmen,

848
00:52:26,234 --> 00:52:31,654
that they ought not be hash salesmen, mere hash salesmen, but actual miners

849
00:52:31,684 --> 00:52:33,384
and know what block they're mining on.

850
00:52:34,044 --> 00:52:38,739
Because I think the ethos among the individual miners is, It's better than,

851
00:52:38,789 --> 00:52:44,709
than maybe these bigger pools that might, might not be, be, uh, as, uh,

852
00:52:44,749 --> 00:52:50,779
concerned with the longevity of the, of the Bitcoin experiment, but, you

853
00:52:50,779 --> 00:52:54,359
know, more fiat minded and wanting, wanting a quick buck now rather than

854
00:52:54,359 --> 00:52:56,549
save the system in the long run.

855
00:52:57,014 --> 00:53:02,784
So, uh, right now it feels like we're trusting these bigger entities to,

856
00:53:02,834 --> 00:53:08,344
to have as much of a disincentive to, to destroy Bitcoin so that

857
00:53:08,344 --> 00:53:11,284
they won't, but, but it's tricky.

858
00:53:11,284 --> 00:53:12,704
Like it's a gray zone, right?

859
00:53:13,654 --> 00:53:14,454
What's your thoughts?

860
00:53:15,239 --> 00:53:19,909
I think Satoshi's genius in designing the Bitcoin protocol was that he did

861
00:53:19,909 --> 00:53:26,009
his best to separate different tasks that need to be done in the system into

862
00:53:26,009 --> 00:53:31,689
different like conceptual entities, and then to ensure that each of these aspects

863
00:53:31,869 --> 00:53:34,289
is distributed as widely as possible.

864
00:53:34,569 --> 00:53:37,869
And this is ultimately what it means that Bitcoin is decentralized, right?

865
00:53:37,869 --> 00:53:43,839
There is not one person that defines the set of rules, for example, or one person

866
00:53:43,839 --> 00:53:46,719
that writes the candidate block, right?

867
00:53:46,719 --> 00:53:49,779
Or one person that provides the proof of work for the candidate block,

868
00:53:49,779 --> 00:53:52,669
or one person that provides the signature for each transaction, right?

869
00:53:52,979 --> 00:53:56,239
Each of these things is distributed.

870
00:53:56,654 --> 00:54:01,274
And in the ideal case, in the original Bitcoin client, to every user, right?

871
00:54:01,554 --> 00:54:08,124
Like, the Bitcoin software in 2009 was mining by default for everyone, right?

872
00:54:08,124 --> 00:54:13,554
So, literally the entire stack of the operation was at 100

873
00:54:13,554 --> 00:54:15,134
percent of the users, right?

874
00:54:15,134 --> 00:54:18,254
There was no non validating, non mining users.

875
00:54:18,784 --> 00:54:20,124
In the beginning, right?

876
00:54:20,154 --> 00:54:23,424
We had perfect decentralization, so to say, right?

877
00:54:23,784 --> 00:54:29,354
And then if efficiencies kick in and economies of scale and division of labor,

878
00:54:29,614 --> 00:54:34,224
and we start to optimize each of these things kind of on its own and split it

879
00:54:34,224 --> 00:54:35,304
out into different branches of government.

880
00:54:36,184 --> 00:54:38,514
Yeah, specialized entities, so to say.

881
00:54:38,894 --> 00:54:43,654
And if you specialize on being the best hasher that you could

882
00:54:43,654 --> 00:54:50,114
possibly be, you just give up on being the best block candidate

883
00:54:50,144 --> 00:54:51,634
creator that you could possibly be.

884
00:54:52,624 --> 00:54:55,774
Because if you do the one thing that you're marginally better at and

885
00:54:55,774 --> 00:54:58,344
focus all your attention on that, you will be the most profitable.

886
00:54:59,224 --> 00:55:02,144
That's the division of labor, basically.

887
00:55:02,504 --> 00:55:04,564
Um, so, yes, it is.

888
00:55:05,044 --> 00:55:06,424
It is an issue.

889
00:55:06,864 --> 00:55:12,804
Um, and we, Bitcoin would be better off if we further distribute the risk

890
00:55:12,804 --> 00:55:17,004
and responsibility of each of these tasks to as many people as possible.

891
00:55:17,224 --> 00:55:20,384
And I think we've done a really good job, for example, of distributing

892
00:55:20,394 --> 00:55:21,714
the ownership of private keys.

893
00:55:22,204 --> 00:55:25,954
And like, there's, I don't know, many millions of private key holders

894
00:55:25,954 --> 00:55:27,804
on the Bitcoin blockchain, right?

895
00:55:27,804 --> 00:55:29,324
So that's, that's great.

896
00:55:29,654 --> 00:55:31,314
Um, but, and we have.

897
00:55:31,499 --> 00:55:33,419
Probably done this as well with hashers, right?

898
00:55:33,419 --> 00:55:39,449
There's a decent amount of quite large independent hashing institutions, right?

899
00:55:40,579 --> 00:55:43,689
Not so well with mining pools and actual block candidate

900
00:55:44,149 --> 00:55:46,039
creation, like, that's pretty bad.

901
00:55:46,459 --> 00:55:51,814
Like, there's two or three of them, so that's scary as fuck.

902
00:55:52,174 --> 00:55:56,404
Right there we've utterly failed and we've made Bitcoin way worse than it was before.

903
00:55:57,144 --> 00:56:02,724
And like, in this one metric of resilience, of decentralization, of

904
00:56:02,744 --> 00:56:06,604
distribution of risks, we made it a lot more efficient, but we made

905
00:56:06,604 --> 00:56:08,114
it much more vulnerable to attack.

906
00:56:09,014 --> 00:56:09,894
And that is a problem.

907
00:56:10,154 --> 00:56:12,314
Thankfully, a lot of people are working on fixing it.

908
00:56:12,314 --> 00:56:14,174
It's a really difficult problem, right?

909
00:56:14,174 --> 00:56:19,489
It's not that like, Like, there's some malicious, like,

910
00:56:19,489 --> 00:56:21,019
attempt of trying to break it.

911
00:56:21,029 --> 00:56:23,889
I mean, maybe there is, but the more likely answer is just bloody

912
00:56:23,889 --> 00:56:25,369
difficult computer science.

913
00:56:25,719 --> 00:56:31,079
And it just needs an insane, an insane amount of research and development

914
00:56:31,089 --> 00:56:36,419
before we will have tools that are even coming close to being actually adequate.

915
00:56:36,849 --> 00:56:37,049
Right?

916
00:56:37,049 --> 00:56:39,999
I'm not praising Satoshi's 2009 code as being perfect, because

917
00:56:39,999 --> 00:56:41,759
it was a pile of shit, right?

918
00:56:41,759 --> 00:56:43,499
And you could break it in a million ways.

919
00:56:43,899 --> 00:56:48,879
Um, so we've, we've improved a lot, but we're very far from done and

920
00:56:48,939 --> 00:56:52,419
because just to some extent the, the realities of the difficulty of the

921
00:56:52,419 --> 00:56:56,669
situation have caught on much faster than our ability to solve these.

922
00:56:56,819 --> 00:56:56,949
Well,

923
00:56:58,109 --> 00:57:03,969
Yeah, I mean, the, the problems that are currently existent in Bitcoin and,

924
00:57:04,029 --> 00:57:09,639
and that now we're, we're at Nostriga today and talking about Nostr, this

925
00:57:09,639 --> 00:57:15,229
sort of related communication layer in relation to Bitcoin, uh, you mentioned

926
00:57:15,229 --> 00:57:17,139
at the very beginning, Freedom Tech.

927
00:57:17,519 --> 00:57:21,959
So, we, when we last talked to you, you were, you were focusing on Wasabi

928
00:57:21,969 --> 00:57:26,359
Wallet and now obviously that has, that project has just been made open

929
00:57:26,359 --> 00:57:31,469
source, uh, essentially, uh, and so my question, my question to you on,

930
00:57:31,509 --> 00:57:36,069
on that is, uh, what are you focusing on in terms of Freedom Tech now?

931
00:57:36,729 --> 00:57:38,289
Nostr is definitely a highlight, right?

932
00:57:38,349 --> 00:57:39,939
Nostr is just incredibly cool.

933
00:57:40,299 --> 00:57:43,179
And it's so wild to think that Nostr is like two years old.

934
00:57:43,679 --> 00:57:47,539
Like, it's, it's not old, but look at the amount of stuff that we've built.

935
00:57:47,814 --> 00:57:50,364
In this short time frame, like how fucking powerful are we?

936
00:57:50,364 --> 00:57:51,784
It's incredible, right?

937
00:57:51,784 --> 00:57:56,434
If we get our act together and actually build on, on like such an open protocol

938
00:57:56,774 --> 00:58:01,944
and get people excited about it and people using it, like, it doesn't

939
00:58:01,954 --> 00:58:06,014
take us long to fundamentally change the pattern of speech on this planet.

940
00:58:06,894 --> 00:58:07,974
Wow, that's incredible.

941
00:58:07,984 --> 00:58:08,704
Like, we did that.

942
00:58:08,714 --> 00:58:09,844
That's, that's wild.

943
00:58:09,844 --> 00:58:10,874
And we're just getting started.

944
00:58:11,214 --> 00:58:11,364
Right?

945
00:58:11,894 --> 00:58:14,684
Like, think about where Nostr is going to be in five years.

946
00:58:14,694 --> 00:58:15,584
It will be wild.

947
00:58:15,604 --> 00:58:16,614
Absolutely insane.

948
00:58:17,014 --> 00:58:20,214
Um, so that, that's very bullish and very encouraging.

949
00:58:20,214 --> 00:58:24,844
And it's super exciting to work at such an early stage in the protocol, because

950
00:58:25,334 --> 00:58:26,726
there's so many obvious improvements.

951
00:58:26,726 --> 00:58:28,485
There's so many obvious use cases.

952
00:58:28,485 --> 00:58:32,001
There's so many low hanging fruits of how we can make it

953
00:58:32,001 --> 00:58:33,759
even better than it currently is.

954
00:58:34,159 --> 00:58:37,899
Alright, so we have something that's already great, and we know a million

955
00:58:37,899 --> 00:58:39,279
ways on how we can make it even better.

956
00:58:39,539 --> 00:58:42,429
Right, and you can be part of making a meaningful improvement

957
00:58:42,479 --> 00:58:45,069
in getting this to like an exponential blow off of awesomeness.

958
00:58:45,244 --> 00:58:49,344
Meaningful improvement in improvement of humanity, really.

959
00:58:49,589 --> 00:58:50,039
Yeah.

960
00:58:50,099 --> 00:58:52,709
Yeah, that's the other thing, like, that's why Freedom Tech is so

961
00:58:53,159 --> 00:58:57,829
exhilarating to work at, um, because like, like we're ending slavery.

962
00:58:57,859 --> 00:58:59,509
That's kind of a big deal, you know,

963
00:59:00,604 --> 00:59:03,234
Yeah, it should have been done at least 300 years ago.

964
00:59:04,589 --> 00:59:04,919
Yeah.

965
00:59:05,329 --> 00:59:06,299
No, it's, it's amazing.

966
00:59:06,299 --> 00:59:09,019
And well, and actually, so, so a couple of things here.

967
00:59:09,419 --> 00:59:13,699
First of all, we've talked about this a little bit, how Nostr seems

968
00:59:13,719 --> 00:59:19,629
like it's the playground that people wanted as an alternative to Bitcoin.

969
00:59:19,809 --> 00:59:23,299
In other words, people who went and started making shitcoins

970
00:59:23,549 --> 00:59:26,929
were basically just wanting a playground to do all this stuff.

971
00:59:26,939 --> 00:59:31,389
But now is, is, is Nostr basically the place where people can do that

972
00:59:31,389 --> 00:59:34,609
and channel their energies in a way that isn't going to break money?

973
00:59:35,499 --> 00:59:35,679
Yeah.

974
00:59:35,679 --> 00:59:36,879
I, I absolutely agree.

975
00:59:36,999 --> 00:59:41,109
So I'm, I'm very bullish on a lot of these use cases and, and one other area that

976
00:59:41,349 --> 00:59:44,499
currently interests me a lot, um, is, is just a zero knowledge cryptography.

977
00:59:44,879 --> 00:59:47,279
It's, it's, it's wild what's possible.

978
00:59:47,279 --> 00:59:48,659
It's, it's absolutely wild.

979
00:59:48,869 --> 00:59:50,699
Within the last five years or so.

980
00:59:51,434 --> 00:59:52,734
The theory has developed.

981
00:59:53,374 --> 00:59:56,834
And again, a lot of shitcoin projects putting zero knowledge

982
00:59:56,834 --> 01:00:00,904
proofs on blockchains and such, and I'm not quite convinced that we

983
01:00:00,904 --> 01:00:02,234
actually need a blockchain for that.

984
01:00:02,544 --> 01:00:04,014
I think relays are just fine.

985
01:00:04,334 --> 01:00:08,314
And so I'm quite bullish on having actual zero knowledge proofs much

986
01:00:08,314 --> 01:00:10,134
more integrated in Nostr clients.

987
01:00:10,134 --> 01:00:11,894
Like, you can do amazing things with this.

988
01:00:11,984 --> 01:00:14,234
Like, for example, anonymous web of trust, right?

989
01:00:14,264 --> 01:00:18,444
You could prove to me under an ephemeral anonymous identity, right, that you

990
01:00:18,444 --> 01:00:20,769
are in fact, On my follower list.

991
01:00:20,769 --> 01:00:23,279
Like, I'm following you, but I don't know who you are.

992
01:00:23,619 --> 01:00:23,969
Right?

993
01:00:24,239 --> 01:00:28,879
So, these types of things are trivial with zero knowledge stuff.

994
01:00:29,149 --> 01:00:33,089
And we don't have any size constraints or computation constraints in Nostr.

995
01:00:33,409 --> 01:00:35,549
Because it is not a global consensus system.

996
01:00:35,549 --> 01:00:38,649
Only the people who are interested in this proof actually have to, like,

997
01:00:39,069 --> 01:00:40,919
download it and verify it and such.

998
01:00:41,319 --> 01:00:45,309
Um, so, it's, I think we can do a lot of amazing stuff here.

999
01:00:45,349 --> 01:00:49,889
I still have to Kind of dig deeper in this rabbit hole, but

1000
01:00:49,999 --> 01:00:51,519
it seems pretty obvious wins here.

1001
01:00:52,094 --> 01:00:56,614
and do you think that driving these 180 IQ

1002
01:00:59,064 --> 01:01:02,324
young developers into Nostr instead of shitcoin development

1003
01:01:02,694 --> 01:01:04,804
is, is like moving them?

1004
01:01:05,159 --> 01:01:10,249
To do, to think more of what they should rather than what they could, uh,

1005
01:01:10,259 --> 01:01:14,929
because I think that's, that's sort of the main problem with this nerdy set

1006
01:01:14,949 --> 01:01:19,119
of shitcoin developers is that they, oh, I could do this if I just do this

1007
01:01:19,119 --> 01:01:22,669
and they, they focus on what they can do rather than what they should do.

1008
01:01:23,149 --> 01:01:28,234
And it's Nostr, uh, Changing the direction of that, are people

1009
01:01:28,264 --> 01:01:31,714
thinking more of ethical things while developing on this than

1010
01:01:32,419 --> 01:01:33,049
I hope so.

1011
01:01:33,679 --> 01:01:37,859
I mean, it's a, it's a big claim, right?

1012
01:01:37,859 --> 01:01:39,569
That like a piece of tech can

1013
01:01:39,794 --> 01:01:40,664
it's a bit of hopium

1014
01:01:40,699 --> 01:01:42,599
improve the morality of people.

1015
01:01:42,959 --> 01:01:48,189
Um, it's definitely a big claim, but it seems, it seems true.

1016
01:01:48,219 --> 01:01:51,909
Like, if you think about it in Bitcoin, like probably each of us,

1017
01:01:52,169 --> 01:01:56,229
um, our level of morality before we discovered Bitcoin and what it is now.

1018
01:01:57,064 --> 01:02:00,764
And our understanding of morality has substantially,

1019
01:02:00,864 --> 01:02:02,494
like insanely improved, right?

1020
01:02:02,784 --> 01:02:06,624
And I'm not sure if it would have happened, at least to this extent, without

1021
01:02:06,624 --> 01:02:08,274
being exposed to the Bitcoin technology.

1022
01:02:08,714 --> 01:02:13,714
And so, and Bitcoin is just money, you know, like, humans do a lot more

1023
01:02:13,764 --> 01:02:19,244
than, than buy stuff, you know, like, sure, money is incredibly important,

1024
01:02:19,264 --> 01:02:24,364
but it's far from the, it's far from everything of the human experience.

1025
01:02:24,684 --> 01:02:25,534
And I think Nostr.

1026
01:02:26,064 --> 01:02:30,314
We'll do a lot of the other stuff and Nostr has this freedom mindset embedded

1027
01:02:30,334 --> 01:02:32,384
into the protocol just as Bitcoin has.

1028
01:02:32,724 --> 01:02:38,094
And so I'm, I'm, I'm extremely bullish on seeing the people who get exposed to Nostr

1029
01:02:38,134 --> 01:02:39,864
and what it does to them in the long run.

1030
01:02:40,554 --> 01:02:41,574
So what happens first?

1031
01:02:41,574 --> 01:02:44,904
Hyper ossification or hyper ization and

1032
01:02:45,029 --> 01:02:46,059
both at the same time.

1033
01:02:46,254 --> 01:02:47,484
does one lead to the other?

1034
01:02:48,469 --> 01:02:50,819
Um, there's definitely synergies here, right?

1035
01:02:50,869 --> 01:02:54,269
Um, and, uh, yes, one leads to the other.

1036
01:02:54,389 --> 01:02:59,099
Um, there's, I met a bunch of people who got interested into Nostr first, and

1037
01:02:59,259 --> 01:03:01,209
then used Bitcoin for the first time.

1038
01:03:01,209 --> 01:03:03,139
It's a very common theme, actually.

1039
01:03:03,539 --> 01:03:08,614
Um, again, because Like, social, like, think of the, think of the, like,

1040
01:03:08,624 --> 01:03:11,264
average screen time of people, right?

1041
01:03:11,784 --> 01:03:14,834
Uh, how much is on social media and how much is in their banking application?

1042
01:03:14,834 --> 01:03:17,814
Like,

1043
01:03:17,994 --> 01:03:18,624
it, for sure.

1044
01:03:18,674 --> 01:03:23,294
you know, um, I think Nostr is going to be way bigger than Bitcoin in the

1045
01:03:24,674 --> 01:03:26,534
improvement of the human condition.

1046
01:03:26,604 --> 01:03:30,624
Then again, every time you press the like button or the retweet button

1047
01:03:30,624 --> 01:03:34,704
or whatever on your social media app, even the legacy system, you are

1048
01:03:34,704 --> 01:03:36,684
providing someone with some value.

1049
01:03:37,304 --> 01:03:40,634
That's why your account is valuable to, to, uh, Facebook's

1050
01:03:40,634 --> 01:03:41,864
and the Twitters of the world.

1051
01:03:42,999 --> 01:03:48,849
There is a value thing embedded into everything you do on the internet.

1052
01:03:49,189 --> 01:03:50,889
It's just, you don't get a tradable good.

1053
01:03:51,139 --> 01:03:51,649
No, no,

1054
01:03:51,839 --> 01:03:53,269
sell the like to someone else.

1055
01:03:53,479 --> 01:03:55,199
no, uh, not at this point.

1056
01:03:55,279 --> 01:03:55,499
Uh,

1057
01:03:55,509 --> 01:03:56,939
know, Telegram did that, actually.

1058
01:03:56,989 --> 01:03:57,759
Uh, I just saw.

1059
01:03:57,759 --> 01:03:59,149
They have now a star emoji.

1060
01:03:59,409 --> 01:04:03,399
If you send the star emoji, you can send the star emoji back to the

1061
01:04:03,399 --> 01:04:04,599
company, and they will give you money.

1062
01:04:05,129 --> 01:04:06,259
So, voila.

1063
01:04:06,389 --> 01:04:08,199
It's basically a shitcoin, but it's a star.

1064
01:04:09,933 --> 01:04:13,843
Well, so, so, is it more important to fix money or the other stuff?

1065
01:04:18,483 --> 01:04:19,373
Well, that's a big one.

1066
01:04:20,123 --> 01:04:20,723
Um

1067
01:04:24,168 --> 01:04:28,918
Both again, because like money is only half of every transaction, right?

1068
01:04:28,938 --> 01:04:35,418
And so like, maybe like, maybe the earlier example of the marketplace for, for, for

1069
01:04:35,418 --> 01:04:39,688
Bitcoin block space is perfect because why did Satoshi include the marketplace,

1070
01:04:39,708 --> 01:04:42,178
the other stuff together with the money?

1071
01:04:42,478 --> 01:04:44,388
Because it was kind of essential, right?

1072
01:04:44,418 --> 01:04:49,188
You, like, you need to have both at the same time in order to live, right?

1073
01:04:49,188 --> 01:04:52,058
You need to speak, you need to advertise your products, you need to

1074
01:04:52,058 --> 01:04:53,778
negotiate with the customers, right?

1075
01:04:53,778 --> 01:04:57,348
You need to convince them of the value that you will provide to them, and

1076
01:04:57,348 --> 01:05:00,818
then you need to receive the money and tell them that you've received it, and

1077
01:05:00,818 --> 01:05:02,328
ultimately hand over the goods, right?

1078
01:05:02,328 --> 01:05:06,578
So there's a lot of human interaction into every trade, and the money aspect

1079
01:05:06,578 --> 01:05:12,693
is just Like, one small part of this long interactive chain of protocol, basically.

1080
01:05:13,123 --> 01:05:17,473
Um, so, yeah, I think we need both at the same time.

1081
01:05:17,543 --> 01:05:23,033
And we're just discovering upgrades to each of them as we move along.

1082
01:05:23,433 --> 01:05:24,853
But this has always been in synergy.

1083
01:05:24,853 --> 01:05:27,433
Like, the internet is way older than Bitcoin, right?

1084
01:05:27,433 --> 01:05:29,953
So arguably, we need the other stuff first, right?

1085
01:05:29,953 --> 01:05:32,603
We needed like 20, 30 years of other stuff before we could

1086
01:05:32,603 --> 01:05:33,743
actually come up with the money.

1087
01:05:33,803 --> 01:05:37,333
so, so fix the money, fix the world that goes both ways, then fix

1088
01:05:37,333 --> 01:05:38,603
the world and you fix the money.

1089
01:05:39,720 --> 01:05:42,310
No, but seriously, we actually talked about this.

1090
01:05:42,390 --> 01:05:48,560
Uh, in that, uh, maybe an analogy to, uh, that the internet needed to

1091
01:05:48,580 --> 01:05:53,400
develop in a centralized way because the, literally the hardware and

1092
01:05:53,400 --> 01:05:59,725
everything, uh, the architecture, the client server model was literally a

1093
01:05:59,725 --> 01:06:01,450
centralized and centralizing system.

1094
01:06:01,750 --> 01:06:03,840
Model and that needed to exist first.

1095
01:06:04,030 --> 01:06:09,410
And then, but then the analogy is that is that gold was centralized

1096
01:06:09,470 --> 01:06:14,340
naturally in the sense that physically the physical constraints of gold made

1097
01:06:14,340 --> 01:06:19,580
it so that it naturally centralized into banks and then fiat solved that

1098
01:06:19,580 --> 01:06:23,030
problem to sort of decentralize it, but it, but it broke everything.

1099
01:06:23,360 --> 01:06:28,040
So now the mechanism of fixing the money and decentralizing the money was gold.

1100
01:06:28,200 --> 01:06:32,300
Bitcoin, but the corollary for decentralizing the

1101
01:06:32,300 --> 01:06:34,700
communication is, is Nostr.

1102
01:06:35,150 --> 01:06:38,670
So both things have kind of happened in a, in a parallel.

1103
01:06:38,690 --> 01:06:40,710
That's, that's what, what we were discussing.

1104
01:06:40,710 --> 01:06:41,050
So,

1105
01:06:42,275 --> 01:06:44,465
That is the alarm telling me I should go on stage.

1106
01:06:44,650 --> 01:06:44,960
Oh,

1107
01:06:45,020 --> 01:06:46,190
Oh, okay.

1108
01:06:46,385 --> 01:06:50,305
So, uh, but I still have a couple minutes, so we'll wrap it up.

1109
01:06:51,080 --> 01:06:53,210
can't we find you online, Max Hillebrand?

1110
01:06:53,220 --> 01:06:54,770
Because you can't be found online.

1111
01:06:54,770 --> 01:06:55,090
Can you?

1112
01:06:55,166 --> 01:06:56,155
Well, I'm

1113
01:06:56,165 --> 01:06:57,085
Nostr for sure.

1114
01:06:57,975 --> 01:07:00,605
Max at TowardsLiberty.

1115
01:07:00,605 --> 01:07:01,035
com.

1116
01:07:01,315 --> 01:07:05,895
You can send me mail, notes and sats to that, which is, by the way, crazy, right?

1117
01:07:05,895 --> 01:07:09,095
That we can have like this unique identifier to get, like, all

1118
01:07:09,095 --> 01:07:10,835
of your needs settled is wild.

1119
01:07:11,255 --> 01:07:15,650
Um, and yeah, like, uh, Check out, uh, lodging of Wayfaring Men.

1120
01:07:15,830 --> 01:07:18,380
That's, I guess the, the main shill of this video.

1121
01:07:18,650 --> 01:07:20,030
And I made the audiobook for it.

1122
01:07:20,120 --> 01:07:21,350
Uh, it's on a podcast.

1123
01:07:21,560 --> 01:07:25,430
The podcast is by the author, um, uh, um, Paul Rosenberg.

1124
01:07:25,790 --> 01:07:28,570
And, uh, it's called Parallel Society, right?

1125
01:07:28,570 --> 01:07:29,500
So check that out.

1126
01:07:29,830 --> 01:07:32,950
Um, right now we've released like the first episode.

1127
01:07:32,950 --> 01:07:36,160
The others will, or first chapter, the others will come shortly thereafter.

1128
01:07:36,730 --> 01:07:37,180
Um.

1129
01:07:37,655 --> 01:07:41,545
And the other book recommendation I should highlight, which we haven't mentioned

1130
01:07:41,545 --> 01:07:45,015
yet, is Cryptoeconomics by Eric Voskuhl.

1131
01:07:45,275 --> 01:07:48,925
Most of what I said here was very much inspired by that book.

1132
01:07:48,925 --> 01:07:51,665
He has the most rigorous understanding of Bitcoin.

1133
01:07:51,665 --> 01:07:53,345
It's by far the best Bitcoin book.

1134
01:07:53,365 --> 01:07:54,865
Sorry, Knut, but you have no chance.

1135
01:07:56,375 --> 01:07:58,565
So I also did the audiobook for that.

1136
01:07:58,895 --> 01:08:00,355
Just search for Cryptoeconomics in your

1137
01:08:00,590 --> 01:08:01,340
audio book though.

1138
01:08:02,340 --> 01:08:02,990
No, it's not.

1139
01:08:02,990 --> 01:08:11,580
When you have to, when you have to read tables of math formulas,

1140
01:08:11,610 --> 01:08:13,610
it's, it's starting to fall apart.

1141
01:08:13,610 --> 01:08:16,970
But there's a lot of verbal logic in the book that goes very well.

1142
01:08:17,500 --> 01:08:19,460
Just get the free PDF for the actual graphs and

1143
01:08:19,870 --> 01:08:24,965
And keep using Wasabi and fire up your own coordinators and whatnot, right?

1144
01:08:24,966 --> 01:08:30,795
Go

1145
01:08:30,850 --> 01:08:32,920
been the, this has been the Bitcoin Infinity Show.

1146
01:08:33,110 --> 01:08:33,960
Thanks for listening.

1147
01:08:34,180 --> 01:08:35,140
Now get on stage, Max.

1148
01:08:35,140 --> 01:08:35,970
Don't want to make you late.

1149
01:08:36,180 --> 01:08:36,390
Bye

1150
01:08:36,485 --> 01:08:39,035
the book, it's almost as good as Erik's.

1151
01:08:40,325 --> 01:08:41,245
that's not what I said.

1152
01:08:43,170 --> 01:08:44,010
right, that's it.