The Case Against BIP-110 with Erik Aronesty | Bitcoin Infinity Show #201

0:00 Eric, welcome to the Bitcoin Infinity Show. Nice to have you here. Hi, yeah. Thanks a lot. Nice to be here. It's nice meeting you. Yeah, nice meeting you too. I mean, we haven't met before. I don't think we've had many interactions at all. We had some interaction last week and that's about it. But you are just, you're a seasoned Bitcoiner too. Yes. I think I can call myself that now after a decade. We have slightly different memories of the block size wars, I think. But first of all, can you give our listeners a TLDR on who you are and your backstory, why people should listen to you?

0:41 Okay. I'm a software engineer with 30-some years' experience. I published a number of cryptography papers. And I was a CTO of a security company, specifically a multi-factor encryption storage company. So I know a little bit about security, a little bit about software. And I've been involved in Bitcoin for well over 10 years now. And, you know, I've been in and out of the IRC channels, done some, you know, code reviews and that sort of thing. So, yeah, I'm somebody with a significant amount of experience and some expertise in the area.

1:22 Yes, and you had a backstory with BIP148, it's called, right? The user-activated soft fork back in the block size wars. So can you give us your version of what happened during the block size wars, please? Sure. So I, at the beginning, I was all over. Back then, Bitcoin Reddit was where a lot of conversation was happening more than Twitter now. I was on there and I was pretty firmly advocating for the larger block size because I thought, you know, the most important thing about Bitcoin is for it to be used every day. I want coffee on Bitcoin. I still do. Personally, I use BitRefill to get that done, but I do wish I didn't have to.

2:07 And so for me, it seemed to make a lot of sense to just let transactions be as fast and robust as they want. Now, obviously, there's a lot of arguments against that. The biggest argument was, hey, it's expensive to run a node. And I thought, you know, people just pay extra money. Hard drive space is cheap. What's the big deal? But the other argument, which was maybe not talked about as much, was the fact that miners need their subsidies. And this is a longer term thinking. So this is actually what convinced me. yes people need to run nodes i believed that you know technology was cheap software was getting cheaper hard drive space was getting cheaper and people would always be able to run nodes if they were an economic player um obviously non-economic nodes don't really matter that much in the big picture of things but if you're sitting on a whole bitcoin and you're spending and you're receiving transactions and you're emerging somewhere that's a node holder that with some economic weight.

3:01 Hardless, when I thought about it a little more, I realized that if blocks were unlimited, people would be able to spend a Satoshi to get a transaction done, and there'd be no reason why miners wouldn't include it. And as a result, blocks would not subsidize miners well. that some competition for fees is required and that small blocks are ultimately best for decentralization for bandwidth reasons more than storage. So there's like many, many layers to this as to why small blocks are better. They're better for bandwidth.

3:41 Storage, I think, is secondary. I always will because I just don't think it's a big deal to most people to buy an extra $40 hard drive. But bandwidth is huge. I have run a Bitcoin node that is open public and I no longer do so because the bandwidth just kicks my connection. People use it for their mobile devices all day long. It gets spammed and attacked all day long. It's just not really worth it for me. And so imagine if that's, you know, times 10, that would be horrible. So you'd have a lot fewer people running public nodes. And that convinced me. Bootstrapping a node is still expensive. That would be worse as well. So there's a lot of reasons to keep block sizes small.

4:22 But the initial reason for keeping block sizes big, which is I want people to use Bitcoin every day, and I don't think simply sitting on Bitcoin is good for the network or for the value of my coin. The value of everyone else's, that remains. So that's why I've sort of pivoted away from being somebody who cared about Blickbox to somebody who cares about usage and using it as a means of exchange. Okay, before we go on, I'd like to offer you my point of view on this and why I'm not worried about any security budget or why I'm not worried about miners and miner revenue. And if we look at Bitcoin today, the current hash rate is around 900 exahashes per second.

5:08 That is 9, 0, 0, or a 9 followed by 20 zeros worth of guesses to find the next block. And this block has to follow all the rules, right? So it's orders of magnitude more secure than it needs to be. And also, if we have the difficulty adjustment algorithm, so mining is always going to be a very competitive game. where there's very small margin. I don't know what you mean by needs to be, but go on. Well, have you noticed any double-spent transactions lately? I think it's been working flawlessly for, what, 16, 17 years now, right?

5:52 I just don't know what the definition of need is, that's all. I feel like it's a... I get it's big. It's an arbitrarily big number, but I don't... And I do know it's very big, but I don't know what the word... I think that the word need can be defined more precisely yeah okay so so let's try to do that like would a hundred x would a 900 petahashes be enough for gigahashes no it's not about the hashes i think that's that's clear um it's definitely more about the total value of the hardware deployed by all the miners all right yeah so and and i'd say it's more i'd say it's more about the total value of the nodes uh as as a counter to that because this the the node the initial the cost of running a node although as you say it's a small problem now and if you're running a significant node you you will can probably afford it anyway the problem is that it's a forever problem as we add more data to the time chain or blockchain, it's bound to grow forever.

7:01 And I think that increasing the block size back in the block size wars would have been a super bad idea because it sets a precedent for doing that again. It's hard forking and setting a precedent for very bad. And we did increase it. We did increase it, but in a very subtle way. We increased it via a soft fork instead of a hard fork, right? Yeah. But the increase, I think, was was I think fairly modest. I think, you know, the maximum was like four megabytes now. And I think that most people at the time thought, well, I could handle four megabytes and no more than that. And I think four megabytes is probably too big, personally.

7:41 Yeah. Same here. Same here. I wish it was smaller. I wish it was in hindsight. Yeah. So, yeah, in hindsight, I do think the ratio of witness expense versus, you know, non-witness expense feels right. I think that was that ratio was was was based on good computation, good calculations. So I just think the the total should just be smaller. Right. We should probably have like a 500 K and a two megabyte or whatever. You know, like a cut it in half. I think we feel a little better. But again, it's an arbitrary thing. At least it's fixed. We never have to raise it ever, ever, ever. I'm not worried about that.

8:23 No. And also we have layer two solutions. We have Lightning to offload. Lightning offload quite a bit right now. Lightning obviously can't scale to everyone using it on a daily basis. There are minor changes we could make to the soft work changes we could do to make it. so that everybody could use lightning. The other point where I have a slight disagreement is the I want Bitcoin to be used, and that meaning as a medium of exchange over space rather than time. Because from my knowledge of Austrian economics, money is never idle. It always provides its owner with some value.

9:05 At the very least, a psychological comfort that I have this money, I can spend it at some point in the future. So I think long-term hodling over generations is a very valid use case, if not the best use case for Bitcoin. I think it's a great use case. I think that without use over time, there are other risks. And it's not just fees. Fees are important. They will get more important slowly over time. Right now, I think the total mining hardware deployment is in the $40 billion range. So it's plenty. No one's going to double spend that. No. So do you foresee a future where hodlers are incentivized to mine simply because they want to secure their Bitcoin?

9:53 Absolutely. If I personally owned, you know, a billion dollars worth of Bitcoin, which I don't, but I wish I did. No, if I personally owned a billion dollars of Bitcoin, there's no doubt in my mind I would run, you know, $10 million worth of mining just to keep it decentralized. Why wouldn't I do that? A, it's profitable. And even if it's not profitable, I could break even. So absolutely. Holders becoming miners should naturally occur in order to secure the system. That's perfectly reasonable. Yeah. That leads us to a proof-of-stake world, which I don't love. No, no, no. Okay. But other things, though, such as I got a beautiful, often too, the 21 Energy home mining heating system.

10:42 So it's really for heating your home primarily. The Bitcoin mining is sort of a side effect. But I run that, of course, because why wouldn't I? It's giving me some money back on my electricity bill. And if I can be prudent and hodl that for a decade or seven, then it's bound to be worth more in the future because of the wonderful number go up technology. That's how I see that. And I think these secondary use cases for miners in terms of heating stuff. I've done a ton of mining, and I can tell you a little bit about mining economics. I've invested a lot of my money in mining over the years. Yeah. And so what do you foresee for the future? I guess my real question is, is this security budget FUD, is there anything real to it or will all those things sort themselves out, especially given that Bitcoin will, if you take for granted that Bitcoin doubles in price every four years, there's no problem, right? Because then at least not until 2140.

11:40 Well, that's true. Bitcoin doubling in price helps. The problem is the value of money is going down and the use of Bitcoin in institutional transfers is going up. And it's only a matter of time before the incentive for a double spend attack begins to approach the value of the ASICs in production. So, you know, it's a question of whether, I think if we continue on the trajectory, if we continue the way we are now with, you know, subset fees and almost no chain usage and subsidy as the only source of revenue, it could be maybe 10 to 20 years before it matters.

12:26 before people are like, wait a second. Holders now have to mine. Stakeholders are now become sort of this sort of double, double. Right now, there's sort of a trifecta of miners, holders, and merchants and exchanges, right? You've got the holders, which are very important. They run their own nodes. They're validating their own transactions. You've got the miners, which have the investment. And then you have the exchanges and merchants that are performing the day-to-day transactions and things. And they sort of have, it's like this, a nice separation of concerns and they all have different, and it keeps Bitcoin somewhat stable. The sort of Nash equilibrium is somewhat stable between those different entities.

13:10 But if you shift to where all the holders are also miners, now the merchants and exchange holders become nobodies. The only thing that matters are the holders. And I'm not sure what development looks like in that world where transaction usage becomes less important over time. Why wouldn't merchants run their own nodes, though? Well, they do. They will. They always will. It's just when I say important, I mean, you know, there's a balance between the importance of miners and the importance of node holders and the importance of coin holders. Not all coin holders run nodes Fact Nope Absolutely not Not all merchants Almost all merchants run nodes And all miners run nodes And then the rest of the nodes that are on the network that are none of those three, they're developers, volunteers, people who have a point, people who believe in sovereignty and just want to run their own nodes.

14:13 And that's important, but it's less important than those three groups. When I say less important, I mean, if there were ever a hard fork and all three of those groups switched over, that's the hard fork that would have all value. I mean, it's pretty abundantly clear that that's the hard fork that would obtain all of the value and the people, the hobbyists and the developers and the people who love Bitcoin would be left out to drift. And the balance between those three communities, I think, is important so that the hobbyists aren't left out to drift and the developers aren't left out to drift. But it's a very tenuous balancing act. And that's what I was talking about before. There's the stuff people talk about in Bitcoin development world, and there's the stuff they don't talk about.

14:55 And I think people were worried for a long time about the subsidy declining over forever. And they don't want to talk about it because they don't want to admit that Bitcoin is vulnerable. And so they come up with other reasons why they need usage. They say, oh, it's because, you know, we want vaulting and we want privacy. And I think those things are great. I actually firmly believe that Bitcoin should have a privacy layer. I think it should have a vaulting system. I think that covenants are important. I think all that stuff is important. But I think the secret reason that people don't love to talk about is the reason why we don't have privacy is they are afraid of the government. Everyone's they saw what happened to Litecoin getting banned from different exchanges. And they're like, oh, I don't want that to happen to Bitcoin. So we're not going to put privacy on Bitcoin.

15:35 It's a simple fork. The code's been proven. It's in production. People have been using Litecoin for a while now. There's millions and millions of dollars tied up in the Mimblewimble blocks on Litecoin. Why not take that proven technology and add it to Bitcoin? That's kind of what Litecoin's for. And the answer is people are afraid. They don't talk about that. Really, is that the only answer, though? Mimblewimble? I think it is. Mimblewimble, like, putting more data on chain? No, not really. Are there trade-offs? I don't think it's putting more data on chain. No, it's Mimblewimble blocks are not particularly burdensome to nodes or miners.

16:17 Would that require a hard fork, by the way? No, it's not a hard fork. Mimblewimble is a soft fork, opt-in, privacy layer that you can use or not use. From what I've seen on the Litecoin network is it encourages usage. People use it. They use it instead of using mixers. And wouldn't it be lovely if I didn't have to use a mixer, if people didn't have to go to jail? It's a terrible thing that happened because we don't have privacy on Bitcoin. And it would be nice if Bitcoin supported that. But I think people are, I think the root reason why people are worried is, oh, my God, don't change this thing because we've got ETFs, we've got institutions, we've got governments, and we need to get them all on board first before we do anything to change that.

17:03 And it's sort of like, I don't know, you're begging government for its approval. And at some point, that is a losing proposition. I don't know when it becomes a losing proposition. But at some point, you know, there's no doubt in my mind that the government is not Bitcoin's friend. No, no, no. It can't be. Like, Bitcoin is the antidote to the government, right? It's the antidote to the government. But to be fair, the pay joins and coin joins work. They still work. I mean, you know, you have to know what you're doing, but there's nothing hindering you from doing it. No, no, they're perfectly fine. The user interface is actually good these days. You send your coin somewhere, you sit on it for a week and then you bring them back and then they're clean.

17:45 It's not difficult. It's a little more expensive than I think it has to be. I think that one of the interesting facts is that almost any covenant opcode can be turned into an on-chain coin joint protocol. Did you know that? Almost anyone. I can't say that I did know that. I'm skeptic about covenants, but mostly because all the people I see on X that have covenants and CTV in their handles are saying absurd things every now and then. And I base my skepticism on that. And I'm in camp, like, if it ain't broke, don't fix it. And do as little as possible.

18:28 Because every time you do anything, you change the incentives. That's true. You definitely risk disturbing the equilibrium we have if you change anything. However, we do change every four years, inevitably. And the equilibrium will get disturbed. And it has been in the past, and it will get disturbed again. Well, I wouldn't say that call the halving a disturbance because it's absolutely planned. It's planned, but it seems to shake up the space every time a little bit, doesn't it? I mean, every four years. Well, if you're unprepared, well, why are you? You haven't done your homework then. Right. That's on the user, not on the network.

19:09 Like everyone knows that there's a halving. I don't know of a single Bitcoiner that isn't aware of the halvings as a thing. And yet miners always seem to panic and struggle and sell. Yeah, but this is the scariest part because miners seem to be the least knowledgeable about the philosophical impacts of deflationary money. To me, it seems like many of the large miners are the most fiat-minded people in the Bitcoin space. And that's what I'm so afraid of. Because they have to sell all the time. They have to pay the rent. You're forced as a miner to sell on a regular basis and switch in and out of fiat. One of the biggest problems Bitcoin has is the onboarding problem.

19:52 How do you obtain Bitcoin? And there's no great way of doing it. Exchanges are horrible. You're showing your driver's license on a screen. It's terrible. I acquired most of my Bitcoin in person. For many, many years, I would meet people. some dude would drive up in a car and I would hand him cash at a Starbucks Have you heard of Vexel? Yes A super interesting project where you can so check out Vexel V-E-X-L where you can The app basically uploads hashes of your phone book contacts so no actual numbers and then that's on one server in one jurisdiction and then all the encrypted messaging is on another server in another jurisdiction and they match you and say that you have this and this friend in common would you like to meet this guy in a dark alley somewhere and if you know the same people yeah the the likelihood that he will scam you is of course lower it's a reputation-based system and it's really big in prague at the moment but it hasn't really taken off but i think such bisque is one thing and there are solutions but but i would definitely what i always recommend to people is Like if you're buying on an exchange, I mean, keep your KYC stack and your non-KYC stack separate.

21:14 Like that's the crucial thing. And also from having worked slightly at an exchange in some type of advisory role, I know that they have to do in very many countries, they have to do the chain analytics or chain anal thing and track everything. But basically no flags are raised before you get a large sum of money into a bank account. So if you sell for cash, no one's going to scour the blockchain for cash payments and assume. That just doesn't happen. So as long as you don't buy a super yacht.

21:55 Keep your spends small. Keep your cash. If you're going to do online transactions, keep them small. And yeah, don't worry about your cash too much. And again, keep it small. There was that guy that was arrested in Florida for buying and selling Bitcoin for cash not long ago. Well, maybe it was a while ago. But that happens. Once you hit a million or two million dollars in transactions, the government turns its ugly head on you and calls you a money transmitter and then puts you in jail. And that happens all the time. It's a risk anyone runs trying to just obtain Bitcoin in a way that's somewhat traceless because you don't necessarily want the government knowing everything about your Bitcoin.

22:37 And this is one of the reasons why I like covenants, because I think, you know, if you have something like OpsiTV on the chain, covenants are very simple. It's just when I you give me a you give me a you give me a you give me a an address and your address is committing to a future spend. You as the recipient get to choose Whether or not you use covenants They're not forced on anybody And that's a mistake that people have They think it's like, oh, it's forced on you It's not You choose because you want to tie it up in a certain way And the result of tying it up in that way Could be, imagine Tying it up with nine other people In a joint Now you've got this lovely thing Where you've committed to future transactions That are going to occur in a regular cadence And then are going to be exited And now basically you've produced a coin join with no coordination at all or with minimal coordination.

23:31 In fact, you can show that most covenants can be turned into clever coin join protocols that reduce coordinator necessities. Anyway. Yeah. It sounds like something my mother will adopt instantly. The nice thing about it is that you can make it easy and standard and baked into wallets if you want. Yeah. All right. Back to the block size wars. And this user-activated software. I'm keen to hear the entire story there. So basically what happened was I submitted a pull request. So somebody else wrote it UASF fork. I think it might have been SIPA, but I don't remember who wrote it. I just can't recall. I have to go look at my GitHub history.

24:11 And it was just sitting out there as a fork, but no pull requests had been submitted. And there were also minor changes that had to be done before it could be a pull request. It was sort of intended to be a, you download this version of Bitcoin and run it and signal UASF. And so people were downloading it, running it and signaling. Some significant economic nodes were signaling. And eventually what I did is I, why isn't it a pull request? I made what little changes were needed. I provided a detailed description and I submitted a PR. And when I submitted a PR, I got a bunch of people. I remember Luke was one of them that texted me or whatever or DMed me and were like, hey, thanks a lot. that's something we couldn't have done.

24:53 And again, it was like, I'm involved with Bitcoin Core. Bitcoin Core could not have done that politically. And I found that interesting on many levels. One is 100% of the Bitcoin Core developers were aware of the political ramifications of submitting a pull request. That's a strange place to work. That's not a regular, I work at a lot of software companies, but consider that they all thought it should be done and nobody was willing to do it. They were willing to advocate for it and talk about it, but they needed their rough consensus first. But, you know, like they had to get everyone on board before any pull request was submitted. The political nature of Bitcoin is deep and entrenched and old and is annoying. It is not. I get it. I understand why it happens, but it's just what is what it is.

25:39 So so what you see on the surface, the comments on pull requests and the posts on Twitter is not always what is actually happening. Pull requests are not happening for reasons that they're only willing to discuss in private chats. And and that's true for a lot of things. And so it does make you want to take a step back and sort of question motivations of things. And I get that. You know, I think that's that's it's important to know that there is a there are there's a public face and a private face. of core and the core contributors and you can tell the difference too the people who submit you can go to the github history and you can see there's lots of people who submit all sorts of crazy prs that are just delete delete delete delete um and then there's the ones that people listen to um and there are different groups of people yeah and and i think that is a part of the criticism that has come from uh the knots campus specifically here in the last couple of months it's just this uh how core refuses to listen to certain voices and the politicization of the like john attack had a great uh talk in in san salvador about how woke ideology has sort of crept in uh it's crept the word like creeping into to core over the years starting back in 2019 even there's diversity hires and so which i i know that a lot of bitcoin hodlers don't agree with any of those politics. A lot of Bitcoin hodlers are ANCAPs and super conservatives.

27:10 So what are your thoughts on that? I don't believe you should ever judge open source code by the behavior of the people who contribute to it. You should judge it on the code. And I think that's difficult because if you are not a very technical person and you are not somebody who reads code and understands it, all you have to go on is, do I trust this guy? And so now you have this social signal which is not a good signal because people are flawed People are wrong I remember when I was at that security company my CEO was a big Bitcoiner early Bitcoiner And I wanted to hire Peter Todd. I texted him. I had talked to him a number of times. And I was like, I want to bring this guy in just for a week to review our cryptography because I think he's really good at it. And he is. He's an empirical cryptographer. He's not a theoretical cryptographer. He's not someone who publishes big, long papers about proofs. But he has a really good instinct about when stuff is broken. And I was writing code and I was a little worried that it might be broken.

28:26 And I was like, I just want to bring him in and take a look at it. And Tan said, don't work with that guy. He's so difficult to work with because he knew him. And I said, that's interesting. You know, yeah. Is he difficult to work with? Maybe that's true, but I don't care. See, that's the difference between me and my CEO. I didn't care. I was willing to work with somebody even for a little bit of time who might have been toxic and difficult to work with and had a hard personality in exchange for getting a lot of expertise. And I always will be that way. I would much rather have worked with somebody who disagrees with me and calls me on my shit and says you're wrong about these 10 things and you're an idiot than somebody who agrees with everything they say. And so, yeah, I don't care what the political environment is that much. I care when people are keeping secrets, keeping the truth away. Those matter to me. And I care when people are, you know, submitting pull requests with good code that make sense and strengthen Bitcoin and solve bugs and are aligned with the network and the incentives and the maintenance and the stewardship of the network.

29:33 That, to me, matters more than anything else. However, the good example is the uncapping of OpReturn. I think it's politically handled as badly as it possibly could be. I understand the arguments. There were subset fees being transmitted on the network for, you know, months that were filtered by policy, but were mined so frequently that it was the majority of transactions. So I was just showing you the policy wasn't really stopping anything. I understand that OpReturn is the most desirable place on the blockchain for an undesirable thing, spam. And when I say that, I mean it doesn't create a UTXO. It is easily prunable, filterable.

30:16 It's a known place where junk lives, so we can block it from the block explorers or things like that. So I understand the rationale. And then also, finally, compact block relay protocol requires that mempools are in sync with what miners are doing. Why is that important? Because it reduces the amount of work that nodes have to do. That's all. It just reduces the amount of work. If you can know that your mempool matched the next block, then you don't need to compute as much when you accept that next block. When the block comes down, when the block is mined. And why is that desirable?

30:57 Just less work for nodes is good because you want to keep the burden on nodes low. Same reason why small blocks are good. Yeah, all right. So I think there's a difference in, okay, I've heard this explanation a million times because I've interviewed a ton of people on both sides and I'm super into this. There's also one more reason too that I haven't given, but go on. Okay, so if you look back at the original Opera Term Wars in 2014, and how both Vitalik and this counterparty guy has said explicitly that they left Bitcoin and started their own shitcoin chains because the developers in Bitcoin were clearly signaling that we don't want your spammy shit here.

31:50 Like, we're going to optimize for money and not for anything else. So I do think that the argument for the Nought side and for the BIP-110 side now is that we want to signal that as hard as we can because these are squatters. They are playing checkers in the chess club. We don't want them here. They are exploiting what Luke describes as a bug. I like the word exploit because I think they're exploiting something. I don't necessarily view it as a bug, but it's an exploit. And the question becomes, can something be done about it? And then should something be done about it? And if that's what?

32:30 And I think this is what splits the community right now, if this thing is going to do anything or not. So what's your take on BIP-110? Do you like parts of it? There are parts I like. So anything that restricts operand size in the witness segment is good. So the 520 byte limit's hard, you know, hard capping that. I like that because I don't think there is a legitimate or even discussed use case for arbitrarily large, you know, push, for example, right? Like there's just there's no reason for arbitrarily large arguments.

33:15 the the one thing you could say sorry sorry for interrupting but is that because that incentivizes shitcoinery on bitcoin basically like these large things incentivizes put you can always do shit coins on bitcoin right colored coins were shit coins on bitcoin that that you can't that you can't change that there's nothing you can do about no no no but you can make it more uh you can make it less uh you can make it more costly to to have to adapt all the time no because if you want i could come up with a protocol tomorrow that just says, you know, any transaction that's, you know, of the following shape, you know, is a shitcoin. Look up the colored coins protocol.

33:55 I remember the colored coin thing. But the thing is, it doesn't take off because you can't run the same scam twice. Or sometimes you can because there's always a bigger fool. But the thing is, these things go away. Color coins still work. Yes, but no one uses it. It's a wonderful protocol for shitcoins on Bitcoin. It's better than all the other ones. It's better than OpReturn. Why would nobody use it? It's a better protocol. It's more efficient. It works. I can get a wallet for it. I can release a shitcoin tomorrow. So the argument that we're making it harder when the easiest possible thing works flawlessly. But the easiest thing is already easy.

34:35 We're not making it more expensive. We have a really good protocol for shitcoins on Bitcoin. Nobody's using it. So the reason why people are coming up with new protocols for shitcoin on Bitcoin is, like you said originally, it doesn't matter that the old thing is cheaper, easier, faster and better. It matters that the new thing is new. And there will always be a new thing. And by blocking whatever the current new thing is, it isn't going to prevent someone else becoming a new thing. No, but it does send a clear signal that these things aren't welcome here at all. And I think that that signal does have value. Like you can't say it has zero value. So, and the main reason I like this soft fork is that it's temporary.

35:18 So it's sure it's doing something. We'll see what happens, but at least it buys us some time to fix the exploit. If you're going to do a temporary soft fork, it should be focused and targeted to the most abusive spam on the network. And it should not be... a collection of popular ideas. And BIP-110 is really a collection of popular ideas because the minimal soft fork needed to invalidate the Ordinals protocol, which is the most abusive protocol right now, maybe the second one is runes.

36:00 The minimal soft fork required, if that's what was up, I don't think anybody would even object to it except the Ordinals guys, which no one cares about. I think if somebody put up a minimal fork that said, oh, yeah, we're just going to restrict this one thing that nobody uses except ordinals, this other thing that nobody uses but ruins, we're done. We're going to move on. But instead, it's this broad and sweeping set of blocks on speculative things like capping op return, which is not used for spam in any significant way, or getting rid of op if, which is, again, not used for spam in any significant way. you can cap the size of arguments and prevent the ordinal's protocol from functioning you can cap runes and prevent the runes protocol from functioning and force them to hard fork their thing which by the way is very easy for them it's easy for them to evade it but once you've done that you've sent the signal without potentially damaging bitcoin's use as money and that's the thing that i have a problem with i think bip 110 potentially damages bitcoin's use as money and may also send a signal that mob rule is the way that development now occurs.

37:09 Because it's pretty clear that exchanges and miners and big holders are not the main proponents behind it. So, you know, if it actually succeeded, it would be quite dangerous. I'm not worried about it succeeding. And I think in a way it's sort of like, see, we don't have to worry about it. But it is distracting. And there's some benefits to it. I do think it's refocusing the conversation on what it means to be a use as money. And I think it does make people more cautious about Bitcoinery on Bitcoin, which is good. I think the signal is valuable, even as it is, without even merging it. 100% agree. Yeah.

37:51 But I do think it could have been better designed and more targeted with a real chance at success, as opposed to this, no one's going to take this thing. especially the the miniscript destruction like why would you invalidate miniscripts that have been like yeah we're gonna only do it up to a certain date and this and that yeah but what if i have a pre-signed scripts people do pre-signed scripts months years in advance i mean there's protocols out there like it's just but what can't overdo it okay so so so so if miniscript is the most destructive thing in it it's probably the miniscript and also the the the um the capping opra turn at 80 bytes are both fairly destructive because there are inheritance protocols that use larger opra turns people are talking about quantum signature uh protocols but they're actually quantum vaults not actual signatures but vault inheritance protocols why are why how is that a monetary use case how is inheritance a monetary use case i mean you can just you can just write down your words and put it in a box somewhere and give it to your people like doing time lock things and stuff like that. Yeah, but okay, so this is what I have a problem with, because many of these use cases, and also, I'm curious, what monetary use case requires miniscripts that is time locked into somewhere in the middle of the fork period? Like, what monetary use case is that?

39:18 I'm not going to say that I am the wizard on all the different monetary use cases of Miniscript. I will say that a friend of mine had developed an inheritance protocol in Wallet that uses it. Now he's staring down the barrel of it being potentially invalidated. He just stopped using Op-If, which is fine. You can stop using it. So the word got out that Op-If was on the chopping block and he just switched his software before it caused any damage. But regardless, that was the reason why I said inheritance protocols. It's because of my acting with doing that.

39:59 Let me fill that in because I think that's a clear case of fiat around and find out. You're trying to do a fiat-y thing on Bitcoin. And there's no dollars involved. No, no, no, no, no. But I think inheritance post-hyper-Bitcoinization will look so different from how we do it now. And you don't need legal entities and whatnot. Regardless, my point. What about Bolt? I'm trying to get to a point. And the point is that the more fringe things you use Bitcoin for, the less purely monetary things you use Bitcoin for, the more at risk those transactions are because you can't really own a Bitcoin. It's always dependent on network consensus.

40:43 It can change. And you know that things that are less popular are more at risk of being fought against in the future. So if you try, if you spam, maybe the cat will come and bump you on the head. And all of a sudden your NFT is useless. Like you're doing all this other more fuck around stuff at your own risk. And every user trying to do anything like that, even time locks are definitely included in that, should be aware. I'm certain of what's the oldest and most useful opcodes in Bitcoin if it wasn't for time locks.

41:24 No, I love them. I love them. I have had so many great conversations about them and just what they enable. And I love Michael Dunworth thing where he sent a Bitcoin to 100 years into the future But the thing is Lightning is not an edge case no no no lightning is not an edge case uh but i say that that but it requires time long the the the fringier your your case your use case is the more at risk your coins are because like at the end of the day you don't really own your bitcoin all you all you do is like you control your private key meaning you know your private key. You know how to move the Bitcoin. And that allows you to act as if you own them.

42:06 But the reason you can act as if you own them is because you find it improbable that the rules will change to such an extent that it will render them useless. And you also find it very... You could hate BIP-110. Yeah, and I would if it was a hard fork. I would if it was trying to do something... None of these other protocols are hard for us. I would if it wasn't temporary, but I like it because it's temporary and that could at least buy us some time to fix the problems. I don't think Bitcoin is for developers who want, mainly for developers who want to try new cool things. I like that's not the main use case. I don't really feel sorry for them.

42:48 They will just have to adapt to what the users want. So, okay, I get it. I don't think Bitcoin is for developers either. I do think that I want Bitcoin. The only major things that I think Bitcoin, that I would desire on Bitcoin is privacy, because I don't think that that is a optional feature of money. I think fungibility is critical. And I think that, you know, watching people get arrested for providing privacy shows that the protocol needs to support it at a fundamental level. And that what we're doing now, which is, you know, this sort of fucking around on the side private is is worse than than modifying the core protocol to support privacy.

43:40 We've created an edge case where there doesn't have to be one. I also think vaulting. Cold storage with recovery delays is not an edge case. I think it is a absolutely op vaults and op CTV together can provide this lovely feature where you can spend and there can be a delay and there can be a recovery path. And that sequence is, again, critical. I don't think it's an optional use case, especially as Bitcoin becomes, you know, hyper Bitcoinization. More and more people are going to be using it. The ability to have a vault-like system where, you know, you reduce the impact of a wrench attack and things like that are going to become more and more important.

44:23 And finally, the main, the other big thing is the ability for what's called VTXOs, where not everybody has to have a UTXO. Where we don't blow up the UTXO set to, you know, 2 billion people have a UTXO. I don't think that's going to work. Yeah, I don't think that's going to work. And Lightning solves that. To a limited extent, it definitely expands the footprint of available Bitcoin usage. I use Lightning, I would say, almost every day. It's thank goodness for Lightning because it changed my ability to use Bitcoin. It changed my ability to just live most of my life on a Bitcoin standard, which I really, really love.

45:04 I think that's critical. And it's not just because of fees and just because that's there's another really big thing is Bitcoin isn't just. It's part of a lifestyle. You're changing who you are as a person and how you interact with society. And for that to occur, using it every day is important. It's important for the Bitcoin culture. And as woo-woo as that sounds, I think it's almost more important than all the other things we're talking about. Like vaulting, whatever, blah, blah, blah, blah, blah. having it be part of your life, having it be something that you use every day, changes how you think about it, how you talk to people about it.

45:46 You know, when I do business with China, which I do import goods from time to time, I always ask if they accept Bitcoin. And if two vendors say no and one vendor says yes, that's the vendor I choose. Now, that doesn't happen that often. But imagine if millions of people are doing this. This could really change what it means for Bitcoin to expand into the world. And so its use as money is important for growth, for getting people on board, for me being able to hold more. I can hold a lot more in coin if I can spend it. If I can't spend it, I have to keep fiat around just to pay my rent. But if I can spend it every day, I don't. No, I absolutely agree with all of the above.

46:28 So I do think there's some changes that I don't believe in ossification today. I think it's not. I think the protocol is not finished. I don't think Bitcoin can ossify because. Yeah. Because the world changes. Yes. And the human beings change their wills. I mean, it's very hard to change it. But at the end of the day, it's human beings choosing stuff. That's backseat more than personal work. And I like the idea of blocking spam. I do. I like the idea of killing, but I just wish it was much more targeted, much more focused on the one thing. And there weren't all sorts of knock-on effects that I can't predict and no one can predict. So would you be pro the cat if that was ever implemented then?

47:09 Because that's way more targeted. Again, I think the cat does the wrong thing. It seizes as opposed to... Now, Robin Linus proposed a simple solution to all of these problems. And very few people talk about it. The one simple solution. solution. If your dust transaction that encodes an image, you can see it's this giant transaction that consumes a very, has a very small UTXO size. So it's like a one Satoshi and 4K. That ratio matters, right? Imagine if we had a simple rule that said, based on that ratio and based on the age, we no longer need to store it on the blockchain.

47:55 And instead, you are responsible for storing it. And if you want to spend it, go ahead. You can move it all you want. But you have to submit a Merkle proof back up to the root in order to spend it. It's an interesting protocol. Because now, if I store an image on the blockchain, it doesn't actually get stored on the blockchain. I have to store it. And then what the hell is the point? I might as well have just committed a hash to Op return for 80 bytes. It's just an idea. I don't know if it's fully worked out, fully fleshed out. But there are other ways we can solve these problems besides just deleting, confiscating people's coins.

48:37 That's a terrible precedent. Yeah. And yes, I like the idea of the cat more than I like. I like to scare people with the cat more than the proposal itself. is not like really serious. It's a little dangerous. Yeah. Yeah. So, but I like the fact that it was even thought of because that in itself, I think had an effect on spam. I hope it did. Like if spammers, yeah. So whatever we can do to stop this, because I don't think people hate these people enough because they're storing shit forever on other people's machines. And it's not a good, it's the definition of a bad actor. Right. Being hostile to spam is a good thing.

49:20 Targeted soft forks that are strict around arguments to opcodes are good for Bitcoin. I see no reason not to restrict the 520 byte limit in BIP 110 seems reasonable to almost everybody. I don't think anybody core and otherwise was like, probably we should have done that in the first place. So why don't we see any other actual proposals like the Robin Williams thing? Because I don't think anyone feels like it's urgent. I don't think anyone feels that spam is causing, you know, fees to rise or undue scrutiny. I don't think, I think there's a lot of, one of the biggest words you hear thrown around core is the word urgent.

50:03 Is it urgent? I remember when OpsiTV was proposed, it's probably the simplest covenant, least powerful, non-recursive. All it says is, here's the shape of the transaction that I'm committing to. hash it, include that hash, and then validate that anything I spend has to match that hash. It's a very straightforward thing. Most people can understand it in very few words. Now that, and also it's like 30 lines of code. So it's like, there's like no footprint risk. It's like, it's like the smallest, littlest thing. And then there's this, all this discussion. Why is it so urgent? Why do you have to do it today? It's been seven years. There's no urgency.

50:43 nobody said like we have to do it tomorrow we're just like you know people who are advocates for CTV are like you know it would be nice if we could build vaulting protocols it would be nice if we could build you know ball lightning where we could onboard lots and lots of people into lightning instead of having all these custodial solutions you know those would be really cool to build and a lot of people have built whole wallets that are just sitting on Cignet forever now yeah yeah but hoping that some of these things happen to devil's advocate that that's one of my favorite features of bitcoin is that it's so resistant to change and i think when it actually does change it does come with unforeseen consequence taproot is the best example of that and in hindsight i think yeah and it was rushed like it should it shouldn't have been put there because it was abused and now it has sort of the opposite effect. Do you know why I like Taproot? Was because it was actually two changes.

51:43 It was one change that I wanted and one change I didn't care about. The change I wanted was Schnorr signatures so that I could do multi-sig signatures that were untraceable. I love that. I was like, I can have any number of signatories and you don't get to know what they are. I love that. That was a great protocol and we used it immediately at my company. immediately. We used, you know, it's like multi-sig. That's how we custody stuff. I did work for a Bitcoin custody company. Which one? You don't want to disclose that? I don't want to disclose it because there's a lawsuit going on. No problem. But, yeah, it's a great protocol.

52:23 It really helps reduce the ability for someone to analyze, to chain analyze your custody solutions. That's Schnorr signatures. Schnorr signatures could have been done all by themselves. There's no reason to include Tapscript. Tapscript is a whole other thing. Huge footprint. Lots and lots and lots of things. Schnorr sigs are like proven secure, cryptographically sound constructions that everyone can nod their heads and say, other than the exposed public key, this is good. Right? That's true. Other than the exposed public key, it's good. And exposed public keys are arguably, if you construct them correctly, they shouldn't be too bad.

53:08 Then we can talk about quantum stuff. But regardless, that was the whole thing about Schnorr. The Tapscript, lots and lots of new codes to look at, potential attack surfaces, and we've seen it being abused repeatedly. I would say there's more abuse of Tapscript than use of it right now. And since it's been merged, I think I wouldn't have to look on the blockchain to count, but I would imagine that you and I would both agree that there's far more abuse of Tapscript than use of Tapscript. Absolutely. I think exchanges are benefiting from some use of it. I do think they do some broadcast transaction things, like when they're doing maybe pools, use them for payouts, or there's like some edge case things that are like, oh, They're useful.

53:56 But if you were to add those up, they would be like 2% of the transactions. 98% is just people abusing Tabscript to do dumb things that are useless. So, yeah, I agree. We definitely have to be careful about changes. Abuse is a real concern. That's one of the reasons why I'm a fan of CTV over TX hash, which is more expressive, or CCV, coin control, which is really, really good for fee management in these protocols. Don't care. I think it's the safest, smallest. Dip your toe in the water and get some scalability and vaulting and protocols that allow people to develop broader retail use of Bitcoin on a day-to-day basis without making too much of a fuss. And that's why the other thing I'm a fan of is MWeb, Mimblewimble, because I think privacy is important. And everyone's like, well, Mimblewimble isn't perfectly private. I'm like, I don't care. Neither is CoinJoin. I don't need a perfect... That's why CTV isn't a perfect covenant. It's really simple. It's limited. It sucks in many ways. Great. I don't want one that's super powerful. Same with Mimblewimble. It's like, Oh, it's limited, it's problematic It's simple, it's provable Those are the things that matter to me When it comes to a Bitcoin change I want simple, provable, small And I want it to be as restricted And bounded as possible

55:27 So it can't be exploited by people Who are exploiting things That's why I like Schnorr And I don't like Tapscript that much. I think Tapscript could have taken another two years of development to get the attack service down before it was merged. I think that would have been the wiser choice. But that's BIP-110, isn't it? Like it's postponing it for two years. I wish. I wish BIP-110 was just, you know, reducing opcode sizes and things like that. But it has this populist, you know, hard restrict op return, which I don't think is useful for the protocol. and I think is potentially restricting use as money in ways that I don't like. So when is a non-pratern above 83 bytes legit?

56:12 So I think it was 160 bytes is the size of HTLC commitment. I think that was the limit. What is that? HTLC commitment? like a way of saying um i i don't know all the details of moon's uh of moon's uh protocol for for inheritance and uh his extension into bolts but it it i believe 160 bytes was the limit that he talked about what he needed um and what he was using and then you know most of these people who are doing these experimental protocols are doing them on the you know because libre relay exists and these other relay networks exist. And that's how subsets exist. Otherwise, subsets would never really get mined. All of this stuff, I mean, policy, people don't understand what the difference between policy and consensus is for the most part, but policy is there to protect the nodes from attacks. And consensus is there to say what miners can mine. And policy is not there to say what miners can mine. It never was. Miners can mine anything they want. But we know that certain transactions can be a burden on notes. And if you want to mine those, you submit them directly to the miners. Go ahead. You know, there's, that was how it was. Then what happened is people started mining a crap ton of stuff that was a one-off experiment. Fine. You're developing some new thing. Maybe you'll, you'll submit a BIP. Go ahead. No one cares. But over time, people started submitting more and more and more out of policy transactions, especially the sub-Satoshi transactions,

57:46 which were big, and 160-byte op returns started growing as well. And so then they were like, oh, we should just uncap it. And I think that was a big mistake because they had a strong use case for 160. Why one byte more? Like, oh, we might have to raise it again later. So what? Go ahead, raise it again later. It's policy. You can. So there was no, in my opinion, there was no legitimate reason for raising it beyond what they were observing on the network. The purpose of policy is you observe what's happening in the miners, and then you make sure the nodes mirror that so that they are insulated as possible from rogue transactions, and their mempool is as accurate as possible.

58:28 So you have to observe what miners are doing and make policy match. And so policy always has to be flexible, because if policy is too strict, then the nodes are out of sync with the miners, and you get terrible inefficiencies, fee estimate and bandwidth inefficiency. Bandwidth is a demon. If policies are too loose, then you get the opposite problem, which is actually even worse, where transactions get relayed that never get mined. And now you have an open protocol for communications. That's really bad. You can't have policies be too loose. Transactions that get relayed should be valid candidates for mining. And vice versa, all validates for mining should be transactions that get relayed, or at least most.

59:11 so so you definitely want you know whatever 99 or more of the transactions that will get mined should be within policy um and and so that's stewardship that has to change on a regular basis policy needs to keep moving as the mining landscape changes as usage changes as protocols change policy has to be flexible um consensus should be incredibly hard to change um take a really long time people argue about it um and i am don't know anybody who's serious about bitcoin that has a problem with that. So anyone who's whining about consensus being hard to change doesn't know Bitcoin at all, right? Like if you're an OpsiTV guy and you're like, yeah, I love OpsiTV.

59:52 I am, I love it, I think it's great. I don't see, I haven't seen any legitimate technical arguments against it, even incentive arguments, not one. And I don't think anybody has. The main argument against it was, it was rushed. Fine, that's a good enough argument for me. I don't care. As long as it's still in play and people are still experimenting and fuzz testing and more proof is being provided, eventually that burden of proof will be exceeded and this tiny little obcode might one day get merged. That's how consensus should work. BIP 110, massive consensus change. All sorts of unpredictable knock-on effects I can't even talk about. The temporariness of it is, you know, a nice feature, I guess, because that way, if there really was any harm, we can find out about it.

1:00:40 But then by then it's too late because then all those people don't trust Bitcoin anymore. And maybe those people are important. I don't know. I just don't know if BIP110 doesn't feel safe to me. But I don't think it feels very safe to anyone who's holding Bitcoin. So let's say when is it in August sometime that it's enforced by this segment, or if enforced is even the right word. after that if you're a miner and you mine compliant BIP110 compliant blocks I'm paraphrasing the theory here but if you mine the compliant blocks then you're at no risk whatsoever of losing because the rest of the network will build on those so who will be the first miner to mine a non-compliant block and what are their incentives to do that Is it just someone trolling?

1:01:37 I don't think miners care. I think you underestimate how lazy most miners are. I was a miner for a long time with a significant amount of hash power, and I don't think I would have updated my software unless I felt like it was really, really worth it. And I would have just seen what happens. What's the worst that can happen? I'll switch to the new version in an hour. I think what will happen is some lazy miner who didn't update his software, which probably is many. Let's assume you're right. And 80% of the miners update their software. That means within an hour, we will see the first block.

1:02:19 That doesn't, right? That doesn And then the question is have the rest of those miners updated their software to refuse to build on it Or have they updated their software to not refuse to build on it And we won't find that out until the first non-BIP-110 block is mined. My suspicion is someone's gonna mine a BIP-110 non-compliant block. People are gonna build on it and nobody will care because all the BIP-110 compliant miners will just, if there are any BIP-110 compliant miners at that point, Any blocks they build will be invalid. So, you know, there is a very big risk for BIP-110 miners. The moment a non-compliant block is built and then something is built upon it, they become out of compliance if they don't build upon it.

1:03:02 And so people who are claiming there's no risk don't understand how mining works. But isn't the risk much bigger the other way around? No, it's about the same. It's a 10-minute difference. But all BIP-110 compliant blocks are also compliant with everything else. Like there's no risk there. But especially if you're a big pool, you have more to lose. So you might as well do that. It's not that there's no risk. There is risk if you're enforcing not building on the other block, right? So you have the same risk as everybody else. Well, it's not really enforcing. It's just I'm choosing to mine this block that follows these rules. No, no, no.

1:03:43 It's different because, okay, I'm going to give you a chain. Ready? Block A comes along. It's BIP-110 compliant. Everybody's happy. Block B comes along. It's not compliant. Some people are happy. Some people aren't. Okay. Block C comes along. Does it refer to block B or does it refer to block A? Question. All the BIP-110 compliant miners will be pointing at block A. All the non-BIP-110 will be pointing at block B. Pointing at B, yeah. So now here's the fork. if there are more BIP-110 compliant minors than there are non-BIP-110 compliant minors, then the BIP-110 compliant minors become the majority chain. This chain splits. If there are more non-BIP-110 compliant minors than BIP-110 compliant minors, then it splits. No matter what, it splits. There's no safety in choosing to enforce that pointer at A. Now, what you can say as a miner is, I'm willing to mine only BIP-110 compliant blocks.

1:04:47 Yes, this is what I'm talking about. But also, I'm not going to do enforcement. No, exactly. I'm always going to point at me. Yeah, that's what I'm... That's a really good idea. You should release the source code for that. That's what I'm talking about, because if... But nobody does this. There is no code that does this. There's no version of BIP-110 compliance that is willing to accept non-compliant blocks. No, no, no. Okay, okay. So, if I'm a miner... Well, there's no code involved. I just choose to mine a compliant block. And if I win, then that gets added to the blockchain. And there's no reason whatsoever for me not to do that.

1:05:29 Because the risk is in mining a non-compliant block. So from the perspective of the individual miner and the next block, there is no risk at all to mining a compliant block. but now you've got to it's not about the next block it's about which block you're pointing to because that gets hashed into your block your block has to contain that pointer and so if you don't contain that pointer and it's not pointing at the right thing no no no but what that's that's within my argument because that only happens once the first non-compliant block has been mined So there is no risk So this is the thing There's a perpetual no risk Action to take And that is always Mining compliant blocks Until there's a change Until the first non-compliant block is mine But no miner is ever Incentivized to mine that first block It doesn't matter Because that's not Mining works like this Even if 10% of the miners Choose to ignore the protocol, one of them may mine that block. And then once they do, now there's risk.

1:06:41 So it doesn't matter. Once a miner mines that block, the risk happens. And now everyone has to decide. Am I the kind of miner that mines BIP-110 compliant blocks that point to A or B? I still mine BIP-110 compliant blocks. I'm being safe. But am I a B miner or I am an A miner? Personally, if I were a miner, I would choose just pointing to the most recent one. I would mine compliant blocks because, hey, it makes people happy. And I would not enforce it because there's zero risk in that. I'm always pointing the biggest proof of work. The protocol has always worked that way. Someone mines a noncompliant block. I let them.

1:07:21 I remain compliant and I point to the most. okay for a stupid pleb non-technical question here if if this is the case if if if miners choose to do what you're describing which is even though even if there is one non-compliant blocks you're still going to continue to mine compliant blocks because less why not why not why not and then make people happy no one has to yell at me yeah but the thing is that then then the soft work is not implemented from a technical perspective, but it still has the intended effect. I like it. No argument for that. I have no argument with that. So if that's the case, then what's the risk with BIP-110? Because BIP-110 doesn't do that. BIP-110 requires enforcement of the prior block. It forces you to ignore the longest proof of work chain.

1:08:15 BIP 110 says, let's say 10 blocks in a row are not compliant. And the longest work chain is much, much bigger. BIP 110 says, ignore all 10 of them and continue to point at the last compliant block. Yes, and that might be enough for people to only mine spammy blocks every now and then and then keep being compliant. No, once you mine a spammy block, the entire chain is split. You can't do it every now and then. I know, I know. No, no, no. I know, but you just said that after the non-compliant block is mined, you're not going to switch back to mining non-compliant. You're still going to just to please people.

1:08:56 Of course. Because the individual miner mine compliant blocks on top of a... Right, but that software doesn't exist. I would like to do that, but I would have to fork BIP-110, remove the enforcement, but leave the compliance, and then use that. So this is perfect because this is the call to action of this particular podcast Write that code Yeah because then your argument would make sense Then it would be like, why not mine blocks that don't have spam in them? Why not mine blocks that are improving the monetary use case and sending a strong signal to spammers that we don't want your crap?

1:09:40 why not have that there's no reason why people wouldn't do that you don't benefit a lot from spam as a minor um at least not today not these days um um there was a time back when you know 2022 when i noticed my revenue going up way a lot and that was the peak of ordinals i was like wow no no february 2023 right isn't it 2023 yeah yeah it was um yeah it was i watched my revenue go up by 20 and 30 percent um and it was and the amazing thing was this is that at the time i was really considering turning my miners off and just being like oh it's not profitable i'm gonna sell them and then suddenly i'm like now i'm profitable again um and so i left them on probably i would say for another three to six months simply because of ordinals and it's it's so wonderful because the osho meme comes to mind instantly it's because people are retarded that's why we were making more money because they were falling for these scams, right?

1:10:37 That's right. That's right. Just because you hate what people are doing with Bitcoin doesn't mean you shouldn't allow it. No, no. That's not, that's, we don't have, that's, Bitcoin's protocol is specifically, you know, designed so that people who do things you don't like can still use it. Yeah, but this is, this is where I always bring this up in these debates. This is where the South Park episode, The Death Camp of Tolerance, comes to mind. And that episode is focused on the difference between approval and tolerance. So you can tolerate stuff that you don't necessarily approve of.

1:11:18 Yes. And that is what filters are, for instance. Like, okay, we tolerate these in blocks, but I don't approve of them, so I'm not going to relay them. That's not what filters are for, but go on. No, no, no. But still, it reminds me of that South Park episode. And I think there comes a point where we disapprove so much so that we don't tolerate anymore. And I think that BIP-110 is sort of the immune system reacting to something that... I'm hoping, I hope that BIP-110, regardless of whether it succeeds or fails, discourages spam on Bitcoin. I think that that would be a good thing.

1:11:59 I think that using Bitcoin's block space as storage is a bad use. But I do know, you know, look, I tell you one thing I did recently. I was like, how hard would it be to evade BIP-110? And I went into Cloud Code and I said, write code that encodes an image that is BIP-110 compliant. and I want you to do it all in one shot and post it to test net and don't come back to me until it's finished. And 45 minutes later, I had a test net transaction with an image on the test net. So that's how hard it is for somebody to evade it.

1:12:40 No, no, no, but I don't think anyone on the BIP 110 side denies that. Okay. I don't think anyone denies that. 0.53% overhead. That's how much more expensive it was for me. and if i was to do the same transaction on op return it would have cost me four times as much yeah so that's one of the reasons why op return isn't our problem is that no no no no op return is too too expensive to actually incentivize and and also i yeah but i think that the whole the whole op return thing that's it's the defeatist attitude like okay we're opening we can't do anything about it yeah there was there was again that's like political you know these guys think they're so politically savvy and then by like you know keeping things quiet and posting this and blah blah blah and then they do stupid things like just you know look there's a whole bunch of people who are upset by it how hard would it have been to put the 160 or the 200 you know bite cap on it and say look here's a list of use cases we think are monetary use cases and that's why we're putting this higher cap on it and then also um everything's getting mined and no one's stopping it.

1:13:50 And also relays are there to protect nodes from DDoSs, not to filter transactions. And if they had put the list of monetary use cases in there and this and that, would have been a much stronger argument. No one would have complained. And none of this would have spiraled out of control. But, you know, I don't know. I mean, maybe it was almost done on purpose so that it did spiral out of control. You know, that's the other thing is like, how far into game theory is this? Yeah, yeah. Miners are incentivized to mine as many transactions as they can, right? They want as many fees as they can get. They want shitcoin on Bitcoin. Miners want it to be flooded with stupid transactions because it doesn't harm their investment, at least not obviously.

1:14:39 And miners are often very short-sighted that way. They see that 20% and they're like, hey, that's what I want. I want more of that. No, this is a super big problem because you have the highest time preference in mining and the lowest time preference in hodlers. And that is not a good incentive structure. No, it is. It's definitely. And then, you know, as a developer, as a core developer, you need to balance miners, holders and exchanges and all of their demands on your network. and hopefully ignore most of them because none of them are really terribly more important than the others.

1:15:20 Yeah, you need to satisfy all of them. If you didn't have exchanges and merchants, Bitcoin would be useless. If you didn't have holders, it would be valueless. And if you didn't have miners, then that would be bad too. Yeah, but I think the ones that are empowered too much are definitely the miners. We don't need miners to be that powerful. Like, I don't see that. I think that if the scales are tilted some way, it's too much towards the miners. It always has been. Yeah, always has been. Scales have been tilted. And honestly, I think the exchanges, too. I think we cater to. I think Coinbase is an enemy of Bitcoin, and everybody should know that.

1:16:01 Yes, yes, yes, yes. I love this. No exchanges And that is like people always say don buy your Bitcoins on a KYC exchange But even more importantly don sell them to a KYC exchange Yeah. You don't want any of that. You don't want the exchanges to have any Bitcoin. Like, drain them of them and just take them into self-custody. Yeah, don't leave them on there. Definitely self-custody if you do acquire it on there. And as soon as you get it off there, mix it because you just, you think it's going to be fine. but they just changed the law this year. They changed the law fast. You know, I don't know if you know, in the United States right now, Coinbase is sending IRS information about everybody who owns Bitcoin.

1:16:45 It's like a new form, something, something, DM. You know, that wasn't true until just this year. And so you thought you were safe. You thought you could just fudge your numbers and blah, blah, blah. Well, guess what? You can't. So any coins you had on exchange for any significant amount of time, there is no way you're getting out of paying full you know uh taxes on every every nickel that you traded on those coins um and people have been people have been trying to use it as a tax dodge and now they're just going to go to prison so um it's it's they're gonna they're coming down hard and in ways that suck um they shut down all those banks like it was insane you know like they just like randomly shut down banks No, and it's obvious.

1:17:29 It's obvious. They want to tax you for using money they can't print. They want to punish you for not being punished. For using money they can't print. Yeah, they want to punish you for refusing to be punished for nothing. That's basically it. And it's awful. And imagine if the most popular exchange in the world was a decentralized exchange where we did atomic swaps. Yeah, yeah. That would be better. It would be better, right? But it can't happen unless we get at least a couple little tiny opcodes on Bitcoin that allow DEXs to happen. Although I have seen some Lightning exchanges that exist. Apparently, you can do Tether on Lightning. There's quite a bit of Tether on Lightning.

1:18:10 I had a great conversation with Giacomo about exactly that this morning and the pros and cons of that. Because I don't really want Tether to be on Lightning. But anyway, that's a different debate. I don't love it, but at the same time, I understand the need for people to be able to switch from one system to another. Yeah. I don't, especially because, you know, merchants don't all take it yet and this and that. I was really happy when Square said like, oh, everyone's going to be able to take Bitcoin. But then I was really sad when it turned out it wasn't really true. It was just like everyone can, but nobody does. Yeah, yeah. no and it's perpetual dilemma as long as which is why i love cash and i and i love dark alley trades and and uh not not conforming not not complying like we need to be resistant off of venmo yeah they kicked me off for buying and selling bitcoin on venmo i never cheated anybody um they kicked me off just because they found out that's what i was doing and they they turned off my account they also turned off my wife's account and it's been 10 years and we can't get a new account even with a new bank account new phone number they figure out who the fuck i am and will not let me sign up that's how aggressive and that if you want to know how how much banking hates bitcoin that's like the best example they kick you off they kick your wife off who had nothing to do with it no no and then they prevent you or your wife from ever using

1:19:41 to get something. It's a mafia organization. It's absolutely a mafia. Yes, and a bank account is a two out of three multi-sig between you, the bank, and the government. And they both have master keys. But you need approval from at least one of the two in order to use your money. So it's awful. Keep as little money as possible in that system and keep as much in Bitcoin. That's the best way to do it. Absolutely. Word. I mean, Europe is just as bad, if not worse. we have the MICA regulation I mean you used to be able to use ATMs here in Spain up until New Year's this year after that you need ID for even transactions under a thousand euros so that avenue is gone and in France there were these horrible attacks only against people who had sold on or reported that they had coins on exchanges so if they had filed their taxes correctly they were now attacked by gangs with literal $15 wrenches that's crazy and that kidnapped parts of the family and what not so it was that in combination with the ledger hack I think but if you file your taxes and you tell the government and in the UN they can pass the law that 100% of people who are going online to play a video game now have to show ID yeah yeah it's awful And that's why they want to protect the children and say that you can't use Facebook if you're under 16.

1:21:14 It's all about the ID stuff. It's all about ID. And the best story I heard about that is a small village in Holland during World War II, where the guy burnt down the church where the honeypot was, where everyone had registered their religious affiliation. And that little town had like 70% more Holocaust survivors. because they couldn't look up who the use were. And it's just such a good story about Honeypots and KYC, why it's so terrible. The whole thing, KYC, money is the tool we use to not have to know our customer. Like it's the very purpose of money.

1:21:55 Otherwise it would be barter. No, and if you trust the guy, if there's a guy in your family, you can just pay you back later. Like nobody cares. You don't need money if you're friends. You need money if you're not friends. You need your money if you don't know your customer. So, yeah. Eric, it has been great to get to know you. And I've been very being educated by you on certain stuff. And I'm still not convinced about everything, of course. That's okay. But neither should I be. Yeah. Where do you want to send people on the internet? Where can they find out more about you or the projects you're working on? Q32.com. Q Yeah, that's all the crap I'm building is there All the crap you're building is on Q42.com With that, this has been the Bitcoin Infinity Show, thank you very much Eric, thank you for watching, like, subscribe and brush your teeth Until next time Thank you.