Why BIP-110 Will Fail | Giacomo Zucco | Bitcoin Infinity Show #194

0:00 Giacomo, welcome back to the Bitcoin Infinity Show. Nice to have you here. Knut, thank you for having me back. Yes, we have covered the pros and cons of both NOTS and BIP110 here on the Infinity Show a couple of times. We have several people from both sides. And I wanted to hear your take. You're officially opposed to BIP110, I hear, which is funny because I'm officially pro-BIP110. So let's dissect maybe the first time we have a difference of opinion in anything. Yeah. Not entirely true, maybe. There have been other cases, but they were always very productive.

0:43 I think in this case as well, we also had the privilege to start agreeing because we both came from the same anti-spam kind of rents two years, three years ago. So we started from the same position. And so it's easier to assume good faith, which I notice is always a very, very hard thing to do when two people come from completely different assumptions. They don't even acknowledge that the other position exists. Then there is a cultural shock of meeting the other position, which is so outrageous that it must be caused by some conspiracy or some ill intent. And in our case, I think it's pretty, we discussed these, we went back and forth both together, sometimes discussing together on many issues and sub-issues.

1:29 So I think it's easier for us to still man each other's position. Yeah, absolutely. And I know you had a long call with Hodlonot the day before he was on and I had a long talk with him and he, you sort of convinced him to, I mean, he contacted you. That's a good thing to remind people of. And you sort of convinced him to be against BIP-110. And now it seems like he's back to supporting it. Yeah, my evil influence is not durable. It's only temporary. I would have to recontact him right before the activation to make sure my influence.

2:10 Yeah. So let's see about the framing here. So I think we both agree. I mean, don't hesitate to interrupt me if I'm wrong in any of these assumptions. But I think we both come from a place that Bitcoin is money, that that is the use case, and that all other use cases that are built on top, or they should also, like the only time that they're sort of morally justified is when they make Bitcoin better money, such as Lightning, for instance, being built on top, anchoring itself to the base time chain. Yeah, I interrupted you just to maybe change the example because Lightning is a clearly monetary application on top. It's needed for money. It's making Bitcoin better money. I think that there are other applications that are clearly non-monetary, which can still make Bitcoin better money for other reasons, for example, even if very marginal.

3:11 For example, if you take something like OpenTest Stamps, it adds potentially absolutely zero overhead to node operators, so it doesn't interfere seriously with the operation of the monetary function, but it can increase a little bit the demand for block space, which which can be considered something useful for the monetary, for the resistance to reorgs and fee sniping. It's very, very marginal, but it's a good example of something that doesn't hurt and can help. Another way can help besides this kind of argument about the fees is helping the acceptance of the Bitcoin infrastructure within the context of traditional system integration.

3:53 So I've shielded open timestamps a lot, and I find it in use cases, which is a typical example of non-monetary, but good. Yeah, I think here is where we're already here. I think our opinions slightly differ. So let's dissect this from the very bit. So open timestamps, I think this is, and correct me if I'm wrong here, But I think the reason that op-return was set at 42 bytes in the beginning, it was later increased to 83, right? Standardness, yes. Core, at least. We have to be super pedantic about this because… Yeah, yeah, yeah. The standard policy. So it was never in the consensus where you could set it to whatever you want, but the standard or the default was 43 or 42 up until… And the reason it was 42, if I'm right about this, is that a hash of a document or a hash of anything really only took 42 bytes.

4:51 Let's say something plus an identifier. So the idea was you can just put an identifier like this is a hash of this service plus the hash itself. Yes. And 42 bytes, it's extremely small. And what you could do with that was prove that something existed at a certain point in time. Correct me if I'm wrong, but can you do anything else really in terms of proving something than the existence of that thing? No, this is a very important distinction. Open timestamps and timestamping and Merkle routes in general are just proof of existence. They are not proof of not existence. That's the reason why they scale so well, because one single hash can prove the existence of millions of documents, because you just create a Merkle tree and you just publish the Merkle route and you keep the Merkle path and you can prove the existence of billions of documents.

5:46 Ricardo Casatta and Peter Todd timestamped the entire internet archives with metadata in one Bitcoin transaction. So timestamping is super scalable and it's private in the sense that you don't leak any information about the documents. On the other hand, to prove something more like the non-existent of some competing transaction, that's the hard part. And that's why we need Bitcoin, where every node has to download every transaction made by any other nodes forever. So the unscalable part of Bitcoin comes from the proof of publication or proof of non-existence or proof of non-contradiction. You can call it in different ways. Todd calls it single-use seals.

6:27 But you're right that the timestamping is only doing proof of existence, which is super scalable and super low. So let me see if I understood that. Proof of non-existence is way harder than proof of existence. Yeah. Yeah, correct. Which might be why some people are religious and some are not. anyway this is and and then you said that this this can at least theoretically create some more demand for block space usage or for bitcoin usage really it's a very weak argument this one about the demand is non-zero i think but very weak mostly because it creates a demand but which so what does the demand it creates more fees for miners that creates more incentive to mine blocks that create a higher cost or basically re-organ the chain.

7:20 So it gives you more security faster. But then again, to enter the block, now you have to spend more to compete with this demand. So you're basically back from the start. I don't want to say this effect is zero, but it's very negligible. If OpenTest Times had either even a very small cost on Bitcoin, I would consider it a waste. Luckily, it has potentially zero cost because not only you can stamp the whole world with one op return, but you can stamp the whole world with zero op return with something called, for example, pay to contract or sign to contract and now with Taproot and Tapret. So you can do that with zero byte on the blockchain.

8:03 The reason that I would consider it bad is because if it didn't provide any benefit is because there's still some spammy level, which means that you have to do a transaction. So if nobody wanted to do a transaction and you want to timestamp something, you can do it with zero byte on top, but you do have to make a transaction, which maybe you were not going to do if there was not a timestamp request. So we cannot really say in full honesty that timestamp has zero footprint, but it's very negligible. As long as somebody is transacting in blocks, then you can use any transaction to timestamp infinite amount of data virtually for zero cost.

8:45 So would it be fair to say that the footprint is negligible? I can never say that word. Negligible. Careful because it could be canceled. It's an N word. Let's say the N word. but that could also be said for the increased block space demand which would also be very small so so like the the they sort of cancel each other out they do plus so i think it's more than that so the the impact is virtually zero the the increase in fear rate that could help the security is non-zero, but is small. And then it also outcompete your transaction to enter the security model. So it basically cancel out. Yeah. All right. So that's, I mean, here's the other point I'd like to address about this. And this is the security budget thing, right? So I see a lot of Bitcoiners take it as a fact that it's good for Bitcoin if miners make more money. And I don't necessarily agree with that because we have the difficulty adjustment algorithm, which sort of ensures that this is always as close to a zero-sum game in terms of like the margins are always super small for miners and they're supposed to be because you get the competition anyway. And I mean, for now, like still most of the revenue is from the subsidy, right? Yes. And not the fees. I heard

10:16 somewhere i think it's this shit coin semi shit coinery podcast where someone said like the the the ordinals and the brc20s are like two percent of minor total minor revenue by some by some calculation at this point uh however like bitcoin is already orders of magnitude more secure than it needs to be arguably because like we have what is it petahashes now like how many are there that If you realize how many guesses per microsecond that is, it's just an enormous number. So I don't get at all why people would want miners to make more money. I don't really see that.

10:56 Do you agree? I agree with you. I think the whole security budget discussion is severely flawed because it assumes that either Bitcoin has some specific hash rate or somehow it doesn't work, it breaks. It doesn't break. what there is is a continuity of cost. So how expensive is it to unroll or to basically reorg one block? How expensive it is to do two or three or four? This is a linear cost growth that can become exponential if you compete with the rest of the network. The probability basically decreases exponentially to have success. And the amount of this decrease, the strength of this exponential depends on the total hash rate.

11:39 But the point is that if the hash rate is low, that just means that you have to wait more to reach the same level of security. You just need more confirmation. So there's never a breaking point in which you don't have security anymore. And there is a circular argument there because if people don't want to pay for on-chain security, so if people are not leaving fees to miner, that means that people don't need on-chain security fast. Maybe because the second layers are so good that they don't need it. If they don't need it, we cannot say it's an emergency that you have to wait more to reach the same level of immutability. So I think it's a circular argument, the one about the security budget. I think Luke Dasher has an argument here too about miner centralization, that that basically needs that if blocks are mined by the same cabal of miners, you need to wait for more blocks.

12:30 We have one hash per second or three exahash doesn't change anything. If you don't have competition, the amount of hash rate doesn't matter. Yeah, so we basically have the same opinion on payments to miners and security budgets. So that's out of the way now. That's it. Let's just be just as a caveat, but it will not change the discussion anyway. But I just want to say that for accuracy. I buy the Eric Voskul argument that fees should eventually overcome subsidy. That's a good thing. So I want not high fees, but I want fees that are higher than the subsidy. The reason for that is that the subsidy is not censorship resistant, while the fees are.

13:14 Meaning, if the government is paying miners to create empty blocks or blocks with just the Coinbase but with zero transaction or only with OFAC transactions, the miners are not forfeiting the subsidy if they do that, but they are forfeiting the black market fees. So the only defense by the black market is to increase the fees until the miners will capitulate because the fees are more than the cost of being kidnapped by the government or the subsidy by the government to censor Bitcoin. So that's a good argument. So the fact that halving is important and inflation should go down to zero And this is an argument actually against tail emission and stuff like that So it good that subsidy goes to zero And it's also good that fees take over.

14:02 But we don't need an absolute level of high fees for some reason. No, and the question here, like with so many other things in Bitcoin, is a question of when and when it's necessary. and it might not be necessary for the next 100 years. Like, who knows? I mean, I find that the biggest flaw in the argument about security budget is thinking that Bitcoin will not double in value every four years. If it does, then the problem goes away because the miners get paid exactly the same, like in fiat terms, at least. Yeah, in this case, I'm actually sad. That's all the halving does. I'm actually sad that Bitcoin will probably more than double every four years. And so we will not have fast enough.

14:46 No, I'm joking. But I think that eventually it's good that the subsidy gets completely overruled by the fees. And that's a part, I think it's part of the censorship resistance design of Bitcoin. But you're right. It could not happen for many, many years. No, and how could it not? I mean, at some point you get into a scenario where you are incentivized to mine, not for the rewards, but simply to secure your own stack, right? Do you buy that theory too? Well, no, not really. I mean, the personal incentive for a miner to mine, to just secure your own stack is very, very marginal.

15:29 In the sense that if nobody's mining, then what you want to prevent is from people to re-orging before you received your stack. So as long as people will not really push this kind of, let's say that you have two years or 10 years of hodling, the idea that you are mining to prevent a 10 years re-org seems a little bit broken to me. If miners can do a 10-year reorg, probably that's already something where probably something I don't like, but something extreme as checkpoints may emerge from the market as a response. Yeah. Can we see the current hash rate?

16:12 Yeah, 953.32 exahashes per second. And to just give people a picture in their mind of what an exahash is. So exah, how many zeros is that? So it's giga is nine. Terra is 12. 12. So peta is 15. Exa would be 18 zeros. So 953 followed by 18 zeros guesses on the correct hash per second. It's a ginormous number. It's like by far the most secure thing on earth in that sense. So I think the fears about miners not getting paid enough is very exaggerated, given the fact that they are mining and doing a lot of it.

17:03 So the second point there, and we're still on the first base layer here, is that things like the Lightning Network are monetary use cases, so therefore they're legit. And here I might have a contention or two, and that is that if it now turns out that Segwit and Taproot led to this spam attack and that in the long run that leads to the slippery slope that will turn Bitcoin into ETH 2.0 and kill the entire thing, then Lightning wasn't worth it. And how do we know that? Well, we can't until after it's happened. So while I love Lightning and the fact that I'm able to use Bitcoin in a very convenient way, I still think velocity of money is a very Keynesian metric to use when evaluating whether something is good money or not.

18:02 Well, slow down a little bit because I think you're packing a lot of assumptions into this, including the connection between these soft forks and the spam attacks, which is something, it's a valid link there. There is for sure some facilitation, especially I think from Segwit discount, but we can analyze that better. Then you're moving to the fact that this attack will basically bring this etherification of Bitcoin, which is something that I think we should analyze a little bit better in the specifics. and then the death of the entire thing, which is a very extreme kind of assumption, a final assumption. I agree that the velocity of money is not the main point, and I agree it could be achieved just by the original Hal Fini vision of having custodials like Cypherpunk, anonymous custodials, just doing stuff, eventually rug-pulling people here and there.

18:53 But overall, it can work better than gold because gold was very costly to settle while Bitcoin is less costly. So you could have this kind of banking system on top of Bitcoin, which is what Alfini was imagining. But the thing is that with Lightning and other layer two within the Lightning Network, You can have this kind of like have your cake and eat it too or the opposite, which is basically almost same secure, good security comparable to Bitcoin plus also some velocity of money if you really need it. And I think that the point is that people only see lighting as an improvement in velocity or like speed, small payments, cheap, small, fast payment.

19:44 That's true. But lighting also does other two things. First, lighting is objectively more private, can be objectively more private. And second, lighting can be more censorship resistant. You can have lighting transaction happening even if miners collude to sensor blocks for years, channels that are already open and ARCs that are already open can, well, not really ARCs, channels that are already open can go on working. And lighting can also work if the internet is basically cut off of the nation for a few years. Of course, you cannot open channels, you cannot close, so you have security issues and raise conditions, but lighting can work. So I think The lighting is an example of not really wanting to pursue velocity.

20:30 I think lighting is a patch on a bug of Bitcoin, which is a necessary bug, which is unresolvable at the fundamental level, but can be mitigated. And the bug is called global consensus. Bitcoin system that which assumes that all the nodes have to download information that they don't directly need, but just to stay in sync with all the other nodes. So every time one node does something, a transaction, All the other nodes need to record it forever. This in itself is a censorship problem, privacy problem, and scalability problem all packed together. I think Lightning is an example of minimizing this, which is also at the very root of the spam problem.

21:11 Yeah, and the fact that fees are low at the moment is, I think, a huge part of that is because Lightning works and people are using it and not transacting on chain. So we agree there on all points, I'd say. Also, what else? Well, in the case, I mean, I think we disagreed here, unless I managed to change your mind a little bit, because I see Lightning as not only monetary, but I see that as a completion, like a fixing of the monetary issues of base layer. So base layer, I think, is bad money in general. Of course, we need it to settle big amounts and to open channels and to close channels.

21:52 But I think that Lightning fixes a fundamental flaw in Bitcoin design, which is global consensus. So maybe this position is a bit stronger than the one you were starting from. No, I totally agree with that position. And I was about to go there that like, especially the privacy route, that is like one of the real benefits of Lightning. I'd just like to point out that the whole velocity of money thing might not be the best argument for it or the best metric. So in the future, and here we sort of come to the meat of the thing, because I know I've met them in Logano. You hang out with a lot of developers and they have a lot of ideas about what to do with atomic swaps and this and that, and using all of these fancy code salad things to allegedly improve Bitcoin as money.

22:42 And the way I see it is like, where do you draw the line between a shitcoin use case and an actual monetary use case? And I, for instance, I don't think stablecoins should be built on Bitcoin if they leave a footprint, because the footprint will be there forever, and thereby making it costlier to run a node and therefore making Bitcoin a worse form of money. And a stablecoin is really just fiat. So I don't see a good argument for ever wanting a stablecoin to be even anchored to Bitcoin. But I think this is somewhere where we disagree. What would you say? Well, I'm not even sure we disagree so much here.

23:23 I have a very, very, usually I tend to have very strong opinions, but on this I have a very nuanced opinion in the sense that I see a fundamental problem with stable coins. So a fiat denominated credit, which is traded permissionlessly to some degree on a secondary market. So what are stable coins? It's fiat credit, but instead of being on a database like PayPal or Venmo, this fiat credit uses the blockchain rule. So if you have a database like Venmo or PayPal, and you try to allow an underage Nigerian boy moving money, then PayPal will stop you because the government will stop PayPal. If you do the same with USDT, the government will try to tell Tether to stop, and Tether will say, oh, it's a blockchain.

24:10 I only control the primary market. This is the secondary market is happening on an open protocol, which is decentralized. I can do nothing about that. So it's a blockchain scam. Now, do I like blockchain scams? No, traditionally, I despise them because they take what I love, which is Bitcoin, and they use Bitcoin to generate confusion, which is the opposite of what I love, which is education on Bitcoin, in order to profit. So I dislike shit coins. But these specific shitcoins is a shitcoin which is not aiming at defrauding investors because it's not promising any gain. You give me a dollar and if you're lucky, you get back a dollar minus the fees. So it's not a get rich quick scheme. It doesn't defraud investors, but it does defraud regulators.

24:54 Now, when a scam, which is using the thing I love, which is blockchain, well, Bitcoin, in order to create a buzzword like blockchain, to confuse and scam things I don't love, like regulators, in that case, I become a little bit more sympathetic. I can still see that somebody may be adversarial toward this scam towards the government, mostly because it's taking some energy out of Bitcoin, like mindshare liquidity. We say that one of the reasons fees are low is that there is lighting. That's true. But the other is that there is stable coins. So many people that would be using Bitcoin instead and also learn about inflation resistance are stuck with fiat credit because it's just more familiar.

25:35 It has less volatility in the short term. So it's as a brand, better brand recognition. So I agree with you that sable coins are problematic to use a woke term. And I will not have any problem with a bitcoiner having a strong stance against them. I'm more tolerant. I agree with you that if such a problematic use case is taking any resource out of Bitcoin, it should be opposed in any realistic way. But some things, some ways to do this stuff, not only doesn't consume Bitcoin's resources, but it can add. For example, the things I tried to work on a little bit, a few years with RGB, is USDT on Lightning.

26:18 Now, USDT on Lightning, there is an old talk by Maximo Lovsky in Berlin Conference 2018, the first Lightning Conference. It increases liquidity and privacy for Bitcoin lighting users because right now, let's say that I want to pay you. There is a liquidity gap in our path. If there is a USDT-based connection, now you can have USDT routing that will help the SAT routing and vice versa, of course. Plus, you have more privacy because the chain analysis look at the opening of a channel and the closing of a channel. if they also have to consider that maybe there is some invisible USDT transfer across the channel, all the heuristics to analyze also get disrupted.

27:04 So the USDT on lighting specifically is a way to basically to do three things. Improve lighting liquidity, which is good for Bitcoin users. Improve lighting privacy, which is good for Bitcoin users. and reduce the credibility of the base layer shitcoins that Tether is using right now, like Solana, Polygon, Ethereum, which gets legitimized. Actually, I will say something controversial, especially as somebody paid by Tether. Tether kept shitcoins alive the last cycle. If not for USDT, shitcoins may be way more dead than they are. So that a bad thing Tether moving ESDT to lighting will help lighting users and will also to some degree help destroying the direct competitors the long competitors to sets which are Solana and Tron. And those are also scams created to scam the investor, not the regulator. Well, both, but more importantly the investor.

28:08 Okay, so here I take a more purist point of view, I guess, because first of all, I sort of like the shit coins in the sense that they're not messing with Bitcoin. And also, there's a comparison here to, I think it's Rothbard, it could be me, he pointed out that other use cases for gold than just the medium of exchange use case are actually making it a worse form of money. So when it's used in industry or as jewelry, it gets mispriced. And this is something I fear could happen to Bitcoin too. If you introduce these rails and you say it provides liquidity, yeah, but if the liquidity is based on a bubble, then that might just lead to more confusion and more volatility.

28:54 And there might be side effects we don't see here. I get that it's a trade-off, but also I'd like to take the point of view of the Nigerian boy that is not able to open a bank account in my point of view it would be way better if he had just started accepting sats instead of going through this stablecoin phase it's sort of like I see it as alright, the boy is smoking because he's using fiat and here's Tether it's a nicotine patch so you can put the nicotine patch here and you won't get the lung cancer. No, but I'm still addicted to nicotine while I have the patch, right?

29:35 Whilst Bitcoin is sort of the remedy to the whole thing. So like to me, the thing I have a huge problem with when mixing fiat and Bitcoin together, and this is also like, it sort of misses the point. We're trying to obsolete fiat, right? And if we bake fiat into Bitcoin, Isn't there a risk that we just prolong the existence of fiat and that we just perpetuate the problem? Like, I'm unsure about the trade-offs and if they're worth it. So that's my point of view. I'm also unsure. I think you make three valid arguments. Especially, I don't like very much the first argument, the one about alternate uses of gold, in the sense that stuff like USDT are not creating any alternate use for sets.

30:26 Sets are still sets. They are still divisible amount of difficulty adjusted proof of work. What is creating is alternative use for, let's say, block space or lighting infrastructure. So it's like to say you're creating a different use for gold mines or for gold refineries or mints. That's not the same as gold itself. So the commodity set is not really influenced by this. The second point, I think, is way better. So you're saying, does it make sense to improve liquidity if it's based on something ephemeral and scammy like a fiat scheme that can just, so the dollar will hyperinflate or the regulators will close down, circle and thither, and then all this liquidity that we assume to have disappears because it's fragile, it's not Bitcoin-like.

31:11 This is a good point, actually. It's a trade-off. I think that the privacy advantages, for example, could remain, but the liquidity advantages could backfire if they get removed suddenly. So I will agree with caution on that side. The last one is a very general ethical problem of harm reduction. I'm not super strong. I don't have a super strong opinion. If you are into heroin, I give you methadone and you increase the probability of your surviving heroin overdose increases for methadone. And maybe we can weigh off methadone better than heroin. Yes. Or maybe you just want to go cold turkey with heroin.

31:55 That's noble. It may fail, but if it succeeded, that's better in the long term. Now, it seems like this is a very common discussion in libertarianism as well, like mitigation of the problem, harm reduction. It will postpone the real resolution, so it's bad, but it's also helping actual people in the meantime, which is good, which seems similar to the Marxist critics of charity. Many Marxists, they were saying, you should not do charity because you are helping the poor, and by doing that, You are postponing the revolution by decreasing the revolutionary momentum, right? So charity is bad because you are postponing the real solution with a fake one.

32:35 This is a, I think it's a sensible argument. I don't think it's, I think that if a stable coin also harms Bitcoin in any way, that settles it. Since it's already a dubious case, if it also creates any problem in Bitcoin, I'm against. if I think there is an argument that it helps Bitcoin, like in the case of Lightning Network, especially because we're not deciding between that existing. That's a typical harm reduction problem. We're not deciding between something bad existing or not. We're deciding it. If something bad exists, would we rather have it this way or that way if we can hijack it or this way, which is also a discussion we have with Oprah Torn and this kind of stuff.

33:18 So I think that if we have stable coins and as long as we do, having them on Lightning with a good way, like RGB, is better than having them on Solana, just because fewer people will be scammed by Solana. All right. So what about introducing yet another argument against that, the slippery slope argument, that if we allow these things to exist on Bitcoin, and if we make good arguments for why it's not as bad, And like you're saying now that this is at least scamming the regulators and whatnot. And we use that as an argument. Then we end up with, I don't know if you saw the video of Pete Rizzo interviewing that Ether 2.0 guy who wants to build Ether on Bitcoin.

34:05 And they're claiming that Bitcoin maximalism is now, they're like warping the word and saying that it's now, you know, platform maximalism. It's the idea that we should build everything on Bitcoin. That's Bitcoin maximalism, which from my point of view, that's the opposite of Bitcoin maximalism. And we want people to build all the other shit on other stuff, because if we have perfectly sound money, then we can pay for all the other shit in sats. And that's the point of Bitcoin. So is there a slippery slope argument or is that too weak? Like, by okaying stuff like Tether on Bitcoin, aren't we encouraging other similar projects, the BitVM stuff and all of this stuff that is trying to build other shit?

35:01 Aren't we encouraging the Citrius of the world and the counterparty or whatever they're called? Let me try to separate. So, first of all, the slip and slop in general. By allowing something, are we not allowing everything as a precedent? So precedents do exist. They are powerful. Actually, one of my arguments against BIP 110 will be one of bad precedents. So it will be a slippery slope argument. It becomes a fallacy if we just assume that everything that goes in a direction will necessarily cause everything in the same direction. That's the slippery slope fallacy. I think it's only a fallacy if we assume that we are ignoring the actual thresholds that we are discussing.

35:45 So what we say is, I'm tolerant of where use cases scam the governments, not use cases scam the users. This is a fuzzy threshold, but it's a threshold. So it's very easy to say that, for example, Ethereum, ETH, is mostly a scam to the buyers because of the pre-mine, the rollbacks and everything. To some degree, people can launder money and avoid taxation with either, and I respect that, but it's mostly a scam to people. NFTs have been a huge tax avoidance scheme because you can create an NFT that costs nothing, and then you buy it from yourself, and now you're an artist and you recycle a lot of Bitcoins. So in that regard, NFTs are a good thing because they scam governments.

36:29 But still, the damage that they have done to the credibility of Bitcoin, to the brain of people with a nonsense argument has been worse. So there is a threshold to be put about the scamminess. I think there are a few. So slippery slope is slippery because there is no discontinuity. I think that this slope is not slippery because you have a few discontinuous steps. So one step is the real purity argument, which says every scam is bad. Even to defend people from regulators, you should always tell the truth. I appreciate this level of this test. I think it's a good equilibrium point. I am very tempted to go above that because I like tax avoidance in general.

37:15 And so when you assume that you can lie to the SS to hide Anne Frank, which I do assume, when you assume that then you have a second threshold which is basically when are you not just fooling the bad guys trying to hurt innocent people but you are fooling innocent people for a gain a zero zero negative gain this is the second threshold then there is a trust even if you are tolerant here you have a third threshold which is this kind of stuff do you accept it even when it hurts bitcoin technically creating overread negative externality or only when it creates positive interactions like liquidity or privacy, even if could be temporary. So I stop at this third step, say, okay, scams may be allowed against bad people.

38:03 And then I allow them only when they, in using the Bitcoin infrastructure in some way, they do boost the Bitcoin infrastructure instead of basically damaging it in any kind or in any type. And this is, of course, a judgment call. We may disagree in the merit, but I don't think it's not slippery because it's very clear when I will say no and when I will stop supporting that. To me, it's very clear. And of course, anybody could misunderstand me in order to support something I do not support, but I can understand myself well enough to remember that there are a few discontinuities in this slope.

38:45 so it's not a slippery slope but rather a non-slippery ladder with those adhesive tape thingies that make you not slip on the ladder yes all right um so maybe we should get into the meat of the BIP110 thing here is a good point to start what is the slippery slope argument against BIP110 yes so first of all I need to do a distinction item like 99% of my argument against BIP 110 is based on the assumption that it will fail. So I will mostly discuss that because that's my probabilistic assumption. I think that that failing will be bad for Bitcoin for reasons that we may agree about, but maybe we don't agree about the probability assignment to this event. So let's discuss first Let's answer your question first, because in the very, for me, unlikely case it does succeed, I'm also against for a different reason.

39:45 And that's the reason of slippery slope and the precedent. Basically, my idea is that a Bitcoin, which can be changed in terms of fundamental rule, in a way that economically pushes all the nodes to be necessarily involved in that and can change arbitrarily, it's way more shitcoin-y as a set of problems than a Bitcoin that allows non-monetary use cases. Examples, if we create the precedent that every time we have ASICs or if we create the precedent that when we have GPU, we change the algorithm of mining to become GPU resistance like Lightning.

40:26 And then, of course, GPU resistance doesn't exist. So we do that with FPGAs and ASICs like Monero does, forking every while just to prevent ASICs. Or if we don't like the monetary policy because security budgets care and then we change it like Peter Todd proposes with TaylorMission and Ethereum does it all the time with monetary policy changes, that's another kind of bad precedent. So rules that change for this way, for this kind of rules, fundamental rules that change easily create something which is not good money, in my opinion. Not because the change cannot be positive, but because the fact that the rules can change easily will create a precedent that can be used later for something worse than what is done now.

41:13 So I think that my idea is right now there is no consensus. It's clear there is no consensus. I think it's very, unless there is consensus, if we eliminate from the set of people that must consent, everybody disagrees. In that case, there is full consensus like with climate change. So there is 100% consensus on climate change if you define every scientist which is opposed as a non So if you define any Bitcoiner like me opposed to 110 as a non we have 100% consensus. Otherwise we don't. And if we can make a change and the change is effectively enforced, even if it's good or in my opinion, not even that good in the merit, it's very confused and it's temporary, it doesn't change much, it doesn't achieve much.

42:02 So I don't like the content of the fork, But even if the content is not bad, because I don't think it will hurt Bitcoin, the content itself, the fact that a confused minority of Bitcoiners managed to change consensus for everybody with a lot of opposition by notable Bitcoin power users and figures, that create a precedent that would be very attractive for attackers that want, the first that want to implement their pet projects in Bitcoin, including all the second layer stuff you were mentioning. CTV people, they learned that it was bad to create an activation clients because there was not, many people like CTV, including me, including Luke Dasher.

42:45 Luke Dasher thinks that CTV should be- Including mechanic. Including mechanic. Most people think that CTV should be activated, but has not been activated. Jeremy Rubin created a client to activate it and we told him, fuck off. We are not activating anything until there is consensus because we are not sure yet. Then if the BIP-110 succeeded, that creates a strong incentive to Jeremy to say, who I am, like I'm the last of the losers. Now activate CTV without consensus. And then it will create the reasonable expectation for drive chain to be activated. And then maybe to TXH and other kinds of things. And these are still good changes, which I like in the merit.

43:26 But then attackers would love to use this kind of momentum of easy to change rules to also make bad changes. And this I want to make, I want to try to still man an argument that we attacked as a bad argument for many, many years about spam. The fact that filtering spam is not censorship. We criticize this abuse of the world many, many times. Filtering spam is not censorship. But the same technique that can be used to filter spam, which is not censorship, can be used to prevent people from transacting with Bitcoin in a way that is forbidden in fiat world, which is financial censorship.

44:11 So I think that the fact that our opponents in terms of knots versus core has been very, very sloppy into identifying spam filtering with censorship does not mean that there is not a good case that changing Bitcoin easily could be used to do actual censorship, like in preventing people from moving money that are illegal for some reason. So this is covering only the scenario which I find. So I don't think, so let me put it this way. I don't think BIP 110 can succeed because Bitcoin resists change by, which are not overwhelming majority of all the economy.

44:53 and I think that the fact that it will fail will be bad because my friends and the people that will be more rational about the spam debates are on the wrong side and they will lose credibility and enthusiasm if this fails. So I'm opposed to the fork because of that. In the case it succeeds, it means I'm wrong about Bitcoin being super easy to change by vocal minority and that scares me because it means that it is a slippery slope argument. Maybe it happens this time, for example, for WASF, UASF Segwit. Well, I was against that many people, including Luke, convinced me to be in favor, mostly with the argument that, not Luke really, but other people convinced me, like this is a one-off.

45:38 My friend Marco Amadori called it a Seldon crisis from the foundation cycle. So Ari Seldon created this plan for the future, and the plan just goes on, But sometimes the plan is broken and you do have to act one-off as an exception to fix the plan and put it back in rails. But it's just one-off. So if USSF Insecuite was a seldom crisis, so something where you had to derogate from the principle of full consensus just to save Bitcoin from the apocalypse, I did buy it. But I don't buy that now we are in another seldom crisis because I don't think there is any crisis.

46:19 I think there is an intelligence crisis in the definition of spam. There is a governance crisis in Bitcoin Core, but there is no Bitcoin crisis, in my opinion. And there is maybe a crisis in terms of node resources, UTXO management, because we have to improve the sync time of a node. But this is not a seldom crisis like Bitmain threatening to fork Bitcoin and the New York agreement taking over the main implementation directly. That was an incredible moment in Bitcoin history. I could buy the idea that we could do a minority takeover because it was one off. I don't buy the idea that it would be a good thing that my opinion and most of the developers' opinion and most of the miners' opinion and most of the exchanges' opinion doesn't matter.

47:12 And an important point I want to make here is a symmetry between status quo and change. So I'm okay if all the most powerful people in Bitcoin cannot enforce change. I like it. I don't like if the most powerful people in Bitcoin are powerless on stopping change. That's a completely different thing because change is the trouble for me. Status quo may not be perfect, but it is reliability. It is something that money needs. So the chemical property of gold may not be perfect. Maybe you can improve them somehow, but they are stable from the beginning of super neutron star collisions. They are stable.

47:53 You know that gold is gold. you know, that all their malleability, the electronegativity, all the characteristics are stable. So stability for Bitcoin-based rules are more important than the specifics of the rule. And changing them without the entire economy supporting the change would be a very scary precedence for me. Okay, so I'm going to try to steelman the argument against all of this stuff, because I don't view BIP-110 as a change of the rules. I view it as a temporary tightening of the rules, which is not changing the rules in the sense that every single BIP-110 compliant block is also compliant with everything in the non-BIP-110.

48:37 So it's not actually changing anything. If anything, it's just taking Bitcoin back to what it was before all these changes were introduced by Core. and you can say that these are not consensus changes these are mempool changes but they were clearly changes that the entire community was not on board with like 20% of nodes are not nodes now because of the behavior of core and that they changed definitions and did all sorts of things I think the biggest issue for most of us definitely for me is this defeatist attitude that you can't do anything about it. When you have clear signals from Vitalik, for instance, and other people from way back when in the first Opera Term Wars where they say that they chose to go and build their own stuff because they feared that they would be subject to change in Bitcoin in the long term.

49:33 So to me, the biggest thing in Bitcoin that cannot ever change is the users being in charge, like everything else being downstream of the users. is the core thing that, pun intended, or pun not intended, but that cannot change. And it was always the case that putting spam on chain was more risky for the guy doing that than putting a normal transaction. Because it's sort of like this South Park episode that I always come back to, the death camp of tolerance, that points out the difference between tolerating something and approving of something. We tolerate spam. We don't approve of it. And at a certain point, we don't tolerate it anymore because it becomes such a big problem that we have to do something about it. And this, to me, is Bitcoin not changing. This is Bitcoin's immune system acting exactly as it was intended. It's the users being in charge. And I also think about the fork, the risk of the fork, you say you don't believe the fork will happen. And I think there's a Pascal's wager thing here. Like if we don't believe it will happen, then there's a smaller likelihood that it will. But if we do believe that it will happen and we do signal that we are pro this thing, just temporary restricting things to make it slightly more expensive for spammers, making sure that they know that they're not

51:03 welcome here, we don't want Citria here, we want these people out of our chain that is there for monetary use only, then if we believe that that will happen, there's a higher likelihood that it will happen. That's Pascal's wager of it all. And I think this is at the core of the debate, is who initiated change, really? Was it the BIP-110 people, or is BIP-110 an immune reaction to core making changes that weren't wanted in the first place?

51:44 And it's maybe not even about the mempool policy thing and the op-return being blown off. it's more like changing definitions and stuff and and the rot that has been in course for years now and it becoming more woke and more like i don't think nfts are bad and all of these quotes right the monetary maximalists or whatever you may call us sort of uh see that and and see that as the as the danger and and bit 110 is just bitcoin reacting to changes that weren't wanted and so So in terms of that, if you see levels of mempool policy as the lightest thing, and then soft fork is harder, but the real change is a hard fork.

52:29 And if now the other side decides to hard fork off, then so be it. I don't think anyone on the BIP110 side intends to fork off. We just intend to do what Bitcoiners always do, run whatever software we want. I know you run, for instance, both Notts and Core and LibreLite at the same time. So, and this is fine. I mean, we're... But not Core V30, because that pisses me off for governance reasons. Yeah, and Core V30 pissed off a lot of people. And this is why there wouldn't have been a BIP-110 if that hadn't happened. I agree with this. And BIP-110, so the thing I see is like, where's the risk?

53:11 if this is temporary and it's restricting so that it's basically just telling every developer and every miner and whatever who was building this and that vault solution or whatever they were building that was technically advanced and really fancy, they just have to wait for two years. I mean, Bitcoin is not made for wallet developers. It's not made for people who want to build stuff on it. Like people who build stuff on it must know what it is and build for users. It's the other way around. Like we have no obligation to cater to developers. Like why would we? If the users aren't in charge, then this is not Bitcoin anymore. That's the way I see it.

53:52 Let me try to break it down because of several different points. The first one is the difference between change and well, the first one is the difference between permanent and temporary. I'm open to this distinction in the sense that a victory of a temporary soft fork, which is controversial, I would consider it less bad as a precedent of a victory of a permanent soft fork, which is controversial. So I agree that temporary measure does reduce the concern a bit because what if we were wrong? What if the alarm was about nothing? What if the solution is imperfect? it. Okay, we just wait and we just deactivate. That's I agree that this is a good point. But I think that's cancelled out. Because if you assume that it's just needed temporarily to send a message, then you're also implicitly saying that we are in this case, I will go into the second argument, which is a waste of scarce resource, which is coordination about a soft fork to something which is just temporary. So all this buzz. And then after two years, we'll be back where we started plus social signaling, which I give a non-zero way to. I think social signaling is important, but I think it's unstable. Like social signaling is something that people could be civilizations on. So I will not dismiss it, especially in social circles that have name and faces and physical gathering like Bitcoin Core. If you allow Bitcoin Core to to accept whatever NFTs, that's bad because you're giving a signal to scammers and to shit corners.

55:27 But that said, while I think social signaling is very strong, In mid space, we realized after a few decades of internet that social signaling is very weak on the internet because on the internet, you don't show your face, you don't show your name, and that's a cypherpunk dream. So you cannot be hurt physically or socially. So you do whatever you want and social stigma will not stop you. So if we say we should not accept the Bitcoin core physical meetings or conference are friendly towards shitcore scams, I think that's a threshold we can try to enforce with some effectiveness. If we say the network will socially reject something that it cannot technically reject, I think that's wishful thinking because anonymous people on the internet will not be stopped by a signal.

56:21 So the second the temporary soft fork expires, maybe we will have used that soft fork to send the signal to Bitcoin Core and whatever, but the network in the sense of anonymous people on the internet trolling us with spam, they may even be emboldened by the challenge. Many of them are, and they would come back more. I think they will spam Bitcoin during, they will spam Bitcoin during the activation, just using BIP-110 compliant method of spam, which there are plenty, and they will spend more when it finishes just because they can. So this is the first distinction, temporary versus perpetual.

57:03 I agree it's less frightening, but it's also less effective. So I think it cancels out a little bit. Let me move then to the second point, which is soft fork versus hard fork. You're saying not really a change, more of a tightening. Yes, that's like saying that we prefer the present of a soft fork than of an hard fork. I agree with you, our fork would be very bad as a precedent, subfork less so, but still, subfork can be used to mess with Bitcoin in important ways. Some of those are all these second layer things that can be enabled by subfork and other things will be blacklists or many other bad things. So subforks can also be bad and there is no reason to say they're not a change, which goes to the third argument, which is I want to change the rule, not to change the system.

57:52 Now, I want to do something tricky now, which is using the argument, the Roger Ver fallacy. We'll see this is a fallacy, possibly. Roger Ver and friends, during the block size wars, they were saying, and I remember so many blog posts and articles about that. We are not changing Bitcoin. You are changing Bitcoin. because even if we are proposing to increase the block size, the actual economics of Bitcoin were in a way which was low on chain fees. Now, the situation has changed. Now fees are high. So if we change the code and the rules, we will maintain the spirit of Bitcoin.

58:32 If we don't, by keeping the rules the same, you are proposing to change Bitcoin because actually now the new conditions are different. This is a very similar argument. I think that it's an interesting rhetoric tool, but it's not really super helpful to understand the problem. But, okay, interruption there, because Roger was talking about a hard fork, not a soft fork. There's a crucial difference there. I agree, and it makes a difference, but the trick to say, I want to change the rules to keep the situation the same, is similar. That doesn't mean it's wrong. I just want to point out it's similar. And I want to point out I didn't buy there, I didn't buy then, not because it was a Zarf fork.

59:13 No, but if you're making the argument, like comparing a hard fork proposal to a soft fork, you must also compare it to a mempool policy change, I think, and say that just going along with whatever core wanted is also using that same type of argument. changing something because that's exactly what it is. I agree. We need to change this policy because otherwise these spammers will use even worse. So they're giving in to a change in the attitude of Bitcoin's users. I'm just saying the same argument.

59:53 I think, well, it's not so important in the debate, I think, but I think it's different. The Bitcoin core propaganda right now was never, we need to open up a mempool so that Bitcoin stays the same. They never pretended to be the real conservative ones, I think. Well, maybe there are some exceptions. They must say that the network changes, so we have to change policy in response. Exactly. But that's the Roger Ver argument. That's what I'm saying. That was slightly different. It was the network changes, so we need to change in order not to change. So that was the flipping of the conservative position. So in Bitcoin, since we want, so I think there is a very powerful attraction to stability because money must be stable.

1:00:36 So whatever seems more conservative or stable puts you on the highest ground in Bitcoin because you are basically remaining the same. So you are giving money stability. so Roger was specifically saying by changing the rules with an art fork which is way more we are preserving the economic status why core is saying by changing the mempool we are just surrendering the president status and we're moving to something new which is unavoidable or for somebody even desirable so that's I think that's a difference it's not so important in the debate, but I think there is a difference there. But my main point is that we should basically, we should not, we should not, we should call a spade a spade. So this is a change. And the fact that this change is trying to put the network in the same situation it was before inscriptions, it's a valid point. It's a less, so let's say in the slope, in the ladder, there is a discontinuity you can say. You can say, no, Giacomo, this is not a slippery slope. This is not a bad precedence because we will only do soft forks which put Bitcoin back to a state in which it already was before. So that's a legit thing. It's something that reduces my concern over a victory, but it doesn't put it to zero because I still think that some people, I accept this difference.

1:02:03 This is a changing of the rules, which is something which creates a scary precedent for me in order to remain to a shelling point that was already present on the network before. So any bad thing that wants to happen in the future, we can still make a distinction. No, wait, we were doing a changing on the rules only to repristinate a state of the system. We will not allow a changing of the rules in minority fashion in order to change the state of the system. That's a good argument. I accept this argument. I don't think it's definitive, but it is a partial mitigation of the slippery slope concern that I have.

1:02:45 Yeah, and to emphasize that, I think the whole this is setting a bad precedent argument is that there's more to it. Because you still require consensus, right? You still require, in BIP 110, it's 55% minor consensus, and then the thing happens, right? Even without, it happens anyway. It happens anyway because users are just going to make blocks involved. But the thing is, it doesn't say anything about OFAC compliance or anything like that. Trying to gain support for a fork that nobody in Bitcoin wants is still going to be super hard. Because this is a change that people actually want.

1:03:27 It's not a change that people don't want. And yeah, I guess we'll see. Yeah, but I mean, people are retarded. I mean, I said that 9%. Let me go to my, so I acknowledge the fact that a status quo achieving change of the rules is better than an unbounded change. Okay, that's the difference. But then you say the real thing we want. So if you were saying the real thing I don't want to change is the state of Bitcoin before inscriptions. I may say, okay, that's a shelling point that maybe we can agree. Not everybody will agree, but we can try to push for that. But then you say the real estate I want to conserve is users in charge. And that's very scary for me because people are retarded. And people are retarded if they vote, one person, one vote, they are retarded and they vote for socialism.

1:04:20 And if you put a weight, a coefficient on the votes, and this coefficient is hash rate, you have the mining cartels. And if the coefficient is GitHub commits, you have the core elite. And if the coefficient is Twitter retweets or ratios, you can have votes or whatever. And you have the podcastocracy. I'm pro that, of course. Of course, yeah, because you're pro podcastocracy. But wait, because Levera is a very powerful podcaster. Yeah, but he's not a podcastocrat. He's a podcast... what was that? Tater.

1:05:06 Well, but he may be tempted to become one if you have the power to change Bitcoin. So I think that the idea that this is a very Luke idea that I always found odd. But with Luke, I'm always very careful because he has a very careful cathedral of definitions in his minds that tend to be internally very consistent. But I never bought the idea that there is a happy ending in a democratic Bitcoin where users are in charge. I don't trust users. I think users, most of Bitcoin users were in favor of COVID restrictions. even if many Bitcoin activists were not, users are retarded. Sometimes even activists are retarded.

1:05:48 They're easy to scare. They're easy to misguide. They're easy to send following, including me. So I trust myself a little bit more than I trust everybody else. So if you were telling me users, that's very scary for me. Sounds like democracy to some degree. Okay, okay. So let me try to argue against that, because I don't mean like a democracy. Of course I don't, because that's retarded. We know all the people are retarded. And here we go into economic nodes versus just listening nodes and whatnot, and even the arguments about prune nodes and whatever, and what constitutes a user.

1:06:29 But at the end of the day, I think like a company like Coinbase running a very significant economic node, they have their clients, they have their customers and the needs and wants of their customers to they have to keep that in mind. The reason I love Bitcoin is that it's the closest thing to a free market thing there is. Miners are clearly employed by the network to secure it. And in order to do that, we pay them in Bitcoin to do us a service. And that's why I love it, because it's totally based on free market dynamics. We pay for services. by using one wallet rather than another we clearly signal to the market that we like that one better I wouldn call it a democracy The users being in charge, I would call that a reflection of as close to a totally free market economy we can get rather than calling it a democracy.

1:07:30 So that's the framing I have. The more skin in the game you put in, the more influence you have. And I'd say every single person on earth is an economic node. They are very differently powerful, of course, but someone signaling on Twitter this or that does have an impact on people. It does have an impact on the network because some guy running a very significant economic node may change his mind about this or that. So you can't really disclude anyone from the equation, not even no coiners or shit coiners that are doing the damage in the first place. So like at the end of the day, I think everything is down, which is why I think plebslop is more important than devslop.

1:08:12 Like at the end of the day, it's all about the will of the users. And sure, they may be retarded and make wrong decisions, but at least it's their decision. Yeah, let me refine. So thank you for helping me refining my argument, which was so that the comparison to democracy, of course, was misguided because democracy is a system where the majority of retarded people can actually take other people's property. or hurt them physically. So it's something where the returners can express in the most hurtful way and the most irreversible ways. So it's very bad. Bitcoin is, as of now, a completely voluntary system. So everything we're discussing, including NFTs, shitcoins, monetary maximalists, platform maximalists, everything right now is going on the basis of not enforcing anything physically hurting people or stealing stuff.

1:09:01 So that's already better. So Bitcoin is a market process. So let's leave democracy aside because it's a bad comparison. Let's put it this way. I don't think that people are retarded only when they express preference in democracy, which maximize the damages of retardeness. I think people are retarded always, including in market processes. Market processes are always better than non-market processes. So non-market processes are rape, slavery, plundering, and fraud. Non-market processes are always bad. Market processes have the way to be bad and good and to learn from the mistake and become better and better. So the market process is good. People, actors in the market, they are still retarded. So it's not because something is appreciated by economic notes that I have to go along with that.

1:09:51 During Segwit 2X, actually, our enemy, the New York agreement, was fully anarcho-capitalist debate of ideas. They were not threatening very much to send cops to hurt me if I don't know what. Disagree. Why? Because I don't view fraud as a free market thing. Fraud is a breach of contract. And if you're deliberately trying to scam people, you're not a free market actor. You're a scammer. like you're you're you're deliberately planning a breach of contract somewhere and of course there's the the distinction is is fuzzy to say the least because where do you draw the line between a scam and a non-scam but in terms of the new york agreement i think it's an uh obvious takeover attempt to set the precedent to make it costlier to run nodes and then you end up with ethereum like 10 full nodes in the entire world and a cabal of people controlling the whole thing i mean Everyone, only the big players was, I mean, this is where I fell in love with Bitcoin because the users, the customers were in charge.

1:10:56 It's clearly showed that we could win battles like that. It didn't show that we had won the war. It's probably a perpetual war, if you can frame it like a war, but since it's voluntary, but at least we could resist the attack. The users could. Most of the users wanted bigger blocks because they were retarded. And like most of the people I knew in the community wanted bigger blocks. And most of the people... That's not the impression I got. I got the impression that most people did not want, and that's why we won. We did the user of Activated Soft Fork and everything. I think that's not the case. My analysis of the block size wars is that people who understood Bitcoin and the trade-off didn't want bigger blocks.

1:11:37 People who didn't understand the trade-off, which were majority of, if you count the number, of course. And there were also majority of the businesses, including Coinbase and all the others. So economic majority and user majority, they were in favor of big blocks. But Bitcoin... I agree with economic majority, but they had incentives to be pro this because it would make their market position even stronger. They would create monopolies like BitPay and Coinbase and so on. I'm not saying they were not incentivized. I'll say that they were. So the market, part of the market was highly in favor. Miners, of course, free market players that were in favor of becoming more monopolistic. So the incumbents were mostly pro.

1:12:19 People that were against were mostly a game out of a very high sophisticated location on trade-offs in the future, which was a relative minority if you counted the hats. But I think the reason we won is because Bitcoin gives a disproportionate advantage to status quo. So I think that if we wanted to, so for example, now I want to reduce the block size. I really want you. I don't think I will win because people are retarded. And if I explain to them why we want a smaller block size, they will not get it. So I will never get a strong majority of the economics with me because Bitcoin favors status quo. So I think that block size wars has been depicted as something where the users win. But then you say, what is a user?

1:13:04 Because you have civil attack. You can just pretend to be 1000 users. So you do Ashers. No, because the miners were in favor of 2x and they lost. So economic nodes. But actually, if you think about that, Coinbase is a huge economic node delegated by the users and they lost. So what really won was not these ill-defined users. What really won was some users, possibly a minority in many, many metrics, if not in technical expertise. It was the overwhelming majority of technical expertise, but a minority in heads, the minority of voices on Reddit, the minority of voices on Bitcoin talk, the minority of hash rate, and the minority of businesses accepting Bitcoin. It was the majority of people not giving a fuck. So let's say, let's put it like this. People not giving a fuck in Bitcoin, they default with the resistance, with the status quo. And that's a superpower of everybody defending the status quo. I think that if we try to say the users are in charge, you may always find a subset of users as big as small blockers. They will try to do something stupid with Bitcoin, including maybe, I don't know, replacing a CDSA with quantum resistance stuff. Many users right now will do that change because they are retarded, because they don't know quantum mechanics. And so they will believe everything they read on the newspaper. Okay, here's why I dislike that framing. And that is because it sort of takes for granted that people not giving a fuck weren't acting, that they were just not

1:14:38 giving a fuck and not worrying about the thing. But inaction is also an action. As you know, from Praxeology, you can deliberately not give a fuck. And I think the users were deliberately not giving a fuck because they saw the trade-off and they realized that doing a hard fork and setting a precedent for increasing the block size over and over again was super dangerous. And that's why they refused to do so. So I don't buy that they... It's sort of like the parallel to COVID here is the Swedish government, which was a very retarded government at the moment, which was great because they didn't do shit. So in that case, I do buy that it was because they were retarded that they didn't act and therefore we didn't have mask mandates.

1:15:24 It's great. But in this case, I think, how could you quantify who was deliberately being inactive and who was just not giving a fuck about their nodes? Like, there is no way to quantify that. So you have to make the assumption that it's a deliberate choice. I have assumption, but I think they are very realistic assumption on the fact that the user of Bitcoin, which will affect the economy, is not a Bitcoiner. Just like the user of a motorcycle is not a biker and the user of a rock is not a rocker. So the BitConer is part of a specific subculture. The subculture with the memes and everything was clearly won.

1:16:04 The subcultural war representative, the meme war was won by us because we had Samson and the Dragon's Day and we were just better at memeing. And to some degree, because technical reality was in our favor and that helps the memes sometimes because if you can meme the technical reality, you can have an advantage. But the reality is that even if we were better at winning the subculture, the total amount of users of Bitcoin, including everybody that will receive any Bitcoin or not, as you said, even the coiners are users to some degree with a very low economic impact, even shit coiners, all these users were clearly not even aware that the block size world was even happening because many people use Bitcoin even back then without being on scaling Bitcoin conference or on Reddit or on Bitcoin talk.

1:16:53 And most of the, I would say that if I have to say, if you define people using Bitcoin to some degree, I think probably by 2017, 15% of 50% of them barely knew there was a block size world going on. And of the other 50%, probably 30% have no clear definition of even the problem. And then of the people with strong definition of the problem, it's like majority of people were big blockers in terms of any metric you can define except for technical proficiency on GitHub. So developers, they were small blockers overhandingly. Miners and businesses, they were big blockers overhandingly.

1:17:37 Then you had the hodlers, and that's an important thing. Then you have Bitfinex creating the future market. And then you realize, and that was a very important thing. Then you realize that hodlers, they tend to, most hodlers, both by pro quota. So with an economic weight of how much they had in terms of willingness to, so let me reframe even better. people with a lot of money and with a lot of risk risk uh with low risk aversion in betting they were overwhelmingly skeptical of 2x not really against it just skeptical it was going to happen that's what basically at the end killed it but i i would absolutely i i think your framing of the block size wars as a moment in which people are strangely not retarded anymore, and the majority of users really understand the problem and really can set the trade-off and choose for the better trade-off globally is very optimistic.

1:18:39 I think that people are very good at choosing local optima, and that's why free market is the best because it allows people to experiment with local optima, but people are very bad at making decisions in general including us because we have partial information because we don have complete information because we have a rational ignorance of stuff that we are basically a division of labor. So not everybody's an expert on block size and stuff like that. Yeah. To clarify my position, it's not to say that everyone's not retarded. All I'm saying is that it's impossible to quantify who was retarded or not. I agree with that. I think that we still have an heuristics that in general, most people were not really understanding the trade-off.

1:19:24 The point you're making about free market being very good for local things, I would count running a node as such a local thing and that the guy intending to run one and doing his homework and why that's important and what software to run, there's less retardateness than in a lot of other things when you come to that stage. I partially disagree. I mean, yes, compared to elections for sure, but running a node has a very low impact on things that people can measure as a very large feedback loop. For example, if you don't run a node, you may lose privacy by connecting to a server of somebody else, but you will not realize, you will not have a feedback loop of your action until the cops will basically steal your stuff because you leaked an IP.

1:20:14 And if you don't run a node, you may have miners, basically miners colluding to let you accept inflation or theft in Bitcoin. But you will realize that only when that actually happened, which never happened in Bitcoin so far. So not running a node is something that will hurt you only far in the future and in some scenario which are bad enough that you will want to prevent that. But if I, so let me put it this way. If I do run Liber Relay and I do run Nots and I, my life doesn't change, if not intellectually due to that, because I didn't find any block in Datum yet. So I didn't generate a clean block with Nots. I don't use Liber Relay for mining, but I didn't create any block.

1:21:02 I don't, my fee estimation, unlike people in Korea saying, is not worse on notes than it is on Liberale. It's not even significantly different. So I have the same fee estimation, the same block production, which is zero, less sadly, because I'm a shitty miner. And doesn't nothing, I don't have, reality is not giving me back any feedback loop on running my dot. That doesn't mean it's not important. It's important for staff that are very either far in the future, like privacy leaks, or low probability like minor collusion, but it's still important. So you don't consider people calling you an arrogant asshole for running LibreLy on X market signal?

1:21:43 Yes, but yes, it is. But interestingly enough, I will receive that signal if I run, if I really, so you don't even know if I really run LibreLy. No, no, you can say that you do just to piss them off. So the real point is go on Twitter with an opinion on this. That's the point that will change my life for the better or the worse during the day. But running the node will change nothing. Now, this is interestingly, so now a very interesting game that we like to play right now is who on the two parts of the debate are more like big blockers. And everybody is saying, no, you, no, you, no, you. I think there are very equally heavenly distributed points in this because in some ways, clearly, core is the big blockers and BIP110 is the small blockers, especially in the sense that nodes don't matter, don't even write a node and stuff like that.

1:22:40 then there is the ways that BIP 110 proponents are the big blockers, which are change the rule in order not to change the economics, which we discussed before, different because of fork and temporary. And then there is developers, evil, common people, perhaps good. That was a very big blocker, anti-intellectual attitude during the block size wars, which, by the way, I was very tempted for because I tend to be anti-intellectual. So whenever I see the plebs against the elite, I tend to side with the plebs instinctively, but not in this case for the specifics. And then there are a few other things. For example, the fact that big business was siding with somebody in this case, clearly big business is siding with core, not even that much, but less than before.

1:23:31 there's not like a clear user resistant software by big business but it could be and and perhaps and let's say small users are siding with with the bap so they're interesting comparison but they're not clear cut it's not that one of the side is clearly roger verlike and the other is clearly the opposite this is a shuffling of the players and the shuffling of the rhetorics the rhetorical point and of the arguments, I think. Yes, history doesn't repeat and it doesn't even fucking rhyme. Not this time, not this time. No, and I agree with that completely. I just, from my point of view, like, even if all it accomplishes is like a hit on the nose on these spammers, I think it's worth doing it because I don't think people hate them enough. Like, and the scamminess and the shit that is being built and the rot that is happening everywhere.

1:24:27 And you can see, maybe it's just my feed. What do I know? But I see like the Bitcoin Magazine people in particular, a lot of people from that camp and similar camps are now like doing, to me it looks like another wave of shitcoins and another wave of shitcoinery. It's the same narratives as it was back in 2017. It's just that now it's much more destructive because they're trying to do all of it on Bitcoin. And like, to me, it's just sending a signal, even if you call it a virtue signal. Like, yeah, I do want a virtue signal. I want to send a signal of virtue to the network that we do not want this.

1:25:10 Like, we are Bitcoiners. We are here not because of short-sighted, high-time preference, fiat gain thingies by scamming people and building this or that. We're here because we want, as you said, the status quo being... What words did you use that there's a proclivity for status quo or that there's a... Well, asymmetric preference for the status quo. Asymmetric preference for status quo. That's what I like because the opposite of that is an asymmetric preference for the statist quo, which is what fiat leads to, right? Agreed. So I think anything I can do in my power to help the former and fight the latter is to me worth it.

1:25:58 And that's why I'm pro this thing. Well, let me, so I agree that virtue signaling on something which is virtuous is good. The problem is at what cost? For example, I was virtue signaling by running notes, mostly virtue signaling. They didn't change the word, but I was signaling something. And people were, but if you do that, your fee estimation may be slightly off of one micro set every five years. Okay, I'm still virtue signaling. The cost is irrelevant. So even the low payoff from my virtue signaling is enough to justify it against the cost. But if you do that, maybe the relay of the minor relay will centralize.

1:26:43 But this is irrelevant. It's like if you do this, Cytria may not change idea on using fake pipe keys and keep using open return for a fucking super edge case in the future when that will even be a thing in the market. Okay. I mean, I'm sorry for that. I don't care. I run notes. The difference is that if you virtual signal with a change of consensus and you fail in achieving a super strong economic consensus, you stop accepting Bitcoin blocks as valid. Well, no, that's a high cost. That's too high a cost for virtual signal. And if you do that, not only you, but all the people that thinks like you about spam and about this shitcoin that goes on, they will all fork off.

1:27:29 And then, of course, they will just probably switch back, but they will be reputationally and culturally weakened. And all the enemies will be emboldened by the fact that they will just tell you, I told you so. So the demise of VIP 110 will be, and I think will be, a strong point in favor of this shitcoinery, just because we have been tricked into virtue signaling at the highest possible cost. I think it's not by chance that while we were fighting spam with notes and filters, people were just teasing us, just fork off, just fork off. And we were answering, no, consensus is static, spam is dynamic, so filters are the best.

1:28:12 And they were, fork off, just fork, do it. They were like, do it, do it. If you have the balls, do it, change consensus. And that was not because they were kind to tell us what, they were not trying to help. They will try precisely to lead us into a trap. And I think that most of the movement fell into this trap. Yeah, they were bullying. But still, this is not a hard fork. This is a soft fork. It's better. Whoever initiates the hard fork is the one forking off. Like, not the people running a soft fork. Like, all of the blocks we will mine on are compliant with the other. I don't think this is even a debate because it's not forking off.

1:28:55 This is another beautiful Luke speak, which can be made internally consistent, but it's clearly at odds with any common sense definition of Bitcoin. Fork is usually when you change the rules to allow stuff that was not valid before. Keeping my core node is not an art fork from any practically useful definition. Keeping my node as is, is not a hard fork. Of course, if we redefine Bitcoin as a Bitcoin, which already includes BAP 110, but then if we don't, so for example, push torque activates drive chain tomorrow, BAP 300, 301. I don't, I'm not hard forking. I think this definition of hard fork becomes very useless very fast.

1:29:39 Okay, but here's the question then. So the activation date comes, and you're a miner, and you can either choose to start mining BIP-110 compliant blocks, or you can mine whatever blocks. And if you do the latter, you are at risk of losing a whole bunch of blocks later down the line, but you're not if you just stay compliant with it. And the cost of that is just this maximum 2% extra fees. And what miner would risk that? And what's the argument against this just activating because of that? Sure. So at the very beginning, the miners will not do it because it's risky for nothing.

1:30:21 So just stay compliant. But the fork is not asking you to only do that. So there are two things that you can do. One is to create a block which is compliant. And the second is to create a block on top of other blocks that are compliant the second part is the hard part because it costs me nothing to create the compliant It costs me 2 to create the compliant block So I would prefer a compliant block so I don't risk to be orphaned. But if the longest chain, the heaviest chain is now non-compliant, whether I am now compliant on top or not, I'm still not compliant, right? So this is the thing that as soon as there's a non-compliant block, that's where the risk happens. But who would mind that non-compliant block? Would it be Mara? Probably.

1:31:09 Well, I mean, just wait. I mean, so this can stale the fork for very long. But to assume that for all the duration of the rule, which is one year, nobody, even out of chance, even a troll with a bid X, will find ever an uncompliant block just because at the risk of being orphaned, I think that's a very optimistic assumption. I hope. So it's not zero probability. I hope it works out. And that will be what I would call a success, which would trigger in me the minor concerns about the president, which, as I said, are not as big as the ones about the failure. But I think it's a very, I mean, we can all, I can pray.

1:31:51 I know you don't, but that's, I think you should start. You think I don't. Exactly. I think you should start, Nude, because. You assume I don't. because if you're hoping that this risk will not be taken from the activation date until the end of the year by any miner able to do one block, that's a very, very, very bold assumption. Even because some people will just create a block, some people may put energy into this just to piss us off, And some governments may confiscate a shrate just to divide the Bitcoin community.

1:32:34 I'm not sure they have a plan right now, but if I was my enemy, I would probably maximize the damage to the Bitcoin community by mining an uncompliant block immediately. So some of the voices that are more critical of shitcoin and Bitcoin are basically reputationally or economically forked off the network. So it's very hard for me that it will not happen. Luke's argument, of course, and I don't know if we have time to go there, but Luke's argument would be no, because nobody is, only pedophile will mind the blocks. But that's not, I don't think it's correct, because you can make a block which is not compliant with zero pedopornography. It's just, you just have to avoid the fork. And so it would be something that I think will happen.

1:33:16 And when it will happen, I think that core people will, will like 30 people will will will flex and and and and gloat and and and be happy and be credible because they were like I think that after blocks has worse we won mostly because of status quo preference and we received an underserved credibility in developers out of that because the winners are always considered better than they are because they are the winners so there is this right history yeah Yes, I mean, Giacomo, this has been fantastic. Regardless of what side you're on here, in August, a good investment would be in any company sending popcorn for sats. I'm sure I'm waiting for that.

1:34:04 Long popcorn. Oh, wait, Krut. Let me, if we have one minute. Yeah, yeah, yeah. I wanted to show the screen because I think that I wanted to, let me say window. Okay. Okay. So I wanted to share a couple of meme. All right. One is this one. I think that I feel like this a lot because you say this was shared by Elon Musk as well. I've seen it. Yeah. In 2000, this is 2008, but for me, it was like 2024. I was very aligned with the left and now it is fellow noses. So running notes.

1:34:45 So I was like, spam is bad. Oh, okay. Maybe it's not, maybe spam. I mean, I was already running liberal relays. So I was close to the center because I said, yeah, the argument about incentive compatibility is a good argument. but spam definition that they're using is retarded. And then basically people were saying, just fork off. And me and you and Mechanic and Luke, we were responding, no, we won't because forking, because spam is a dynamic problem and filters are dynamic, but consensus is static. So we won't fork, we won't take debate. And then these running people are you, my VIP 110 friends.

1:35:28 And now I close to the center because, yeah, you know, I'm still not, I'm still anti-spam, but I feel like I'm not running. I'm just staying here. And then for the last few months, people are calling me shitcoin enablers and spammer and Procore and Walk and Pedo and whatever, which is basically me feeling moving to the right. But I stayed there. I think I just stayed there. And it was the whole anti-spam movement to run to the left. I'm still, so I think if I read my tweets in 2024, where I was agreeing with Luke and Mechanic and many others, I was saying the exactly same things in the merit that I'm saying now about forking.

1:36:12 And the second, which is a more advanced version of this, is this one, which is not only I stayed in the same position and BIP 110 people are running to my left. But also I perceive that they are radicalizing me in the other direction because, for example, I disagree. I make you an example. I disagree with Peter Todd on many things, tail emission, geopolitics, many, many things. Genocide. Genocide. And I hang out with Peter discussing Bitcoin since 2016. He was the first person I started to do that with. I never used friendship or closeness as a criteria to agree with him.

1:36:57 So I never said he's a friend. So whatever he's saying is not retarded. I always did the opposite. I always stayed very clear on that, which is something I do with other friends. Like I'm friends with Bruce Fenton and I think he's a shit corners and I think he's wrong. I was friends with Antonopoulos before COVID. Then it became a little bit more personal and he was wrong on shit corners and was still hanging out with Antonopoulos. So now if people come to me and they tell me, if you are, if you keep, which is something a little bit like this, I'm still doing the same thing. Making a freaking meetup with Peter freaking Todd. I still do the same. His position may be more radical on spam. Not really.

1:37:37 They're always the same. They're literally the same since I know in 2016. His geopolitical position on genocide and killing Russian babies is, that's notably worse. and I tell him they are notably worse, but so are other positions in the Bitcoin space that I disagree upon. For example, Luke, I think it's probably for that penalty for masturbation or something. I think it's wrong. I think you should not give that penalty for masturbation. Still, I stay there. And if the best way to push me, and that's the contrarian problem that I run into, the best way to actually radicalize me against BIP 110 is to force me to change my ideas of preference based on the new thing, the new current thing. I'm still repeating what I think. I'm easy to convince otherwise if there is anybody that has a good argument to convince me otherwise. But let me try to stop sharing. But I feel radicalized, not by you, of course, but this is a message to the fellow So, let me go back to the Pascalian.

1:38:47 I don't think it was actually a Pascalian wager in the proper sense. But what you were saying is basically this is like a Schrodinger observation. If you are against something that can increase the probability of failure just by being against. I realize that. So, if plebs, if you think that I'm important for BIP 110, I don't think I am. I think that if your fork relies on me, you are screwed anyway. But if you think it's important to have me there, stop trying to police me about what I do and where I meet and only stay on the arguments. Because that's super triggering to me. That's one of the reasons I became so radicalized against Core.

1:39:29 Because they were saying to me, you cannot run Nutz. What? I cannot what? So that's really triggering to my contrarianism. So that's absolutely not what Nutz is doing. and this kind of debate actually helped me smoothing out my position. I didn't think I changed it, but I think you made a few good arguments mitigating my concerns in case of victory. I think I'm still very... I still assume defeat as very, very probable and I still think that defeat will be bad for the anti-spam movement. but I think you assured me that if I'm wrong and if he wins, probably the president can be insulated for many reasons that will not make it very concerning for the future.

1:40:20 You convinced me, I think. Well, happy that you say that. You know, I love having you as a sparring partner and a friend to point out to me when I'm being retarded and on some of the points, sure, I'm slightly retarded, not entirely convinced that I'm entirely retarded about this whole thing. I think guilt by association is something that we can let lefties do. And we shouldn't be, you know, hostile to one another for guilt of association. I mean, I do a podcast, I talk to people, I think diplomacy is a very important thing if we want to bridge any gap ever. Sure, there are exceptions and there are people you shouldn't platform for instance i i try to not interact with shit coiners anymore on twitter because of the whole never pick a fight with a pig because you both get dirty and the pig likes it all they want is your attention so i try to not uh comment or or like or retweet or anything or point out how stupid they are even though i love pointing out when people are wrong on the internet that's why we're both primarily on x and not nostr i think yeah everybody's too right on Noster. Yeah, but I absolutely love this conversation. I think it's one of the most constructive ones we've had and take from it what you will. More pro, more against. Comment and like and subscribe and brush your damn teeth and I hope to see you soon again, Giacomo. I don't know when

1:41:51 the next time is. Probably Prague, right? Yes, we will be in Prague. Yeah, fantastic. And then after that, I'm looking forward to spending another week in Lugano, one of my favorite places in the entire universe. Well, Luke is so forward to have you back. Students were already excited. Fantastic to hear. And give my hugs to Mir and everyone else at Plan B. And till next time, cheerio.