Why Bitcoin Miners Ignored BIP-110 with Bob Burnett | Bitcoin Infinity Show #223

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Bob, a warm welcome back to the Bitcoin Infinity Show. Nice to have you back.

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Hi, Knut. Great to see you. Nice to be back here. Thank you.

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Yeah, it's been quite a while since we last spoke. I think we were going to talk about,

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you know, if mining is possible on Mars or something, and then we cut off the pod just

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before. So, but we won't, I don't think we'll talk about that this time around too. We'll have

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to save something. That's a good one though. That's a good one. It is a good one.

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Yeah, the center of hash and all of that.

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Now, of course, I want to talk to you about, first of all, congratulations on being elected chairman of the board for Ocean.

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Well, thank you.

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Thank you.

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I am excited about it, but, you know, it was not what I sought.

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But, you know, obviously change was imminent in the organization.

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And I think what Ocean does, and I'm sure we'll talk about it more, is essential to Bitcoin operating properly going forward.

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And so it's important that that mission stay on track.

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And frankly, it got off track.

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And so we need to focus it.

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Yeah, I've been looking forward to this conversation for a long time.

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I was pro the fork

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and so were you at one point

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I think at least pro the soft fork

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I didn't make too many predictions

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about how likely it was to come through or anything

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I was pro the soft fork

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for other reasons than just game theory reasons

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I hoped that more people

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would buy that narrative and cling on to it

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and just saw it as a very modest thing to do,

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like a very small, what mechanic called it,

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a milk chocolate soft fork.

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I kind of like that term.

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It didn't do very much, so why not just implement it?

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But now here we are.

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Things played out the way they did.

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I get a lot of comments in my comments from both sides.

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Of course, the Blake 2 beers now view me as a cop-out.

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And I see these comments about I'm only having the position that I have because I need the sponsorship money and the views and whatnot, which I giggle at a bit because, first of all, I don't get that much sponsorship money.

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And also, I was not first and foremost a podcaster, and I will never let any such incentives change my views on anything.

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And if you want proof of that, all I have for you is trust me, bro.

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But I hope that if you listen to enough of these conversations, you'll understand that these are honest conversations.

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And I try to pick guests that I view as honest people, including yourself.

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And so just getting that out of the way, I hope that people from both sides of this can enjoy these conversations and hopefully be able to have a bit more of a neutral view of what actually happened.

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Yeah, there's a long preamble here, but the way I see it, if Core V30 hadn't been released the way it was released, and if they had just refrained from doing that small change that no one except spammers really asked for, then we would still have had all of those great Bitcoiners that are now forking off on the main chain.

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The soft fork wouldn't have even been a thing.

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So first of all, do you agree with that view?

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Was it Core's fault that this happened?

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Or like, how do you view that?

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I think that the impetus for the BIP-110 movement,

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if we might want to call it that,

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was rooted in that decision to change Op return in Core V30.

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I think that, and I still think to this day,

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that the justification for it

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was technically incorrect that now was it motivated because of you know trying to help

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spammers uh in citria and i i don't think it's fair for me to to assume anything like that or

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project anything like like that on somebody because i don't have evidence of that but um i understand

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why people would be suspicious about it.

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And I think that as Bitcoiners,

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there's a lot of tendency to leap to conspiracy theorist type stuff.

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And that happens on both sides, by the way.

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I've noticed.

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So, you know, and I've even been the subject of some of those,

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you know, which we can maybe talk about later with,

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with is tether taking over ocean or like there's some of that sort of stuff that

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has happened to me recently. But certainly V30 was the impetus. And, you know, I, if we kind of

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go to the root cause, there's, there's a fundamental belief, I think that still exists

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within core and a lot of the people that have been very supportive of core that, that it doesn't

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really matter and you know we shouldn't we should just acquiesce as as happened so BIP 110 came out

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of that and you know as you said in your preamble I guess I give a little of mine too is you know I

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I was a supporter of BIP 110 because I there were several reasons um one reason um was that

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I think we needed a reset. It was clear that there was a massive divide occurring. And I thought BIP-110

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and the temporary nature of BIP-110 was an opportunity for us to maybe come back together.

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I was hoping it would be a coalescing function and not a dividing function. But it obviously

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ended up being the opposite of that. But other reasons that I supported it, even though I thought

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it had warts, but because of its temporary nature, I didn't think those, I thought those warts

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were less ugly than the warts of staying on Core V30. So I supported it and I thought it was a

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chance for us to kind of come, as I said, kind of come back together and coalesce.

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I never supported a division of the community, though.

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And this is where I think you were the same way, too.

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Like, one of the things I said throughout was I'm not going to mine on a minority chain.

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Like, you know, I will I am expressing my opinion.

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My support of it was, you know, Bob Burnett's and, you know, my support through my company barefoot.

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We were supporting it.

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but not to the extent that,

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Hey,

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if this thing doesn't become the heaviest chain,

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then I can't,

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I can't go there.

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Like it,

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and I don't do that just because I own a shitload of equipment that,

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that is a shot to 56.

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But,

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well,

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I guess that's the proof of work thing,

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but it's not,

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it's not,

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it was not financially motivated

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for

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me. It was about

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the worst

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thing for Bitcoin, I think, is

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a fork, is a hard

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split. I think that's a bad, bad

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thing.

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And I didn't want to support

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that. So the other thing that

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happened, I think, as you know, I created

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the first signaling block

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for BIP110.

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And

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And I still think that that was the right decision because one I was supporting it I wanted the world to remember that this was part of mining that part of mining is creating blocks and expressing your support or opinion about potential protocol changes

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That's part of the process. And I think it's important for miners to remember that because we have this whole thing of miners versus hashers, right?

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Are you a miner or are you a hasher? And I thought, you know, this is a great way to demonstrate to the world that being a miner is something that has power, but it also has responsibility.

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and that if you abdicate that responsibility to the pool itself,

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that's when you stop being a minor, when you do those sorts of things.

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So I continued to signal through May.

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In early June is when I stopped signaling.

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And maybe I'll pause there and give you a chance to comment up to that point

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because it was kind of a pivot point for me right around there.

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Why was that a pivot point?

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Because what I saw happening, and you may disagree with this, and that's fine.

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What I saw happening was I saw the BIP-110 movement getting too caustic, first of all.

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And I thought that it had swayed to where the voices promoting at that point had gotten very adversarial, number one.

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Number two, to me, I never bought the node thing.

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So not that the nodes don't have a significant say, right?

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I mean, I think we saw a lot of nodes.

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But what I wasn't seeing was any support outside of a small group

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that when I would talk amongst the community,

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It was either opposition or apathy. And this is everything from, you know, ecosystem, wallet developers, application developers, people at exchanges, like large OGs that owned a lot of Bitcoin.

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I was just not seeing, outside of kind of the initial group, I wasn't seeing new people come in.

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It was kind of clear to me that the consensus was very much in opposition to a change.

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And so I toned down my activity and my support at that point.

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yeah so so uh okay uh the the thing that i'm really trying to get to the bottom of and uh

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for the most part just to educate myself and get a clearer picture of how how bitcoin actually

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works under the hood is this uh the the sort of perspective that was given from the pro side

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I think not in the beginning, but it evolved into that, is that the nodes are in charge and user-activated soft fork, minority soft forks, are possible.

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And that at some point you would trigger this domino effect where you have to anticipate whether the other miner is going to signal or not.

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and you're also incentivized to signal as late as possible into the game

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because that gives you an advantage over other miners that aren't prepared.

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However, I don't think that view is entirely correct

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because I think there are more factors at play.

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And also their narrative, as I understand it now,

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is that some of them, as we've talked about conspiratory thinking,

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I mean, I'm all pro-adversarial thinking, but conspiracy is another thing.

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And I think a lot of Blake-to-beers think that the big miners colluded to not have to signal for a minor rejected soft fork or whatever, and instead could just ignore this thing.

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so I'm trying to visualize the factors at play when you're a miner and you have to make this

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decision whether to flip the bit or not on August the 8th and I think on the one side you have

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the missed opportunity of all the fees that could have gone through those nodes that would now fork

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off and on the other side you have every other uh every other economic incentive including you know

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just as giacomo pointed out the other uh the other day uh inertia that it's uh change change is always

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costly like it's it's much easier to just stay keep doing what you're doing and also reputational

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damage from not doing what the other miners wanted and what most users seem to want even

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though they didn't signal for anything and also yeah there's also the the fees to be gained from

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from actual spam that's also a factor uh but so so i now see user activated soft for minority soft

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forks as possible but maybe we didn't go we we never came above the threshold needed and i think

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a large factor in that is that as many pointed out, these new nodes that, you know, Start9 and

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Umbro were showing great sales statistics, all of those nodes, the fact that they were just

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purchased and just purchased for this specific purpose to signal for BIP-110, that points to

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those nodes not having that much economic activity and also not probably they won't have that much

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economic activity in the future so you're not missing out on that many fees if you're the

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miner and you're making the decision whether to flip the bit or not so so what went through your

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head when when the date actually came and what what incentives what factors did you have to

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weigh in here including your own you know moral stance if you will

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Well, first, I mean, as an organization, and I'm going to speak, well, I'll speak to it both from an ocean perspective and from a perspective as CEO of Barefoot Mining.

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In both cases, we were completely prepared to go either way.

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Like in a minute, we could flip a switch and we could be on either chain.

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Which, by the way, is one of the powers of Datum and the way that Ocean was structured was it gave miners that capability.

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And that's what we put significant effort in at Ocean to make sure that we could service the miners.

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I think some of it's with hindsight, but not all of it, that a user-activated soft fork is still possible.

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I think there are a set of circumstances to it, but I think there was, I don't know if this almost sounds funny, there was too much focus on the node directly and not on kind of the supporting part of the system.

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so um one things like exchanges and i even hate to say it like treasury companies are important

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like i think there should have been marketing an effort to convince them why this is would have been

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in um advantageous to them to be part of it because to tell you the truth about the mining community itself there are a lot of suits in mining

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We'll call them suits.

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And they're not Bitcoiners.

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They are economically incented actors.

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They are the reason things like FPPS exist.

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But see, that in and of itself, I think, is a great clue as to how miners will.

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So when I'm saying miners, I'm going to be specific.

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Very large miners, the public companies and the biggest miners.

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They are on the whole so risk averse and volatility averse that they choose the FPPS-based payout pools versus a TIDES or PPLNS,

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which pays less over any significant period of time,

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but they do it because a volatility of a couple percent on a monthly basis

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is too much for them to take on.

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Okay, so let's get the terminology straight here.

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I think you're talking about hashers now, not miners, right?

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Well, I am.

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Well, yes, I am.

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And that's bad for me because I'm one of the biggest proponents of defining hasher versus miner.

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But we have a lot of hashers.

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The majority of hash rate is controlled by people who only want to hash.

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They want to be paid for that function.

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And they want as little volatility as possible related to that.

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And I think people confuse economically incented, even Satoshi talks about economically incented miners, that sort of thing.

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Well, there is a maximizing your revenue versus having predictable revenue.

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And they are largely predictable.

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Predictable revenue is better than maximum revenue.

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And so that gives you some insight into the way that they think.

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You know, and I would say, this is my guess, I think somewhere around 28 to 30% of global hash rate sits in the hands of the big publicly traded mining companies today.

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so and then probably another uh 15 to 25 percent sits in what i would call privately held

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elephants so really big organizations but privately held they all kind of come from that same

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that same mindset i will also point out i don't think there was enough marketing to them

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I think there was too much emphasis on the nodes are in control.

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The miners, if you think about the miners, the miners are going to care about what the exchanges think.

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Like it's going to be really important to these guys, these big guys, what the exchanges think, because they need that off ramp.

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Right. That's critical to them.

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They care about what their shareholders are going to think.

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They won't care about the nodes that much.

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They barely, like most of them don't even run nodes,

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or they may run a node in their finance department

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where they do some of their treasury management,

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but they're not running nodes relative to the mining function.

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so i i i think a lot more work should have been done in the broader community to try to

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gain support because the and i spoke to a lot of big big miners it wasn't even on their radar

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like they they had put zero thought into it because they felt zero pressure to even think

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about it. Maybe that's the best thing to say. The only thing a few of them did, and I think we have

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to even give Foundry some degree of credit for it, when Foundry said, hey, we're going to ask these

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people to vote, that was the first time some of them even thought about it. Yeah, and I thought

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that might actually have triggered something because now the other miners would have had to

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take that into account and then prepare accordingly.

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But apparently they didn't have to.

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And also, I don't buy that they were colluding behind closed doors

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because they didn't need to.

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If they weren't even informed, and I totally buy that, by the way.

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But as you say, if they now prefer lower gains but more predictable gains,

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That to me sounds like a high time preference behavior, which is exactly what Bitcoin is trying to fix.

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It's a product of the fiat system, if you will, that people are that way, to some extent at least.

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And also that they care so much about what the exchanges think because they want to sell their B2C and buy dollars so they can pay their electrical bills, I guess.

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But how do you see this going forward then? Is it going to be a bigger and bigger problem going forward? And what part does Ocean play in solving that problem?

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Well, the first part of your question, yeah, it's very complex.

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I mean, one, these are fiat-minded organizations.

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It's something I've spoken about a lot, that it's why, it's why, like, barefoot is not a

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public mining company.

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I used to work in a Fortune 200 company in the C-suite, and I know what hap- as soon

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as you make that decision to be public, you cannot be a Bitcoin company. And you are forced

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into a fiat mindset. You are legally obligated, and I guess you could probably even argue morally

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obligated when you make that step, to be fiat-centric. And you are also beholden to the

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perception of your investors. And that's what's really scary. Because we live in this litigious

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society, if you're a public company, as I say, you are subservient to the perception

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of your shareholders. So if your shareholders think you're going down the wrong route,

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even if you're making a sage decision, they can still sue you.

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Right. And and you're you're you know, so you you get into this box of being very, very conservative for the most part. Most organizations are led by people who get very, very conservative and they're holding big bags to they.

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you know, a lot of these guys, we won't have to talk about MetaPlanet or all that, but that kind

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of behavior where the executive incentive plans are such that it's not necessarily even about

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them providing great shareholder returns. It's about them thinking the shareholders

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will not sue them and can they hang on long enough to collect the big bag?

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you know and so so that's where we are i mean there's no way to make it illegal for a um

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a company a company structure to be filtered out of whether or not they can participate in

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the mining network or not see i think i think by the way we won't go down this one right now

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When I watch what's happening with the Blake 2Bers right now,

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they're upset because the behavior of the miners isn't what they want.

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And they're struggling with that.

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Well it the same problem they had on the other side Yeah I think that but here what interesting Canute The public miners are losing power within the Bitcoin ecosystem right now And the big guys are losing power within the ecosystem The timing by the way BIP 110 was really poor in my opinion

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Like that was pushed too early, that there may have been a time when the world would have been in a better environment to accept it.

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And this is one of those things where, like by my estimates, the U.S. or the big public miners have fallen from about 38% to about 28% of global hash rate just in the last year.

254
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And I expect that to continue. And I expect, I don't know if you remember my rabbits, horses, elephants.

255
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Absolutely.

256
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Well, the horses and the rabbits are rapidly gaining power, but they don't have enough right now.

257
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But the public miners are leaving for two reasons. One is they actually can't make money.

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the the economic the pure economics and two they have a savior which is ai and so they're they're

259
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leaving rapidly so the ecosystem is kind of self-correcting anyway and and uh there's a lot

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of activity in the horse class and we i mean if bip 110 did one thing it did help a lot of people

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run nodes and i think it did help a lot of people start mining again even at the individual level

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the rabbit level so that's really good yeah uh so i i think we're we're we're gonna see

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the big miners that they'll they'll calm down the horses and the rabbits are more

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how should we say they're they're more bitcoin centric companies i think by definition

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yeah and if you say if what you say is true and and if it will keep on being true that

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this goes from the elephants to the horses and the rabbits and i think as long as that's

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that holds true i'm i'm super optimistic um because there are so many levels of irony here

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because you have irony in the public companies

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that are most of the hash rate

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being the most fiat-minded people on earth, really,

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because Bitcoin was created to solve exactly this

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and to separate money and state,

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which means that none of this would apply.

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None of this would make any sense in a hyper-Bitcoinized world,

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like none of those behaviors.

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and you would be barefoot instead of wearing loafers, so to speak.

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You would not be a suit.

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You would wear a toga.

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But the other irony is that just as the bigger players here

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move from real stupidity to artificial intelligence,

281
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you get some of the best real stupid ones forking off.

282
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And that's, in my opinion, that's sad because like, who's going to be on the battlefronts in the next fight? And I really don't like the fact that so many good Bitcoiners have now chosen to separate themselves from this.

283
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Because as you say, I think it's inevitable that they will face exactly the same problems, if not worse, probably worse because they're a smaller network.

284
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So it's easier to change it.

285
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And it's like it's already centralized, in my opinion.

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I don't view I just don't see it happening.

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And then we're going to have to rebuild everything and convince everyone that the that the that Bitcoin 2.0 is better.

288
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and it's just the same futile fight

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as every other attempt at creating a shitcoin.

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Even though maybe I agree that the goals are way nobler

291
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than with something like Bcash or Ethereum or whatever, Solana.

292
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But noble goals is not everything here.

293
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Sound money needs to be actually sound.

294
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Yeah, I agree.

295
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It's not my nature to wish ill on anybody.

296
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I think that's a bad, a bad thing, but I, I cannot, I cannot see a path to success for them. And, um, I think the, the centralization is massive there right now. I think they're suffering even to a greater degree from the same issues that Bitcoin itself has.

297
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has, I think it kind of has the worst of, how can I say this? So I saw, I'll tell you an interesting

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story. So two, two, two quick stories. So one is I did a show. I have a show I call old man yells.

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and I did a show in January of 2025

300
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and it was because it's called Collective Denial.

301
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It's the title of the show, anybody interested in it.

302
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It's about 20 minutes.

303
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And the reason I shot that show was at the time

304
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I kept finding myself in these battles

305
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with Bcash and BSV people

306
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and who were insisting that they were Bitcoin,

307
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that we were flawed you know kind of the same narrative and uh they struck a chord with me one

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day so i i did this show on a guy named hiro onoda it's the story of hiro onoda hiro onoda was a

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japanese soldier in world war ii and um i won't tell you the whole episode obviously but the at

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the end of the story he and four other guys were um were part of a team on an island in the

311
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philippines and they refused to believe that the war was over and i've heard this story yeah and so

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i go through the detail of it within the show and it's very interesting um and you know at at some

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point like one of the guys uh leaves the group he actually gets lost finds himself in a village in

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the philippines becomes convinced the war actually was over because it's like a 12 years later or

315
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something at that point. And he flies home to Japan and realizes the war really was over.

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And so he comes back to try to convince the remaining part of the group that the war is

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really over. And they still refuse to believe him, thinking that it was a conspiracy and a

318
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attempt to make him turn them against the war. It was like completely delusional thinking at that

319
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point. And Hero, by the way, was the last guy. I think it was like 28 or 30 years he ended up

320
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on the island. So part of this though, part of the reason I'm saying this is there's a guy named

321
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Brett Weinstein. Have you ever heard of Brett?

322
00:33:48,982 --> 00:33:50,082
Yeah, I've seen

323
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a lot of Brett Weinstein stuff.

324
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I think he's

325
00:33:53,722 --> 00:33:55,922
a fascinating guy. I don't agree with

326
00:33:55,922 --> 00:33:57,701
everything he says, but he's been

327
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following him for a long time.

328
00:34:00,062 --> 00:34:02,102
Yeah, and he does a show called Dark Horse.

329
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He did one recently on

330
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fanaticism.

331
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And

332
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I'll tell you another short

333
00:34:10,061 --> 00:34:11,862
story, but I think these are very

334
00:34:11,862 --> 00:34:13,942
pertinent to this

335
00:34:13,942 --> 00:34:15,902
topic. And what he said was, hey,

336
00:34:15,942 --> 00:34:19,461
imagine there's a group of people

337
00:34:19,461 --> 00:34:24,282
who come to think that the world is going to end

338
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let's just say on August 8th as an example

339
00:34:28,182 --> 00:34:32,021
they come to think the world is going to end on August 8th

340
00:34:32,021 --> 00:34:35,922
and but it's January 1st

341
00:34:35,922 --> 00:34:39,142
but they've come to think the world is going to end on January 8th

342
00:34:39,142 --> 00:34:42,001
so as time marches on

343
00:34:43,161 --> 00:34:48,821
And there's a thousand people thinking this.

344
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As time marches on and they get, let's say, to like May, June,

345
00:34:57,001 --> 00:35:01,701
there's some of the group realizes that like, hey, nobody else is buying the story.

346
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It doesn't feel like it's happening.

347
00:35:05,101 --> 00:35:08,681
So 200 people kind of drift away.

348
00:35:08,681 --> 00:35:15,921
and then you get a little closer and another 200 people drift away and you get a little closer and

349
00:35:15,921 --> 00:35:23,081
another 100 drift away and then you hit then you hit august 8th and it doesn't happen like the world

350
00:35:23,081 --> 00:35:36,221
doesn't end and so you lose a few more and so at some point maybe um september 1st

351
00:35:36,221 --> 00:35:40,861
the group that remains is like 250 people.

352
00:35:41,621 --> 00:35:45,181
They are the most bought in to the narrative.

353
00:35:45,821 --> 00:35:48,081
And they've lost the counterweight.

354
00:35:48,281 --> 00:35:53,721
They've lost the voices that maybe keep them balanced, right?

355
00:35:54,121 --> 00:36:02,461
And I think there's some of that that's happened in the Blake 2B group right now,

356
00:36:02,461 --> 00:36:05,721
where, you know, the check and balance is gone.

357
00:36:06,221 --> 00:36:18,841
Now, to your point about some of those people being valuable in the Bitcoin side, the Bitcoin side lost something, too, which is the Bitcoin side lost some of the people who also were the counterbalance.

358
00:36:18,841 --> 00:36:22,161
Right. So there's a there's a there's a loss on both sides.

359
00:36:23,301 --> 00:36:30,381
And so I'm not I'm not trying to completely just say, oh, the Blake to be guys are idiots or anything like that.

360
00:36:30,421 --> 00:36:32,081
That's not the point of my story.

361
00:36:32,081 --> 00:36:36,101
I do think they're not going to make it

362
00:36:36,101 --> 00:36:37,461
and I feel bad for them

363
00:36:37,461 --> 00:36:39,561
because I know there's a tremendous amount of energy

364
00:36:39,561 --> 00:36:41,921
and effort and money

365
00:36:41,921 --> 00:36:43,461
and emotional

366
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I don't know the right word is

367
00:36:46,401 --> 00:36:48,481
but emotional energy

368
00:36:48,481 --> 00:36:52,461
a lot of effort went into this

369
00:36:52,461 --> 00:36:56,381
and it sucks to put that much into something

370
00:36:56,381 --> 00:36:57,401
and not have it work

371
00:36:57,401 --> 00:36:58,961
but at some point you have to realize

372
00:36:58,961 --> 00:37:00,581
it isn't going to work

373
00:37:00,581 --> 00:37:06,341
and go try to fix the thing that really matters.

374
00:37:08,361 --> 00:37:09,321
Yeah, I couldn't agree more.

375
00:37:09,501 --> 00:37:13,581
I mean, I've seen it from the inside and from the outside.

376
00:37:13,581 --> 00:37:16,161
And as you say, I've seen it on both sides.

377
00:37:16,461 --> 00:37:18,481
There's this tribalism.

378
00:37:19,501 --> 00:37:24,841
Tribalism is strong in human beings in general.

379
00:37:25,441 --> 00:37:27,081
And there's the sunk cost fallacy.

380
00:37:27,261 --> 00:37:30,401
And you keep doubling down once you've bought one narrative.

381
00:37:30,581 --> 00:37:34,401
you stop asking yourself, what if I'm wrong?

382
00:37:35,421 --> 00:37:38,181
And I think for both sides,

383
00:37:38,361 --> 00:37:41,161
the thing I heard from the core side

384
00:37:41,161 --> 00:37:43,481
when the soft fork was on the table

385
00:37:43,481 --> 00:37:48,081
was the biggest argument was,

386
00:37:48,281 --> 00:37:51,121
it's not going to happen, therefore I'm against,

387
00:37:51,281 --> 00:37:52,561
which is a circular argument.

388
00:37:52,561 --> 00:37:57,281
So why are you basing your opinions

389
00:37:57,281 --> 00:37:59,441
on whether it's a good idea or not

390
00:37:59,441 --> 00:38:02,541
on what you think the outcome will be.

391
00:38:02,541 --> 00:38:05,381
That's not how Bitcoin is supposed to operate.

392
00:38:05,381 --> 00:38:06,921
You're supposed to make a decision

393
00:38:06,921 --> 00:38:08,981
because you think it's the right decision,

394
00:38:08,981 --> 00:38:12,521
and then you battle test it and see if it works or not.

395
00:38:12,521 --> 00:38:14,561
And that's what I did.

396
00:38:14,561 --> 00:38:17,421
But that doesn't mean, because on the other side,

397
00:38:17,421 --> 00:38:20,121
it's just like, oh, the only explanation for this

398
00:38:20,121 --> 00:38:23,961
is that the miners are a cartel and now nodes are worthless.

399
00:38:23,961 --> 00:38:25,601
And I don't buy that.

400
00:38:25,601 --> 00:38:26,641
I don't buy that at all.

401
00:38:26,641 --> 00:38:28,961
Bitcoin is supposed to be hard to change,

402
00:38:29,441 --> 00:38:36,641
I think the BIP 110 was a reaction to a very small change in Bitcoin, a mempool policy default change.

403
00:38:37,841 --> 00:38:43,981
It's small in the sense that it's not on the consensus layer, but in the mempool.

404
00:38:44,141 --> 00:38:53,841
It's a big change in terms of the magnitude of a filter that was bytes, and now it's 100 kilobytes.

405
00:38:54,061 --> 00:38:55,441
Of course, that's a big change.

406
00:38:55,441 --> 00:39:01,681
but in terms of how it changes the functionality of bitcoin is not not that big of a change and i

407
00:39:01,681 --> 00:39:07,281
was much more in the i i think the taproot bug and the inscriptions and all that that like op if not

408
00:39:07,281 --> 00:39:12,881
being used for anything good whatsoever that was the bigger motivator for me than op return like

409
00:39:12,881 --> 00:39:18,981
op return i always viewed as a sort of a there's no judge in the world that is going to care whether

410
00:39:18,981 --> 00:39:27,021
your CSAM is in an operator or somewhere else on chain because they don't understand data to begin

411
00:39:27,021 --> 00:39:32,961
with. They don't understand computers. And they're all corrupt. I wouldn't trust a judge to have

412
00:39:32,961 --> 00:39:41,141
judgment in any part of the world. And not when it comes to things like that. So then again,

413
00:39:41,141 --> 00:39:47,661
of course, I thought it was a completely unnecessary and stupid change made for the

414
00:39:47,661 --> 00:39:55,041
wrong decisions. I still stand by that. But I don't think it motivated the suggestion of a soft

415
00:39:55,041 --> 00:40:00,881
fork, but that doesn't mean it motivated a hard fork. Absolutely not. So, yeah, I'm just trying

416
00:40:00,881 --> 00:40:06,021
to, yeah, I talk a lot in these latest interviews because I'm trying to get my thoughts together

417
00:40:06,021 --> 00:40:15,881
here. It's kind of hard to have everything in the right place again. I completely empathize with

418
00:40:15,881 --> 00:40:23,261
that i think that one i think where you and i probably start from and that thing i said about

419
00:40:23,261 --> 00:40:34,581
the fanaticism and is that like you and i were more moderate in the the the supporters of bip 110

420
00:40:34,581 --> 00:40:42,221
probably probably me me even uh more moderate than you or or less well i didn't mind any

421
00:40:42,221 --> 00:40:47,741
bit on 10 blocks well that's that's a fair point and by the way this is not saying it's good or bad

422
00:40:47,741 --> 00:40:54,001
i'm just you know i i like i said i kind of i i never rooted against it because i still supported

423
00:40:54,001 --> 00:41:00,121
it right i never rooted against it i never publicly said i think it's bad and you know i

424
00:41:00,121 --> 00:41:07,381
you know had foundry flipped or one of the big miners flipped you know okay you know that would

425
00:41:07,381 --> 00:41:11,221
have been that would have been fine that would have been i think in my opinion the better outcome

426
00:41:11,221 --> 00:41:18,781
but it's not um i never viewed it existential i was i was clear about that you know from the

427
00:41:18,781 --> 00:41:27,481
beginning and i think that um i i think that that was actually part of the problem the pr problem

428
00:41:27,481 --> 00:41:37,961
that those who were the active promoters really had was i think promoting it as so existential

429
00:41:37,961 --> 00:41:48,121
leaning into the the c-sam issue so hard made it more difficult for

430
00:41:48,121 --> 00:41:56,841
people who were less involved in the community they had less like it just sounds so

431
00:41:56,841 --> 00:42:04,841
fanatical like like i i could see them i could see a lot of people just turning off a podcast

432
00:42:04,841 --> 00:42:09,181
or just turning off and muting people in their Twitter feed

433
00:42:09,181 --> 00:42:12,521
and those sort of things when that stuff kept coming up.

434
00:42:12,781 --> 00:42:16,121
And because I think the narrative got lost.

435
00:42:16,681 --> 00:42:24,021
The other thing is, you know, RDTS was always proposed as,

436
00:42:24,021 --> 00:42:26,021
well, by definition, it was temporary.

437
00:42:26,981 --> 00:42:31,281
So the way I viewed it was, well, you know, if it doesn't pass,

438
00:42:31,401 --> 00:42:34,021
if it doesn't get accepted, well,

439
00:42:34,841 --> 00:42:39,441
then let's just work on what the next thing should have been anyway, right?

440
00:42:39,481 --> 00:42:40,361
Because it was temporary.

441
00:42:42,001 --> 00:42:49,521
I think what the Blake-to-beer group did was they then lost

442
00:42:49,521 --> 00:42:57,581
a tremendous amount of credibility by not just hard forking,

443
00:42:58,121 --> 00:43:02,201
but proof-of-work change, block header change,

444
00:43:02,201 --> 00:43:05,641
even if those are great things that should have been addressed,

445
00:43:05,941 --> 00:43:13,081
like, wow, the world will infer that this is what you think,

446
00:43:13,401 --> 00:43:18,001
what you were going to try to do on the backside of the RDTS.

447
00:43:19,421 --> 00:43:32,102
And I also say too I agree with you you know about things like you know Op and the taproot bug and all that

448
00:43:32,102 --> 00:43:49,322
Like one of the things I've said, my biggest issue that BIP110 helped with and that I was hoping the backside would fix is that the abuse of the SegWit discount.

449
00:43:49,942 --> 00:43:58,262
So you could view that a couple different ways because one way you can look at that is I don't want spam on the chain.

450
00:43:58,442 --> 00:43:59,442
I don't, right?

451
00:43:59,482 --> 00:44:00,221
And you don't.

452
00:44:00,221 --> 00:44:19,242
But another way to look at it is why have we, and this would have, I think, resonated with the miners, by the way. Why are we being forced to price our block space? That is what miners do. Miners produce block space.

453
00:44:19,242 --> 00:44:28,262
why are we being forced to give a big discount to these people who are using large amounts of space

454
00:44:28,262 --> 00:44:34,942
to be the opposite like hey you want to like if you want to put a really big transaction in

455
00:44:34,942 --> 00:44:43,602
then i'm gonna i'm gonna i want you to pay an exorbitant amount for it right so if if if if

456
00:44:43,602 --> 00:44:49,682
so anyway i mean i'm still hopeful that we can maybe figure that out i think honestly that's

457
00:44:49,682 --> 00:44:55,002
probably the most likely path where we could we could maybe get some consensus within the community

458
00:44:55,002 --> 00:45:03,262
to to fight spam is because the the for lack of a better term the v30 crowd or the traditional crowd

459
00:45:03,262 --> 00:45:10,262
thinks that economic incentives fix this i i think there are things we could do to be fair

460
00:45:10,262 --> 00:45:15,682
or to be honest, but I do think there's a lot we can do with economic incentives.

461
00:45:15,902 --> 00:45:21,862
And one of those things would be by closing that hole and making the SegWit discount.

462
00:45:23,082 --> 00:45:27,922
As an example, one of the things I've been circulating and I'm potentially working on,

463
00:45:27,922 --> 00:45:31,042
well, I am kind of working on a BIP, whether or not I'll see the light of day,

464
00:45:31,042 --> 00:45:39,802
is to in essence say can we can we have a mechanism where the segwit discount applies

465
00:45:39,802 --> 00:45:47,682
only to the first 256 or 512 bytes or something like that and after that you pay full price

466
00:45:47,682 --> 00:45:54,602
now we're talking that sounds excellent and i think that this is so funny because i from this

467
00:45:54,602 --> 00:46:00,762
conversation i can tell that you and i have very very similar views on on this whole thing uh

468
00:46:01,042 --> 00:46:08,042
For instance, like the Blake2B thing, I've not been active in the groups.

469
00:46:08,322 --> 00:46:12,622
I've been eavesdropping a bit, like I'm still in them and I'm still welcome there, I hope.

470
00:46:12,622 --> 00:46:17,802
I'm not trying to bash one side or the other here.

471
00:46:17,961 --> 00:46:24,682
But from what I could tell, they did a thing that I've been wanting for a long time, which is reduce the size of blocks.

472
00:46:25,382 --> 00:46:26,982
And they just did that.

473
00:46:26,982 --> 00:46:31,282
And it's like, oh, but how did you just do that?

474
00:46:31,362 --> 00:46:36,382
And it turns out it was a poll on a Discord server between the people.

475
00:46:36,642 --> 00:46:39,502
And it's like, yeah, I would want that.

476
00:46:39,742 --> 00:46:41,602
But that's not how Bitcoin works, though.

477
00:46:41,782 --> 00:46:47,542
Like in Bitcoin, you need to suggest it as a soft fork and then do it when you have consensus for it.

478
00:46:48,022 --> 00:46:55,662
Like your principles have turned into we don't care about principles anymore.

479
00:46:55,662 --> 00:47:00,002
To me, it's completely counter to how this is supposed to work.

480
00:47:00,822 --> 00:47:02,782
So it's like, hang on a minute.

481
00:47:04,702 --> 00:47:10,602
So I'd like to know where our points of view differ here.

482
00:47:11,662 --> 00:47:16,442
I mean, but maybe we won't find that.

483
00:47:16,442 --> 00:47:19,982
So instead, let's start from another angle.

484
00:47:19,982 --> 00:47:23,142
what Luke would say

485
00:47:23,142 --> 00:47:25,182
to Ocean still

486
00:47:25,182 --> 00:47:25,982
being important

487
00:47:25,982 --> 00:47:28,922
and I believe it is and I believe

488
00:47:28,922 --> 00:47:31,002
Datum is one of the most important inventions

489
00:47:31,002 --> 00:47:32,602
in Bitcoin the last

490
00:47:32,602 --> 00:47:34,022
five years at least

491
00:47:34,022 --> 00:47:37,122
he would say that

492
00:47:37,122 --> 00:47:38,822
it's no longer relevant

493
00:47:38,822 --> 00:47:40,922
because SHA-256

494
00:47:40,922 --> 00:47:42,022
is corrupt now

495
00:47:42,022 --> 00:47:44,062
so what would you say to that?

496
00:47:44,302 --> 00:47:45,581
What would you

497
00:47:48,581 --> 00:47:49,182
well

498
00:47:49,982 --> 00:48:11,442
I think Luke not even accepting that what the Blake2B group is working on is not Bitcoin.

499
00:48:11,442 --> 00:48:17,122
and that what I will call the main chain that's recognized as Bitcoin,

500
00:48:17,122 --> 00:48:23,382
I think by 99.9% of the holders of Bitcoin

501
00:48:23,382 --> 00:48:27,082
and by every exchange and every treasury company

502
00:48:27,082 --> 00:48:31,302
and steak and shake when you want to go buy a burger,

503
00:48:33,042 --> 00:48:35,422
you know, like that's Bitcoin.

504
00:48:35,422 --> 00:48:58,262
And so we have a fundamental issue where when we can't even agree on that, I mean, that's a big problem. And just by the way, a quick sidelight. I think that poll, the manner in which the proof of work change happened, the Discord server, those sort of things.

505
00:48:58,262 --> 00:49:03,502
on the Blake2B chain,

506
00:49:03,922 --> 00:49:07,242
there are holders of 20 million Bitcoin,

507
00:49:08,302 --> 00:49:09,942
if I accept their definition.

508
00:49:11,782 --> 00:49:14,242
There's 20 million holders of them

509
00:49:14,242 --> 00:49:15,922
that they are serving,

510
00:49:17,562 --> 00:49:18,882
including me, by the way.

511
00:49:18,882 --> 00:49:22,442
I mean, I technically own some coins on their chain,

512
00:49:23,002 --> 00:49:26,422
and I think it's, frankly, it's ludicrous

513
00:49:26,422 --> 00:49:42,862
to think that because a very small group of people are communicating in very tight insular circles,

514
00:49:43,182 --> 00:49:47,461
are making these decisions, and they're making them very rapidly.

515
00:49:47,862 --> 00:49:50,482
I mean, Bitcoin is global.

516
00:49:50,482 --> 00:50:17,382
There's a bunch of holders in China and Russia and Malaysia and the Philippines and people that don't speak English. And, you know, it takes quite a while for messages to ripple through. And they're just rapid firing this stuff. And I think that that's, you know, I think that's really wrong. And it's part of my fatalism related to their movement.

517
00:50:17,382 --> 00:50:35,802
Now, as for Ocean, I mean, we're serving Bitcoin. Me and the whole group, we're adamant that what we're working on is Bitcoin, that the chain we support is Bitcoin.

518
00:50:35,802 --> 00:50:51,341
um and you know our job is to to be a pool um our our job is not to try to define bitcoin our job is

519
00:50:51,341 --> 00:50:58,242
not to tell people what client to run our our our job isn't to tell people what to put in their

520
00:50:58,242 --> 00:51:06,622
templates, you know, and, and I know this may be cringeworthy, but if somebody wants to,

521
00:51:06,622 --> 00:51:15,142
to create a template using Datum and they want to abuse the witness discount, let people abuse

522
00:51:15,142 --> 00:51:21,841
the witness discount and do all those things that, you know, we're, we're, we believe we are obligated

523
00:51:21,841 --> 00:51:26,782
to allow that template in.

524
00:51:27,201 --> 00:51:27,662
We're not going to,

525
00:51:27,782 --> 00:51:29,742
because that would just be censorship, right?

526
00:51:29,841 --> 00:51:31,602
You know, we're here to be a pool.

527
00:51:31,802 --> 00:51:34,302
We're here to give people the opportunity

528
00:51:34,302 --> 00:51:35,081
to be a miner

529
00:51:35,081 --> 00:51:37,961
and we're here to help them defer

530
00:51:37,961 --> 00:51:40,362
and mitigate risk

531
00:51:40,362 --> 00:51:42,721
so they don't have to be a solo miner to do this.

532
00:51:43,282 --> 00:51:45,402
But that's the role of a pool.

533
00:51:48,922 --> 00:51:50,222
So that's what I think,

534
00:51:50,682 --> 00:51:53,242
And that's what I think we're doing well.

535
00:51:55,262 --> 00:51:57,502
So I don't know if that answers your question or not.

536
00:51:58,061 --> 00:51:59,142
Yeah, I think it does.

537
00:51:59,301 --> 00:52:10,402
I mean I sort of struggling to find the correct questions here But if we poke on this double click on this where we might differ in our opinions

538
00:52:11,262 --> 00:52:12,542
where was I going with that?

539
00:52:12,642 --> 00:52:13,642
I just had something.

540
00:52:14,302 --> 00:52:15,182
Damn brain.

541
00:52:18,262 --> 00:52:18,822
Yeah.

542
00:52:19,082 --> 00:52:22,162
So one thing from this whole debacle that I've,

543
00:52:23,042 --> 00:52:24,962
a conclusion I've made, a personal conclusion,

544
00:52:24,962 --> 00:52:28,982
is that I will be more careful in calling people shitcoiners going forward,

545
00:52:28,982 --> 00:52:36,502
though because i think the the fundamental underlying thing here regardless of how obvious

546
00:52:36,502 --> 00:52:44,362
it is to you that one chain is bitcoin and the other is not is that the right to to define what

547
00:52:44,362 --> 00:52:52,702
bitcoin is subjectively is is the most crucial thing like as uh so that's the whole point of

548
00:52:52,702 --> 00:52:58,422
running a node and and being a participant in the network is to be able to dictate the rules of the

549
00:52:58,422 --> 00:53:07,122
money you use the thing with bitcoin is this is how i view them the most fundamental part is that

550
00:53:07,122 --> 00:53:15,162
if i choose the same rules as as the majority of the network i get the network effect if i play

551
00:53:15,162 --> 00:53:19,622
chess the way other people play chess i can play chess with all the chess players in the world

552
00:53:19,622 --> 00:53:27,702
if i choose to play without queens or if i choose to do bitcoin without spam without this or that

553
00:53:27,702 --> 00:53:33,942
possibility to spam in this way, then I will not have as many players to play with. And therefore,

554
00:53:34,382 --> 00:53:40,102
it is costly for me to choose the wrong rules. But it's still my fundamental right to choose

555
00:53:40,102 --> 00:53:47,102
whatever rules I want. And it is a fundamental right of Luke's to have this view of the world

556
00:53:47,102 --> 00:53:55,502
where he says Bitcoin and he means something else than everyone else. So the paraphrasing of the

557
00:53:55,502 --> 00:54:00,202
Voltaire quote that I came up with is, I don't agree with your fork, but I'm going to fight

558
00:54:00,202 --> 00:54:01,762
to the death for your right to fork it.

559
00:54:01,942 --> 00:54:04,142
Like, that's my stance on that.

560
00:54:04,142 --> 00:54:07,882
Do we differ here or are you of the same opinion?

561
00:54:13,342 --> 00:54:16,902
I think there's some gray here.

562
00:54:17,982 --> 00:54:21,522
And so a couple things.

563
00:54:21,522 --> 00:54:24,502
I agree that

564
00:54:24,502 --> 00:54:26,642
you can play by whatever rules

565
00:54:26,642 --> 00:54:28,802
you wish that is your prerogative

566
00:54:28,802 --> 00:54:30,082
as a human being

567
00:54:30,082 --> 00:54:32,282
and if you find a

568
00:54:32,282 --> 00:54:34,742
another group of people who are willing

569
00:54:34,742 --> 00:54:36,542
to play by your rules wonderful

570
00:54:36,542 --> 00:54:39,122
like you have a game to play

571
00:54:39,122 --> 00:54:46,502
if Bitcoin is a game though

572
00:54:46,502 --> 00:54:51,322
whether that's

573
00:54:51,522 --> 00:55:01,302
a game like football or baseball or basketball or, you know, whatever.

574
00:55:02,642 --> 00:55:12,422
If 99.99% of the people are playing a game and they are calling it basketball,

575
00:55:12,422 --> 00:55:19,282
and you decide that when a basket is made,

576
00:55:19,402 --> 00:55:21,982
it's worth 10 points, not two points,

577
00:55:22,582 --> 00:55:30,742
and you insist with your 0.001% of the world

578
00:55:30,742 --> 00:55:32,302
that what you're doing is basketball,

579
00:55:32,802 --> 00:55:36,502
and you don't respect the right of other people,

580
00:55:36,502 --> 00:55:40,702
the 99.99, who say they're playing basketball,

581
00:55:40,702 --> 00:55:44,682
I think that's where Luke is

582
00:55:44,682 --> 00:55:46,342
I mean, we'll be specific to Luke

583
00:55:46,342 --> 00:55:50,642
but I guess the whole community

584
00:55:50,642 --> 00:55:51,562
kind of is in that

585
00:55:51,562 --> 00:55:53,982
we talked about the fanaticism, right?

586
00:55:54,082 --> 00:55:55,582
so the tribalism

587
00:55:55,582 --> 00:55:57,302
we're at this point where

588
00:55:57,302 --> 00:55:59,602
I think they've gone so hard over there

589
00:55:59,602 --> 00:56:02,042
that they're not respecting

590
00:56:02,042 --> 00:56:04,402
the 99.99

591
00:56:04,402 --> 00:56:06,162
yeah, so

592
00:56:06,162 --> 00:56:07,962
I think what I'm getting at

593
00:56:07,962 --> 00:56:10,682
is more an actual semantics thing

594
00:56:10,702 --> 00:56:29,482
Because if Bitcoin is truly leaderless and everyone's allowed to define what it is, and simultaneously no one is, then it's not really wrong to call it Bitcoin if you're a minority fork.

595
00:56:30,702 --> 00:56:38,022
There's nothing ethically incorrect about that since it is this leaderless thing.

596
00:56:38,022 --> 00:56:44,102
By definition, leaderless means no one gets to dictate anything for another person.

597
00:56:44,442 --> 00:56:48,242
And then you get into this relativism thing, which is ironic, by the way,

598
00:56:48,302 --> 00:56:53,222
because relativism is sort of the thing we're trying to get away from with the fork.

599
00:56:53,502 --> 00:57:00,882
But anyway, yeah, that's basically a philosophical little nugget of some kind.

600
00:57:00,882 --> 00:57:06,882
I mean, I guess so, but I, you know, where my...

601
00:57:08,022 --> 00:57:13,722
where my issues with the Blake to be movement are,

602
00:57:13,722 --> 00:57:20,862
are I think the vehemence with which I see this.

603
00:57:21,162 --> 00:57:23,762
And because it, I mean, to me, it,

604
00:57:24,162 --> 00:57:30,802
it's misleading to people and confusing to people.

605
00:57:31,342 --> 00:57:35,202
And so I guess we each have an individual right to,

606
00:57:35,842 --> 00:57:37,522
I guess I can't agree with your,

607
00:57:38,022 --> 00:57:45,262
with your stance there but but it has to i i feel

608
00:57:45,262 --> 00:57:57,662
obligated to to call it out so that that yeah i mean that's the case you know the opposite is true

609
00:57:57,662 --> 00:58:04,322
too like we are as much as they are free to call themselves bitcoiners on another chain uh we are

610
00:58:04,322 --> 00:58:06,242
free to call them retards for doing so.

611
00:58:06,562 --> 00:58:08,162
Yeah. Well, I mean,

612
00:58:08,222 --> 00:58:10,182
let's be honest. It's no different

613
00:58:10,182 --> 00:58:12,082
than the Bcash or the BSV people,

614
00:58:12,262 --> 00:58:14,242
right? I mean, there's to this day in

615
00:58:14,242 --> 00:58:16,262
both of those communities, the same thing

616
00:58:16,262 --> 00:58:17,442
occurs. For me,

617
00:58:17,822 --> 00:58:20,282
it changed my view on those people

618
00:58:20,282 --> 00:58:21,842
a bit because I think,

619
00:58:22,082 --> 00:58:24,162
yeah, for the most part, they were

620
00:58:24,162 --> 00:58:26,282
bad actors. I think it was a takeover

621
00:58:26,282 --> 00:58:28,462
attempt. Like it was much more of a blatant

622
00:58:28,462 --> 00:58:30,422
takeover attempt. Like the

623
00:58:30,422 --> 00:58:32,402
Blip 110 thing and the

624
00:58:32,402 --> 00:58:34,242
Blake 2B thing is done

625
00:58:34,242 --> 00:58:35,922
with, I don't

626
00:58:35,922 --> 00:58:38,322
suspect it's done with anything

627
00:58:38,322 --> 00:58:39,702
but the best of intentions.

628
00:58:40,162 --> 00:58:42,502
I can't say that for Bcash or BSV.

629
00:58:43,042 --> 00:58:44,642
Like BSV in particular

630
00:58:44,642 --> 00:58:46,422
where Craig

631
00:58:46,422 --> 00:58:47,842
is an obvious scammer.

632
00:58:48,482 --> 00:58:50,482
There's no doubt about it.

633
00:58:50,722 --> 00:58:52,482
Only an idiot would fall for that.

634
00:58:53,522 --> 00:58:54,122
Bcash

635
00:58:54,122 --> 00:58:56,502
mostly scammers because

636
00:58:56,502 --> 00:58:58,482
it was this, or maybe not

637
00:58:58,482 --> 00:59:00,522
outright scammers, but people who wanted

638
00:59:00,522 --> 00:59:02,082
to be in charge of Bitcoin.

639
00:59:02,082 --> 00:59:08,622
you know BitPay and the big miners and the New York agreement people

640
00:59:08,622 --> 00:59:13,342
they wanted that and then they forked off and they were cheered on by

641
00:59:13,342 --> 00:59:18,102
a handful probably really believed in it and believed it was the real thing

642
00:59:18,102 --> 00:59:25,802
including Roger Ver and Roger Ver yeah he probably wasn't lying to him

643
00:59:25,802 --> 00:59:30,002
well, in his view, he was probably honest,

644
00:59:30,562 --> 00:59:33,182
even though I suspect he was lying to himself

645
00:59:33,182 --> 00:59:38,782
in not wanting to understand all aspects of economics

646
00:59:38,782 --> 00:59:39,542
and stuff like that.

647
00:59:39,982 --> 00:59:44,222
But in hindsight, I can't really call them as much.

648
00:59:44,822 --> 00:59:46,962
I think there are degrees of shitcoinery.

649
00:59:47,502 --> 00:59:49,802
I think Solana and Cardano and all this crap

650
00:59:49,802 --> 00:59:53,562
is obviously, that's very much shitcoinery.

651
00:59:53,562 --> 00:59:57,522
I think Ethereum is also shitcoinery through and through.

652
00:59:57,902 --> 00:59:59,822
I don't believe there were any good intentions there.

653
00:59:59,962 --> 01:00:01,862
I believe it was created as a scam.

654
01:00:02,682 --> 01:00:05,562
And a lot of Etherheads would...

655
01:00:06,082 --> 01:00:08,242
I believe a lot of gullible people,

656
01:00:08,662 --> 01:00:11,062
intelligent gullible people fell for it.

657
01:00:12,202 --> 01:00:14,502
And the same true for the other forks.

658
01:00:14,742 --> 01:00:15,562
Like there's...

659
01:00:16,102 --> 01:00:17,502
Well, Ethereum wasn't a fork,

660
01:00:17,662 --> 01:00:21,942
but there are intent sort of matters.

661
01:00:21,942 --> 01:00:22,702
I think it was a social fork.

662
01:00:22,702 --> 01:00:24,222
It was a social fork.

663
01:00:24,362 --> 01:00:32,282
It may not have been a fork in the traditional sense of what happened with Blake2B,

664
01:00:32,382 --> 01:00:34,542
but I think Ethereum was a social fork.

665
01:00:34,822 --> 01:00:37,442
You know, one of the things, too, I guess,

666
01:00:38,062 --> 01:00:52,223
trying to explore things that we may or may not disagree upon is when a lot of the game theory that was discussed

667
01:00:52,223 --> 01:00:54,163
around what might happen

668
01:00:54,163 --> 01:00:55,063
for BIP-110

669
01:00:55,063 --> 01:00:58,243
centered around

670
01:00:58,243 --> 01:01:00,303
activities from

671
01:01:00,303 --> 01:01:02,283
the SegWit activation,

672
01:01:02,463 --> 01:01:02,643
right?

673
01:01:03,643 --> 01:01:04,283
And

674
01:01:04,283 --> 01:01:08,203
the reality

675
01:01:08,203 --> 01:01:10,203
is it's a very different world

676
01:01:10,203 --> 01:01:13,883
a decade later, roughly a decade later.

677
01:01:14,843 --> 01:01:18,303
Bitcoin, for better or worse,

678
01:01:18,383 --> 01:01:21,123
and I think some people would say worse,

679
01:01:22,843 --> 01:01:25,323
you know, there are, for lack of a better term,

680
01:01:25,423 --> 01:01:29,203
there's a lot of Bitcoin by proxy now.

681
01:01:30,303 --> 01:01:33,283
Whether that's an ETF, whether that's a...

682
01:01:33,283 --> 01:01:33,583
A paper Bitcoin.

683
01:01:35,103 --> 01:01:37,603
Well, yeah, I mean, if I go here,

684
01:01:37,683 --> 01:01:39,303
I live in South Florida, right?

685
01:01:39,303 --> 01:01:46,083
There's a lot of people now who, if I ask them, do you own some Bitcoin, will say yes.

686
01:01:47,023 --> 01:01:50,303
And probing, they own a BlackRock ETF.

687
01:01:51,243 --> 01:01:52,963
They own MicroStrategy.

688
01:01:53,823 --> 01:01:55,983
When you probe, that's what it is.

689
01:01:56,543 --> 01:02:00,223
And I know you and I would say, well, no, you really don't own Bitcoin.

690
01:02:01,063 --> 01:02:05,283
However, they think they own Bitcoin.

691
01:02:05,283 --> 01:02:09,103
And they do own Bitcoin by proxy.

692
01:02:09,303 --> 01:02:39,263
So there's some semantics here, right? But they own Bitcoin by proxy. They can have an influence, but it's indirect, right? They have to influence somebody else to make a difference, right? Because if it's BlackRock, and I know this is probably appalling for people to think about, but I wonder, did anybody in the BIP-110 movement reach out to BlackRock and say,

693
01:02:39,303 --> 01:02:43,863
hey, you hold several hundred thousand Bitcoin, what do you think?

694
01:02:45,003 --> 01:02:50,323
Because, by the way, if you get them in, that's a big freaking deal.

695
01:02:51,523 --> 01:02:53,463
Yeah, and they can talk to Coinbase.

696
01:02:54,423 --> 01:02:54,903
Exactly.

697
01:02:55,163 --> 01:02:56,063
Or they're custodian.

698
01:02:57,003 --> 01:02:57,223
Right.

699
01:02:57,403 --> 01:03:01,423
And I know even talking to Coinbase is probably appalling to a lot of people.

700
01:03:01,423 --> 01:03:08,363
But the reality is, I mean, like it or not, and maybe it will change with time,

701
01:03:08,363 --> 01:03:10,883
a massive amount of the infrastructure

702
01:03:10,883 --> 01:03:13,303
is Bitcoin by proxy right now.

703
01:03:13,943 --> 01:03:14,863
So you can

704
01:03:14,863 --> 01:03:17,323
influence the people

705
01:03:17,323 --> 01:03:18,643
who defer

706
01:03:18,643 --> 01:03:20,523
and they can say

707
01:03:20,523 --> 01:03:21,063
hey,

708
01:03:23,423 --> 01:03:25,903
they can contact BlackRock

709
01:03:25,903 --> 01:03:27,163
and they can say

710
01:03:27,163 --> 01:03:29,363
hey, either support

711
01:03:29,363 --> 01:03:30,683
BIP-110 or I'm out.

712
01:03:31,883 --> 01:03:33,043
I'm selling.

713
01:03:33,903 --> 01:03:35,203
There's a certain power

714
01:03:35,203 --> 01:03:36,243
that goes with that.

715
01:03:37,263 --> 01:03:37,443
But

716
01:03:38,363 --> 01:03:45,543
For lack of a better term, you know, the suits are here and they're not going to go away, at least not for a long, long time.

717
01:03:45,543 --> 01:03:47,263
And I think it was inevitable, by the way.

718
01:03:47,583 --> 01:03:55,423
I think Bitcoin doesn't reach its pinnacle without corporations and financial institutions and nation states participating.

719
01:03:56,003 --> 01:04:01,543
That that that is essential to Bitcoin to the world hyper Bitcoinizing.

720
01:04:01,883 --> 01:04:05,903
Now, can we keep it so that they don't overwhelm us and overwhelm the rules?

721
01:04:06,223 --> 01:04:07,783
That's that's the trick.

722
01:04:08,363 --> 01:04:22,163
But whether even the Blake 2Bers ultimately, I think, would face that same problem, if what they think is Bitcoin truly became Bitcoin, the same thing would happen.

723
01:04:22,163 --> 01:04:29,083
yeah here's the thing though if if you can't even convince a person to buy actual bitcoin

724
01:04:29,083 --> 01:04:36,263
instead of paper bitcoin or blackrock etf bitcoin then you're never gonna you good luck

725
01:04:36,263 --> 01:04:42,603
explaining bit 110 there's there's like bit 110 was hard enough for bitcoiners to understand

726
01:04:42,603 --> 01:04:55,503
It's super, super, you know, it took me months to fully understand what the hell they were talking about and why it was a good idea.

727
01:04:55,643 --> 01:04:58,543
Like, it took a lot of mental effort.

728
01:04:59,683 --> 01:05:09,103
And a person who chooses to buy a BlackRock ETF instead of actual Satoshi is nowhere near that level of understanding.

729
01:05:09,283 --> 01:05:10,243
I don't think that happened.

730
01:05:10,243 --> 01:05:23,183
So the question here and the thing I want to explore, because one thing I say often is the final scene of Fight Club.

731
01:05:23,303 --> 01:05:24,443
You've seen Fight Club, right?

732
01:05:24,603 --> 01:05:25,143
Yes, I have.

733
01:05:25,243 --> 01:05:26,943
I just watched it again in the last month.

734
01:05:27,263 --> 01:05:27,883
Oh, fantastic.

735
01:05:28,043 --> 01:05:38,803
You know, when all the skyscrapers for the credit card companies fall apart and he's just shot himself in the face, but he gets the girl and the wonderful Pixies song comes up.

736
01:05:40,243 --> 01:05:52,003
And that's the future I'm looking forward to, you know, because these people who own paper Bitcoin can and will get rugged at some point.

737
01:05:52,363 --> 01:05:57,143
Not your keys, not your coins is just as true now as it was back in 2011.

738
01:05:57,643 --> 01:05:59,383
There is no getting around that.

739
01:05:59,543 --> 01:06:02,143
And to me, that is the most beautiful thing.

740
01:06:02,143 --> 01:06:05,043
Like it turns the entire world on its head.

741
01:06:05,043 --> 01:06:09,403
And everything, every ETF, every treasury company

742
01:06:09,403 --> 01:06:13,423
is just trying to get this square peg into a round hole.

743
01:06:13,783 --> 01:06:18,363
Because Bitcoin is not, it does not fit into the fiat world

744
01:06:18,363 --> 01:06:19,843
because it's so different.

745
01:06:20,103 --> 01:06:23,343
And it's so based on the individual.

746
01:06:23,583 --> 01:06:25,823
Like you've heard my rants about the Satoshis

747
01:06:25,823 --> 01:06:27,383
actually living in your head and stuff.

748
01:06:27,643 --> 01:06:31,803
Like I think that this beast cannot be tamed by the whole system.

749
01:06:31,843 --> 01:06:32,503
And that's the beauty.

750
01:06:32,503 --> 01:06:34,103
So my question would be,

751
01:06:35,043 --> 01:06:40,103
So what does that future look like?

752
01:06:40,143 --> 01:06:43,803
If the suits come in and then they get rugged every here and there,

753
01:06:43,803 --> 01:06:48,343
are we just facing 50 more years of extreme volatility

754
01:06:48,343 --> 01:06:53,483
when BlackRock loses all its Bitcoin and Coinbase goes under

755
01:06:53,483 --> 01:06:57,883
and some guy at Coinbase buys an island somewhere and Sailor is rugged?

756
01:06:58,323 --> 01:07:00,283
How do you envision that?

757
01:07:00,283 --> 01:07:08,683
uh i don't know if it's 50 years but i think there is a struggle that continues i mean i i

758
01:07:08,683 --> 01:07:14,743
certainly agree with your fundamental premise not your keys not your coin right and and i agree that

759
01:07:14,743 --> 01:07:21,723
there will be there has been and there will continue to be tremendous turmoil and pain

760
01:07:21,723 --> 01:07:29,423
associated with people who didn't follow that path

761
01:07:29,423 --> 01:07:31,903
and letting proxies do it.

762
01:07:32,903 --> 01:07:35,703
But the opposite of that is,

763
01:07:36,263 --> 01:07:40,743
if we look at Bitcoin as the ultimate money of the world

764
01:07:40,743 --> 01:07:42,423
or the final settlement layer,

765
01:07:42,643 --> 01:07:44,183
if the network is the final settlement layer,

766
01:07:44,243 --> 01:07:45,603
like these sorts of things,

767
01:07:45,603 --> 01:07:56,443
it's it's impossible in my mind to envision a future where um nation states and big corporations

768
01:07:56,443 --> 01:08:03,063
and financial institutions aren't actively participating in the network like they they

769
01:08:03,063 --> 01:08:12,343
and and you know i i think it's likely that we'll see the big financial institutions as an example

770
01:08:12,343 --> 01:08:16,403
that Bank of America and JPMorgan and BlackRock and Fidelity

771
01:08:16,403 --> 01:08:19,303
and those sort of traditional organizations

772
01:08:19,303 --> 01:08:21,463
figure out ways to participate.

773
01:08:22,103 --> 01:08:23,363
I think they will have to

774
01:08:23,363 --> 01:08:26,563
because I think some people will demand it.

775
01:08:27,403 --> 01:08:31,663
I also think that new ones will emerge

776
01:08:31,663 --> 01:08:34,183
that will maybe be more Bitcoin-centric

777
01:08:34,183 --> 01:08:38,923
and approach this from a Bitcoin mindset.

778
01:08:38,923 --> 01:08:42,483
and hopefully they will succeed.

779
01:08:43,743 --> 01:08:48,443
And for instance, you know, allowing,

780
01:08:49,443 --> 01:08:51,283
and I'm just making this up, you know,

781
01:08:51,283 --> 01:08:53,563
some sort of financial institution

782
01:08:53,563 --> 01:08:57,703
using some sort of multi-sig

783
01:08:57,703 --> 01:09:03,203
that doesn't allow rehypothecation of funds

784
01:09:03,203 --> 01:09:05,803
and, you know, but still allows you

785
01:09:05,803 --> 01:09:09,743
to maybe easily take fiat loans

786
01:09:09,743 --> 01:09:11,643
and things like that,

787
01:09:12,183 --> 01:09:13,163
you know, against your coin.

788
01:09:13,223 --> 01:09:14,403
I think those sort of services

789
01:09:14,403 --> 01:09:15,303
will be important.

790
01:09:15,663 --> 01:09:16,603
And they'll even be important

791
01:09:16,603 --> 01:09:17,803
for corporate treasuries.

792
01:09:18,403 --> 01:09:19,543
You know, like I could speak to it

793
01:09:19,543 --> 01:09:21,183
for barefoot or for ocean,

794
01:09:21,343 --> 01:09:24,183
like, hey, we have Bitcoin treasuries,

795
01:09:24,183 --> 01:09:25,323
but we have needs

796
01:09:25,323 --> 01:09:26,283
or we may have cash

797
01:09:26,296 --> 01:09:34,996
shortfalls. We need ways of, you know, getting cash and making payroll and paying bills and

798
01:09:34,996 --> 01:09:41,056
like these sorts of things. I think this will be really important. But there will be

799
01:09:41,056 --> 01:09:49,736
a lot of pain and suffering along the way. I don't think it, you know, I'm 62 years old. I don't know

800
01:09:49,736 --> 01:09:55,536
if I'll see it, the end result. You're a little younger, Knut, so, you know, you may. But I think

801
01:09:55,536 --> 01:10:06,076
it's in that window yeah so i i agree to a degree because i i think this is all transitory like

802
01:10:06,076 --> 01:10:12,856
it's all temporary like because all of these things are are fiat things and and where we're

803
01:10:12,856 --> 01:10:20,596
going there is no state and there there are no fiat loans like uh in the long run bitcoin is the

804
01:10:20,596 --> 01:10:26,816
remedy to fiat it's like it cannot coexist with the dollar like it will either one of them will

805
01:10:26,816 --> 01:10:34,016
win and it remains to be seen which they sure bitcoin can fail for a variety of different

806
01:10:34,016 --> 01:10:40,196
reasons but as long as it works it is superior to the dollar and therefore it will win over the

807
01:10:40,196 --> 01:10:44,836
dollar in the long run and the dollar will hyperinflate it will all other fiat currencies

808
01:10:44,836 --> 01:10:46,996
will hyperinflate before the dollar,

809
01:10:47,396 --> 01:10:48,896
but the dollar is on the same path.

810
01:10:49,416 --> 01:10:53,036
Like just now you heard Trump bribing the voters.

811
01:10:53,456 --> 01:10:54,936
Like I find it fascinating.

812
01:10:55,596 --> 01:10:57,116
People call this guy a capitalist.

813
01:10:57,576 --> 01:10:58,336
He's a commie.

814
01:10:58,836 --> 01:11:00,796
Like, can't you see that?

815
01:11:00,936 --> 01:11:02,436
Free handouts for voting for,

816
01:11:02,596 --> 01:11:03,716
what the fuck is that?

817
01:11:03,976 --> 01:11:05,876
It's like banana state stuff.

818
01:11:07,096 --> 01:11:08,556
Total banana state stuff.

819
01:11:08,556 --> 01:11:09,676
I don't know if you,

820
01:11:10,676 --> 01:11:11,696
yeah, yeah, yeah.

821
01:11:11,696 --> 01:11:13,456
It has been, it's funny you mentioned banana state

822
01:11:13,456 --> 01:11:15,756
because I don't know if you've met my wife, Lola.

823
01:11:15,876 --> 01:11:16,796
She's from the Philippines.

824
01:11:17,216 --> 01:11:19,176
And in the last election,

825
01:11:19,276 --> 01:11:20,716
there's a woman named Imelda Marcos.

826
01:11:20,856 --> 01:11:21,696
She's very famous.

827
01:11:21,876 --> 01:11:24,496
Her husband, Ferdinand Marcos, was a dictator there.

828
01:11:25,416 --> 01:11:26,996
And she's still alive.

829
01:11:27,076 --> 01:11:28,636
Her son was running for election.

830
01:11:29,776 --> 01:11:31,975
And she was walking through the slums of Manila,

831
01:11:33,036 --> 01:11:35,535
handing out, literally handing out

832
01:11:35,535 --> 01:11:38,496
the equivalent of $10 bills to people,

833
01:11:38,496 --> 01:11:41,876
which is like, you know, several days' salary

834
01:11:41,876 --> 01:11:48,376
for the average person there, you know, and just a big stack of money and just handing it out.

835
01:11:48,456 --> 01:11:54,196
So just a similar version of that. Well, I think it's cheaper in the Philippines than in the U.S.,

836
01:11:54,196 --> 01:12:01,256
but I give it that. Oh, yeah, yeah, yeah. But but see, the thing is, you and I don't disagree.

837
01:12:01,516 --> 01:12:07,936
Maybe we disagree on timeline, though, because I mean, I think this transitory state, as you refer to it,

838
01:12:07,936 --> 01:12:10,576
We have to go through that transitory state.

839
01:12:10,816 --> 01:12:12,596
We can't skip it.

840
01:12:12,996 --> 01:12:16,615
And so I'm talking a lot about this transitory state.

841
01:12:17,876 --> 01:12:20,816
But even on the other side, I think there still are corporations.

842
01:12:21,115 --> 01:12:22,596
I mean, maybe we disagree with that.

843
01:12:22,756 --> 01:12:26,396
I think on the other side of it, I think there still will be corporations.

844
01:12:27,416 --> 01:12:30,676
Yeah, but what is a corporation on a Bitcoin standard?

845
01:12:30,876 --> 01:12:32,716
The way I see it, it's just a signal group.

846
01:12:32,936 --> 01:12:35,036
It's just a group of people doing stuff together.

847
01:12:35,636 --> 01:12:37,276
Yeah, I think that's what it is even now.

848
01:12:37,276 --> 01:12:40,676
Yeah, but now you have to have all these lube companies.

849
01:12:40,836 --> 01:12:46,696
You have to have the accountants and professional services teams and tax lawyers and whatnot.

850
01:12:48,136 --> 01:12:52,776
A corporation has to abide by a ton of rules.

851
01:12:52,976 --> 01:12:57,216
All of those rules are gone on a Bitcoin standard because you can do everything without permission.

852
01:12:59,456 --> 01:13:02,596
Well, I think this is very interesting.

853
01:13:02,596 --> 01:13:06,756
I think the corporation is a group of people.

854
01:13:06,756 --> 01:13:19,015
I think that that group of people will impose their own set of rules and own set of behaviors for participating in that group.

855
01:13:19,276 --> 01:13:27,196
It won't necessarily be democratic because there, you know, there will be people taking risk.

856
01:13:27,196 --> 01:13:33,096
I mean, just because like a corporation, whether it's Bitcoin based or any other currency based that has risk.

857
01:13:33,096 --> 01:13:45,356
It has people that have different incentives within the group and take different risks in the group.

858
01:13:45,455 --> 01:13:47,115
So I think all that still exists.

859
01:13:47,636 --> 01:13:48,516
Would be wonderful.

860
01:13:49,196 --> 01:13:52,596
And we still will have an accountant in that world.

861
01:13:52,835 --> 01:13:54,976
We just won't have to do taxes, hopefully.

862
01:13:55,156 --> 01:13:56,115
That would be wonderful.

863
01:13:56,675 --> 01:14:01,115
We wouldn't have the bureaucracy and the regulation that we have today.

864
01:14:01,115 --> 01:14:02,416
That would be wonderful.

865
01:14:02,416 --> 01:14:05,176
But we're still trying to accomplish that.

866
01:14:05,756 --> 01:14:08,516
And, you know, is that the nation state?

867
01:14:08,796 --> 01:14:09,596
And it's very philosophical.

868
01:14:09,816 --> 01:14:16,396
Like, is the nation state really just, and it may even be virtual, right?

869
01:14:16,596 --> 01:14:16,976
Yeah, yeah.

870
01:14:17,495 --> 01:14:21,456
That there's still groups of people that coalesce around something.

871
01:14:22,576 --> 01:14:27,316
And that may be a nation state of its own with its own economic power

872
01:14:27,316 --> 01:14:31,116
and rules of engagement and inclusion.

873
01:14:32,416 --> 01:14:45,995
Well, for instance, if you're the Coca-Cola company on a Bitcoin standard, it's trivial to just make sure that the sats go to the right person whenever you sell a can of Coke.

874
01:14:47,576 --> 01:14:55,316
So 50% of the sats go to the franchise, like the nine people employed at the Coca-Cola company sitting in an office in New York.

875
01:14:55,316 --> 01:15:07,555
Like half of it goes there and the retailer still wants it because he can sell the Coke, the can of Coke for more than double the next best thing, which is some local brand of Coke.

876
01:15:08,275 --> 01:15:10,456
So he still chooses to do that.

877
01:15:10,495 --> 01:15:12,175
So they still get these massive profits.

878
01:15:12,895 --> 01:15:18,256
But the thing is, you can automate that in the product, like in the payment for the product.

879
01:15:18,256 --> 01:15:28,016
For instance, I just recorded some music and I put the album up on Fountain and my brother helped me make the album.

880
01:15:28,136 --> 01:15:34,076
So I can just split the payments with him by just entering the percentages.

881
01:15:34,676 --> 01:15:37,096
And every corporation on earth could just be that.

882
01:15:37,796 --> 01:15:39,476
It doesn't have to be more complicated.

883
01:15:39,476 --> 01:15:48,756
All of these, you know, shell companies and you move to this part of the company to the Bahamas to do this and blah, blah.

884
01:15:48,935 --> 01:15:54,435
All of that stuff, all of that goes away on a Bitcoin standard because there's no state anymore.

885
01:15:54,856 --> 01:15:56,156
There's literally.

886
01:15:56,736 --> 01:16:02,516
And I think this transitory phase, though, I think it takes 200 years or something.

887
01:16:02,935 --> 01:16:04,856
It's definitely not in our lifetime.

888
01:16:05,275 --> 01:16:09,456
So we're not disagreeing.

889
01:16:09,476 --> 01:16:11,396
I don't think I get to see that.

890
01:16:11,555 --> 01:16:13,016
I hope no, no, me neither.

891
01:16:13,016 --> 01:16:16,096
Something positive to help it.

892
01:16:16,636 --> 01:16:16,856
Yeah.

893
01:16:16,856 --> 01:16:19,676
I want to tell you, there's a, there's a company I'm an advisor to,

894
01:16:19,676 --> 01:16:21,555
a small investor and it's called Resolver.

895
01:16:22,856 --> 01:16:39,406
And um it is providing some of this infrastructure that you talking about about immediate payment and resolution to the insurance industry And the basic summary of it is it very interesting

896
01:16:39,646 --> 01:16:44,346
is, you know, let's say you buy a life insurance policy.

897
01:16:45,806 --> 01:16:48,666
And when you buy the life insurance policy,

898
01:16:48,866 --> 01:16:50,646
let's just say it's for a million dollars.

899
01:16:51,306 --> 01:16:57,026
Most likely what happens is the insurance company that sold it to you

900
01:16:57,026 --> 01:17:04,866
then sells off pieces of that risk to, let's say, 10 other companies, right?

901
01:17:05,066 --> 01:17:10,186
And who might even further sell it to another group of 10, right?

902
01:17:10,226 --> 01:17:14,086
So you have this kind of tree of risk mitigation.

903
01:17:15,546 --> 01:17:21,746
And so when you make a payment against that policy, let's say it's $1,000 a year,

904
01:17:21,746 --> 01:17:28,546
that money has to float down all the way to the bottom of that tree.

905
01:17:29,826 --> 01:17:32,386
And then the opposite, let's say you get killed,

906
01:17:32,586 --> 01:17:35,946
now the million dollars has to get paid out,

907
01:17:36,306 --> 01:17:40,866
you have to retrieve the money from all of those paths.

908
01:17:41,866 --> 01:17:50,286
And it's very interesting how archaic and antiquated the systems are for that.

909
01:17:51,746 --> 01:17:53,726
Even big, big companies, right?

910
01:17:53,746 --> 01:17:57,226
I won't name names, but like really big companies are,

911
01:17:57,826 --> 01:18:01,146
they have spreadsheets and monthly phone calls

912
01:18:01,146 --> 01:18:04,666
and they're trying to reconcile and who got paid and blah, blah, blah.

913
01:18:05,366 --> 01:18:09,246
Well, what Resolver basically did is, you know,

914
01:18:09,246 --> 01:18:13,206
moved all that into a Bitcoin standard

915
01:18:13,206 --> 01:18:15,946
and using the same sort of tools.

916
01:18:16,186 --> 01:18:19,506
Like that stuff is now essentially instantaneous,

917
01:18:20,026 --> 01:18:21,726
you know, using the Bitcoin network.

918
01:18:21,746 --> 01:18:30,986
so um you're absolutely right that that same concept can apply to buying a a coca-cola or a

919
01:18:30,986 --> 01:18:36,386
hamburger at mcdonald's or you know whatever that that sort of thing is so massive efficiency

920
01:18:36,386 --> 01:18:48,006
and maybe i have some hope that the 200 years is a little less because the the impact of ai

921
01:18:48,006 --> 01:18:55,886
accelerating some of these things might there might be this other effect in parallel with

922
01:18:55,886 --> 01:19:03,866
bitcoin that forces some of this stuff a little faster um i don't know agreed yeah so maybe it's

923
01:19:03,866 --> 01:19:10,686
100 years and not 200 well who knows yeah yeah fun to speculate though it is fun to speculate

924
01:19:10,686 --> 01:19:17,406
though speaking of uh i've heard this interesting theory that uh the stock market is actually a form

925
01:19:17,406 --> 01:19:24,306
of socialism. So this goes back to the days of the Hanseatic League. So this is like the first

926
01:19:24,306 --> 01:19:34,566
stock ever invented. So you have, say you have 10 shipping companies who send ships from Amsterdam

927
01:19:34,566 --> 01:19:44,946
to Sydney. And one company, one ship per year is sunk and lost forever, including the crew

928
01:19:44,946 --> 01:19:52,086
and the cargo. So one of these companies goes bankrupt every year because of that ship.

929
01:19:52,246 --> 01:19:58,066
They couldn't take that loss. Now they realize that if we instead co-own all the 10 companies

930
01:19:58,066 --> 01:20:07,306
and we have a stake in each other's boats, then we can share the losses and it doesn't have to

931
01:20:07,306 --> 01:20:14,086
be catastrophic. Now that sounds all swelling good and it was for the most part, but what it does is

932
01:20:14,086 --> 01:20:22,026
socialize the losses and not but but the gains are still private so so so what i mean by that is

933
01:20:22,026 --> 01:20:27,906
uh you have an you now have a malincentive in the whole thing because you don't have to take

934
01:20:27,906 --> 01:20:35,586
care of your boat that well since uh since it doesn't matter as much to you if it sinks you

935
01:20:35,586 --> 01:20:42,586
don't have as much skin in the game as you used to so and i find that just a picture in my head

936
01:20:42,586 --> 01:20:48,866
very fascinating and i'm like are there parallels here to bitcoin mining is this what fps is like

937
01:20:48,866 --> 01:20:57,506
there's so many thoughts that come up and and is is it really a good thing like um i definitely

938
01:20:57,506 --> 01:21:03,246
think that if you own something to a hundred percent then you take better care of it uh

939
01:21:03,246 --> 01:21:07,686
which is also the argument for why monarchy is better than democracy according to hans-herman

940
01:21:07,686 --> 01:21:14,326
hopper and there's all sort of philosophical strings to pull on here but yeah uh thoughts

941
01:21:14,326 --> 01:21:18,106
yeah that's actually very interesting um

942
01:21:18,106 --> 01:21:24,946
first is would your normal audience uh understand fpps

943
01:21:24,946 --> 01:21:36,126
okay for those of you that don't fpps stands for uh full pay per share and this is when you sell

944
01:21:36,126 --> 01:21:48,146
hash power to a mining pool, you get paid out a fixed sum per time unit instead of when the pool

945
01:21:48,146 --> 01:21:58,766
actually finds a block. And this means that the pool has to add on quite a large fee because of

946
01:21:58,766 --> 01:22:03,886
the risk that the pool owner is taking because the pool can have bad luck for a while and not

947
01:22:03,886 --> 01:22:13,046
find blocks at all. So I hope you agree with this TLDR explanation. Yeah, it is. Just two

948
01:22:13,046 --> 01:22:21,446
points to expand on. One is, this is the way that the formula itself, it varies slightly from

949
01:22:21,446 --> 01:22:29,126
pool to pool. But most of them, what they'll do is they'll say, when they're deciding how much to

950
01:22:29,126 --> 01:22:36,606
pay the hasher, they'll say, let me look back at the previous 144 blocks, which is supposed to be

951
01:22:36,606 --> 01:22:43,126
one day's worth of work. I will throw out the five highest paying block rewards and the five lowest

952
01:22:43,126 --> 01:22:50,506
playing block rewards, and I'll average the rest. Okay. So by the way, if you think about it, that's

953
01:22:50,506 --> 01:23:00,246
where the premium is coming because typically the five highest blocks are further from the

954
01:23:00,246 --> 01:23:09,466
mean than the lowest blocks so that's where they capture the premium okay so that's one thing

955
01:23:09,466 --> 01:23:20,266
the second thing similar to the iq bell curve yes yes exactly exactly so that's the trick

956
01:23:20,266 --> 01:23:25,166
right that's the trick on the surface it looks good if you don't think about it a little bit

957
01:23:25,166 --> 01:23:27,366
the second thing is

958
01:23:27,366 --> 01:23:43,396
even a fairly large pool can have a massive run of bad luck and there have been several pools that failed that were smaller and

959
01:23:46,036 --> 01:23:51,076
and the reason was you have to have a massive reserve of bitcoin because you still have to

960
01:23:51,076 --> 01:23:57,156
make bitcoin payments to the hashers right and they're expecting it on a regular cadence

961
01:23:57,156 --> 01:24:05,496
some get paid every block or every day like it's on a regular cadence and so if you have a run of

962
01:24:05,496 --> 01:24:13,896
bad luck and you do the math behind it you need a big old pile of bitcoin just sitting there in case

963
01:24:13,896 --> 01:24:21,696
right so uh versus like what ocean uses which we call it tides it's really a form of what's called

964
01:24:21,696 --> 01:24:35,016
PPLNS, pay per last number of shares. The basic concept is when you're mining, we're always

965
01:24:35,016 --> 01:24:46,016
collecting statistics on how much work everybody in the pool is doing. And we are between,

966
01:24:46,016 --> 01:25:00,856
So whether we win a block once a day or we win a block five times a day, we share the proceeds only when we win the block.

967
01:25:01,716 --> 01:25:05,636
So if we have periods of good luck, the payment gets really good.

968
01:25:05,716 --> 01:25:09,436
If we have periods of bad luck, the payment is poorer.

969
01:25:10,276 --> 01:25:11,576
But there's no premium.

970
01:25:11,576 --> 01:25:18,816
we aren't we aren't taking the risk and we aren't giving a haircut based on the the way the formula

971
01:25:18,816 --> 01:25:26,816
works so it's why by the way in the end of the day ocean if you look at the stats i think the

972
01:25:26,816 --> 01:25:34,916
number last year was 3.7 percent so that was the that was the that was by the way the discount the

973
01:25:34,916 --> 01:25:43,156
big guys took by using like foundry and andpool they took a 3.7 discount for the consistency of

974
01:25:43,156 --> 01:25:48,556
knowing they could they could essentially at the beginning of the month almost calculate exactly

975
01:25:48,556 --> 01:25:55,076
how much the revenue for the month was going to be it just happened to be about 96 less than

976
01:25:55,076 --> 01:26:04,896
their expected value if they used ocean yeah this is uh reminds me of uh what misa said about

977
01:26:04,896 --> 01:26:15,076
entrepreneurs versus wage labor laborers. If the thing you get when you choose to get a monthly wage,

978
01:26:15,076 --> 01:26:20,316
instead of being an entrepreneur and having skin in the game, is the stability of that payment.

979
01:26:20,316 --> 01:26:29,676
But the payment is obviously less risk, less reward is basically the thing. And the less risk

980
01:26:29,676 --> 01:26:35,796
thing is ironically that i think there's a largely a product of the fiat system but also

981
01:26:35,796 --> 01:26:41,716
just human incentives in general and time preference if you have more capital you can

982
01:26:41,716 --> 01:26:51,276
afford to take on more risk and therefore uh also uh potential higher gains uh right right something

983
01:26:51,276 --> 01:26:57,016
to that you know you started this though with about socialism so that was a very long-winded

984
01:26:57,016 --> 01:27:06,776
way of saying yes fpps is a form of socialism and it's a welfare state and i think it's also

985
01:27:06,776 --> 01:27:15,256
important to note that that's so if you're a big miner so right now um well global hash rate i

986
01:27:15,256 --> 01:27:21,556
don't know it's like 850 to 800 to 900 exahashes it's kind of bouncing around kind of in there

987
01:27:21,556 --> 01:27:22,776
at least 30-day average.

988
01:27:23,556 --> 01:27:27,156
So if you were, let's say, somebody with 40 exahashes,

989
01:27:27,616 --> 01:27:30,516
as an example, and we'll just call that,

990
01:27:30,596 --> 01:27:32,616
for argument's sake, 5% of the network,

991
01:27:33,916 --> 01:27:39,516
you're going to win seven blocks a day.

992
01:27:40,516 --> 01:27:43,716
That's your expected value is about seven blocks a day.

993
01:27:44,776 --> 01:27:49,516
Well, the reality is, I mean, I could tell you this,

994
01:27:49,516 --> 01:27:54,376
As much as I love ocean and I'm the chairman of ocean, I'm an investor in ocean.

995
01:27:54,956 --> 01:27:58,476
Like if I have 40 exahashes, I might not even need ocean.

996
01:27:59,656 --> 01:28:04,776
Like the real math should be, I will just solo mine, right?

997
01:28:04,916 --> 01:28:10,016
That I might win five someday and nine some days and 11 some days and two some days.

998
01:28:10,176 --> 01:28:14,676
But, but I don't know, I probably don't even need a pool.

999
01:28:14,676 --> 01:28:32,676
The concept of a pool was, you know, to, it's still almost, even tides is somewhat of a form of socialism, right? It's a lesser socialism. But the real version is to be a solo miner. That's capitalism.

1000
01:28:32,676 --> 01:28:37,516
Yeah, and that's the boldest thing to do, of course.

1001
01:28:41,276 --> 01:28:46,556
Anything else you want to bring up that we haven't talked about?

1002
01:28:49,296 --> 01:28:56,316
Well, I'd just say, you know, it was a very turbulent time.

1003
01:28:56,316 --> 01:29:06,216
and um i think for ocean for barefoot for the people that were in the bip 110 movement you know

1004
01:29:06,216 --> 01:29:16,796
we we we all expended a tremendous amount of energy in the last year toward this and um

1005
01:29:16,796 --> 01:29:25,796
but it's in the past now and and you can look at it as a one or a loss i don't i don't view it that

1006
01:29:25,796 --> 01:29:34,976
way I view it as well we we expressed our opinion I think that we did what Bitcoiners are supposed to

1007
01:29:34,976 --> 01:29:43,236
do and but we also have to accept accept the result and move forward and make our best you

1008
01:29:43,236 --> 01:29:52,076
know within within that result so if you were if you were on the BIP 110 side personally I I respect

1009
01:29:52,076 --> 01:29:57,996
you're right if you want to follow the Blake two beers, but I, I don't think that's the right path.

1010
01:29:57,996 --> 01:30:05,256
I would counsel people to obviously consider it and make their own decision, but, but

1011
01:30:05,256 --> 01:30:15,356
I think there's much more to be done, much more positive impact of focusing your energy on Bitcoin

1012
01:30:15,356 --> 01:30:20,136
that that's where you're going to have the biggest impact. I think that's what you're doing,

1013
01:30:20,136 --> 01:30:25,716
Canute is you know you're regathering I know you put a lot into that that effort

1014
01:30:25,716 --> 01:30:29,376
and but now you're trying to make the best of it and I think that's I think

1015
01:30:29,376 --> 01:30:36,576
that's what everybody should do and if you were on the others yeah if you're on

1016
01:30:36,576 --> 01:30:55,646
the other side of it I don think it should be considered a victory I don think it good to gloat um i don think anything good comes of it i think if you um adversarial to folks who spent time in the bip 110 camp um you know

1017
01:30:55,646 --> 01:31:05,246
i i i hope you won't hold ill toward them um you know that i think that's a very unbitcoin thing to

1018
01:31:05,246 --> 01:31:15,006
do too so yeah in innocent until proven guilty i mean uh be adversarial but not not conspiratorial

1019
01:31:15,006 --> 01:31:25,146
that's that's uh the message i want to send i guess uh the i i think the some some level of of uh

1020
01:31:25,146 --> 01:31:33,486
suspicion is uh founded sometimes but we shouldn't just take everyone every public bitcoiner is not

1021
01:31:33,486 --> 01:31:39,586
a scammer that's that's just simply not true there's a lot of bad apples yes and especially

1022
01:31:39,586 --> 01:31:45,306
in the wider crypto space where there is almost only bad apples but there's a lot of bad apples

1023
01:31:45,306 --> 01:31:51,726
in the fiat world too that doesn't mean everyone's fucking corrupt i just don't buy it yeah i think

1024
01:31:51,726 --> 01:31:58,486
there's a there's a lot less conspiracy going on than people think i think yeah yeah yeah you don't

1025
01:31:58,486 --> 01:32:04,086
need conspiracy like especially when you have the fiat system that is set up in order to to

1026
01:32:04,086 --> 01:32:11,226
incentivize people to be slightly crooked all the time and steal from their children by using

1027
01:32:11,226 --> 01:32:18,686
dollars like there's that uh but that doesn't mean everyone has bad intentions that's that's

1028
01:32:18,686 --> 01:32:23,566
never attribute to 5d chess that which can be explained by retardation

1029
01:32:23,566 --> 01:32:35,606
well said yeah yeah uh oh one thing we haven't touched on is the uh uh just just to remind people

1030
01:32:35,606 --> 01:32:41,526
that this is still a thing renting hash power i i i this is one of the positives that came out of

1031
01:32:41,526 --> 01:32:47,306
the bip 110 movement i think because it it started with that sort of thing you can still rent hash

1032
01:32:47,306 --> 01:32:53,046
power and it's it's a pretty cool thing uh and you can spend fiat and get hash power back you

1033
01:32:53,046 --> 01:32:58,306
you're basically becoming a mining pool by doing that it's it's uh it's pretty cool

1034
01:32:58,306 --> 01:33:04,706
yeah but there's a lot of there's a lot of positives and that's why i said i think it's bad

1035
01:33:04,706 --> 01:33:11,866
to to view this um whichever side you were on but especially if you were on quote unquote the

1036
01:33:11,866 --> 01:33:19,226
winning side to think that that the BIP 110 people were horrible for doing so and by the way I've

1037
01:33:19,226 --> 01:33:25,666
I've had a lot of nice interactions with people people have been very good to me on the whole

1038
01:33:25,666 --> 01:33:32,686
um you know about about this um even some people I would have never expected that from

1039
01:33:32,686 --> 01:33:37,206
have been been very kind and and open to me so I I really appreciate it

1040
01:33:37,206 --> 01:33:44,326
I think though, you know, we have more nodes. I think we have more independent miners. I think

1041
01:33:44,326 --> 01:33:50,246
we're going to have, you know, the use of data. I'm like, if we look at ocean, all the, it really

1042
01:33:50,246 --> 01:33:55,306
incented a lot of people to create, create templates. So I think all these things are very

1043
01:33:55,306 --> 01:34:04,246
positive outcomes that, that are really needed. And we have a lot of positives too. I mentioned,

1044
01:34:04,246 --> 01:34:09,346
you know, the reversal of hash rate, the emergence of the small miners and the medium-sized miners.

1045
01:34:10,426 --> 01:34:16,946
Those are good things. I think Foundry and Antpool and some of the other pools,

1046
01:34:17,546 --> 01:34:24,126
I think the message has been heard a little bit. I think you'll see, at some point, you'll see

1047
01:34:24,126 --> 01:34:34,526
adoption of sv2 or or um datum by by other pools and even though that's a it's one of the key

1048
01:34:34,526 --> 01:34:40,466
advantages of ocean i still think it's a great thing for bitcoin right so so i i applaud and

1049
01:34:40,466 --> 01:34:48,186
ocean applauds it like we want these things to succeed so uh i think there's a lot of reason for

1050
01:34:48,186 --> 01:34:50,566
optimism and

1051
01:34:50,566 --> 01:34:52,406
and you know that's how

1052
01:34:52,406 --> 01:34:53,846
that's how I'm looking at it

1053
01:34:53,846 --> 01:34:56,266
I hope

1054
01:34:56,266 --> 01:34:58,346
I hope we're about to start a bull run that would be

1055
01:34:58,346 --> 01:34:59,766
really nice that will make

1056
01:34:59,766 --> 01:35:01,626
that will make a lot of

1057
01:35:01,626 --> 01:35:03,186
any day now

1058
01:35:03,186 --> 01:35:03,786
yeah

1059
01:35:03,786 --> 01:35:05,066
yeah

1060
01:35:05,066 --> 01:35:06,146
yeah

1061
01:35:06,146 --> 01:35:07,246
yeah

1062
01:35:07,246 --> 01:35:12,446
I couldn't agree more will we see each other

1063
01:35:12,446 --> 01:35:14,346
this this fall are you

1064
01:35:14,346 --> 01:35:16,566
coming down to El Salvador in November for instance

1065
01:35:16,566 --> 01:35:23,506
uh i just stacy reached out to me recently and asked me to please come so i'm considering it

1066
01:35:23,506 --> 01:35:27,506
yeah i'm looking at it yeah i'm looking where are you going to be canute where are you going to be

1067
01:35:27,506 --> 01:35:35,206
this fall uh yeah i'm gonna be in helsinki um uh i think helsinki is around the the time that this

1068
01:35:35,206 --> 01:35:41,226
is released uh it's like no no it's this is probably released after helsinki actually

1069
01:35:41,226 --> 01:35:46,806
but i will have been in helsinki when this is released and because helsinki is next weekend

1070
01:35:46,806 --> 01:35:54,566
okay and or two weekends what damn day is it it's tuesday right is it the last week of september

1071
01:35:54,566 --> 01:35:58,706
because we have a couple people from ocean coming oh yeah mark is coming right yeah

1072
01:35:58,706 --> 01:36:07,506
yeah i met mark this summer and he's coming yeah uh so that would be the 24th and 25th

1073
01:36:07,506 --> 01:36:12,406
of September. Before that, I'm going to Bodrum to the Property Freedom Society

1074
01:36:12,406 --> 01:36:16,366
conference with a bunch of libertarians. That's going to be interesting.

1075
01:36:17,366 --> 01:36:20,186
And in October, I'm going to Lugano,

1076
01:36:20,686 --> 01:36:22,966
where I'll celebrate my 50th birthday.

1077
01:36:23,726 --> 01:36:24,466
That'll be fun.

1078
01:36:26,306 --> 01:36:30,246
There's an outside chance I show up there. I haven't decided yet.

1079
01:36:30,746 --> 01:36:32,606
Have you been before?

1080
01:36:33,366 --> 01:36:34,806
No, I haven't been to Lugano before.

1081
01:36:34,806 --> 01:36:41,986
so it's absolutely beautiful that's it's a gorgeous place you you'll love it uh i can

1082
01:36:41,986 --> 01:36:47,766
guarantee that it's it's uh it's a very very good looking little town

1083
01:36:47,766 --> 01:36:56,926
and and uh and lots of fun and then i'll be at bitcoin historical in el salvador in uh

1084
01:36:56,926 --> 01:37:03,206
mid-november and i might stay for a week or so there's something in el santo the week weekend

1085
01:37:03,206 --> 01:37:08,646
after so i hope you come to that too it'll be a lot of fun okay well i i hope i hope to get to at

1086
01:37:08,646 --> 01:37:15,286
least one of those two in either logano or el salvador and get a chance to see you yeah and uh

1087
01:37:15,286 --> 01:37:20,526
i hope i'll show up in florida you never know when i show up in florida i'll yeah you're in florida

1088
01:37:20,526 --> 01:37:27,326
i missed you the last time oh yeah yeah i was in naples like last summer yeah yeah so but but if

1089
01:37:27,326 --> 01:37:32,386
If you're in Miami or Tampa or obviously Naples, please let me know.

1090
01:37:33,026 --> 01:37:33,366
I will.

1091
01:37:33,626 --> 01:37:34,006
I will.

1092
01:37:34,086 --> 01:37:34,426
Absolutely.

1093
01:37:35,446 --> 01:37:39,286
So anyway, with that, thank you very much, Bob.

1094
01:37:39,466 --> 01:37:41,106
This has been the Bitcoin Infinity Show.

1095
01:37:41,426 --> 01:37:42,646
And you should brush your teeth.

1096
01:37:43,046 --> 01:37:43,726
Like and subscribe.

1097
01:37:44,266 --> 01:37:44,906
Do all the things.

1098
01:37:45,046 --> 01:37:48,766
Buy products from my goddamn sponsors and call me a bigot.

1099
01:37:49,226 --> 01:37:49,466
Goodbye.