Bitcoin Is Under Attack | Matthew Kratter, Bitcoin University

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Hey, hey, welcome back to the Bitcoin Matrix, where critical thinkers meet.
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I'm your host, Cedric Youngelman.
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Today's guest is Matthew Cratter.
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Most of us were told Bitcoin is unstoppable, like digital gold, locked in by math.
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Matthew's here to tell you that's not quite true.
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Bitcoin can be killed.
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And right now, there's a quiet civil war over whether it stays money at all.
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We get into who actually controls the network.
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hint it's not the miners the devs or the exchanges why he says consensus flows from culture
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and the one move that could end the whole thing just running a node and now let's enter the
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bitcoin matrix for episode 279 with matthew cratter
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what is real how do you define real you can't jump into cash
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Cash is trash. What do you do? You get out.
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Matthew Cratter runs Bitcoin University, a daily channel where for the better part of a decade,
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he's been one of the most watched voices teaching Bitcoin and tearing down the foot around it.
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Before Bitcoin, he did a PhD in literature at Berkeley, studied under the philosopher René Girard,
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and then spent years running global macro at Peter Thiel's hedge fund.
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Today, he is nearly everything he owns at Bitcoin,
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and he's become one of the loudest voices warning that Bitcoin is under attack from the inside.
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Matt, welcome to the Bitcoin Matrix, where critical thinkers...
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I'm doing good. Thanks for having me, Cedric.
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I've been a big fan of your pod over the years, so it's really fun to talk to you like this.
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Wow, I really appreciate that.
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I mean, you have a huge channel on YouTube and you've been keeping a lot of people in
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tune every day for a long time.
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I kind of want to get into your background, though, a little bit about who you are.
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Maybe like you studied literature, I guess, at Berkeley.
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What were you thinking you were going to do with your life?
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How'd you end up at Berkeley studying literature?
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If you want the definition of idealism, I guess it would be majoring in English and music, which is what I did as an undergrad at Stanford.
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So I was an undergrad at Stanford.
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I actually grew up in the Pacific Northwest.
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I was born in Colorado, grew up in the Pacific Northwest.
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I then came to California for college and attended Stanford where I met my wife.
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and I majored in, I actually started off as a physics major. I was growing up, I was in high
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school, I was good at science and math as well. And I did all the APs. I did AP physics and AP
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calculus and stuff. And I was a big fan of people like Albert Einstein. I just thought it was really
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cool what he did at Princeton at the end of his life. And the kind of physics he did were just
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pencil and paper. But I discovered at Stanford that I was not Einstein and studying physics was,
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so I did a year of physics my first year. I did the physics track actually with a guy named
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Steven Chu who became Professor Chu, who became Obama's energy secretary many, many years later.
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He was a great teacher. It's kind of sad he went into politics, but I was kind of a B student in
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physics. Um, and there was, there was a lot of labs and stuff. And I thought I've, you know,
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I wanted to do like work on like quantum and unified field theory and stuff that I was
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not mathematically prepared or intellectually prepared for. And then I was taking, I was taking
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humanities classes on the side and just having a lot more fun with those. And it was a lot more,
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it was, it was a little more slower paced and you could sit around and drink pints and,
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or drink coffee and, uh, have long philosophical discussions. And so I ended up,
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Um, just, just very, very idealistic, uh, in that way.
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And I assumed I was going to become a professor.
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I went to, uh, after graduating from Stanford, I, I attended UC Berkeley, where I, uh, ended
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up getting a PhD in English literature focused on, on the 20th century, uh, what we call
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literary modernism, kind of all the big guys like Ezra Pound and, and, uh, William Faulkner
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and James Joyce.
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And I, I always loved really difficult literature, like Finnegan's Wake.
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I was part of the Joyceans and also the Poundians.
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I hung out in Italy with some of the Pound people.
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And some of the Joyce people too, there's actually a funny story.
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I was in Rome once in the summer in Rome, which you know is obviously very, very hot.
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And I was hanging out with, it was a James Joyce conference.
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And obviously a lot of Irish people there.
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And I love the Irish.
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I've hung out with them obviously a lot.
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But so we found ourselves in an Irish pub.
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It was about 110 degrees outside Fahrenheit.
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And here we were in this pub that had the air conditioning blasting and it had a roaring
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fire and all the windows closed with curtains.
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So we could be miserable as if we were in an Irish winter.
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But that's so I did a lot of it's very strange because I've sort of come full circle, which
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is which the Bitcoiner crowd is a lot like the crowds I used to hang out with.
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very interdisciplinary, very interesting people, weird, quirky people from all different backgrounds
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with fun things to say. I got interested. Berkeley was obviously, they just weren't,
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academics weren't really working on stuff that I was that interested in. I was much more
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sort of traditionalist and interested in a synthesis of different disciplines. So what is
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is there a way we can come up with a unified field theory for the humanities or what the
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French called it, the human sciences. So psychology and anthropology and sociology.
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And this was something that was very popular in the, in the late 19th century when, when Western
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civilization still believed in itself and was interested in trying to come up with the laws
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of human culture and sort of systematize, systematize everything. And then slowly the,
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the humanities were captured by post-structuralism and Marxism and post-colonialism and wokeism,
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et cetera. And I really saw the beginnings of that at UC Berkeley. As part of this, I was working with
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a professor, Professor René Girard, which I think you mentioned him in the intro, who's a very,
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was a brilliant cultural critic, French cultural critic, who was involved in the same things,
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sort of a synthesis of the humanities. And he eventually, near the end of his life, was inducted
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in the Académie Française. So very, very impressive guy, polymath, brilliant mind.
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And so he was on my, he became a family friend, he came to my wedding. And he also, I was highly
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involved with the Girardians, as we called ourselves, and attended a seminar, weekly seminar
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at Stanford. Girard sat on my dissertation committee, read my dissertation, and I attended
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these weekly seminars at Stanford. I would drive over from UC Berkeley once a week. And as part of
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that, I actually met Peter Thiel at those groups. He was very interested in Rene Girard as well.
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And we'd always go out for drinks afterwards. And that's how I got to know Peter. And I began to,
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I've told the story on other podcasts, but basically I had a Stanford reunion where I
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realized all my friends were trading stocks and making money and stuff. And I was thinking about
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getting married at the time. And I'm like, wow, I actually, I'm going to need money because these
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houses, these really expensive houses in Palo Alto that are $200,000, like who could afford
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that in Palo Alto? Of course, those are like five or $6 million now. So I, and I was just,
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once I started studying the markets and just reading everything I could and going into some
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of the early internet chat rooms and forums, trading forums, I got really obsessed with it.
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And so that was something else that Peter Thiel and I talked about in the late nineties, kind of
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at the end of the Girard seminar.
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And both Peter and I also gave
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sort of financial market paper.
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So the seminar, you'd always have someone
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present a paper every week
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and then people would talk about it
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and that'd be the basis for discussion.
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So Peter did some macro stuff.
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I did some, obviously markets,
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financial markets function.
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There's a crowd element to it.
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And this is something that Rene Girard
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was very interested in.
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And this is something that goes through
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through the French cultural theorists. I think it was Le Bon wrote a book called The Crowd.
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There's a Gustave Le Bon, maybe. There's this whole theory. And so I was applying Girardian
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theory to the stock market and talking about my experiences there. Long story short, graduated,
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got my PhD. Actually, I should rewind. I actually started trading in graduate school because I
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became, I realized that you could, this was the beginning of the online brokerage,
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retail brokerage revolution. There's a company called Daytech that basically you could use the
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internet to log on and trade stocks. This was just, my dad was interested in stocks, but he had
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like a special machine at his office and he also would call the broker up. But the discount
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brokerages, here's a way I could pay $10 a trade and start to test out my theories.
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And so I got very into systems trading, sort of systematic rules-based trading.
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And I gradually lost interest in academia, as I saw that academia mainly consisted of professors presenting papers to each other and publishing them in scholarly journals.
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And really, like, you'd write stuff and only four or five people would end up reading it.
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And it was just kind of this echo chamber, this academic echo chamber.
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Then all the postmodernism stuff I was not interested in.
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I was interested in the pursuit of truth, et cetera.
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And then the job market was also very bad for academia. And this was in the late 90s, which is famously when the unemployment rate in the US in 98 or 99 was like, it was like 0%. Basically, anyone who wanted to work was employed back then.
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And so I realized I knew enough about economics to put one and one together and realize that if the academic job market was this difficult at the best time in American history for jobs, that this was going to be a very difficult thing.
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And so I sort of transitioned into just thinking about markets.
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And I finished up my dissertation as fast as I could and just started full-time trading.
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I had some scholarship money.
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I got a Mellon grant. Don't tell the Mellon people this, but gave me $15,000. And I put that in my
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brokerage account and started trading with it. So this whole time I'm trading, Peter's running
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Teal Macro, which was his early hedge fund. At a certain point, he took all the money out of Teal
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Macro or took a lot of it out. And it was a very small hedge fund. And he put it in a company called
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infinity that later became became paypal and um then that company i believe that company merged
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with x.com which was elon musk's company that was the original the original x.com and so it's really
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an amazing time um hanging out i'd go to the paypal uh startup headquarters and i go to some
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other parties and i was i never worked for paypal or invested in it um i didn't have enough money i
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I tried to get my dad to invest in it.
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And he regrets to this day that there were $50,000 investments.
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They became $5 or $6 million at the time of the IPO.
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But I really learned a lot from Peter.
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We were trading notes.
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And he ended up selling PayPal in 2002.
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He sold it to eBay and decided to reboot his hedge fund, which was rebranded to Clarion Capital.
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and he hired all his friends, which was really cool for me because I was an unemployed English PhD.
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And we'd already, basically, I just, nothing really changed. I just hung out with him a lot
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more. This time the offices were in San Francisco and we just continued the dialogue. We had various
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silos at the hedge fund at first. So there was like the systems trading silo and there's some
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other, basically every, it was almost like a family office. Peter like was started a restaurant
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that he was running out of there and he had a guy who was working on a um nascar magazine he was just
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trying all these different business ideas and uh and then the core of it was a global macro strategy
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that was based on the idea was sort of to recreate george soros the because at this point people had
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become much more interested in in sort of long short portfolios and nothing very bold and
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directional and leveraged and peter liked the idea of you know figuring out where the world is going
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making concentrated leverage bets and having very high returns.
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So we had a very, we had an interesting fee structure.
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I believe if I'm remembering correctly, it was zero and 25.
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Most, most hedge funds at the time were two,
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2% management fee and 20% of the profits, 20% incentive.
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This one was set up that such that we did not make any money unless we had
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good returns. So it was a 0% management fee.
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Peter was paying all the management costs, you know,
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office and salaries out of his own pocket.
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And then we were taking 25% of our gains at the end of the year.
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And so when I joined, it was basically just Peter's money, $50 million in his Roth IRA, famously.
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And when I left we grown it to billion So it was very very interesting to see who was around there I got to know the Palantir guys who were some of them actually worked for me
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Two of them worked for me, you know, in the office hierarchy, whatever that means.
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And I got to just meet very interesting people.
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I never met Elon, but, you know, Max Levchin, I worked very closely with his, I sat across
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from his girlfriend at the time who became his wife. And so I got to know a lot of the sort of
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PayPal mafia people, even though I never worked for PayPal and was a part of that. And I got to
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watch Peter work through the ideas of one day he started talking about network effects and how
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important they were in terms of social networks. And he had this idea that social networks would
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be the next stage of the internet, that they'd be very, you know, we had email, we had web browsers
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and stuff, but he thought maybe people would want to socialize online and utilize a social graph.
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And so then he began to invest in companies, obviously, like Facebook. And I think he invested
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in, he basically invested in all of them at the time. Was it MySpace? And there were a couple
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others. And, and I really, I had, I did not understand what he was talking about at the time
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in terms of social, like it's all very clear in retrospect. It's very transparent. And I remember
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this was also interesting. This was a very bearish time in Silicon Valley because we just had the
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dot-com crash. And the general sentiment was the internet was dead, that this was a bubble that had
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popped and it was never coming back. And I remember talking to Peter about it in 2002 saying, you know,
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really sad that the this is all done and peter's like what are you talking about he's like this is
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the greatest time of opportunity in history like the internet's not dead it's this is just we went
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back a few steps but there's going to be just billions of dollars made and you know no one was
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talking that way in silicon valley at the time there's just peter so he has this um this visionary
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quality to him so that's basically how i transitioned from academia to to working at a
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hedge fund and it was a very interesting hedge fund experience as well because um we would um
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he would organize he would organize meetings with gerard we'd have just very interesting people come
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in um he'd he'd invite milton friedman to come over to his house and we'd all go there and hang
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out with milton friedman um and various various i'm trying to think who else he had and peter just
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was was seeding all these people to do documentaries and books and research on longevity and even
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transhumanism at that that early stage and so it's a very dynamic intellectual time and um we were
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very we're a very quirky group like the uh the uh the the um the capital allocators didn't really
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know what to do with us because we were we were so different and we were sort of i won't i won't
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say fly by night, but we weren't, we weren't, we were like Bitcoiners. We weren't wearing suits or
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anything. And Peter had a policy, basically. He said, I'm not going to hire any MBAs. Don't like
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MBAs. They're just, they're just too much groupthink and they're too much people pleasers.
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And also it's interesting in light of, he eventually came up with a scholarship, you know,
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to pay people not to go to college. But I remember we were, as we were growing, I was helping him
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hire people. And so we'd have stacks of resumes this big. And I asked him, you know, like, what
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are we looking for? And he basically said, we'll go through them and throw out all the resumes
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that are not from people who didn't go to Stanford, Yale, Harvard, Princeton, whatever
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the short list was like that. Just throw the rest in the garbage because we're just going to hire
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people from those places. And maybe there's group think there as well, but we might as well,
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at least they've shown. So that's kind of interesting too, in retrospect, thinking about
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his paying you not to go to college. There's still that. There's always that contradiction then.
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Because Peter is obviously a very successful academic and went to Stanford and went to Stanford
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Law School and tried to become clerk for a Supreme Court justice. And he did structured products,
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I believe, at Credit Suisse, if I remember correctly. And as part of that, he developed a
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real distrust of Wall Street desks, which I've inherited because he used to be on the other side
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structuring, creating these complex option products for customers. And he basically told us
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everything that these banks or the prime broker builds or these trading desks, you got to be
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really careful. And especially if they show you a trade idea and it looks like just a slam dunk
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and it looks like free money, it's always a trap. And so that's something I still have with me.
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um this this this i think i learned this from peter this this dislike of financial engineering
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and so when people i've lately been quite critical of the bitcoin treasury companies
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which we can talk about if later if you're interested but part of part of my critique of
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them goes back 20 years and seeing how wall street behaves seeing what structured products look like
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and just seeing the how silly financial engineering is there's a place there's a place for some of it
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But a lot of the ideas that are infiltrating Bitcoin are just old Wall Street, TradFi ideas that have been repackaged.
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And unfortunately, a lot of Bitcoiners see these, think these are shiny new objects, whereas they're just traps.
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They're just traps.
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And if you've been around Wall Street long enough, and I guess I should explain something a lot of people don't understand who weren't in the business.
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In the hedge fund business, or at least back then, you had what's called the buy side, which are the hedge funds like us.
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And so we're kind of the customer or the person who gets to decide what we want.
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And then the sales side is the people who service us, the brokerage, the trading desk.
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And they want to get a lot of our business and generate a lot of commissions.
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And then they come by.
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And I was still there at that point where there was still a lot of gift giving.
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This went away fairly quickly.
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But just like at Christmas time, just getting obscene, getting like 20 steaks from our prime
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broker and all these bribes, basically.
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and um you always wonder when you see presents like that it's like wow we're really we're really
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probably spending too much they can give us uh they never gave us cars or anything like uh
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like taylor swift would have done but um so it's it's it's it's interesting having this this
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context and this is one reason i find i find bitcoin so refreshing because
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because it's it's very very different and and crypto and i think the bitcoin treasury companies
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they try to bring a lot of TradFi back in. They try to sneak it in through the back door. And I
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think it's a mistake because Bitcoin's a bearer asset. It's a very, very special, very special
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asset. So that's basically, that's how I transitioned from academia to working at a hedge
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fund, which is very strange. And I've always been very grateful to Peter for giving me that chance
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because I certainly did not have the background.
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I mean, I had the background in terms of being able to do good research
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and just work very independently,
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and that served me well with my YouTube channel as well.
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But I didn't have the pedigree.
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I hadn't majored in – a lot of people I knew at Stanford majored in econ
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or, I don't know, more quantitative math that they could use on Wall Street.
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But Peter was much more about the big ideas, the directional ideas,
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you know, where's the world going and what mispricings can we profit from?
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So, for example, we did a lot with crude oil at the time.
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Crude oil was priced very cheaply back then, and it was highly backwardated,
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and the distant months, the distant future, so delivery 12 months, 24 months, 36 months at,
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was very, very cheap.
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Crude oil was trading at like $15 or $20 out the curve for people who understand futures curve.
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And so there's some interesting trades where you could buy crude oil futures and you basically
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roll up the curve because it was in backwardation.
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And you can make money because basically if the front, if the price of crude oil on the
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markets, the spot markets is $25 a barrel and you buy the futures contract at $15 a barrel,
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eventually it will converge.
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Assuming that the spot price stays around $25, you'll basically ride up the curve.
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It's called riding up the curve, the backwardated curve.
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And that $15 will turn into $25 by the time you get close to delivery.
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So that's just to give you a flavor of, and then we had very big, we had very big theses about how the world was going to unfold.
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And I think I've told this story on other pods, but my first day of work at Clarion in 2003, I walk into the conference room.
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Everyone's there who's already been working there.
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And the topic of discussion is that housing is out of control, that the Fed is in the process of engineering a housing bubble to bail out the economy after the dot-com collapse, and that the real risk is that this is going to take down the U.S. banking system.
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It's going to blow up Freddie May, Fannie Mae and Freddie Mac.
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This was literally the topic of discussion in 2003 on my first day there.
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And I didn't quite know what to make of it.
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I'm not sure I'd even heard of Fannie Mae at that point.
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But obviously, for those who know the story, this is what happened in 2008 and 2009.
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And we did get a global financial crisis and the U.S. banking system basically blew up and had to be bailed out.
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And of course, this is the backdrop for Bitcoin.
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And this is Chancellor on the brink of a second bailout that Satoshi put in the Genesis block.
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But Peter's always been ahead of the curve and is very good at seeing which way the world is trending.
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As part of that, too, I got to talk on the phone with some of the big short guys, Michael Burry and his guys.
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I would talk on the phone with them. We were trading notes and stuff.
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We didn't end up actually putting together a trade with them.
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But this was sort of the context. So really, really interesting people.
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that's amazing i mean there's so many more uh probably interesting people that you crossed
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paths with we might have even crossed paths i i lived in san francisco really 2003 and 2004
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and i worked in not every day but uh my main headquarters was that's where 555 555 california
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i heard yeah that's where we were yeah which is a very famous building yeah well i didn't go every
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day i was a consultant so i would go uh i was with the big four with ernest young now ey so i would
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go to Adobe, Microsoft, sometimes travel. A lot of times I was down in San Jose or over in the East
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Bay for certain clients. I think we were on the 43rd floor of Make of American. I don't remember.
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Maybe 28, 29. I don't remember. And I only went there probably like two dozen times,
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maybe three dozen times over the two years I lived there, that particular building.
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um but there you know in terms of uh i want to talk about culture and and and peter teal
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and so first with culture i'd like to hear more about what you studied with renee gerard around
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like maybe mimetic desire scapegoating and human culture and we can start there and then even with
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peter teal there's just so much you know him sean parker at first to me or for a long time seemed
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like sort of renegades where they learned about the system and kind of, you know, do jujitsu on
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the system. And Peter Thiel, it's very few humans who are at the forefront. I mean, we were seeing
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a few more unicorns, but very few people have multiple billion dollar ideas or catch on a
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different waves more than once. Right. And Peter Thiel has been sort of the forefront of all of
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them. And so I'm kind of curious what these seminars were like. Was this really like nine
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or 10 people? Was this 100 people? Was this very formal? And obviously, I mean, but you got into
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the informal talking with him that you bring up certain movies, like it sounds like you ran the
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hedge fund, like you would see Michael Burry, you know, sort of run his office and maybe toss around
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ideas and talking about philosophy and talking to the world's greatest minds that people dream about
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his life uh and even sort of maybe you know getting all their money into a roth i don't know
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how he got all oh he because he i believe he just he he did a minimum whatever the the contribution
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was you know two or three thousand dollars a year in the late 90s and then he invested in paypal
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via the roth instrument if i'm remembering correctly yeah that's that's what was very
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unique probably at the time and maybe uh he was at the forefront of and he spoke about a lot of
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things he was against sort of yeah you know kids going to college that was much later that was like
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20 2010 or 2012 or so that was yeah yeah but vitalik came out of that right and he took on
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sean parker as a partner in a founder's fund right and that sean parker i mean famously with napster
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which i thought was the coolest thing in the world when i was 17 18 years old and i was downloading
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every every three I could get my hands on. And the idea of these guys were not just renegades
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and financial engineering geniuses like the way he got the money into the Roth and used the system against it But they were technologists sort of dreaming up how it would go and or investing in
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They were also interested in, obviously, a lot of people know this now, but the tagline or the
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motto for PayPal in the early years was new world currency. And that's really what they wanted to do
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was create something that would replace the US dollar.
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And that was, which is, it's crazy to think of that
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in the late 90s or 2000s.
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Yeah, and then they've been blessed.
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They went on to become the PayPal mafia
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and do sort of LinkedIn, Facebook,
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or invest in all these things.
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Everything that's sort of centralized.
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Palantir, I mean, everything that's sort of the antithesis
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of a lot of these kernels of ideas.
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That's the central contradiction.
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That's a weird art.
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Yeah.
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I mean, Peter certainly was a very staunch,
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serious libertarian in the late 90s.
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I mean, he was sort of,
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he could wear the conservative hat
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or the right libertarian hat.
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And he founded the Stanford Review,
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which is kind of the conservative newspaper at Stanford.
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And he was sort of, he's always a contrarian.
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And so it was kind of a left-wing campus.
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And then so he would piss people off by being super Republican or whatever.
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But I think his real passion was for people, for the books he was reading were like Ayn Rand, obviously.
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And he loved Tolkien.
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Obviously, he's named a lot of the name Palantir and a bunch of his companies come from Tolkien's novels.
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um so there's there's this progression from i think i think if you're a successful entrepreneur
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you you figure out at a certain point that you kind of go up the scale and you have various exits
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and you make certain amounts of money but at a certain point it's the guys with the printing
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press who are the the best customers and those are the the governments and they're they're
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company in central banks. And so Peter and his VC friends began to figure out, certainly Elon
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figured this out very early with the carbon credits for Tesla, et cetera, figured out that
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getting the government as your customer, government doesn't care what it pays for stuff.
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It has a money printer. And you can, and so this is, I think this may, because obviously Peter is,
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Peter's not, it's like, how do you square this circle being, creating this global, this horrendous
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company called Palantir, which I was an early investor in. Back when it was started,
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we were, it was started, the way I was sold on it, basically, I did some consulting work for them.
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So I didn't get a huge number of shares. I wasn't a founder or anything. But I did get,
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I went to Palantir very early. I went to their first headquarters. I would hang out there quite
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a bit after work because I lived on the peninsula. I worked in San Francisco and they were on page
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mail down by Stanford. And I remember I got to play around with their early software,
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which was really cool, just doing searches and stuff. I don't know if it was, I assume it was
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like real names and real data back then, which is kind of creepy to think about. But their idea was
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at least the surface idea, because they were co-funded by the CIA, by In-Q-Tel, which is the
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VC arm of the CIA. And for some reason, I was quite a, I was sort of a Republican normie back
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then. And it didn't, I remember being puzzled in the nineties when people told me, you know,
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I tell them I like George Bush senior and they're like, he used to head the CIA. And I was like,
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oh, that's great or whatever. But, but the CIA was an investor in Palantir. And I remember going
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to their offices on page mail and they had a big map on the, as you walked in, kind of a whiteboard
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or a chalkboard at the time. And they'd mapped out all the different government agencies.
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So this was about 2004, I would say. And I was just blown away by how big the US federal government
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was and how many shadow agencies. And they were trying to figure it out on their own so they know
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who to sell their software to. But their selling point was basically Palantir could have stopped
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September 11th. And I guess I certainly wasn't a 9-11. I sort of accepted the story at face value
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back then. But the idea was that if different government data, the CIA wasn't talking to the
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FBI, wasn't talking to the whatever, that if those government databases had been able, if you'd been
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able to do searches and have the different agencies talk to each other, we could have somehow
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prevented September 11th, which it seems sort of absurd looking back on it, because obviously
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September 11th is a very complicated thing, and we've never really gotten the true story.
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And there are a lot of interesting theories. But George Soros was an investor in Palantir,
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original investor, or his fund in In-Q-Tel, et cetera. And so then it's a very different world
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in right now. I saw basically to close the loop on Palantir, I sold my shares at the IPO in 2021.
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I think they went public at the end of 2020, if I remember. Then there's a six-month lockup.
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And as soon as I was unlocked, I sold at that time. I got into Bitcoin in late 2019. So
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So when Palantir, when I finally had liquidity, I sold all of it.
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I was not a fan of the company at that point.
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And I put all those proceeds into Bitcoin.
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And it's kind of funny because I think Bitcoin was probably around the same price it is now,
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which is ironic.
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If I had held Palantir, it just was like a...
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I mean, I knew it was going to continue to do well because they had basically succeeded
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and they had the backings of very powerful and shady things going on.
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But at that point, I was really no longer a Republican normie
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that thought Palantir was there to stop the next 9-11
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and wanted to get out and put it into Bitcoin.
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It was funny when you were talking earlier about sort of being a literature student
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and going to the reunion and seeing everyone.
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I flashed a little hunting when Robin was back to the Harvard reunion.
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I was there. I was like, they're mopping the floors.
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The janitor is the grad student.
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I mean, looking around you, you know, the Bay Area is a weird place.
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I lived there for a couple of years and you could be an accountant at a big four accounting firm making decent money.
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And the kid next door, who's your age, I'm not saying a kid in a derogatory, you know,
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the person next door is, you know,
405
00:34:30,410 --> 00:34:35,890
was an administrative assistant at Salesforce and is sitting on $4 million in
406
00:34:35,890 --> 00:34:39,850
stock options. And they're like, Hey, why don't you be like me and quit your,
407
00:34:39,850 --> 00:34:43,430
you know, safe, stable accounting job and go work at some random startup,
408
00:34:43,550 --> 00:34:46,190
anything you could do and make you rich like me.
409
00:34:46,270 --> 00:34:46,790
It's a weird place.
410
00:34:46,790 --> 00:34:49,710
I knew a couple like that who were, we were at a,
411
00:34:49,890 --> 00:34:52,410
my wife and I and our young kids were at a summer camp with them.
412
00:34:52,470 --> 00:34:56,230
I think it was a Stanford summer camp. And they seemed this, this couple,
413
00:34:56,230 --> 00:35:02,110
they were, they were fairly young and they had young kids like we did. And, um, I remember my
414
00:35:02,110 --> 00:35:07,010
wife was going to, there's some t-shirts you could buy at the end or something. And the woman was,
415
00:35:07,170 --> 00:35:11,010
and these two, this couple, they look like, they look like starving grad students. You know,
416
00:35:11,050 --> 00:35:14,890
you didn't think they had any money. And my wife was sort of surprised because these, you know,
417
00:35:14,890 --> 00:35:19,330
these t-shirts were like $30 or something or 20, they were kind of expensive. And the lady just
418
00:35:19,330 --> 00:35:23,270
kind of handed a check or just gave my wife a lot of cash and said, you know, just get us some.
419
00:35:23,270 --> 00:35:24,750
and we're kind of like, that's weird.
420
00:35:25,190 --> 00:35:28,510
But then we found out she had worked as a,
421
00:35:29,290 --> 00:35:32,090
I think she'd like been a massage therapist or something.
422
00:35:32,190 --> 00:35:33,830
She had done something over the summer at Google
423
00:35:33,830 --> 00:35:35,870
and she was smart enough to say,
424
00:35:35,970 --> 00:35:38,050
don't pay me in money, pay me in stock options.
425
00:35:38,490 --> 00:35:41,050
But they were worth, this was probably 2004.
426
00:35:41,310 --> 00:35:42,830
That couple was worth like $20 million
427
00:35:42,830 --> 00:35:45,030
right after Google had IPO'd.
428
00:35:45,690 --> 00:35:46,350
And so you're right.
429
00:35:46,470 --> 00:35:48,530
There is a lot of like just crazy money
430
00:35:48,530 --> 00:35:50,630
that you just never know.
431
00:35:50,630 --> 00:35:52,530
And you might see some kid
432
00:35:52,530 --> 00:35:57,790
and you realize like he's a billionaire. And I remember seeing Zuck at Stanford, speaking at
433
00:35:57,790 --> 00:36:04,090
Stanford in 2004. And, you know, he was very young at that point. And there's this huge crowd at,
434
00:36:04,250 --> 00:36:09,610
he spoke at Treseter, Treseter Union, which is this kind of student hangout place. And I couldn't
435
00:36:09,610 --> 00:36:14,970
understand like why everyone was so excited about this, this little nerd. And, but yeah, that was,
436
00:36:14,970 --> 00:36:18,870
that was, that was obviously when Facebook had already, had already launched. And I think it was
437
00:36:18,870 --> 00:36:24,670
a year or so later that Yahoo, it was 2005 or 2006 that Yahoo offered to buy them for a billion
438
00:36:24,670 --> 00:36:30,350
dollars. The famous story that Peter tells and, and Zuck says basically, well, it'd be, it'd be
439
00:36:30,350 --> 00:36:35,110
fun to sell them, but what would I do with the money? I'd want to buy another social network to
440
00:36:35,110 --> 00:36:39,290
work on. So I might as well just keep working on Facebook because it's, I enjoy working on this
441
00:36:39,290 --> 00:36:44,070
stuff, but yeah, cross, cross paths with a lot of people, but I wasn't smart enough somehow.
442
00:36:44,070 --> 00:36:50,190
If I'd worked on the founders fund side of things, those guys, a lot of those guys became billionaires.
443
00:36:50,310 --> 00:36:52,010
They made a heck of a lot of money.
444
00:36:52,410 --> 00:36:54,930
But I was on the hedge fund side of things, which was good.
445
00:36:55,050 --> 00:36:56,210
I'm very grateful for it.
446
00:36:56,430 --> 00:37:00,230
But it wasn't the crazy Facebook money.
447
00:37:04,150 --> 00:37:06,470
Yeah, I mean, those were wild times.
448
00:37:06,670 --> 00:37:10,590
And there was a period of time, I think, in San Francisco where people were paying like 12 months rent up front.
449
00:37:11,190 --> 00:37:12,570
Housing was in a real crunch.
450
00:37:12,570 --> 00:37:18,530
um there's just yeah and then but you know i think a lot about how i don't i don't necessarily
451
00:37:18,530 --> 00:37:24,850
believe a lot of founder stories i think there's a non-zero chance they're like sort of vehicles
452
00:37:24,850 --> 00:37:28,810
for the government to kind of demonstrate a private public partnership that they can
453
00:37:28,810 --> 00:37:34,370
control through which is being sort of a major shareholder in one of these huge companies yeah
454
00:37:34,370 --> 00:37:39,330
is very powerful i think i think whitney webb's done some work on and she's she's so prolific i
455
00:37:39,330 --> 00:37:50,450
I haven't followed all of it, but I remember seeing stuff from her about that Facebook was a DARPA project or something, that a lot of these companies had sort of deep state roots.
456
00:37:51,170 --> 00:37:54,850
And in retrospect, that seems quite plausible.
457
00:37:55,090 --> 00:37:56,250
Like you never know for sure.
458
00:37:56,250 --> 00:38:07,030
But these companies eventually, they either start off as deep state projects or when they get big enough and powerful enough, they get absorbed into the blob.
459
00:38:07,030 --> 00:38:10,730
they sort of have to be or they were part of the blob the blob to begin with
460
00:38:10,730 --> 00:38:17,110
yeah even sean parker there's the wrinkle where you know i thought he was the coolest kid in the
461
00:38:17,110 --> 00:38:21,810
world doing napster and then but you find out before that and i probably knew it i just didn't
462
00:38:21,810 --> 00:38:25,190
connect dots but he was raided by the fbi oh i didn't know that
463
00:38:25,190 --> 00:38:32,170
yeah and so the odds that you know you kind of get raided by the fbi and not cut a deal maybe
464
00:38:32,170 --> 00:38:35,930
or just did they say what why they do do we know why they raided him
465
00:38:37,030 --> 00:38:40,110
He hacked some, I think, bank or I should know.
466
00:38:40,210 --> 00:38:40,290
Okay.
467
00:38:40,410 --> 00:38:41,310
He did some hacking.
468
00:38:42,110 --> 00:38:43,450
The FBI showed up.
469
00:38:43,610 --> 00:38:44,770
And so maybe that's real.
470
00:38:44,810 --> 00:38:46,510
And they're like, well, we got a really talented kid here.
471
00:38:46,550 --> 00:38:51,150
And they hand it over to the CIA, you know, or the NSA, or that wasn't real.
472
00:38:51,170 --> 00:38:53,470
And they need a story to kind of whatever.
473
00:38:53,710 --> 00:38:55,010
I met Sean a couple of times.
474
00:38:55,010 --> 00:38:56,470
I had dinner with him a couple of times.
475
00:38:56,470 --> 00:39:01,650
He, there were some mutual friends who were working on this seasteading project, which
476
00:39:01,650 --> 00:39:05,010
is this idea of starting a new country out in the middle of the ocean where it's outside
477
00:39:05,010 --> 00:39:10,210
of different jurisdictions with the guy who's spearheading that was actually Milton Friedman's
478
00:39:10,210 --> 00:39:16,810
grandson, a guy named Patry Friedman. And I think Sean was involved with that because I met him
479
00:39:16,810 --> 00:39:25,250
briefly. I wasn't friends with him or anything. I crossed paths with him briefly. He invested in
480
00:39:25,250 --> 00:39:31,030
a small independent documentary I worked on. So I got to see him at the premiere. He seemed like a
481
00:39:31,030 --> 00:39:37,210
nervous and just his energy was just incredibly nerve-wracking it's really everywhere it seemed to
482
00:39:37,210 --> 00:39:43,470
me yeah just you know just very nerve just anxiety ridden or something it's just maybe he didn't want
483
00:39:43,470 --> 00:39:48,450
to be there i have no idea and uh he wasn't there but we got to go to his house was that san francisco
484
00:39:48,450 --> 00:39:56,930
epic uh no in new york city on like 10th street his 20 million dollar mansion with i mean it's just
485
00:39:56,930 --> 00:39:58,970
his house was crazy
486
00:39:58,970 --> 00:40:01,290
but you know
487
00:40:01,290 --> 00:40:02,450
so I wonder you know
488
00:40:02,450 --> 00:40:05,170
Peter Thiel to me seemed like someone who
489
00:40:05,170 --> 00:40:06,870
wasn't like a real true maybe
490
00:40:06,870 --> 00:40:08,110
self-made person
491
00:40:08,110 --> 00:40:11,070
but it's hard for me to think now that
492
00:40:11,070 --> 00:40:12,110
he's not captured
493
00:40:12,110 --> 00:40:15,030
and it's hard for me to not think that he didn't
494
00:40:15,030 --> 00:40:16,270
see this coming in some way
495
00:40:16,270 --> 00:40:18,470
you paint it and I believe it because
496
00:40:18,470 --> 00:40:21,170
I hear Elon Musk talk
497
00:40:21,170 --> 00:40:22,970
I'm not that impressed
498
00:40:22,970 --> 00:40:24,830
intellectually at least
499
00:40:24,830 --> 00:40:26,550
I haven't heard him say things that really
500
00:40:26,550 --> 00:40:30,150
same thing with Zuckerberg. They'll maybe say things about their business or their experience
501
00:40:30,150 --> 00:40:35,390
of what they do. But Peter Thiel, I found fascinating from the very beginning with the
502
00:40:35,390 --> 00:40:41,750
Roth IRA move, the way he went out, did his own money and the things he invested in. But now he's
503
00:40:41,750 --> 00:40:47,110
just been in crypto from both angles within the Bitcoin system. I don't like what he's
504
00:40:47,790 --> 00:40:52,290
kind of affiliated with. So either he knows what's coming or someone tells him what's coming.
505
00:40:52,290 --> 00:40:58,490
Maybe he's the true, just he saw the government as the biggest customer in the world and wanted to be the biggest provider.
506
00:40:58,650 --> 00:41:03,150
I think part of it, too, is he just he's had so much money for a while that he really does.
507
00:41:03,430 --> 00:41:05,170
He can almost invest in everything.
508
00:41:07,650 --> 00:41:10,810
I've talked to some small Bitcoin companies that I won't name.
509
00:41:10,970 --> 00:41:15,770
And, you know, the founder will tell me, you know, Peter, Peter invested five hundred thousand dollars in this one.
510
00:41:15,770 --> 00:41:30,606
And so you can kind of and you know that that Peter can offer a lot of good business advice and and just being able to say that he an investor I mean maybe it flips at a certain point where you know that that uh Peter can offer a lot of good business advice and um and just being able to say that he an investor I mean it it may be it flips at a certain point where where it like you know I mean this guy told me this off the record
511
00:41:30,606 --> 00:41:32,445
He didn't tell me, he didn't tell me on the record.
512
00:41:33,225 --> 00:41:37,485
Um, but yeah, I, I don't, um, Peter, Peter was very good to me.
513
00:41:37,485 --> 00:41:45,425
So I don't want to, um, you know, I don't, I don't want to cast shade in any, in any way, but certainly the projects he's involved with lately.
514
00:41:45,425 --> 00:41:51,185
and just seeing the digital prison come down the road.
515
00:41:51,565 --> 00:41:56,905
You can almost taste it happening with Palantir and pre-crime.
516
00:41:57,245 --> 00:42:00,545
And there's some speculation.
517
00:42:00,905 --> 00:42:01,805
I don't know if this is true.
518
00:42:01,805 --> 00:42:04,745
I haven't spoken to Peter in over two years, I should also say.
519
00:42:05,285 --> 00:42:11,445
And for all the haters, I should also say I haven't been on his payroll since 2006.
520
00:42:11,445 --> 00:42:18,905
um and so if i'm a teal plant uh you know i spent years attacking ethereum which was a peter teal
521
00:42:18,905 --> 00:42:25,305
project um my latest crusade has been against these bitcoin spam companies or bitcoin companies
522
00:42:25,305 --> 00:42:30,585
that abuse the chain like citria which i call shitria which is a founders founders fund is
523
00:42:30,585 --> 00:42:38,705
invested in them which is a peter project um and um yeah it's very it's actually very strange because
524
00:42:38,705 --> 00:42:45,606
because I was more of kind of Republican normie when Peter was a libertarian and I've become more
525
00:42:45,606 --> 00:42:52,445
libertarian over the years. And I don't know, Peter's just a bundle of, of contradictions,
526
00:42:53,106 --> 00:42:58,405
a devout Christian who's, who's, you know, obviously an open, open homosexual.
527
00:42:58,405 --> 00:43:11,725
he's a complex person. And he's clearly on the spectrum, like a lot of people in Bitcoin.
528
00:43:14,885 --> 00:43:21,585
And I've never been able to square the circle with him or reconcile what makes him tick or
529
00:43:21,585 --> 00:43:28,245
what he's driven by. The one thing I do know is he's quite brilliant. And I saw that even
530
00:43:28,245 --> 00:43:33,205
before he was rich and famous that he just had this incredible, incredible mind. And I think
531
00:43:33,205 --> 00:43:38,505
that's one reason both he and I, you know, were attracted to Rene Girard and wanted to hang out
532
00:43:38,505 --> 00:43:46,965
with him because Rene Girard had a beautiful mind as well. And basically, you know, that was someone
533
00:43:46,965 --> 00:43:52,106
that if there's a guy who Peter Thiel thinks is smart and wants to hang out with, and Peter was
534
00:43:52,106 --> 00:43:57,005
very good to Rene Girard by the end of his life. He was, I think he gave him a million dollars a
535
00:43:57,005 --> 00:44:03,905
year just to like play with. So Rene could, could, you know, fly students over from France or I don't
536
00:44:03,905 --> 00:44:07,146
think, I don't think Girard really knew what to do with the money because he was an academic and
537
00:44:07,146 --> 00:44:10,945
he had a nice house on the Stanford campus, but he wasn't, he wasn't interested in,
538
00:44:11,765 --> 00:44:18,285
but I, I do remember when Peter flew Girard to, um, to Paris for the, he, when he got inducted
539
00:44:18,285 --> 00:44:24,925
into the Academy of Francaise, um, and they flew him, uh, Peter flew Girard and attended in his
540
00:44:24,925 --> 00:44:33,385
private jet and whenever that was 2005 maybe i can't remember it's a really cool thing when you
541
00:44:33,385 --> 00:44:38,345
get to um be a benefactor to your elders or to the people yeah it was a very it was a very
542
00:44:38,345 --> 00:44:44,345
beautiful thing and i know gerard appreciated the um appreciated the gesture i'm not sure i
543
00:44:44,345 --> 00:44:49,205
answered your question about about gerard in retrospect but when i think of though you know
544
00:44:49,205 --> 00:44:53,606
A lot of people think freedom, financial freedom, would come with money.
545
00:44:54,505 --> 00:44:55,545
And then I think, I don't know.
546
00:44:55,785 --> 00:44:57,725
So do you think, it's a two-part question.
547
00:44:57,845 --> 00:45:06,646
Do you think someone like Peter Thiel is financially free, sovereign, is sort of free from government interference if they want to say no?
548
00:45:06,925 --> 00:45:08,205
I won't make this about Peter.
549
00:45:08,305 --> 00:45:09,845
I'll just speak in generalities.
550
00:45:10,126 --> 00:45:15,745
But I think at a certain, well, just at a practical, let's look at it at a practical level.
551
00:45:15,745 --> 00:45:22,545
at a practical level, when you achieve a certain amount of wealth, you become a target,
552
00:45:22,745 --> 00:45:28,106
you become a political target. Politicians love to run saying, why does this guy have so much money?
553
00:45:29,626 --> 00:45:35,365
And you also, depending what country you're in, you could obviously, like what happened in Russia
554
00:45:35,365 --> 00:45:38,985
in the early 2000s, you could actually end up getting killed if you're one of the oligarchs.
555
00:45:38,985 --> 00:45:45,685
And so I think there's always that tension. There's also this tension that a lot of these
556
00:45:45,686 --> 00:45:53,905
people, they have tremendous wealth, but it comes with a lot of counterparty risk.
557
00:45:54,705 --> 00:46:02,225
It's usually very large. I guess Musk, people are saying he's a trillionaire now after the SpaceX
558
00:46:02,225 --> 00:46:10,626
IPO, but most billionaires and now trillionaire, they're obviously not holding cash because
559
00:46:10,626 --> 00:46:16,646
they're not, they know it's a melting ice cube. They have huge stock portfolios and they have a
560
00:46:16,646 --> 00:46:22,745
lot of, you know, founder stock and they can't really, they can borrow against it. They can try
561
00:46:22,745 --> 00:46:27,245
to sell it, but you know, they're often very big or they have, they own, they own class B shares,
562
00:46:27,245 --> 00:46:31,745
like people like Zuckerberg or Michael Saylor has his own class B shares. And so it's,
563
00:46:33,365 --> 00:46:39,146
if, are you really, are you really free? Are you really free when your, your company gets,
564
00:46:39,146 --> 00:46:44,686
is dependent on government contracts. Are you really free when billions of dollars of your
565
00:46:44,686 --> 00:46:53,465
wealth are sitting in accounts on Wall Street? Obviously, brokerage accounts, bank accounts can
566
00:46:53,465 --> 00:47:02,365
be frozen. This is the wonderful thing about Bitcoin. And then it becomes more complicated
567
00:47:02,365 --> 00:47:07,065
when they... I think billionaires enter politics in part to sort of hedge and protect themselves.
568
00:47:07,065 --> 00:47:09,646
So obviously Peter Thiel funded JD Vance.
569
00:47:10,845 --> 00:47:15,985
And, but even getting into politics itself can be a dangerous game because if you pick
570
00:47:15,985 --> 00:47:17,465
the wrong horse, you can end up.
571
00:47:18,646 --> 00:47:20,146
And so that was another thing.
572
00:47:20,185 --> 00:47:25,945
Peter was very early on the Trump train in 2015, 2016, and really he alienated so many
573
00:47:25,945 --> 00:47:26,905
people in Silicon Valley.
574
00:47:27,045 --> 00:47:30,925
And then of course, all those people were like on the Trump team and team in 2024.
575
00:47:31,146 --> 00:47:32,166
It's kind of interesting to see.
576
00:47:34,485 --> 00:47:36,725
So it's a complicated game.
577
00:47:36,725 --> 00:47:41,725
I think I don't envy public billionaires.
578
00:47:41,825 --> 00:47:42,505
I'll tell you that.
579
00:47:42,785 --> 00:47:45,925
I think it's, I see these videos of Peter online
580
00:47:45,925 --> 00:47:48,085
where he's occasionally, they pop up in my ex feed
581
00:47:48,085 --> 00:47:50,025
where he's walking down the street in New York City
582
00:47:50,025 --> 00:47:52,565
and people are attacking him and cursing him.
583
00:47:52,685 --> 00:47:54,545
And he's trying to walk as fast as possible.
584
00:47:55,065 --> 00:47:57,146
And the cameras are following him.
585
00:47:57,925 --> 00:47:59,945
This is, I guess, comes with all forms of celebrity
586
00:47:59,945 --> 00:48:03,545
because if you're an actress or a rock star or something,
587
00:48:03,545 --> 00:48:04,885
you have the same problem.
588
00:48:06,725 --> 00:48:15,146
But there's this old saying talking about kings and rich people.
589
00:48:16,285 --> 00:48:18,385
I don't know if it's like a toilet metaphor or something,
590
00:48:18,385 --> 00:48:25,545
or a throne metaphor, that no matter how high you sit up
591
00:48:25,545 --> 00:48:28,765
or no matter how high you're seated, you're still sitting on your ass.
592
00:48:29,565 --> 00:48:35,425
And so I've known a few billionaires and spent quite a bit of time with them.
593
00:48:35,425 --> 00:48:43,905
And, you know, they have health problems and they have back pain and they get in fights with their family or friends.
594
00:48:44,085 --> 00:48:46,585
And, you know, they're just they're just like you and me. They're human.
595
00:48:47,385 --> 00:48:51,045
And and then, of course, they're subject to to various risks.
596
00:48:51,126 --> 00:48:55,445
You know, people want to attack them or kidnap them or do do horrible things or political attacks.
597
00:48:55,445 --> 00:49:03,865
So I think it's I think if you're going to be a billionaire, it's probably better to be to be a more of a private billionaire.
598
00:49:03,865 --> 00:49:10,205
I think we have some in the US, you know, these rich families, but you never kind of hear from the people.
599
00:49:10,465 --> 00:49:17,445
And they're usually second or third generation billionaires, but they stay pretty quiet and you don't even know what they look like.
600
00:49:17,485 --> 00:49:18,825
That's probably wiser.
601
00:49:18,945 --> 00:49:20,765
But if you want to accomplish things, you've got to be like Peter.
602
00:49:20,865 --> 00:49:25,345
You've got to put yourself out there and be the face and keep pounding the pavement.
603
00:49:25,666 --> 00:49:28,106
And that's one thing about Peter, just incredibly hard worker.
604
00:49:28,106 --> 00:49:31,945
you know when he most people if they made their first 50 million dollars would
605
00:49:31,945 --> 00:49:38,126
take some time off and but he was he's a tremendously hard worker and um i always laugh
606
00:49:38,126 --> 00:49:42,445
when people uh you know people like aoc say you know it's like easy to become a billionaire you
607
00:49:42,445 --> 00:49:47,565
didn't deserve it or you you didn't earn it or something it's like these these people are pulling
608
00:49:47,565 --> 00:49:51,825
all-nighters and and flying around the world you know they're flying on private jets but you know
609
00:49:51,825 --> 00:49:57,365
it's still they still have to pound the pavement and uh deal deal with a lot of things so i'll say
610
00:49:57,365 --> 00:50:03,606
about Peter that he definitely, he worked his ass off. Whenever I saw him, he was always going 120%,
611
00:50:03,606 --> 00:50:11,065
just incredible energy and brilliance. Yeah, definitely seems super smart.
612
00:50:13,206 --> 00:50:18,505
What can we, I want to talk about culture and how it's upstream of consensus and what, what is it?
613
00:50:18,505 --> 00:50:24,465
So, this is, I assume, in the Bitcoin context.
614
00:50:26,345 --> 00:50:32,525
So, basically, it could be not the Bitcoin context and we can move it there.
615
00:50:32,525 --> 00:50:32,666
Yeah.
616
00:50:32,706 --> 00:50:41,985
So, I think that's kind of a saying that I've been putting out in the last six months or so as a way of talking about consensus rules in Bitcoin.
617
00:50:41,985 --> 00:50:56,085
And I think my background has sort of given me that perspective, just being involved in cultural theory and thinking about the impact of culture.
618
00:50:56,085 --> 00:51:01,925
And a lot of, I think this is something that people who are more computer science may miss.
619
00:51:02,065 --> 00:51:06,505
Some of the Bitcoin core devs, for example, they don't have the same understanding of culture.
620
00:51:06,505 --> 00:51:15,745
And they think that you can somehow create the perfect, if you create the perfect software or the perfect cryptographic functions, that you can have the perfect money.
621
00:51:16,005 --> 00:51:21,345
But Bitcoin is so interesting because it's software, it's these technical things, but it's also social consensus.
622
00:51:22,106 --> 00:51:25,005
And we have this word consensus that's used in so many ways.
623
00:51:25,005 --> 00:51:34,885
There's a technical meaning of it in Bitcoin, which is the rules that are enforced by the Bitcoin protocol and that apply to what ends up in mined blocks.
624
00:51:35,965 --> 00:51:48,666
So it's a consensus rule that, for example, we get the having of the block reward or the block subsidy every four years in Bitcoin or every certain number of blocks.
625
00:51:49,606 --> 00:51:53,845
And that's one of the things that ensures the 21 million cap.
626
00:51:53,845 --> 00:52:09,585
And that's a consensus rule that is, it's a technical software rule, but it's also interesting because it is a way of sort of artificially enforcing scarcity and trying to create a scarce digital commodity kind of on the model of something like gold.
627
00:52:09,585 --> 00:52:24,325
So it's got an issuance. Bitcoin has an issuance per block that's asymptotically approaching zero over time. And then at a certain point, the transaction fees obviously need to take over.
628
00:52:24,325 --> 00:52:44,265
But I think a lot of people in the Bitcoin community miss, they don't value culture as highly as they should. And I want to be really clear. I think people misunderstood it because obviously you say Bitcoin culture. I'm not assuming that Bitcoin culture is homogeneous or anything like this.
629
00:52:44,265 --> 00:53:06,525
And it's not a code word for white libertarian men who eat meat, though there's certainly a lot of us in Bitcoin like that, or INTJs, or as Gloria Zhao, a Bitcoin core, former maintainer said, toxic, nutty, carnivore, Bitcoin maximalist, or whatever she said.
630
00:53:06,525 --> 00:53:20,025
But what I mean by Bitcoin culture, we obviously have a lot of that. And Bitcoin is for everyone. I should just emphasize that. It's for people from all tribes and races and countries and backgrounds and economic levels and gender and all those things.
631
00:53:20,025 --> 00:53:30,385
What I mean by Bitcoin culture is sort of the tradition that has been handed down from the early days.
632
00:53:30,385 --> 00:53:41,865
And this is almost, I almost think of it in religious terms where in a lot of religions, you have a revelation and then there's not, it can be a mistake to have innovation on top of that.
633
00:53:41,865 --> 00:53:50,825
and so whether it's christ or buddha or muhammad or whoever um like like the golden rule or various
634
00:53:50,825 --> 00:53:55,945
things like you know thou shalt not murder these things you know they're kind of handed down and
635
00:53:55,945 --> 00:53:59,305
if you if you disagree with a lot of them you probably don't want to be part of that religion
636
00:53:59,305 --> 00:54:04,445
but but like if you're going to reform stuff and saying like murder is okay and it's a christian
637
00:54:04,445 --> 00:54:10,666
thing or you know obviously we could talk about different forms of murder um so culture what i
638
00:54:10,666 --> 00:54:17,785
mean by Bitcoin culture is this tradition handed down. And I often get this accusation like, Matt,
639
00:54:17,885 --> 00:54:21,725
why are you telling people how to use their Bitcoin? Who are you to tell people? And the
640
00:54:21,725 --> 00:54:26,265
answer to that is I'm nobody. And I don't tell people what to do with their money. But what I do
641
00:54:26,265 --> 00:54:31,865
try to do is pass down the tradition that I've learned from Bitcoin OGs and from reading the
642
00:54:31,865 --> 00:54:37,265
Bitcoin talk forum and sort of understanding the evolution of Bitcoin history. So I made a video
643
00:54:37,265 --> 00:54:41,985
about this i can't remember all the talking points in it about bitcoin culture but one of
644
00:54:41,985 --> 00:54:48,146
there are a couple things uh one of them is that we respect the um we respect the blockchain and
645
00:54:48,146 --> 00:54:54,865
we try to minimize our on-chain footprint with bitcoin because this is the blockchain is forever
646
00:54:55,425 --> 00:54:59,905
those of us who think bitcoin is going to succeed uh think it's going to be around for you know a
647
00:54:59,905 --> 00:55:01,505
a thousand years.
648
00:55:01,505 --> 00:55:03,585
This is the millennial dream.
649
00:55:03,585 --> 00:55:06,885
And because of that, everything,
650
00:55:06,885 --> 00:55:08,686
the Bitcoin blockchain is really just the history
651
00:55:08,686 --> 00:55:09,686
of all the transactions.
652
00:55:09,740 --> 00:55:14,580
the ledger since 2009. And so when we interact with the ledger, we should do it in such a way,
653
00:55:14,680 --> 00:55:18,740
when we interact with the blockchain, we shouldn't put a lot of garbage on there that some family's
654
00:55:18,740 --> 00:55:22,880
going to have to download 100 years from now. So this is an example of what I mean by Bitcoin
655
00:55:22,880 --> 00:55:27,440
culture. It doesn't mean what people would normally think, but basically the kind of
656
00:55:27,440 --> 00:55:37,820
traditions where Bitcoiners value truth and we value private property rights, which Bitcoin does
657
00:55:37,820 --> 00:55:48,860
a great job of enforcing. We minimize our on-chain footprint. We verify instead of trusting.
658
00:55:49,560 --> 00:55:53,120
We don't put people on pedestals. We don't trust the experts in Bitcoin.
659
00:55:54,040 --> 00:55:58,960
And if someone's been in Bitcoin and they're an OG and they're a prominent Bitcoin celebrity,
660
00:55:59,760 --> 00:56:05,100
we are fine and we accept the fact that they can certainly be wrong about things.
661
00:56:05,100 --> 00:56:22,240
And so this is what's wonderful about you go on Bitcoin Twitter, Bitcoin X, and you see plebs interacting with Bitcoin OGs or billionaires like Saylor or Adam Back and just saying, you know, you're wrong about this.
662
00:56:22,240 --> 00:56:36,020
So this is what I mean by Bitcoin culture. You could probably go on and add to this, but it's a certain, I guess it does have sort of libertarian anarcho-capitalist roots in a sense, but it's carrying on Satoshi's tradition.
663
00:56:36,020 --> 00:56:45,220
And we're obviously against authoritarianism and central bankers.
664
00:56:45,540 --> 00:56:50,460
And we're against seniorage where we think it's immoral and unethical for people to be
665
00:56:50,460 --> 00:56:51,620
able to print up their own money.
666
00:56:52,720 --> 00:56:57,600
US government can print up a hundred dollar bill for a couple pennies and then spend it.
667
00:56:57,680 --> 00:56:59,500
Obviously, there's a digital version and spend it.
668
00:56:59,580 --> 00:57:03,100
So that's what seniorage is where you can actually make money printing money.
669
00:57:03,100 --> 00:57:16,200
And so this is why we don't like shit coins, because they have pre-mines and they're centralized and they're controlled and they're kind of schemes to enrich a small group of insiders.
670
00:57:16,440 --> 00:57:18,840
And they end up looking more like securities as a result of this.
671
00:57:20,180 --> 00:57:22,980
So that's what I mean by Bitcoin culture.
672
00:57:22,980 --> 00:57:30,680
And this is, I think it's important for people to realize that the consensus rules.
673
00:57:30,680 --> 00:57:56,480
So basically, Bitcoin is a network and it's an asset. And the asset is moved across the network. The asset is secured by the network, secured by the miners. It's secured by public key cryptography. No one can take your money unless they know your private key. And this is one way we enforce private property. And we make sure Bitcoin's secure and it's censorship resistant.
674
00:57:56,480 --> 00:58:19,060
But what a lot of people don't realize is it's not this. And I'm guilty of this myself. I think in my first few years in Bitcoin, some of the videos I made sort of attributed magical properties to Bitcoin as if it's this, you know, calling it digital gold is a great metaphor. And I don't know if Saylor brought that in. I can't really remember, but whoever did, it's a great way of explaining Bitcoin to newcomers.
675
00:58:19,060 --> 00:58:42,480
But there's also problems with metaphors. So gold has its certain atomic structure and it sort of comes with the universe and was created in supernovas or whatever. And it doesn't really need, it's enforced by its properties of money or sort of enforced by the way it's distributed all around the world.
676
00:58:42,480 --> 00:58:49,420
And it's sort of short in supply, though, obviously, if you look out in the solar system in the universe, there's a lot of gold.
677
00:58:49,820 --> 00:58:51,080
But Bitcoin is very different.
678
00:58:51,440 --> 00:58:58,100
And people sometimes forget that Bitcoin is made up of Bitcoiners who run nodes, which is what the Bitcoin network is.
679
00:58:58,140 --> 00:59:05,680
It's just people like you and me running Bitcoin nodes on our laptops or desktops or personal servers and enforcing the rules.
680
00:59:05,680 --> 00:59:14,960
And this is what gives Bitcoin its decentralization, that we don't have the banker at Wells Fargo keeping track of our spending.
681
00:59:15,600 --> 00:59:17,740
Every node builds its own version of the blockchain.
682
00:59:18,800 --> 00:59:25,000
And through Nakamoto consensus, we all converge to the same transaction history.
683
00:59:25,540 --> 00:59:27,020
And the chain is immutable.
684
00:59:27,260 --> 00:59:30,720
It's very, very difficult, or it's impossible to rewrite past a certain point.
685
00:59:30,720 --> 00:59:39,420
And this is another part of Bitcoin culture, which we can talk about, that we don't go into the blockchain history and make manual interventions.
686
00:59:39,420 --> 00:59:51,020
For example, like Vitalik did at the DAO hack in 2016, whenever that was, 2016, 2017, where he went back and basically changed the blockchain.
687
00:59:51,020 --> 01:00:02,060
Because if you go in and if you modify the blockchain manually and you go back in history and hard code a block, you basically turn Bitcoin into a trusted solution forever.
688
01:00:02,920 --> 01:00:08,080
And this has been, this relates to the discussion of Bitcoin spam, which we can get into if you want.
689
01:00:08,160 --> 01:00:14,720
And this risk because of Bitcoin Core's recent actions that very bad things could end up in the blockchain.
690
01:00:14,980 --> 01:00:17,380
For example, child sexual abuse material, CSAM.
691
01:00:17,840 --> 01:00:18,980
This is one of the concerns.
692
01:00:18,980 --> 01:00:24,740
and Bitcoin is very different because it's immutable and we want it to be that way.
693
01:00:25,280 --> 01:00:27,940
And so it's important to prevent these things from getting into the chain
694
01:00:27,940 --> 01:00:33,960
because once they're in the chain, future people need to either download that CSAM
695
01:00:33,960 --> 01:00:36,640
when they spin up a node, which is just horrendous,
696
01:00:36,740 --> 01:00:38,800
or you have to go in and do a manual intervention,
697
01:00:38,800 --> 01:00:44,800
which then turns the Bitcoin blockchain into this trusted blockchain.
698
01:00:44,800 --> 01:00:50,820
trusted blockchain because if once you intervene once you could always go back and you know how do
699
01:00:50,820 --> 01:00:54,280
you know someone's not going to intervene in the future bitcoiners won't decide to intervene in the
700
01:00:54,280 --> 01:01:00,400
future and basically take your transaction out of the blockchain and for example if someone sent you
701
01:01:00,400 --> 01:01:06,100
sent you bitcoin in 2018 and for some reason there's a change and people decide to manually
702
01:01:06,100 --> 01:01:10,540
change that block maybe you're still hoddling that bitcoin but if they change that block
703
01:01:10,540 --> 01:01:14,440
obviously they'd have to change all the blocks afterwards so there's there's there's a theoretical
704
01:01:14,440 --> 01:01:20,540
piece to this. But if they change that, you won't have Bitcoin anymore because the history will have
705
01:01:20,540 --> 01:01:28,020
been erased and no one sent you Bitcoin. And there's certain, each block contains a hash of
706
01:01:28,020 --> 01:01:34,020
the previous block. So if you change one block, you have to go through and change all the subsequent
707
01:01:34,020 --> 01:01:39,540
blocks as well. So it gets a little technically complicated. But Satoshi designed it in such a way
708
01:01:39,540 --> 01:01:46,640
that the history stays immutable, which I think is very important. And so it's important to protect
709
01:01:46,640 --> 01:01:53,960
the chain. If you end up with, heaven forbid, CSAM on your personal computer, and you obviously
710
01:01:53,960 --> 01:01:58,520
didn't intend to put it there, you can delete it, but you can't delete stuff from the Bitcoin
711
01:01:58,520 --> 01:02:04,680
blockchain. And so this has been one of the attack vectors that the Bitcoin core devs,
712
01:02:04,680 --> 01:02:07,220
which used to be the major node software.
713
01:02:07,540 --> 01:02:11,320
This is the attack vector they opened up last year
714
01:02:11,320 --> 01:02:14,600
for people who've been following the whole opportune wars
715
01:02:14,600 --> 01:02:17,040
and the spam wars and all this stuff.
716
01:02:17,580 --> 01:02:19,280
I think I'm sort of rambling at this point.
717
01:02:20,560 --> 01:02:21,440
No, it's great.
718
01:02:21,640 --> 01:02:22,880
You're getting to all the things I want to,
719
01:02:22,920 --> 01:02:24,580
and I think we even have to go back a little further.
720
01:02:25,700 --> 01:02:28,220
I want to talk about why spam is actually a problem.
721
01:02:29,380 --> 01:02:31,820
And, you know, there's two types of spam, I guess.
722
01:02:32,060 --> 01:02:33,620
If we could agree something is spam,
723
01:02:33,620 --> 01:02:39,940
there's spam i don't like it and then there's spam this is uh c sam or something that's just
724
01:02:39,940 --> 01:02:44,600
egregious right and maybe if you don't agree on the both buckets but the two buckets exist and we
725
01:02:44,600 --> 01:02:50,520
can talk about it is just why is spam bad the big bucket of just spam and i think about it a little
726
01:02:50,520 --> 01:02:55,480
bit uh growing up whenever we got in a pool with a bunch of kids it was like hey especially if you
727
01:02:55,480 --> 01:02:59,600
owned a pool or a pop-up pool or above ground or an in-ground pool or went to the public please
728
01:02:59,600 --> 01:03:05,160
don't pee in the pool no one pee in the pool but inevitably four hours later over ice cream or
729
01:03:05,160 --> 01:03:11,520
pizza or candy some conversation someone would admit yeah to peeing in the pool uh and you're
730
01:03:11,520 --> 01:03:15,400
just kind of like oh that's gross uh i wish you didn't tell me that now that i've lived through
731
01:03:15,400 --> 01:03:19,680
it but just don't do that again and inevitably someone always pees in the pool someone's like
732
01:03:19,680 --> 01:03:25,820
i don't feel like getting out and doing the hard work of going to the bathroom myself and uh you
733
01:03:25,820 --> 01:03:27,180
And you look at public pools differently.
734
01:03:27,860 --> 01:03:29,760
So why is spam actually a problem?
735
01:03:29,820 --> 01:03:30,100
I don't know.
736
01:03:30,200 --> 01:03:32,180
Maybe we got to start with the op return.
737
01:03:32,320 --> 01:03:41,480
So I think I like the example you used of peeing in the pool because it's a good way of demonstrating what antisocial behavior looks like.
738
01:03:41,480 --> 01:03:42,380
Now, kids are kids.
739
01:03:42,700 --> 01:03:44,620
Maybe depending on the age, we don't really blame.
740
01:03:44,920 --> 01:03:46,480
Little kids can't really understand this.
741
01:03:46,640 --> 01:03:50,100
But at a certain age, you understand that it's antisocial.
742
01:03:50,400 --> 01:03:51,700
It's just bad behavior, too.
743
01:03:52,220 --> 01:03:53,520
It's good for you to pee in the pool.
744
01:03:53,520 --> 01:03:58,300
you get immediate relief, but it's bad for everyone else. And you begin to understand that,
745
01:03:58,780 --> 01:04:03,860
I think the technical word for this is tragedy of the commons, where if everyone does this,
746
01:04:03,900 --> 01:04:09,020
then the pool is sort of ruined. And the classic thing in English history is that the overgrazing
747
01:04:09,020 --> 01:04:14,360
of a piece of public land. And it makes rational economic sense for you to put your sheep on there
748
01:04:14,360 --> 01:04:19,000
and eat the grass. But if everyone does it, and then all the plants get ripped up or whatever,
749
01:04:19,000 --> 01:04:24,100
then you've had a tragedy of the commons. And so the Bitcoin blockchain, that's one way of seeing
750
01:04:24,100 --> 01:04:29,780
it as this commons that needs to be protected. And there may be people who profit from putting
751
01:04:29,780 --> 01:04:35,800
spam on it. One form of spam would be, for example, Bitcoin NFTs, which we call inscriptions,
752
01:04:36,120 --> 01:04:43,580
putting JPEGs online. And there have been various waves of Bitcoin NFTs or inscriptions. You can make
753
01:04:43,580 --> 01:04:47,860
the person who puts them on there and then sells them to other people,
754
01:04:48,860 --> 01:04:52,580
that they can make a lot of money from it, but then everyone else has to store that for the rest
755
01:04:52,580 --> 01:04:59,140
of eternity. So this is how spam works. So basically, spam is a problem in all online
756
01:04:59,140 --> 01:05:09,620
systems. And we all have encountered it with our email inbox and voicemails and telemarketer calls.
757
01:05:09,620 --> 01:05:20,920
And so the difference is that one difference is that email certainly has become very centralized, even though it didn't start off that way.
758
01:05:21,040 --> 01:05:28,580
But Google can put in various filters, various email filters, and it's very helpful.
759
01:05:28,580 --> 01:05:45,600
And one of the things we don't do is we don't, so for example, if Google came to us and said, we're going to stop using email filters because we can't stop all the spam, we would think they're absolutely crazy.
760
01:05:45,840 --> 01:05:50,100
And we would be like, well, just try to stop some of it, try to rate limit it, try to mitigate it.
761
01:05:50,140 --> 01:05:51,100
It doesn't have to be perfect.
762
01:05:51,380 --> 01:05:53,440
We don't want to let the perfect be the enemy of the good.
763
01:05:54,260 --> 01:05:56,640
And this is a good analogy.
764
01:05:56,640 --> 01:06:02,980
this is basically what Bitcoin Core said to us in 2025, or really 2023 to 2025. We can't stop all
765
01:06:02,980 --> 01:06:07,420
Bitcoin spam, therefore we're going to do nothing about it. And when you think of the email context,
766
01:06:07,420 --> 01:06:11,840
you realize how silly this is. But basically the Bitcoin spam question goes back to even
767
01:06:11,840 --> 01:06:19,260
Satoshi's days. And there's a famous discussion in Bitcoin Talk where Satoshi was speaking with
768
01:06:19,260 --> 01:06:25,480
Gavin Andreessen and Gavin said, my evil. And the interesting thing about Gavin is he paid a visit
769
01:06:25,480 --> 01:06:30,300
to the CIA very early on in Bitcoin history. And Satoshi disappeared very shortly thereafter,
770
01:06:31,180 --> 01:06:35,100
which leads you to, so it makes you realize that the CIA has been aware of Bitcoin since
771
01:06:35,100 --> 01:06:39,880
the very beginning. But Gavin Andreessen had this famous quote where he said,
772
01:06:39,960 --> 01:06:46,380
my evil little mind imagines we could embed some data in Bitcoin. We could put a Lady Gaga video
773
01:06:46,380 --> 01:06:53,080
and split it up, et cetera. And Satoshi's response to this is, obviously this is a bad thing. Satoshi
774
01:06:53,080 --> 01:06:57,700
understood what Bitcoin spam was. He didn't say to Gavin, how do we really know what the Bitcoin
775
01:06:57,700 --> 01:07:04,480
blockchain is for? Maybe it's an agnostic arbitrary data storage platform. And who am I to tell you
776
01:07:04,480 --> 01:07:10,780
not to put Lady Gaga videos on there and to force you to use it as money? No, Gavin and Satoshi
777
01:07:10,780 --> 01:07:19,280
both understood that this was spam. And so this has been a problem since 2010. And this really
778
01:07:19,280 --> 01:07:26,080
came to a head the first time in 2014, 2013, 2014, when people began to abuse the blockchain.
779
01:07:26,560 --> 01:07:32,340
There was Eric Voorhees had a project called Satoshi Dice, where you could basically,
780
01:07:33,140 --> 01:07:39,700
it was like a casino built on the blockchain itself. And I forget exactly how it worked,
781
01:07:39,740 --> 01:07:43,820
but it created a lot of dust outputs, these very small amounts of unspendable Bitcoin
782
01:07:43,820 --> 01:07:50,860
and bloated the UTXO set, and then people needed to hold those when they ran nodes.
783
01:07:51,280 --> 01:07:55,920
And so there were a number of projects being built on top of Bitcoin that were sort of
784
01:07:55,920 --> 01:07:56,880
non-monetary.
785
01:07:57,560 --> 01:08:05,560
They were doing things like Counterparty, Omni, and some of these were monetary or borderline
786
01:08:05,560 --> 01:08:05,960
monetary.
787
01:08:05,960 --> 01:08:09,900
You can debate whether putting a casino on Bitcoin is monetary, and people play these
788
01:08:09,900 --> 01:08:10,320
word games.
789
01:08:10,320 --> 01:08:18,560
But obviously, I think the question you always have to ask when people do stuff with Bitcoin or when you want to make a change to Bitcoin is, does it make it better money or worse money?
790
01:08:18,960 --> 01:08:26,480
And I would argue that having a casino built into Bitcoin makes it worse money and creates all this on-chain activity that we don't really need.
791
01:08:27,580 --> 01:08:34,280
And so people have understood what spam was since the beginning, but we had a much better group of Bitcoin core devs.
792
01:08:34,560 --> 01:08:38,220
Again, the ones who make the Node software back in 2013 and 2014.
793
01:08:38,220 --> 01:08:44,740
and they showed real hostility to this arbitrary data or non-monetary data on Bitcoin. And they
794
01:08:44,740 --> 01:08:51,960
decide to fight spam. And they basically, the way they did it is they, first of all, they just
795
01:08:51,960 --> 01:09:02,829
displayed hostility to it which is very important So if you don want something if you want less crime for example you should tell people that crime is bad and you should be tough on crime
796
01:09:03,309 --> 01:09:08,169
even though you know you can't stop all crime. But just having that facade, having that front,
797
01:09:08,289 --> 01:09:13,069
having that attitude really helps. And so this is what Bitcoin Core basically was saying. And
798
01:09:13,069 --> 01:09:18,929
people like Greg Maxwell, who are still, who's sort of done a 180 on Bitcoin spam, were saying
799
01:09:18,929 --> 01:09:23,769
that this is, you know, abuse of the blockchain and, um, we need to stop people from doing this.
800
01:09:23,769 --> 01:09:28,549
And so the solution at that point was to create a small space. They, they basically repurposed an
801
01:09:28,549 --> 01:09:35,789
op, an op code, um, called opera turn. And what opera turn does is it basically when, when you're,
802
01:09:36,009 --> 01:09:41,789
when your computer sees that, or when the node sees it, it doesn't, it doesn't, um, it stops,
803
01:09:41,969 --> 01:09:46,589
it stops. Uh, there's no, it does, it doesn't execute any function. And so it's basically you
804
01:09:46,589 --> 01:09:50,649
do op return. And then there's a place there you can put some arbitrary data into a Bitcoin
805
01:09:50,649 --> 01:09:56,169
transaction. It started off at 40 bytes, which is obviously a very small amount of data. Then it was
806
01:09:56,169 --> 01:10:00,389
raised to 80 bytes. I think there's a debate about putting it back to 40 bytes, but it's essentially
807
01:10:00,389 --> 01:10:07,329
been at 40 to 80 bytes since 2013, 2014. And this upset someone named who we talked about earlier in
808
01:10:07,329 --> 01:10:14,469
this conversation, someone named Vitalik Buterin, who wanted to build his scam coin, his scam casino
809
01:10:14,469 --> 01:10:21,229
know, on top of Bitcoin. And he actually says this in a tweet, which you can find on X and I've
810
01:10:21,229 --> 01:10:25,549
referenced in my videos. He basically tells the history of Ethereum saying I wanted to build it
811
01:10:25,549 --> 01:10:31,689
on, I wanted to build Ethereum on Bitcoin, but the Bitcoin core devs hostility to storing arbitrary
812
01:10:31,689 --> 01:10:37,209
data on chain basically drove me away because I was afraid they would just keep attacking me.
813
01:10:37,849 --> 01:10:42,109
And so I decided to just build my own. I think he first tried to build it on a different blockchain,
814
01:10:42,109 --> 01:10:48,069
But then he eventually created Ethereum, which I like to call an idiot container.
815
01:10:48,629 --> 01:10:58,349
And it was great because all the people who didn't really understand Bitcoin and all the devs who wanted to create lots of bills and whistles and fancy things, they all left Bitcoin and went to work on Ethereum.
816
01:10:58,849 --> 01:11:00,829
Many of them became very rich as a byproduct.
817
01:11:00,829 --> 01:11:18,849
But we had a period of relative peace in Bitcoin history where all the shit coins and tokens and NFTs and garbage was on Ethereum and other chains, later Solana and Cardano in part.
818
01:11:19,529 --> 01:11:23,949
And so we had this period of peace really from 2014 to call it 2023.
819
01:11:23,949 --> 01:11:50,749
We had a software upgrade in 2021, I believe it was. This was the Taproot soft fork, which was a very accepted soft fork. And it shipped with a bug that basically made it possible to embed data and sort of sneak it into people's nodes and sneak it into transactions on the input side of things.
820
01:11:50,749 --> 01:11:59,329
And someone figured out that you could use this to create shitcoins on Bitcoin and also to create NFTs on Bitcoin.
821
01:12:00,329 --> 01:12:07,229
And so we began to, the Bitcoin blockchain began to be attacked and the network began to be attacked starting in early 2023.
822
01:12:07,229 --> 01:12:17,929
and basically this was a movement that was sort of funded by various VCs,
823
01:12:18,069 --> 01:12:19,409
venture capitalists in the space.
824
01:12:19,909 --> 01:12:22,289
David Bailey of the Bitcoin Conference, Bitcoin Magazine,
825
01:12:22,589 --> 01:12:24,549
is one who funded a bunch of them.
826
01:12:25,109 --> 01:12:28,369
A company called Taproot Wizards is a well-known example.
827
01:12:29,030 --> 01:12:33,129
And these had the effect of sort of giving these startups money
828
01:12:33,129 --> 01:12:34,509
to spam the blockchain.
829
01:12:34,509 --> 01:12:43,009
And they tried to create by promoting these at the conference and promoting them online, saying, we're going to make Bitcoin fun again.
830
01:12:43,129 --> 01:12:45,549
We're going to let people do collectibles on Bitcoin.
831
01:12:46,089 --> 01:12:48,809
And we can issue shit coins on Bitcoin.
832
01:12:49,189 --> 01:12:54,829
And this was at the point where, you know, obviously people begin to, people lose money in shit coins.
833
01:12:54,949 --> 01:12:57,549
And then they don't want to buy shit coins anymore.
834
01:12:57,689 --> 01:13:01,049
So the scammers and spammers always have to come up with new solutions for this.
835
01:13:01,049 --> 01:13:19,429
And the way they do that is to, they decide to bring this stuff back home to Bitcoin. As if putting a scam on Bitcoin, Bitcoin has a very nice brand and a very strong brand. And so people who aren't paying attention might think that, well, Bitcoin's permissionless. Who are you to tell people they can't scam on Bitcoin?
836
01:13:19,429 --> 01:13:34,689
Well, the problem with scamming on Bitcoin and spamming the Bitcoin blockchain is it violates Bitcoin culture, which is this idea that we don't want to abuse the blockchain and put too much stuff on there. We want to keep it lean and mean.
837
01:13:34,689 --> 01:13:43,209
And so basically what happened in 2023 and 2024 was what's called the UTXO set.
838
01:13:43,389 --> 01:13:46,429
So a UTXO is just a chunk of unspent Bitcoin.
839
01:13:46,989 --> 01:13:51,189
And it's very important for nodes to, this is something that nodes need to keep.
840
01:13:51,589 --> 01:13:52,809
They can't prune it.
841
01:13:53,349 --> 01:13:59,189
And the reason nodes need to keep this is because when they see a transaction, they need to be able to double check to make sure the Bitcoin hasn't been spent already.
842
01:13:59,389 --> 01:14:02,309
Otherwise, we run into things like the double spending problem.
843
01:14:02,309 --> 01:14:20,569
And so the result of this was the UTXO set, which is the set, the collection of all this unspent Bitcoin, which is the most important thing. This set grew from 4 gigabytes in late 2022 to about 12 gigabytes by, call it, the middle of 2024.
844
01:14:20,569 --> 01:14:25,469
And we saw massive spam attacks around the time of the 2024 Bitcoin halving.
845
01:14:26,109 --> 01:14:32,249
Anyone who's trying to transact on chain then, you'd have to pay maybe $50 or $100 to do a transaction.
846
01:14:33,149 --> 01:14:36,549
This hurt a lot of people in the global south who couldn't transact on chain.
847
01:14:36,889 --> 01:14:43,049
And it even hurt people who are trying to open and close lightning channels because they're being priced out by the spam, these very spam attacks.
848
01:14:44,009 --> 01:14:48,009
And the sad thing about this is the spam attacks were funded by Bitcoiners.
849
01:14:48,009 --> 01:14:53,869
prominent Bitcoiners, OGs, people like David Bailey, who had been in the space for a long time
850
01:14:53,869 --> 01:15:00,829
and had done a lot of good and were respected. And it was not opposed this time by the Bitcoin
851
01:15:00,829 --> 01:15:10,909
core devs who had opposed it back in 2013 and 2014. There'd been a changing of the guard when
852
01:15:10,909 --> 01:15:15,909
it came to the Bitcoin core devs. A lot of people, a lot of the older ones, kind of the original
853
01:15:15,909 --> 01:15:21,889
cypherpunk types ended up retiring because they got rich. And there was also this guy named fake
854
01:15:21,889 --> 01:15:27,029
Toshi, Craig Wright, who was like suing Bitcoin core devs and just suing everyone and causing a
855
01:15:27,029 --> 01:15:31,129
lot of problems. And, you know, if you're a rich Bitcoin core dev, you don't really, you don't
856
01:15:31,129 --> 01:15:34,649
really need this mess. So there was a lot of people retired or stopped working on the project.
857
01:15:34,929 --> 01:15:41,549
And then they were replaced by young, much younger devs. People from a lot of people just
858
01:15:41,549 --> 01:15:47,389
fresh out of college, like Gloria Zhao, for example, who is no longer with Bitcoin Core.
859
01:15:49,689 --> 01:15:54,249
There's this push basically by the funding organizations that fund these core devs
860
01:15:54,249 --> 01:16:02,769
to bring in very young people and to sort of institute a more corporate culture and to get
861
01:16:02,769 --> 01:16:08,289
people together in offices in large blue cities like San Francisco and New York and London.
862
01:16:08,289 --> 01:16:33,949
And so you had a very different, these people had a very different view of Bitcoin. And I would argue that they were not steeped in Bitcoin culture. So for example, Gloria Zhao, she'd grown up in the Bay Area, went to UC Berkeley as an undergrad. I think she studied computer science. And while she was there, she worked on shit coins like she showed. You can still look at her GitHub and see how she was showing people how to do ICO scams on Ethereum.
863
01:16:33,949 --> 01:16:49,589
And so this was someone who was, I believe, for reasons of nepotism and DEI as well, was promoted very rapidly to Bitcoin Core Maintainer, which is someone who has write access to the repo and can actually make changes to the software.
864
01:16:50,249 --> 01:16:51,329
So you had this changing of the guard.
865
01:16:51,429 --> 01:16:56,689
You had a lot of young people there who had imbibed a little too much postmodernism from UC Berkeley.
866
01:16:56,849 --> 01:17:00,309
And I'd seen it firsthand in the 90s, and it only got worse since then.
867
01:17:00,309 --> 01:17:08,369
postmodernism, poststructuralism, wokeism, and just a general agnosticism. Like they didn't
868
01:17:08,369 --> 01:17:13,009
understand that Bitcoin was money and they weren't willing to enforce it as money. So when these spam
869
01:17:13,009 --> 01:17:19,169
attacks happened, we had a lot of young devs who were part of various social cliques that were also
870
01:17:19,169 --> 01:17:24,909
interacting with shitcoiners in New York City, for example, and in San Francisco, kind of moving in
871
01:17:24,909 --> 01:17:31,009
the same social circles. And so as a result, we did not have the same hostility showed by Bitcoin
872
01:17:31,009 --> 01:17:37,569
Core to these spammers and scammers. And there was an effort made by people like Luke Dasher.
873
01:17:37,689 --> 01:17:44,489
Luke Dasher created a pull request and a software patch to patch the hole that had been opened up as
874
01:17:44,489 --> 01:17:49,629
part of the Taproot upgrade. This is what we call the inscriptions exploit that made possible these
875
01:17:49,629 --> 01:17:56,249
coins on Bitcoin and NFTs on Bitcoin. At the time, this was early 2023, if Bitcoin Core had
876
01:17:56,249 --> 01:18:01,969
paid attention to Luke Dasher, who's really the OG of Bitcoin Core devs or Bitcoin devs. He's been
877
01:18:01,969 --> 01:18:08,530
around since 2011. And he now runs a fork of Bitcoin Core called Bitcoin Knots, which is the
878
01:18:08,530 --> 01:18:13,449
software that I run. But a guy who's really steeped in, very serious guy, who's really steeped in
879
01:18:13,449 --> 01:18:21,469
Bitcoin culture. And he had a mining pool back in 2013, 2014. So he knows more about the Bitcoin
880
01:18:21,469 --> 01:18:28,209
code base and Bitcoin than maybe any living human being. And he's a genius programmer.
881
01:18:29,089 --> 01:18:35,069
So he saw this for the attack that it was because he had lived through 2013 and 2014.
882
01:18:35,629 --> 01:18:40,809
And he basically submitted a request to the Bitcoin core devs to close this particular hole.
883
01:18:40,809 --> 01:18:47,209
And if they had listened to him, we would not be suffering with this bloated UTXO set that we are now.
884
01:18:48,029 --> 01:18:55,169
And the Taproot upgrade turned out, in retrospect, to be very bad because 90% of Taproot outputs now are just spam and dust.
885
01:18:55,949 --> 01:19:01,809
And the whole UTXO set, I think, is 50% dust at this point or more than 50% spam.
886
01:19:01,809 --> 01:19:23,889
And so what happened is Bitcoin Core refused to merge that fix for the bug that came, that shipped with Taproot. And the reason they gave for it, or the reason one of the core devs named A. Chow gave for it was that this is too contentious, this is too controversial. And A. Chow said, we don't merge controversial changes to Bitcoin.
887
01:19:23,889 --> 01:19:50,729
So fast forward, and that's kind of a reasonable thing to say. Fast forward to 2025. In May, June of 2025, Bitcoin Core decided, after having not fixed this one hole in Bitcoin, the inscriptions exploit, they decided to blow open another hole in Bitcoin and expand OpReturn from 80 bytes, where it had been since, call it 2015, expand OpReturn from 80 bytes to 100,000 bytes.
888
01:19:50,729 --> 01:20:03,649
They basically blew open op return, what's called data carrier size, and they removed the cap. They completely uncapped it, and now it's basically capped just by a different filter, some sort of 100,000 byte filter.
889
01:20:04,329 --> 01:20:17,129
The problem with this is, and you can play around on your computer with this, you can take an emoji, find an emoji, and ask AI or look, right click on it and figure out how much data it takes up.
890
01:20:17,129 --> 01:20:19,069
Maybe it takes up 30 bytes or something.
891
01:20:19,530 --> 01:20:25,869
Maybe if it's a very complex emoji, it takes up 80 bytes or 120 bytes if it's a fancy emoji.
892
01:20:26,989 --> 01:20:32,229
And so there's not that much you can put in the chain if you have an operaturn of 40 or 80 bytes.
893
01:20:32,689 --> 01:20:36,729
And it's really just intended for like a hash of a larger amount of data.
894
01:20:37,349 --> 01:20:44,609
But what happened when they blew open operaturn is they made it possible to put larger blobs of data in this place.
895
01:20:44,609 --> 01:20:49,849
and this is what's opened up the network to just a whole range of attacks. So if you think about it,
896
01:20:50,429 --> 01:20:56,089
this idea that, for example, what if you ran a home server and you just opened it up to the
897
01:20:56,089 --> 01:21:00,089
internet? You didn't have any sort of firewall and you just let people post whatever they want
898
01:21:00,089 --> 01:21:05,329
on your server. And we know what would end up there. It'd be a lot of porn. It'd be a lot of
899
01:21:05,329 --> 01:21:11,289
swastikas. It'd probably be a lot of cat pictures. It'd just be junk basically. And no one is stupid
900
01:21:11,289 --> 01:21:16,889
enough to do that and servers have various controls but the problem with operaturn is it functions in
901
01:21:16,889 --> 01:21:23,209
this way operaturn since 2013 and 2014 and you can google this you can ask chat gbt or grok
902
01:21:23,769 --> 01:21:30,329
what is the designated space place in bitcoin for non-monetary data for arbitrary data you do any
903
01:21:30,329 --> 01:21:35,369
search for that and this is this is part of bitcoin culture operaturn is the place you can
904
01:21:35,369 --> 01:21:41,089
you can put a small amount of arbitrary data, non-monetary data. And so what Bitcoin Core did
905
01:21:41,089 --> 01:21:48,029
in 2025 is they blew this open. So 100,000 bytes is a lot more, obviously, than 80 bytes. It's
906
01:21:48,029 --> 01:21:55,869
1,250 times as big. And instead of being able to put just a tiny emoji or a little hash of some data,
907
01:21:56,329 --> 01:22:02,589
you can put a very high fidelity picture. And you can even put a short video or an MP4.
908
01:22:02,589 --> 01:22:21,949
And when you think about it, there's really nothing. The Bitcoin blockchain is just full of financial history. And we have all these, you can go back and look inside of blocks and you can see various Bitcoin addresses and transactions that have taken place. And obviously, just like the US dollar, some of these transactions were probably for very bad things.
909
01:22:21,949 --> 01:22:32,949
They could be people buying bad things or, you know, drugs, sex, weapons, whatever, war, et cetera.
910
01:22:32,949 --> 01:22:37,949
But as Bitcoiners, we agree to, and it's all pseudonymous, so we don't really know.
911
01:22:37,949 --> 01:22:57,038
You can really see that oh this was a North Korean hacker or some terrorist or something But what we do when we run a node when we use Bitcoin as money there sort of this agreement There this gentleman agreement that basically I download the whole blockchain because I need it to run a full archival node
912
01:22:58,158 --> 01:23:02,718
And I understand that there's probably, you know, money is used for good things.
913
01:23:02,858 --> 01:23:03,998
It's used for bad things.
914
01:23:03,998 --> 01:23:04,838
It's just like fire.
915
01:23:04,958 --> 01:23:05,938
It's sort of a neutral thing.
916
01:23:05,938 --> 01:23:14,798
And so it's one thing to expect Bitcoiners to store transactions, monetary transactions.
917
01:23:15,438 --> 01:23:26,458
And we're incentivized to do this because if I want you to store my monetary transaction or to enable me to transact on Bitcoin, if I want you to allow it, I should enable that for you as well.
918
01:23:26,998 --> 01:23:29,358
And so there's this reciprocity that's involved.
919
01:23:29,358 --> 01:23:45,358
But if you think about it, once you start to introduce large blobs of arbitrary data on Bitcoin, which is similar to just creating a server and letting anyone upload whatever they want to it, once you do this, it's a completely different world.
920
01:23:45,798 --> 01:23:52,038
You're then asking people who want to spin up a new node to download whatever crap someone has put into the blockchain.
921
01:23:52,038 --> 01:24:01,318
And it could be the extreme example, of course, is CSAM, which is some people are confused and they think, oh, we're trying to conform ourselves to government rules.
922
01:24:01,958 --> 01:24:10,018
And just somehow if we enforce these rules for CSAM, the next thing we'll do is we'll censor monetary transactions.
923
01:24:10,238 --> 01:24:13,758
Well, certainly I'm not going to censor monetary transactions.
924
01:24:13,758 --> 01:24:18,978
I want to use Bitcoin as money, but I will censor CSAM transactions because I don't want that crap on my computer.
925
01:24:19,358 --> 01:24:21,898
And even if it were legal, this isn't a legal question.
926
01:24:22,038 --> 01:24:39,238
If I was living in a country, which there's probably no country where it's legal, I still wouldn't want it on my computer because it's disgusting. I have children. It's unethical. And so when you begin to think about it, arbitrary data, there's many different, think about all the different cultures in the world and all the different people.
927
01:24:39,238 --> 01:24:44,218
and some people will think certain symbols are cool
928
01:24:44,218 --> 01:24:46,878
and some people will be incredibly offended by it.
929
01:24:47,318 --> 01:24:50,398
You can have cartoons of religious figures,
930
01:24:50,758 --> 01:24:53,658
which in the past have caused actual riots in cities.
931
01:24:54,378 --> 01:24:58,098
This is just a mess that no one wants.
932
01:24:58,518 --> 01:25:00,138
I signed up to use Bitcoin as money.
933
01:25:00,778 --> 01:25:02,638
I don't want to have to worry about what's on my node.
934
01:25:03,038 --> 01:25:08,678
I don't want to have to relay CSAM across the internet.
935
01:25:08,678 --> 01:25:12,818
I don't want to have to relay just any arbitrary data that doesn't make Bitcoin better money.
936
01:25:13,478 --> 01:25:16,178
Because it exposes me as a node runner to risks.
937
01:25:16,658 --> 01:25:18,398
It's bad for Bitcoin's brand.
938
01:25:18,998 --> 01:25:22,918
And so this is what Bitcoin Core enabled last year by blowing open Op return.
939
01:25:23,638 --> 01:25:29,018
And the last point I wanted to make about this was this was an extremely controversial change.
940
01:25:29,618 --> 01:25:35,538
And basically, there was a huge fight online on X and on the GitHub repo.
941
01:25:35,538 --> 01:25:38,678
that there was a lot of funny business that was involved
942
01:25:38,678 --> 01:25:39,798
where you have this process
943
01:25:39,798 --> 01:25:41,358
where various people have to approve stuff.
944
01:25:41,458 --> 01:25:42,818
They can either act it, in other words,
945
01:25:42,878 --> 01:25:45,598
acknowledge or say yes to the change
946
01:25:45,598 --> 01:25:47,318
and other people will knack it,
947
01:25:47,398 --> 01:25:49,558
which means to not accept the change.
948
01:25:49,998 --> 01:25:51,258
So there's a lot of funny business
949
01:25:51,258 --> 01:25:53,038
with the actual software and the repo
950
01:25:53,038 --> 01:25:55,778
where they were letting people get access to act it,
951
01:25:55,838 --> 01:25:56,898
but if they wanted to knack it
952
01:25:56,898 --> 01:25:58,478
and people were banned from it,
953
01:25:58,818 --> 01:26:01,758
highly, highly controversial change ended up
954
01:26:01,758 --> 01:26:03,798
when people realized that Bitcoin Core
955
01:26:03,798 --> 01:26:04,818
was not going to back down,
956
01:26:04,818 --> 01:26:21,798
A lot of us just stopped running Bitcoin Core software. We migrated to Bitcoin Noughts. And that's the node type that I run today. And Bitcoin Noughts is maintained by Luke Dasher, who's a great guy and a brilliant guy who's also been able to protect us from a lot of bugs that have ended up in Bitcoin Core.
957
01:26:21,798 --> 01:26:27,818
So the whole Bitcoin Core software development process is broken. They just had a new bug
958
01:26:27,818 --> 01:26:34,358
disclosed yesterday. They had a bug earlier in 2026. The beginning of 2026, it actually deleted
959
01:26:34,358 --> 01:26:39,218
your wallet when you ran it. They forced you to upgrade your Bitcoin wallet as part of spinning
960
01:26:39,218 --> 01:26:43,998
up a node or upgrading your node. And then it deleted your wallet and people lost money.
961
01:26:44,378 --> 01:26:48,918
So there's a real problem happening over at Bitcoin Core. It's hard to know whether they've
962
01:26:48,918 --> 01:26:55,138
been somehow infiltrated, corrupted, compromised, whether they're just young kids who don't have
963
01:26:55,138 --> 01:26:57,918
much experience and they don't have sort of a cypherpunk ideal.
964
01:26:59,218 --> 01:27:05,058
So what happened is in spite of all this contention, you'll remember that I said in 2023,
965
01:27:05,398 --> 01:27:12,138
H. House said she was not going to merge. He or she, I don't know what to call her, said H. House
966
01:27:12,138 --> 01:27:18,778
that they were not going to merge this contentious change to Bitcoin Core. And because it was Luke's
967
01:27:18,778 --> 01:27:28,978
patch because it was too contentious. And what we saw in 2025 is that they were happy to merge this
968
01:27:28,978 --> 01:27:33,398
very contentious change, blowing open op return. And that's when a lot of us realized that there
969
01:27:33,398 --> 01:27:39,658
was probably something malicious going on because you can't be selective and say, we only merge
970
01:27:39,658 --> 01:27:44,358
contentious things that we like. There's this idea that Bitcoin core devs and the maintainers,
971
01:27:44,358 --> 01:27:50,258
they're like janitors. They fix bugs, they do operating system updates, and they don't really
972
01:27:50,258 --> 01:27:54,618
do anything that the community is against. They don't do anything contentious, as H.O. said in
973
01:27:54,618 --> 01:28:01,618
2023. But they were very happy to push through this highly contentious change in 2025. It appears
974
01:28:01,618 --> 01:28:06,458
all the discussion happened offline because these people are working in offices together. They're
975
01:28:06,458 --> 01:28:11,358
not these isolated cypherpunks living in El Salvador in the jungle or living all over the
976
01:28:11,358 --> 01:28:16,298
world. They're all in the same social circles. They're interacting with shitcoiners and people
977
01:28:16,298 --> 01:28:20,638
want to do Bitcoin affinity scams. And so at that point, it became apparent to a lot of us who've
978
01:28:20,638 --> 01:28:25,778
been following it that something very, very wrong was going on and that it was quite likely.
979
01:28:26,698 --> 01:28:32,258
What we realized is if there were an attack on Bitcoin, this could certainly be what it looked
980
01:28:32,258 --> 01:28:38,618
like. And this is another part of, I would say, another part of Bitcoin culture, which is
981
01:28:38,618 --> 01:28:44,918
adversarial thinking. And we all question each other. And it can be hard in Bitcoin because you
982
01:28:44,918 --> 01:28:49,259
may have Bitcoin or friends who are on the other side of the aisle when it comes to some of these
983
01:28:49,259 --> 01:29:00,278
debates or civil wars. And this is a vulnerability. And I remember Giacomo Zucco saying a few years
984
01:29:00,278 --> 01:29:04,918
ago that this is the hardest thing in Bitcoin is to call out your Bitcoin or friend when they're
985
01:29:04,918 --> 01:29:11,958
doing something that's bad for Bitcoin. And so Bitcoin is currently embroiled in a civil war
986
01:29:11,958 --> 01:29:21,098
that was caused by Bitcoin Core's negligence and their changing of the culture. And so to sort of
987
01:29:21,098 --> 01:29:30,298
loop back and return to this idea that culture, the consensus flows from culture, if you change
988
01:29:30,298 --> 01:29:36,318
Bitcoin culture, then the consensus rules, the actual software rules that are enforced
989
01:29:36,318 --> 01:29:41,458
will end up getting changed. And this is what we've seen where there's a hostility to spam
990
01:29:41,458 --> 01:29:48,758
and to NFTs and just putting any junk on chain back in 2013 and 2014. And then this really changed
991
01:29:48,758 --> 01:29:53,518
in 2023 for a lot of people. And obviously there are lots of newcomers coming to Bitcoin.
992
01:29:53,518 --> 01:29:56,558
Some people maybe came to Bitcoin because they wanted to do NFTs.
993
01:29:56,558 --> 01:30:01,718
and um you know i would argue that's not the that's not the right way to onboard people to
994
01:30:01,718 --> 01:30:06,838
bitcoin that people come to bitcoin to shitcoin very rarely usually usually they're just paid
995
01:30:06,838 --> 01:30:13,598
actors who just want to sell these things to other people um but this is the this is the context where
996
01:30:13,598 --> 01:30:17,698
the consensus rules change and if you have a change in bitcoin culture where you have the
997
01:30:17,698 --> 01:30:22,758
community and especially the the devs who have right access to the repo when you have them no
998
01:30:22,758 --> 01:30:29,038
longer recognizing and understanding the history of how Bitcoin spam has been treated.
999
01:30:29,718 --> 01:30:33,238
And if there's strong reasons why this should change, why Bitcoin is no longer money,
1000
01:30:33,838 --> 01:30:39,498
that's something you need to take up with the community. But consensus flows from culture.
1001
01:30:40,298 --> 01:30:45,318
And this is the great risk to Bitcoin because Bitcoin is only as good as the Bitcoiners who
1002
01:30:45,318 --> 01:30:52,278
run the software and enforce the consensus rules. And if we Bitcoiners want to change Bitcoin,
1003
01:30:52,758 --> 01:31:13,838
We can change it. We can increase the 21 million cap if we all agree to do it. And if we do a, I'm not sure if that'd be a soft fork or a hard fork, probably a hard fork. But this is why it's so important to protect Bitcoin culture. And it's very similar. The analogy I like to use here is the US Constitution.
1004
01:31:13,838 --> 01:31:29,078
And so many of us who respect the Constitution as a document, we look at how the Constitution, we look at how the system of government works in the U.S. in 2026 at the 250th anniversary coming up.
1005
01:31:29,078 --> 01:31:47,678
And it's very different from 1776. And people who think that we're still a constitutional republic, that this is how politics functions are very confused because we have a ton of money in politics.
1006
01:31:47,678 --> 01:31:54,478
we have much higher taxes we have an income tax we have a central bank we have lobbyists we have
1007
01:31:54,478 --> 01:32:00,458
big pharma we have big war we have big food the way the government the way the u.s functions is
1008
01:32:00,458 --> 01:32:04,858
it's very very different it's gone through it's more we're kind of the american empire the end of
1009
01:32:04,858 --> 01:32:09,458
the american empire and so much is driven by the military industrial complex and the financial
1010
01:32:09,458 --> 01:32:14,158
industrial complex and people like people like simon dixon have done a great job recently of
1011
01:32:14,158 --> 01:32:17,978
talking about this. So I'd encourage people to check out his interviews as well.
1012
01:32:19,298 --> 01:32:23,478
So that the changes, we still have the US Constitution. And the example I like to use
1013
01:32:23,478 --> 01:32:28,978
is the Second Amendment. The Second Amendment hasn't changed, but it's been diluted and the
1014
01:32:28,978 --> 01:32:32,898
culture around it has changed. And I'm very grateful for the Second Amendment, which is
1015
01:32:32,898 --> 01:32:38,298
obviously the right to bear arms, which wasn't just put there for hunting. There's been a lot
1016
01:32:38,298 --> 01:32:42,258
of revisionism. It wasn't just put there for hunting or for to defend your family, though
1017
01:32:42,258 --> 01:32:47,138
those are both great things. It's cool to be able to get your own meat and also to protect your
1018
01:32:47,138 --> 01:32:52,819
wife and kids. But I think the real reason the founders put it in there was this is a form of
1019
01:32:52,819 --> 01:32:57,678
decentralized distributed defense. It's a defense against a tyrannical government.
1020
01:32:58,878 --> 01:33:04,438
And so unfortunately, the American founding father culture has changed. And you have a lot
1021
01:33:04,438 --> 01:33:09,118
of Americans now who, you know, they definitely want to get rid of the Second Amendment. But the
1022
01:33:09,118 --> 01:33:10,438
The Second Amendment has been weakened.
1023
01:33:10,678 --> 01:33:17,918
It's been weakened in many different ways when it comes to permits and licenses and how you're supposed to store the guns at home, et cetera.
1024
01:33:18,638 --> 01:33:24,498
And this goes against the whole reason that it exists.
1025
01:33:24,498 --> 01:33:28,778
because if the Second Amendment is there to protect us from tyrannical governments,
1026
01:33:29,458 --> 01:33:36,138
then there's no reason to, it's absurd to say that you need a license or a permit,
1027
01:33:36,278 --> 01:33:40,578
because if you're trying to defend against government tyranny, you should need to ask
1028
01:33:40,578 --> 01:33:45,858
the government for permission to use a gun. And so I think that's an example of the culture
1029
01:33:45,858 --> 01:33:50,518
changing. The consensus rule is still there. The Second Amendment is still there, and it's
1030
01:33:50,518 --> 01:33:54,678
enforced in various ways all the way up to the Supreme Court, but it's really been watered down
1031
01:33:54,678 --> 01:34:01,898
and it has changed. And it is not, the US American culture has not changed. I don't think it's
1032
01:34:01,898 --> 01:34:08,378
changed for the better. And I admire the founder's vision. So this is the risk in Bitcoin that we
1033
01:34:08,378 --> 01:34:15,978
could be like, well, we're still Bitcoiners, but we're fine with shit coins on top of Bitcoin and
1034
01:34:15,978 --> 01:34:23,178
and nfts on top of bitcoin and where you know when you first become a bitcoiner you should buy a stock
1035
01:34:23,178 --> 01:34:27,918
and a bitcoin treasury company instead like there's the the culture can change and this has
1036
01:34:27,918 --> 01:34:34,358
real repercussions because the network is made up of bitcoiners running nodes and so if the culture
1037
01:34:34,358 --> 01:34:38,518
changes then the consensus rules which are enforced by the nodes will change over time
1038
01:34:38,518 --> 01:34:44,398
and this is this is the real danger and i think a lot of bitcoiners are very complacent about the
1039
01:34:44,398 --> 01:34:50,518
risks here. They seem to think that Bitcoin has these magical alchemical properties, whereas
1040
01:34:50,518 --> 01:34:58,618
Bitcoin is secured by the human action of Bitcoiners. And newcomers to Bitcoin, even newcomers
1041
01:34:58,618 --> 01:35:04,618
to my videos are often offended by the immune system of Bitcoin in action and how we call each
1042
01:35:04,618 --> 01:35:12,018
other out and how we meme shitcoiners and make fun of them. And we call out scammers and spammers.
1043
01:35:12,018 --> 01:35:26,578
And this isn't how I treat people in my personal life. I don't treat my wife and kids and friends or a waitress or something like that. I'm not toxic to them. I'm actually a nice guy in real life.
1044
01:35:26,578 --> 01:35:49,818
But when you're defending the Bitcoin network, there's an amount of toxicity that needs to happen. Because if you don't have the gun using the Second Amendment analogy, then why would you expect the burglar or the murderer to listen to you? And so nodes enforce the consensus rules.
1045
01:35:49,819 --> 01:35:54,998
the civil wars escalate to the point where we're actually at the point of doing a soft fork
1046
01:35:54,998 --> 01:36:02,418
and trying to reverse some of the damage that Bitcoin Core has done over the past
1047
01:36:02,418 --> 01:36:09,378
two, three years. And so this is the soft fork. If you're deep into Bitcoin, you will have heard of
1048
01:36:09,378 --> 01:36:15,878
BIP-110. It used to be called BIP-444 or RDTS, which stands for Reduced Data Temporary Soft
1049
01:36:15,878 --> 01:36:22,558
fork. This is the effort of many of us. And currently about 13% of the network is running
1050
01:36:22,558 --> 01:36:41,068
this new client What we trying to do is to revert the mistakes that Bitcoin Core made and basically return Bitcoin to where it was in 2022 before these attacks happened And so we getting rid of the inscriptions bug and we
1051
01:36:41,068 --> 01:36:47,048
bringing Operaturn back down to 80 bytes. And this will be done at the consensus level. So it'll be
1052
01:36:47,048 --> 01:36:51,707
enforced at the level of mined blocks. I didn't really go into it, but last year's debate was much
1053
01:36:51,707 --> 01:36:56,847
more about what's called mempool policy or policy, which deals with the kind of transactions
1054
01:36:56,847 --> 01:36:59,707
that Bitcoin nodes relay to each other.
1055
01:36:59,767 --> 01:37:02,867
And these are mostly unmined, unconfirmed transactions
1056
01:37:02,867 --> 01:37:06,427
that haven't yet made their way into a block.
1057
01:37:06,548 --> 01:37:09,147
So part of the debate was about mempool filters.
1058
01:37:10,088 --> 01:37:12,727
And what Bitcoin Core did last year was actually a change
1059
01:37:12,727 --> 01:37:17,347
at the filter level saying that the new Bitcoin Core software
1060
01:37:17,347 --> 01:37:24,887
would allow nodes to relay hop returns up to 100,000 bytes.
1061
01:37:24,887 --> 01:37:52,427
But basically, we're in a situation now where we've had to escalate to the level of proposing and activating a temporary soft fork to protect Bitcoin, to protect it from CSAM, and also to really push back because we cannot have a situation where the reference implementation, namely Bitcoin Core, is able to push through something unilaterally against the wishes of a large percentage of the network.
1062
01:37:52,427 --> 01:38:14,387
So they ended up losing more than 20% of the network after they did that. And yet they still haven't reverted the changes. They're still on the same terrible path. And a lot of the devs there seem to be okay with this idea of turning Bitcoin into Ethereum and basically filling up the chain with garbage.
1063
01:38:14,387 --> 01:38:18,847
And this is where the Peter Thiel company, Citria, that we alluded to early comes in.
1064
01:38:20,707 --> 01:38:25,387
And so there's been this gradual escalation that this sort of escalation wasn't necessary.
1065
01:38:26,287 --> 01:38:31,447
It wasn't needed in 2013 and 2014 because Bitcoin Core was hostile to spam.
1066
01:38:32,007 --> 01:38:34,347
And we still had that cypherpunk ideal back then.
1067
01:38:34,447 --> 01:38:38,887
So the community was hostile to spam and Bitcoin Core was hostile to spam.
1068
01:38:38,887 --> 01:38:46,227
And so doing these mempool filter level changes, doing operator and eliminating it to 80 bytes was enough.
1069
01:38:46,328 --> 01:38:53,387
But we're at the point now where Bitcoin Core itself has gone hostile and has refused to mend its ways.
1070
01:38:54,088 --> 01:38:56,707
And so ultimately, Bitcoin is not controlled by the miners.
1071
01:38:56,927 --> 01:38:58,727
It's not controlled by the devs.
1072
01:38:59,068 --> 01:39:00,828
It's not controlled by the exchanges.
1073
01:39:01,088 --> 01:39:03,088
It's not controlled by bankers or politicians.
1074
01:39:03,427 --> 01:39:07,007
It's controlled by node runners like you and me who run software.
1075
01:39:07,007 --> 01:39:27,827
This is the cypherpunk ideal. We don't fight in the physical world. We fight using software. And it's a very nonviolent revolution, which is one thing I like about it, because I think violent revolutions end up being very bad for your own family and the people in your community, etc.
1076
01:39:27,828 --> 01:39:35,308
So this is one of the hopes that Bitcoin can avoid this by doing a soft fork.
1077
01:39:35,467 --> 01:39:48,947
And so there's been this escalation from the level of mempool filters all the way up to now this temporary soft fork, which is in the process of being activated and will certainly be activated by August at the latest.
1078
01:39:49,467 --> 01:39:50,947
So there's a lot to unpack there.
1079
01:39:51,548 --> 01:39:54,907
And I'll try to do it with – I'll try to be articulate and not puke it all out.
1080
01:39:55,267 --> 01:39:56,267
I'll try to be patient.
1081
01:39:56,267 --> 01:40:03,727
So I didn't realize that BIP44 became BIP110.
1082
01:40:03,727 --> 01:40:06,808
There's a lot of inside baseball there, but it's basically the same proposal.
1083
01:40:07,207 --> 01:40:12,387
It was just like everything in Bitcoin, because it's decentralized, there was a big fight about what number.
1084
01:40:12,967 --> 01:40:14,247
We're really at that level.
1085
01:40:14,587 --> 01:40:16,767
There's a fight about what number to use for it.
1086
01:40:16,787 --> 01:40:19,407
And that's its own rabbit hole, but we don't need to go there.
1087
01:40:20,327 --> 01:40:20,507
Yeah.
1088
01:40:21,427 --> 01:40:21,867
No.
1089
01:40:21,867 --> 01:40:24,487
I find it interesting too that Americans
1090
01:40:24,487 --> 01:40:26,667
and people around the world are doing a great job of maybe funding
1091
01:40:26,667 --> 01:40:28,568
our own dystopic future through
1092
01:40:28,568 --> 01:40:30,847
SpaceX, Palantir
1093
01:40:30,847 --> 01:40:31,927
Facebook
1094
01:40:31,927 --> 01:40:34,607
and even things like shit coins
1095
01:40:34,607 --> 01:40:36,667
and one way I think shit coins were an attack
1096
01:40:36,667 --> 01:40:38,308
I think they're a state sponsored attack
1097
01:40:38,308 --> 01:40:40,667
VC angle to milk retail
1098
01:40:40,667 --> 01:40:42,808
and to get retail to spend all
1099
01:40:42,808 --> 01:40:44,687
that money and lose all that money so they can
1100
01:40:44,687 --> 01:40:46,627
build out the future dystopian
1101
01:40:46,627 --> 01:40:48,467
stable coin financial
1102
01:40:48,467 --> 01:40:50,347
surveillance CBDC infrastructure
1103
01:40:50,347 --> 01:40:52,167
and we pay for it along the way.
1104
01:40:52,247 --> 01:40:54,068
We fund the projects, they pick the winners
1105
01:40:54,068 --> 01:40:56,687
and it's the same thing in the stock market
1106
01:40:56,687 --> 01:40:57,367
in a lot of ways.
1107
01:40:59,048 --> 01:41:01,627
And you think about how little money it takes
1108
01:41:01,627 --> 01:41:05,027
to sort of fund a Vitalik Buterin
1109
01:41:05,027 --> 01:41:07,367
and I don't believe his origin story.
1110
01:41:07,747 --> 01:41:09,328
I think Joe Lubin and all those guys
1111
01:41:09,328 --> 01:41:11,007
probably had a bigger influence than he did.
1112
01:41:11,467 --> 01:41:13,167
I think they needed a Zuckerberg,
1113
01:41:13,308 --> 01:41:17,147
idiot savant front man to kind of make it look utopian.
1114
01:41:17,147 --> 01:41:18,608
He was actually a scammer before that.
1115
01:41:18,608 --> 01:41:24,787
He did it. Ironically, given the current context, he did a quantum computing scam right before Ethereum.
1116
01:41:25,627 --> 01:41:27,387
So he's he's. Yeah.
1117
01:41:28,707 --> 01:41:37,607
He's a prime candidate and it's just a nonzero chance that he's just not an honest actor or not the player, the construct that we're led to believe.
1118
01:41:37,927 --> 01:41:41,507
And I wonder if we've always been under attack from both sides.
1119
01:41:41,507 --> 01:41:50,647
And even if Bitcoin was created, founded, or discovered by the state, it doesn't mean it isn't what it is now for humanity, whether it got out of the bag or they seeded it.
1120
01:41:51,068 --> 01:42:00,247
Maybe Satoshi handed the keys to Gavin in that manner to make Bitcoin look rogue and to give Gavin a lot of power that he wouldn't necessarily have had.
1121
01:42:00,787 --> 01:42:04,307
I think about the block wars and whether we were attacked from both sides.
1122
01:42:04,487 --> 01:42:09,467
And one way I think about that, I don't know how little blocks or smaller blocks can be bad.
1123
01:42:09,627 --> 01:42:10,847
I'm kind of a purist.
1124
01:42:10,847 --> 01:42:13,387
I want Bitcoin to be money.
1125
01:42:14,187 --> 01:42:22,328
I want to understand what spam is because I think non-monetary transactions don't belong on the chain because of the respect and the culture and the vision that we're trying to achieve.
1126
01:42:22,427 --> 01:42:26,467
And part of that, the way I think about that is the internet is not everything it could have been.
1127
01:42:28,187 --> 01:42:33,127
And Bitcoin is going to end up in some shape or form, not everything it could have been.
1128
01:42:33,427 --> 01:42:39,947
And every sort of degradation leads to a much different outcome, even if it's 100%.
1129
01:42:39,947 --> 01:42:44,947
So with little blocks and big blocks, like maybe big blocks really bad.
1130
01:42:45,867 --> 01:42:57,207
Little blocks may be good, but if they see it, it's like they, I believe one party controls both sides of Republicans, Democrats, and sort of like WW world wrestling.
1131
01:42:57,487 --> 01:43:00,167
You know, the owner benefit whoever wins and they need a heel.
1132
01:43:01,227 --> 01:43:02,927
And the heel can even change teams.
1133
01:43:03,147 --> 01:43:04,767
I think it's very, I think you're right about that.
1134
01:43:04,767 --> 01:43:09,527
I think it's, there's probably a uniparty, but it's even more complicated than that.
1135
01:43:09,527 --> 01:43:12,767
There's just like lots of international groups that have their own.
1136
01:43:14,327 --> 01:43:14,687
Yeah.
1137
01:43:14,867 --> 01:43:16,867
Maybe they're vying for power with amongst themselves.
1138
01:43:17,247 --> 01:43:17,627
I really don't know.
1139
01:43:17,627 --> 01:43:18,487
They don't tell us, do they?
1140
01:43:20,467 --> 01:43:23,068
No, but they have more in common with each other than they do with me.
1141
01:43:23,207 --> 01:43:23,267
Me too.
1142
01:43:23,927 --> 01:43:24,367
And with you.
1143
01:43:25,167 --> 01:43:28,987
And so then you look at sort of like little blocks, big blocks.
1144
01:43:29,068 --> 01:43:32,127
Maybe there are some quote unquote heroes, and I try not to have any heroes.
1145
01:43:32,207 --> 01:43:34,407
I'd never wear another man's name on my back.
1146
01:43:35,027 --> 01:43:38,147
But like, I like ideas and people have great ideas.
1147
01:43:38,147 --> 01:43:42,187
and sometimes people have lots of great ideas in a row and doesn't mean their next idea is great
1148
01:43:42,187 --> 01:43:46,068
and sometimes people have terrible ideas and they have a great idea so not everyone who's been wrong
1149
01:43:46,068 --> 01:43:51,727
once is never right again but maybe some of these little block peoples will put a uh on a pedestal
1150
01:43:51,727 --> 01:43:55,887
so that we would believe them in future fights well we should we should pause to tell listeners
1151
01:43:55,887 --> 01:44:02,227
so that this this whole debate about big blocks and and and big the big blockers versus the small
1152
01:44:02,227 --> 01:44:09,267
blockers. And this was kind of the heart of the block size wars or the fork wars of 2015 to 2017.
1153
01:44:09,267 --> 01:44:13,347
There's a great book you can read by Jonathan Beer. I think it's called The Block Size War.
1154
01:44:14,467 --> 01:44:19,587
This was a debate. It was a debate about block size, but it's also just a debate about who gets
1155
01:44:19,587 --> 01:44:23,727
to change the consensus rules in Bitcoin. So it's quite relevant for understanding the current
1156
01:44:23,727 --> 01:44:31,407
struggle. But the idea, the reason to want smaller blocks is to make it easier to run a node so that
1157
01:44:31,407 --> 01:44:38,507
the blockchain grows more slowly over time. And Luke Dasher was actually a visionary in this
1158
01:44:38,507 --> 01:44:43,387
respect as well. He basically, he was arguing at the time, I don't know when he started arguing this,
1159
01:44:43,447 --> 01:44:48,747
but he was arguing that one megabyte blocks were already too big. That's sort of where Satoshi
1160
01:44:48,747 --> 01:44:55,247
left things. And it appears to me, I agree with Luke on this one, that Satoshi basically made a
1161
01:44:55,247 --> 01:45:02,907
mistake. He made blocks too big. And then Roger Ver and the big blockers, they just didn't
1162
01:45:02,907 --> 01:45:09,568
understand this. And they compounded it by doing eight megabyte blocks. But the reason to have
1163
01:45:09,568 --> 01:45:15,987
small blocks is to have as lean and mean a blockchain as possible. And it's not just about
1164
01:45:15,987 --> 01:45:22,727
the storage, because you often hear people say, well, just go out and buy some extra storage for
1165
01:45:22,727 --> 01:45:31,407
your node. And the, so the thing about, about small blocks versus big blocks, people sometimes
1166
01:45:31,407 --> 01:45:38,308
say you can run, you can just, you know, it's not a big deal just buy, buy a hundred dollars worth of
1167
01:45:38,308 --> 01:45:43,507
more storage. And I think this is, is sort of disrespectful to people who live in,
1168
01:45:44,068 --> 01:45:50,347
I visited Cuba once and stayed in Airbnb and the woman was an internist, just a brilliant doctor.
1169
01:45:50,347 --> 01:45:57,687
She made $2 a day. So if you tell people like that, obviously, I'm not sure you can run a Bitcoin node in Cuba, but you probably can.
1170
01:45:58,447 --> 01:46:04,147
Telling her to just buy $100 worth of storage, which is 50 days worth of earnings, is kind of obnoxious.
1171
01:46:04,287 --> 01:46:12,068
So we want everyone from every economic, socioeconomic in every country to be able to buy, to be able to run a Bitcoin node.
1172
01:46:12,068 --> 01:46:25,907
So the other thing that people, and this is part of the problem with the spam attacks from 2023 and 2024, that the sort of low end hardware like the Raspberry, some of the cheaper Raspberry Pis no longer work to run a Bitcoin node.
1173
01:46:26,007 --> 01:46:31,307
So this has had real damage for the decentralization of the network.
1174
01:46:31,447 --> 01:46:40,127
We want everyone to be able to run a node because we don't just want rich people in San Francisco or Apple and Wells Fargo to run nodes for us.
1175
01:46:40,127 --> 01:46:42,907
because in that case, they can be captured and it's all over.
1176
01:46:43,387 --> 01:46:49,147
And so in many ways, the fight against spam is very similar to the block size wars and
1177
01:46:49,147 --> 01:46:49,967
the small blockers.
1178
01:46:50,387 --> 01:46:55,068
And what they have in common is that this respect for node runners and trying to keep
1179
01:46:55,068 --> 01:47:00,287
the network decentralized by making it as easy as possible to run a node.
1180
01:47:00,387 --> 01:47:02,907
And it's not just about the size of the blockchain and the storage.
1181
01:47:03,167 --> 01:47:04,687
It's also about bandwidth issues.
1182
01:47:04,687 --> 01:47:08,447
If you think about people in parts of the world where they may not have quite as fast
1183
01:47:08,447 --> 01:47:14,267
internet speed. When you spin up a node, you need to download and verify, validate the entire
1184
01:47:14,267 --> 01:47:20,487
blockchain since 2009. And a lot of these Bitcoin core devs, they're in these office buildings in
1185
01:47:20,487 --> 01:47:24,307
San Francisco and the Presidio or wherever, and they've got high-speed internet and they've got
1186
01:47:24,307 --> 01:47:28,247
a $3,000 laptop. And they're like, well, I'm not having any problems with my node.
1187
01:47:29,207 --> 01:47:35,068
But we want this to be very, very egalitarian and at least make it possible for people to run
1188
01:47:35,068 --> 01:47:42,827
nodes. But the other problem is that we're all used to, we all have very short attention spans,
1189
01:47:42,947 --> 01:47:48,387
myself included. And if I ever try to download a new app on my iPhone, for example, and it takes
1190
01:47:48,387 --> 01:47:53,487
more than 15 seconds, 30 seconds, I'm just, I'm gone. Like, unless it's really important,
1191
01:47:53,548 --> 01:47:59,667
I lose attention. Spinning up a new Bitcoin node, we're lucky today if it takes 12 hours.
1192
01:48:00,467 --> 01:48:04,967
You know, I think if you have good broadband like I do, and I haven't spun up a node in a
1193
01:48:04,967 --> 01:48:09,068
while. But this is the real, it doesn't have to do with storage. It doesn't necessarily have to do
1194
01:48:09,068 --> 01:48:14,987
with RAM. It basically, we need it to be as fast and easy as possible to spin up a Bitcoin node,
1195
01:48:15,108 --> 01:48:22,647
because even if you can, it doesn't mean that you will. And especially now, I heard a Bitcoin
1196
01:48:22,647 --> 01:48:28,247
mechanic talking about this on a recent video. He said he tried to, he was just for the heck of it,
1197
01:48:28,287 --> 01:48:34,048
was going to start a, and he's kind of a Bitcoin OG. He was going to spin up a new node and he lives
1198
01:48:34,048 --> 01:48:37,048
in Canada to be publicly disclosed.
1199
01:48:37,607 --> 01:48:40,467
And he said he either went to order it online.
1200
01:48:40,747 --> 01:48:47,767
And it was $1,500 Canadian, which is, you know, that's not like,
1201
01:48:48,287 --> 01:48:51,548
it used to be like $100, $200 to get the Raspberry Pi.
1202
01:48:51,787 --> 01:48:54,167
Or you could even, I mean, Raspberry Pis before COVID,
1203
01:48:54,267 --> 01:48:57,127
I was buying them for like $5 or $10 for a little Raspberry Pi.
1204
01:48:57,807 --> 01:49:00,367
And so all these, and then obviously the price of RAM is spiked.
1205
01:49:00,367 --> 01:49:08,447
And a lot of these things have been byproducts of AI and people wanting to use this hardware for other things.
1206
01:49:09,048 --> 01:49:14,527
But that's the really important thing is just to make it as easy and fast as possible for people to run nodes.
1207
01:49:15,207 --> 01:49:19,967
And I believe it was possible to run a node, for example, on an iPhone back in 2013.
1208
01:49:21,307 --> 01:49:24,407
And it's obviously no longer possible now.
1209
01:49:24,407 --> 01:49:32,068
So sometimes people will invoke Moore's law and similar law saying, you know, don't worry about it because the technology ensures that everything gets cheaper and faster.
1210
01:49:33,808 --> 01:49:41,267
And they'll say, you know, that Moore's law is exponential and the blockchain growth is arithmetical or constant slope.
1211
01:49:42,068 --> 01:49:53,447
And this is, if you look over the last decade, it's actually over the last 15 years, it's become much more difficult to run a node in spite of even Moore's law hasn't really bailed us out.
1212
01:49:53,447 --> 01:49:55,847
And there's some debate about things like Moore's law,
1213
01:49:55,847 --> 01:49:57,947
how much further they can continue
1214
01:49:57,947 --> 01:50:01,767
because we're really getting to the nano microscopic levels
1215
01:50:01,767 --> 01:50:04,327
on a lot of these chips, et cetera.
1216
01:50:04,327 --> 01:50:07,807
And so one of the other reasons not to have,
1217
01:50:07,807 --> 01:50:09,207
no one wants CSAM on their node,
1218
01:50:09,207 --> 01:50:12,127
but also we don't want to do anything
1219
01:50:12,127 --> 01:50:14,927
that makes it more difficult to spin up a new node.
1220
01:50:14,927 --> 01:50:17,527
This is called IBD initial block download.
1221
01:50:17,527 --> 01:50:19,347
And this is the real bottleneck.
1222
01:50:19,376 --> 01:50:24,456
the real concern. So when people say you can just buy $100 worth of storage, that doesn't matter.
1223
01:50:24,456 --> 01:50:30,856
That's not a problem for most people who live in maybe America or Europe or wherever today.
1224
01:50:31,956 --> 01:50:37,056
But if it takes you three or four weeks to spin up a node, maybe you just won't do it. And there's
1225
01:50:37,056 --> 01:50:42,716
got to be a large class of people who just aren't willing to do that. Or you try to spin up a new
1226
01:50:42,716 --> 01:50:47,076
node and it keeps stopping halfway through, and then you have to start again and download it.
1227
01:50:47,076 --> 01:51:14,076
And not a lot of people have patience for that. So that's sort of my aside about the small blockers understood this very well. The big blockers, for some reason, even people like Roger Ver, who used to be called Bitcoin Jesus and was very early to Bitcoin, he didn't seem to understand this very obvious engineering point that even an English major like me can understand,
1228
01:51:14,076 --> 01:51:22,096
that basically you want to keep the blockchain as lean and mean as possible and make it easy for people to spin up nodes.
1229
01:51:22,456 --> 01:51:29,076
Roger Ver is famous for saying that he didn't care if Bitcoin became, he wanted larger blocks,
1230
01:51:29,396 --> 01:51:37,816
even if it turned Bitcoin into PayPal 2.0, which certainly we don't need PayPal 2.0 because we've got Venmo and Zelle and PayPal.
1231
01:51:37,816 --> 01:51:41,916
And what we need is censorship resistant money.
1232
01:51:41,916 --> 01:51:55,856
So this is, I guess this whole aside is just another way of saying that spam has these other implications and can ultimately hurt Bitcoin node centralization.
1233
01:51:55,976 --> 01:52:03,076
You can imagine if we end up with CSAM on the chain that, I mean, who's going to want to spin up a new node and have to download that stuff?
1234
01:52:03,356 --> 01:52:08,916
You're just opening yourself up to not just legal attacks, but it's just not something you feel good about.
1235
01:52:10,476 --> 01:52:10,956
Yeah.
1236
01:52:11,916 --> 01:52:21,636
Well, I mean, Roger Ver is interesting. I find that maybe the, I love that he was Bitcoin Jesus and he, not many people evangelize.
1237
01:52:21,636 --> 01:52:24,436
He did a lot of good for Bitcoin. It's important to remember.
1238
01:52:25,476 --> 01:52:34,896
And I find that, you know, so he got the beginning right. I feel like he got the middle wrong, but the end is like, we got to use Bitcoin as money. And he's kind of there too.
1239
01:52:34,896 --> 01:52:43,076
and the state has attacked roger yeah in lots of ways um but so he's a conflict confusing person
1240
01:52:43,076 --> 01:52:49,556
to me i'd like to hear more from him about the use bitcoin his money uh i'm i'm not happy about
1241
01:52:49,556 --> 01:52:54,116
the state going no definitely not it's hard to know exactly what happened there but it seems like
1242
01:52:54,116 --> 01:52:59,456
he paid an exit tax and then they came back after him for other reasons but i don't know the details
1243
01:52:59,456 --> 01:53:07,156
i don't like to see you know yeah and then um one thing that i think i'd love for you to kind
1244
01:53:07,156 --> 01:53:13,096
of break down those how is op return like email attachments versus just a transaction as a
1245
01:53:13,096 --> 01:53:18,596
transaction oh yeah that's an analogy that i'm doing and you know how involved i am in
1246
01:53:18,596 --> 01:53:24,196
knowing what i'm sending yeah so this is this is um i think it's an important point that you um
1247
01:53:24,196 --> 01:53:30,716
that you make. And there's a debate about, there's a certain part of, there's a certain
1248
01:53:30,716 --> 01:53:36,716
debate where people, where Bitcoin Core was saying, no one knows what spam is. And that was the most
1249
01:53:36,716 --> 01:53:42,136
disturbing kind of postmodern part of it. Spam is obviously just anything that makes Bitcoin worse
1250
01:53:42,136 --> 01:53:48,216
money or it's non-monetary. And it's a little bit like that judge who was like, he said, I can't
1251
01:53:48,216 --> 01:53:53,196
define pornography, but I know what it is when I see it. And we all know what spam is when we see
1252
01:53:53,196 --> 01:54:09,796
We know what, and it's so absurd that these brilliant technical geniuses at Bitcoin core who can code and I can't code, you know, somehow have imbibed this postmodern ideology from the universities that no one really knows what a man is or a woman is or no one knows what spam is.
1253
01:54:10,536 --> 01:54:12,636
And there's some analogies there.
1254
01:54:13,256 --> 01:54:17,316
And so there's first the argument that we don't know what spam is.
1255
01:54:17,316 --> 01:54:25,876
But once you understand that shitcoins on Bitcoin and JPEGs and MP4s, MP3s or 4s, this is definitely spam.
1256
01:54:26,256 --> 01:54:33,756
Then the argument from the other side is often, well, it's possible to, all information is ultimately zeros and ones.
1257
01:54:34,276 --> 01:54:38,016
It's always possible to embed data within other data.
1258
01:54:38,516 --> 01:54:44,496
You can convert something from a QR code to numbers, to letters.
1259
01:54:44,496 --> 01:54:52,496
And so this is something called steganography, which comes from the Greek for hidden writing, stegano and graphos.
1260
01:54:53,316 --> 01:54:57,536
And this is the idea that you can embed data.
1261
01:54:58,496 --> 01:55:04,056
And so it is possible to sneak stuff into Bitcoin.
1262
01:55:04,976 --> 01:55:13,536
And the analogy I like to use for op return and steganography is this email analogy that you brought up.
1263
01:55:14,396 --> 01:55:25,816
And so the way I explain it is that I can send you an email and it could just look like a normal email, but maybe there's some code that I attach to it.
1264
01:55:25,816 --> 01:55:31,756
So T equals the letter, T equals the number two and H equals the number three.
1265
01:55:32,196 --> 01:55:39,916
And so I send you an email or maybe I send you an email and your friend an email and I give your friend the secret code so he knows how to decode it.
1266
01:55:39,996 --> 01:55:43,516
You think it's just a friendly email for me talking about a barbecue we're going to have on Sunday.
1267
01:55:43,536 --> 01:55:49,556
But your friend realizes that it's actually, you know, it's the coordinates to where the buried treasure is or something.
1268
01:55:49,676 --> 01:55:50,496
And I've embedded that.
1269
01:55:51,136 --> 01:55:56,016
Each letter in the email text corresponds to a number and this is the GPS or whatever.
1270
01:55:56,756 --> 01:56:01,756
Or maybe there's a secret message or you can take those letters and convert them to a picture, etc.
1271
01:56:01,956 --> 01:56:02,536
So that's steganography.
1272
01:56:03,276 --> 01:56:05,136
That's hiding stuff in an email.
1273
01:56:05,676 --> 01:56:07,976
And there's no way to prevent that, obviously.
1274
01:56:08,336 --> 01:56:10,516
And there's no way to prevent that with Bitcoin.
1275
01:56:10,516 --> 01:56:20,516
But if I send you an email with an attachment, everyone knows that the attachment is a file and maybe it's an image or video or whatever it is.
1276
01:56:21,036 --> 01:56:34,356
And that is, so to use the gross extreme example, which we seem to keep coming back to, which is probably my fault, the CSAM example, because this really is an attack vector for the Bitcoin network.
1277
01:56:35,216 --> 01:56:39,116
If I, if, let's not say it's you and me, let's say it's two people because it's really gross.
1278
01:56:39,116 --> 01:56:46,116
you know, if someone person A sends to person B a, an email, and it's basically like child sexual
1279
01:56:46,116 --> 01:56:50,776
abuse material embedded in the email. So you can, if you have the secret code, these are like two
1280
01:56:50,776 --> 01:56:55,676
pedophiles, you have the secret code, you can convert the letters into some horrific image and
1281
01:56:55,676 --> 01:57:00,396
see what's in it. You know, that's, that's a terrible thing, but it's very hard for Google
1282
01:57:00,396 --> 01:57:06,876
to filter that. And it's also, you know, if you don't know it's there and you're not into those
1283
01:57:06,876 --> 01:57:11,356
things. It's not the worst thing in the world. There's probably lots of weird stuff on websites
1284
01:57:11,356 --> 01:57:16,996
that we visit that's embedded there that we somehow, someone has put there, maybe some hacker
1285
01:57:16,996 --> 01:57:24,076
at the software company put it there. But if person A emails, person B, a JPEG attachment of
1286
01:57:24,076 --> 01:57:34,496
child sexual abuse material, CSAM, attachments are where you put files. And so there's the first
1287
01:57:34,496 --> 01:57:38,996
one, the first example, the text of the email, steganography, but the attached file, you're going
1288
01:57:38,996 --> 01:57:45,716
to have a hard time arguing, your honor, this JPEG is, it's actually a musical composition and it may
1289
01:57:45,716 --> 01:57:50,756
look like this horrendous material. And so OpReturn functions in this way, in a similar way in Bitcoin,
1290
01:57:51,356 --> 01:57:55,716
where you can embed secret things in Bitcoin. No one can stop you, you can chop it up
1291
01:57:55,716 --> 01:58:02,656
and embed it in various places. But what we're trying to fight is people putting large files in
1292
01:58:02,656 --> 01:58:07,656
OpReturn. Because again, as we talked about earlier in this conversation, OpReturn has been
1293
01:58:07,656 --> 01:58:13,056
the designated place. This is the Bitcoin protocol saying, oh, you have like a small file, you want
1294
01:58:13,056 --> 01:58:18,416
to store in Bitcoin, put it in OpReturn. So what Bitcoin Core did, and they're so stuck in there.
1295
01:58:19,596 --> 01:58:27,696
Yeah. It's basically, so the general, it's been a strange pushback from Bitcoin Core and the people
1296
01:58:27,696 --> 01:58:33,656
on the other side saying, well, you can always embed stuff in the Bitcoin blockchain, just like
1297
01:58:33,656 --> 01:58:39,076
you can always embed stuff in an email text. And our pushback from our side has been, well,
1298
01:58:39,696 --> 01:58:45,536
Opera turns more like an email attachment where this has always been the designated spot.
1299
01:58:46,276 --> 01:58:51,596
And yes, we can't stop spam completely, but there's this very strange thing, this idea,
1300
01:58:51,716 --> 01:58:56,776
and we alluded to it before with Gmail. If Google came to you and said, we can't stop all spam,
1301
01:58:56,776 --> 01:59:00,936
so we're not going to try to stop any spam emails. You would just think they're crazy,
1302
01:59:01,196 --> 01:59:05,036
but this is actually the argument that Bitcoin core devs have been making for the past 12 months.
1303
01:59:05,416 --> 01:59:10,776
We can't stop all spam, so we're not even going to try. So then that leads to various
1304
01:59:10,776 --> 01:59:15,836
possibly conspiracy theories like why is there so much pushback? This is something that was
1305
01:59:15,836 --> 01:59:21,496
always understood in Bitcoin. Bitcoin is money. Bitcoin is a monetary network. But there does
1306
01:59:21,496 --> 01:59:27,996
seem to be a whole side of Bitcoin core devs who are much more agnostic and want to view Bitcoin as
1307
01:59:27,996 --> 01:59:33,436
this arbitrary data storage platform and to sort of let it evolve on its own is a very strange way
1308
01:59:33,436 --> 01:59:39,756
of looking at the world. There's some evidence that a lot of these devs who speak in this way,
1309
01:59:39,836 --> 01:59:45,236
they don't own very much Bitcoin at all. They don't even run nodes. And so there's kind of a
1310
01:59:45,236 --> 01:59:51,216
misalignment of incentives here. And then you have a lot of plebs like yourself and myself who are
1311
01:59:51,216 --> 01:59:56,096
very serious about Bitcoin and family men and want to do what's right for Bitcoin and, you know,
1312
01:59:56,216 --> 02:00:03,136
poured our life savings into it. And it's quite terrifying, actually, to see Bitcoin in the hands
1313
02:00:03,136 --> 02:00:09,696
of devs who just view it as another software gig and not something that's so important,
1314
02:00:09,696 --> 02:00:16,856
not just for separating money and state, but also just for our family's futures.
1315
02:00:16,856 --> 02:00:22,536
and we've invested so much, so many of us have invested not just money, but our time and
1316
02:00:22,536 --> 02:00:27,576
the learning and to have to go back to square one and defend Bitcoin as money.
1317
02:00:27,736 --> 02:00:30,816
It really does seem like a psyop of sorts.
1318
02:00:30,816 --> 02:00:35,596
And it's unlikely that I don't think there's some conspiracy that all Bitcoin core devs
1319
02:00:35,596 --> 02:00:36,256
are in on this.
1320
02:00:36,416 --> 02:00:42,336
And there's, even though even the core maintainers may not be in on this, but it does smack of
1321
02:00:42,336 --> 02:00:49,136
postmodernism and the arguments, we don't know what spam is, but spam will still get outpriced
1322
02:00:49,136 --> 02:00:52,996
by monetary transactions. This thing, we don't know what spam is, but we're sure it's going to
1323
02:00:52,996 --> 02:00:58,576
be outpriced. Just various circular, circular arguments. And there've been people like Adam
1324
02:00:58,576 --> 02:01:03,476
Back who spent much of last year, it's obviously a Bitcoin OG who's mentioned in the Bitcoin
1325
02:01:03,476 --> 02:01:10,956
white paper. He spent much of last year on X with many of us just making us run in circles,
1326
02:01:10,956 --> 02:01:15,756
having these circular discussions. And so there's been just a lot of strangeness going on,
1327
02:01:15,836 --> 02:01:21,796
a lot of gaslighting, a lot of efforts to convince us that this is how Bitcoin has always been,
1328
02:01:22,136 --> 02:01:25,856
or that something has changed with the Bitcoin network. This has been an argument from Bitcoin
1329
02:01:25,856 --> 02:01:31,996
Core that we all need to relay spam because it'll contribute to better fee estimation for blocks
1330
02:01:31,996 --> 02:01:37,396
or better block propagation, or it will somehow help with Bitcoin mining centralization,
1331
02:01:37,396 --> 02:01:41,936
which is a real problem. But at the same time, they seem unwilling to talk to miners, actual
1332
02:01:41,936 --> 02:01:47,196
miners, like for example, Bob Burnett of Barefoot Mining. They're not interested in talking to real
1333
02:01:47,196 --> 02:01:51,716
Bitcoiners who are actually out in the field running Bitcoin mining rigs. And so you have
1334
02:01:51,716 --> 02:01:59,456
this strange situation where there are these sort of technical reasons to blow open, up or turn,
1335
02:02:00,116 --> 02:02:06,916
but ignoring all of the really practical consequences like CSAM and just the increased
1336
02:02:06,916 --> 02:02:14,416
burden on node runners. And so that makes many of us think that this may be part of some sort of
1337
02:02:14,416 --> 02:02:21,156
coordinated attack by the deep state, or it's always hard to know, and you don't really know
1338
02:02:21,156 --> 02:02:27,396
who's in on it and who's not. But just this push away from understanding Bitcoin as a monetary
1339
02:02:27,396 --> 02:02:32,516
network and saying like somehow something has changed on the network and we need to be more
1340
02:02:32,516 --> 02:02:37,796
open-minded and who are you to say what money is or who are you to say what bitcoin is it really
1341
02:02:37,796 --> 02:02:44,356
does smack of the has the same flavor as the as as the culture wars and you begin to feel you begin
1342
02:02:44,356 --> 02:02:50,436
to feel like you're taking crazy pills like why why am i arguing with with long-term bitcoin core
1343
02:02:50,436 --> 02:02:55,636
devs who are these master c plus plus programmers like they don't know what spam is all of a sudden
1344
02:02:55,636 --> 02:02:59,236
and they don't know bitcoin history and then you have people like greg maxwell for example
1345
02:02:59,236 --> 02:03:06,596
who was a long-term, who was basically people like Peter Wula and Greg Maxwell, who were
1346
02:03:06,596 --> 02:03:13,696
involved with Bitcoin Core and Bitcoin in 2013, 2014. They were involved in the previous
1347
02:03:13,696 --> 02:03:18,516
operaturn wars, and yet they've somehow flipped their position on this and now say that
1348
02:03:18,516 --> 02:03:24,136
UTXO set bloat's not a problem or spam is not a problem and it will somehow resolve itself.
1349
02:03:25,096 --> 02:03:27,956
And so these are the contradictions we've been dealing with.
1350
02:03:28,016 --> 02:03:29,496
And it can be a fun game, actually.
1351
02:03:29,576 --> 02:03:35,596
I've made videos where I have Greg Maxwell of 2026 arguing with Greg Maxwell of 2015.
1352
02:03:36,356 --> 02:03:41,476
But it's not what you want to see because Greg Maxwell used to be a great guy, contributed a lot to Bitcoin.
1353
02:03:41,476 --> 02:03:44,636
And now he's kind of on the forums.
1354
02:03:44,636 --> 02:03:56,176
He likes to stay in places that are safe, that have very strong censorship of posts like Reddit or Delving Bitcoin or the Bitcoin dev mailing list.
1355
02:03:56,696 --> 02:04:13,792
And a lot of these people are unwilling to expose themselves to the public square on X for example which is where the debate has been raging So it a very strange time to be alive It a very confusing time to be a Bitcoiner where you feel like it so similar to COVID
1356
02:04:14,012 --> 02:04:19,812
where it's like, this week, don't wear a mask. Next week, you have to wear a mask and you have
1357
02:04:19,812 --> 02:04:24,272
to take off your mask. It's safe to take off your mask once you're at the dining room table, but
1358
02:04:24,272 --> 02:04:28,472
not while you're waiting in line at the restaurant. And vaccines are safe and effective,
1359
02:04:28,472 --> 02:04:32,372
but unvaccinated people are somehow a threat to you, even if you're vaccinated.
1360
02:04:32,792 --> 02:04:38,072
It's the same sort of crazy debate, which makes many of us think, or gaslighting or changing
1361
02:04:38,072 --> 02:04:42,952
narratives, which makes many of us think that there's something, maybe something darker going
1362
02:04:42,952 --> 02:04:49,712
on here. I definitely feel something conspiratorial is going on. Why wouldn't large or big actors want
1363
02:04:49,712 --> 02:04:55,292
to try to get involved? And I, you know, just even thinking adversarially, and when this all
1364
02:04:55,292 --> 02:05:01,172
bubbled up again um you know first you're like oh coders are just fighting and coding is kind of
1365
02:05:01,172 --> 02:05:06,532
like the one area where you know it's really hard to you know there's a lot of air bitcoin's very
1366
02:05:06,532 --> 02:05:14,792
complex and you kind of have to become an expert in several uh idioms or areas mediums or you know
1367
02:05:14,792 --> 02:05:19,572
and maybe one of them so maybe someone's like i really like coding and that's my area and i like
1368
02:05:19,572 --> 02:05:23,592
these four other areas but i'm not going to get involved in culture or yeah these other areas and
1369
02:05:23,592 --> 02:05:24,932
Maybe someone else is like, I like the culture.
1370
02:05:25,032 --> 02:05:25,752
I like the philosophy.
1371
02:05:25,892 --> 02:05:28,432
I like the economics, but I don't like the coding and the photography.
1372
02:05:28,892 --> 02:05:30,492
I'll learn as much as I need to.
1373
02:05:31,252 --> 02:05:35,172
Don't trust verify, but, you know, while the argument's simmering,
1374
02:05:35,252 --> 02:05:38,272
I might look to these voices that I trust to understand better.
1375
02:05:39,492 --> 02:05:42,492
But very quickly to me, you look at something like chain code,
1376
02:05:42,532 --> 02:05:43,992
and I'm like, what the fuck is that?
1377
02:05:45,172 --> 02:05:46,352
That smells rotten.
1378
02:05:47,352 --> 02:05:50,712
And you look at reasons I came to Bitcoin beyond,
1379
02:05:50,852 --> 02:05:53,012
number go up beyond, separate money from state.
1380
02:05:53,592 --> 02:05:55,212
is to get out of the culture wars.
1381
02:05:55,712 --> 02:05:55,832
Yeah.
1382
02:05:56,052 --> 02:05:59,532
To not have to, to get away from people risk,
1383
02:06:00,092 --> 02:06:01,292
to be able to bet on myself
1384
02:06:01,292 --> 02:06:04,072
and not worry about other people's mistakes in execution.
1385
02:06:04,872 --> 02:06:06,252
Hey, I want to save in something
1386
02:06:06,252 --> 02:06:08,972
and I don't want to invest in a bar
1387
02:06:08,972 --> 02:06:11,232
because my cousin Jimmy owns the bar,
1388
02:06:11,292 --> 02:06:12,192
might lose the license.
1389
02:06:12,232 --> 02:06:14,032
Or I don't want to invest in Amazon
1390
02:06:14,032 --> 02:06:16,572
because Bezos might get caught on tape getting a blow job
1391
02:06:16,572 --> 02:06:17,912
and the stock's going to tank.
1392
02:06:18,292 --> 02:06:20,452
Or Elon might smoke a joint on Rogan
1393
02:06:20,452 --> 02:06:22,072
and I got to deal with that for the next year
1394
02:06:22,072 --> 02:06:22,832
when I want to retire.
1395
02:06:23,592 --> 02:06:29,112
yeah and core introduces like it's like wow well this is really centralized there's only a few
1396
02:06:29,112 --> 02:06:34,312
people that can do things that feels not very bitcoiny and then they started to move fast and
1397
02:06:34,312 --> 02:06:38,472
break things like zuckerberg and facebook and that's not what we do definitely we're already
1398
02:06:38,472 --> 02:06:42,312
dealing with second order and third order effects that may be more unintended from taproot and
1399
02:06:43,352 --> 02:06:50,472
segwit so i kind of want to smash core just in general um and we need decentralization we should
1400
02:06:50,472 --> 02:06:55,272
have more reference clients that are competing to be the best reference client and things yeah i
1401
02:06:55,272 --> 02:06:58,392
think i think there's a silver there's a silver lining to all this which you're which you're
1402
02:06:58,392 --> 02:07:04,232
alluding to that i don't want to paint a picture of doom because it's actually very very interesting
1403
02:07:04,232 --> 02:07:10,392
to see the network routing around these hostile actors and so big guys don't clear until we
1404
02:07:10,392 --> 02:07:15,432
probably go through this so i really want to get into bip 110. yeah yeah so this is the software
1405
02:07:15,432 --> 02:07:22,372
that we briefly alluded to. So BIP-110 is, as I said, it tries to basically revert these changes
1406
02:07:22,372 --> 02:07:28,632
and bring Bitcoin back to where it was in 2022 before the inscriptions exploit and the oppratern,
1407
02:07:29,072 --> 02:07:34,672
blowing out, blowing open oppratern. And then it closes RDTS, which is the other name for it,
1408
02:07:34,772 --> 02:07:39,952
stands for reduced data temporary soft fork. So the reduced data piece of it is closing
1409
02:07:39,952 --> 02:07:45,392
all of these fields, trying to make these various fields, these various places that people can stash
1410
02:07:45,392 --> 02:07:51,052
non-monetary data on Bitcoin, making them as small as possible, and thus optimizing Bitcoin
1411
02:07:51,052 --> 02:08:00,472
as money. So the two big ones are OpRoturn and inscriptions and BRC20 tokens, which use the same
1412
02:08:00,472 --> 02:08:08,192
exploit. And then there are a couple, so you can go to BIP110.org and you can read about it,
1413
02:08:08,192 --> 02:08:14,872
and there's a link to the GitHub proposal there. There are a couple other fields that are part of
1414
02:08:14,872 --> 02:08:20,892
it that are not really currently used, but this is also closing sort of future attack vectors that
1415
02:08:20,892 --> 02:08:30,192
spammers might want to use. And if you read the BIP in depth, you will see that it doesn't claim
1416
02:08:30,192 --> 02:08:36,232
to be able to stop spam. So there are a lot of strawmanning attacks of this BIP saying, well,
1417
02:08:36,252 --> 02:08:42,572
you can't stop spam, so this BIP is bad. What actually says in the BIP, this BIP does not try
1418
02:08:42,572 --> 02:08:47,432
to stop spam. It just tries to limit it. It tries to revert some of these changes that Core made.
1419
02:08:48,012 --> 02:08:53,492
And it basically tries to demonstrate to the world that Bitcoin Core cannot push through
1420
02:08:53,492 --> 02:09:00,192
whatever it wants without serious repercussions. And as part of that, it's taking power away from
1421
02:09:00,192 --> 02:09:05,412
Core. It's probably going to give more power to Bitcoin Nots. We have other implementations in
1422
02:09:05,412 --> 02:09:13,132
the works as well. But what we're really seeing is that the network escalating against the spammers
1423
02:09:13,132 --> 02:09:20,592
and scammers. And again, a soft fork wasn't necessary in 2013 and 2014 because we had the
1424
02:09:20,592 --> 02:09:25,572
reference of implementation. We had Bitcoin Core on our side. We had Greg Maxwell on our side. We
1425
02:09:25,572 --> 02:09:30,712
had Peter Woll and all these great Bitcoiners on our side. This time, it's very, very strange
1426
02:09:30,712 --> 02:09:36,332
because we have a lot of people, especially a lot of those OG Bitcoin core devs, and a lot of
1427
02:09:36,332 --> 02:09:43,472
some influencers as well, Bitcoin celebrities, whatever you want to call them, who will say,
1428
02:09:43,992 --> 02:09:48,652
I hate spam too, but there's nothing we can do about it, or I don't want to do anything about it.
1429
02:09:49,172 --> 02:09:53,332
So you have to ask people, it's like people who say they hate crime, but they don't actually want
1430
02:09:53,332 --> 02:09:58,032
to prosecute criminals, and they don't want to lock their door and put on an alarm system and
1431
02:09:58,032 --> 02:10:03,892
get a gun and prosecute people who steal from drugstores, et cetera. So it's very strange in
1432
02:10:03,892 --> 02:10:08,272
that way too, where you have a lot of people who are unwilling to commit and just be like,
1433
02:10:08,332 --> 02:10:12,752
oh, I hate spam, but I'm unwilling to stick my neck out and do anything about it, which is a very
1434
02:10:12,752 --> 02:10:19,872
non-Bitcorner way of looking at the world because many of us have adjacent interests in maybe
1435
02:10:19,872 --> 02:10:27,272
Austrian economics and this concept of human action and human freedom and basically taking
1436
02:10:27,272 --> 02:10:33,932
taking personal responsibility in your life. And we've seen this with Bitcoin Core devs in
1437
02:10:33,932 --> 02:10:37,812
particular. They're sort of, I hate to say it, but kind of a bunch of spoiled children.
1438
02:10:38,352 --> 02:10:42,092
They want all the freedom that comes with being able to code and to do things with Bitcoin.
1439
02:10:42,412 --> 02:10:48,092
But when something goes wrong, they don't want to take personal responsibility. And it's a little
1440
02:10:48,092 --> 02:10:54,172
bit like government mistakes where you have the great financial crisis, but yet no one goes to
1441
02:10:54,172 --> 02:11:00,032
jail. No one's ever prosecuted. Nothing ever happens. It's been the same with Bitcoin Core,
1442
02:11:00,332 --> 02:11:04,852
which you would expect because this confirms to us that this is a very tight social click.
1443
02:11:05,552 --> 02:11:11,192
And they're optimizing for their own relations with each other. And some of these people,
1444
02:11:11,192 --> 02:11:17,752
we've had funders dating devs. So there's been a lot of confusing office politics that would not
1445
02:11:17,752 --> 02:11:24,152
be a problem. That obviously happens in offices, but it becomes much more risky when it's
1446
02:11:24,152 --> 02:11:39,252
It's an open source project and the beneficiaries of this nepotism get pushed through much, much faster than, you know, don't have the experience to deal with things or the ethos to deal, the Bitcoin ethos to deal with spam attacks.
1447
02:11:39,992 --> 02:11:43,532
So BIP-110, it's a temporary soft fork.
1448
02:11:44,392 --> 02:11:45,912
And so we should talk about this.
1449
02:11:45,992 --> 02:11:48,272
This gets very confusing, this area of forks.
1450
02:11:48,312 --> 02:11:49,892
And I've had to learn a lot in this process.
1451
02:11:49,892 --> 02:11:55,312
But it's a fascinating, first thing we should say is that it's a really interesting time to be alive as a Bitcoiner.
1452
02:11:55,712 --> 02:12:01,032
It's a very exciting time to be alive because we have Bitcoin plebs taking back control.
1453
02:12:01,452 --> 02:12:08,832
And we've had so many new Bitcoiners and plebs running Bitcoin nodes over the last 12 months and learning how to mine with them.
1454
02:12:09,872 --> 02:12:14,012
And basically, forks are the prerogative of nodes.
1455
02:12:14,012 --> 02:12:20,232
It's basically a fork is a change in Bitcoin nodes in the Bitcoin rules that are enforced by nodes.
1456
02:12:20,412 --> 02:12:22,432
So it's a software change.
1457
02:12:23,612 --> 02:12:39,152
And the reason this is the ultimate way that the Bitcoin network protects itself is when sovereign Bitcoiners like you and me, we decide we're going to run a certain kind of software to enforce certain rules.
1458
02:12:39,152 --> 02:12:41,552
And we're not happy with spam and CSAM on our nodes.
1459
02:12:41,552 --> 02:12:49,692
So we're going to push through a software update that closes those attack surfaces.
1460
02:12:49,892 --> 02:12:56,032
I think that's a good metaphor to use as well, closing the inscriptions exploit and the op return attack surfaces.
1461
02:12:57,672 --> 02:13:01,332
And so we should say a fork is, there are two kinds of forks.
1462
02:13:01,432 --> 02:13:03,392
There's a soft fork and a hard fork.
1463
02:13:04,272 --> 02:13:07,712
A soft fork is a narrowing of the rules.
1464
02:13:08,372 --> 02:13:22,532
So, for example, we could say in the real world, we could say, I accept for this club, we accept men who are wearing blue T-shirts and red T-shirts.
1465
02:13:23,072 --> 02:13:24,192
Men can join this club.
1466
02:13:24,712 --> 02:13:29,752
A soft fork would be we only accept men who are wearing blue shirts.
1467
02:13:30,412 --> 02:13:33,072
So nodes who are running the original rules would still accept.
1468
02:13:33,072 --> 02:13:35,672
They know that men with blue shirts are allowed.
1469
02:13:35,672 --> 02:13:45,352
But the updated rules narrow or contract what was available before, whereas hard forks expand the rule set, expand the rules.
1470
02:13:45,532 --> 02:13:58,212
And so this is what Roger Ver, we were talking about, the big blockers, Bcash or Bitcoin Cash, Ver's project, the big blockers project was a hard fork because they widened the rules.
1471
02:13:58,212 --> 02:14:05,772
they said that eight megabyte blocks or whatever it was is okay. Whereas the small blockers wanted
1472
02:14:05,772 --> 02:14:13,352
to keep stuff at one megabytes. So if you go from one megabyte blocks to half a megabyte blocks
1473
02:14:13,352 --> 02:14:18,552
enforcing that, that'd be a soft fork. But if you go the other direction from one megabyte blocks to
1474
02:14:18,552 --> 02:14:23,792
eight megabyte blocks, that'd be a hard fork, just by definition. And there are people who,
1475
02:14:24,092 --> 02:14:27,492
there are different ways of thinking about this. I just think it's important to be very consistent.
1476
02:14:27,492 --> 02:14:51,492
And so this is the most helpful way I found of explaining it. Soft forks narrow the rules, hard forks expand the rules. The other axis we should be concerned with is this idea of chain splits. So what can happen in the Bitcoin blockchain, this is very normal, this happens, this can happen every once in a while, even without a soft fork, is you end up temporarily with two versions of the blockchain.
1477
02:14:51,492 --> 02:14:56,232
blockchain. So you might think of it as you could think of the sort of the history of Christianity
1478
02:14:56,232 --> 02:15:02,512
and sort of a united church. And then you had a chain split. You had one chain split in 1054
1479
02:15:02,512 --> 02:15:07,452
when the Orthodox and the Catholics split off. They had a common history, and then they went
1480
02:15:07,452 --> 02:15:12,592
their different directions. And then the Catholic fork split into, we had the Reformation, the
1481
02:15:12,592 --> 02:15:18,552
Protestant Reformation, and that split into 30,000 different denominations. And so that'd be the
1482
02:15:18,552 --> 02:15:24,872
analogy for a chain split, but in the event of a chain split, you end up briefly or sometimes
1483
02:15:24,872 --> 02:15:29,952
permanently with two different versions of the Bitcoin blockchain. And if it's a permanent split,
1484
02:15:30,612 --> 02:15:37,892
which is basically what happened with Bcash, then people have to decide which one they consider to
1485
02:15:37,892 --> 02:15:45,052
be the real Bitcoin. And in the case of that chain split, the Bitcoin won and the other one
1486
02:15:45,052 --> 02:15:54,832
was called Bcash. But in the past, we've only had the soft forks in Bitcoin have come without
1487
02:15:54,832 --> 02:16:01,692
chain splits. So we had Taproot, the Taproot soft fork that we talked about in 2021 that introduced
1488
02:16:01,692 --> 02:16:08,932
some of these vulnerabilities. That was a soft fork because it narrowed the rules,
1489
02:16:09,252 --> 02:16:14,532
but there was no chain split. You get a chain split when you have miners mining on both sides
1490
02:16:14,532 --> 02:16:21,272
of the two chains. And then eventually one chain will overtake the other chain.
1491
02:16:23,512 --> 02:16:33,132
This is where it gets complicated. So what could happen with BIP-110 is we could have the first,
1492
02:16:33,232 --> 02:16:39,852
this could be the first soft fork that leads to a chain split where you end up with two chains,
1493
02:16:39,852 --> 02:16:50,992
But it's going to be a very strange chain split because I think we'll probably avoid this.
1494
02:16:51,152 --> 02:16:58,252
But if it were to happen, let's say we have the BIP-110 chain and then we have the legacy chain, the current chain.
1495
02:16:58,252 --> 02:17:10,552
If we have a split like that, there's an asymmetry where going forward in time, the BIP-110 chain can wipe out or subsume the legacy chain.
1496
02:17:10,992 --> 02:17:19,112
Whereas the legacy chain, the one that's not enforcing the BIP-110 rules, cannot wipe out the BIP-110 chain.
1497
02:17:19,112 --> 02:17:44,532
So there's this asymmetry, which means that it's an asymmetry that leads to the game theory where people are going to want to bail on the legacy chain and come over to the BIP-110 chain, simply because if you can think about it from a mining perspective, if you're mining blocks on the old chain and you're not allowed to spend your mining rewards for 100 blocks, there's this delay.
1498
02:17:44,532 --> 02:17:59,067
if that chain gets wiped out you may have spent millions of dollars for those mining those blocks and you will not get the payout because those blocks will cease to exist Basically the chain with the most proof of work is the one that wins or the longest chain
1499
02:17:59,427 --> 02:18:04,207
which is usually the one with the most proof of work. So what can...
1500
02:18:06,147 --> 02:18:10,827
It's a very complicated thing to explain. So there's two parts to the soft fork,
1501
02:18:11,387 --> 02:18:17,947
and we're currently in the part where... Well, let me rewind and explain it in terms of 2017.
1502
02:18:17,947 --> 02:18:26,367
So in 2017, there was this decision made by the Bitcoin community, and not everyone wanted it, but a lot of people wanted it.
1503
02:18:26,627 --> 02:18:28,627
It's called SegWit, which we talked about.
1504
02:18:29,007 --> 02:18:34,367
And SegWit is what enables the Lightning Network, and it fixed something called transaction malleability.
1505
02:18:35,207 --> 02:18:37,647
And so people had this idea for upgrading the Bitcoin rules.
1506
02:18:37,907 --> 02:18:38,807
It was called SegWit.
1507
02:18:39,147 --> 02:18:45,887
They put out a soft fork proposal, and they told the miners to activate it.
1508
02:18:45,887 --> 02:19:02,747
And it turns out the miners, the large mining pools, the large Bitcoin mining pools did not want to activate it. So then there is a situation where, and we have to understand in Bitcoin at that time and even more today, they're basically like five mining pools that create 90% of the blocks.
1509
02:19:02,747 --> 02:19:08,267
and they build the block templates they get to decide what goes into blocks and so they get to
1510
02:19:08,267 --> 02:19:13,847
decide whether to signal for forks so you can have this situation where you can be held you can be
1511
02:19:13,847 --> 02:19:20,527
held hostage by people talk about well the miners are not on board with this upgrade it's important
1512
02:19:20,527 --> 02:19:28,747
to understand that that uh the miners is just like five people in the world and so so it's important
1513
02:19:28,747 --> 02:19:34,127
understand that these large mining pools, they work for you and me. They work for the Bitcoin
1514
02:19:34,127 --> 02:19:39,967
plebs and Bitcoin node runners. And the mining pools, their job is just to do proof of work,
1515
02:19:39,967 --> 02:19:47,967
to do SHA-256 double hashes, and to follow the rules that the Bitcoin nodes set.
1516
02:19:48,607 --> 02:19:53,927
So what happened in 2017 is the miners refused to activate the soft fork. And we later learned
1517
02:19:53,927 --> 02:19:59,647
that it was probably because the largest Chinese miner, which was also and still is the largest
1518
02:19:59,647 --> 02:20:06,667
maker of Bitcoin mining rigs, namely Bitmain, they did not want to activate SegWit because it would
1519
02:20:06,667 --> 02:20:13,887
have degraded an advantage they had with mining called ASIC boost or secret ASIC boost. And so we
1520
02:20:13,887 --> 02:20:18,607
had an upgrade, which was very good for the Bitcoin network that enabled lightning, that gave us
1521
02:20:18,607 --> 02:20:24,087
lightning today that was being held hostage by a large Chinese mining pool that didn't want to
1522
02:20:24,087 --> 02:20:27,827
upgrade the rules because it would have hurt their own. They were basically cheating when it came to
1523
02:20:27,827 --> 02:20:36,887
Bitcoin mining. And so what happened then is a guy named Shaolin Fry, a nim, and then later Luke
1524
02:20:36,887 --> 02:20:41,947
Dasher came up with this idea of a user-activated soft fork where the Bitcoin nodes themselves
1525
02:20:41,947 --> 02:20:51,167
would activate the soft fork. And the way they did it is they basically create, they wrote a
1526
02:20:51,167 --> 02:20:56,507
new client. And this client said, if you're a miner, if you're mining blocks, your block will
1527
02:20:56,507 --> 02:21:02,507
only be valid, will only be accepted by the network if you signal for SegWit, if you flip
1528
02:21:02,507 --> 02:21:10,687
this bit, this version bit and signal for SegWit. And it was basically, it was 500,
1529
02:21:10,687 --> 02:21:16,727
There were probably 100,000 nodes back then and only 500 people running this UASF client.
1530
02:21:18,147 --> 02:21:31,727
And on the other side were all the big Bitcoin mining pools, companies like Coinbase, all the large American Bitcoin and crypto corporations were against this.
1531
02:21:31,727 --> 02:21:40,447
And then you had all the B-cashers, all the Roger Ver people who hated Segwit ended up forking off right as Segwit was getting activated.
1532
02:21:40,687 --> 02:22:01,667
So to summarize, Segwood started off as a miner activated soft fork, and then the miners refused to play along. And everyone, all Bitcoiners looked at each other and said, we're being held hostage by one guy in China? Like, is this really how Bitcoin works? Does Jihan Wu control Bitcoin? Because if so, this is a very bad thing. No, he doesn't.
1533
02:22:01,667 --> 02:22:13,787
We're going to throw out their blocks. We're going to run this new software as a UASF, a user-activated soft fork. And we're going to say, if you don't signal for Segwit, we throw your block in the garbage and you don't get paid.
1534
02:22:13,787 --> 02:22:32,247
And that was basically what made SegWit happen. There was a face-saving Bitcoin improvement proposal called BIP-91 that gave the miners a way to activate SegWit without losing face.
1535
02:22:33,147 --> 02:22:45,287
But the story, it's almost like a Henry V story or one of these stories of a very small band of very dedicated people who basically said, we want this soft work to happen no matter what.
1536
02:22:45,927 --> 02:22:47,407
And it was a good soft work.
1537
02:22:47,487 --> 02:22:48,787
It gave us lightning, as I said.
1538
02:22:49,087 --> 02:22:58,047
And so 500 Bitcoiners out of 100,000 nodes ran the software, basically threatened the miners, and the miners capitulated.
1539
02:22:58,187 --> 02:23:01,547
Because at the end of the day, miners just want to mine blocks and get paid for it.
1540
02:23:01,547 --> 02:23:03,947
They don't really want to get caught up in politics.
1541
02:23:04,067 --> 02:23:08,207
In this case, Jihan Wu wanted to, you know, he wanted to keep his ASIC boost advantage,
1542
02:23:08,407 --> 02:23:09,427
but he ended up losing.
1543
02:23:10,247 --> 02:23:13,247
And this was really the triumph of the node runners.
1544
02:23:13,787 --> 02:23:18,207
And this was a very important point in Bitcoin where we realized that it's the node runners
1545
02:23:18,207 --> 02:23:19,287
who control the network.
1546
02:23:19,747 --> 02:23:22,027
The miners, the large mining pools are just the employees.
1547
02:23:22,147 --> 02:23:23,807
They don't get to set the rules of the network.
1548
02:23:24,567 --> 02:23:29,667
What we also learned from this is that minority soft forks are possible in Bitcoin, which is
1549
02:23:29,667 --> 02:23:36,907
a really counterintuitive result that, because in a democracy, you need to get elected president,
1550
02:23:36,907 --> 02:23:42,047
you need, well, it depends if we're talking about the electoral college or the popular vote,
1551
02:23:42,127 --> 02:23:46,727
but in typical democracy, you need 51% of the vote to win or more than 50%.
1552
02:23:47,367 --> 02:23:53,527
Whereas in Bitcoin, we had, this was a half a percent of the nodes, 500 nodes out of 100,000
1553
02:23:53,527 --> 02:24:00,967
roughly half a percent of the nodes running, um, uh, running that basically forcing everyone to go
1554
02:24:00,967 --> 02:24:08,767
along with them. And there was a group that opposed them, but the only way to oppose a minority led
1555
02:24:08,767 --> 02:24:15,007
soft fork is you have to do your own counter fork. You have to hard fork away or do what's called a
1556
02:24:15,007 --> 02:24:20,627
user, user resisted or use user reactive soft fork. And this is basically what Roger Ver and
1557
02:24:20,627 --> 02:24:25,667
friends did. So on August 1st, I believe it was August 1st, when Segwit was activated by Luke
1558
02:24:25,667 --> 02:24:35,547
Dasher and Shaolin Fry and this band of brothers running the BIP-148 UASF, Roger Ver and his friends
1559
02:24:35,547 --> 02:24:40,607
basically forked off the network. They did a hard fork. And we've had two separate chains since then.
1560
02:24:40,607 --> 02:24:46,987
And Bcash has been, Roger Ver's fork has been a disaster. All the Bitcoin, as we know today,
1561
02:24:46,987 --> 02:24:56,487
is the small blocker chain. This is the chain that won. That was a chain split that did not heal.
1562
02:24:57,127 --> 02:25:04,107
But what we learned from that is that the miners don't control the network. So if you're going to
1563
02:25:04,107 --> 02:25:10,207
do a soft fork, you can give the miners a chance to activate it early, which is what we've done
1564
02:25:10,207 --> 02:25:16,207
with BIP-110. So for any two-week period, for any difficulty adjustment period of two weeks,
1565
02:25:16,207 --> 02:25:25,647
which is 2016 blocks, which is roughly two weeks because you have a 10-minute block time.
1566
02:25:26,267 --> 02:25:32,247
If minors, if 55% of the blocks signal for this soft fork, it will activate.
1567
02:25:32,328 --> 02:25:33,707
It'll activate after two weeks.
1568
02:25:34,947 --> 02:25:37,207
And so that's the period we're in right now.
1569
02:25:37,287 --> 02:25:41,027
The miners, we've given them the courtesy of activating this soft fork early
1570
02:25:41,027 --> 02:25:44,507
if they want to make this a very orderly event.
1571
02:25:44,507 --> 02:26:03,127
And miners just want to get paid. They don't get to decide the rules, especially the large mining pools. And so we're smarter this time around, though, rather than doing a miner-activated soft fork and then realizing, oh, the miners decide not to activate it. What are we going to do now? We have to write a UASF.
1572
02:26:03,127 --> 02:26:10,207
BIP-110 packages these up into these two types of soft fork into one or these two activation
1573
02:26:10,207 --> 02:26:17,407
methods into a single thing. So between now and call it August 7th, the miners have a chance to
1574
02:26:17,407 --> 02:26:22,087
activate the soft fork and start running the new software rules. But if they don't do it on
1575
02:26:22,087 --> 02:26:28,027
approximately August 7th, a certain block height, people like me who are running the software will
1576
02:26:28,027 --> 02:26:32,927
start to throw miners blocks in the garbage who are not signaling for this soft fork.
1577
02:26:33,127 --> 02:26:37,567
and they will not get paid for their blocks. And so then we'll run into a situation,
1578
02:26:37,887 --> 02:26:41,828
probably most of the miners capitulate before this, because again, they just want to get paid.
1579
02:26:42,127 --> 02:26:47,167
They're not necessarily ideological. They just want to do what the rule makers,
1580
02:26:47,167 --> 02:26:57,527
the nodes tell them to do. But if the miners do not go along with this right when it happens,
1581
02:26:57,527 --> 02:27:04,848
And I think we haven't had a lot of minor signaling in favor of BIP-110 so far because this is how these things always work.
1582
02:27:04,947 --> 02:27:07,667
There's no consequences to not signaling right now.
1583
02:27:08,407 --> 02:27:19,868
And there's a game theory involved where why would you – it's a little bit like you're in a room and you need a volunteer – you're a church or something.
1584
02:27:19,967 --> 02:27:22,487
They need a volunteer to help with the maintenance next Sunday.
1585
02:27:23,627 --> 02:27:26,368
And very few people will be the first one to raise their hand.
1586
02:27:26,368 --> 02:27:29,267
You usually need someone who takes the risk.
1587
02:27:29,647 --> 02:27:35,707
And maybe it's not the best analogy, but people are not going to make decisions unless there's consequences.
1588
02:27:36,407 --> 02:27:39,847
And so the miners, there's no consequences for them until August 7th.
1589
02:27:39,887 --> 02:27:45,167
But August 7th, their blocks are going to start getting thrown in the garbage.
1590
02:27:45,787 --> 02:27:49,828
And we're basically going to activate this whether the miners want to or not.
1591
02:27:49,828 --> 02:28:11,187
And we have this precedent in Bitcoin with SegWit, which I just summarized, that minority soft forks are possible in Bitcoin. You don't need a majority to change the rules. And it's the reason this seems sort of counterintuitive. How could we change the network without everyone going along with it?
1592
02:28:11,187 --> 02:28:19,328
it only works for soft forks because soft forks narrow the rules. And so the rules that we're
1593
02:28:19,328 --> 02:28:25,627
going to be enforcing are a subset of the existing rules. Whereas what Roger Ver was trying to do,
1594
02:28:25,707 --> 02:28:30,447
he was expanding the rules. It was a hard fork. And when you expand the rules, you need to get
1595
02:28:30,447 --> 02:28:36,367
node runners, everyone to upgrade their nodes to the new software. Whereas when you're contracting
1596
02:28:36,367 --> 02:28:41,067
the rules or narrowing the rules as you do in a soft fork, you do not need to get everyone
1597
02:28:41,067 --> 02:28:46,407
to upgrade their software because the legacy nodes, even the Bitcoin core nodes,
1598
02:28:46,507 --> 02:28:50,387
will recognize our blocks as valid because they're just going to have smaller opportunists.
1599
02:28:50,987 --> 02:28:55,007
They're going to be, and they're not going to have the inscriptions exploit. So it's a subset.
1600
02:28:56,007 --> 02:29:01,147
And this is also, there's really no one who's against this either because it's very reasonable.
1601
02:29:01,147 --> 02:29:07,147
It's returning Bitcoin to where it was in 2022 or early 2023. It's not adding new bells and
1602
02:29:07,147 --> 02:29:11,767
whistles. It's not adding new functionality. It's contracting the attack surface rather than
1603
02:29:11,767 --> 02:29:16,707
expanding it like Bitcoin Core has done. And so the only way to resist something like this,
1604
02:29:16,927 --> 02:29:21,387
a minority soft fork, the only way you can resist it is you have to run a counter fork.
1605
02:29:22,308 --> 02:29:27,147
And so then the Bitcoin network and the Bitcoin community today are comprised of,
1606
02:29:27,147 --> 02:29:32,328
they're basically three groups. There's the Bit110 Bitcoin Noughts people like me,
1607
02:29:32,328 --> 02:29:38,567
who understand what a threat to the network Bitcoin core has become. And so we want to run
1608
02:29:38,567 --> 02:29:43,828
the soft fork. And then you have the majority. So we're currently at about 13% of the network.
1609
02:29:43,828 --> 02:29:51,747
13% of the network is RDTS nodes. Then most of the community is clueless, ambivalent, doesn't care,
1610
02:29:52,147 --> 02:29:57,187
playing around with Bitcoin treasury companies, doing whatever. And they're either unaware of us
1611
02:29:57,187 --> 02:29:58,507
or they just don't care either way.
1612
02:29:59,387 --> 02:30:02,127
And then you have maybe like 10 guys on Twitter
1613
02:30:02,127 --> 02:30:03,207
who are against us.
1614
02:30:04,487 --> 02:30:06,687
And so the only way to stop our soft fork
1615
02:30:06,687 --> 02:30:10,627
is if those 10 guys create a client, a URSF client,
1616
02:30:10,967 --> 02:30:12,567
and try to create a counter fork.
1617
02:30:13,447 --> 02:30:14,808
And so we can game this out.
1618
02:30:15,107 --> 02:30:16,787
What would be their sales proposition?
1619
02:30:17,147 --> 02:30:18,927
These guys who want to do a URSF
1620
02:30:18,927 --> 02:30:21,347
and basically counter fork against us
1621
02:30:21,347 --> 02:30:23,667
the same way Roger Ver did against the small blockers.
1622
02:30:23,667 --> 02:30:41,047
Their ad would be, come run our URSF. It's got really big op returns where people can stick CSAM. It's the spam chain. Plus, they're just a few loud voices on Twitter. They don't really have organic followings.
1623
02:30:41,047 --> 02:30:50,927
And so this is one reason I think this soft fork will succeed, because the only way you can stop a minority soft fork is by opposing it.
1624
02:30:51,787 --> 02:31:07,407
And the important thing to notice as well is that I think it's important that the Bitcoin network and Bitcoiners become familiar with this, because while BIP-110 is a very conservative soft fork, it just closes these gaping attack surfaces, and it does it just for a year.
1625
02:31:07,407 --> 02:31:12,328
It expires after 12 months. So after 12 months, all the rules will expire. We'll be back to where
1626
02:31:12,328 --> 02:31:16,467
we are. And this gives us time to basically come together as a community and come up with a
1627
02:31:16,467 --> 02:31:21,047
permanent solution. But we try to make this fork just as conservative and easy as possible. Like
1628
02:31:21,047 --> 02:31:26,527
if you like Bitcoin in 2022 and you hate CSAM and you don't want your node to be full of garbage and
1629
02:31:26,527 --> 02:31:35,907
spam, then you should run this. So what I was going to say is that when you hear this idea that
1630
02:31:35,907 --> 02:31:49,803
a small minority can change Bitcoin that minority soft forks are available are possible And this is exactly what happened in 2017 Just 500 people did this This makes you realize that Bitcoiners need to be
1631
02:31:49,803 --> 02:31:56,243
prepared for hostile minority soft forks. So while ours is very transparent, it's very benevolent,
1632
02:31:56,643 --> 02:32:00,403
all it does is close these tax services. It doesn't hurt Bitcoin's money at all.
1633
02:32:00,823 --> 02:32:05,103
It grandfathers in UTXOs. No one's going to have their money confiscated or lost. It's very,
1634
02:32:05,103 --> 02:32:11,203
very conservative. We could at some point have a small group, a minority that tries to do a
1635
02:32:11,203 --> 02:32:17,103
minority soft fork that's bad for Bitcoin. Bit.110 makes Bitcoin better money, restores it to where
1636
02:32:17,103 --> 02:32:23,343
it was in 2022. But if someone comes through and tries to do a minority soft fork that makes Bitcoin
1637
02:32:23,343 --> 02:32:28,843
worse money, it's very important to know that we have, that we node runners. And again, if you're
1638
02:32:28,843 --> 02:32:32,923
not running a node, sorry, you're not part of this conversation. That's why all Bitcoiners should run
1639
02:32:32,923 --> 02:32:38,603
of note because it's taking back the power and being a self-sovereign individual. But in the
1640
02:32:38,603 --> 02:32:45,183
future, if there's a hostile minority soft fork, we will all get together and we will do a URSF
1641
02:32:45,183 --> 02:32:51,443
and we will fight them in that way. But what makes BIP-110 very unusual is we have no real
1642
02:32:51,443 --> 02:32:55,783
opposition. We have miners who don't really care, who are just like, tell us the rules.
1643
02:32:56,143 --> 02:33:01,343
We don't want network disruption. We have exchanges like Coinbase, just tell us the rules.
1644
02:33:01,343 --> 02:33:02,763
We'll just go with the longest chain.
1645
02:33:03,983 --> 02:33:08,583
And then we have some noisy people on Twitter who say they hate spam, but they're unwilling
1646
02:33:08,583 --> 02:33:09,623
to do anything about it.
1647
02:33:09,703 --> 02:33:11,363
Some of them have worked for spam companies.
1648
02:33:12,003 --> 02:33:15,803
There are a lot of very strange, possibly compromised individuals.
1649
02:33:17,223 --> 02:33:21,803
And so in summary, this is how the Bitcoin network defends itself through node runners.
1650
02:33:21,983 --> 02:33:22,763
It's not magical.
1651
02:33:23,243 --> 02:33:25,503
It's not like through its atomic properties like gold.
1652
02:33:26,183 --> 02:33:28,303
The Bitcoin network is very dynamic.
1653
02:33:28,303 --> 02:33:44,883
It's comprised of high agency individuals like you and me, low time preference, high agency, people who love freedom, and who are willing to protect the network against people who just want to spam on it and do their shitcoin scams on it.
1654
02:33:45,103 --> 02:33:49,243
And so I think it's a very interesting time to be alive because we're going to learn throughout this.
1655
02:33:49,883 --> 02:33:58,183
We're going to see that minority soft forks are possible because BIP-110 is going to be activated, maybe by the miners early, but definitely by the rest of us at that point.
1656
02:33:58,303 --> 02:34:08,663
And I think the other thing to point out is that another reason I think it's going to be activated is that we plebs who are running it, we have a very high tolerance for chaos.
1657
02:34:09,303 --> 02:34:12,563
So, for example, my Bitcoin is in cold storage.
1658
02:34:12,843 --> 02:34:14,023
It's not leveraged.
1659
02:34:14,103 --> 02:34:15,803
I haven't taken out any loans against it.
1660
02:34:16,303 --> 02:34:26,843
I really don't care if Bitcoin goes to $5,000 or if it goes to $1,000 or if we have a chain split that makes it impossible to transact for a couple days, if we have real chaos.
1661
02:34:26,843 --> 02:34:49,303
And again, if this happens, this will be because the miners are either malicious or they're not paying attention. If they all start mining, we'll be fine. But if you think about the miners who are spending millions of dollars a day in electricity, the exchanges like Coinbase, they just want stability in the network.
1662
02:34:49,303 --> 02:34:54,663
they're not like us crazy plebs who are basically have the, I think, I think I've heard Bitcoin
1663
02:34:54,663 --> 02:35:00,183
mechanic use the, uh, the, uh, the, uh, the grenade, the grenade metaphor. Like we're just
1664
02:35:00,183 --> 02:35:04,723
crazy enough to walk into the room and to be like, look, Bitcoin is money. This means this is so
1665
02:35:04,723 --> 02:35:08,683
important to me. I've got a grenade here and I'm willing to blow all of us up if you don't,
1666
02:35:09,223 --> 02:35:12,423
you know, if you don't go along with us. And so we don't, we don't have, we don't have an
1667
02:35:12,423 --> 02:35:17,783
opposition. No one, no one has the hand grenade. It says I want spam and see Sam on Bitcoin.
1668
02:35:17,783 --> 02:35:23,523
And if there were a group that was trying to push that through, then I would definitely URSF them because that's unacceptable.
1669
02:35:24,963 --> 02:35:27,763
But I think it's a very exciting time to be in Bitcoin.
1670
02:35:28,263 --> 02:35:34,903
We're seeing Bitcoin heal itself, fight back against Bitcoin Core, rat around the spammers and scammers.
1671
02:35:36,003 --> 02:35:38,763
And unfortunately, this all could have been avoided.
1672
02:35:38,763 --> 02:35:49,223
Like Bitcoin Core, if they weren't so stubborn or corrupted, all they need to do is like fix the inscriptions exploit and bring Operatorn back to 80 bytes, where it's been since 2015.
1673
02:35:49,663 --> 02:35:52,083
Like that's not a radical thing to ask.
1674
02:35:52,703 --> 02:35:57,583
If they had just done that, if they could do that tomorrow, and it would really take the wind out of our sails, I can tell you.
1675
02:35:57,743 --> 02:36:00,263
I would probably have second thoughts about the soft fork.
1676
02:36:00,263 --> 02:36:17,423
But instead, they're so stubborn or stupid or malicious or compromised that they're willing to disrupt the entire network over their silly little changes, which have opened the network up to just horrendous things like CSAM.
1677
02:36:17,423 --> 02:36:35,003
So it's great to see in the BIP 110 movement, it seems to be mostly like men with families who own Bitcoin, who take it very seriously, not like the Bitcoin core devs who get paid in fiat and don't really own a lot of Bitcoin, especially the younger ones and don't run nodes.
1678
02:36:35,443 --> 02:36:43,923
This is like real Bitcoiners, hardcore Bitcoiners who run nodes, who want to protect their life savings and want Bitcoin to be around for their children.
1679
02:36:43,923 --> 02:36:49,243
Whereas a lot of Bitcoin Core devs, it's a certain demographic that just doesn't even have children.
1680
02:36:50,243 --> 02:36:52,063
So those are basically the battle lines.
1681
02:36:52,643 --> 02:36:55,983
And I think BIP-110 is the right thing to do.
1682
02:36:56,103 --> 02:37:00,143
This has been a three-year escalation where we've tried to do everything we could.
1683
02:37:00,483 --> 02:37:03,463
We tried to have the inscriptions exploit patched in 2023.
1684
02:37:04,323 --> 02:37:07,603
We argued with Bitcoin Cores that don't blow open Oprtern.
1685
02:37:07,823 --> 02:37:08,583
They did it anyway.
1686
02:37:09,123 --> 02:37:11,063
So we deserted them.
1687
02:37:11,063 --> 02:37:15,023
We dumped our Bitcoin core nodes and started running Bitcoin knots.
1688
02:37:15,463 --> 02:37:17,723
20, 25% of the network left them.
1689
02:37:18,143 --> 02:37:18,923
They're still stubborn.
1690
02:37:19,063 --> 02:37:20,183
They're not making any changes.
1691
02:37:20,443 --> 02:37:23,003
They still want to push through.
1692
02:37:23,343 --> 02:37:26,603
And there's a chance that they're going to keep doing this if they can get away with it.
1693
02:37:27,403 --> 02:37:31,783
And so there's been a slow escalation from pressure at the social level to pressure at
1694
02:37:31,783 --> 02:37:37,523
the mempool level to dumping Bitcoin core and running Bitcoin knots.
1695
02:37:37,623 --> 02:37:39,083
And we're now at the soft fork level.
1696
02:37:39,083 --> 02:38:05,403
And it's a very conservative soft fork. It's temporary, et cetera. But basically, it's just like you have to do with crime. If you live in a stable, sane society, people teach their kids you don't shoplift, you don't steal stuff. And why do you do that? It's just because if you have a store, dad has a store, he doesn't want people stealing from him. This is just how humans need to live together.
1697
02:38:05,403 --> 02:38:16,163
And so this is, I think I lost where I was going with that thought, but this is, oh, I know what I was going to say, that the escalation is, it's very similar to crime.
1698
02:38:16,163 --> 02:38:31,903
If you don't show hostility to crime, if you're just very wishy-washy about it and you say, you know, it's okay because these people have had hard lives or their past social injustices or whatever, those things may be very true, but you can't live in a functioning society.
1699
02:38:31,903 --> 02:38:39,703
I don't like going to the drugstore and buying razor blades and having to get a clerk to unlock it for a $10 razor.
1700
02:38:39,983 --> 02:38:42,603
That's not the kind of society you want to live in.
1701
02:38:43,183 --> 02:38:53,123
And so the way you avoid that is you don't have to have capital punishment and have the death penalty for people who steal razor blades from a store.
1702
02:38:53,403 --> 02:38:55,203
But you have to show hostility to crime.
1703
02:38:55,603 --> 02:38:57,263
And you arrest people who steal things.
1704
02:38:57,763 --> 02:38:59,563
And then you have to be willing to escalate it.
1705
02:38:59,563 --> 02:39:04,043
If someone just keeps coming in your store and robbing you, they need to go to jail.
1706
02:39:04,303 --> 02:39:06,943
And if they get out of jail and do it again, you put them in jail for longer.
1707
02:39:07,383 --> 02:39:11,143
And the great thing is you don't actually have to hurt these people because if you show
1708
02:39:11,143 --> 02:39:15,923
that you have teeth and that you're tough on crime and they're not willing to be all
1709
02:39:15,923 --> 02:39:20,543
postmodern and woke about it, then these people won't commit crimes because they don't want
1710
02:39:20,543 --> 02:39:21,223
to go to jail.
1711
02:39:21,463 --> 02:39:24,503
They don't want to go to jail for 10 years for some razor blades.
1712
02:39:24,503 --> 02:39:45,663
And so this is, BIP-110 is the last step, or it's the next step. We could actually do even more severe things. But this is basically saying we're going to take back the Bitcoin network, we're going to revert the damage that Bitcoin Core did, and we're going to proclaim to the world that Bitcoin is a monetary network, Bitcoin is money, and that's what it needs to be used for.
1713
02:39:45,663 --> 02:39:51,583
which is hardly, seems like hardly a controversial hell to be willing to have to die on.
1714
02:39:51,803 --> 02:39:56,943
If Bitcoiners can't agree that Bitcoin is money, and if we're going to let malicious miners decide
1715
02:39:56,943 --> 02:40:03,463
the rules of the network, then that's basically a 51% attack that we're in. And Satoshi himself
1716
02:40:03,463 --> 02:40:11,043
said in the white paper, the Nakamoto consensus system cannot function if 51% of the miners are
1717
02:40:11,043 --> 02:40:16,263
malicious and hostile. And so we're going to find out. We're going to find out in a couple months,
1718
02:40:16,263 --> 02:40:23,223
are the miners just stupid and slow and just focused on mining blocks? Or is there something
1719
02:40:23,223 --> 02:40:28,563
malicious going on? In which case, they will need to be fired as well. Because we can't have
1720
02:40:28,563 --> 02:40:35,323
malicious miners who are going to be willing to cooperate with governments. In 2028, we could have
1721
02:40:35,323 --> 02:40:39,843
the US federal government tell these large Bitcoin mining pools, American Bitcoin mining pools,
1722
02:40:39,843 --> 02:40:49,123
oh, you can't mine OFAC non-compliant transactions, or you can't mine transactions from Iran or North Korea or wherever, Venezuela,
1723
02:40:49,623 --> 02:40:54,243
whoever is the American enemy at that point, just whatever the made up enemy is.
1724
02:40:54,843 --> 02:41:01,163
And so we need to have Bitcoin miners who follow the Bitcoin nodes and do what we tell them to do.
1725
02:41:01,223 --> 02:41:03,203
So that's basically what the soft work is about.
1726
02:41:03,763 --> 02:41:08,863
It's interesting how you frame it as firing the miners so that they're taking that step further.
1727
02:41:08,863 --> 02:41:12,083
is like, we want them to do the, we're going to hire people that would do the work we want them
1728
02:41:12,083 --> 02:41:17,563
to do in a way that's respectable and keeps the commons clean. You know, you mentioned sort of
1729
02:41:17,563 --> 02:41:21,783
escalating it, you know, actually, before, before you go to that point, so the term, let me just
1730
02:41:21,783 --> 02:41:25,923
flesh it out. Cause I, when I said fire the miners, I was alluding to something that's,
1731
02:41:25,923 --> 02:41:33,083
that's very, very controversial that, um, that not everyone may have picked up on what the ultimate,
1732
02:41:33,363 --> 02:41:37,163
the ultimate way you can get rid of the miners, if they're truly malicious. And I don't think
1733
02:41:37,163 --> 02:41:40,483
it's going to come to that this year, but it's important that Bitcoiners understand this.
1734
02:41:40,963 --> 02:41:45,663
And this is like the death penalty. It's important that you have it there, even if you don't use it,
1735
02:41:45,923 --> 02:41:51,843
because it really does put the fear of God into people. The ultimate way to fire the miners is to
1736
02:41:51,843 --> 02:41:59,783
change the proof of work algorithm from SHA-256. And so if node runners were to change SHA-256,
1737
02:42:00,343 --> 02:42:04,903
it would brick all the machines. It would instantly put all the miners and the hashers
1738
02:42:04,903 --> 02:42:06,983
and the people who own these machines out of business overnight.
1739
02:42:07,563 --> 02:42:09,043
And their machines would be worthless
1740
02:42:09,043 --> 02:42:11,583
because a machine that does SHA-256,
1741
02:42:11,723 --> 02:42:12,963
it's not good for anything else.
1742
02:42:13,623 --> 02:42:16,863
You could mine BSV or Bcash or one of these shit coins on it.
1743
02:42:17,223 --> 02:42:19,643
But basically, that's the ultimate thread.
1744
02:42:19,783 --> 02:42:22,243
And it's a little bit like the nuclear bomb.
1745
02:42:22,243 --> 02:42:26,423
We don't want to use this because it's probably going to hurt us too.
1746
02:42:27,063 --> 02:42:29,903
But we have a nuke and you know we have a nuke.
1747
02:42:30,083 --> 02:42:33,143
And so changing SHA-256, changing proof of work,
1748
02:42:33,143 --> 02:42:38,023
that is the that's the ultimate way to fire the miners and that at some point in bitcoin i don't
1749
02:42:38,023 --> 02:42:42,983
think it's going to happen this year but some point down the 10 years from now we might need
1750
02:42:42,983 --> 02:42:47,543
to actually do that if the miners are malicious because we can't have a network with malicious
1751
02:42:47,543 --> 02:42:53,823
miners so i just wanted to to fill in that illusion for you well yeah so i want to kind of cover you
1752
02:42:53,823 --> 02:42:58,703
know some ways you've kind of framed this up maybe in other places but you know bit 110 i've heard
1753
02:42:58,703 --> 02:43:00,243
you call sort of like a prophylactic.
1754
02:43:01,343 --> 02:43:02,343
And so, you know, it's sort of,
1755
02:43:03,023 --> 02:43:04,483
I guess here it delays pregnancy,
1756
02:43:04,563 --> 02:43:05,863
but you can still get pregnant in the future.
1757
02:43:06,043 --> 02:43:06,923
You know, it's temporary.
1758
02:43:08,063 --> 02:43:12,803
And we do live in a high trust society.
1759
02:43:14,263 --> 02:43:15,963
As Bitcoiners don't trust Verify,
1760
02:43:16,123 --> 02:43:17,923
but I can go into a car dealership
1761
02:43:17,923 --> 02:43:20,403
and it's highly regulated,
1762
02:43:20,403 --> 02:43:22,663
but I could walk out of there with a car
1763
02:43:22,663 --> 02:43:26,363
worth a few tens of thousands of dollars very quickly
1764
02:43:26,363 --> 02:43:28,343
and coordinate with a lot of parties
1765
02:43:28,343 --> 02:43:33,583
and settlement hasn't been isn't final or like a rental car it's it's it used to amaze me when i
1766
02:43:33,583 --> 02:43:37,723
was younger that i would just give him a credit card and i could drive a fifty thousand dollar
1767
02:43:37,723 --> 02:43:41,983
car and just but obviously you know there are repercussions if you do something bad with that
1768
02:43:41,983 --> 02:43:48,683
car sure um but it's all based on trust to some extent that's true and you know you can go into
1769
02:43:48,683 --> 02:43:54,523
a liquor store and uh the guy's behind glass and you know uh i had an offline conversation with a
1770
02:43:54,523 --> 02:43:58,583
frat once. I don't think I'm going to fringe on it here, but like, you know, the idea of what makes
1771
02:43:58,583 --> 02:44:03,763
you feel safer, are you actually safer? And, you know, I walk into that sort of that store and I'm
1772
02:44:03,763 --> 02:44:07,243
like, he's safer, but I don't feel safe. I don't know if I feel safe in the neighborhood anymore.
1773
02:44:07,503 --> 02:44:12,423
Yeah. I want to shop in that environment. And it's high trust being able to go in the store
1774
02:44:12,423 --> 02:44:17,763
and not have glass between us. I like how you kind of say, you know, this temporary bit 110 for a
1775
02:44:17,763 --> 02:44:23,643
year, it scares, you know, the spammers and scammers away. And why that's important culturally
1776
02:44:23,643 --> 02:44:26,983
is it's hard to build somewhere where you're not allowed or not accepted.
1777
02:44:27,303 --> 02:44:30,183
And you even mentioned this around the touchy subject of CSAM.
1778
02:44:30,283 --> 02:44:32,443
It's like you could want to put CSAM on the blockchain.
1779
02:44:32,623 --> 02:44:34,743
You could find ways or the time chain to sneak it on there.
1780
02:44:35,083 --> 02:44:38,363
But it's hard to build a project or get any sort of reputation awareness
1781
02:44:38,363 --> 02:44:42,083
or any investment if you don't tell people that you're doing that.
1782
02:44:42,543 --> 02:44:43,003
Really good point.
1783
02:44:43,123 --> 02:44:43,943
And drum up the interest.
1784
02:44:43,943 --> 02:44:47,723
So it's like you delay for a year, but it sort of delays growing seeds,
1785
02:44:47,863 --> 02:44:50,683
planting seeds for several years maybe.
1786
02:44:50,683 --> 02:45:01,623
And just the idea of this software, even just putting out this podcast, this is going to scare, and all the actions we've taken leading up to this, people dumping core for knots.
1787
02:45:01,623 --> 02:45:26,823
If you're a crypto VC and you're thinking about funding a Bitcoin spam, a spam company that's going to put NFTs on Bitcoin or that's going to put it on Solana or Ethereum or one of the more tolerant chains, just seeing the Bitcoin community, all the furor on Twitter and everyone dumping core for knots that this this we've already driven away spammers and scammers because why?
1788
02:45:26,823 --> 02:45:28,143
Why would you fund something?
1789
02:45:28,563 --> 02:45:29,003
Um.
1790
02:45:29,038 --> 02:45:43,838
It's the same thing. If there's a community, if there's a neighborhood that's got neighborhood watch and everyone is heavily armed in their houses, why in the world would you rob that neighborhood? You might as well go to a neighborhood where they're not scaring away criminals.
1791
02:45:43,838 --> 02:45:57,198
So just the very fact of talking about these soft forks has actually, I'm sure it's already prevented a lot of spam. And it's kind of a counterintuitive thing. It's a little bit like, well, it's like we were talking about prophylaxis or contraception.
1792
02:45:57,198 --> 02:46:02,218
And it's like, I think mechanic or someone is, maybe Marcellus has used the same analogy.
1793
02:46:02,618 --> 02:46:08,758
If contraception works, you know, I don't think contraception works because we're all the babies who are prevented.
1794
02:46:09,198 --> 02:46:13,478
And we all understand like that's, you can't measure things that didn't happen in the same way.
1795
02:46:13,618 --> 02:46:22,338
If you have an NRA sign in front of your house and whatever, that you did probably drive away some people who decide not to break into your house.
1796
02:46:22,778 --> 02:46:25,458
Or if you have a fence, it's like, why is no one ever climbing my fence?
1797
02:46:25,558 --> 02:46:26,538
Well, because it's a fence.
1798
02:46:26,538 --> 02:46:44,058
And so they go to my neighbor's house instead. So there's this measurement problem and the survivorship bias problem that a lot of people miss in a very naive way. So just even putting out a podcast like this, there will be a crypto VC who watches this and realizes how pissed a lot of us are. And he's not going to-
1799
02:46:44,058 --> 02:46:44,858
We'll filter them out.
1800
02:46:45,338 --> 02:46:46,258
We won't let them watch.
1801
02:46:48,558 --> 02:46:55,278
But, you know, I think you've mentioned there's like 50% of the time chain blockchain.
1802
02:46:55,918 --> 02:46:58,518
I kind of want to move away from blockchain because I just think it has like a,
1803
02:46:59,278 --> 02:47:01,678
unfortunately for us, it has a negative connotation with crypto.
1804
02:47:01,678 --> 02:47:08,698
But there are some estimates that there's like 40% to 60% of spam already on the blockchain.
1805
02:47:08,698 --> 02:47:18,558
and there was a moment i think during sort of the the filter wars where adam beck i think even
1806
02:47:18,558 --> 02:47:26,078
came out with a really i think uh material maybe uh olive branch said hey why don't we go from 80
1807
02:47:26,078 --> 02:47:35,758
kilobytes to 160 let's yeah bite bites 80 bites 160 180 bites to 160 we can enlarge us a little
1808
02:47:35,758 --> 02:47:41,138
bit see what happens maybe we get a new use case let's but let's not open the barn door you know to
1809
02:47:41,138 --> 02:47:48,418
100,000 bytes which is absurd yeah and but but what what what what could we be missing
1810
02:47:48,418 --> 02:47:56,658
what the way you frame it and I I like it it sounds good it sounds reasonable it sounds logical
1811
02:47:56,658 --> 02:48:02,558
you see the game theory um we're going to clean up the chain even if it's temporarily and we're
1812
02:48:02,558 --> 02:48:07,918
going to be the longest chain, but is there something we could be missing? Are Bitcoiners
1813
02:48:07,918 --> 02:48:13,038
who adopt Bit110 maybe putting coins at stake that they don't understand in some way?
1814
02:48:14,078 --> 02:48:19,078
No, I don't think so because there's an actual rule to the soft fork that grandfathers in
1815
02:48:19,078 --> 02:48:24,418
all chunks of Bitcoin or UTXOs that were created before the fork activates.
1816
02:48:25,338 --> 02:48:29,878
And what about a new chain? If more proof of work goes to a new chain, if people make
1817
02:48:29,878 --> 02:48:37,598
non-economic decisions that somehow don't hold up to us the way we think actors would logically act.
1818
02:48:38,818 --> 02:48:44,418
Well, I would suspect that the legacy chain, the CSAM chain too, that would be the side that
1819
02:48:44,418 --> 02:48:50,898
you would expect the intel agencies and the deep state to be wanting to win. And unfortunately,
1820
02:48:50,898 --> 02:48:56,578
that's the chain we're sitting on right today. How could Mara come out? And I know it's not a
1821
02:48:56,578 --> 02:49:00,758
conversation. It's a good way of defining things. There are hashers and there are miners. And I'm
1822
02:49:00,758 --> 02:49:05,918
not saying Marathon is a hasher, but I mean, I'm not saying Marathon is a miner. They're hashing.
1823
02:49:06,238 --> 02:49:09,738
They're renting. They're actually both. Marathon. That's true. They're both.
1824
02:49:09,878 --> 02:49:14,278
They build their own blocks too. So they're a weird exception.
1825
02:49:14,958 --> 02:49:19,278
Right. But whether it's Marathon or not, but let's say someone makes a decision that just
1826
02:49:19,278 --> 02:49:25,738
does not sound economically rational and says, we love op return. We don't care if C-SPAM or
1827
02:49:25,738 --> 02:49:32,678
anything ends up in there. We like this chain and we're 30% of the proof of work. And there's only
1828
02:49:32,678 --> 02:49:39,658
five mining pools and et cetera, et cetera. Is there some sort of blind corner that we're not
1829
02:49:39,658 --> 02:49:51,378
seeing around? Well, in that case, first of all, it's even hard to steel man that side because we
1830
02:49:51,378 --> 02:49:58,078
know these large regulated pools have lawyers. And we don't want to depend on the legal system.
1831
02:49:58,358 --> 02:50:02,678
This isn't about suing anyone. But you can imagine the discussion with the corporate lawyers at
1832
02:50:02,678 --> 02:50:08,658
Foundry. Should we mine on the chain that doesn't have CSAM or the chain that does have CSAM?
1833
02:50:08,658 --> 02:50:16,658
It's a no-brainer for a family. It's a no-brainer for a corporation. Why even have that risk? And
1834
02:50:16,658 --> 02:50:20,438
especially the CSAM chain can be wiped out by the BIP-110 chain.
1835
02:50:21,198 --> 02:50:23,678
And so you could be, this is the thing.
1836
02:50:23,738 --> 02:50:25,478
If we end up with a chain split, we could,
1837
02:50:25,778 --> 02:50:28,018
the BIP-110 chain is never going to go away.
1838
02:50:28,018 --> 02:50:33,818
Like we can, we can just keep waiting there and people will,
1839
02:50:34,018 --> 02:50:36,618
there's, there's a weird game theory where you, you want to get,
1840
02:50:36,718 --> 02:50:38,258
you want to come over to our chain first,
1841
02:50:38,258 --> 02:50:41,378
because the sooner you come over to our chain, the lesser,
1842
02:50:42,058 --> 02:50:45,438
the smaller chance that your work gets wiped, gets wiped out.
1843
02:50:45,438 --> 02:50:50,838
you don't want to be the last, you know, the last person off the CSAM chain or off the CSAM
1844
02:50:50,838 --> 02:50:55,838
boat coming over. But in terms of stuff that we might be missing, this has been the strange thing
1845
02:50:55,838 --> 02:51:00,298
about the argument that no one seems to, everyone says they're against spam and obviously everyone's
1846
02:51:00,298 --> 02:51:07,398
against CSAM. They don't, they don't, there aren't good, there aren't good arguments on the other
1847
02:51:07,398 --> 02:51:12,038
side. The argument, they say they'll basically create straw men and say, well, it doesn't stop
1848
02:51:12,038 --> 02:51:17,438
spam. And it's like, well, it says in the BIP that it doesn't stop spam. This is a straw man.
1849
02:51:17,598 --> 02:51:23,458
You're attacking it for not doing something that it says it doesn't do. Or it's going to confiscate
1850
02:51:23,458 --> 02:51:30,478
people's Bitcoin. But it's not going to confiscate people's Bitcoin because every transaction or
1851
02:51:30,478 --> 02:51:36,738
every UTXO that's created before that block hide is grandfathered in. Then you do have some bad
1852
02:51:36,738 --> 02:51:44,258
actors who have created these very intricate constructions using taproot and many deep,
1853
02:51:44,358 --> 02:51:49,018
deep, I'm going to say this wrong, but deep leaves. And they've done it in sort of an
1854
02:51:49,018 --> 02:51:56,058
obstructionist way. And it's a little bit like the guy who runs out into the middle of the highway
1855
02:51:56,058 --> 02:52:01,178
and, you know, tries to get in front of a bus and says, stop the bus. And then the bus hits him.
1856
02:52:01,178 --> 02:52:03,018
And he's like, why did you hit me?
1857
02:52:03,578 --> 02:52:05,738
It's like, well, this is a highway.
1858
02:52:06,378 --> 02:52:09,238
If you want to make changes, you don't run out.
1859
02:52:09,358 --> 02:52:10,738
And so we do have a couple of people.
1860
02:52:10,738 --> 02:52:18,638
And actually, Greg Maxwell has said online that he has some transaction that's going to be hurt by the soft fork.
1861
02:52:19,178 --> 02:52:29,578
And it looks to me, at least, that he's done this sort of one-off weird transaction that it's like running in front of the bus and then being like,
1862
02:52:29,578 --> 02:52:47,431
Why are you driving your butt You going to hit me So no real Bitcoin uses will be affected by this Lightning won be affected People using single SIG or multi SIG or even regular taproot Bitcoin addresses you still be able to use those
1863
02:52:47,431 --> 02:52:55,791
You just won't be able to use the op if op code in the input for the transaction.
1864
02:52:56,011 --> 02:53:05,671
So there don't seem to be good arguments against it. And there's
1865
02:53:05,671 --> 02:53:12,271
it makes sense that there there's this is why there's no ursf opposing us so there'll be people
1866
02:53:12,271 --> 02:53:18,431
who oppose us and they'll say i hate spam too and then we're like well why are you opposing us
1867
02:53:18,431 --> 02:53:25,191
and they're they're like well because uh because you know you shouldn't be able to
1868
02:53:25,191 --> 02:53:29,571
a minority shouldn't be able to impose their will on the network and then we're like well this is
1869
02:53:29,571 --> 02:53:34,771
what happened with segway and the the change we're trying to push through is very benevolent we're
1870
02:53:34,771 --> 02:53:40,131
just trying to stop these things and so then they'll be like well you know it's it's so it's
1871
02:53:40,131 --> 02:53:45,011
so inorganic then on our side we have thousands and thousands of plebs who have started running
1872
02:53:45,011 --> 02:53:50,771
nodes who understand like it's not it's not complex computer science theory they're like
1873
02:53:50,771 --> 02:53:55,991
why are you fighting for what you believe in that's why you're not being an asshole why don't
1874
02:53:55,991 --> 02:54:00,991
you allow the assholes to hang out with us it reminds me a little bit uh like we were talking
1875
02:54:00,991 --> 02:54:05,311
about it's like so there's that anti i didn't mean to cut you off no no i was just saying it's like
1876
02:54:05,311 --> 02:54:11,991
the peeing in the pool yeah it's the same thing anti-social behavior is so i understood this very
1877
02:54:11,991 --> 02:54:18,331
at a young age you're walking down the schools now the hallways at in high school and some kids like
1878
02:54:18,331 --> 02:54:24,711
hey you fucking asshole yeah i don't like your shirt and yeah and you're like shut up dick and
1879
02:54:24,711 --> 02:54:29,831
he's like did you call me a dick yeah exactly we're gonna fight now yeah i'm like are you
1880
02:54:29,831 --> 02:54:36,411
overlooking how you just called me an asshole and it's like why why is there all this hostility from
1881
02:54:36,411 --> 02:54:40,991
the soft fork it's like well because the reference implementation went rogue and the network's now
1882
02:54:40,991 --> 02:54:46,391
open to see sam and no one seems to want to do anything about this like it's like taking crazy
1883
02:54:46,391 --> 02:54:51,491
pills again yeah well we'll see how it goes it seems like it's gonna be a hot summer i i think
1884
02:54:51,491 --> 02:55:00,171
that in a weird way, price is really related to this. Yeah. And yeah, Bitcoin's in a, it's in a
1885
02:55:00,171 --> 02:55:06,271
very bad place right now. And, and there's, that brings a lot of uncertainty. And I believe for me
1886
02:55:06,271 --> 02:55:13,791
on easiness. Me too. It seems logical, but you know, and you don't want to end up in a situation
1887
02:55:13,791 --> 02:55:18,451
where the thing ends up in a place where you're like, I can't stand behind this. You know, it's
1888
02:55:18,451 --> 02:55:24,791
not what I thought it was. I don't think it's going that way. I think this is the battle towards
1889
02:55:24,791 --> 02:55:30,231
preventing that. Everything's moving in the right direction to heal. So people are running knots
1890
02:55:30,231 --> 02:55:33,751
and people are supporting the soft fork. That's the good news. And people ask me,
1891
02:55:33,971 --> 02:55:39,411
why haven't you left the space or why haven't you sold your Bitcoin? It's because I'm just amazed by
1892
02:55:39,411 --> 02:55:45,931
all the just the regular Bitcoin plebs coming through on this one. And people have never run
1893
02:55:45,931 --> 02:55:51,671
nodes before, people taking this really, really seriously. And that's very encouraging. That
1894
02:55:51,671 --> 02:55:55,631
shows Bitcoin's immune system is still alive. And Bitcoin's immune system is still alive.
1895
02:55:56,011 --> 02:55:59,311
And we have people defending the network who actually own Bitcoin and care about it,
1896
02:55:59,311 --> 02:56:06,651
who aren't working for spam companies that want to profit from scams. Then Bitcoin's in a good
1897
02:56:06,651 --> 02:56:12,451
place. And I think things could get turbulent this summer. But I think it was Winston Churchill
1898
02:56:12,451 --> 02:56:15,391
who said that Americans always do the right thing
1899
02:56:15,391 --> 02:56:17,071
after exhausting all the other options.
1900
02:56:17,491 --> 02:56:18,391
I think Bitcoiners will do,
1901
02:56:18,651 --> 02:56:19,971
this is a similar situation.
1902
02:56:20,111 --> 02:56:21,351
Bitcoiners will do the right thing
1903
02:56:21,351 --> 02:56:26,691
after the last very frustrating 12 months.
1904
02:56:27,051 --> 02:56:30,411
But this is definitely the best option at this point.
1905
02:56:30,491 --> 02:56:31,691
Again, unless Bitcoin Core,
1906
02:56:32,431 --> 02:56:35,311
it would take a hit to their ego or whatever,
1907
02:56:35,411 --> 02:56:37,151
but they can also fix things
1908
02:56:37,151 --> 02:56:39,431
by just reverting all those changes.
1909
02:56:39,431 --> 02:56:42,191
I think that would probably derail the soft fork.
1910
02:56:42,451 --> 02:56:43,371
It's hard to say, but.
1911
02:56:44,191 --> 02:56:52,531
It seems like you're putting it all on the line, making this sort of, you know, even reputationally, I think, you know, if this.
1912
02:56:53,871 --> 02:56:54,891
In the Bitcoin world.
1913
02:56:54,891 --> 02:56:57,691
This is the last people should understand this.
1914
02:56:57,871 --> 02:57:01,311
This is the last stand that if BIP110 fails.
1915
02:57:02,451 --> 02:57:04,211
This is really bad for Bitcoin.
1916
02:57:04,671 --> 02:57:11,231
And Bitcoin is then on the path where basically the miners can say how it's supposed to be, the large mining pools.
1917
02:57:11,231 --> 02:57:14,311
and that Bitcoin core gets to make up the rules for the network.
1918
02:57:15,311 --> 02:57:19,911
And there's a lot of Bitcoin affinity scams like Citria, which we talked about,
1919
02:57:20,171 --> 02:57:23,051
who are preparing to put loads and loads of data on the blockchain
1920
02:57:23,051 --> 02:57:28,851
for all their stupid tokens and things that don't even scale Bitcoin.
1921
02:57:29,611 --> 02:57:34,571
And so if you want to understand what the failure case looks like here,
1922
02:57:34,771 --> 02:57:37,651
you can just look at Ethereum, just a complete disaster.
1923
02:57:38,031 --> 02:57:39,251
No one runs an Ethereum node.
1924
02:57:39,371 --> 02:57:40,591
There's no pleb you can talk to.
1925
02:57:40,591 --> 02:57:43,811
It runs a full archival Ethereum node.
1926
02:57:43,931 --> 02:57:45,831
And they don't even understand what one is.
1927
02:57:46,311 --> 02:57:52,731
Bitcoin is the only, it's the only, I shouldn't call it a cryptocurrency, but it's the only cryptocurrency that-
1928
02:57:52,731 --> 02:57:53,991
It is the only cryptocurrency, period.
1929
02:57:54,191 --> 02:57:54,671
I think that's what you can-
1930
02:57:54,671 --> 02:57:56,711
It's the only one that has plebs running nodes.
1931
02:57:57,031 --> 02:57:58,371
And you can't recreate them.
1932
02:57:58,611 --> 02:57:58,751
Yeah.
1933
02:57:59,171 --> 02:58:00,691
Well, that's why it's decentralized.
1934
02:58:01,331 --> 02:58:02,171
That's why it's decentralized.
1935
02:58:02,731 --> 02:58:08,891
And so the reason I put everything on the line for this, and I'm also, we didn't talk about it,
1936
02:58:08,891 --> 02:58:13,951
But I'm also mining. A lot of us are renting Hashrate and using it to signal for this.
1937
02:58:13,951 --> 02:58:26,391
So we're actually spending money out of our own pockets, Bitcoin out of our own pockets from our cold storage to try to to try to help get miners to signal and to mine BIP 110 signaling blocks.
1938
02:58:26,531 --> 02:58:30,771
Because if we fail on this, it's, you know, Bitcoin's not going to die.
1939
02:58:30,911 --> 02:58:35,991
That's not what I'm there. There's always people in Bitcoin saying, you know, do what I say or Bitcoin's going to die.
1940
02:58:35,991 --> 02:58:43,171
But the trend is in the wrong direction, where we've had more and more spam, more and more Bitcoin affinity scams.
1941
02:58:43,551 --> 02:58:44,451
People are distracted.
1942
02:58:44,611 --> 02:58:47,091
They think you should buy Bitcoin treasury stocks.
1943
02:58:47,691 --> 02:58:51,611
This is just if BIP-110 fails, which should be very clear, I don't think it's going to fail.
1944
02:58:52,051 --> 02:58:56,531
But if it does, that's just another of these thousand cuts to Bitcoin.
1945
02:58:57,151 --> 02:58:58,851
And Bitcoin is not physical gold.
1946
02:58:58,951 --> 02:59:00,051
You can kill Bitcoin.
1947
02:59:00,491 --> 02:59:06,891
If Bitcoiners decide they want to be Ethereum, Bitcoin will become Ethereum or Bit-Theorem, as people like to joke.
1948
02:59:07,731 --> 02:59:10,571
And there's nothing to stop it.
1949
02:59:10,571 --> 02:59:13,971
If Bitcoin node runners want Bitcoin to become Ethereum, it will become Ethereum.
1950
02:59:14,371 --> 02:59:15,951
And that will be really bad.
1951
02:59:16,291 --> 02:59:19,571
And so we know that Ethereum really has no value.
1952
02:59:19,911 --> 02:59:20,591
It's a disaster.
1953
02:59:20,731 --> 02:59:21,591
No one runs nodes.
1954
02:59:22,271 --> 02:59:27,771
And so I would hope that people could think at least three or four steps ahead and see where we're headed.
1955
02:59:27,771 --> 02:59:31,291
and just the hostility and the compromise at Bitcoin Core,
1956
02:59:31,851 --> 02:59:35,471
the mining pool centralization, and these various problems,
1957
02:59:36,151 --> 02:59:39,511
that this is a very essential soft fork.
1958
02:59:39,611 --> 02:59:41,551
And people will look back on it after we're successful,
1959
02:59:42,091 --> 02:59:43,351
just like they were for Segwit.
1960
02:59:43,411 --> 02:59:45,811
There's so many people now who take credit for Segwit
1961
02:59:45,811 --> 03:00:01,163
and have these alternate histories and say I was there fighting for it And I talked to the guys who are actually there fighting for it like Mechanic and Luke Dasher And they like those people they were just sitting on the sidelines waiting to join the winners And this is how it always is This was the American
1962
03:00:01,163 --> 03:00:05,143
revolution. They're people who are willing to get up and take arms for what they believe in.
1963
03:00:05,543 --> 03:00:08,603
And then there are the people who will come afterwards and take credit for it. And that's
1964
03:00:08,603 --> 03:00:15,123
fine. We want to extend bridges. We're all Bitcoin brothers and sisters. But it really is the
1965
03:00:15,123 --> 03:00:21,623
minority that makes history that's willing to speak up and put their reputations and put their
1966
03:00:21,623 --> 03:00:29,423
money on the line. And it worked with Segwit. It basically saved Bitcoin that way. And it's going
1967
03:00:29,423 --> 03:00:36,043
to work again. And we have Mechanic and Luke Dasher. We're in the last UASF. So we have precedent
1968
03:00:36,043 --> 03:00:39,743
and we've got a good Bitcoin army of plebs that's going to push this thing through.
1969
03:00:40,583 --> 03:00:42,183
Yeah, I love that.
1970
03:00:42,783 --> 03:00:46,203
Bob Burnett and I are working on a stealth mode startup.
1971
03:00:46,643 --> 03:00:47,403
Oh, nice.
1972
03:00:47,583 --> 03:00:48,203
I love Bob.
1973
03:00:48,703 --> 03:00:50,043
Do solo mining at home.
1974
03:00:52,443 --> 03:00:55,623
Not through sharing a pool, but sort of solo style like a bid axe.
1975
03:00:56,643 --> 03:00:59,163
And, you know, I think you've mentioned it.
1976
03:00:59,163 --> 03:01:06,123
The advice you'd give is run a node, mine with your node, and understand the spam wars.
1977
03:01:06,943 --> 03:01:07,063
Yeah.
1978
03:01:07,923 --> 03:01:08,903
I think that's really important.
1979
03:01:08,903 --> 03:01:21,763
And take full control, take full control as a Bitcoin or like you have to understand Bitcoin in cold storage, not your keys, not your coins, run a Bitcoin node, use it to make transactions, use it to build blocks and mine with it.
1980
03:01:21,823 --> 03:01:26,783
And I'll put in a small plug here. It's a free plug. Bitcoin university dot com forward slash mining.
1981
03:01:27,523 --> 03:01:31,563
It's it's on my website, but it's no there's no you don't need to put your email in.
1982
03:01:31,623 --> 03:01:35,883
There's no paywall or anything. It's actually just a copy of the same tutorial that's on YouTube.
1983
03:01:35,883 --> 03:01:40,223
So you can find it on YouTube as well, how to mine Bitcoin from home.
1984
03:01:40,583 --> 03:01:45,343
But I put it on that URL so I can shell it on podcasts like this.
1985
03:01:45,723 --> 03:01:52,063
So if you want to learn how to mine Bitcoin from home and do it with rented hash, you don't need to buy machines in this case.
1986
03:01:52,703 --> 03:01:57,663
And you can mine. I'm mining at five petahash right now, four or five thousand bid acts equivalent.
1987
03:01:58,523 --> 03:02:02,243
And it doesn't cost that much. You make most of the money back.
1988
03:02:02,243 --> 03:02:12,383
So I would just encourage Bitcoiners, get your hands dirty, really learn how to use Bitcoin the way Satoshi intended, where you just you have a whole stack and you're completely independent on it.
1989
03:02:12,423 --> 03:02:14,123
But I'm sorry I interrupted you in the middle.
1990
03:02:14,123 --> 03:02:20,743
No worries. I mean, I love what you just said. Being a Bitcoin is not being on X. It's not telling your friends to buy the Bitcoin ETF. It's running a node.
1991
03:02:21,263 --> 03:02:27,443
Yeah. And when you start mining from home, even with rented hash power, you're doing the same thing the pools do.
1992
03:02:27,443 --> 03:02:29,583
You're picking the blocks and transactions.
1993
03:02:30,103 --> 03:02:34,863
You're renting hash power like anyone else could and deploying it the way you want to.
1994
03:02:35,063 --> 03:02:37,783
You get to vote for BIP 110 if you want to.
1995
03:02:37,863 --> 03:02:38,883
I'm not telling you what to do.
1996
03:02:39,263 --> 03:02:39,823
Well, that's the thing.
1997
03:02:39,883 --> 03:02:42,983
You get to decide and you don't have other miners deciding for you.
1998
03:02:43,223 --> 03:02:43,423
Yep.
1999
03:02:43,463 --> 03:02:48,563
And you get to spit out with your filters, transactions you don't want to process up front.
2000
03:02:48,843 --> 03:02:53,063
They might come into your node through the back door, but you don't have to propagate them to start.
2001
03:02:53,063 --> 03:03:03,163
And something very interesting that's sort of the icing on the cake here, which might be the real win, is let's say your example, you spend $200 in fiat or Bitcoin.
2002
03:03:03,903 --> 03:03:07,223
It could be denominated in fiat, but you send it in Bitcoin if you want.
2003
03:03:07,643 --> 03:03:07,763
Yeah.
2004
03:03:08,043 --> 03:03:14,703
And you spend $200, you get 4,000 to 5,000 equivalents of Bidex in Pentahash.
2005
03:03:15,363 --> 03:03:20,323
And then you receive, let's call it $190 in Bitcoin or fiat.
2006
03:03:20,703 --> 03:03:21,623
Well, it's Bitcoin in this case.
2007
03:03:21,623 --> 03:03:27,423
So you're losing $10 in fiat denominated terms, but you're getting KYC free sats back.
2008
03:03:27,643 --> 03:03:28,863
Yeah, that's the secret.
2009
03:03:29,023 --> 03:03:29,803
We don't talk about too much.
2010
03:03:29,803 --> 03:03:32,503
Clean sats and KYC free.
2011
03:03:33,063 --> 03:03:43,303
And I recommend to any Bitcoiner, if you have some sats, have some portion of your sats that are KYC free for different threat vectors and scenarios that you might come to see in the world.
2012
03:03:43,803 --> 03:03:47,943
Yeah, Bitcoin miners, you get paid when you mine in the way that I talk about in the tutorial.
2013
03:03:48,083 --> 03:03:49,163
You get virgin Bitcoin.
2014
03:03:49,383 --> 03:03:50,603
It's from the Coinbase.
2015
03:03:50,603 --> 03:03:55,003
and when you get it you'll discover you'll learn about bitcoin's rules because when i first got some
2016
03:03:55,003 --> 03:04:00,343
of it i wanted to send it back to brains to buy more hash power and for some reason my wallet would
2017
03:04:00,343 --> 03:04:05,083
not let me send it and i tried again and again and then i realized oh there is a hundred block delay
2018
03:04:05,083 --> 03:04:12,183
before i can spend it so it was really cool to to know like i'm a bitcoin miner now and um this
2019
03:04:12,183 --> 03:04:16,163
protocol i've read about this in books but it is very real and i have to wait a hundred blocks
2020
03:04:16,163 --> 03:04:17,383
before I can spend my reward.
2021
03:04:17,783 --> 03:04:20,123
So just running a node and mining with it,
2022
03:04:20,143 --> 03:04:21,443
you'll learn so much about Bitcoin,
2023
03:04:21,603 --> 03:04:24,083
like crazy stuff that you've read about in textbooks.
2024
03:04:24,403 --> 03:04:26,503
But when you experience it yourself, it's so exciting.
2025
03:04:27,063 --> 03:04:28,903
It's funny in a way, like that could be the one,
2026
03:04:29,003 --> 03:04:31,183
I could see a minority group
2027
03:04:31,183 --> 03:04:33,243
wanting to change the 100 block rule.
2028
03:04:33,903 --> 03:04:35,603
Who is in the Bitcoin network to tell me
2029
03:04:35,603 --> 03:04:38,803
I can't move my coins, my stats before I want to?
2030
03:04:38,803 --> 03:04:40,983
I was mad at first and then I realized it's there for a reason.
2031
03:04:41,483 --> 03:04:43,403
Yeah, well, it's Satoshi's idea
2032
03:04:43,403 --> 03:04:44,763
and it may or may not be a good one.
2033
03:04:44,823 --> 03:04:45,663
That's for you to decide.
2034
03:04:46,163 --> 03:04:50,803
um i've enjoyed this conversation tremendously it's been really dope i have two questions for you
2035
03:04:51,763 --> 03:04:55,683
um one is there any question that no one asked you that you wish someone would
2036
03:04:58,323 --> 03:05:02,323
there probably is but i can't think of it right now i got a little bit of the brain
2037
03:05:02,323 --> 03:05:05,203
wrap myself at this point it's like a little bit of like a wet that's a great i appreciate you
2038
03:05:05,203 --> 03:05:10,003
asking asking the question though it's um the other one i'll just bring it up the name i mean
2039
03:05:10,003 --> 03:05:13,763
you've you've come across a lot of interesting people in your life i don't think saying someone's
2040
03:05:13,763 --> 03:05:17,543
like Forrest Gump is a compliment, but Forrest Gump did meet a lot of people in his life. So
2041
03:05:17,543 --> 03:05:21,583
kind of like the Forrest Gump of Bitcoin a little bit. You were college roommates,
2042
03:05:21,683 --> 03:05:27,583
I guess, with Kevin Warsh. Yeah. It's another one like, for me, Peter Thiel,
2043
03:05:27,663 --> 03:05:30,483
from what I've heard you speak about him, I mean, he came from sort of a wealthy background.
2044
03:05:31,403 --> 03:05:35,883
No, he didn't come from a wealthy background. Oh, I thought he did come from like a Beverly Hills
2045
03:05:35,883 --> 03:05:41,243
type. Oh, Kevin Warsh did. Kevin Warsh. Yeah. Yeah. Sorry. I thought you were saying Peter
2046
03:05:41,243 --> 03:05:45,863
teal did no no but kevin came from a little bit of a wealthy background but yeah seems like a smart
2047
03:05:45,863 --> 03:05:52,743
guy i could see why that job is extremely exciting or sec you know you can you get the money on the
2048
03:05:52,743 --> 03:05:58,263
pulse of the the cost of money in the world it's almost like being joseph in in the stories about
2049
03:05:58,263 --> 03:06:04,983
the pharaoh and egypt and explaining how bread works and we feast when you know sort of helping
2050
03:06:04,983 --> 03:06:10,223
out the pharaoh and being the whisperer you know the money whisperer yeah and greenspan for a long
2051
03:06:10,223 --> 03:06:14,603
time was the most respected person in the world and you know he thought that this person was like
2052
03:06:14,603 --> 03:06:20,083
yeah fiat could be evil it could be bad but this person's the benefit you know he's here to help
2053
03:06:20,083 --> 03:06:24,523
he's like the wizard of oz you know he's behind the curtain he's but i can't help but be
2054
03:06:24,523 --> 03:06:30,403
conspiratorial about finding out who he's married to and sort of you know how how we think power
2055
03:06:30,403 --> 03:06:34,843
structures might work so i don't know if you have any just thoughts there it didn't seem like you
2056
03:06:34,843 --> 03:06:41,503
know him knew him very well i mean like my for kevin warsh yeah my god i was very smart but i
2057
03:06:41,503 --> 03:06:47,383
could probably get them in a lot of trouble yeah he was just a good a good guy he was um stanford
2058
03:06:47,383 --> 03:06:50,703
had suffered from the loan would create an earthquake so there was a housing shortage
2059
03:06:50,703 --> 03:06:56,703
so it was basically there was a lottery for housing and my my friend group got split up as
2060
03:06:56,703 --> 03:07:14,755
a result of that lottery so i was basically rooming with i can remember his four or five other guys But Kevin Warsh and basically his friend group were part of it So I didn hang out with him that much I was mostly out and about But Kevin was a very smart guy great guy
2061
03:07:15,695 --> 03:07:21,375
And it's really, it's just, it's totally surreal to meet someone like that. And then you,
2062
03:07:21,375 --> 03:07:27,155
I was aware, I was sort of following his path. And I remember joking with Peter Thiel, actually,
2063
03:07:27,155 --> 03:07:33,235
in 2004. So we were joking because we both knew Kevin, like, what if he becomes a, or whenever,
2064
03:07:33,395 --> 03:07:38,595
I guess he was nominated by Bush in maybe it was 2005 or so. But around then it's like, wow,
2065
03:07:38,615 --> 03:07:42,535
he could actually become chairman someday. Wouldn't that be crazy? I'm sure Peter's still
2066
03:07:42,535 --> 03:07:48,675
in contact with him. So he's reconnected. Yeah. Or reconnected. But I only have good things to say
2067
03:07:48,675 --> 03:07:54,075
about Kevin. Sad thing is he became a central banker, you know, what a waste, what a waste of
2068
03:07:54,075 --> 03:07:57,055
talent, but he was always nice to me. And, um,
2069
03:07:57,655 --> 03:07:59,375
I mean, if you're going to stay in Fiat land, I mean,
2070
03:07:59,375 --> 03:08:01,595
that's probably the ultimate job. And yeah, it is.
2071
03:08:02,675 --> 03:08:05,915
A lot of people don't envy it, but some people, you know, really
2072
03:08:05,915 --> 03:08:10,415
can handle being maybe, or desire being the positions, other people,
2073
03:08:10,635 --> 03:08:13,095
the majority says we can't handle that. I would never want that job.
2074
03:08:13,355 --> 03:08:15,295
I remember there was a, you know, when Clinton was,
2075
03:08:15,295 --> 03:08:18,095
Bill Clinton was leaving office, what are you going to do? He said, well,
2076
03:08:18,115 --> 03:08:19,415
maybe, uh,
2077
03:08:19,415 --> 03:08:22,735
I'll try to run for mayor of New York city and try to get the hardest job in
2078
03:08:22,735 --> 03:08:27,355
the country. Yeah. You know, almost like sort of being humble about the presidency and stuff.
2079
03:08:27,575 --> 03:08:32,595
But well, that's the funny thing about being a central banker, though. We say it's in many ways,
2080
03:08:32,595 --> 03:08:37,475
it is a more powerful job than, you know, even being the president. But yeah, but there's a
2081
03:08:37,475 --> 03:08:42,095
there's a reverse way of looking at that where he basically his hands are completely tied by the
2082
03:08:42,095 --> 03:08:50,375
markets. So he has he paradoxically has a lot of power and prestige. But but basically, he when
2083
03:08:50,375 --> 03:08:55,875
the treasury market starts just going into dysfunction, he has to print. And so it's almost
2084
03:08:55,875 --> 03:09:00,015
like he has, he's just part of, he's floating down the river with the rest of us. He doesn't have that
2085
03:09:00,015 --> 03:09:05,015
much power. He'll just try to keep rates as high as possible. And then if something breaks, he has
2086
03:09:05,015 --> 03:09:10,115
to immediately lower them and start printing money. So maybe the job's not that, I find that
2087
03:09:10,115 --> 03:09:15,375
not actually that interesting, but if you like hobnobbing with powerful politicians and
2088
03:09:15,375 --> 03:09:22,575
flying around on private jets, which I think he could do already. But if I had that,
2089
03:09:22,575 --> 03:09:27,715
he should be focused on Bitcoin, probably. That's what makes it interesting. Obviously,
2090
03:09:27,915 --> 03:09:32,595
it's like survivor bias and sort of like with spam. We know who said yes. We don't know who said no.
2091
03:09:33,075 --> 03:09:38,855
Yeah. That's true. It's very interesting. A lot of people presume they would say no,
2092
03:09:40,255 --> 03:09:44,095
but you're not. Yeah, that's a good point. That's a very good point.
2093
03:09:44,095 --> 03:09:45,875
And then it's sort of like, well, what, you know,
2094
03:09:45,875 --> 03:09:47,995
sort of the Peter Thiel thing, it's like, well, if I say no,
2095
03:09:48,075 --> 03:09:51,795
what else could I do that would be that complex?
2096
03:09:52,035 --> 03:09:54,375
And even if, as with most things,
2097
03:09:54,395 --> 03:09:55,755
even being CEO of a company, it's like,
2098
03:09:55,815 --> 03:09:57,315
well, you think you have all this freedom?
2099
03:09:57,415 --> 03:09:58,575
No, you have to go out there and sell.
2100
03:09:59,155 --> 03:10:00,575
You have to tell the company line.
2101
03:10:00,735 --> 03:10:03,075
You have to say that you believe these things,
2102
03:10:03,115 --> 03:10:04,455
even if you don't.
2103
03:10:04,455 --> 03:10:04,935
Very true.
2104
03:10:05,335 --> 03:10:06,435
You know, they all have sort of limiting.
2105
03:10:06,495 --> 03:10:07,995
Yeah, it's kind of a paradox of power
2106
03:10:07,995 --> 03:10:11,535
that the higher you rise, maybe the less power you have
2107
03:10:11,535 --> 03:10:13,795
or certainly the less self-sovereignty.
2108
03:10:14,095 --> 03:10:17,815
Yeah. Yeah. I mean, the dream for most seems to not, I shouldn't say for the most, but
2109
03:10:17,815 --> 03:10:20,475
some is like walk away from it all when you have enough.
2110
03:10:20,955 --> 03:10:24,635
Yeah. You know, and very hard to do. Most people don't do it. They want that.
2111
03:10:26,135 --> 03:10:30,055
I'll leave it to you for any parting words, let people know where they can find you and your work.
2112
03:10:30,855 --> 03:10:35,635
Yeah. Thank you, Cedric. This has been, you're such a good interviewer and it's so fun to be on
2113
03:10:35,635 --> 03:10:39,875
your, it's always surreal to have watched a pod and then to be on it. So I thank you for the
2114
03:10:39,875 --> 03:10:45,235
opportunity. You can find me on YouTube. I have a channel called Matthew Cratter's Bitcoin
2115
03:10:45,235 --> 03:10:52,475
University. You can just type Bitcoin University into YouTube. I'm at Matt Cratter, M-A-T-T-K-R-A-T-T-E-R
2116
03:10:52,475 --> 03:10:58,795
on X. And then be sure to check out that BitcoinUniversity.com forward slash mining link.
2117
03:10:59,275 --> 03:11:03,315
I'd like to get just as many Bitcoiners, even Bitcoiners who don't support the soft fork,
2118
03:11:03,315 --> 03:11:09,815
just get as many Bitcoiners getting their hands dirty, running nodes and mining with them.
2119
03:11:09,875 --> 03:11:13,055
I think this is really what Bitcoin needs at this point.
2120
03:11:13,135 --> 03:11:15,615
So I want to onboard as many newcomers to that as possible.
2121
03:11:16,055 --> 03:11:19,035
And you can mine, you can spend just a couple bucks a day mining too,
2122
03:11:19,395 --> 03:11:23,755
or just experiment with it, you know, throw $10 towards it, see what happens.
2123
03:11:24,135 --> 03:11:26,115
And I think if you do that, you'll actually get hooked.
2124
03:11:26,115 --> 03:11:27,335
It's very cool.
2125
03:11:27,535 --> 03:11:30,455
So first thing I check in the morning, I don't check Bitcoin's price at all.
2126
03:11:30,535 --> 03:11:33,255
I haven't really done that in years, but I do check.
2127
03:11:33,395 --> 03:11:36,915
I check my Bitcoin mining address that's receiving the rewards.
2128
03:11:36,915 --> 03:11:41,175
And I go on ocean and look when the last block was mined and look inside the block.
2129
03:11:41,375 --> 03:11:46,475
And so it's its own world that I think more Bitcoiners deserve to experience.
2130
03:11:46,795 --> 03:11:48,575
So that'd be my parting words.
2131
03:11:49,215 --> 03:11:51,495
Yeah, I got a little bit axe behind me or nerd miner.
2132
03:11:51,635 --> 03:11:52,695
That's my nerd miner.
2133
03:11:52,835 --> 03:11:53,355
Oh, nice.
2134
03:11:53,595 --> 03:11:53,995
Nice.
2135
03:11:54,495 --> 03:11:55,255
I like that one.
2136
03:11:55,335 --> 03:11:57,335
I do a small amount of binding through.
2137
03:11:57,615 --> 03:11:58,255
You can do both.
2138
03:11:58,655 --> 03:12:02,315
I love the bit axe and I love these home projects.
2139
03:12:02,495 --> 03:12:04,215
So I have a couple of bit axes as well.
2140
03:12:04,215 --> 03:12:07,015
But do the bid X and then also do rented hash.
2141
03:12:07,175 --> 03:12:08,695
Like it's, they're not mutually exclusive.
2142
03:12:09,435 --> 03:12:15,215
Just doing a small mining project helped me sort of think about Bitcoining from a mining perspective, which is very different.
2143
03:12:15,435 --> 03:12:16,035
Very different.
2144
03:12:16,175 --> 03:12:16,355
Yeah.
2145
03:12:16,875 --> 03:12:18,055
And a user and a spender.
2146
03:12:18,955 --> 03:12:25,575
And, and it made me realize how brutal that, that, that industry is to make profit.
2147
03:12:25,575 --> 03:12:26,115
It's really hard.
2148
03:12:26,175 --> 03:12:26,355
Yeah.
2149
03:12:27,455 --> 03:12:27,895
And.
2150
03:12:28,855 --> 03:12:31,015
People like Bob Burnett, they're, they're doing it the right way.
2151
03:12:31,015 --> 03:12:34,535
these kind of wild horse miners in the middle of nowhere.
2152
03:12:35,815 --> 03:12:37,455
Just off grid even.
2153
03:12:37,895 --> 03:12:38,355
I hear about it.
2154
03:12:38,735 --> 03:12:38,855
Yeah.
2155
03:12:38,895 --> 03:12:41,715
I got to go to one of Bob's off grid sites with dam mining,
2156
03:12:42,095 --> 03:12:43,395
mining from a dam.
2157
03:12:44,055 --> 03:12:44,395
Oh, really?
2158
03:12:44,955 --> 03:12:45,355
Yeah.
2159
03:12:45,635 --> 03:12:47,155
I'll tell you a little bit about that offline,
2160
03:12:47,235 --> 03:12:50,335
but the solo mining is fun because it's a little more lottery style and
2161
03:12:50,335 --> 03:12:52,115
it's not so steady Eddie.
2162
03:12:53,495 --> 03:12:53,615
Yeah.
2163
03:12:53,655 --> 03:12:55,015
Bidex, you can, you can earn.
2164
03:12:55,395 --> 03:12:56,975
I mean, if you find a block solo mining,
2165
03:12:57,135 --> 03:12:59,175
we should tell people 3.125 Bitcoin.
2166
03:12:59,175 --> 03:13:04,855
So I don't know where Bitcoin is right now, but call it $200,000.
2167
03:13:05,375 --> 03:13:05,735
Very exciting.
2168
03:13:05,755 --> 03:13:06,795
$100 BitAx.
2169
03:13:07,035 --> 03:13:11,235
And that's why we call it lottery, lottery mining, obviously, because it's probably not going to happen.
2170
03:13:11,275 --> 03:13:13,555
But it has happened to some Bitcoin solo miners.
2171
03:13:14,075 --> 03:13:14,215
Yeah.
2172
03:13:16,215 --> 03:13:16,575
All right.
2173
03:13:16,615 --> 03:13:17,075
Hang on tight.
2174
03:13:17,135 --> 03:13:18,275
We'll chat a little bit after the show.
2175
03:13:18,395 --> 03:13:18,795
Sounds good.
2176
03:13:19,055 --> 03:13:19,435
Thank you.
2177
03:13:19,795 --> 03:13:20,735
Hey, hey.
2178
03:13:21,115 --> 03:13:23,055
And that's a wrap on this one.
2179
03:13:23,575 --> 03:13:28,315
If this conversation added value, share it with one person who needs to hear it.
2180
03:13:28,315 --> 03:13:32,595
That is how the Bitcoin matrix, where critical thinkers meet, grows.
2181
03:13:33,315 --> 03:13:38,575
Huge thanks to our sponsors, Stamp Seed, Firefish, Club Orange, and Camp Nakamoto.
2182
03:13:39,075 --> 03:13:42,255
These are companies and products I personally use and believe in.
2183
03:13:42,755 --> 03:13:45,735
Please support them so they can keep supporting the show.
2184
03:13:46,355 --> 03:13:48,875
Links and codes for all of them are in the show notes.
2185
03:13:49,475 --> 03:13:50,615
Not on Fountain yet?
2186
03:13:51,035 --> 03:13:56,555
$5 a month gets you every episode a full day early, completely ad-free.
2187
03:13:56,555 --> 03:13:59,815
or $1 per episode after early access.
2188
03:14:00,455 --> 03:14:01,535
Follow me on X.
2189
03:14:01,735 --> 03:14:02,935
I'm at Sed Youngelman.
2190
03:14:03,335 --> 03:14:05,775
The show is at underscore Bitcoin Matrix.
2191
03:14:06,315 --> 03:14:08,955
We're in the conversation every single day.
2192
03:14:09,575 --> 03:14:10,695
The Matrix is real.
2193
03:14:11,155 --> 03:14:12,035
Keep on stacking.
2194
03:14:12,435 --> 03:14:13,535
Keep your head on a swivel.
2195
03:14:13,955 --> 03:14:14,995
Spend your time well.
2196
03:14:15,255 --> 03:14:16,795
And thank you for listening.