Bitcoin Is Under Attack | Matthew Kratter, Bitcoin University의 전체 녹취록

00:02:26,120 --> 00:02:27,520 So I was an undergrad at Stanford. 32 00:02:28,260 --> 00:02:29,920 I actually grew up in the Pacific Northwest. 33 00:02:30,220 --> 00:02:32,380 I was born in Colorado, grew up in the Pacific Northwest. 34 00:02:32,380 --> 00:02:40,480 I then came to California for college and attended Stanford where I met my wife. 35 00:02:40,480 --> 00:02:48,940 and I majored in, I actually started off as a physics major. I was growing up, I was in high 36 00:02:48,940 --> 00:02:54,060 school, I was good at science and math as well. And I did all the APs. I did AP physics and AP 37 00:02:54,060 --> 00:02:59,540 calculus and stuff. And I was a big fan of people like Albert Einstein. I just thought it was really 38 00:02:59,540 --> 00:03:05,320 cool what he did at Princeton at the end of his life. And the kind of physics he did were just 39 00:03:05,320 --> 00:03:12,100 pencil and paper. But I discovered at Stanford that I was not Einstein and studying physics was, 40 00:03:12,700 --> 00:03:17,500 so I did a year of physics my first year. I did the physics track actually with a guy named 41 00:03:17,500 --> 00:03:24,500 Steven Chu who became Professor Chu, who became Obama's energy secretary many, many years later. 42 00:03:24,980 --> 00:03:30,580 He was a great teacher. It's kind of sad he went into politics, but I was kind of a B student in 43 00:03:30,580 --> 00:03:35,360 physics. Um, and there was, there was a lot of labs and stuff. And I thought I've, you know, 44 00:03:35,360 --> 00:03:39,400 I wanted to do like work on like quantum and unified field theory and stuff that I was 45 00:03:39,400 --> 00:03:44,820 not mathematically prepared or intellectually prepared for. And then I was taking, I was taking 46 00:03:44,820 --> 00:03:49,240 humanities classes on the side and just having a lot more fun with those. And it was a lot more, 47 00:03:49,620 --> 00:03:54,060 it was, it was a little more slower paced and you could sit around and drink pints and, 48 00:03:54,060 --> 00:03:59,960 or drink coffee and, uh, have long philosophical discussions. And so I ended up, 49 00:03:59,960 --> 00:04:03,980 Um, just, just very, very idealistic, uh, in that way. 50 00:04:03,980 --> 00:04:05,460 And I assumed I was going to become a professor. 51 00:04:05,460 --> 00:04:11,860 I went to, uh, after graduating from Stanford, I, I attended UC Berkeley, where I, uh, ended 52 00:04:11,860 --> 00:04:17,400 up getting a PhD in English literature focused on, on the 20th century, uh, what we call 53 00:04:17,400 --> 00:04:22,760 literary modernism, kind of all the big guys like Ezra Pound and, and, uh, William Faulkner 54 00:04:22,760 --> 00:04:23,580 and James Joyce. 55 00:04:23,580 --> 00:04:27,640 And I, I always loved really difficult literature, like Finnegan's Wake. 56 00:04:27,640 --> 00:04:32,180 I was part of the Joyceans and also the Poundians. 57 00:04:33,040 --> 00:04:35,400 I hung out in Italy with some of the Pound people. 58 00:04:36,380 --> 00:04:40,100 And some of the Joyce people too, there's actually a funny story. 59 00:04:40,220 --> 00:04:45,360 I was in Rome once in the summer in Rome, which you know is obviously very, very hot. 60 00:04:45,980 --> 00:04:48,840 And I was hanging out with, it was a James Joyce conference. 61 00:04:49,560 --> 00:04:51,1000 And obviously a lot of Irish people there. 62 00:04:52,840 --> 00:04:54,620 And I love the Irish. 63 00:04:54,800 --> 00:04:56,380 I've hung out with them obviously a lot. 64 00:04:56,380 --> 00:05:00,120 But so we found ourselves in an Irish pub. 65 00:05:00,240 --> 00:05:02,540 It was about 110 degrees outside Fahrenheit. 66 00:05:03,200 --> 00:05:07,600 And here we were in this pub that had the air conditioning blasting and it had a roaring 67 00:05:07,600 --> 00:05:10,480 fire and all the windows closed with curtains. 68 00:05:10,480 --> 00:05:13,260 So we could be miserable as if we were in an Irish winter. 69 00:05:15,200 --> 00:05:21,460 But that's so I did a lot of it's very strange because I've sort of come full circle, which 70 00:05:21,460 --> 00:05:26,140 is which the Bitcoiner crowd is a lot like the crowds I used to hang out with. 71 00:05:26,140 --> 00:05:31,760 very interdisciplinary, very interesting people, weird, quirky people from all different backgrounds 72 00:05:31,760 --> 00:05:40,920 with fun things to say. I got interested. Berkeley was obviously, they just weren't, 73 00:05:41,280 --> 00:05:45,560 academics weren't really working on stuff that I was that interested in. I was much more 74 00:05:45,560 --> 00:05:55,980 sort of traditionalist and interested in a synthesis of different disciplines. So what is 75 00:05:55,980 --> 00:06:01,800 is there a way we can come up with a unified field theory for the humanities or what the 76 00:06:01,800 --> 00:06:05,940 French called it, the human sciences. So psychology and anthropology and sociology. 77 00:06:06,280 --> 00:06:12,340 And this was something that was very popular in the, in the late 19th century when, when Western 78 00:06:12,340 --> 00:06:18,380 civilization still believed in itself and was interested in trying to come up with the laws 79 00:06:18,380 --> 00:06:23,780 of human culture and sort of systematize, systematize everything. And then slowly the, 80 00:06:23,780 --> 00:06:33,360 the humanities were captured by post-structuralism and Marxism and post-colonialism and wokeism, 81 00:06:33,620 --> 00:06:40,300 et cetera. And I really saw the beginnings of that at UC Berkeley. As part of this, I was working with 82 00:06:40,300 --> 00:06:45,560 a professor, Professor René Girard, which I think you mentioned him in the intro, who's a very, 83 00:06:46,080 --> 00:06:50,180 was a brilliant cultural critic, French cultural critic, who was involved in the same things, 84 00:06:50,180 --> 00:06:55,420 sort of a synthesis of the humanities. And he eventually, near the end of his life, was inducted 85 00:06:55,420 --> 00:07:00,960 in

the Académie Française. So very, very impressive guy, polymath, brilliant mind. 86 00:07:01,580 --> 00:07:07,080 And so he was on my, he became a family friend, he came to my wedding. And he also, I was highly 87 00:07:07,080 --> 00:07:11,780 involved with the Girardians, as we called ourselves, and attended a seminar, weekly seminar 88 00:07:11,780 --> 00:07:16,720 at Stanford. Girard sat on my dissertation committee, read my dissertation, and I attended 89 00:07:16,720 --> 00:07:22,680 these weekly seminars at Stanford. I would drive over from UC Berkeley once a week. And as part of 90 00:07:22,680 --> 00:07:27,720 that, I actually met Peter Thiel at those groups. He was very interested in Rene Girard as well. 91 00:07:28,340 --> 00:07:33,500 And we'd always go out for drinks afterwards. And that's how I got to know Peter. And I began to, 92 00:07:34,380 --> 00:07:38,440 I've told the story on other podcasts, but basically I had a Stanford reunion where I 93 00:07:38,440 --> 00:07:44,660 realized all my friends were trading stocks and making money and stuff. And I was thinking about 94 00:07:44,660 --> 00:07:48,380 getting married at the time. And I'm like, wow, I actually, I'm going to need money because these 95 00:07:48,380 --> 00:07:53,840 houses, these really expensive houses in Palo Alto that are $200,000, like who could afford 96 00:07:53,840 --> 00:07:59,960 that in Palo Alto? Of course, those are like five or $6 million now. So I, and I was just, 97 00:08:00,180 --> 00:08:05,100 once I started studying the markets and just reading everything I could and going into some 98 00:08:05,100 --> 00:08:09,860 of the early internet chat rooms and forums, trading forums, I got really obsessed with it. 99 00:08:09,920 --> 00:08:13,220 And so that was something else that Peter Thiel and I talked about in the late nineties, kind of 100 00:08:13,220 --> 00:08:16,660 at the end of the Girard seminar. 101 00:08:16,900 --> 00:08:18,420 And both Peter and I also gave 102 00:08:18,420 --> 00:08:23,580 sort of financial market paper. 103 00:08:23,760 --> 00:08:25,920 So the seminar, you'd always have someone 104 00:08:25,920 --> 00:08:27,700 present a paper every week 105 00:08:27,700 --> 00:08:28,880 and then people would talk about it 106 00:08:28,880 --> 00:08:30,160 and that'd be the basis for discussion. 107 00:08:30,420 --> 00:08:32,400 So Peter did some macro stuff. 108 00:08:32,400 --> 00:08:34,760 I did some, obviously markets, 109 00:08:34,880 --> 00:08:36,060 financial markets function. 110 00:08:36,620 --> 00:08:38,160 There's a crowd element to it. 111 00:08:38,200 --> 00:08:39,680 And this is something that Rene Girard 112 00:08:39,680 --> 00:08:40,720 was very interested in. 113 00:08:40,940 --> 00:08:42,600 And this is something that goes through 114 00:08:42,600 --> 00:08:48,820 through the French cultural theorists. I think it was Le Bon wrote a book called The Crowd. 115 00:08:49,900 --> 00:08:55,220 There's a Gustave Le Bon, maybe. There's this whole theory. And so I was applying Girardian 116 00:08:55,220 --> 00:09:00,720 theory to the stock market and talking about my experiences there. Long story short, graduated, 117 00:09:00,720 --> 00:09:06,440 got my PhD. Actually, I should rewind. I actually started trading in graduate school because I 118 00:09:06,440 --> 00:09:10,780 became, I realized that you could, this was the beginning of the online brokerage, 119 00:09:10,780 --> 00:09:17,460 retail brokerage revolution. There's a company called Daytech that basically you could use the 120 00:09:17,460 --> 00:09:23,860 internet to log on and trade stocks. This was just, my dad was interested in stocks, but he had 121 00:09:23,860 --> 00:09:29,760 like a special machine at his office and he also would call the broker up. But the discount 122 00:09:29,760 --> 00:09:35,500 brokerages, here's a way I could pay $10 a trade and start to test out my theories. 123 00:09:36,300 --> 00:09:40,320 And so I got very into systems trading, sort of systematic rules-based trading. 124 00:09:40,780 --> 00:09:52,540 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. 125 00:09:53,100 --> 00:09:57,480 And really, like, you'd write stuff and only four or five people would end up reading it. 126 00:09:57,560 --> 00:10:00,780 And it was just kind of this echo chamber, this academic echo chamber. 127 00:10:00,900 --> 00:10:05,800 Then all the postmodernism stuff I was not interested in. 128 00:10:05,920 --> 00:10:08,580 I was interested in the pursuit of truth, et cetera. 129 00:10:08,580 --> 00:10:24,740 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. 130 00:10:24,740 --> 00:10:38,600 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. 131 00:10:39,260 --> 00:10:43,240 And so I sort of transitioned into just thinking about markets. 132 00:10:43,540 --> 00:10:49,000 And I finished up my dissertation as fast as I could and just started full-time trading. 133 00:10:49,240 --> 00:10:50,600 I had some scholarship money. 134 00:10:50,600 --> 00:10:56,040 I got a Mellon grant. Don't tell the Mellon people this, but gave me $15,000. And I put that in my 135 00:10:56,040 --> 00:11:00,240 brokerage account and started trading with it. So this whole time I'm trading, Peter's running 136 00:11:00,240 --> 00:11:05,620 Teal Macro, which was his early hedge fund. At a certain point, he took all the money out of Teal 137 00:11:05,620 --> 00:11:10,700 Macro or took a lot of it out. And it was a very small hedge fund. And he put

it in a company called 138 00:11:10,700 --> 00:11:19,660 infinity that later became became paypal and um then that company i believe that company merged 139 00:11:19,660 --> 00:11:25,660 with x.com which was elon musk's company that was the original the original x.com and so it's really 140 00:11:25,660 --> 00:11:31,180 an amazing time um hanging out i'd go to the paypal uh startup headquarters and i go to some 141 00:11:31,180 --> 00:11:36,620 other parties and i was i never worked for paypal or invested in it um i didn't have enough money i 142 00:11:36,620 --> 00:11:38,140 I tried to get my dad to invest in it. 143 00:11:38,780 --> 00:11:44,300 And he regrets to this day that there were $50,000 investments. 144 00:11:44,540 --> 00:11:48,040 They became $5 or $6 million at the time of the IPO. 145 00:11:48,680 --> 00:11:50,240 But I really learned a lot from Peter. 146 00:11:50,240 --> 00:11:51,680 We were trading notes. 147 00:11:52,460 --> 00:11:55,460 And he ended up selling PayPal in 2002. 148 00:11:55,760 --> 00:12:01,520 He sold it to eBay and decided to reboot his hedge fund, which was rebranded to Clarion Capital. 149 00:12:01,520 --> 00:12:07,340 and he hired all his friends, which was really cool for me because I was an unemployed English PhD. 150 00:12:08,300 --> 00:12:12,720 And we'd already, basically, I just, nothing really changed. I just hung out with him a lot 151 00:12:12,720 --> 00:12:19,380 more. This time the offices were in San Francisco and we just continued the dialogue. We had various 152 00:12:19,380 --> 00:12:24,220 silos at the hedge fund at first. So there was like the systems trading silo and there's some 153 00:12:24,220 --> 00:12:29,400 other, basically every, it was almost like a family office. Peter like was started a restaurant 154 00:12:29,400 --> 00:12:34,1000 that he was running out of there and he had a guy who was working on a um nascar magazine he was just 155 00:12:34,1000 --> 00:12:40,920 trying all these different business ideas and uh and then the core of it was a global macro strategy 156 00:12:40,920 --> 00:12:47,720 that was based on the idea was sort of to recreate george soros the because at this point people had 157 00:12:47,720 --> 00:12:53,880 become much more interested in in sort of long short portfolios and nothing very bold and 158 00:12:53,880 --> 00:12:59,160 directional and leveraged and peter liked the idea of you know figuring out where the world is going 159 00:12:59,400 --> 00:13:04,320 making concentrated leverage bets and having very high returns. 160 00:13:04,320 --> 00:13:06,660 So we had a very, we had an interesting fee structure. 161 00:13:06,800 --> 00:13:10,380 I believe if I'm remembering correctly, it was zero and 25. 162 00:13:10,760 --> 00:13:12,660 Most, most hedge funds at the time were two, 163 00:13:12,980 --> 00:13:16,480 2% management fee and 20% of the profits, 20% incentive. 164 00:13:16,740 --> 00:13:21,540 This one was set up that such that we did not make any money unless we had 165 00:13:21,540 --> 00:13:23,960 good returns. So it was a 0% management fee. 166 00:13:24,520 --> 00:13:26,840 Peter was paying all the management costs, you know, 167 00:13:26,860 --> 00:13:28,680 office and salaries out of his own pocket. 168 00:13:28,680 --> 00:13:36,140 And then we were taking 25% of our gains at the end of the year. 169 00:13:36,140 --> 00:13:41,440 And so when I joined, it was basically just Peter's money, $50 million in his Roth IRA, famously. 170 00:13:42,240 --> 00:13:55,975 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 171 00:13:56,075 --> 00:14:00,475 Two of them worked for me, you know, in the office hierarchy, whatever that means. 172 00:14:01,155 --> 00:14:05,075 And I got to just meet very interesting people. 173 00:14:05,235 --> 00:14:11,455 I never met Elon, but, you know, Max Levchin, I worked very closely with his, I sat across 174 00:14:11,455 --> 00:14:16,975 from his girlfriend at the time who became his wife. And so I got to know a lot of the sort of 175 00:14:16,975 --> 00:14:23,495 PayPal mafia people, even though I never worked for PayPal and was a part of that. And I got to 176 00:14:23,495 --> 00:14:30,035 watch Peter work through the ideas of one day he started talking about network effects and how 177 00:14:30,035 --> 00:14:34,975 important they were in terms of social networks. And he had this idea that social networks would 178 00:14:34,975 --> 00:14:42,035 be the next stage of the internet, that they'd be very, you know, we had email, we had web browsers 179 00:14:42,035 --> 00:14:48,675 and stuff, but he thought maybe people would want to socialize online and utilize a social graph. 180 00:14:49,375 --> 00:14:56,095 And so then he began to invest in companies, obviously, like Facebook. And I think he invested 181 00:14:56,095 --> 00:15:00,395 in, he basically invested in all of them at the time. Was it MySpace? And there were a couple 182 00:15:00,395 --> 00:15:06,395 others. And, and I really, I had, I did not understand what he was talking about at the time 183 00:15:06,395 --> 00:15:11,755 in terms of social, like it's all very clear in retrospect. It's very transparent. And I remember 184 00:15:11,755 --> 00:15:16,395 this was also interesting. This was a very bearish time in Silicon Valley because we just had the 185 00:15:16,395 --> 00:15:22,775 dot-com crash. And the general sentiment was the internet was dead, that this was a bubble that had 186 00:15:22,775 --> 00:15:27,895 popped and it was never coming back. And I remember talking to Peter about it in 2002 saying, you know, 187 00:15:27,895 --> 00:15:32,135 really sad that the this is all done and peter's like what are you talking about he's like this is 188 00:15:32,135 --> 00:15:37,575 the greatest time of opportunity in history like the internet's not dead it's this is just we

went 189 00:15:37,575 --> 00:15:42,375 back a few steps but there's going to be just billions of dollars made and you know no one was 190 00:15:42,375 --> 00:15:46,935 talking that way in silicon valley at the time there's just peter so he has this um this visionary 191 00:15:46,935 --> 00:15:54,055 quality to him so that's basically how i transitioned from academia to to working at a 192 00:15:54,055 --> 00:16:00,295 hedge fund and it was a very interesting hedge fund experience as well because um we would um 193 00:16:01,495 --> 00:16:06,695 he would organize he would organize meetings with gerard we'd have just very interesting people come 194 00:16:06,695 --> 00:16:12,295 in um he'd he'd invite milton friedman to come over to his house and we'd all go there and hang 195 00:16:12,295 --> 00:16:19,815 out with milton friedman um and various various i'm trying to think who else he had and peter just 196 00:16:19,815 --> 00:16:26,955 was was seeding all these people to do documentaries and books and research on longevity and even 197 00:16:26,955 --> 00:16:34,835 transhumanism at that that early stage and so it's a very dynamic intellectual time and um we were 198 00:16:34,835 --> 00:16:42,995 very we're a very quirky group like the uh the uh the the um the capital allocators didn't really 199 00:16:42,995 --> 00:16:47,755 know what to do with us because we were we were so different and we were sort of i won't i won't 200 00:16:47,755 --> 00:16:51,975 say fly by night, but we weren't, we weren't, we were like Bitcoiners. We weren't wearing suits or 201 00:16:51,975 --> 00:16:59,155 anything. And Peter had a policy, basically. He said, I'm not going to hire any MBAs. Don't like 202 00:16:59,155 --> 00:17:03,615 MBAs. They're just, they're just too much groupthink and they're too much people pleasers. 203 00:17:04,115 --> 00:17:10,475 And also it's interesting in light of, he eventually came up with a scholarship, you know, 204 00:17:10,475 --> 00:17:15,515 to pay people not to go to college. But I remember we were, as we were growing, I was helping him 205 00:17:15,515 --> 00:17:20,555 hire people. And so we'd have stacks of resumes this big. And I asked him, you know, like, what 206 00:17:20,555 --> 00:17:26,195 are we looking for? And he basically said, we'll go through them and throw out all the resumes 207 00:17:26,195 --> 00:17:32,335 that are not from people who didn't go to Stanford, Yale, Harvard, Princeton, whatever 208 00:17:32,335 --> 00:17:36,735 the short list was like that. Just throw the rest in the garbage because we're just going to hire 209 00:17:36,735 --> 00:17:40,615 people from those places. And maybe there's group think there as well, but we might as well, 210 00:17:41,235 --> 00:17:44,795 at least they've shown. So that's kind of interesting too, in retrospect, thinking about 211 00:17:44,795 --> 00:17:49,275 his paying you not to go to college. There's still that. There's always that contradiction then. 212 00:17:49,975 --> 00:17:54,935 Because Peter is obviously a very successful academic and went to Stanford and went to Stanford 213 00:17:54,935 --> 00:18:02,415 Law School and tried to become clerk for a Supreme Court justice. And he did structured products, 214 00:18:02,515 --> 00:18:07,895 I believe, at Credit Suisse, if I remember correctly. And as part of that, he developed a 215 00:18:07,895 --> 00:18:13,775 real distrust of Wall Street desks, which I've inherited because he used to be on the other side 216 00:18:13,775 --> 00:18:20,155 structuring, creating these complex option products for customers. And he basically told us 217 00:18:20,155 --> 00:18:29,635 everything that these banks or the prime broker builds or these trading desks, you got to be 218 00:18:29,635 --> 00:18:35,215 really careful. And especially if they show you a trade idea and it looks like just a slam dunk 219 00:18:35,215 --> 00:18:43,075 and it looks like free money, it's always a trap. And so that's something I still have with me. 220 00:18:43,075 --> 00:18:48,755 um this this this i think i learned this from peter this this dislike of financial engineering 221 00:18:48,755 --> 00:18:53,155 and so when people i've lately been quite critical of the bitcoin treasury companies 222 00:18:53,795 --> 00:18:57,955 which we can talk about if later if you're interested but part of part of my critique of 223 00:18:57,955 --> 00:19:03,395 them goes back 20 years and seeing how wall street behaves seeing what structured products look like 224 00:19:03,395 --> 00:19:09,235 and just seeing the how silly financial engineering is there's a place there's a place for some of it 225 00:19:09,235 --> 00:19:15,395 But a lot of the ideas that are infiltrating Bitcoin are just old Wall Street, TradFi ideas that have been repackaged. 226 00:19:16,015 --> 00:19:21,995 And unfortunately, a lot of Bitcoiners see these, think these are shiny new objects, whereas they're just traps. 227 00:19:22,575 --> 00:19:23,195 They're just traps. 228 00:19:23,495 --> 00:19:29,715 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. 229 00:19:30,595 --> 00:19:36,735 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. 230 00:19:36,735 --> 00:19:42,615 And so we're kind of the customer or the person who gets to decide what we want. 231 00:19:42,895 --> 00:19:46,775 And then the sales side is the people who service us, the brokerage, the trading desk. 232 00:19:47,655 --> 00:19:50,495 And they want to get a lot of our business and generate a lot of commissions. 233 00:19:50,615 --> 00:19:51,515 And then they come by. 234 00:19:51,595 --> 00:19:54,875 And I was still there at that point where there was still a lot of gift giving. 235 00:19:55,335 --> 00:19:56,755 This went away fairly quickly. 236 00:19:57,135 --> 00:20:02,575 But just like at Christmas

time, just getting obscene, getting like 20 steaks from our prime 237 00:20:02,575 --> 00:20:05,055 broker and all these bribes, basically. 238 00:20:05,055 --> 00:20:10,455 and um you always wonder when you see presents like that it's like wow we're really we're really 239 00:20:10,455 --> 00:20:15,535 probably spending too much they can give us uh they never gave us cars or anything like uh 240 00:20:16,135 --> 00:20:21,895 like taylor swift would have done but um so it's it's it's it's interesting having this this 241 00:20:21,895 --> 00:20:26,095 context and this is one reason i find i find bitcoin so refreshing because 242 00:20:26,095 --> 00:20:32,575 because it's it's very very different and and crypto and i think the bitcoin treasury companies 243 00:20:32,575 --> 00:20:38,035 they try to bring a lot of TradFi back in. They try to sneak it in through the back door. And I 244 00:20:38,035 --> 00:20:42,535 think it's a mistake because Bitcoin's a bearer asset. It's a very, very special, very special 245 00:20:42,535 --> 00:20:52,955 asset. So that's basically, that's how I transitioned from academia to working at a hedge 246 00:20:52,955 --> 00:20:59,035 fund, which is very strange. And I've always been very grateful to Peter for giving me that chance 247 00:20:59,035 --> 00:21:01,015 because I certainly did not have the background. 248 00:21:01,535 --> 00:21:04,655 I mean, I had the background in terms of being able to do good research 249 00:21:04,655 --> 00:21:06,675 and just work very independently, 250 00:21:06,675 --> 00:21:09,575 and that served me well with my YouTube channel as well. 251 00:21:10,435 --> 00:21:12,595 But I didn't have the pedigree. 252 00:21:12,595 --> 00:21:17,535 I hadn't majored in – a lot of people I knew at Stanford majored in econ 253 00:21:17,535 --> 00:21:23,595 or, I don't know, more quantitative math that they could use on Wall Street. 254 00:21:25,155 --> 00:21:28,695 But Peter was much more about the big ideas, the directional ideas, 255 00:21:29,035 --> 00:21:34,295 you know, where's the world going and what mispricings can we profit from? 256 00:21:34,375 --> 00:21:36,655 So, for example, we did a lot with crude oil at the time. 257 00:21:37,475 --> 00:21:42,475 Crude oil was priced very cheaply back then, and it was highly backwardated, 258 00:21:42,755 --> 00:21:50,075 and the distant months, the distant future, so delivery 12 months, 24 months, 36 months at, 259 00:21:50,115 --> 00:21:51,095 was very, very cheap. 260 00:21:51,095 --> 00:21:58,295 Crude oil was trading at like $15 or $20 out the curve for people who understand futures curve. 261 00:21:59,035 --> 00:22:02,755 And so there's some interesting trades where you could buy crude oil futures and you basically 262 00:22:02,755 --> 00:22:04,995 roll up the curve because it was in backwardation. 263 00:22:05,535 --> 00:22:10,555 And you can make money because basically if the front, if the price of crude oil on the 264 00:22:10,555 --> 00:22:18,655 markets, the spot markets is $25 a barrel and you buy the futures contract at $15 a barrel, 265 00:22:19,015 --> 00:22:20,515 eventually it will converge. 266 00:22:20,635 --> 00:22:25,495 Assuming that the spot price stays around $25, you'll basically ride up the curve. 267 00:22:25,495 --> 00:22:27,715 It's called riding up the curve, the backwardated curve. 268 00:22:27,715 --> 00:22:32,755 And that $15 will turn into $25 by the time you get close to delivery. 269 00:22:34,235 --> 00:22:41,095 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. 270 00:22:41,715 --> 00:22:50,015 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. 271 00:22:50,015 --> 00:22:53,015 Everyone's there who's already been working there. 272 00:22:53,015 --> 00:23:09,015 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. 273 00:23:09,275 --> 00:23:12,595 It's going to blow up Freddie May, Fannie Mae and Freddie Mac. 274 00:23:13,095 --> 00:23:17,335 This was literally the topic of discussion in 2003 on my first day there. 275 00:23:17,635 --> 00:23:19,635 And I didn't quite know what to make of it. 276 00:23:19,635 --> 00:23:21,815 I'm not sure I'd even heard of Fannie Mae at that point. 277 00:23:21,815 --> 00:23:27,655 But obviously, for those who know the story, this is what happened in 2008 and 2009. 278 00:23:27,655 --> 00:23:36,695 And we did get a global financial crisis and the U.S. banking system basically blew up and had to be bailed out. 279 00:23:37,575 --> 00:23:39,255 And of course, this is the backdrop for Bitcoin. 280 00:23:39,455 --> 00:23:44,615 And this is Chancellor on the brink of a second bailout that Satoshi put in the Genesis block. 281 00:23:44,615 --> 00:23:51,615 But Peter's always been ahead of the curve and is very good at seeing which way the world is trending. 282 00:23:51,615 --> 00:23:59,615 As part of that, too, I got to talk on the phone with some of the big short guys, Michael Burry and his guys. 283 00:23:59,615 --> 00:24:04,615 I would talk on the phone with them. We were trading notes and stuff. 284 00:24:04,615 --> 00:24:07,615 We didn't end up actually putting together a trade with them. 285 00:24:07,615 --> 00:24:13,615 But this was sort of the context. So really, really interesting people. 286 00:24:13,615 --> 00:24:18,935 that's amazing i mean there's so many more uh probably interesting people that you crossed 287 00:24:18,935 --> 00:24:25,535 paths with we might have even crossed paths i i lived in san francisco really 2003 and 2004 288 00:24:25,535 --> 00:24:32,875 and i worked in not every day but uh my main headquarters was that's where 555 555

california 289 00:24:32,875 --> 00:24:38,235 i heard yeah that's where we were yeah which is a very famous building yeah well i didn't go every 290 00:24:38,235 --> 00:24:43,355 day i was a consultant so i would go uh i was with the big four with ernest young now ey so i would 291 00:24:43,355 --> 00:24:50,055 go to Adobe, Microsoft, sometimes travel. A lot of times I was down in San Jose or over in the East 292 00:24:50,055 --> 00:24:58,235 Bay for certain clients. I think we were on the 43rd floor of Make of American. I don't remember. 293 00:24:59,315 --> 00:25:04,855 Maybe 28, 29. I don't remember. And I only went there probably like two dozen times, 294 00:25:05,415 --> 00:25:08,935 maybe three dozen times over the two years I lived there, that particular building. 295 00:25:08,935 --> 00:25:15,175 um but there you know in terms of uh i want to talk about culture and and and peter teal 296 00:25:15,175 --> 00:25:20,715 and so first with culture i'd like to hear more about what you studied with renee gerard around 297 00:25:20,715 --> 00:25:27,855 like maybe mimetic desire scapegoating and human culture and we can start there and then even with 298 00:25:27,855 --> 00:25:35,435 peter teal there's just so much you know him sean parker at first to me or for a long time seemed 299 00:25:35,435 --> 00:25:42,115 like sort of renegades where they learned about the system and kind of, you know, do jujitsu on 300 00:25:42,115 --> 00:25:48,695 the system. And Peter Thiel, it's very few humans who are at the forefront. I mean, we were seeing 301 00:25:48,695 --> 00:25:55,395 a few more unicorns, but very few people have multiple billion dollar ideas or catch on a 302 00:25:55,395 --> 00:26:02,535 different waves more than once. Right. And Peter Thiel has been sort of the forefront of all of 303 00:26:02,535 --> 00:26:08,895 them. And so I'm kind of curious what these seminars were like. Was this really like nine 304 00:26:08,895 --> 00:26:14,335 or 10 people? Was this 100 people? Was this very formal? And obviously, I mean, but you got into 305 00:26:14,335 --> 00:26:18,255 the informal talking with him that you bring up certain movies, like it sounds like you ran the 306 00:26:18,255 --> 00:26:23,415 hedge fund, like you would see Michael Burry, you know, sort of run his office and maybe toss around 307 00:26:23,415 --> 00:26:28,075 ideas and talking about philosophy and talking to the world's greatest minds that people dream about 308 00:26:28,075 --> 00:26:34,175 his life uh and even sort of maybe you know getting all their money into a roth i don't know 309 00:26:34,175 --> 00:26:40,295 how he got all oh he because he i believe he just he he did a minimum whatever the the contribution 310 00:26:40,295 --> 00:26:45,635 was you know two or three thousand dollars a year in the late 90s and then he invested in paypal 311 00:26:45,635 --> 00:26:52,395 via the roth instrument if i'm remembering correctly yeah that's that's what was very 312 00:26:52,395

--> 00:26:57,035 unique probably at the time and maybe uh he was at the forefront of and he spoke about a lot of 313 00:26:57,035 --> 00:27:00,615 things he was against sort of yeah you know kids going to college that was much later that was like 314 00:27:00,615 --> 00:27:09,595 20 2010 or 2012 or so that was yeah yeah but vitalik came out of that right and he took on 315 00:27:09,595 --> 00:27:17,835 sean parker as a partner in a founder's fund right and that sean parker i mean famously with napster 316 00:27:17,835 --> 00:27:23,255 which i thought was the coolest thing in the world when i was 17 18 years old and i was downloading 317 00:27:23,255 --> 00:27:28,855 every every three I could get my hands on. And the idea of these guys were not just renegades 318 00:27:28,855 --> 00:27:41,490 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 319 00:27:41,730 --> 00:27:47,890 They were also interested in, obviously, a lot of people know this now, but the tagline or the 320 00:27:47,890 --> 00:27:53,390 motto for PayPal in the early years was new world currency. And that's really what they wanted to do 321 00:27:53,390 --> 00:27:58,570 was create something that would replace the US dollar. 322 00:27:58,990 --> 00:28:02,970 And that was, which is, it's crazy to think of that 323 00:28:02,970 --> 00:28:04,610 in the late 90s or 2000s. 324 00:28:06,450 --> 00:28:07,910 Yeah, and then they've been blessed. 325 00:28:08,050 --> 00:28:09,650 They went on to become the PayPal mafia 326 00:28:09,650 --> 00:28:13,190 and do sort of LinkedIn, Facebook, 327 00:28:13,630 --> 00:28:14,870 or invest in all these things. 328 00:28:15,050 --> 00:28:16,390 Everything that's sort of centralized. 329 00:28:18,390 --> 00:28:22,250 Palantir, I mean, everything that's sort of the antithesis 330 00:28:22,250 --> 00:28:24,590 of a lot of these kernels of ideas. 331 00:28:24,750 --> 00:28:26,570 That's the central contradiction. 332 00:28:27,790 --> 00:28:28,550 That's a weird art. 333 00:28:29,290 --> 00:28:29,490 Yeah. 334 00:28:29,850 --> 00:28:32,770 I mean, Peter certainly was a very staunch, 335 00:28:33,690 --> 00:28:36,890 serious libertarian in the late 90s. 336 00:28:37,830 --> 00:28:38,590 I mean, he was sort of, 337 00:28:38,690 --> 00:28:40,170 he could wear the conservative hat 338 00:28:40,170 --> 00:28:42,030 or the right libertarian hat. 339 00:28:42,030 --> 00:28:45,230 And he founded the Stanford Review, 340 00:28:45,470 --> 00:28:47,510 which is kind of the conservative newspaper at Stanford. 341 00:28:48,450 --> 00:28:50,690 And he was sort of, he's always a contrarian. 342 00:28:50,690 --> 00:28:53,090 And so it was kind of a left-wing campus. 343 00:28:53,290 --> 00:28:57,790 And then so he would piss people off by being super Republican or whatever. 344 00:28:58,130 --> 00:29:04,670 But I think his real passion was for people, for the books he was reading were like Ayn Rand, obviously. 345 00:29:05,030 --> 00:29:06,670 And he loved Tolkien. 346 00:29:06,670 --> 00:29:14,510 Obviously, he's named a lot of the name Palantir and a bunch of his companies come from Tolkien's novels. 347 00:29:14,510 --> 00:29:24,330 um so there's there's this progression from i think i think if you're a successful entrepreneur 348 00:29:24,330 --> 00:29:30,170 you you figure out at a certain point that you kind of go up the scale and you have various exits 349 00:29:30,170 --> 00:29:34,690 and you make certain amounts of money but at a certain point it's the guys with the printing 350 00:29:34,690 --> 00:29:38,570 press who are the the best customers and those are the the governments and they're they're 351 00:29:38,570 --> 00:29:46,590 company in central banks. And so Peter and his VC friends began to figure out, certainly Elon 352 00:29:46,590 --> 00:29:51,030 figured this out very early with the carbon credits for Tesla, et cetera, figured out that 353 00:29:51,030 --> 00:29:56,270 getting the government as your customer, government doesn't care what it pays for stuff. 354 00:29:56,270 --> 00:30:04,190 It has a money printer. And you can, and so this is, I think this may, because obviously Peter is, 355 00:30:04,190 --> 00:30:12,770 Peter's not, it's like, how do you square this circle being, creating this global, this horrendous 356 00:30:12,770 --> 00:30:19,010 company called Palantir, which I was an early investor in. Back when it was started, 357 00:30:19,590 --> 00:30:24,710 we were, it was started, the way I was sold on it, basically, I did some consulting work for them. 358 00:30:24,790 --> 00:30:28,750 So I didn't get a huge number of shares. I wasn't a founder or anything. But I did get, 359 00:30:28,750 --> 00:30:32,690 I went to Palantir very early. I went to their first headquarters. I would hang out there quite 360 00:30:32,690 --> 00:30:36,130 a bit after work because I lived on the peninsula. I worked in San Francisco and they were on page 361 00:30:36,130 --> 00:30:42,250 mail down by Stanford. And I remember I got to play around with their early software, 362 00:30:42,630 --> 00:30:48,830 which was really cool, just doing searches and stuff. I don't know if it was, I assume it was 363 00:30:48,830 --> 00:30:53,990 like real names and real data back then, which is kind of creepy to think about. But their idea was 364 00:30:53,990 --> 00:31:02,030 at least the surface idea, because they were co-funded by the CIA, by In-Q-Tel, which is the 365 00:31:02,030 --> 00:31:08,090 VC arm of the CIA. And for some reason, I was quite a, I was sort of a Republican normie back 366 00:31:08,090 --> 00:31:13,250 then. And it didn't, I remember being puzzled in the nineties when people told me, you know, 367 00:31:13,270 --> 00:31:17,570 I tell them I like George Bush senior and they're like, he used to head the CIA. And I was like, 368 00:31:17,830 -->

00:31:27,550 oh, that's great or whatever. But, but the CIA was an investor in Palantir. And I remember going 369 00:31:27,550 --> 00:31:33,570 to their offices on page mail and they had a big map on the, as you walked in, kind of a whiteboard 370 00:31:33,570 --> 00:31:38,030 or a chalkboard at the time. And they'd mapped out all the different government agencies. 371 00:31:39,110 --> 00:31:44,970 So this was about 2004, I would say. And I was just blown away by how big the US federal government 372 00:31:44,970 --> 00:31:49,930 was and how many shadow agencies. And they were trying to figure it out on their own so they know 373 00:31:49,930 --> 00:31:57,990 who to sell their software to. But their selling point was basically Palantir could have stopped 374 00:31:57,990 --> 00:32:06,750 September 11th. And I guess I certainly wasn't a 9-11. I sort of accepted the story at face value 375 00:32:06,750 --> 00:32:12,990 back then. But the idea was that if different government data, the CIA wasn't talking to the 376 00:32:12,990 --> 00:32:18,910 FBI, wasn't talking to the whatever, that if those government databases had been able, if you'd been 377 00:32:18,910 --> 00:32:22,750 able to do searches and have the different agencies talk to each other, we could have somehow 378 00:32:22,750 --> 00:32:26,890 prevented September 11th, which it seems sort of absurd looking back on it, because obviously 379 00:32:26,890 --> 00:32:31,790 September 11th is a very complicated thing, and we've never really gotten the true story. 380 00:32:31,790 --> 00:32:38,730 And there are a lot of interesting theories. But George Soros was an investor in Palantir, 381 00:32:38,770 --> 00:32:46,930 original investor, or his fund in In-Q-Tel, et cetera. And so then it's a very different world 382 00:32:46,930 --> 00:32:57,210 in right now. I saw basically to close the loop on Palantir, I sold my shares at the IPO in 2021. 383 00:32:59,150 --> 00:33:05,050 I think they went public at the end of 2020, if I remember. Then there's a six-month lockup. 384 00:33:05,050 --> 00:33:11,770 And as soon as I was unlocked, I sold at that time. I got into Bitcoin in late 2019. So 385 00:33:11,770 --> 00:33:15,450 So when Palantir, when I finally had liquidity, I sold all of it. 386 00:33:15,570 --> 00:33:17,610 I was not a fan of the company at that point. 387 00:33:19,130 --> 00:33:22,310 And I put all those proceeds into Bitcoin. 388 00:33:23,370 --> 00:33:28,690 And it's kind of funny because I think Bitcoin was probably around the same price it is now, 389 00:33:29,030 --> 00:33:29,690 which is ironic. 390 00:33:29,690 --> 00:33:32,690 If I had held Palantir, it just was like a... 391 00:33:33,310 --> 00:33:37,650 I mean, I knew it was going to continue to do well because they had basically succeeded 392 00:33:37,650 --> 00:33:42,230 and they had the backings of very powerful and shady things going on. 393 00:33:43,270 --> 00:33:47,590 But at that point, I was really no longer a Republican normie 394 00:33:47,590 --> 00:33:50,210 that thought Palantir was there to stop the next 9-11 395 00:33:50,210 --> 00:33:52,610 and wanted to get out and put it into Bitcoin. 396 00:33:55,970 --> 00:34:00,870 It was funny when you were talking earlier about sort of being a literature student 397 00:34:00,870 --> 00:34:02,950 and going to the reunion and seeing everyone. 398 00:34:02,950 --> 00:34:07,750 I flashed a little hunting when Robin was back to the Harvard reunion. 399 00:34:07,930 --> 00:34:10,110 I was there. I was like, they're mopping the floors. 400 00:34:10,270 --> 00:34:11,950 The janitor is the grad student. 401 00:34:13,650 --> 00:34:17,250 I mean, looking around you, you know, the Bay Area is a weird place. 402 00:34:17,350 --> 00:34:23,790 I lived there for a couple of years and you could be an accountant at a big four accounting firm making decent money. 403 00:34:23,990 --> 00:34:28,090 And the kid next door, who's your age, I'm not saying a kid in a derogatory, you know, 404 00:34:28,090 --> 00:34:30,390 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.