Full Transcript for 049. Exploring Braidpool: Innovations in Decentralized Bitcoin Mining

Antarctica is covered about 3 kilometers thick of ice. 23 00:02:19.920 --> 00:02:28.645 And, you know, a kilometer or so down, it's really tightly packed and very, very clear, very transparent. And so what they do is they use a hot water grill to place, photo detectors, 24 00:02:29.265 --> 00:02:32.420 in the ice. And so they've got these strings that form a cube 25 00:02:32.880 --> 00:02:33.700 in the ice. 26 00:02:34.080 --> 00:02:38.735 And what they're looking for, they're looking for high energy particles in space to hit the ice, 27 00:02:39.115 --> 00:02:41.375 knock oxygen or hydrogen atom, 28 00:02:41.915 --> 00:02:47.360 and then deposit a bunch of energy, which makes a bunch of light. They pick up that light and they see tracks of neutrinos 29 00:02:47.819 --> 00:02:49.360 coming from outer space. 30 00:02:50.220 --> 00:02:50.959 Oh, interesting. 31 00:02:51.260 --> 00:02:52.785 The neutrino telescope, really. 32 00:02:54.225 --> 00:02:54.725 Wow. 33 00:02:55.585 --> 00:03:00.940 But they're Are you into the South Pole? I have not. But there are lots of other stuff down the South Pole too. There's a 34 00:03:01.500 --> 00:03:07.985 radio telescopes looking from the surface. There's, you know, biology experiences. There's a whole research program itself. 35 00:03:09.105 --> 00:03:13.605 Awesome. What's the craziest experiment you know of that's going on right now? 36 00:03:18.209 --> 00:03:18.950 I don't 37 00:03:20.530 --> 00:03:26.935 can't really think of 1. I mean, ice cube is is pretty crazy. It's been going on for a long time. None of them are really crazy. Scientists are actually pretty 38 00:03:28.755 --> 00:03:33.500 conservative. I don't know. I don't really think anything terribly crazy. You know, go look where they'll also look before and and that's 39 00:03:34.060 --> 00:03:37.600 that's always interesting. What's what's crazy is experiments that, 40 00:03:38.860 --> 00:03:41.145 it's what's crazy is experiments we're not doing. 41 00:03:41.705 --> 00:03:44.845 Yeah. Tell us about that. What what experiments were we not doing? 42 00:03:45.785 --> 00:03:47.965 In particular, reproduction studies. 43 00:03:48.640 --> 00:03:54.820 Right? So throughout science, we, we tend to study something. We get an answer, and then it has to be a novel answer. 44 00:03:55.280 --> 00:03:59.005 And then we publish it, and then nobody goes back and checks whether we got the right answer. 45 00:03:59.465 --> 00:04:04.525 And this is less it's less of a problem in physics, but it's more of a problem in other fields like biology. 46 00:04:05.370 --> 00:04:12.590 Where, you know, somebody says, oh, this drug works. Well, what you don't know is that they trialed 20 drugs and publish the one that works with 95% 47 00:04:12.970 --> 00:04:13.470 interval. 48 00:04:13.775 --> 00:04:19.395 Well, you've got the 95% because of the other 20 drugs you rejected. And they don't even tell you that they did that. Right? 49 00:04:20.790 --> 00:04:28.010 So, you know, reproduction studies is something that we really need to do across across science, but because of the desire for novelty journals, 50 00:04:28.790 --> 00:04:29.370 you know, 51 00:04:29.935 --> 00:04:33.795 novel is reproductive studies are are not sexy. Right? They're boring, 52 00:04:34.415 --> 00:04:43.960 but they're very, very important. And it's crazy that we we by and large don't do them. Them. And that strongly biases the sign of results we get and a lot of scientific results, we get are wrong because of it. 53 00:04:47.105 --> 00:05:01.389 Very well said. So now I'm gonna go into welcome to pod two fifty six, a weekly Bitcoin podcast focused on Bitcoin mining, energy, and proof of work, hosted by me, rod at bitkite on Twitter, and you can also find me on Noster. 54 00:05:01.850 --> 00:05:03.814 My other co host of pod 2 56, 55 00:05:04.194 --> 00:05:07.094 just the one and only and greatest of all time, 56 00:05:07.395 --> 00:05:08.294 Econo Alchemist. 57 00:05:09.395 --> 00:05:10.670 Eko, my friend, how you 58 00:05:11.390 --> 00:05:16.050 doing? I'm doing good. Still trying to warm up my core from that cold plunge, 59 00:05:16.510 --> 00:05:26.405 but good otherwise. Man, I'm I'm Bob, I don't I don't think we've ever met, by the way, and I'm just excited to pick your brain on a number of different topics now, especially with this, like, little opener. Okay. 60 00:05:26.945 --> 00:05:29.285 Well, I just Yeah. Sorry. That was a complete tangent. 61 00:05:29.665 --> 00:05:30.370 I know. But 62 00:05:31.889 --> 00:05:34.710 but we're into tangents on this show, believe it or not. 63 00:05:36.449 --> 00:05:37.990 All tangents. No scripts. 64 00:05:38.610 --> 00:05:39.510 Full send. 65 00:05:40.375 --> 00:05:41.195 But maybe, Bob, 66 00:05:41.495 --> 00:05:46.395 just to kick it off for the audience, maybe you could give a brief, intro on yourself, 67 00:05:47.655 --> 00:05:49.115 and then we can get started. 68 00:05:50.350 --> 00:05:51.090 Sure. So, 69 00:05:52.030 --> 00:05:53.170 my name is Bob McElrath. 70 00:05:53.630 --> 00:05:54.270 You probably 71 00:05:54.830 --> 00:05:56.930 if you've if you've heard of Brightpearl, 72 00:05:57.230 --> 00:05:59.845 I do run the the Brightpearl Twitter account. I've I've, 73 00:06:00.324 --> 00:06:05.465 written about I've written the architecture documents for it and I'm working on it. We'll talk about that in a bit. 74 00:06:05.845 --> 00:06:08.745 My background is actually in theoretical physics. So I got my PhD, 75 00:06:09.370 --> 00:06:11.150 wrote a thesis on the Higgs boson, 76 00:06:11.850 --> 00:06:12.990 did a couple of postdocs. 77 00:06:13.850 --> 00:06:17.765 I worked at CERN for a while at the Large Hadron Collider in Switzerland. 78 00:06:19.345 --> 00:06:25.660 And, you know, after a few years, kind of took a left turn, didn't get a faculty job. We can talk about what's wrong with science more if you like, but 79 00:06:26.300 --> 00:06:31.440 didn't get a faculty job and took

a left turn, and started working on Bitcoin. I discovered Bitcoin, 80 00:06:31.820 --> 00:06:37.405 when I was at CERN actually, the that's when the Bitcoin white paper came out around 2009, 2010, and I noticed it, like, immediately. 81 00:06:38.845 --> 00:06:42.224 It might have been this post on Slashdot where I first noticed it, 82 00:06:43.300 --> 00:06:50.520 but I didn't really do anything with it. You know, my priorities were elsewhere. And I've always been interested in cryptography as well as finance, and so I I said, wow, that's really interesting. 83 00:06:51.605 --> 00:06:56.025 And so in the intervening years, you know, I I moved up to New York, worked for, 84 00:06:56.885 --> 00:07:02.130 Solid X. They were the guys proposed the Bitcoin ETF competition with Winklevoss Brothers back in 2015 timeframe 85 00:07:02.590 --> 00:07:03.810 that got turned down, 86 00:07:04.509 --> 00:07:05.810 went and worked for Fidelity, 87 00:07:06.350 --> 00:07:10.205 helped them build Philly Digital Assets, which is their Bitcoin copy service, 88 00:07:11.625 --> 00:07:12.025 and, 89 00:07:12.505 --> 00:07:13.645 did that for a couple years. 90 00:07:13.945 --> 00:07:16.260 Since then, I have gone consulting. 91 00:07:16.800 --> 00:07:20.580 So these days, I consult with a number of, Bitcoin sector companies. 92 00:07:21.120 --> 00:07:23.860 Some of them are public, and you may have heard of. One is 93 00:07:25.345 --> 00:07:34.005 Custodia, which is a cable and mongs bank up in Wyoming. 1 is a company called Satoshi Energy. They broke the power contracts for miners mostly in Texas, but they're expanding into other regions. 94 00:07:35.090 --> 00:07:38.870 And another is, Commerce Block. They're the guys behind the Mercury Wallet. 95 00:07:39.250 --> 00:07:39.650 They, 96 00:07:40.050 --> 00:07:42.070 these are state chain atomic swaps. 97 00:07:43.255 --> 00:07:47.435 And then there's Brightpool and a few other projects too. So I consult on a number of key topics. 98 00:07:48.215 --> 00:07:49.275 Just kind of freelance 99 00:07:49.735 --> 00:07:50.475 for now. 100 00:07:51.730 --> 00:07:58.050 Man. Awesome. Dude, I think I I think a few years ago, you and I were talking, and I applied for 101 00:07:58.985 --> 00:08:02.845 I sent you a resume because I was interested in working for a satoshi energy. 102 00:08:03.385 --> 00:08:06.125 Oh, did you? Do do you recall that? No. 103 00:08:06.590 --> 00:08:09.330 Yeah. It was as if it was years ago. 104 00:08:09.950 --> 00:08:10.450 Okay. 105 00:08:10.830 --> 00:08:14.930 I I don't know your I only know Econo Alchemist. I don't know your your actual name. 106 00:08:15.574 --> 00:08:19.995 Yeah. I had I had taken every I had taken everything off of the, resume. 107 00:08:21.414 --> 00:08:21.914 Okay. 108 00:08:22.350 --> 00:08:25.070 If you're scared. Good guys. They're doing doing awesome. 109 00:08:25.390 --> 00:08:29.010 I gotta say, they're probably my most successful consulting client. 110 00:08:30.005 -->

00:08:32.425 Awesome. Yeah. They're good they're good dudes. 111 00:08:33.845 --> 00:08:48.910 Can I like, so it seems like each sector within Bitcoin, you're you have your hands on? Now, why in the heck did you want to start or work on braid pool? And maybe you can explain, you know, my question from Twitter was, what's a braid pool? 112 00:08:50.125 --> 00:08:50.925 Sure. Well, that's, 113 00:08:51.965 --> 00:08:56.465 so this is an old, old idea. So the first time I talked about this was in 2015, 114 00:08:56.845 --> 00:08:58.990 the Scaling Bitcoin Conference in Hong Kong. 115 00:08:59.550 --> 00:09:02.850 And, you know, at the time, this is before Segwit. It was before, 116 00:09:03.230 --> 00:09:05.330 Bitcoin Cash worked off. It was before 117 00:09:06.029 --> 00:09:09.295 the the real block size wars was kinda spiked in 20 16, 2017. 118 00:09:09.915 --> 00:09:13.375 And, you know, a lot of people were thinking about, well, how do we make Bitcoin go faster? 119 00:09:13.755 --> 00:09:18.300 And one of the things in the back of my mind has always been that, you know, a direct to a cyclic graph 120 00:09:18.940 --> 00:09:24.480 has a lot of advantages. So there's talks online. If you're bored, you can go look up that talk from Hong Kong scaling Bitcoin. 121 00:09:25.635 --> 00:09:29.175 And the motivation is to get the block time to be faster. Right? 122 00:09:29.795 --> 00:09:31.175 So these 10 minute blocks 123 00:09:31.795 --> 00:09:32.295 have 124 00:09:32.790 --> 00:09:33.610 some disadvantages, 125 00:09:33.990 --> 00:09:38.010 you know, obviously nobody wants to wait 10 minutes. Can we make it faster in principle? 126 00:09:38.710 --> 00:09:42.375 But also there there's a reason for that 10 minute block time. If you if you make it, 127 00:09:43.154 --> 00:09:43.654 faster 128 00:09:44.675 --> 00:09:48.135 in a naive way, what you end up doing is creating a lot of orphans. 129 00:09:48.440 --> 00:09:52.220 We can talk about p 2 pools, kind of a predecessor to upgrade pool as well. 130 00:09:52.920 --> 00:09:58.265 So the the talk I gave them was really about well, can we make a blockchain with a direct basic graph in first place? 131 00:09:58.825 --> 00:10:00.925 And how would you do it? Proof of work blockchain. 132 00:10:01.625 --> 00:10:05.165 So it's kind of the first presentation on that topic. Since then, there have been a number of blockchains, 133 00:10:05.705 --> 00:10:09.940 that have actually done it. The most successful is right now is probably Casper. 134 00:10:10.960 --> 00:10:15.460 And I went back and forth with, the off one of the main authors of 135 00:10:15.795 --> 00:10:16.295 Kasper, 136 00:10:17.395 --> 00:10:17.975 Jonathan Sumpolinski 137 00:10:18.915 --> 00:10:19.415 about 138 00:10:19.795 --> 00:10:22.135 it while he was writing the DAG night paper. 139 00:10:22.675 --> 00:10:28.910 Some of the same authors that wrote those DAG paper which is used in Ethereum. But then they moved on from that to create a proper graph. 140 00:10:29.450 --> 00:10:31.950 And the grade that I propose is probably 141 00:10:32.570 --> 00:10:36.805 formally equivalent to what he has done, Although I came about it from a slightly different perspective. 142 00:10:38.144 --> 00:10:43.925 But yeah. So braid the word braid is just something I came up with that, you know, if you look at a picture of a direct basic graph, 143 00:10:44.780 --> 00:10:57.865 it's kind of a blob with a bunch of arrows and stuff. I said, well, can I come up with a word that is not a chain? Right? We know what a chain is. That's gotta be something that's more complex than a chain. So I came up with the word braid. Mhmm. So that's where that's where that started. 144 00:10:58.324 --> 00:11:04.620 And, you know, in the intervening years, this is not really been something I've worked on. You know, from time to time, I'll write a little bit about it or blog about it. 145 00:11:05.880 --> 00:11:09.900 But things changed about 2 years ago with the advent of the Frost algorithm. 146 00:11:10.835 --> 00:11:17.255 Now Frost gives us the ability I mean, the big problem with running a decentralized mining pool is that somebody has to hold the funds. 147 00:11:17.870 --> 00:11:20.370 Where do the funds get held until they get distributed to miners? 148 00:11:21.230 --> 00:11:26.530 And so you need kind of a decentralized mechanism to do that. What Frost does is allows you to have it basically a giant multisig. 149 00:11:27.455 --> 00:11:31.155 And this this fundamentally needs the, the Taproot Schnorr signature, 150 00:11:31.935 --> 00:11:32.435 mechanism. 151 00:11:33.135 --> 00:11:35.715 And so we can go into that in more more detail, but 152 00:11:36.240 --> 00:11:38.579 that's what's kind of the gating thing. And, 153 00:11:39.199 --> 00:11:41.459 to to build a direct a cyclic graph, 154 00:11:41.920 --> 00:11:44.019 b, custody through a giant multisig. 155 00:11:44.715 --> 00:11:46.735 And then there are a few other pieces of this too, like, 156 00:11:47.435 --> 00:11:49.055 unspent hasher payout mechanism. 157 00:11:49.595 --> 00:11:52.735 And I can I can kinda go down down the list if you like? 158 00:11:53.130 --> 00:11:54.830 But, you know, in the last year, 159 00:11:55.850 --> 00:11:58.270 we've we've got 2 developers working on it now. 160 00:11:58.730 --> 00:12:00.430 My collaborator, Kulprit Singh, 161 00:12:00.810 --> 00:12:04.445 applied for a grant and won 2 grants, one from the Human Rights Foundation 162 00:12:04.825 --> 00:12:05.885 and one from, 163 00:12:07.145 --> 00:12:07.645 Satoshi 164 00:12:09.945 --> 00:12:11.165 oh, what's the name of it? 165 00:12:11.930 --> 00:12:19.950 Open. Sorry. That's yeah. Open. That's So we won 2 grand for that. We also have a summer Bitcoin student who's got some froth experiments working with us now as well. 166 00:12:20.345 --> 00:12:23.885 So things are moving along. I just talked to him yesterday. We get a catch up weekly. 167 00:12:24.745 -->

00:12:28.000 I'll probably end up writing the braid code itself in about a month or so. 168 00:12:28.480 --> 00:12:34.420 And in a few months, hopefully, we'll have a beta test version of this ready, so people can actually run it. Hell, yeah. 169 00:12:35.575 --> 00:12:36.075 Awesome. 170 00:12:36.455 --> 00:12:38.555 Who are all the signers in the multisig? 171 00:12:40.375 --> 00:12:44.795 So the the plan is to take the last several people who won blocks, 172 00:12:45.209 --> 00:12:46.829 and they are the signers. Right? 173 00:12:47.209 --> 00:12:49.069 Ideally, you wanna have, like, all miners, 174 00:12:49.769 --> 00:12:50.269 who 175 00:12:51.129 --> 00:12:58.655 remind the block, sign it or maybe even more. But there are scaling limitations as to how many people can actually effectively sign a frost ticket. 176 00:12:59.035 --> 00:13:06.390 Because the frost protocol itself, I believe it's a 3 round protocol, where you've got a you've got to agree upon a nonce degree upon what you're signing. 177 00:13:06.850 --> 00:13:17.505 Each party contributes essentially a signature, which comes from a Schmeer share. And then somebody has to aggregate all the signatures. So it's it's a several round protocol that involves quite a bit of network communication. 178 00:13:18.045 --> 00:13:21.024 It scales probably, like, or n cubed in terms of network communication. 179 00:13:21.510 --> 00:13:25.529 So as n grows large, which is the number of signers, at some point, this peters out. 180 00:13:26.070 --> 00:13:31.764 So we don't know right now exactly what n is going to be. We would like to be as large as practically possible, 181 00:13:32.704 --> 00:13:34.324 given that we need to sign, 182 00:13:35.024 --> 00:13:35.764 the payout 183 00:13:36.144 --> 00:13:44.759 within roughly 10 minutes. Right? So we're gonna we're gonna let that be dynamic. We're gonna evaluate that, you know, once we have code running to do it and say, well, how large can we let this be? 184 00:13:47.245 --> 00:13:52.625 And is that I'm looking at the Braid Pool Twitter account. Is that graphic in the background? 185 00:13:53.165 --> 00:14:02.770 The of the profile, is that that chart you were talking about? That graph? Uh-huh. That is that comes from a simulation I did a couple years ago, which, let me pull up that account. 186 00:14:04.835 --> 00:14:09.975 Yeah. So so the if you go to our GitHub, you can find a link to the simulation I did of 187 00:14:11.390 --> 00:14:16.130 a braid and came up with basically how to do the difficulty adjustment and things like that. That 188 00:14:16.510 --> 00:14:17.490 picture is 189 00:14:17.790 --> 00:14:18.850 from that simulation. 190 00:14:19.255 --> 00:14:25.195 And that's that's why. Okay. Some other free pictures on there too. I used a graph library to draw that. 191 00:14:25.975 --> 00:14:30.820 And then what is it? I I know you you touched on this, but I just wanna 192 00:14:31.839 --> 00:14:34.740 unpack it a little bit more so I so

I completely understand. 193 00:14:35.235 --> 00:14:38.855 What does it mean when the the blocks are a 1000 times faster? 194 00:14:40.115 --> 00:14:45.580 So the block time so I I like to differentiate between a Bitcoin block and a block within the 195 00:14:47.320 --> 00:14:48.620 the share chain, right? So 196 00:14:49.000 --> 00:14:52.460 there are several terms here, we could call grateful a share chain. 197 00:14:53.024 --> 00:14:59.764 We could call it a merge mind blockchain. Okay. Okay. It's a big graph. It's not a blockchain. It's a DAG. 198 00:15:00.225 --> 00:15:03.350 And it's merge mind with Bitcoin. Right? Okay. Okay. 199 00:15:04.130 --> 00:15:31.635 So I like to call the the blocks within the the share chain slash DAG beads just to differentiate it. So beads are the share chain, blocks or Bitcoin blocks, just so we don't confuse the 2. But they're conceptually the same animal. Right? In fact, any bead is a valid bit point block if it had hit the difficulty target. That's the only thing wrong with it. Is it's difficult target is too low. And so we by lowering the difficulty target, we can produce blocks that are roughly a 1000 times faster. 200 00:15:32.015 --> 00:15:42.920 And this will end up being dynamic, exactly how fast it is. We're gonna measure the network latency of how fast those blocks get produced or those beads get produced, and use that to determine, you know, how fast we can actually run. 201 00:15:44.205 --> 00:15:45.185 It's it's worth 202 00:15:45.645 --> 00:15:50.225 taking a look at p 2 pool. So p 2 pool was an old, let's say, circa 20 203 00:15:50.529 --> 00:15:51.029 13, 204 00:15:51.810 --> 00:16:04.605 mining pool that lowered the block time to 30 seconds. So Bitcoin is 600 seconds, 10 minutes, and they lowered it to 30 seconds. So it's roughly 20 times faster, which means, you know, 20 times more minor or 20 times smaller minor can effectively 205 00:16:04.940 --> 00:16:05.839 tribute to the network. 206 00:16:06.779 --> 00:16:17.315 20 is not that big of a factor. We we wanna get a factor of, like, a1000000. So right? But the 20 is what they could do. And what ends up happening when you lower that walk time and you have a blockchain is that you create orphans. 207 00:16:17.855 --> 00:16:24.620 So 2 people on opposite sides of the world accidentally mine a block at approximately the same time or a bead in the shared chain. Right? 208 00:16:25.000 --> 00:16:29.019 And this is not an attack. It is no. Through no fault of anybody's. 209 00:16:29.480 --> 00:16:41.930 It's just network latency calls. That's right. And then they have to communicate this new beat to the other, parties in the network, and now you have a race condition. Whoever can propagate that new block to everybody else in the share chain faster, 210 00:16:42.949 --> 00:16:50.405 wins the race condition. And when end up hap when what ended up happening with, p 2 pool is there was a lot of latency games being played. 211 00:16:51.105 --> 00:16:51.605 The 212 00:16:52.145 --> 00:16:54.885 P2P network on Bitcoin and 213 00:16:55.640 --> 00:16:57.260 p2pool was not very efficient. 214 00:16:57.640 --> 00:17:02.060 It takes, you know, order 6 to 6 to 10 seconds to get your your block out to everybody. 215 00:17:02.735 --> 00:17:03.235 Right? 216 00:17:03.535 --> 00:17:04.015 And, 217 00:17:04.575 --> 00:17:10.275 you know, what that meant is that people would optimize the connections they had to other peers to reduce their latency. 218 00:17:10.680 --> 00:17:22.835 And this is a centralizing effect because the way to get the lowest latency is to put everybody geographically in the same place. So we want to get rid of that. We don't want to create this late game. And this late game is fundamentally a consequence of using a blockchain. 219 00:17:23.135 --> 00:17:26.034 This is why Bitcoin's block time is 600 seconds. 220 00:17:26.414 --> 00:17:34.640 With, the measurements I did back at the time, back in a while ago, I've given, like, 3 talks on this. If you're if you're bored and go look these up. But one of the measurements I did, 221 00:17:35.420 --> 00:17:36.540 I measured that the, 222 00:17:37.554 --> 00:17:41.495 the mean time to propagate a block through the Bitcoin network with roughly 6 seconds. 223 00:17:41.875 --> 00:17:54.610 And you can get this number basically directly from the orphan rate. Just look at the, or look at the block times and how often does the block come faster than 6 seconds. And if you've seen the discussion on Twitter about empty blocks recently, 224 00:17:55.165 --> 00:18:00.545 these are all blocks that happen in quick succession after one another. Right? Right. This this leads into it. Right? 225 00:18:01.085 --> 00:18:18.855 So you're you're less likely to have an orphan because there's less data to propagate if you make an empty block. Right? But if you try it if you wanna go to the next level, right, this is already a problem in Bitcoin. 10 minute block times, This is already a problem. Right? But if you wanna start decreasing that block time down to 30 seconds or even lower, we wanna get below 1 sec. 226 00:18:20.309 --> 00:18:26.330 Then then this becomes a much more serious problem. You have to project with a completely different solution. That's what the direct is that provides. 227 00:18:28.230 --> 00:18:29.850 And so do miners 228 00:18:30.695 --> 00:18:33.914 mining to Braid Pool, if they're, like, finding these 229 00:18:34.375 --> 00:18:39.674 these blocks faster, are they getting rewards for it? Is there, like, another token involved? Or 230 00:18:40.470 --> 00:18:43.450 That's right. So we want to I mean, within any 231 00:18:43.830 --> 00:18:46.970 pool, centralized or otherwise, there is a notion of a share. 232 00:18:47.575 --> 00:18:53.115 Right? So your your pool allocate shares to you, and you get paid based on how many shares you contribute. Right? 233 00:18:53.815 --> 00:18:56.480 So we do actually want to make that a

transferable coin. 234 00:18:56.960 --> 00:19:01.059 At the end of the day, any pool needs to do accounting on these shares. You need to mount, 235 00:19:01.360 --> 00:19:06.465 sorry, account for and measure these shares for every miner. And because this is a distributed system, 236 00:19:07.105 --> 00:19:15.125 this database needs to be distributed. So everybody has to know the shares of everybody else to be able to validate if the shares have been distributed correctly. Right? 237 00:19:17.380 --> 00:19:27.505 So, yeah, that might as well be a coin. Right? Right. Right. And that's what I that's what I propose to do here is actually make it a coin. I wanna call it the Terahash coin 238 00:19:27.885 --> 00:19:28.385 THC. 239 00:19:30.365 --> 00:19:33.270 Nice. It doesn't have to be that. It's just to share. Right? 240 00:19:33.830 --> 00:19:46.605 And, you know, shares on centralized pools are not fungible with each other. You know, if I go to one pool and get a share there, I can't sell it to somebody on another pool or trade it against a share or another pool, but they're fundamentally kind of the same object 241 00:19:47.065 --> 00:19:51.164 up to the the fees that that they are charging on the different pools. 242 00:19:53.360 --> 00:19:53.860 Awesome. 243 00:19:54.640 --> 00:19:55.460 And so 244 00:19:56.400 --> 00:19:58.340 just for listeners, how does 245 00:19:59.050 --> 00:19:59.325 let's 246 00:19:59.885 --> 00:20:03.885 how does Bradpool decentralized Bitcoin mining? Because that's kinda how the, 247 00:20:05.565 --> 00:20:12.370 the topic of inviting Bradpool onto the show came up just for listeners who missed the interactions on Twitter. 248 00:20:13.070 --> 00:20:15.330 We had Boris on our last show, 249 00:20:15.710 --> 00:20:17.330 and he had been monitoring 250 00:20:17.675 --> 00:20:18.655 stratum jobs 251 00:20:19.435 --> 00:20:21.215 and looking at pool centralization. 252 00:20:21.835 --> 00:20:22.815 1 of our listeners 253 00:20:23.515 --> 00:20:29.200 mentioned that they were disappointed we didn't talk about Braid Poole on the show and so we decided to change 254 00:20:29.660 --> 00:20:38.945 that. And, and we tagged Braidpool on Twitter, and we got in touch with Bob, and and now we're on the show. So there's all kind of the whole backdrop here is kinda decentralizing 255 00:20:39.325 --> 00:20:44.289 Bitcoin mining. So can you speak to to how Braid Pool helps decentralize 256 00:20:45.230 --> 00:20:46.210 Bitcoin mining? 257 00:20:46.830 --> 00:20:47.710 Absolutely. So the, 258 00:20:48.669 --> 00:20:53.845 the question of centralization really comes down to the pools. Right? Because the pools are centralized entities 259 00:20:54.225 --> 00:20:58.725 and among other things they produce the block template. They select the transactions that get into the block. 260 00:20:59.345 --> 00:21:00.250 And because of that 261 00:21:00.810 --> 00:21:06.270 they can not only censor transactions, but they can also, you know, if they

get large enough performance with a few percent attack. 262 00:21:06.810 --> 00:21:08.350 And so we have this kind of 263 00:21:08.810 --> 00:21:09.870 nasty dichotomy 264 00:21:11.605 --> 00:21:13.145 within pools where 265 00:21:13.605 --> 00:21:17.304 I mean, the fundamental purpose of a pool is to decrease variance. Right? 266 00:21:17.605 --> 00:21:20.050 And very if you're a minor, variance is, 267 00:21:20.430 --> 00:21:24.690 I mean, let's say I have 1% for the network hash rate. Right? Which is pretty big minor. 268 00:21:25.390 --> 00:21:30.034 So 1% of cash rate means on average, I'm gonna win 1.4 blocks per day, 269 00:21:30.895 --> 00:21:35.315 or, you know, on average, let's say, 40 to 45 blocks per month. Right? 270 00:21:35.720 --> 00:21:38.140 Now the variance on your revenue, 271 00:21:38.520 --> 00:21:42.460 this is a Poisson process. Right? So the variance on your revenue is the square root of that 272 00:21:43.774 --> 00:21:48.195 over the total number of blocks. And so I calculated a while back that if you want to have, 273 00:21:49.215 --> 00:21:51.394 let's say, a 1% annual variance 274 00:21:51.695 --> 00:21:52.674 on your revenue, 275 00:21:53.180 --> 00:21:55.520 you need to have 20% of the network cash rate. 276 00:21:55.980 --> 00:22:12.110 Wow. That's a pretty, pretty big number and 1% annual variance, which is to say, I need to be able to pay my bills, right? So I need to know that I'm gonna make this much money this year. I need that be within 1%. I think it's a pretty reasonable statement for a business. Right? And that corresponds to around a 3 and a half. I remember correctly, 3 and a half monthly, 277 00:22:13.130 --> 00:22:21.265 variance. Right? So your your profit goes up and down by 3 and a half percent per month. Right? And this is statistics. Right? So sometimes it goes up twice, up and down by twice that. 278 00:22:23.185 --> 00:22:27.205 So the whole purpose of a pool is to decrease fat variance, right? 279 00:22:28.280 --> 00:22:36.045 And so you you have this dichotomy where I want pool to be big so that the variance goes down, but I don't want it to be so big that it performs 51% attack. 280 00:22:37.085 --> 00:22:42.865 So this is why I I hypothesize it. That's why all of the pools kind of land in this sweet spot somewhere between roughly 20% 281 00:22:43.245 --> 00:22:43.745 50%. 282 00:22:44.970 --> 00:22:47.710 As you want to be big but you don't want them to be too big. 283 00:22:48.250 --> 00:22:52.910 Right? And you know these days there are other things going on like the FPPS mechanism where 284 00:22:54.165 --> 00:22:59.145 they they reduce they remove the risk in other ways in particular by just paying you no matter what, 285 00:22:59.525 --> 00:23:01.145 which is a completely different mechanism 286 00:23:02.020 --> 00:23:06.500 whereby they have to have funds. They have to have a pool of funds. And if you've been following the, 287 00:23:07.780 --> 00:23:08.280 discussion, 288 00:23:08.660 --> 00:23:10.360 there's a number of tweets by 289 00:23:11.135 --> 00:23:11.635 0xv10c 290 00:23:12.735 --> 00:23:14.434 on Twitter. He's our analysis. 291 00:23:14.895 --> 00:23:16.035 Yeah. Yeah. Absolutely. 292 00:23:16.575 --> 00:23:22.360 I've talked to him a few times about this, and he's been analyzing the block templates and pointed out that most of the pools 293 00:23:22.660 --> 00:23:25.755 have the same block template, like all the transactions are the same, 294 00:23:26.315 --> 00:23:32.735 and in the same order. And what's what appears to be going on there is bit main is essentially subsidizing other pools. 295 00:23:33.730 --> 00:23:35.270 So those smaller pools, 296 00:23:35.730 --> 00:23:45.005 even with, you know, only 10% of the hash rate, the pool itself can't handle the variance. Right? I mean, it's it's a large capital cost, and he's got estimates of the capital cost to do this. 297 00:23:45.705 --> 00:23:50.860 It's a large capital cost to run that run that pool, and it's just a it's a pure risk. Right? 298 00:23:51.320 --> 00:24:04.940 The miners don't wanna take that risk. Right? They've got other risks. They've got, you know, power production risk. They've got the, you know, equipment failure risks. They've got a bunch of other risks. They don't wanna take on this financial risk of how many blocks am I gonna win? Because there's no there's no good answer. 299 00:24:05.419 --> 00:24:09.840 Right? I can't this isn't a it's purely statistical process. It's pure lottery. 300 00:24:10.220 --> 00:24:13.039 So I can't do anything to optimize that. Right? Right. 301 00:24:14.135 --> 00:24:15.115 So they want to outsource 302 00:24:15.895 --> 00:24:18.795 that. Now I propose to do something completely different within grateful. 303 00:24:20.295 --> 00:24:21.995 And we mentioned before the 304 00:24:22.375 --> 00:24:23.755 the the shares being tradable. 305 00:24:24.570 --> 00:24:32.485 In order to to have somebody take this risk for you, all you really have to do is send your share to a counterparty. Your counterparty sends Bitcoin. 306 00:24:32.945 --> 00:24:41.690 Right? That is a forward contract. So I'm getting I'm getting Bitcoin now, and the grateful protocol will pay whoever is holding share Bitcoin in the future. 307 00:24:41.990 --> 00:24:43.610 This is a called a forward contract. 308 00:24:44.390 --> 00:24:47.130 Futures are basically standardized forward contracts, 309 00:24:47.684 --> 00:24:51.065 where they all have kind of the same structure and makes them tradable amongst each other. 310 00:24:52.085 --> 00:24:53.945 This is a hash rate future. 311 00:24:54.780 --> 00:24:58.080 And, you know, what miners could be doing is they could be essentially 312 00:24:58.780 --> 00:25:03.135 paying someone to take this risk. And that risk taker is, of course, gonna charge a fee. There's gonna 313 00:25:06.975 --> 00:25:11.075 be a spread between the, the share price and and the Bitcoin price. And some of that's

gonna do with fee estimation. Some of that's gonna do with 314 00:25:12.050 --> 00:25:17.350 the the rate of rate of blocks are coming. Some of that's gonna do after the cash rate futures, but fundamentally, 315 00:25:17.730 --> 00:25:19.270 they want to outsource this risk. 316 00:25:19.585 --> 00:25:21.685 This is what futures markets are. 317 00:25:23.105 --> 00:25:26.645 You know, long time ago we figured out corn farmers and oil oil 318 00:25:27.505 --> 00:25:37.245 drillers figured out that they could get other people to take this risk for them. And so they hire professional firms like Citadel and Susquehanna. And what what those companies do is 319 00:25:37.545 --> 00:25:41.005 they build fancy models of the weather. They wanna know the precipitation 320 00:25:41.305 --> 00:25:41.805 for, 321 00:25:42.185 --> 00:25:59.784 for corn. They wanna know how cold the winter is gonna be in there or how much heating oil is gonna be used by the oil industry. They do things like they fly drones over the the oil storage containers near ports and look at the level of the oil in the in the container because the the lid on those things basically goes up and down with oil. 322 00:26:00.640 --> 00:26:04.100 And they try to find other ways to figure out and model these things, 323 00:26:04.560 --> 00:26:09.060 and then they come up with a professional prediction. And they say, we've we've done the risk analysis, and we think 324 00:26:09.855 --> 00:26:14.355 it's gonna be this, and we're gonna make a bet on it. And therefore, they sell futures, on the futures markets. 325 00:26:14.975 --> 00:26:21.480 Corn farmers buy there, buy them, and then the corn farmers and oil drillers can lock in their profit and not be subject to this risk. 326 00:26:21.780 --> 00:26:27.625 And so what I propose to do is do the same damn thing for Bitcoin. Right? We have an a a different kind of 327 00:26:28.725 --> 00:26:40.920 variance going on here, a different kind of risk, and that is hash rate as well as b risk. But none nonetheless, these are just risks. They're professional risk takers that do this. The only thing we need to do to enable this is allow shares to change hands. 328 00:26:41.380 --> 00:26:42.440 And if it's a coin 329 00:26:42.945 --> 00:26:46.164 and operates just like Bitcoin, it's easy peasy. Right? 330 00:26:47.025 --> 00:26:47.525 Right. 331 00:26:52.630 --> 00:26:53.130 Just 332 00:26:53.670 --> 00:26:54.490 go ahead, Heiko. 333 00:26:56.550 --> 00:27:00.625 No. I was just I was just gonna go back to the the decentralizing 334 00:27:00.925 --> 00:27:01.485 aspect, like, 335 00:27:03.485 --> 00:27:04.625 so it's Sorry. 336 00:27:05.245 --> 00:27:09.425 I didn't I didn't I got off on tangent. I didn't answer your question. Let me ask you a question about how is it decentralized? 337 00:27:09.950 --> 00:27:11.330 There, do you wanna enter that quick? 338 00:27:11.870 --> 00:27:12.770 No. Go ahead. 339 00:27:13.550 --> 00:27:16.210 How does it decentralized?

Okay. It decentralizes. 340 00:27:17.150 --> 00:27:20.205 So I I just described one way it decentralized because the, 341 00:27:20.505 --> 00:27:24.845 the pool so centralized pools are already taking on this risk management function. 342 00:27:25.625 --> 00:27:28.205 And if the analysis of b 10 c is correct, 343 00:27:28.700 --> 00:27:34.400 this risk management function is something they don't want to do, and they're essentially all outsourcing this risk management function to Bitmain. 344 00:27:35.434 --> 00:27:44.735 There's one thing that may knows that nobody else knows. And that's how many Bitcoin mining devices they produce in this in some timeframe. Right. And that's one of the things that needs to go into a proper risk management. 345 00:27:46.190 --> 00:27:47.009 But this is 346 00:27:47.309 --> 00:27:48.769 kind of a bad deal. So, 347 00:27:49.149 --> 00:27:49.809 if we 348 00:27:50.190 --> 00:27:53.169 decentralize that by having there be lots of market makers 349 00:27:53.475 --> 00:28:02.540 who can all buy and sell shares, I mean, you and I could do it. Right? If you have the right market, if this was a coin listed on exchanges, I could go buy share coins, and and sell Bitcoin for it. Right? 350 00:28:04.520 --> 00:28:05.820 The other way it decentralizes 351 00:28:06.760 --> 00:28:07.740 mining is, 352 00:28:08.600 --> 00:28:09.260 the pools 353 00:28:09.560 --> 00:28:10.060 also 354 00:28:10.765 --> 00:28:12.625 create the block template in select transactions. 355 00:28:12.925 --> 00:28:21.100 What we will do with Great Pool is actually have every single miner run their own Bitcoin node and their own Great Pool node and construct their own blocks. Right? 356 00:28:21.559 --> 00:28:32.115 The only requirement here is that, any of your shares you create must have could have been a Bitcoin block if it is difficult to target. Right? And so that's something we have to verify about. So 357 00:28:35.055 --> 00:28:38.490 by having more people producing blocks, more people selecting transactions, 358 00:28:39.750 --> 00:28:44.945 it makes it much more difficult for, let's say, a government to come in and say, okay, you you can't 359 00:28:45.485 --> 00:28:48.225 pass this transaction or you can't pass that transaction. Right? 360 00:28:48.925 --> 00:28:50.385 Right. Yeah. Because everybody 361 00:28:51.165 --> 00:28:51.600 is 362 00:28:52.000 --> 00:28:55.940 distributed, and they're selecting their own transactions from their own nodes. 363 00:28:56.640 --> 00:28:57.140 Yeah. 364 00:28:57.520 --> 00:28:58.705 So we wanna get 365 00:28:59.424 --> 00:29:03.205 pools out of the business of trucking blocks. Right? That's one way of decentralizing. 366 00:29:03.585 --> 00:29:15.080 We also wanna get pools out of the risk management function, which and decentralized that as well. This is something that people don't talk about very much. But the the analysis of b 10 c is really highlighting how important that risk management function is. 367

00:29:15.405 --> 00:29:17.585 So by decentralizing both of those things, 368 00:29:18.205 --> 00:29:31.169 we we hope to allow centralized pools to continue to operate and continue to buy those functions that they want on top of grateful, because there's not going to be a fee for running on top of grateful. So they're gonna be able to provide bread better services at lower costs, 369 00:29:31.924 --> 00:29:37.465 and continue to do what they're doing if they choose to. But miners will also be able to run braid pool themselves. 370 00:29:38.485 --> 00:29:40.985 And so, like, in theory, the 371 00:29:41.350 --> 00:29:44.490 the pool braid pool wouldn't even have to be handling 372 00:29:45.269 --> 00:29:46.889 the Bitcoin payouts 373 00:29:47.350 --> 00:29:55.895 for the miners. Because I could if I'm mining with Braid pool, I can take my shares and sell them to somebody for Bitcoin now, even before 374 00:29:56.755 --> 00:30:04.190 a block is found at a valid difficulty that gets it on the Bitcoin main chain. Right? That's right. And then once 375 00:30:04.570 --> 00:30:07.789 once braid once a braid pool miner does find a block 376 00:30:08.335 --> 00:30:10.275 that meets that difficulty requirement, 377 00:30:10.895 --> 00:30:14.275 then that's when that braid pool multi sig 378 00:30:14.735 --> 00:30:15.955 kicks in. Right? 379 00:30:16.440 --> 00:30:28.625 That's right. So it is necessary that the, the shares get turned into Bitcoin at some point. Right? The share shares are not a shit point. Right? There's not gonna be a presale of them. The only way to get shares is to mine. Right? So you're gonna have to mine, 380 00:30:29.085 --> 00:30:36.210 what would be bad valid Bitcoin block. And the only way that shares get turned into Bitcoins is if we successfully actually mine actual Bitcoins. Mhmm. Right? 381 00:30:36.909 --> 00:30:43.009 And so if if I were on the other side of that transaction and I bought Braid pool shares from somebody mining, 382 00:30:43.695 --> 00:30:46.835 then when when that multi sig gets activated, 383 00:30:47.375 --> 00:30:49.235 then I get my Bitcoin back. 384 00:30:49.695 --> 00:30:55.080 Right? That's right. Okay. Yeah. So what I propose to do is essentially have a 2 week time window 385 00:30:55.540 --> 00:30:56.360 where we 386 00:30:56.820 --> 00:31:02.465 aggregate those shares. And the 2 week time window is 2016 blocks, it corresponds to the difficulty adjustment. 387 00:31:02.925 --> 00:31:06.065 And the reason for this is that within that 2016 blocks, 388 00:31:06.605 --> 00:31:25.830 the difficulty is the same. So if you want to create a hash rate derivative instrument, what you're doing is you're comparing the difficulty within 1 2016 block epoch Mhmm. And the next 26 block epoch. I mean, they call them finance derivatives for a reason. They are they are functionally mathematically at the river. You know, it's a it's a discreet difference between 2 different time intervals. 389 00:31:26.690 --> 00:31:29.110 The the hash rate in one time or not, you know, the hash rate in another. 390 00:31:30.690 --> 00:31:31.190 So, 391 00:31:31.717 --> 00:31:31.945 by 392 00:31:33.465 --> 00:31:34.524 lost my train of thought. 393 00:31:36.024 --> 00:31:39.804 Well, while while you're trying to find it, actually, Rob on this thread, 394 00:31:40.390 --> 00:31:42.490 hit us up in the the the chat. 395 00:31:43.669 --> 00:31:51.875 Yes. Thank you, Rob. He says, you 2 are looking more handsome than ever. Rod is 10 years younger, and Encano is twice as anonymous. 396 00:31:53.055 --> 00:31:56.950 So thank you, Rob, for that. And congrats on, publishing 397 00:31:57.429 --> 00:32:00.090 that awesome book, man. I can't wait to get my hands on it. 398 00:32:00.549 --> 00:32:01.049 Question. 399 00:32:01.590 --> 00:32:14.780 How does this differ from the Luxor product? Is this a different product or a new competitor in this in that space? So Luxor has a derivatives product. I don't know, Bob, if you're familiar with that that product. I'm familiar with it. I'm not that familiar with it. 400 00:32:15.480 --> 00:32:17.580 Look, there are many different ways to do 401 00:32:17.960 --> 00:32:19.180 derivatives. Right? 402 00:32:20.125 --> 00:32:26.385 And Luxor is not the 1st party to have tried this. There there have been a number of companies who've tried to make Hashtag derivatives. 403 00:32:27.565 --> 00:32:28.545 Do it real quick. 404 00:32:30.510 --> 00:32:34.530 And, you know, fundamentally, what you want is is a large liquid market 405 00:32:35.230 --> 00:32:35.730 of, 406 00:32:36.110 --> 00:32:39.065 the, you know, the futures instrument you want to do. Now 407 00:32:39.765 --> 00:32:42.105 the the most liquid we could make this market 408 00:32:42.725 --> 00:32:49.350 is to have all of the shares. If everybody was mining on Brightpool, and all of the shares were actual Bitcoin, and I could trade all of those futures. 409 00:32:49.730 --> 00:32:51.590 That would be the largest we can make it, 410 00:32:52.265 --> 00:32:53.005 Sort of. 411 00:32:53.545 --> 00:32:55.245 You can actually make it large. 412 00:32:55.705 --> 00:32:58.365 And this actually happens in the gold market, 413 00:32:58.825 --> 00:33:00.970 where the the number of outstanding, 414 00:33:01.590 --> 00:33:06.010 derivative instruments on gold is larger than the spot gold market. Mhmm. 415 00:33:06.550 --> 00:33:10.645 I think it's a terrible fucking idea. Mhmm. Because it puts you on a tail wags the dog situation. 416 00:33:11.665 --> 00:33:14.645 I don't think people should be trading instruments which are 417 00:33:15.105 --> 00:33:19.360 not tied to the underlying. I think I think this is just fundamentally a bad idea. 418 00:33:20.860 --> 00:33:23.360 It's it's, you know, you might call a rehab application. 419 00:33:25.335 --> 00:33:31.275 Trading paper Bitcoin because there aren't enough Bitcoin or shares out there to correspond to the amount of futures. Right? 420 00:33:31.950

--> 00:33:33.730 But there's a lot more capital out there 421 00:33:34.110 --> 00:33:37.650 to fool with the market. So I I don't want that to happen. 422 00:33:38.270 --> 00:33:41.965 We want, you know, everything to be correlated to the other ones. So every, 423 00:33:42.525 --> 00:33:51.080 user's instrument needs to have corresponding Bitcoin associated with it. And I think that's kind of part and parcel of of one of the thesis of this entire market that's different from traditional markets. 424 00:33:51.940 --> 00:33:53.399 And I believe Luxor's 425 00:33:54.820 --> 00:33:57.480 product because Luxor is a relatively small pool. 426 00:33:58.135 --> 00:33:59.835 I believe their product is indexed, 427 00:34:00.215 --> 00:34:01.595 which means that they, 428 00:34:02.375 --> 00:34:07.035 you know, they they measure the the hash rate. And so the question is, like, how do you measure the hash rate? 429 00:34:07.760 --> 00:34:15.305 And then, you know, from that, they make an they make an index and then you can bet on it. Right? There are a lot of products out there which operate this manner. In fact, 430 00:34:15.605 --> 00:34:23.704 the the Bitcoin futures product on the Chicago MercTeal Exchange is of such a such a character. Right? No Bitcoin actually changes hand on that product. 431 00:34:24.140 --> 00:34:25.760 It's it's indexed. Right? 432 00:34:26.060 --> 00:34:26.800 And so 433 00:34:27.180 --> 00:34:30.800 because of that, you can it's it's kind of like paper Bitcoin, basically. 434 00:34:32.035 --> 00:34:35.735 So the Luxor product, I believe, is indexed in that manner. Now, 435 00:34:36.435 --> 00:34:47.335 people could be using it. Nonetheless, it's a hedging instrument. Right? It is a useful hedging instrument. So if you're a miner, you wanna protect yourself from variations from how much you might or the hash price going up or down, 436 00:34:47.815 --> 00:34:52.395 you could be doing that. My experience with miners has been that fewer are actually doing this. 437 00:34:53.015 --> 00:34:55.515 I think as this market kind of professionalizes, 438 00:34:56.110 --> 00:34:59.090 more and more people are gonna do this. Mhmm. I mean, no professional 439 00:34:59.710 --> 00:35:02.210 corn farmer or, you know, oil driller 440 00:35:02.670 --> 00:35:18.150 is not trading futures. They're all trading futures. Right? Because that it's risk management. It's hedging. It's just a smart thing to do. Everybody's doing it. Yep. So the follow-up question here is, like, how do you manage counterparty risk, I. E. A miner sells forward their hash rate but does not deliver? 441 00:35:20.915 --> 00:35:23.095 That is a problem we are not gonna solve. 442 00:35:23.795 --> 00:35:27.415 So there are several Easter bunnies already in this project. 443 00:35:28.580 --> 00:35:30.520 What you're really describing there is 444 00:35:31.300 --> 00:35:33.400 a decentralized exchange. Right? 445 00:35:34.260 --> 00:35:39.015 And fundamentally, for cryptographic perspective, this comes down to a protocol called the 2 party fair exchange, 446 00:35:39.795 --> 00:35:41.335 which means I'm gonna give you, 447 00:35:42.275 --> 00:36:00.165 my shares and you're gonna give me Bitcoin. Now there's a paper computer science paper out there proving that this problem does not have a solution without a third party. That doesn't matter whether we're talking about PDF files, shoes, or dollars and cars, Doesn't matter what you're trading. There's fundamentally no solution to this problem where 2 parties exchange some, 448 00:36:01.345 --> 00:36:04.965 atomic. Right? And so that's really we're talking about. There's an atomic swap. 449 00:36:05.430 --> 00:36:10.890 Now we can do atomic swaps on on Bitcoin. And there are many protocols to do that. 450 00:36:11.990 --> 00:36:15.714 The tier Nolan originally put out another one, but I want in the beginning. 451 00:36:17.055 --> 00:36:20.035 What's her name? Sharon Goldberg has a refined to that, 452 00:36:20.335 --> 00:36:21.234 that she published 453 00:36:22.414 --> 00:36:25.819 and and give a talk about it at MIT BIC and Expo, I believe, 3 or 4 years ago. 454 00:36:26.359 --> 00:36:29.980 So this is one answer to your question. You can do an atomic swap. Right? 455 00:36:30.484 --> 00:36:33.224 Those atomic swaps, the way they work is they have a set of timeouts, 456 00:36:34.724 --> 00:36:35.224 whereby, 457 00:36:36.565 --> 00:36:41.380 the if I so you have 2 blockchains, essentially. Right? So we could do a Bitcoin Litecoin 458 00:36:41.760 --> 00:36:45.060 swap today. This has been done. You can you can Google it. People have done this. Right? 459 00:36:46.315 --> 00:36:56.700 Somebody has to go first. They send the transaction to the chain. Right? And then somebody has to go second, and then there's a time out where if the other party doesn't go, I can get my points back. And so it's a little bit of a complicated protocol. 460 00:36:58.600 --> 00:37:01.580 Within chains like Ethereum, where you're trading ICOs 461 00:37:02.885 --> 00:37:04.345 or an ICO for ether, 462 00:37:04.725 --> 00:37:12.140 it's the blockchain itself that makes it atomic because they're they're kind of actually the same asset because they're both on the same. Right? 463 00:37:13.160 --> 00:37:14.380 So that provides atomicity. 464 00:37:15.079 --> 00:37:20.700 So so your question is, how do I handle counterparty risk? What you're really saying is how do I achieve atomicity 465 00:37:21.265 --> 00:37:22.724 on a decentralized exchange? 466 00:37:23.105 --> 00:37:36.890 Well, one answer to that is to use atomic swaps, decentralized exchange. And there are some lightning decentralized exchanges that are beginning to come up now. There's also just simply center centralized exchanges. Right? So they they essentially handle this counterparty risk for you. 467 00:37:38.390 --> 00:37:58.185 But this is, you know, this is an Easter bunny we are not gonna solve. This has been solved by other people,

and it's gonna be solved by other people. It making a decent dollar exchange is something I've worked on before. I'm gonna grab a hole if you want, but, it's just too much for this project right now. We're gonna let it be solved. The share wouldn't be valid unless the miner had 468 00:37:58.725 --> 00:37:59.705 already contributed 469 00:38:00.485 --> 00:38:14.505 the work to generate that share. Right? Right. The issue is not whether the share is valid. I mean, I'm not gonna be able to send you an invalid share. It's a blockchain like just like Bitcoin. Right? So I can't send you an invalid Bitcoin either. Right? That's just the concept doesn't even make sense. Right? 470 00:38:14.885 --> 00:38:18.265 Give me a fake address, and then I'll immediately know it's a fake address. So, 471 00:38:19.285 --> 00:38:34.695 the the question is, is counterparty risk. In other words, I'm gonna send you shares, you're gonna send me Bitcoin. And generally, this is gonna be a private agreement. So I'm gonna go to you. You you are gonna be a professional risk taker, and you and I are gonna be hammering out a contract. We're gonna sign with wet ink in a legal jurisdiction. 472 00:38:35.050 --> 00:38:37.070 And so if you don't pay me, I can sue 473 00:38:37.370 --> 00:38:46.745 you. That's another solution to this this problem is that we have to make a a way to do this where I'm gonna send you the shares, and then you're obligated to send me the the Bitcoin app. 474 00:38:47.285 --> 00:38:52.540 Right? And you have to keep up your end of the bargain. Right? Or you're gonna go to court. And this allows, 475 00:38:53.400 --> 00:38:56.700 people who are mining to have a counterparty in the appropriate jurisdiction 476 00:38:57.000 --> 00:38:58.859 such that a legal option is 477 00:38:59.320 --> 00:39:02.355 available to them. Because if you think you're gonna sue Bitmain, 478 00:39:02.735 --> 00:39:03.475 you're not. 479 00:39:04.095 --> 00:39:05.475 If you don't like what they're doing, 480 00:39:05.855 --> 00:39:09.955 you're you're chill out of luck. You're not gonna be able to have much progress in court on that. 481 00:39:12.559 --> 00:39:15.539 I guess I'm still just a little bit confused because, like, 482 00:39:16.240 --> 00:39:21.505 I just don't see where the the counterparty risk is. Right? Like, if the shares are tokenized 483 00:39:22.765 --> 00:39:24.545 and that's traded for Bitcoin, 484 00:39:25.325 --> 00:39:25.825 then, 485 00:39:26.365 --> 00:39:29.099 like, when the when Bradepull finds 486 00:39:29.400 --> 00:39:30.059 a block, 487 00:39:30.519 --> 00:39:31.660 that share is gonna 488 00:39:32.760 --> 00:39:34.655 is gonna earn me that Bitcoin back. 489 00:39:35.135 --> 00:39:40.435 That's correct. So if you just mine and you hold your shares and you wait the 2 weeks and then that gets turned into Bitcoin, 490 00:39:40.815 --> 00:39:45.340 there is no counterparty. You're correct. Yep. It's on the future side. It's only 491 00:39:45.720 --> 00:39:47.340 it's only if you want to 492 00:39:48.360 --> 00:39:54.225 have payouts faster than once every 2 weeks, which by all indications is actually very desirable by basically all miners. 493 00:39:55.005 --> 00:39:59.780 And you want this risk management function, which by all indications is very desirable by basically all miners, 494 00:40:00.500 --> 00:40:07.240 then then you have counterparty risk. And counterparty risk is defined as I send you my stuff, but you don't send me your stuff or vice versa. 495 00:40:07.700 --> 00:40:10.664 Mhmm. It's one on one with the atomicity of a of a 2 party exchange. 496 00:40:11.444 --> 00:40:12.424 Shares of Bitcoin. 497 00:40:14.885 --> 00:40:18.984 Yeah. Okay. Iko, to be cognizant of Bob's time and and, 498 00:40:19.510 --> 00:40:20.410 like, a 315, 499 00:40:21.030 --> 00:40:27.450 stop, should we get do you think and there's some really good questions I just perused as well. Do you think we should just get into some of these questions as well? 500 00:40:28.714 --> 00:40:29.115 Yeah. 501 00:40:29.515 --> 00:40:31.295 You wanna skip the state of the network? 502 00:40:32.234 --> 00:40:33.214 What do you think? 503 00:40:33.835 --> 00:40:43.380 Let's just blaze through this real quick. Okay. Go for it. Alright. We're and and, Bob, feel free to jump in anytime if you got a comment on any of these points. Yep. 504 00:40:43.920 --> 00:40:44.420 Okay. 505 00:40:45.234 --> 00:40:47.575 We are at block height 849603. 506 00:40:51.394 --> 00:40:56.140 And according to our friends at new hedge dot i0, Bitcoin difficulty is 83.6 507 00:40:56.839 --> 00:41:01.580 trillion set to decrease roughly 5% at the conclusion of epoch 421. 508 00:41:02.085 --> 00:41:06.585 Let's go. It should be which should be on Independence Day or the day after. 509 00:41:07.605 --> 00:41:09.385 Over at Kaboomrax Marketplace, 510 00:41:09.685 --> 00:41:14.060 miners around 18 jewels per terahash are selling for roughly 511 00:41:14.440 --> 00:41:14.940 $20.58 512 00:41:15.960 --> 00:41:16.780 per terahash. 513 00:41:17.895 --> 00:41:19.275 And moving over to mempool.space, 514 00:41:20.375 --> 00:41:23.435 Hash rate has been taking a nosedive down to 577 515 00:41:24.295 --> 00:41:24.795 exahash 516 00:41:25.335 --> 00:41:27.355 on the 14 day moving average. 517 00:41:27.810 --> 00:41:29.590 That's down from the all time high of 639 518 00:41:30.690 --> 00:41:31.190 exahash 519 00:41:31.970 --> 00:41:33.350 set on April 27, 520 00:41:33.730 --> 00:41:34.230 2024. 521 00:41:35.615 --> 00:41:37.635 And then taking a look at insights.brains.com, 522 00:41:39.215 --> 00:41:40.595 hash value is currently 523 00:41:41.135 --> 00:41:41.635 80,000 524 00:41:41.935 --> 00:41:44.859 sats per petahash per day and hash price 525 00:41:45.799 --> 00:41:46.460 is $49 526 00:41:46.839 --> 00:41:48.299 per petahash per day. 527 00:41:49.480 --> 00:41:52.140 And then the halving is due in 1,389 528 00:41:53.319 --> 00:41:55.565 days according to

coin wars. 529 00:41:56.425 --> 00:42:00.125 And, Bob, this segment of the show is where we have our guest 530 00:42:00.744 --> 00:42:01.965 read out the 531 00:42:02.740 --> 00:42:05.720 names of the Hashers who've been pointing us hash rate, 532 00:42:06.500 --> 00:42:09.400 over the last couple of weeks. So I'm gonna copy this list 533 00:42:10.005 --> 00:42:12.345 and then I'm gonna put it in the chat on Riverside, 534 00:42:13.125 --> 00:42:14.905 which you should be able to access. 535 00:42:16.405 --> 00:42:20.450 And so if any of our listeners are interested in supporting the show, 536 00:42:21.230 --> 00:42:23.630 you can point us hash rate, go to, 537 00:42:24.110 --> 00:42:25.010 pod 256.org, 538 00:42:27.035 --> 00:42:32.095 and click on the support page, and then you'll see all the instructions there on how 539 00:42:32.475 --> 00:42:34.015 to support the show 540 00:42:34.315 --> 00:42:35.535 with your hash rate. 541 00:42:36.230 --> 00:42:36.730 Also, 542 00:42:37.110 --> 00:42:41.450 Bob, before you read out the miners for the last week or 2, 543 00:42:41.910 --> 00:42:48.154 I wanna give a big shout out to Rob Warren who's writing the Bitcoin Miner's Almanac. Huge. 544 00:42:48.855 --> 00:42:50.875 Co publishing it with Bitcoin Magazine. 545 00:42:51.414 --> 00:42:53.914 I do believe it's available on the 546 00:42:54.220 --> 00:42:56.240 Bitcoin magazine website right now. 547 00:42:56.780 --> 00:42:59.040 And he has graciously 548 00:42:59.340 --> 00:43:00.320 offered to, 549 00:43:01.100 --> 00:43:02.240 contribute 10% 550 00:43:03.475 --> 00:43:07.255 of his profits from that book, or is it overall sales? 551 00:43:07.795 --> 00:43:09.175 Oh, that's a good question. 552 00:43:09.635 --> 00:43:16.490 Profits are sales. And, by the way, it's available on Amazon too. So you can just click click and just buy it. 553 00:43:17.750 --> 00:43:20.010 Okay. Yep. Yep. I see that in the note. 554 00:43:20.974 --> 00:43:24.195 So, yeah, thank you, Rob, for doing that. That's amazing. And, 555 00:43:24.815 --> 00:43:26.755 that support is going to, 556 00:43:27.535 --> 00:43:28.595 help the 256 557 00:43:28.974 --> 00:43:29.474 Foundation. 558 00:43:31.200 --> 00:43:34.660 So thank you. And more to come on that later. Hundo percento. 559 00:43:35.920 --> 00:43:42.565 So you up for this, Bob? Each of our guests, read out the the names. It's in the chat right now if you wanna go for it. 560 00:43:43.825 --> 00:43:47.980 Alright. I see why you want me to do this. You want me to stumble over all the crazy names 561 00:43:52.600 --> 00:44:07.200 and and I assume I assume you mean shout out to our Bitcoin miners here. Yeah. Yeah. There's a typo. Hey. Alright. Shout out to our Bitcoin miners. Oh. The draw Sorry. Lintcoin lintcoin is the mining pool. Yeah. But he's got a competing mining pool, so he wants to just call it mining, Bitcoin miners. 562 00:44:07.740 --> 00:44:12.640 Okay. Oh, well, I invite you guys to run on top of a free pool when we're ready. Alright. We're not ready yet. But, 563 00:44:13.375 --> 00:44:16.815 yeah. You just no worries you can't keep doing what you're doing and run on top of There you go. 564 00:44:18.495 --> 00:44:20.915 LimCoin. K. Shout out for our LimCoin miners. 565 00:44:21.410 --> 00:44:23.349 Dot the DROT, bytes and Bitcoin 566 00:44:23.730 --> 00:44:26.309 mainly brains in the plains of pain. 567 00:44:26.930 --> 00:44:27.670 After 1. 568 00:44:28.450 --> 00:44:31.835 Bitax wanna be just Ant 17 pro. 569 00:44:33.255 --> 00:44:33.755 Bizzabler, 570 00:44:34.535 --> 00:44:38.130 don't mind me just stacking web testing as 571 00:44:38.430 --> 00:44:39.329 Google Miner. 572 00:44:40.990 --> 00:44:41.970 A stealth miner. 573 00:44:43.230 --> 00:44:45.329 So good. Miners are not for profit 574 00:44:45.715 --> 00:44:50.135 and Bitcoin Bay Barn miner. Nice. And also shout out for public twin miners, Boris. 575 00:44:50.755 --> 00:44:51.255 Awesome. 576 00:44:51.635 --> 00:44:53.975 Thank you, Rob. Good job. Good job. 577 00:44:54.309 --> 00:44:58.730 Hell, yeah. Well done. Alright. Let's get into some questions from the audience. 578 00:44:59.589 --> 00:45:04.455 Alright. So we got into Go ahead. My what is a braid pool. So well done there. 579 00:45:05.315 --> 00:45:06.835 I'll start with the first one, Iko. 580 00:45:07.235 --> 00:45:08.055 From Constantine, 581 00:45:08.675 --> 00:45:16.030 can you ask them what are the main things that are that differentiate braid pool from p t p to p pool? 582 00:45:16.490 --> 00:45:22.075 Also, any idea what the hardware and bandwidth requirements will be for running a Braid pool node? 583 00:45:22.454 --> 00:45:25.194 How does this fare against block withholding attacks? 584 00:45:25.575 --> 00:45:27.070 So 3 part question. Great. 585 00:45:28.030 --> 00:45:31.570 Let me answer the first one, then remind me what the second one is. Sure. The first one was, 586 00:45:33.870 --> 00:45:34.370 Rami? 587 00:45:34.964 --> 00:45:39.944 The first one is, can you ask them what are the main things that differentiate break pool from p to p pool? 588 00:45:40.964 --> 00:45:43.145 So the first one I already talked about, and that's 589 00:45:43.850 --> 00:45:46.510 time, right? So p two pool had a 30 second block time. 590 00:45:47.210 --> 00:45:48.510 And it used a blockchain, 591 00:45:48.810 --> 00:45:51.230 which resulted in, you know, this this game between 592 00:45:51.610 --> 00:46:00.200 miners optimizing latency, and I've heard informally from a number of miners that they were able to double their profits by playing this latency game, optimize it with peers they connect 593 00:46:00.680 --> 00:46:04.859 to. So we solve that problem by using a direct basic graph to the blockchain. 594 00:46:05.960 --> 00:46:11.405 Now this should allow us to get to individual share times, speed times below a second. 595 00:46:12.345 --> 00:46:13.485 The Casper protocol, 596 00:46:14.025 --> 00:46:15.725 or the or the Dagnite protocol,

597 00:46:16.665 --> 00:46:17.165 published, 598 00:46:18.000 --> 00:46:21.060 they have benchmarks saying they can get down to a 150 milliseconds. 599 00:46:22.400 --> 00:46:23.540 I think that's optimistic. 600 00:46:23.920 --> 00:46:26.020 But, you know, somewhere between, I think, 601 00:46:26.865 --> 00:46:29.605 150 milliseconds and 6 seconds, I think is a reasonable target. 602 00:46:30.385 --> 00:46:32.965 So, you know, on order of a 1000 times faster. 603 00:46:33.745 --> 00:46:38.829 That's the first major difference. The second major difference is is in how the payout works. Right? So, 604 00:46:39.529 --> 00:46:42.445 p 2 pool paid every miner in every block, 605 00:46:43.885 --> 00:46:46.465 And this resulted in very large Coinbase transactions. 606 00:46:47.245 --> 00:46:52.800 Because, you know, instead of withdrawing your your funds once per day or once per week or whenever it is, 607 00:46:53.340 --> 00:46:55.120 you get paid in every block of harvest. 608 00:46:55.740 --> 00:46:59.505 This consumes a lot of block space, which competes against fee paying transactions. 609 00:47:00.065 --> 00:47:06.244 And and as time goes on and we're we get away from the, block subsidy and toward a fees of fee subsidized market, 610 00:47:06.545 --> 00:47:09.970 this is a bigger and bigger problem. It was already a problem back in p two pool days. 611 00:47:10.510 --> 00:47:13.090 The ocean protocol, which is a reboot of the Elegis 612 00:47:13.390 --> 00:47:17.010 pool, has the same problem. Their estimates are that on average, 613 00:47:17.555 --> 00:47:19.734 every miner will get paid roughly 8 times, 614 00:47:20.595 --> 00:47:32.660 wherein a centralized pool they would get paid from. So they're they're using roughly 8 times more blocks based to pay miners than a centralized pool, would. That's one of the reasons we are gonna aggregate over a 2 week time window, 615 00:47:33.440 --> 00:47:39.365 is because we want to aggregate, and we don't wanna pay people on in every single block. We wanna pay people infrequently 616 00:47:39.825 --> 00:47:41.925 to allow there to be block space for, 617 00:47:42.465 --> 00:47:48.640 for transactions because those transactions pay fees, and that's one of the ways buyers rep. So those are, I think, the 2 major differences. 618 00:47:49.420 --> 00:47:51.680 3rd major differences is just a complete reboot. 619 00:47:52.060 --> 00:47:53.839 The p two pool code base was 620 00:47:54.220 --> 00:47:54.720 widely 621 00:47:55.020 --> 00:47:56.000 known to be 622 00:47:56.365 --> 00:47:57.105 terrible, written 623 00:47:57.485 --> 00:48:00.465 in Python, very poorly documented, very difficult to, 624 00:48:02.125 --> 00:48:02.625 to 625 00:48:03.085 --> 00:48:03.585 modify. 626 00:48:04.470 --> 00:48:07.130 And so we're starting from scratch using Rust. 627 00:48:07.990 --> 00:48:08.490 Nice. 628 00:48:10.869 --> 00:48:12.755 And then the second part of that 629 00:48:13.154 --> 00:48:14.454 question was, also, 630 00:48:14.755 --> 00:48:20.454 any idea what the hardware and bandwidth requirements will be for running a braid pool node? 631 00:48:21.730 --> 00:48:25.430 The bandwidth requirements and hardware requirements is basically the same as running a Bitcoin node. 632 00:48:27.090 --> 00:48:34.825 So, you know, for whatever reason, most miners are not doing this today, but it's not huge expense. I mean, technically, you can do it on a Raspberry Pi. Our 633 00:48:36.244 --> 00:48:38.184 requirements will be a bit higher than that. 634 00:48:39.204 --> 00:48:41.710 But we're we're looking at, you know, on 635 00:48:42.170 --> 00:48:42.410 order, 636 00:48:43.690 --> 00:48:45.310 the same as Bitcoin bandwidth. 637 00:48:45.849 --> 00:48:49.470 So the the largest part of Bitcoin bandwidth is actually the peer to peer network. 638 00:48:49.835 --> 00:48:57.055 And so our peer to peer network is gonna be basically the same because you're really looking at the set of transactions, and our set of transactions is gonna be the same Bitcoins 639 00:48:57.720 --> 00:48:58.220 Plus, 640 00:48:58.520 --> 00:48:59.500 you know, one 641 00:49:00.039 --> 00:49:01.260 block header per 642 00:49:03.720 --> 00:49:08.095 per second, let's say, if we get down to a second, but that's not a very that's like a kilobyte or something. 643 00:49:09.115 --> 00:49:12.175 The larger contribution is going to be from the frost protocol. 644 00:49:12.795 --> 00:49:15.980 So if you want to do this, you can anticipate in the cosigning of 645 00:49:16.280 --> 00:49:18.140 custody part and actually paying people. 646 00:49:19.000 --> 00:49:23.775 That's a multi round protocol that is going to require a bit of bandwidth, but it's still gonna be on order, 647 00:49:24.714 --> 00:49:26.734 the amount that Bitcoin has. Right? So 648 00:49:27.515 --> 00:49:32.960 this shouldn't be onerous to anybody who ever run a node of any kind. Another 649 00:49:33.500 --> 00:49:36.160 thing to note is that grateful is not going to have history. 650 00:49:37.020 --> 00:49:42.835 So once a 2 week window is done, and we've collected a bunch of shares, counter those shares, paid it in Bitcoin, 651 00:49:43.135 --> 00:49:44.515 we can then dump that history. 652 00:49:44.895 --> 00:49:53.610 So it's not it doesn't keep history forever like Bitcoin does. It only keeps for that 2 week window, possibly 2 2 week windows, depending on some features we've we've discussed. 653 00:49:54.630 --> 00:50:01.795 But it's not gonna have as much disk space requirement. It only needs all the, you know, at most months worth of blocks of data, DAG data. 654 00:50:06.190 --> 00:50:11.250 And then how does this fare against block withholding attacks was the final part of that question. 655 00:50:12.510 --> 00:50:13.010 Oh, 656 00:50:19.645 --> 00:50:22.340 have to jog my memory about this. I'm caught up in a little while. 657 00:50:25.380 --> 00:50:27.000 So the block withholding attack. 658 00:50:29.545 --> 00:50:34.045 So

there's there's 2 things here. 1 is a share withholding attack, the other is a block with full factory. 659 00:50:35.785 --> 00:50:37.180 So share withholding attacks 660 00:50:37.579 --> 00:50:41.440 basically don't make any sense because of the direct basically graph structure. 661 00:50:42.619 --> 00:50:44.559 You know, share withholding attacks. 662 00:50:53.015 --> 00:50:58.510 We might wanna pass on this one. This is a deep topic. There's like, there's actually 2 questions implied by this. 663 00:50:59.310 --> 00:50:59.970 One is 664 00:51:00.670 --> 00:51:03.170 block withholding, one is share withholding, and one is 665 00:51:04.215 --> 00:51:08.715 the selfish mining attack. And then there's are you attacking the pool? Or are you attacking? 666 00:51:10.750 --> 00:51:12.049 It's a complicated question. 667 00:51:12.829 --> 00:51:25.655 That's fine. We can And maybe, like, a a written, like, a respond like, you know, writing this up because I do think some people would be interested in knowing that. It's an it's an important question. I do wanna answer it. I'm just not gonna do it off the cuff. Totally. Completely fair. 668 00:51:25.955 --> 00:51:28.215 Do you wanna go to the Boris question, Iko? 669 00:51:29.040 --> 00:51:32.180 Yep. This one comes from our last guest on pod 256, 670 00:51:32.560 --> 00:51:33.060 Boris. 671 00:51:33.599 --> 00:51:34.099 Could 672 00:51:34.480 --> 00:51:36.260 covenant enabling opcodes, 673 00:51:36.640 --> 00:51:37.115 like, 674 00:51:37.755 --> 00:51:38.494 for example, 675 00:51:38.795 --> 00:51:39.295 op_checktemplify 676 00:51:41.515 --> 00:51:43.055 check excuse me. 677 00:51:43.595 --> 00:51:44.095 Opchecktemplate 678 00:51:44.955 --> 00:51:45.455 verify, 679 00:51:46.140 --> 00:51:46.880 for example, 680 00:51:47.180 --> 00:51:49.599 potentially affect braid pools design. 681 00:51:51.500 --> 00:51:52.000 Yeah. 682 00:51:52.779 --> 00:51:53.935 Okay. Go ahead. Go ahead. 683 00:51:54.441 --> 00:51:55.875 The sorry. He's got 33 684 00:51:56.255 --> 00:52:03.475 questions in one. Do you want me to just wait till you answer? Yeah. I'll answer. Let me just answer them in succession because I'm not gonna remember all three questions. 685 00:52:05.040 --> 00:52:05.540 So, 686 00:52:05.920 --> 00:52:10.900 yes, for those that don't know, I've actually written 2 academic papers about covenants on Bitcoin. 687 00:52:11.705 --> 00:52:15.725 While I was at Fidelity, I collaborated with Brian Bishop, some of you may know, as Kanzure. 688 00:52:17.545 --> 00:52:18.685 And another 689 00:52:19.099 --> 00:52:22.319 Fidelity employee to write a couple of papers about this. And this is pre CTV 690 00:52:23.579 --> 00:52:25.119 and pre Segwit. Right? 691 00:52:25.660 --> 00:52:26.400 And so 692 00:52:26.780 --> 00:52:28.560 I'm a fan of covenants. I've 693 00:52:28.985 --> 00:52:32.845 not gotten involved in a lot of the politics. I did attend Jeremy Rubin's, 694 00:52:33.865 --> 00:52:40.670 first CTV meeting in San Francisco, and that was a lot of fun. And since then, everything just kinda went south. 695 00:52:41.369 --> 00:52:45.470 Yeah. I think Germany hates me. But nonetheless, covenants, I think, are a good idea. 696 00:52:46.305 --> 00:52:52.805 And, you know, exactly how we get the covenants or how we do the covenants is a tedious conversation that a lot of people are are engaging in. 697 00:52:53.265 --> 00:52:55.845 Actually, you guys spurred me to think about this because, 698 00:52:56.250 --> 00:52:58.670 so one of you posted from this last podcast 699 00:52:59.210 --> 00:53:01.310 that if we only had, I think, like, 300,000,000 700 00:53:02.090 --> 00:53:10.195 of of those future bit home miners, we could secure Bravepool against 51% attacks. Somebody put something like that. Yeah. The Bitax miners. Yeah. 701 00:53:10.815 --> 00:53:12.835 Yeah. So that's not quite true. 702 00:53:13.789 --> 00:53:20.135 So if you there there are 2 kinds of 51% tax here. Right? So if everybody was mining on top of Great Pool, which is safe, 703 00:53:20.855 --> 00:53:24.935 what it does is it transfer 51% attack to the Great Pool itself. Right? 704 00:53:25.255 --> 00:53:29.880 So it still has that that attack vector. And if that attack vector ever happened, the whole thing goes down. 705 00:53:30.759 --> 00:53:31.559 But then you, 706 00:53:31.960 --> 00:53:41.085 you know, you distributed the got a larger set of the spinning parts, whereas 51% attack when you have these centralized pools, much more risky. Great pool, it's gonna be much less likely to 707 00:53:42.265 --> 00:53:48.260 happen. The the other is, let's say break pool is small. Let's say it's early days and it only has 1% of the hash rate, 708 00:53:48.980 --> 00:53:51.080 and you wanted a 51% attack it, 709 00:53:51.940 --> 00:53:53.480 you would only have to add, 710 00:53:53.940 --> 00:53:57.905 you know, another 1% of hash rate, which there are parties out there that do, 711 00:53:58.525 --> 00:54:02.385 to attack grateful itself and steal the accumulated funds on freight. 712 00:54:03.245 --> 00:54:05.105 Right. That's a bigger problem 713 00:54:06.980 --> 00:54:08.599 That can be solved by covenants. 714 00:54:09.299 --> 00:54:18.645 Because what we're really doing here is we are we're taking the Coinbase, when we win a Bitcoin block, we take that Coinbase and we use the l two protocol, e l t o o, 715 00:54:19.905 --> 00:54:21.025 to roll that up, 716 00:54:21.425 --> 00:54:29.200 among different blocks. Right? So the l two protocol is the same. If you've heard of any pre vial or no no input Mhmm. In the context of, like, the lightning network, 717 00:54:29.820 --> 00:54:30.720 that's the way, 718 00:54:31.580 --> 00:54:34.400 the lightning network basically invalidates previous state. 719 00:54:35.164 --> 00:54:46.130 What we're doing is basically an on chain version of l two. So we invalidate the last payout because we have new information of a new block. Right? We invalidate the last

payout we created. Right? Now we do that with every block that we've been. 720 00:54:47.470 --> 00:54:50.210 And we have to sign that with a a giant multisync. 721 00:54:50.590 --> 00:54:51.090 Right? 722 00:54:52.134 --> 00:54:56.234 If you're able to be most parties signing that in the multistig, 723 00:54:57.095 --> 00:55:01.970 you have full control of that. Right? And that is 51% attack against the pool itself. Mhmm. 724 00:55:02.910 --> 00:55:04.930 Now that can be solved with a covenant 725 00:55:05.525 --> 00:55:09.224 because payout from the pool, if I can commit to that payout 726 00:55:09.525 --> 00:55:17.080 and I can say, the the payout has to have this structure and must pay these miners, and I commit to that at the time I mined the Bitcoin block, I've solved that problem. 727 00:55:18.420 --> 00:55:20.680 So we are planning on building something that uses, 728 00:55:21.380 --> 00:55:24.045 frost dead of a covenant because we don't have covenants. 729 00:55:24.585 --> 00:55:25.625 However, if, 730 00:55:25.945 --> 00:55:31.010 the community agrees upon some covenant mechanism, we will most likely use it for exactly this reason. 731 00:55:31.790 --> 00:55:32.290 Gotcha. 732 00:55:32.910 --> 00:55:38.530 And he goes on to ask, could something like this enable more efficient or secure implementations 733 00:55:48.045 --> 00:55:51.299 leverage such opcodes to enhance its decentralization 734 00:55:51.599 --> 00:55:52.420 and scalability? 735 00:55:56.125 --> 00:56:02.704 Just by being more secure and making sure everybody gets paid. I think that's the answer to that. Yeah. Just making sure you can't get 51% 736 00:56:03.085 --> 00:56:03.984 attack with 737 00:56:05.070 --> 00:56:10.770 with Yeah. I mean, it doesn't have a direct impact on scalability or decentralized innovation itself. It does have an impact on 738 00:56:11.070 --> 00:56:12.050 whether it works. 739 00:56:12.830 --> 00:56:13.730 Yeah. Right? 740 00:56:15.165 --> 00:56:30.010 You know, that we I was bouncing around with culprit yesterday, some other ideas we could, we might be able to use in the absence of covenants. You know, what I really want is a feature where we detect that this is going on. And we just shut that we have other methods to detect failure modes. 741 00:56:30.705 --> 00:56:38.769 And if that happens, basically, everybody reverse solo mining, and we take the last known good payout and pay everybody with that. Mhmm. That's a lot difficult to do in the 51% 742 00:56:39.309 --> 00:56:50.285 tax scenario, and covenants may be the right answer there. But if we can figure out a way to do it, that's ultimately what we want. We want to pay out the last known good, and then everybody becomes a solo miner after that, because everybody can see this happen. 743 00:56:50.665 --> 00:56:56.839 If the 51% attack happens, and the funds go to some funny place, everybody in that works gonna say, ah, this thing is broken. 744 00:56:57.619 --> 00:56:59.880 I'm I'm just I'm just with fools. Right? Right. 745 00:57:01.875 --> 00:57:13.640 And, you know, it's not we don't have the problem of hard fork. So we can just spin up spin down the whole network, say, you know, we we we're gonna hard fork, but we've decided there's a fatal bug. Spin it down and spin up another one once that bug is fixed. 746 00:57:17.300 --> 00:57:17.800 Alright. 747 00:57:20.025 --> 00:57:20.525 Okay. 748 00:57:20.825 --> 00:57:21.885 Boris is back, 749 00:57:23.224 --> 00:57:25.390 with another question. He's a big brain. 750 00:57:25.950 --> 00:57:30.210 Today's dominant mining pools, like Ample, f 2 pool, via BTC, and Foundry, 751 00:57:31.150 --> 00:57:35.170 benefit from out of band transactions and centralized transaction selection, 752 00:57:35.535 --> 00:57:37.875 which dire directly impacts their revenue. 753 00:57:38.415 --> 00:57:44.435 These pools seem to have little incentive to adopt or support a decentralized model like Stratum v 2 or Braidpool, 754 00:57:44.780 --> 00:57:47.200 which could potentially reduce their profits and control. 755 00:57:47.660 --> 00:57:52.800 How does Braidpool create incentives for major pools to transition to a decentralized model? 756 00:57:54.885 --> 00:57:55.625 Great question. 757 00:57:56.565 --> 00:57:58.425 So I occasionally run a, 758 00:57:59.125 --> 00:58:00.265 spaces on Twitter, 759 00:58:00.645 --> 00:58:06.030 which I call Friday night fights. If you want to go look through my history and look for Friday night fight. 760 00:58:07.050 --> 00:58:11.775 A few weeks ago, maybe a month ago, we had the guy from Marapool who wrote the soccer do this 761 00:58:12.815 --> 00:58:17.075 on, and he had a lot to say about this. And it was a very interesting conversation. 762 00:58:17.934 --> 00:58:28.070 I'm not a fan of doing this, but I think I I held my tongue with him and let him let him tell us what he was doing. So that's a very if you wanna get some insight as to how they're doing it and why they're doing it, go go listen to that. 763 00:58:28.555 --> 00:58:30.575 But long story short there are 764 00:58:31.035 --> 00:58:34.975 2 notions of consensus, right? 1 is the consensus that goes into a Bitcoin block 765 00:58:35.275 --> 00:58:46.480 and the allowed set of rules that that can be in a Bitcoin block. Right? The other notion of consensus is in the peer to peer light. Mhmm. So I'm because hard forks suck and could create altcoins. 766 00:58:47.724 --> 00:58:49.105 We didn't wanna make, 767 00:58:49.484 --> 00:58:53.424 hard forks. And so a number of problems that were found in Bitcoin, 768 00:58:53.724 --> 00:58:58.569 were solved by essentially making it illegal to relay those transactions on the peer to peer network. 769 00:58:58.950 --> 00:59:00.970 They can still be mined in Bitcoin blocks. 770 00:59:01.270 --> 00:59:04.089 And if you go listen to that, space on Twitter, 771 00:59:04.455 --> 00:59:06.635 the Mara fellow, forgive me, I forget his name, 772 00:59:07.815 --> 00:59:11.770

goes into some of the things he had to do. There's, you know, quadratic caching attack, 773 00:59:13.210 --> 00:59:30.750 like, too many pub keys and too many, signature checks, things like this. So there's a there's a whole list of these. So it's like a dozen of these kind of attacks on Bitcoin. They're solved by the p two p layer, but can be in a Bitcoin block. And so if a malicious minor wanted to publish a block, they would basically make all Bitcoin nodes go into La la land. That is possible. 774 00:59:31.310 --> 00:59:33.410 And it would require a hard fork to fix it fully. 775 00:59:33.710 --> 00:59:34.210 So, 776 00:59:35.630 --> 00:59:45.234 you know, in between that right? So the set of transactions we definitely don't want no matter what. So break pulls is gonna do the same thing that we're gonna say we we can't allow you to mine, acquired a caching 777 00:59:45.694 --> 00:59:54.140 bug problem like this. We we can't find those. And the mar Marapool guy, I think, did probably did did a good job of kind of enumerating those and saying, okay, we're not those kind of transactions. 778 00:59:55.295 --> 00:59:58.035 But there's still a wide window between, 779 00:59:58.815 --> 01:00:02.230 what is what is allowed in the peer to peer in art and what's allowed to pick up a clock. 780 01:00:02.710 --> 01:00:03.210 Ultimately, 781 01:00:04.390 --> 01:00:13.045 the answer is gonna lie somewhere in the middle. You know, as time goes on, we're gonna have to look at those transactions and say, well, is there a good reason to omit this transaction? Now 782 01:00:13.425 --> 01:00:14.885 my bias is to, 783 01:00:15.265 --> 01:00:18.005 let this be as broad as possible and let people, 784 01:00:18.625 --> 01:00:20.460 mine out of band transactions. 785 01:00:22.440 --> 01:00:22.940 Because 786 01:00:24.040 --> 01:00:25.260 there's a more serious 787 01:00:25.560 --> 01:00:34.404 problem of transaction censorship here. Now on the one hand, it might be an outbound transaction. On the other hand, it might be a transaction that some government says, we don't want this party 788 01:00:35.180 --> 01:00:51.670 receiving funds, you know, and in some countries, this might be a political opponent. It's like, we don't want you to make donations to our political opponent Or the guy today who paid half $1,000,000 to Julian Assange for his plane ticket to fly. You know, government might say, we don't want you to pay that. We we wanna make sure that nobody sends once they see 789 01:00:52.150 --> 01:00:58.685 doing this on his Bitcoin address, the US government could have said, okay. Miners don't mind anything goes to this address because we don't want that to happen. 790 01:01:00.205 --> 01:01:00.705 So 791 01:01:01.325 --> 01:01:04.065 my my bias is to let this be very broad because, 792 01:01:05.085 --> 01:01:11.160 as soon as you start putting in filters and clamping down on this and saying, okay, we don't like these contracts. We don't like those kind of transactions. 793 01:01:12.819 --> 01:01:16.440 Your lawyers are gonna tell you to check every single one of those boxes you can possibly 794 01:01:17.055 --> 01:01:17.955 Don't mind, 795 01:01:18.895 --> 01:01:20.035 you know, don't mind, 796 01:01:21.455 --> 01:01:23.315 Oh, I see your type transactions. 797 01:01:24.050 --> 01:01:33.615 Don't mind, what are they called? What's the ruins? You know, ruins are essentially illegal securities issuance and minor where we'll tell the minor, I don't want you to be involved in that. I don't want you to be implicated. 798 01:01:34.555 --> 01:01:50.080 From a legal perspective, this gets you in trouble. Don't mind ruins. Okay? Don't mind graffiti just because because it's spam. Okay? Well, I I I don't think people should mind graffiti, but at the same time, I don't think great bullshit stop them from doing it. So as far as accepting out of band trans out of band fees for transactions, 799 01:01:51.215 --> 01:01:52.755 miners will still be able to do it. 800 01:01:54.175 --> 01:01:57.955 And in fact, we're gonna end up having essentially an alternative mempool. 801 01:01:58.655 --> 01:01:59.395 Because within 802 01:02:00.180 --> 01:02:03.400 break pool, in order to get transactions into blocks, 803 01:02:03.700 --> 01:02:08.795 we have to first mine them into a beam. Right? And then the block, I I have a post 804 01:02:09.255 --> 01:02:16.075 on building Bitcoin and on our GitHub about deterministic block selection. Right? We could do deterministic transaction selection. 805 01:02:16.520 --> 01:02:21.660 And this has a very serious advantage in that everybody knows what the block block is before it's published, 806 01:02:22.120 --> 01:02:23.900 which means you don't have to transmit it, 807 01:02:24.755 --> 01:02:27.735 which decreases our bandwidth, decreases our our latency substantially. 808 01:02:28.275 --> 01:02:37.220 I think it's a really interesting idea. The idea being that if you send me a transaction, I will mine it into a feed, And then once it's in a feed, it's guaranteed to end up on a Bitcoin block eventually. 809 01:02:37.520 --> 01:02:38.180 Mhmm. Right? 810 01:02:39.280 --> 01:02:43.295 Now I can take it out of hand feed for doing that. I don't really see anything wrong with doing that. 811 01:02:45.855 --> 01:02:47.795 And so you're are you saying 812 01:02:48.335 --> 01:02:55.290 a person wouldn't necessarily have to broadcast it over the Bitcoin peer to peer network to get it included in a block that way? 813 01:02:57.270 --> 01:03:05.704 It needs to be before it's in a Bitcoin block, it needs to be in the grade pool them pool essentially. Right? So it needs to be mined in grade pool beam. 814 01:03:06.165 --> 01:03:06.665 Yeah. 815 01:03:07.365 --> 01:03:12.980 So it has to be known. So it's not gonna be what's not gonna be possible is withholding transactions, 816 01:03:13.520 --> 01:03:15.220 until a block of mine. Right? 817 01:03:15.520 --> 01:03:19.145 So that big blob of

graffiti transactions that that Mara published, 818 01:03:20.005 --> 01:03:24.025 if you did that on Brightpearl, everybody has to know that's coming. Everybody has to know that. Okay. 819 01:03:25.570 --> 01:03:34.630 So it's not gonna be possible to withhold them until the last second. And this is a good thing because it also means that you can't create blocks that take a long time to validate. 820 01:03:35.335 --> 01:03:41.914 Again, you can precompute the block. You know, if I know everything that goes into it and I have any kind of deterministic algorithm which selects the transactions, 821 01:03:43.220 --> 01:03:51.559 I know what's gonna be in that block. I've already seen it. Right? So I I don't I'm not hit with, a huge validation time when I see the block because I've already pre validated all of that. 822 01:03:55.185 --> 01:03:55.685 Awesome. 823 01:03:57.345 --> 01:03:58.725 This one comes from 824 01:03:59.185 --> 01:04:00.805 longtime listener, Cortic. 825 01:04:01.265 --> 01:04:02.005 He asks, 826 01:04:02.760 --> 01:04:05.980 did Satoshi design Bitcoin to be solo mined? 827 01:04:07.080 --> 01:04:08.380 Ask that. Yep. 828 01:04:09.000 --> 01:04:10.060 Ask that. Yes. 829 01:04:10.575 --> 01:04:13.234 Yeah. Yes. I don't think Satoshi saw 830 01:04:13.695 --> 01:04:14.195 fools. 831 01:04:14.895 --> 01:04:16.595 He didn't have an inkling that fools 832 01:04:17.270 --> 01:04:18.090 would would have. 833 01:04:18.710 --> 01:04:23.770 And it's a it's a bit of an oversight on his part, you know. If we were to go back and rewrite Bitcoin 834 01:04:24.310 --> 01:04:25.850 today knowing what we know, 835 01:04:27.215 --> 01:04:29.635 I would create something closer to a freight pool. 836 01:04:29.935 --> 01:04:30.595 Mhmm. Right? 837 01:04:31.615 --> 01:04:34.320 You you have faster blocks. You have direct acyclic graph, 838 01:04:34.880 --> 01:04:41.335 and you kill this. You can look at other protocols that have faster block time. So look at the go look at the before Ethereum shut down 839 01:04:41.974 --> 01:04:45.515 and, became a complete shitcoin when it went through a stake. 840 01:04:46.295 --> 01:04:47.915 You can look at their mining pool distribution, 841 01:04:48.455 --> 01:04:51.220 and it was much more distributed than than Bitcoin money. 842 01:04:51.680 --> 01:04:54.100 And I believe that is because of the, 843 01:04:54.480 --> 01:05:02.175 the variance issue. Right? I I calculated so they had a 15 second clock time, and I believe I calculated that, if you had it as 844 01:05:02.715 --> 01:05:07.530 a 1% pool this is in one of the talks I gave a while back. If you had a 1% pool, 845 01:05:07.830 --> 01:05:16.635 1% of the hash rate, you'd have effectively a 1% annual variance on your revenue. Whereas in Bitcoin, that needs to be a 20 percent. Oh, wow. So just by having faster block times, 846 01:05:17.175 --> 01:05:19.275 essentially solves this variance problem. 847 01:05:19.975 --> 01:05:24.059 Now it doesn't fully solve

it. Right? Because, you know, estimates are there a few million mining devices 848 01:05:24.440 --> 01:05:28.460 on the port. So if I have just 1 s 17 or s 19 or whatever, 849 01:05:29.319 --> 01:05:30.460 I am too small 850 01:05:30.760 --> 01:05:31.495 to mine, 851 01:05:31.975 --> 01:05:46.660 even a braid pool bead on any kind of reasonable time skip. So within our proposal, you can go read it. I also have proposal sub pools, which is a braid pool made under a braid pool. So I I otherwise, it's completely identical, which should allow you to get another factor of a 1,000, 852 01:05:47.599 --> 01:05:48.339 in the 853 01:05:49.715 --> 01:05:52.215 faster block rate or more block, but real product, 854 01:05:52.835 --> 01:05:56.535 to let you get and we can make subsub pools as well, which lets us get down to the individual. 855 01:05:58.690 --> 01:06:08.694 Although, I know there are a lot of home miners who list this have these bid access and things like this. I've talked to the guys at Futurebit about this with respect to Grainpool, and frankly, I don't have a great solution. 856 01:06:09.315 --> 01:06:12.375 I don't think Great Pool is the solution for you because 857 01:06:12.914 --> 01:06:14.694 your payouts are so darn small. 858 01:06:15.590 --> 01:06:17.930 If you're if you're just earning pennies per day, 859 01:06:18.470 --> 01:06:20.410 it just doesn't make sense. Not on Bitcoin. 860 01:06:21.510 --> 01:06:24.730 You I I think the best solution for you guys actually have a centralized 861 01:06:25.335 --> 01:06:33.275 party who's gonna send you a penny a day over lightning, something like that. And because the amounts are so small, it's gonna have to end up being centralized, unfortunately. 862 01:06:34.000 --> 01:06:38.579 That said, your centralized party who is essentially providing the service to future bit miners, 863 01:06:38.880 --> 01:06:40.660 could be running on top of break pool. 864 01:06:40.965 --> 01:06:42.185 And therefore, you could achieve 865 01:06:42.645 --> 01:06:44.985 variance reduction at the level of a large miner, 866 01:06:45.285 --> 01:06:48.550 and get data for Lightning because this this centralized pool 867 01:06:49.590 --> 01:06:54.170 invests in Lightning or eCash or whatever kind of new payment that comes up or Arc, 868 01:06:54.550 --> 01:06:56.010 and pays you however you want. 869 01:06:59.494 --> 01:07:02.474 Yeah. I mean, that makes sense because 870 01:07:03.974 --> 01:07:08.234 your mining rewards are just gonna be so low if you if you've only got, like, 2 Terahash. 871 01:07:10.840 --> 01:07:13.740 I mean, yeah. What what are you gonna do? Get paid once per year? Right. 872 01:07:15.000 --> 01:07:22.145 You know, in practice, this is not gonna be we can't get down to that level of resolution. Right? I mean, I'm And you just think about, like Unless you're solo minded, 873 01:07:23.650 --> 01:07:25.430 and you Well, you hit a block. 874 01:07:26.130 --> 01:07:31.490 Well, if you're if you're treating the whole thing like a lottery, which I think a lot of these bid x minors are Yeah. And, 875 01:07:32.585 --> 01:07:34.444 It's a lottery with slightly better odds. 876 01:07:35.305 --> 01:07:40.210 Smaller payouts, but more frequent payouts. Right? So you're, you're still playing a lottery, if that's what you think of it. 877 01:07:40.770 --> 01:07:41.270 You 878 01:07:41.730 --> 01:07:44.230 know, instead of playing the, you know, $100,000,000 879 01:07:44.690 --> 01:07:45.990 lotto, now you're playing the $10,000 880 01:07:46.290 --> 01:07:48.070 lotto. Right? Right. 881 01:07:51.125 --> 01:07:58.025 Do you think do you think someone with the bid act should still mine with braid if they're just coming at it from, like, a lottery perspective? 882 01:07:59.900 --> 01:08:02.480 Well, that's up to you. If you're treating it like a, 883 01:08:03.660 --> 01:08:04.319 a lottery, 884 01:08:04.779 --> 01:08:08.655 you know, are you gonna play the 100,000,000 jackpotter, or you do play the 10 $10,000 885 01:08:08.955 --> 01:08:10.115 scratch offs? You know, that's 886 01:08:10.555 --> 01:08:11.855 both are valid markets. 887 01:08:12.715 --> 01:08:19.800 I'm I'm not a gambler myself. I know way too much statistics, and I have a degree in physics and math, so I don't gamble. That's, 888 01:08:21.079 --> 01:08:22.780 I don't know if you can see my camera 889 01:08:23.159 --> 01:08:30.415 behind me, Bob, but that's a bit ax back there. It's kinda small on the screen. But Right. That where's that bit ax pointed, Rod? 890 01:08:31.435 --> 01:08:34.890 That's a good question. Where is that bit ax pointed? I think it's 891 01:08:36.310 --> 01:08:40.330 Did you set it up or did No. Scott set it up. I think p two b pool. 892 01:08:40.870 --> 01:08:41.610 Oh, okay. 893 01:08:41.910 --> 01:08:42.410 Yeah. 894 01:08:43.215 --> 01:08:47.555 Or public pool, you mean? Yeah. Public pool. Sorry. Sorry. Public pool. Yeah. Yeah. Public pool. 895 01:08:48.735 --> 01:08:51.055 So fun fact, back in the day, I used to have one of those, 896 01:08:51.935 --> 01:08:52.435 21 897 01:08:53.370 --> 01:08:57.550 co miners. Oh, really? What was company? Apologies company? 898 01:08:59.210 --> 01:09:04.395 They got they got bought by somebody, but Coinbit. Right? They would they were the first one to make a mining 899 01:09:04.695 --> 01:09:05.915 Raspberry Pi device. 900 01:09:06.615 --> 01:09:10.490 What were they called? It's 21 something. I think it's just 21, the name of the 901 01:09:11.450 --> 01:09:14.350 company. I don't remember. That was before my time. 902 01:09:15.850 --> 01:09:18.190 This is back, like, 2015 or so. 903 01:09:19.405 --> 01:09:20.465 Yeah, 21 inc. 904 01:09:21.245 --> 01:09:24.864 Yeah. Finally revealed its secretive product, a Bitcoin mining chip, 905 01:09:25.245 --> 01:09:26.145 May in 20. 906 01:09:27.620 --> 01:09:30.440 So I had one of their devices. It might very, very slowly. 907 01:09:32.420 --> 01:09:37.375 And, yeah, I mean, I'm happy

to see a reboot of this this market. It's it's great fun. 908 01:09:37.755 --> 01:09:39.454 I think what's more important to me is, 909 01:09:40.554 --> 01:09:43.350 that you run a Bitcoin note as well. But you're on blocks. 910 01:09:43.890 --> 01:09:52.614 But that's a lot to ask. If you're just playing the lottery and you just wanna do a scratch off and spend 5 minutes and then, you know, go on your go about your business, Asking you to install a Bitcoin note is 911 01:09:52.915 --> 01:09:53.975 a a lot to ask, 912 01:09:54.675 --> 01:09:57.094 especially if you are unlikely to win a block 913 01:09:57.554 --> 01:09:58.520 ever. Right? 914 01:09:59.480 --> 01:09:59.980 Right. 915 01:10:01.160 --> 01:10:08.895 But, you know, if you're doing this because you like the hardware, you like software, you want you wanna actually involve the ecosystem, run a Bitcoin note. You should be doing that anyway. 916 01:10:10.875 --> 01:10:11.375 Yeah. 917 01:10:13.930 --> 01:10:20.670 We got our last question. By the way, this ripped like that hour plus ripped like this, Bob. Thank you so much, man. 918 01:10:21.449 --> 01:10:28.655 I know it's Like, I hope it was enjoyable for you. But let me, like, get get this last, question from are you at Noster, by the way? 919 01:10:30.120 --> 01:10:30.860 I am. 920 01:10:31.880 --> 01:10:37.260 Dig through my Twitter post, you will find a Noster link there somewhere. I'm just curious. What do you think about Noster? 921 01:10:41.655 --> 01:10:44.795 I have not been following it closely, to be completely honest. 922 01:10:45.980 --> 01:10:47.920 I think it's probably a very naive protocol. 923 01:10:48.860 --> 01:10:56.175 Ultimately, it's just a way to send messages, and there are a 1,000 people in a 1,000 of ways to decide if they got a message message if you tell them they all think they're clever. 924 01:10:57.355 --> 01:10:57.594 I I 925 01:10:58.955 --> 01:11:06.010 yeah. Which message do you get sent? Now I gotta make filters. Now I gotta aggregate those filters. Now I gotta get it. It's not a scalable problem. I 926 01:11:07.350 --> 01:11:12.969 this may be a very naive for those who know a lot more about NASA, it may be a very naive approach. But who remembers 927 01:11:13.815 --> 01:11:14.554 new tele? 928 01:11:15.735 --> 01:11:17.114 Back in the days of now. 929 01:11:17.974 --> 01:11:22.480 Oh, shit. Yeah. Yeah. There was a protocol called the new tele. Yep. And Nutella did 930 01:11:23.280 --> 01:11:38.780 and and both of these got displaced by Bitcoin, right, back in the day. And what Nutella did is it basically had an everyone to everyone publication model, somewhat of Bitcoin. Like, I have this file to share. I'm gonna send that message to everybody. Now this scales for shit. Right? It's an n squared, 931 01:11:39.579 --> 01:11:42.159 scaling. Right? So the more stuff there is to share, 932 01:11:42.460 --> 01:11:43.039 the more 933 01:11:43.579 --> 01:11:53.094 it goes and goes like n squared, the more

messages get sent. Because of this, there were these search engines where you go look for files and people would make aggregators with high bandwidth, 934 01:11:53.955 --> 01:11:54.455 colocated 935 01:11:55.290 --> 01:11:59.390 hosts that would aggregate all these new tele files. Right? But ultimately, 936 01:11:59.850 --> 01:12:04.750 at the end of the day, the the broadcast everything that everyone model doesn't scale. Right? 937 01:12:05.195 --> 01:12:22.870 It doesn't scale for Bitcoin and doesn't scale for any other form of messages either, like Twitter or Nasr. But I think I think Nasr is probably gonna you know, if it it sees any kind of success, it's gonna fall down for some reason. Because you can't send every single message, every single, you know, every brain fart everybody has, everybody in the world. It doesn't scale. 938 01:12:24.764 --> 01:12:27.745 And, you know, I'm sure there are people working on mitigating that, but I I 939 01:12:28.605 --> 01:12:30.465 yeah. I I don't it's not that interesting 940 01:12:31.510 --> 01:12:33.290 for that reason. Fair enough. 941 01:12:34.470 --> 01:12:36.170 Alright. Last question from Byzantine 942 01:12:36.550 --> 01:12:38.250 on Noster or from Noster. 943 01:12:39.285 --> 01:12:42.905 Please ask about latency with oh, and we've kinda touched on this, but I'm gonna, 944 01:12:44.165 --> 01:12:49.369 repeat it anyways. And I know we're gonna expand, maybe another write up as well for this question. 945 01:12:49.750 --> 01:12:56.889 Please expand on about latency with template building by the user versus template building by the pool, and how that could lead to uncompetitiveness 946 01:12:58.265 --> 01:13:05.405 with building on prior blocks as compared to a centralized pool that can even take it to an extreme with a block withholding attack. 947 01:13:07.700 --> 01:13:08.600 Okay. So, 948 01:13:09.620 --> 01:13:11.000 from a latency perspective, 949 01:13:11.780 --> 01:13:13.675 Greatpool will be more competitive here, 950 01:13:14.554 --> 01:13:15.054 Because 951 01:13:15.355 --> 01:13:22.580 what's going on is that if you if you're using a centralized pool and they're building your block template, right, so they receive a new block, 952 01:13:23.060 --> 01:13:28.040 and they say, alright, I need everybody to stop by where it's working on right now. Start working on something else. Right? 953 01:13:28.580 --> 01:13:33.284 And there's a window of time there where miners may still be working on the old work, 954 01:13:34.385 --> 01:13:51.845 and haven't come to get a new piece of work, or I haven't finished validating the block. So this is where the empty block phenomena comes from. There's a lot of good posts about the empty block phenomena. I don't wanna repeat that discussion right now, but go go read them. It's not a problem for network. But it is caused because I have an additional source of latency 955 01:13:52.465 --> 01:13:54.165 between my minor and the pool. 956 01:13:54.865 --> 01:13:55.320 Right? 957 01:13:55.719 --> 01:14:05.179 And that latency one of the reasons the pool send empty blocks is because when they receive a new block, they have to blast out a new work unit to 958 01:14:05.665 --> 01:14:07.845 tens of thousands or hundreds of thousands of devices, 959 01:14:08.385 --> 01:14:25.085 maybe millions of devices. A lot of miners have each of their individual, you know, s 19 minuteing devices pointed directly at the pool, making it their own independent TCP connection to the pool. So if I have a farm with 10,000 devices in it and 10,000 TCP connections of the stratum protocol to the pool, 960 01:14:26.105 --> 01:14:31.245 that's a huge hit in terms of bandwidth and latency where I have to when I receive a block, I could instantaneously 961 01:14:32.050 --> 01:14:46.475 send out this work unit. So not only that mine with 10,000 devices, but this other mine of 10,000 devices, other mine up to, you know, the largest pools, you know, let's say 20, 30%. You're talking a 1000000 devices. So I've got to send a 1000000 individual 962 01:14:46.935 --> 01:14:49.640 stratum packets to a 1000000 individual devices. 963 01:14:50.500 --> 01:14:56.280 This is the source of the, you know, the this empty block cannot because that takes at a minimum a couple seconds, 964 01:14:56.625 --> 01:15:04.645 And the difference between the work unit that contains the block template and then doesn't contain a block template is a factor of 2 or so. But that factor of 2 is enough 965 01:15:04.970 --> 01:15:07.950 to where, they don't wanna do it. They'd rather send out, 966 01:15:08.810 --> 01:15:10.030 an empty work unit 967 01:15:10.570 --> 01:15:14.670 than, than a full one. Now this is solved by using a proxy. 968 01:15:15.275 --> 01:15:24.094 So if I hide all of my minors behind a proxy, and that proxy looks like just one minor, then that prop distributes that that load to all the minors. 969 01:15:24.880 --> 01:15:26.980 Now I I only have to 970 01:15:27.440 --> 01:15:28.580 do that redistribution 971 01:15:30.160 --> 01:15:38.985 once on my site. Right? And we're talking about a microsecond communications latency between my proxy and my buying devices as opposed to, let's say, a 100 millisecond 972 01:15:39.420 --> 01:15:42.960 latency between my buying devices and the upstream pool. Right? 973 01:15:43.580 --> 01:15:51.215 Break pool operate in a similar manner. You'll have your own on-site Bitcoin node and break pool node, and that's the guy that's responsible for sending work units to your miners. 974 01:15:51.675 --> 01:15:52.175 Right? 975 01:15:52.955 --> 01:15:53.875 Your your 976 01:15:54.315 --> 01:16:01.830 the other people on the break pool network are not gonna know what kind or how many kind of mining devices you have. Your individual mining devices, individual, 977 01:16:02.210 --> 01:16:05.590 Bitmain, what's minor devices are not gonna be connecting to other 978 01:16:05.905 --> 01:16:13.445 breakable nodes or other

mining devices. They're all going to be hidden behind the breakable node. Right? And so, in a way this acts as a proxy. 979 01:16:14.610 --> 01:16:20.230 So this means that Brightpearl have the advantage here. We will be able to construct a full block template. 980 01:16:21.365 --> 01:16:22.265 This can be done fairly fast. 981 01:16:22.645 --> 01:16:23.765 It's the latency between the, 982 01:16:24.645 --> 01:16:25.925 the mining device and the, 983 01:16:27.125 --> 01:16:33.679 the pool. And the fact the pool have to do this for millions of devices all at the same time that causes that problem. Right? 984 01:16:34.860 --> 01:16:40.475 If the you know, if I receive a block and my own local device does this, it can do it in milliseconds. 985 01:16:41.255 --> 01:16:46.780 So much so we will have a significant advance there. We will be able to mine full blocks immediately after 986 01:16:47.719 --> 01:16:50.860 receiving a block and not mine a few blocks because we don't have this. 987 01:16:51.535 --> 01:16:52.915 Hope that answered your question. 988 01:16:53.375 --> 01:16:54.835 I think there are other parts of this. 989 01:16:56.495 --> 01:16:57.875 I think you did well. 990 01:16:58.895 --> 01:17:07.630 Yeah. No. That was great. I learned a lot about Braidpool. Is there anything about Braidpool that we didn't talk about that you that you wanna 991 01:17:08.285 --> 01:17:10.864 that you wanna take this opportunity to speak to? 992 01:17:13.885 --> 01:17:32.594 No. I think I think that's it. I I often get the question, like, how much hash rate do I need to be useful for this? The that the answer to that is that none. There is no lower limit. BrightView will operate with just one miner running CPU mining. Won't win any blocks, but it'll operate. It'll build the DAG, and it'll do all the things we need to do. 993 01:17:34.335 --> 01:17:35.715 I often get the question, 994 01:17:36.250 --> 01:17:44.025 can I contribute some hash rate? The answer is not yet. We will have a test net up and running in a few months. And when you see that, you know, we would love to have people contribute. 995 01:17:45.545 --> 01:17:53.140 I often get a question like, what do we need now? Now we need developers. If any of these ideas have interested you, and or you know, Rust or want to learn Rust, 996 01:17:53.780 --> 01:17:55.320 there are detailed specifications 997 01:17:55.700 --> 01:17:59.000 on our GitHub. Please read them, comment on them, 998 01:17:59.780 --> 01:18:03.805 ask questions. You can send them to me or the great bull account on Twitter. Happy to discuss them. 999 01:18:04.185 --> 01:18:09.500 And, yeah, we're happy to receive contributions. It's an open source project just like Bitcoin. It's not a company. 1000 01:18:10.200 --> 01:18:20.365 We're not doing any kind of fundraising or any ICO. The the developers we have are either volunteers or paid through grants, and we tend to keep it that way. We want this to we want the development of grateful 1001 01:18:20.825 --> 01:18:21.805 to to be democratic 1002 01:18:22.505 --> 01:18:23.725 distributed as well. 1003 01:18:25.760 --> 01:18:33.894 Awesome. Rock and roll, man. Well, Bob, thank you so much for joining us. I think, there's gonna be a lot to unpack here. And, 1004 01:18:34.335 --> 01:18:34.974 I'll make the 1005 01:18:35.775 --> 01:18:37.474 we invite you to Nashville, Tennessee, 1006 01:18:38.255 --> 01:18:39.554 to Bitcoin Park, 1007 01:18:40.014 --> 01:18:42.280 whenever you want. Come visit us. 1008 01:18:42.840 --> 01:18:48.380 And I mean, actually, the weather is terrible in January. And not terrible, but, like, it's not good. 1009 01:18:49.159 --> 01:18:58.494 But we host a a a energy and mining summit here, and, we'd love to have you come and and and and speak to Bradepool on a number of other topics as well. 1010 01:18:59.659 --> 01:19:02.320 Yeah. I think, I have heard of that. 1011 01:19:03.980 --> 01:19:07.280 That's July. I I will say that my collaborator, Kalfreet, 1012 01:19:07.739 --> 01:19:08.695 just won a ticket 1013 01:19:09.094 --> 01:19:12.074 to, Bitcoin, 2024 in Nashville, July 25th. 1014 01:19:12.375 --> 01:19:13.034 Oh, good. 1015 01:19:13.335 --> 01:19:16.875 Oh, nice. So he's got a yeah. He's he's got a grant from the 1016 01:19:17.210 --> 01:19:17.710 HRF 1017 01:19:18.890 --> 01:19:28.935 Human Rights Foundation. Yeah. And they also sponsored free tickets for developers. Yep. He won one of those. He's he's gonna be attending and he will be on the open source stage talk about Anybody's gonna be in Nashville with that, 1018 01:19:29.235 --> 01:19:30.135 go talk to Koprete. 1019 01:19:30.995 --> 01:19:32.535 Great. How do you spell his name? 1020 01:19:34.515 --> 01:19:36.615 K u l p r e e t. 1021 01:19:37.220 --> 01:19:41.000 His last name is Singh, s I n g h. Perfect. Kolpreet Singh. 1022 01:19:41.860 --> 01:19:45.940 Awesome, man. Well, thanks again for get a free pass, so I'm not gonna be there. But 1023 01:19:46.875 --> 01:19:51.375 Well, if we I mean, we're we're not yeah. We can we'll sort something out. 1024 01:19:52.715 --> 01:19:56.074 But, Bitcoin Park, we we host these meetups pretty much, 1025 01:19:57.020 --> 01:20:00.240 2, 3 now we got, I think, 4 meetups that we host regularly, 1026 01:20:00.700 --> 01:20:03.360 focused on Bitcoin and Bitcoin adjacent technologies. 1027 01:20:05.725 --> 01:20:10.385 So, if you're ever in town or wanna come by, we get you got a place to to work from and hang. 1028 01:20:11.005 --> 01:20:15.810 Yeah. Absolutely. We'll talk. I'd love to do that. I'll be, I'll be around this summer, so, it's it's a possibility. 1029 01:20:16.510 --> 01:20:17.010 Awesome. 1030 01:20:17.389 --> 01:20:20.355 I I would love to go to Nashville or really spend time. 1031 01:20:22.275 --> 01:20:25.095 Thanks, Paul. You could probably go to bit devs as well. Right? 1032 01:20:25.475 --> 01:20:26.695 So we do. Yes. 1033 01:20:27.690 --> 01:20:30.250 Go ahead. I've done in my life. I used to co host, 1034 01:20:30.730 --> 01:20:32.429 BitDevs with the guys in New York. 1035 01:20:32.969 --> 01:20:34.670 Oh, Jay and those guys? 1036 01:20:35.305 --> 01:20:35.945 Yeah, Jay. 1037 01:20:36.585 --> 01:20:39.245 I used to co host what I call white paper Wednesdays 1038 01:20:39.865 --> 01:20:44.480 in New York, like, 2015, 2016. So we would, you know, have a close reading of a cryptography 1039 01:20:44.860 --> 01:20:45.920 paper and then test 1040 01:20:46.300 --> 01:20:46.620 it. 1041 01:20:47.260 --> 01:20:48.000 That's besides 1042 01:20:48.620 --> 01:20:50.960 project to the what j it does. 1043 01:20:51.445 --> 01:20:58.264 So Steve Myers, who's a contributor to the BDK project, Matthew Ramsden, who's a contributor to BDK as well now, and LDK, 1044 01:20:59.190 --> 01:21:06.645 They both host the bit dev or we call it NASH bit devs here, which is the 2nd Tuesday of every month. And then we have a more of a 1045 01:21:07.205 --> 01:21:07.705 social, 1046 01:21:08.965 --> 01:21:10.825 meetup, but it's still topic based. 1047 01:21:12.005 --> 01:21:19.850 Yeah. Open house on that the day after on the 2nd Wednesday of every month. And then we have a Rust Bitcoin meet or Rust meetup 1048 01:21:20.390 --> 01:21:23.130 the 3rd or 4th Thursday of every month. 1049 01:21:23.590 --> 01:21:27.275 And then Yeah. We may host a monthly mining focused, 1050 01:21:27.735 --> 01:21:28.555 mining energy, 1051 01:21:28.935 --> 01:21:37.110 meetup, as well. Yeah. The bit dev is really my jam. You know, I've been I hosted 1 in New York. I've been from Miami, Austin, and 2 other places. 1052 01:21:37.489 --> 01:21:40.790 I really love the Socratic structure that that Jay follows and Yep. 1053 01:21:41.889 --> 01:21:42.885 Yeah. It's a great meetup. 1054 01:21:44.144 --> 01:21:46.485 Awesome. We'll see you soon. Thanks again, Bob. 1055 01:21:47.025 --> 01:21:51.125 Yeah. Thanks, Bob. It was great to meet you virtually, finally, and 1056 01:21:52.670 --> 01:21:55.570 hope to see you again and see you around Nashville sometime. 1057 01:21:56.030 --> 01:21:56.770 Yeah. Absolutely. 1058 01:21:57.230 --> 01:21:57.730 Cheers.