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If you're watching this video, you're going to learn three big things.

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Number one, what Bitcoin's biggest technical fights are actually about in plain English.

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Number two, why Bitcoin has to balance cheap transactions against security and decentralization.

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And number three, my favorite, why brand new Bitcoiners don't need to panic when Bitcoin drama

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hits. Today's guest is Jameson Lopp, number 33. He's

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back. He's one of Bitcoin's best known security experts and builders. He's been in the trenches

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of all the Bitcoin protocol debates. So if you're brand new to Bitcoin,

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come on inside the world's biggest Bitcoin welcome center for today's show.

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Welcome to Sat Chats, the Bitcoin podcast where we chat about sats. Sats are the smallest part

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of a Bitcoin the same way pennies are the smallest part of a dollar. With Sat Chats,

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we are building the world's biggest Bitcoin welcome center to serve as your gateway to

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generational wealth. So if you are brand new to Bitcoin, we want to chat about sats with you.

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Head to satchats.com to grab your slot in the studio today. I'm your host, Stuart.

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And I'm your co-host, Anna Bevan. And with us back for his Bitcoin baby is number 33, Jameson.

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let's go jameson welcome back to the show brother great to be here so

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a lot has happened in the 12 months that you've been away we taped you in march of last year so we

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had we had two new versions of bitcoin core i believe in that time we had like a crypto week

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over the summer that was supposed to be pretty neat,

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but there's like still all kinds of legislation

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and regulations that nothing's happening with.

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We had an all-time high in October,

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which felt super juicy.

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We had a Thursday in recent memory that was very scary

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and me and some other Bitcoiners had to get together

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and hug one another because we're so new to Bitcoin.

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That was our first proper drawback.

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I mean, and as you said before we started taping,

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The 20 millionth Bitcoin has been mined.

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It's going to take another hundred-ish years for the remaining Bitcoins to come out.

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I mean, what has been your emotional, you know, journey over the past year in terms of all the activity that we've seen in the Bitcoin space?

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uh i mean last year was feeling pretty good until october um you know and then i think reality hit

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and uh this just culmination of a bunch of other macro economic conditions and uncertainty about

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the world in general uh you know has just made a lot of investors rethink i guess their uh risk

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appetite. And I don't know, from my perspective, unfortunately, from my perspective, Bitcoin has

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actually been a lot more boring than I would like over the past year. But I'm a technologist,

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I want to continue to see more innovation happen. And from my perspective, at least at the

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base protocol level, we continue to ossify, we continue to slow down the innovation that's

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happening. And whenever you try to talk about making improvements at the base protocol level,

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you get more and more flack. So, you know, there has been drama and debate around what's happening

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at the base protocol level. There have been more innovations happening at layer two levels,

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things coming out like ARK, for example, which is kind of like a competitor to Lightning.

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and really I would say what I've been more focused on has been AI related stuff which

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you know you can tie into all of this and then the fact that we do expect that

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autonomous agents are going to prefer using cryptocurrency to using trusted rails that

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they can't even KYC with in the first place but also once again from a technologist perspective

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using AI to accelerate innovation and building software. And the flip side of that being all

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the security issues, which I'm very concerned about, because we're really rushing headlong

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into kind of the unknown with the AI phenomenon and how quickly it's evolving and how

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more deeply it's getting embedded into many, many different aspects of our lives.

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And that I think we're kind of, I guess the term would be like getting ahead of our skis with regard to the security aspects of implementing AI in a thoughtful manner because there aren't really many best practices that have been developed yet.

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So, you know, I think it's as a security professional, it's going to continue to be a very interesting space to work in.

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But that's mainly because I expect more and more catastrophes to happen, novel catastrophes.

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catastrophes. Ooh. So as the most brand new Bitcoiner here, what of those elements stood out

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to you that you want to learn more about? So Jameson, I'm class of 2025. So brand new.

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I only know Bitcoin basically being in the hundreds. So this is, this is a dip for me,

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but it's really comforting.

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We've had a lot of guests who talk about this is like,

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talk to me later, this is nothing.

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But you saying that Bitcoin has been boring over the last year

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is just so interesting because I feel like

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I'm like constantly refreshing the Clark Moody dashboard.

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I, well, I've been soaking up all of this information about Bitcoin.

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And so nothing feels super boring

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except for maybe some of the really technical stuff,

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which is the stuff that you love. Yeah. Yeah. I mean, I think it has to do with how far down

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the rabbit hole you are, right? Like it takes many, many, many years to get a really deep

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knowledge of Bitcoin. And like, I'm so far down like at the protocol level, like that's,

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that's where things move the slowest and that's, they should be moving the slowest. We don't want

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the base protocol to be constantly changing and potentially pulling the rug out from people.

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So, yeah, it's all relative, right? It will take you probably at least like another five to ten years before you feel like you have a decent grasp of what's going on.

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It's like Inception, Jameson, where, you know, I think Anna Bevin's probably at the topmost layer in the – they're in the airplane, right, where they get put under.

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You know, I like to think that I might be in the white van. You know what I mean?

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the white van maybe maybe absolute and like i try to dip down into the hotel sequence but you're

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like you're you're you're past the hotel sequence in the past the ice fort you're in like limbo where

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you know one second at anna bevan's airplane level is like a hundred years for you down there

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at the protocol level right so like that and at the very top there's news there's headlines there's

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price predictions, there's, there's ups and downs. And where you are, that's all so boring to me,

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because, you know, it's like history doesn't repeat, but it does rhyme, right. And so it seems

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to me like the majority of the discussions or the chatter or whatever that happens on social media

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is like you say, it's around price, it's around investment, it's around building narratives to

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try to make Bitcoin's virality continue to increase because, of course, we're all incentivized to do

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that. But I would say the flip side of that, and one of the reasons that I think it's been kind of

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boring, this past cycle felt different to me. And the main reason for that, like I said, once again,

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I'm a tech guy. I'm really into statistics and metrics. I run all types of different projects

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where I track things. And the short version is that if you want to call it a bull run,

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the bull market of last year, which I would also argue was kind of a fake bull market in that you

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could argue that if you adjust the exchange rate to inflation, to pre-COVID prices, we actually

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never broke a hundred thousand dollars, like adjusted to pre-COVID exchange rates. And so,

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you know, yeah, it was, it felt great to get up to like 126 or whatever. But I felt like this was

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all driven by institutional adoption. Like we never really had like retail hype FOMO.

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So, you know, usually you have some sort of blow off top because something that's insanely stupid, you know, like ICOs or NFTs or whatever, or meme coins was like the previous one.

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Like, you know, there's always some sort of retail FOMO hype that brings in like the taxi drivers and, you know, the man on the street, so to speak.

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And we didn't have that this time. And I felt like that was one of the main differences.

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And if we want to be pessimistic, part of that may be a combination of the fact that just a lot of people already know about Bitcoin or crypto.

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They probably just know about crypto and they lump it all together as the same thing.

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And that most of them, or at least of the general populace, has either been burned by crypto or knows people who have been burned by crypto.

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And so they just have written off the entire industry at this point. And it may have even been made worse by the fact that now it's politicized. Right. It's like, you know, we won't go into all of the details, but basically the crypto industry ended up aligning with the Republicans, which was a sensible thing to do because the Democrats were like actively trying to destroy the industry from a variety of different attack vectors.

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And so now I think a lot of people also consider crypto to be like a right wing Republican thing.

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And of course, we all know that it's completely neutral and that's not the case.

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But I think that that I'm just saying that could additionally have turned off another cohort of potential adopters and may take them even longer to get past whatever inherent biases have been impressed upon them.

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who were we talking to the other day that said there was like,

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there were reasons for people on the right-hand side to like Bitcoin and reasons for people on

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the left-hand side. It was Conrad. It was Conrad from Bitcoin. Well, yeah. I mean,

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he was kind of making the point that there are values that folks on the right side of the

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political spectrum would admire in Bitcoin. And there are values that people on the left side of

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the spectrum would also value in Bitcoin. It's not a left and right thing, right? The reason that

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that is true is because regardless of which side, or if you're not even on a side like me,

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it's not left and right. It's actually top and bottom. There are always

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authorities or people or organizations in positions of power that can and will abuse that.

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And Bitcoin is the way that you protect yourself in a variety of different ways.

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And so I think I've said this a few times over the past year, is that especially looking at some of

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the Democrat platform rhetoric that was coming out near the end of the Biden administration,

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and definitely during the time when Kamala and Trump were going at their campaigns, is that, or especially whenever I look at Elizabeth Warren, I'm like, do you people not remember Occupy Wall Street?

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It's like my recollection was that Occupy Wall Street was primarily like a left Democrat run movement.

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And they and that movement should really be very pro Bitcoin, anti central bank.

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And yet somehow over the 15 years since that happened, we seem to have completely flip flopped on that particular issue.

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And we seem, at least the Democrats seem to be very pro-regulation and harsh financial regime.

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So when I got my start in 2024, truly, I had heard about it earlier, but when I was really like, oh my gosh, Bitcoin.

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I was seized in the spring of 2024, so about two years ago, with this deep-seated urgency to get as much Bitcoin as humanly possible.

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It was in the 60s around that time.

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Because I was like, it's only a matter of time before this thing explodes.

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I mean, I think in 2024, there were people were trying to determine whether Trump, who I believe was a like a candidate at the time, was going to like basically say, if you elect me, it's going to be Bitcoin all day long.

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um like naive bukele was stacking sats in el salvador like we learned that um the the the

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biden administration was like for real trying to put a dent into the crypto industry uh like

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it came out that bhutan was stacking sats with its waterfall i was like corporations were coming

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on board, the ETFs were explained like, dude, this is wild child business here. And when

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I looked into Bitcoin myself, I'm like, man, I mean, going as deep as I could go at that

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time Bitcoin is more like the internet than a risky gamble And I like this is the money protocol period It the intergalactic credit in the year 7 So it should be good for me to buy in the year 2

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And we're back where I started two years ago.

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And now it's like, it feels like a sailor is the only one buying up the Bitcoin now.

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And he's just continues hoovering it up regardless of what the rest of the market sentiment is.

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And that's actually just another point of concern for me of like, yes, I mean, he he as far as I know, he's doing this completely legitimately and above board and doing crazy financial engineering stuff that I can't even claim to fully comprehend because that's not my domain of expertise.

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But it seems to be working. And if if he continues on this path, you know, they're probably going to be one of the wealthiest companies and entities in the world.

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And I'm mostly concerned because whenever I see large amounts of Bitcoin going into one pot, my security-minded adversarial thinking starts going off and being like, oh, this is a systemic risk.

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And so I don't know. I mean, I'm even more concerned about it because they don't even custody their own Bitcoin, right?

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is they're just using other trusted third parties.

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And I've gone back and forth with Saylor a few times on that.

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And I understand his thinking and his point.

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Like he's a businessman and he has a bunch of, you know,

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business and legal agreements and traditional auditing and stuff set up.

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But I'm a cypherpunk crypto anarchist.

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And so I don't like put a lot of weight into that stuff.

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Cypherpunk crypto anarchist.

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Mom, did you get that?

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My mom's listening.

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She's like, she's trying to take notes.

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she thinks I'm she's she knows I'm gonna ask on Friday uh what you called yourself in your episode

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and the correct answer is gonna be cypherpunk crypto anarchist but is that metal that just

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sounds like metal to me I was thinking I wonder what I would call myself I mean like I would never

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call myself that but like I don't know if I would ever like would I get to that point where I could

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Anna Bevan put it in the comments while you subscribe do you think Anna Bevan in five to

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10 years will be a cypherpunk crypto anarchist, which, which, which, which effectively for the

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brand new Bitcoiner in our audience means that Jameson as a cypherpunk believes in mathematics

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and freedom and privacy in the digital age. And as a crypto anarchist, crypto anarchist,

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to my understanding, effectively means not because a lot of people are going to see that and go,

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um this guy is a dan brown da vinci code um like skull and crossbones crypto cryptic kind of guy

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who wants to burn the world down it's like that's not correct crypto as in cryptography as in

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securing things with mathematics yeah systems and rules systems yeah i mean and i mean what what

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What anarchy is basically calling for in this moment is for organization to happen from the bottom up spontaneously versus from the top down.

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I mean, it's propaganda.

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It's statist propaganda that anarchy equates to chaos.

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It's because the state is the top down authority and they are very afraid of the bottom up, you know, organic creation of systems of rules, which ultimately Bitcoin is an anarchic system.

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It is a system of rules that is just agreed upon by a bunch of people around the world.

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And we run software to enforce those in an automated fashion.

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You know, there is no governing authority.

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There is no single top-down organization, though there are plenty of times of drama within the ecosystem where people point the finger and say, look, there's like power concentrations here and there.

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But really, power is scattered all over the place.

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And it's extremely difficult to understand how the governance of Bitcoin even works because it's not – the rules of the governance of Bitcoin are not even written down.

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And we kind of figure them out as we go along.

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Now, speaking of governance here, Jameson

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I kind of want to take you on a journey here

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Back through your story

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To try to get to the present day

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To talk about governance a little bit

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So we're actually going to

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And I'm going to try to do this in a way

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That keeps us from getting lost in limbo

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Because we're going to go down a couple of levels here

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So brand new Bitcoiners, hang on here

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We're going to kind of go down

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and we're going to try to do the clap back up.

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You know what I mean?

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Where the dude from Third Rock and from the sun

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is going to strap us all together in the elevator.

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Do the, you know what I mean?

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And we're going to fall into the bathtub.

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I got to watch that movie again.

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That movie is so good.

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So talk to me about your Block Wars experience.

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Break that down for my mom

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who was not there during that time.

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Help us understand what was going on.

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What side were you on?

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Why?

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How did it all turn out?

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Let's start with that piece of your story.

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Well, at the time, I mean, it's hard to put a specific date on when the block size wars really started because they had been simmering for a number of years.

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I mean, I think people started talking about block size stuff in like 2010 or 2011 and then just slowly trickled, ramped up over the years.

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And then it was maybe 2013 or 2014 when we started hitting the soft caps.

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So as many of you know, there was a hard cap one megabyte block size limit, which limited how many transactions, how much data could go into a block, which happens approximately every 10 minutes.

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But before that, there were soft caps, I think, that were set within the Bitcoin core mining template logic.

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And so I think the first one was at 250 kilobytes, so a quarter of a megabyte.

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And then I think we hit that because Satoshi Dice, which was a very simple gambling on-chain game where you would send Bitcoin to an address that would have a specific risk and payout.

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And then it was basically provably fair because of the way that the cryptography worked.

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So you know that you weren't getting cheated, or at least you knew exactly what the specific house advantage was.

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And it was a very simple game that took off to the point where we actually had enough transaction volume that we started hitting that 250 kilobyte limit.

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And so a kind of word went out across all of the miners and they started increasing it to, I think, 500 kilobytes.

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And then eventually they just lifted the soft cap completely and people started creating full one megabyte blocks.

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It was once that started happening, like once that actual pressure started happening because block space suddenly became a scarce resource that people were having to fight over.

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And by fight, I mean outbid each other.

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So no longer were the days of the one Satoshi per byte limit, which is kind of funny because we're back there now.

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But that's, of course, a decade long story.

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And so people were getting upset because Bitcoin was becoming more expensive to use and you weren't always getting your transactions confirmed in the next block within 10-ish minutes.

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And so this was causing some additional friction and poor user experience for people.

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And it's very difficult when you're using this permissionless protocol that's not controlled by anyone.

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If you run into issues, there's no tech support number to go to.

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So there's a lot of people going to forums or just open source discussion areas and trying to figure out what's going on.

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Why is Bitcoin not working the way that it used to work?

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And all of that, as I said, started contributing to the block size debate heating up.

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And interestingly enough, at the time, prior to 2015, I was working at a marketing company in Durham, North Carolina, where I was essentially doing cloud computing in the very early days.

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This was just in the first few years after Google had open sourced their ecosystem.

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They called it the Hadoop ecosystem.

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But essentially, this allowed you to take commodity hardware computers and create large distributed clusters and effectively be able to process insane amounts of data at Internet scale fairly cheaply.

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So that's what I was doing.

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I was doing large scale data analysis, statistics and such, because we were sending out millions and millions of emails a day through our system on behalf of various online retailers.

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And then my job was to help crunch all of that data and provide insights and analytics and allow them to target their audience better so that they would only send emails to people that really wanted to buy stuff.

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So a short version is that I was very obsessed with throughput and capacity and how hitting your capacity caused extremely terrible user experience.

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And so this was something that I was doing on a daily basis was looking at like, what is our total system capacity?

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How much headroom do we need to have to be able to handle?

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For example, we would have days on like Cyber Monday and Black Friday and other major online retail holidays where our normal capacity, we would need like 10 times as much.

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And if we didn't pre-plan that ahead of time and make sure that we had enough headroom, and this actually happened to us several years, our entire system would just grind to a halt.

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And the emails would go out slower.

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The metrics would come back more slowly.

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People weren't getting the real-time level of feedback that they were wanting, and they were missing their target windows to sell stuff to people.

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and terrible user experience if we couldn't push everything out the door as quickly as people

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wanted. So I started out, there's a roundabout way of explaining my thinking of how I actually

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started out as a big blocker. I was aligned with Mike Hearn and Gavin Andreessen in the early days

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and their thinking, because Mike Hearn, who I actually worked with a little bit on some of his

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open source projects way back then, he was also, he was a Google engineer, and he was also dealing

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with large scale problems similar to what I was doing, but probably even larger scale than what I

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was focused on. And so he had the same type of thinking of capacity planning. And he had several

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blog posts about this, where he said, you know, if we don't have the capacity, we're going to

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eventually crash into the limit and Bitcoin user experience will become terrible and we're going to lose a lot of our users and Bitcoin will fail to continue growing and scaling like we want.

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And I bought into that because I was in the same type of mindset.

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And then in early 2015, that's when I actually went from a sort of part-time voluntary enthusiast that was running some open source projects to actually being a full-time Bitcoin infrastructure engineer.

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And so I started working at BitGo. I was running their nodes. I was writing a bunch of software to basically index the blockchain as quickly as possible so that whenever a client was coming to us and looking for their balances and their addresses and transaction history and stuff, that they could get that information as quickly as possible.

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And that's very difficult to do if all you're doing is running a Bitcoin node because the Bitcoin core software doesn't even support indexing by anything other than just block hash and transaction hash.

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It doesn't do addresses or balances or anything like that.

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You have to build your own other software for that.

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And that was really what started to get me to start changing my perspective, which was that even though we had these tiny one megabyte blocks, which compared to the systems I had worked on beforehand, which had petabytes, like hundreds, if not thousands of petabytes of information.

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And I could run a job that would essentially crunch all of that within like 20 or 30 minutes because we scaled it out across thousands of machines.

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Instead, now I was working with tiny little like one megabyte blocks and like it was probably maybe 200 to 300 gigabyte blockchain total size.

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And I would just have that on one machine and scan through it and be able to index the whole blockchain in maybe like 12 hours.

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without even parallelizing anything.

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So I was looking at this and I was like,

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oh, if the blockchain becomes huge,

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we can always just paralyze this.

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Like I already know how technology works

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to build distributed systems that can scale out

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and so on and so forth.

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But I started seeing how,

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even with only one megabyte blocks,

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it started getting harder and harder for me

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to spool up a new service that indexed everything.

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And most of that came down to just the complexity

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of how UTXOs work.

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And UTXOs basically end up creating this data structure

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that branches out like a tree.

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And so as of today, I think the UTXO set

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has something like 200 million UTXOs.

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And this all starts just from one block.

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And then each time a block comes along,

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you have one new UTXO.

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And then each of those, as people transact, sort of blossoms out into a massive tree.

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So even though the overall blockchain size was fairly tiny, some of the data structures within it do not scale linearly.

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They do not scale very well because of the complexity of what people can be doing.

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And so basically over the next year or so

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of me being full-time Bitcoiner,

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I started coming around to, you know,

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it's probably safer if we just keep the block size

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constrained as small as possible.

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But this became less of a technical debate over those next few years and more of an ideological debate And ultimately after yelling about this for like three or four years I was finally able

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to compress the entire debate into essentially one sentence.

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And so effectively, the entire five plus year block size debate was about

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a trade-off that is inherent to the nature of Bitcoin. And that is you can either optimize

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for low cost of transacting, which means low cost of block space by creating a lot of block space

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and increasing the size of blocks, or you can optimize for low cost of auditing the entire

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system, which means you have to keep blocks small and constrained and keep all of the data structures

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and complexity as constrained as possible so that a normal person with a normal average computer

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can run a node that scans through the entire blockchain and enforces all of the validity

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rules on the entire history of the blockchain to make sure that nobody is defrauding us by

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breaking the rules and double spending Bitcoin and so on and so forth.

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And so these two things are ultimately at odds with each other, and you have to choose one or another. And so I think the ecosystem rightfully chose to keep the cost of auditing the system small at the potential expense of high cost of transacting.

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But as I already mentioned slightly, there are plenty of other things and other factors that can change the actual cost of transacting.

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Those are basically the things that change the demand for a block space.

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And I would say that one of the other things I'm disappointed about over the past few years is that this sort of institutional adoption, ETFs, all of that other stuff, it may have been good for the price of Bitcoin.

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But if you actually look at the statistics of the network and the people who are using Bitcoin, it doesn't seem to be a lot of people actually using the system directly.

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And if you're not using the system directly, you don't have sovereignty.

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You don't have permissionlessness.

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You may have financial exposure to Bitcoin, the asset, but you're throwing out the vast majority of the things that I would say makes Bitcoin unique and valuable as an asset.

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so that was really interesting for me to learn that your personal experience at it was bronto

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right yeah um that was a client of ours at atlantic yeah back in the day man um so i think

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we lost some good developers too bronto was sucking them up um it was interesting several

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Several of my former Bronto colleagues ended up going and working at Bitcoin companies too, which was interesting.

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I don't know how much of it was a result of me.

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I was definitely the first one who went full-time Bitcoin.

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And then over the next four or five years, several of them followed.

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Let's go.

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We love that flow.

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Wow.

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But it was interesting to learn that part of your early stance in the block size wars was informed by your work in early cloud computing,

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where you're living that world of increasing throughput.

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So why not very rationally apply that to Bitcoin itself?

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Interesting to hear also that your views changed over time

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to where, I guess another way to almost talk about

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that one sentence distillation would be,

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are we looking for speed or are we looking for security?

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I mean, is that another way to kind of frame up the trade-offs?

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Yeah, it's also a trade-off between is Bitcoin a transaction-based retail currency for day-to-day purchases, or is Bitcoin the store of value long-term savings?

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Like those two things are kind of in conflict as well, though there are ways to mitigate that, right, with like layer twos where you can start to have both properties by building other systems on top of Bitcoin that don't necessarily have all of the constraints.

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But you end up with a different set of tradeoffs, like no layer two will ever be able to have the same level of security as your layer one on-chain Bitcoin.

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so if if that was your experience during the block wars where and by the way for me maybe i should ask

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you too and i'm evan it's fascinating for me to learn about the block size wars because it's

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regular people human beings you and me from the bottom up that are arguing or debating or trying

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to figure out the best way for this to continue to do what it's trying to do. Like at no point

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are the three of us on this show allowed to go have this kind of moment with the government,

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for example. Like, I don't even think they're talking about how to make it better.

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I mean, we can send letters. We can call our lawmakers.

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Oh, sweet. Yeah. We can sweep up outside too. I mean, what's that going to do?

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You know, like, I mean, you were saying there was no like we we can communicate with them.

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Yeah, they just choose not to listen.

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Yeah, exactly.

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I mean, it's a choice.

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Exactly.

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It's like, come on, dude.

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Well, I do think it is insane that that we are able to talk about how to make this thing better.

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And if that was your experience during the block size wars, you know, now, and we really haven't brought this up on the show because it's for brand new Bitcoiners.

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And I've never understood the block size wars before this moment.

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Because I think the.

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Didn't I didn't really care too much about the transaction and like, how long are you going to wait?

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Like, why is that such a big deal?

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like we wait 24 hours for in our normal banking system for basically anything and it'll say like

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pending for a couple of days and it was the the functionality versus the ideological part

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that made it make sense more because it your one sentence distillation was very helpful

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um it's like do we and and to an extent like the transaction element of are we going to use bitcoin

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for buying coffees every day which is the greatest example that we all use um is that going to be how

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we use bitcoin i mean like we've had many guests who are talking about all the different kinds of

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like crypto that they think are going to fill in that gap of increasing like making it easier to

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transact and then and then we're like but wait we have the lightning network i don't know it just

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that's interesting the store of value versus everyday use and now now we got a big old debate

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kind of all over again around some other stuff i mean it's this um it's ideological again

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yeah can you can because i've been i've been kind of following along to the best of my ability

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in terms of the war that's going on right now inside Bitcoin.

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I've been trying to understand it as much as humanly possible,

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but I'd love to hear from you.

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What do you think the one sentence distillation of the current stuff,

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if you even haven't yet?

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What's your take on this stuff?

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Yeah. So once again, it's helpful to understand the decade long history of how we got here. And I have several very lengthy blog posts that I can point you to.

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One of them that I wrote a few years ago was called A History of Bitcoin Maximalism. And that is more looking at Bitcoin through the lens of ideological narratives of people saying Bitcoin is blah.

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And this is one of the great reasons that we have all of these debates about what Bitcoin should do or how we should upgrade Bitcoin, because many people have different perspectives of what Bitcoin actually is.

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And since there is no authority, no one can authoritatively say Bitcoin is blah.

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I can authoritatively tell you like what the technicals of the protocol does.

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But there's always this level beyond that.

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the, it's almost like a proto consensus that is not defined by anything that we, at least

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as technical people are always trying to kind of like grab that out of the air and figure

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out like, what is it that the world would like to see from Bitcoin?

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What can we continue to build and offer to the world that still follows the ethos of

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Bitcoin?

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And there are many different like inviolable properties that I've also written about.

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I've got an article called like I think the key properties of Bitcoin where I dig into like 10 different properties that I think are most people would agree are important for Bitcoin to uphold.

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But how did we get to where we are right now?

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Essentially, there are groups within Bitcoin that have coalesced around this idea that Bitcoin must only be a purely monetary protocol.

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protocol, and that any use of Bitcoin for what they would consider non-monetary purposes must be

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fought against at all costs. Because by allowing non-monetary usage of the protocol and the

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blockchain, that this could say is like poison or weakens Bitcoin or invites what many of them

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would call spammers or scammers to abuse the Bitcoin protocol. And so an egregious example

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of that, of course, is an NFT of embedding JPEG data into the blockchain, which has been happening

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a lot over the past few years. And I would argue that one of the reasons it's been happening a lot

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is because, once again, transaction fees are extremely cheap because no one's actually using

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Bitcoin for monetary purposes. People are just buying the ETF or buying a micro strategy or

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whatever. And so because it's so cheap, there are people out there who are like, okay, we can

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manipulate the protocol in order to build other things on top of it. And that may be various

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tokens. There's all types of different token protocols that have come and gone over the past

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few years. And so there's a movement within Bitcoin that says we have to do everything we

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can to stop this. The flip side of that is the people who are like, well, Bitcoin is a permissionless

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protocol and it is designed to be censorship resistant. So now the sort of two conflicting

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ideologies we have, or one ideology says, no, we consider this stuff bad. We have to change the

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protocol to restrict it and limit it as much as possible for the long-term good of Bitcoin.

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The other side is generally saying, yes, we agree we don't like any of this stuff,

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but if you start going down that road of trying to censor a censorship-resistant network,

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it turns into a never-ending cat and mouse game, and you're ultimately wasting a lot of

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developers time by continuing to change the rules. And every time you change the rules,

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00:42:18,120 --> 00:42:24,600
the people that you don't like are just going to slightly modify what they're doing to route around

395
00:42:24,600 --> 00:42:33,980
it, essentially to continue finding loopholes. Because at the base of it, you hear the side that

396
00:42:33,980 --> 00:42:38,500
I tend to call the Puritans, because they want Bitcoin to be pure from whatever their subjective

397
00:42:38,500 --> 00:42:45,220
perspective is, is that they say Bitcoin is money. And that is true. And I agree with that. Bitcoin

398
00:42:45,220 --> 00:42:51,420
is money. But I think the nuance of what they're generally leaving out is that Bitcoin is

399
00:42:51,420 --> 00:42:58,700
permissionless programmable money. And as soon as you have a programming language and you have

400
00:42:58,700 --> 00:43:02,980
a data structure, like this is basic computer sciences, data structures and algorithms,

401
00:43:03,520 --> 00:43:07,900
and Bitcoin has both of those, even though its programming language is incredibly limited,

402
00:43:07,900 --> 00:43:26,380
That means there's going to be potential for someone to find ways to embed data into the blockchain. And there's more ways than really I can even count and potentially an unlimited number of ways that people can embed data.

403
00:43:26,380 --> 00:43:30,660
You can even embed data within the public keys.

404
00:43:31,520 --> 00:43:52,560
So the short version is it would be very difficult to stop everyone from putting, call it arbitrary non-monetary data into the Bitcoin blockchain without crippling Bitcoin and actually preventing a lot of the use cases that we are currently enjoying today.

405
00:43:52,560 --> 00:44:11,160
And so that's why there is a Bitcoin improvement proposal that's out there. I've also written an extremely long article about that just a month or so ago. And I went into all of the details of why, from my perspective, the proposal is not very well thought out.

406
00:44:11,940 --> 00:44:15,560
It's had a number of issues that have already been found with it.

407
00:44:16,060 --> 00:44:19,300
And it has basically no economic support.

408
00:44:19,300 --> 00:44:24,620
I think, as best I can tell, there's probably a few thousand like hardcore Bitcoiners who

409
00:44:24,620 --> 00:44:29,740
are very in favor of the proposal and they're running nodes and they're talking on social

410
00:44:29,740 --> 00:44:30,880
media and so on.

411
00:44:31,320 --> 00:44:38,320
But I consider them to have basically a 0% chance of success at this because none of

412
00:44:38,320 --> 00:44:44,740
the economic actors within the ecosystem consider this to be interesting at all.

413
00:44:44,740 --> 00:44:49,740
And especially the miners, I think some of the miners are actively opposed to it because

414
00:44:49,740 --> 00:45:07,910
it would likely reduce their income by making a lot of transactions invalid so they would no longer be able to collect fees from them So I mean it interesting that we gotten to this point And mostly I think what going to be more interesting is to

415
00:45:07,910 --> 00:45:13,570
see what happens in the fall, because the way that these people have coded up their proposal

416
00:45:13,570 --> 00:45:19,490
and their nodes, they're pretty much guaranteed to fork off from the Bitcoin network. And the only

417
00:45:19,490 --> 00:45:28,170
question then is how much mining hash rate do they have? I would be very surprised if they end up with

418
00:45:28,170 --> 00:45:34,630
more than a few percent of total hash rate. And will they have enough hash rate to even create

419
00:45:34,630 --> 00:45:41,450
blocks to have a usable network? I would expect them to maybe get like one or two blocks a day.

420
00:45:41,690 --> 00:45:46,330
And then I think I calculated that it would take something like three years for them to hit the

421
00:45:46,330 --> 00:45:50,710
next difficulty adjustment so that the blocks can actually start coming a little bit faster

422
00:45:50,710 --> 00:45:57,510
if they only have one or 2% of the network. But as I said, there's a ton of other reasons why I

423
00:45:57,510 --> 00:46:04,750
think it's just a non-starter. And what I really expect is that August is going to come,

424
00:46:05,490 --> 00:46:09,250
their nodes are going to get forked off of the network, and then they're going to realize that

425
00:46:09,250 --> 00:46:13,370
they're on a network that has absolutely no value, no utility, and they're just going to come back to

426
00:46:13,370 --> 00:46:22,330
Bitcoin. And the main problem that I have with a lot of the supporters is that none of them

427
00:46:22,330 --> 00:46:29,650
are willing to put their money where their mouths are. And what I really mean there is show economic

428
00:46:29,650 --> 00:46:35,590
support, not just words. Talk is cheap. Even running nodes, and they'll say, oh, we've got

429
00:46:35,590 --> 00:46:40,550
thousands of nodes running. Running nodes is cheap. I can run 5,000 nodes on a single machine.

430
00:46:40,550 --> 00:46:56,510
It cost me practically nothing. Of course, I have a little bit of technical wizardry that allows me to do that that would be difficult for other people to do. But I want these people to actually engage in futures markets. We had futures markets during the block size wars.

431
00:46:56,510 --> 00:47:15,290
I think it was BitMEX, Bitfinex, maybe one or two other large centralized markets that ran these futures where you could literally deposit your Bitcoin and you could say, I'm going to bet for this fork of Bitcoin or against this fork of Bitcoin.

432
00:47:15,870 --> 00:47:22,050
And then based upon how those forks played out, you would either lose your money or you would get more money back.

433
00:47:22,050 --> 00:47:25,430
and it's possible for us to do the same thing now.

434
00:47:26,270 --> 00:47:28,750
And I've been making this offer to anyone

435
00:47:28,750 --> 00:47:31,410
who seems to be in support of the fork.

436
00:47:31,590 --> 00:47:34,430
I'm willing to put my Bitcoin on the line

437
00:47:34,430 --> 00:47:36,770
to say that this is doomed to failure

438
00:47:36,770 --> 00:47:39,430
and I will take your Bitcoin if I am correct.

439
00:47:39,590 --> 00:47:41,510
And if you are correct, you can take my Bitcoin.

440
00:47:41,510 --> 00:47:44,230
And so far I have yet to have a single person

441
00:47:44,230 --> 00:47:46,370
actually take me up on that offer.

442
00:47:46,550 --> 00:47:51,330
So I just don't consider it to be a serious fork.

443
00:47:51,330 --> 00:48:17,950
It compared to the block size forks where we had several billionaires like Bitcoin billionaires that were putting their money on the line and that were going all around the world and and doing everything that they could to drum up support, not just within the social network system, but within all of the large economic players, the custodians and the miners and so on and so forth.

444
00:48:17,950 --> 00:48:35,770
And comparing this movement to that movement, this movement is just a joke. I can't take it seriously because I don't see the same level of commitment. All I see is a lot of people yelling on social media who aren't actually willing to put their money where their mouth is.

445
00:48:35,770 --> 00:48:57,210
Hmm. So, you know, what I, what I got out of that, Jameson is, you know, right now there is a debate, you know, the block size wars were like, Hey, how much, how many transactions should we be able to handle in any given moment?

446
00:48:57,210 --> 00:49:09,210
Do we want to stay a little bit smaller and maybe focus on security and long-term store of value where Bitcoin is kind of like a digital gold of the future?

447
00:49:10,330 --> 00:49:21,610
Or do we want to open that up, focus more on Bitcoin as a daily driver for your payments?

448
00:49:21,610 --> 00:49:32,850
and today this is a little bit more esoteric for sure and who knows whether my mom is still

449
00:49:32,850 --> 00:49:40,450
hanging on or not but to try to distill that in my own thinking it's it's it's a debate around

450
00:49:40,450 --> 00:49:47,890
other entry points in the code that's a debate around the characteristics of bitcoin transactions

451
00:49:47,890 --> 00:49:52,790
themselves rather than just like the quantity of transactions.

452
00:49:53,310 --> 00:49:53,650
There it is.

453
00:49:53,650 --> 00:49:55,550
It's not the number of transactions.

454
00:49:55,550 --> 00:49:57,390
It's the type of transaction.

455
00:49:57,390 --> 00:50:05,170
In today's world, we've got, you know, the Epstein files that made things feel kind of

456
00:50:05,170 --> 00:50:05,650
messy.

457
00:50:06,410 --> 00:50:15,150
We've got these, you know, what could effectively be a new civil war between Bitcoiners.

458
00:50:15,150 --> 00:50:19,250
and we've got institutional adoption

459
00:50:19,250 --> 00:50:22,710
that makes some feel like

460
00:50:22,710 --> 00:50:25,370
it could pose a risk to the network.

461
00:50:25,570 --> 00:50:27,250
It makes others feel like

462
00:50:27,250 --> 00:50:29,390
the dang number should go up.

463
00:50:29,950 --> 00:50:31,650
The politicization,

464
00:50:31,810 --> 00:50:35,090
you know, things feel messy right now,

465
00:50:35,090 --> 00:50:37,250
but for a brand new Bitcoiner,

466
00:50:37,430 --> 00:50:38,370
what's your advice?

467
00:50:38,670 --> 00:50:42,350
Like, do they even need to care about this

468
00:50:42,350 --> 00:50:44,610
or can they just stack sats

469
00:50:44,610 --> 00:50:52,770
stay humble and in another eight years all this will be historical stuff that we dive into on your

470
00:50:52,770 --> 00:51:02,770
next update right uh yeah you you don't have to be involved at all in the call it the governance

471
00:51:02,770 --> 00:51:08,790
of bitcoin um you know there are some people who this becomes their entire life and they feel like

472
00:51:08,790 --> 00:51:15,150
they are fighting to save Bitcoin and you can become very ideological and, and, and in some

473
00:51:15,150 --> 00:51:20,670
cases very nasty about it, uh, which is understandable, especially if you have like the

474
00:51:20,670 --> 00:51:29,190
majority of your wealth tied up in it. Um, but to your point, like with previous forks, whenever

475
00:51:29,190 --> 00:51:34,050
there is, even if there is a fork, if, if you don't, you don't have to do anything, you hold

476
00:51:34,050 --> 00:51:39,890
both sides of it and you can, you can be a fence sitter and you can wait and see which side wins.

477
00:51:40,290 --> 00:51:46,210
And, uh, you know, theoretically the side that wins should be worth more. That's what happened

478
00:51:46,210 --> 00:51:51,290
with the block size stuff. That's what I expect will happen, uh, with the fork. I think it's

479
00:51:51,290 --> 00:51:57,890
going to be an even greater disparity with the fork, uh, this fall that I'm expecting. Um, but

480
00:51:57,890 --> 00:52:10,310
But the flip side of that and kind of what I was talking about earlier is that if you do want to participate in governance, you have to be willing to put your Bitcoin on the line.

481
00:52:10,310 --> 00:52:24,490
You have to be willing to actually show that you're an economically motivated actor and you're basically sending economic signals to the other economic participants in the network, be that custodians, miners, so on and so forth.

482
00:52:24,490 --> 00:52:31,970
Especially if you're trying to do what this new fork is doing, which is they're basically trying to threaten miners by saying we're going to reject your blocks.

483
00:52:32,530 --> 00:52:45,190
And miners are only going to care about getting their blocks rejected if the entities that are rejecting it are the ones that they're trying to get a payout from and get that money spent on other things.

484
00:52:45,190 --> 00:52:57,870
So if you have just a bunch of randos running nodes on Raspberry Pis who aren't actually processing the transactions that these miners care about, then I think the miners are just going to ignore them.

485
00:52:58,610 --> 00:53:03,650
But yeah, the governance is messy because this is anarchy.

486
00:53:04,210 --> 00:53:07,230
There is no well-defined process.

487
00:53:07,770 --> 00:53:11,810
Sure, we have the Bitcoin improvement proposal process pipeline and stuff.

488
00:53:11,810 --> 00:53:13,610
But even that is just a suggestion.

489
00:53:13,610 --> 00:53:15,990
Like there is no one who can enforce it.

490
00:53:16,390 --> 00:53:21,270
You can always just write your own code and put it out there and try to get people to run it.

491
00:53:22,710 --> 00:53:23,930
So crazy, dude.

492
00:53:24,070 --> 00:53:24,570
So crazy.

493
00:53:24,790 --> 00:53:24,970
Okay.

494
00:53:25,430 --> 00:53:25,930
All right.

495
00:53:25,990 --> 00:53:30,970
Well, I mean, it's clear that there's so much to Bitcoin that will never fit it into a single chat about Sats Jameson.

496
00:53:31,010 --> 00:53:43,350
And quite frankly, we've learned today, because I know you're a data-driven fellow, that if we analyze the statistics here, there's so much to Bitcoin that will never fit it into two chats about Sats, which is wild, which is wild.

497
00:53:43,350 --> 00:53:52,570
So we do ask each of our guests if they'd be willing to come back on in nine months to give us an update on their Bitcoin baby, which would be your Bitcoin toddler at that point, actually.

498
00:53:52,670 --> 00:53:53,950
Would you be willing to do that for us, brother?

499
00:53:54,870 --> 00:53:55,610
Sounds good.

500
00:53:56,290 --> 00:53:57,730
Sounds good. Yes.

501
00:53:58,430 --> 00:54:00,750
Jameson's going to be coming back for life, brother.

502
00:54:01,290 --> 00:54:03,190
All right. We're Tar Heel friends.

503
00:54:03,390 --> 00:54:05,670
OK, we ain't never going to not be buds.

504
00:54:06,410 --> 00:54:07,130
Come on now.

505
00:54:07,130 --> 00:54:09,470
All right. So let's take a break here.

506
00:54:09,470 --> 00:54:16,650
refill our brains with some caloric value that can help us ask Jameson the next question that we

507
00:54:16,650 --> 00:54:24,810
have for him. Correct. So today with our buy the dip moment sponsor, Ithaca Hummus, reminding us to

508
00:54:24,810 --> 00:54:31,950
buy the dip. What are we going to do if Bitcoin forks off? Buy both forks? What are we going to

509
00:54:31,950 --> 00:54:38,310
say? I think we just say buy the dip. Buy whichever one's dipping more. I don't know.

510
00:54:38,310 --> 00:54:39,790
How do we handle that?

511
00:54:39,890 --> 00:54:46,810
I think it's going to be hard to buy both forks because I expect the minority fork will not even exist on any of the exchanges to buy in the first place.

512
00:54:47,830 --> 00:54:49,190
Okay, that's comforting to me.

513
00:54:49,270 --> 00:54:51,710
I don't have to try to figure that out.

514
00:54:51,790 --> 00:54:52,050
Yeah.

515
00:54:52,190 --> 00:54:57,330
I'll let my DCA continue to stack whatever river is stacking for me, right?

516
00:54:57,430 --> 00:54:58,190
I mean, I'm sure it'll.

517
00:54:58,510 --> 00:54:58,710
Yeah.

518
00:54:59,130 --> 00:54:59,270
Yeah.

519
00:54:59,710 --> 00:55:00,010
All right.

520
00:55:00,010 --> 00:55:06,310
So in the studio, we are going to act as your taste buds here for Ithaca Hummus' lemon garlic flavor.

521
00:55:07,130 --> 00:55:07,490
Okay.

522
00:55:07,490 --> 00:55:07,970
All right.

523
00:55:07,970 --> 00:55:08,250
Cheers.

524
00:55:13,030 --> 00:55:19,270
That always makes my tongue tingle.

525
00:55:19,710 --> 00:55:20,550
You know what I mean?

526
00:55:20,790 --> 00:55:21,790
The back of the tongue.

527
00:55:22,950 --> 00:55:25,230
Yeah, I guess that's the lemon.

528
00:55:25,710 --> 00:55:25,830
Yeah.

529
00:55:26,530 --> 00:55:31,350
Jameson, did you have any hummus between now, between March, over the past year?

530
00:55:31,450 --> 00:55:32,150
Any Ithaca hummus?

531
00:55:32,230 --> 00:55:32,890
Did you ever pick it up?

532
00:55:33,550 --> 00:55:36,910
Oh, I've had lots of hummus, and I have had Ithaca hummus, and it's great, yeah.

533
00:55:37,490 --> 00:55:38,010
Let's go.

534
00:55:38,090 --> 00:55:39,770
Now, did we introduce you to it?

535
00:55:40,610 --> 00:55:41,530
I don't think so.

536
00:55:42,770 --> 00:55:44,530
Oh, knew about it beforehand.

537
00:55:44,930 --> 00:55:45,150
Okay.

538
00:55:45,350 --> 00:55:45,970
All righty.

539
00:55:46,050 --> 00:55:47,590
Favorite flavor of Ithaca hummus?

540
00:55:49,090 --> 00:55:49,530
Ooh.

541
00:55:50,110 --> 00:55:53,450
I mean, I know that I've had the lemon one that you were just talking about.

542
00:55:53,730 --> 00:55:54,170
Yeah.

543
00:55:54,750 --> 00:55:55,770
This is yum, yum.

544
00:55:56,190 --> 00:55:56,710
The lemon garlic.

545
00:55:56,770 --> 00:55:57,330
Yum, yum.

546
00:55:57,450 --> 00:55:58,710
It's the closest to the classic.

547
00:55:58,710 --> 00:56:00,930
The classic and the lemon garlic are similar.

548
00:56:01,410 --> 00:56:01,650
Yes.

549
00:56:01,750 --> 00:56:02,470
So I like them both.

550
00:56:02,470 --> 00:56:11,950
Now, if you're going to come back on in nine months, then it's time for us to ask you to give us your two sats.

551
00:56:12,030 --> 00:56:13,050
Let them know what that means, Aves.

552
00:56:13,330 --> 00:56:13,730
Yes.

553
00:56:13,910 --> 00:56:21,350
So we would like to hear your two sats for brand new Bitcoiners on what you think is going to happen in the next nine months.

554
00:56:21,410 --> 00:56:23,430
And this moment is powered by Salt.

555
00:56:23,590 --> 00:56:24,350
Oh, yeah.

556
00:56:24,590 --> 00:56:26,310
And our very own number, 1, 2, 3, Sean.

557
00:56:26,410 --> 00:56:27,130
Our very own.

558
00:56:27,190 --> 00:56:28,910
So what do you think is going to happen over the next nine months?

559
00:56:28,970 --> 00:56:30,270
What can my mom expect?

560
00:56:30,270 --> 00:56:41,390
I mean, at the technical level, once again, I think not too much at the low level protocol,

561
00:56:41,630 --> 00:56:47,050
though I am hoping that we can make some progress on something that's called the great consensus

562
00:56:47,050 --> 00:56:57,430
cleanup. I think that's BIP52, maybe BIP54. But that basically goes back to just fixing some of

563
00:56:57,430 --> 00:57:04,070
really low level issues with Bitcoin that are vulnerabilities, the extreme edge cases, things

564
00:57:04,070 --> 00:57:12,550
that could cause the Bitcoin network to be attacked and degraded and such. And so I'm hoping that we

565
00:57:12,550 --> 00:57:19,430
can get some sort of Bitcoin improvement proposal through because we're in unprecedented times right

566
00:57:19,430 --> 00:57:26,150
now. It has never been as many years since the last SoftFork was activated as where we are right

567
00:57:26,150 --> 00:57:31,430
now and we currently don't really have any that i think are going to get activated uh like i said

568
00:57:31,430 --> 00:57:37,350
the the one that people want to activate for anti-spam so on stuff uh seems to be dead on arrival

569
00:57:38,150 --> 00:57:42,470
oh wow okay yeah and it sounds like that will happen in the next nine months too right i think

570
00:57:42,470 --> 00:57:50,470
you said august is when it's yeah yeah yeah so that i think that there will be uh a fork but that

571
00:57:50,470 --> 00:57:56,990
it will probably be pretty short-lived. I don't think that it will have enough miners and economic

572
00:57:56,990 --> 00:58:03,310
actors behind it to actually sustain a separate network. And even if they did, it would be really

573
00:58:03,310 --> 00:58:07,970
messy because they're not going to have something called replay protection, which basically means

574
00:58:07,970 --> 00:58:12,370
that if you make a Bitcoin transaction on one network, it would also happen on the other network

575
00:58:12,370 --> 00:58:17,270
and you'd be spending your coins twice on both networks. And that's a really messy situation to

576
00:58:17,270 --> 00:58:26,110
get into oh yeah okay deep dive yeah that is happening uh jameson where can our satillioners

577
00:58:26,110 --> 00:58:35,810
go to spend more time with you online well i'm still on x somewhat my handle is lop l-o-p-p

578
00:58:35,810 --> 00:58:42,850
i'm also on nostr i prefer nostr i couldn't tell you my in pub off the top of my head though it's

579
00:58:42,850 --> 00:58:49,230
very long. And you can always check out my website. It's just lop.net. I post all of my articles,

580
00:58:49,230 --> 00:58:56,190
interviews, and I have several thousand links to a variety of Bitcoin resources to cover

581
00:58:56,190 --> 00:59:05,150
absolutely every angle of this vast ecosystem. Wild. Awesome. Amazing. Yeah. All right,

582
00:59:05,210 --> 00:59:10,450
Cotillionaires, if you have enjoyed today's show, click the subscribe button at your chance to win

583
00:59:10,450 --> 00:59:12,570
this collectible silver coin

584
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with Satoshi on one side

585
00:59:13,910 --> 00:59:16,070
and 50,000 stats

586
00:59:16,070 --> 00:59:17,830
through a QR code on the other.

587
00:59:18,030 --> 00:59:19,250
And this is from our friends

588
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at CryptoLink Coins

589
00:59:20,890 --> 00:59:22,890
when we get to 3,000 subscribers.

590
00:59:23,710 --> 00:59:24,550
And if you'd like to find out

591
00:59:24,550 --> 00:59:26,230
more ways to support the show,

592
00:59:26,390 --> 00:59:27,470
grab your slot in the studio,

593
00:59:27,630 --> 00:59:28,390
become a sponsor.

594
00:59:28,910 --> 00:59:30,930
You can even be a member on YouTube.

595
00:59:31,230 --> 00:59:32,130
And so we've got lots

596
00:59:32,130 --> 00:59:33,110
of different layers there.

597
00:59:33,810 --> 00:59:35,590
You can do so in our show notes.

598
00:59:36,510 --> 00:59:38,670
And SatChats is for educational purposes only

599
00:59:38,670 --> 00:59:39,870
and should not be construed

600
00:59:39,870 --> 00:59:40,830
as financial advice

601
00:59:40,830 --> 00:59:41,950
and our guest

602
00:59:41,950 --> 00:59:43,510
on their own.

603
00:59:44,010 --> 00:59:44,950
So until next time,

604
00:59:45,450 --> 00:59:46,330
keep stacking them stats.

605
00:59:46,330 --> 00:59:47,090
Keep stacking them stats.

606
00:59:47,270 --> 00:59:48,450
Get them stacked up.

607
00:59:48,890 --> 00:59:49,490
All right?

608
00:59:50,550 --> 00:59:51,650
Just do it.

609
00:59:52,450 --> 00:59:53,270
It's all you need

610
00:59:53,270 --> 00:59:54,150
for now, folks.