If you're watching this video, you're going to learn three big things.
Number one, what Bitcoin's biggest technical fights are actually about in plain English.
Number two, why Bitcoin has to balance cheap transactions against security and decentralization.
And number three, my favorite, why brand new Bitcoiners don't need to panic when Bitcoin drama
hits. Today's guest is Jameson Lopp, number 33. He's
back. He's one of Bitcoin's best known security experts and builders. He's been in the trenches
of all the Bitcoin protocol debates. So if you're brand new to Bitcoin,
come on inside the world's biggest Bitcoin welcome center for today's show.
Welcome to Sat Chats, the Bitcoin podcast where we chat about sats. Sats are the smallest part
of a Bitcoin the same way pennies are the smallest part of a dollar. With Sat Chats,
we are building the world's biggest Bitcoin welcome center to serve as your gateway to
generational wealth. So if you are brand new to Bitcoin, we want to chat about sats with you.
Head to satchats.com to grab your slot in the studio today. I'm your host, Stuart.
And I'm your co-host, Anna Bevan. And with us back for his Bitcoin baby is number 33, Jameson.
let's go jameson welcome back to the show brother great to be here so
a lot has happened in the 12 months that you've been away we taped you in march of last year so we
had we had two new versions of bitcoin core i believe in that time we had like a crypto week
over the summer that was supposed to be pretty neat,
but there's like still all kinds of legislation
and regulations that nothing's happening with.
We had an all-time high in October,
which felt super juicy.
We had a Thursday in recent memory that was very scary
and me and some other Bitcoiners had to get together
and hug one another because we're so new to Bitcoin.
That was our first proper drawback.
I mean, and as you said before we started taping,
The 20 millionth Bitcoin has been mined.
It's going to take another hundred-ish years for the remaining Bitcoins to come out.
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?
uh i mean last year was feeling pretty good until october um you know and then i think reality hit
and uh this just culmination of a bunch of other macro economic conditions and uncertainty about
the world in general uh you know has just made a lot of investors rethink i guess their uh risk
appetite. And I don't know, from my perspective, unfortunately, from my perspective, Bitcoin has
actually been a lot more boring than I would like over the past year. But I'm a technologist,
I want to continue to see more innovation happen. And from my perspective, at least at the
base protocol level, we continue to ossify, we continue to slow down the innovation that's
happening. And whenever you try to talk about making improvements at the base protocol level,
you get more and more flack. So, you know, there has been drama and debate around what's happening
at the base protocol level. There have been more innovations happening at layer two levels,
things coming out like ARK, for example, which is kind of like a competitor to Lightning.
and really I would say what I've been more focused on has been AI related stuff which
you know you can tie into all of this and then the fact that we do expect that
autonomous agents are going to prefer using cryptocurrency to using trusted rails that
they can't even KYC with in the first place but also once again from a technologist perspective
using AI to accelerate innovation and building software. And the flip side of that being all
the security issues, which I'm very concerned about, because we're really rushing headlong
into kind of the unknown with the AI phenomenon and how quickly it's evolving and how
more deeply it's getting embedded into many, many different aspects of our lives.
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.
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.
But that's mainly because I expect more and more catastrophes to happen, novel catastrophes.
catastrophes. Ooh. So as the most brand new Bitcoiner here, what of those elements stood out
to you that you want to learn more about? So Jameson, I'm class of 2025. So brand new.
I only know Bitcoin basically being in the hundreds. So this is, this is a dip for me,
but it's really comforting.
We've had a lot of guests who talk about this is like,
talk to me later, this is nothing.
But you saying that Bitcoin has been boring over the last year
is just so interesting because I feel like
I'm like constantly refreshing the Clark Moody dashboard.
I, well, I've been soaking up all of this information about Bitcoin.
And so nothing feels super boring
except for maybe some of the really technical stuff,
which is the stuff that you love. Yeah. Yeah. I mean, I think it has to do with how far down
the rabbit hole you are, right? Like it takes many, many, many years to get a really deep
knowledge of Bitcoin. And like, I'm so far down like at the protocol level, like that's,
that's where things move the slowest and that's, they should be moving the slowest. We don't want
the base protocol to be constantly changing and potentially pulling the rug out from people.
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.
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.
You know, I like to think that I might be in the white van. You know what I mean?
the white van maybe maybe absolute and like i try to dip down into the hotel sequence but you're
like you're you're you're past the hotel sequence in the past the ice fort you're in like limbo where
you know one second at anna bevan's airplane level is like a hundred years for you down there
at the protocol level right so like that and at the very top there's news there's headlines there's
price predictions, there's, there's ups and downs. And where you are, that's all so boring to me,
because, you know, it's like history doesn't repeat, but it does rhyme, right. And so it seems
to me like the majority of the discussions or the chatter or whatever that happens on social media
is like you say, it's around price, it's around investment, it's around building narratives to
try to make Bitcoin's virality continue to increase because, of course, we're all incentivized to do
that. But I would say the flip side of that, and one of the reasons that I think it's been kind of
boring, this past cycle felt different to me. And the main reason for that, like I said, once again,
I'm a tech guy. I'm really into statistics and metrics. I run all types of different projects
where I track things. And the short version is that if you want to call it a bull run,
the bull market of last year, which I would also argue was kind of a fake bull market in that you
could argue that if you adjust the exchange rate to inflation, to pre-COVID prices, we actually
never broke a hundred thousand dollars, like adjusted to pre-COVID exchange rates. And so,
you know, yeah, it was, it felt great to get up to like 126 or whatever. But I felt like this was
all driven by institutional adoption. Like we never really had like retail hype FOMO.
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.
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.
And we didn't have that this time. And I felt like that was one of the main differences.
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.
They probably just know about crypto and they lump it all together as the same thing.
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.
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.
And so now I think a lot of people also consider crypto to be like a right wing Republican thing.
And of course, we all know that it's completely neutral and that's not the case.
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.
who were we talking to the other day that said there was like,
there were reasons for people on the right-hand side to like Bitcoin and reasons for people on
the left-hand side. It was Conrad. It was Conrad from Bitcoin. Well, yeah. I mean,
he was kind of making the point that there are values that folks on the right side of the
political spectrum would admire in Bitcoin. And there are values that people on the left side of
the spectrum would also value in Bitcoin. It's not a left and right thing, right? The reason that
that is true is because regardless of which side, or if you're not even on a side like me,
it's not left and right. It's actually top and bottom. There are always
authorities or people or organizations in positions of power that can and will abuse that.
And Bitcoin is the way that you protect yourself in a variety of different ways.
And so I think I've said this a few times over the past year, is that especially looking at some of
the Democrat platform rhetoric that was coming out near the end of the Biden administration,
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?
It's like my recollection was that Occupy Wall Street was primarily like a left Democrat run movement.
And they and that movement should really be very pro Bitcoin, anti central bank.
And yet somehow over the 15 years since that happened, we seem to have completely flip flopped on that particular issue.
And we seem, at least the Democrats seem to be very pro-regulation and harsh financial regime.
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.
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.
It was in the 60s around that time.
Because I was like, it's only a matter of time before this thing explodes.
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.
um like naive bukele was stacking sats in el salvador like we learned that um the the the
biden administration was like for real trying to put a dent into the crypto industry uh like
it came out that bhutan was stacking sats with its waterfall i was like corporations were coming
on board, the ETFs were explained like, dude, this is wild child business here. And when
I looked into Bitcoin myself, I'm like, man, I mean, going as deep as I could go at that
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
And we're back where I started two years ago.
And now it's like, it feels like a sailor is the only one buying up the Bitcoin now.
And he's just continues hoovering it up regardless of what the rest of the market sentiment is.
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.
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.
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.
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?
is they're just using other trusted third parties.
And I've gone back and forth with Saylor a few times on that.
And I understand his thinking and his point.
Like he's a businessman and he has a bunch of, you know,
business and legal agreements and traditional auditing and stuff set up.
But I'm a cypherpunk crypto anarchist.
And so I don't like put a lot of weight into that stuff.
Cypherpunk crypto anarchist.
Mom, did you get that?
My mom's listening.
She's like, she's trying to take notes.
she thinks I'm she's she knows I'm gonna ask on Friday uh what you called yourself in your episode
and the correct answer is gonna be cypherpunk crypto anarchist but is that metal that just
sounds like metal to me I was thinking I wonder what I would call myself I mean like I would never
call myself that but like I don't know if I would ever like would I get to that point where I could
Anna Bevan put it in the comments while you subscribe do you think Anna Bevan in five to
10 years will be a cypherpunk crypto anarchist, which, which, which, which effectively for the
brand new Bitcoiner in our audience means that Jameson as a cypherpunk believes in mathematics
and freedom and privacy in the digital age. And as a crypto anarchist, crypto anarchist,
to my understanding, effectively means not because a lot of people are going to see that and go,
um this guy is a dan brown da vinci code um like skull and crossbones crypto cryptic kind of guy
who wants to burn the world down it's like that's not correct crypto as in cryptography as in
securing things with mathematics yeah systems and rules systems yeah i mean and i mean what what
What anarchy is basically calling for in this moment is for organization to happen from the bottom up spontaneously versus from the top down.
I mean, it's propaganda.
It's statist propaganda that anarchy equates to chaos.
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.
It is a system of rules that is just agreed upon by a bunch of people around the world.
And we run software to enforce those in an automated fashion.
You know, there is no governing authority.
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.
But really, power is scattered all over the place.
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.
And we kind of figure them out as we go along.
Now, speaking of governance here, Jameson
I kind of want to take you on a journey here
Back through your story
To try to get to the present day
To talk about governance a little bit
So we're actually going to
And I'm going to try to do this in a way
That keeps us from getting lost in limbo
Because we're going to go down a couple of levels here
So brand new Bitcoiners, hang on here
We're going to kind of go down
and we're going to try to do the clap back up.
You know what I mean?
Where the dude from Third Rock and from the sun
is going to strap us all together in the elevator.
Do the, you know what I mean?
And we're going to fall into the bathtub.
I got to watch that movie again.
That movie is so good.
So talk to me about your Block Wars experience.
Break that down for my mom
who was not there during that time.
Help us understand what was going on.
What side were you on?
Why?
How did it all turn out?
Let's start with that piece of your story.
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.
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.
And then it was maybe 2013 or 2014 when we started hitting the soft caps.
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.
But before that, there were soft caps, I think, that were set within the Bitcoin core mining template logic.
And so I think the first one was at 250 kilobytes, so a quarter of a megabyte.
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.
And then it was basically provably fair because of the way that the cryptography worked.
So you know that you weren't getting cheated, or at least you knew exactly what the specific house advantage was.
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.
And so a kind of word went out across all of the miners and they started increasing it to, I think, 500 kilobytes.
And then eventually they just lifted the soft cap completely and people started creating full one megabyte blocks.
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.
And by fight, I mean outbid each other.
So no longer were the days of the one Satoshi per byte limit, which is kind of funny because we're back there now.
But that's, of course, a decade long story.
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.
And so this was causing some additional friction and poor user experience for people.
And it's very difficult when you're using this permissionless protocol that's not controlled by anyone.
If you run into issues, there's no tech support number to go to.
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.
Why is Bitcoin not working the way that it used to work?
And all of that, as I said, started contributing to the block size debate heating up.
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.
This was just in the first few years after Google had open sourced their ecosystem.
They called it the Hadoop ecosystem.
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.
So that's what I was doing.
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.
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.
So a short version is that I was very obsessed with throughput and capacity and how hitting your capacity caused extremely terrible user experience.
And so this was something that I was doing on a daily basis was looking at like, what is our total system capacity?
How much headroom do we need to have to be able to handle?
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.
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.
And the emails would go out slower.
The metrics would come back more slowly.
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.
and terrible user experience if we couldn't push everything out the door as quickly as people
wanted. So I started out, there's a roundabout way of explaining my thinking of how I actually
started out as a big blocker. I was aligned with Mike Hearn and Gavin Andreessen in the early days
and their thinking, because Mike Hearn, who I actually worked with a little bit on some of his
open source projects way back then, he was also, he was a Google engineer, and he was also dealing
with large scale problems similar to what I was doing, but probably even larger scale than what I
was focused on. And so he had the same type of thinking of capacity planning. And he had several
blog posts about this, where he said, you know, if we don't have the capacity, we're going to
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.
And I bought into that because I was in the same type of mindset.
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.
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.
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.
It doesn't do addresses or balances or anything like that.
You have to build your own other software for that.
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.
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.
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.
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.
without even parallelizing anything.
So I was looking at this and I was like,
oh, if the blockchain becomes huge,
we can always just paralyze this.
Like I already know how technology works
to build distributed systems that can scale out
and so on and so forth.
But I started seeing how,
even with only one megabyte blocks,
it started getting harder and harder for me
to spool up a new service that indexed everything.
And most of that came down to just the complexity
of how UTXOs work.
And UTXOs basically end up creating this data structure
that branches out like a tree.
And so as of today, I think the UTXO set
has something like 200 million UTXOs.
And this all starts just from one block.
And then each time a block comes along,
you have one new UTXO.
And then each of those, as people transact, sort of blossoms out into a massive tree.
So even though the overall blockchain size was fairly tiny, some of the data structures within it do not scale linearly.
They do not scale very well because of the complexity of what people can be doing.
And so basically over the next year or so
of me being full-time Bitcoiner,
I started coming around to, you know,
it's probably safer if we just keep the block size
constrained as small as possible.
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
to compress the entire debate into essentially one sentence.
And so effectively, the entire five plus year block size debate was about
a trade-off that is inherent to the nature of Bitcoin. And that is you can either optimize
for low cost of transacting, which means low cost of block space by creating a lot of block space
and increasing the size of blocks, or you can optimize for low cost of auditing the entire
system, which means you have to keep blocks small and constrained and keep all of the data structures
and complexity as constrained as possible so that a normal person with a normal average computer
can run a node that scans through the entire blockchain and enforces all of the validity
rules on the entire history of the blockchain to make sure that nobody is defrauding us by
breaking the rules and double spending Bitcoin and so on and so forth.
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.
But as I already mentioned slightly, there are plenty of other things and other factors that can change the actual cost of transacting.
Those are basically the things that change the demand for a block space.
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.
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.
And if you're not using the system directly, you don't have sovereignty.
You don't have permissionlessness.
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.
so that was really interesting for me to learn that your personal experience at it was bronto
right yeah um that was a client of ours at atlantic yeah back in the day man um so i think
we lost some good developers too bronto was sucking them up um it was interesting several
Several of my former Bronto colleagues ended up going and working at Bitcoin companies too, which was interesting.
I don't know how much of it was a result of me.
I was definitely the first one who went full-time Bitcoin.
And then over the next four or five years, several of them followed.
Let's go.
We love that flow.
Wow.
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,
where you're living that world of increasing throughput.
So why not very rationally apply that to Bitcoin itself?
Interesting to hear also that your views changed over time
to where, I guess another way to almost talk about
that one sentence distillation would be,
are we looking for speed or are we looking for security?
I mean, is that another way to kind of frame up the trade-offs?
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?
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.
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.
so if if that was your experience during the block wars where and by the way for me maybe i should ask
you too and i'm evan it's fascinating for me to learn about the block size wars because it's
regular people human beings you and me from the bottom up that are arguing or debating or trying
to figure out the best way for this to continue to do what it's trying to do. Like at no point
are the three of us on this show allowed to go have this kind of moment with the government,
for example. Like, I don't even think they're talking about how to make it better.
I mean, we can send letters. We can call our lawmakers.
Oh, sweet. Yeah. We can sweep up outside too. I mean, what's that going to do?
You know, like, I mean, you were saying there was no like we we can communicate with them.
Yeah, they just choose not to listen.
Yeah, exactly.
I mean, it's a choice.
Exactly.
It's like, come on, dude.
Well, I do think it is insane that that we are able to talk about how to make this thing better.
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.
And I've never understood the block size wars before this moment.
Because I think the.
Didn't I didn't really care too much about the transaction and like, how long are you going to wait?
Like, why is that such a big deal?
like we wait 24 hours for in our normal banking system for basically anything and it'll say like
pending for a couple of days and it was the the functionality versus the ideological part
that made it make sense more because it your one sentence distillation was very helpful
um it's like do we and and to an extent like the transaction element of are we going to use bitcoin
for buying coffees every day which is the greatest example that we all use um is that going to be how
we use bitcoin i mean like we've had many guests who are talking about all the different kinds of
like crypto that they think are going to fill in that gap of increasing like making it easier to
transact and then and then we're like but wait we have the lightning network i don't know it just
that's interesting the store of value versus everyday use and now now we got a big old debate
kind of all over again around some other stuff i mean it's this um it's ideological again
yeah can you can because i've been i've been kind of following along to the best of my ability
in terms of the war that's going on right now inside Bitcoin.
I've been trying to understand it as much as humanly possible,
but I'd love to hear from you.
What do you think the one sentence distillation of the current stuff,
if you even haven't yet?
What's your take on this stuff?
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.
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.
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.
And since there is no authority, no one can authoritatively say Bitcoin is blah.
I can authoritatively tell you like what the technicals of the protocol does.
But there's always this level beyond that.
the, it's almost like a proto consensus that is not defined by anything that we, at least
as technical people are always trying to kind of like grab that out of the air and figure
out like, what is it that the world would like to see from Bitcoin?
What can we continue to build and offer to the world that still follows the ethos of
Bitcoin?
And there are many different like inviolable properties that I've also written about.
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.
But how did we get to where we are right now?
Essentially, there are groups within Bitcoin that have coalesced around this idea that Bitcoin must only be a purely monetary protocol.
protocol, and that any use of Bitcoin for what they would consider non-monetary purposes must be
fought against at all costs. Because by allowing non-monetary usage of the protocol and the
blockchain, that this could say is like poison or weakens Bitcoin or invites what many of them
would call spammers or scammers to abuse the Bitcoin protocol. And so an egregious example
of that, of course, is an NFT of embedding JPEG data into the blockchain, which has been happening
a lot over the past few years. And I would argue that one of the reasons it's been happening a lot
is because, once again, transaction fees are extremely cheap because no one's actually using
Bitcoin for monetary purposes. People are just buying the ETF or buying a micro strategy or
whatever. And so because it's so cheap, there are people out there who are like, okay, we can
manipulate the protocol in order to build other things on top of it. And that may be various
tokens. There's all types of different token protocols that have come and gone over the past
few years. And so there's a movement within Bitcoin that says we have to do everything we
can to stop this. The flip side of that is the people who are like, well, Bitcoin is a permissionless
protocol and it is designed to be censorship resistant. So now the sort of two conflicting
ideologies we have, or one ideology says, no, we consider this stuff bad. We have to change the
protocol to restrict it and limit it as much as possible for the long-term good of Bitcoin.
The other side is generally saying, yes, we agree we don't like any of this stuff,
but if you start going down that road of trying to censor a censorship-resistant network,
it turns into a never-ending cat and mouse game, and you're ultimately wasting a lot of
developers time by continuing to change the rules. And every time you change the rules,
the people that you don't like are just going to slightly modify what they're doing to route around
it, essentially to continue finding loopholes. Because at the base of it, you hear the side that
I tend to call the Puritans, because they want Bitcoin to be pure from whatever their subjective
perspective is, is that they say Bitcoin is money. And that is true. And I agree with that. Bitcoin
is money. But I think the nuance of what they're generally leaving out is that Bitcoin is
permissionless programmable money. And as soon as you have a programming language and you have
a data structure, like this is basic computer sciences, data structures and algorithms,
and Bitcoin has both of those, even though its programming language is incredibly limited,
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.
You can even embed data within the public keys.
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.
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.
It's had a number of issues that have already been found with it.
And it has basically no economic support.
I think, as best I can tell, there's probably a few thousand like hardcore Bitcoiners who
are very in favor of the proposal and they're running nodes and they're talking on social
media and so on.
But I consider them to have basically a 0% chance of success at this because none of
the economic actors within the ecosystem consider this to be interesting at all.
And especially the miners, I think some of the miners are actively opposed to it because
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
see what happens in the fall, because the way that these people have coded up their proposal
and their nodes, they're pretty much guaranteed to fork off from the Bitcoin network. And the only
question then is how much mining hash rate do they have? I would be very surprised if they end up with
more than a few percent of total hash rate. And will they have enough hash rate to even create
blocks to have a usable network? I would expect them to maybe get like one or two blocks a day.
And then I think I calculated that it would take something like three years for them to hit the
next difficulty adjustment so that the blocks can actually start coming a little bit faster
if they only have one or 2% of the network. But as I said, there's a ton of other reasons why I
think it's just a non-starter. And what I really expect is that August is going to come,
their nodes are going to get forked off of the network, and then they're going to realize that
they're on a network that has absolutely no value, no utility, and they're just going to come back to
Bitcoin. And the main problem that I have with a lot of the supporters is that none of them
are willing to put their money where their mouths are. And what I really mean there is show economic
support, not just words. Talk is cheap. Even running nodes, and they'll say, oh, we've got
thousands of nodes running. Running nodes is cheap. I can run 5,000 nodes on a single machine.
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.
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.
And then based upon how those forks played out, you would either lose your money or you would get more money back.
and it's possible for us to do the same thing now.
And I've been making this offer to anyone
who seems to be in support of the fork.
I'm willing to put my Bitcoin on the line
to say that this is doomed to failure
and I will take your Bitcoin if I am correct.
And if you are correct, you can take my Bitcoin.
And so far I have yet to have a single person
actually take me up on that offer.
So I just don't consider it to be a serious fork.
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.
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.
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?
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?
Or do we want to open that up, focus more on Bitcoin as a daily driver for your payments?
and today this is a little bit more esoteric for sure and who knows whether my mom is still
hanging on or not but to try to distill that in my own thinking it's it's it's a debate around
other entry points in the code that's a debate around the characteristics of bitcoin transactions
themselves rather than just like the quantity of transactions.
There it is.
It's not the number of transactions.
It's the type of transaction.
In today's world, we've got, you know, the Epstein files that made things feel kind of
messy.
We've got these, you know, what could effectively be a new civil war between Bitcoiners.
and we've got institutional adoption
that makes some feel like
it could pose a risk to the network.
It makes others feel like
the dang number should go up.
The politicization,
you know, things feel messy right now,
but for a brand new Bitcoiner,
what's your advice?
Like, do they even need to care about this
or can they just stack sats
stay humble and in another eight years all this will be historical stuff that we dive into on your
next update right uh yeah you you don't have to be involved at all in the call it the governance
of bitcoin um you know there are some people who this becomes their entire life and they feel like
they are fighting to save Bitcoin and you can become very ideological and, and, and in some
cases very nasty about it, uh, which is understandable, especially if you have like the
majority of your wealth tied up in it. Um, but to your point, like with previous forks, whenever
there is, even if there is a fork, if, if you don't, you don't have to do anything, you hold
both sides of it and you can, you can be a fence sitter and you can wait and see which side wins.
And, uh, you know, theoretically the side that wins should be worth more. That's what happened
with the block size stuff. That's what I expect will happen, uh, with the fork. I think it's
going to be an even greater disparity with the fork, uh, this fall that I'm expecting. Um, but
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.
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.
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.
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.
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.
But yeah, the governance is messy because this is anarchy.
There is no well-defined process.
Sure, we have the Bitcoin improvement proposal process pipeline and stuff.
But even that is just a suggestion.
Like there is no one who can enforce it.
You can always just write your own code and put it out there and try to get people to run it.
So crazy, dude.
So crazy.
Okay.
All right.
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.
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.
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.
Would you be willing to do that for us, brother?
Sounds good.
Sounds good. Yes.
Jameson's going to be coming back for life, brother.
All right. We're Tar Heel friends.
OK, we ain't never going to not be buds.
Come on now.
All right. So let's take a break here.
refill our brains with some caloric value that can help us ask Jameson the next question that we
have for him. Correct. So today with our buy the dip moment sponsor, Ithaca Hummus, reminding us to
buy the dip. What are we going to do if Bitcoin forks off? Buy both forks? What are we going to
say? I think we just say buy the dip. Buy whichever one's dipping more. I don't know.
How do we handle that?
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.
Okay, that's comforting to me.
I don't have to try to figure that out.
Yeah.
I'll let my DCA continue to stack whatever river is stacking for me, right?
I mean, I'm sure it'll.
Yeah.
All right.
So in the studio, we are going to act as your taste buds here for Ithaca Hummus' lemon garlic flavor.
Okay.
All right.
Cheers.
That always makes my tongue tingle.
You know what I mean?
The back of the tongue.
Yeah, I guess that's the lemon.
Yeah.
Jameson, did you have any hummus between now, between March, over the past year?
Any Ithaca hummus?
Did you ever pick it up?
Oh, I've had lots of hummus, and I have had Ithaca hummus, and it's great, yeah.
Let's go.
Now, did we introduce you to it?
I don't think so.
Oh, knew about it beforehand.
Okay.
All righty.
Favorite flavor of Ithaca hummus?
Ooh.
I mean, I know that I've had the lemon one that you were just talking about.
Yeah.
This is yum, yum.
The lemon garlic.
Yum, yum.
It's the closest to the classic.
The classic and the lemon garlic are similar.
Yes.
So I like them both.
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.
Let them know what that means, Aves.
Yes.
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.
And this moment is powered by Salt.
Oh, yeah.
And our very own number, 1, 2, 3, Sean.
Our very own.
So what do you think is going to happen over the next nine months?
What can my mom expect?
I mean, at the technical level, once again, I think not too much at the low level protocol,
though I am hoping that we can make some progress on something that's called the great consensus
cleanup. I think that's BIP52, maybe BIP54. But that basically goes back to just fixing some of
really low level issues with Bitcoin that are vulnerabilities, the extreme edge cases, things
that could cause the Bitcoin network to be attacked and degraded and such. And so I'm hoping that we
can get some sort of Bitcoin improvement proposal through because we're in unprecedented times right
now. It has never been as many years since the last SoftFork was activated as where we are right
now and we currently don't really have any that i think are going to get activated uh like i said
the the one that people want to activate for anti-spam so on stuff uh seems to be dead on arrival
oh wow okay yeah and it sounds like that will happen in the next nine months too right i think
you said august is when it's yeah yeah yeah so that i think that there will be uh a fork but that
it will probably be pretty short-lived. I don't think that it will have enough miners and economic
actors behind it to actually sustain a separate network. And even if they did, it would be really
messy because they're not going to have something called replay protection, which basically means
that if you make a Bitcoin transaction on one network, it would also happen on the other network
and you'd be spending your coins twice on both networks. And that's a really messy situation to
get into oh yeah okay deep dive yeah that is happening uh jameson where can our satillioners
go to spend more time with you online well i'm still on x somewhat my handle is lop l-o-p-p
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
very long. And you can always check out my website. It's just lop.net. I post all of my articles,
interviews, and I have several thousand links to a variety of Bitcoin resources to cover
absolutely every angle of this vast ecosystem. Wild. Awesome. Amazing. Yeah. All right,
Cotillionaires, if you have enjoyed today's show, click the subscribe button at your chance to win
this collectible silver coin
with Satoshi on one side
and 50,000 stats
through a QR code on the other.
And this is from our friends
at CryptoLink Coins
when we get to 3,000 subscribers.
And if you'd like to find out
more ways to support the show,
grab your slot in the studio,
become a sponsor.
You can even be a member on YouTube.
And so we've got lots
of different layers there.
You can do so in our show notes.
And SatChats is for educational purposes only
and should not be construed
as financial advice
and our guest
on their own.
So until next time,
keep stacking them stats.
Keep stacking them stats.
Get them stacked up.
All right?
Just do it.
It's all you need
for now, folks.