Thanks for joining us here.
We again are doing a day-night doubleheader.
This is the second.
Earlier today, we talked to David Sampson about our tribal future.
And now we're diving into what is possibly one of the more,
I used this term before, psychedelic understandings of Bitcoin.
we're talking about the article bitcoin is time by the inimitable der gg and in this article der
gg is going to lay out for us and help us understand that there are actually two times
there is the one on my wrist the seconds and minutes and hours but then there is the time
that is kept by Bitcoin, which is blocks.
And how can we leave the native understanding of time that we have,
which is that what we're born with,
and we understand it the same way we do gravity,
which is that we don't really understand it at all.
We just live in it.
So how can we kind of bring our understanding to this new
and perhaps even more real world?
in such that real is real, understanding of what time is.
And to do that, to lead us off, as always, our lead-off hitter, undefeated world champion.
Coming off the bench just for this.
That's right.
Bring it to us, man.
Coming off the top rope.
Tell me about time.
To engage in the psychedelic endeavor of unraveling time in digital space.
We're going to see what this is all about.
This essay could be very technical.
We could make it super technical.
you can get deep into the bowels of Bitcoin's operation on the mathematics and all that.
I'm going to say that we're not going to do that because we don't want to, because we're going to make that's a nice way to say.
Let's just say because we don't have the intellectual horsepower between the two.
Yeah, I've been I mean, I've been cradling mastering Bitcoin by Andreas Antonopoulos here going over and over again.
The chapters on cryptographic hash functions, the blockchain.
But we're going to take this at a high level because this is also this is a very philosophical essay.
And that's what we want to talk about. This essay is about time and its relation to money in really two broad ways. First, time is money. It's a popular saying, but there's also some truth to that. Time makes something usable as money. Time enforces scarcity in the real world. We think of the value of gold. We could say that it is valuable because it is yellow. Probably not.
We could say it is valuable because it takes a lot of time to dredge it up from the earth and to bring it to our usage introduced into circulation.
The time behind gold mining makes it valuable.
We're going to see the time behind Bitcoin, the time it takes to mine, the time it takes to do computation is going to make Bitcoin valuable.
Also, the second part in the bulk of this essay, money requires time.
Money requires time to order its transaction.
It requires a sort of physical law structure of time in order to ensure that if I give something to one person, I can't then turn around and give it to another person.
That I gave it to one person first, and if I try to give it to another person second, we can determine who has priority between the two.
This is the double spend problem.
This essay actually helps us understand the double spend problem at a deeper level.
If you've heard that phrase, the double spend problem, kind of wondering, why is this even a problem?
Discussing time really gets us to the pith of that.
And as I said, the second sense, money requiring time for its operation to order transactions to determine which transactions are valid, that's going to occupy the bulk of this essay.
A quick summary of the argument then of this essay, the structure of it.
Money in a digital age requires ledgers.
Ledgers then require an unambiguous order to the transactions that occur on the ledger and order requires time.
Yes.
Money.
Money as such requires ledgers, right?
Not just in digital, but in physical.
There can be two times.
We're going to talk about that in a second.
So, okay, ledgers require an unambiguous order to transactions that occur on the ledger and order requires time.
then a trustless ledger, which is what we want, must maintain its own time.
Because if you want to be truly trustless, you can't trust time as such from any external source.
You can't look at the luminary clock in the sky, as DurrGG has a quote, I think, from Auden or Elliot.
You can't trust any external source.
No physical protocol can even gaze up at the sky, obviously.
It is in its own locked-in space where time does not exist.
and to be trustless, it can't trust anybody else to tell it what the time is.
And yet to be functional for us, it must have a sense of time.
But let's rewind to the first point.
And we're going to get to Lucas's point here.
Money in the digital age requires ledgers.
What else could money be?
Well, there's two types, Derjiji points out, two ways to account for,
we may say anything, but here, at least for the purposes of money,
there can be a ledger or a token.
A token is a physical, tangible thing.
you give somebody a token in the real world and they then have that token and you don't it's a
unique collection of atoms that's a token a ledger is different a ledger is an accounting book
in which to transfer one thing to another person you make a debit in one account and you write it
out in as a positive um account and the other person's balance so the difference tokens directly
represent the state of who has what you literally have the physical coin so they're trustless you
don't have to trust that you have the physical coin the laws of space and time thermodynamics
ensure that coin is what you have ledgers indirectly represent the state of things their
lists their account books they need a designated ledger keeper and you have to then trust that
ledger keeper to keep the ledger in a trustworthy fashion and here's one final point on this you
have this is what kind of lucas was getting at in the digital realm there is only the ledger you
can't have tokens in the digital realm. And this is such a brilliant observation in this essay.
And one of the recurring themes in talking about Bitcoin now is Bitcoin, not crypto. And one of the
things that crypto people talk about is having digital tokens. We know after reading this essay
that digital tokens are a contradiction. Tokens are physical, real world, tangible things.
Why does this matter?
If you say a digital token, you're presuming that you can move the token around a digital space.
But there is no movement in digital space.
There is no space, properly speaking.
We call it that, kind of as an abstraction.
When you move, quote unquote, in digital space, you copy something in one location and paste it in another.
Did it move?
No, because it's still, it's now in two places, right?
It's where you copied it from and where you pasted it to.
You now have two of the thing unless you trust a centralized ledger keeper to delete the thing that was copied and pasted.
So digital ledgers then require trust if you're going to, quote unquote, move value digitally or move anything digitally because you have to trust that the person maintaining the ledger not only added the thing in one person's balance, but also deleted it in the other.
So that's the first, I guess, really premise and observation of this essay.
And if you stop watching right now, you've got more than enough value from this conversation because this is such a brilliant observation that there are tokens and ledgers and there can only be ledgers in digital space.
Yeah. So ledgers are accounting. Ledgers are not ledgers are an abstraction of what occurs in the real world.
when I take $50 out of my account and I give it to you and you put it in your account.
I did that physically, but what happened on the back end was that there's this abstraction,
there's this digital accounting, there's this digital record that also reflects that.
And it's so important for us to understand that the token is a physical thing,
that it is, it cannot, there is not a token in the digital world.
There is an abstraction of a token that this thing does not actually move
because how could it move?
Because digital is not, it has no space.
It has no physics.
Turns out Tron was not a documentary.
Yeah.
And so how do we think about that?
And the way that I put that into my mind was I, we had an instance with the band.
We went up and we played in South Dakota.
We came back, we stopped at a gas station.
And late at night, some people are sleeping, some people are not.
Fill up with fuel, we get in and we get out.
And in my mind, I had a ledger of who had gotten off the bus and who, you know, who was sleeping when I left the bus.
And so I got back in and in my mind, my ledger said that everybody was on the bus. I took off a mile down the road. I got a call from my guitar player standing outside the gas station saying that we left it. And I realized then, you know, like later on, I'd heard a story from a traveling band that talked about the way that they accounted for that was they had their hats.
And if you're on the bus, your hat is on the dash. That's your physical token that lets you know that you're there. Much like in the essay, Durjiji talks about the shepherd bringing in the sheep. And you could either count the sheep and make a mark or you could take the collar off the sheep and hang it on the wall. That's the token. You could always miscount. But you can't, you know, there's a hook for every, there's a hook for every collar and there's a, there's a hook for, there's a collar for every sheep.
Yeah. So that's actually that's more more reflect that that is the real world. And the ledger is just a reflection of the real world. And this is why I struggle a lot with the trustless idea, because we think about trust. Trust is good. I want to trust. You know, I trust you. You know, that's like, you know, people do business with those that they know they like and most importantly, that they trust.
Yeah. And this understanding that in order for a monetary system to be pure, to work well, it cannot have trust. And Jason Lowry explained this so well in Softwar.
the vagaries and the failings of a trusted system is that there is no example of a centralized
system. The Catholic Church, the United States government, your Little League baseball coach,
there's no example ever in history of trust that was put into a centralized system where that trust
was not abused at the benefit of the trusted and at the detriment of the trusting.
Yes. And from our conversation with David Samson this morning, he looks at Bitcoin as the resolution of the evolutionary problem of who we can trust, not because we can trust Bitcoin, but because we don't have to trust it. It eliminates this requirement of trust.
Yes. So we can then scale trust infinitely in that we can trust in the system that we don't have to trust because it is verified.
Yeah. So that's the first part. Money in a digital age requires ledgers. The second part, ledgers then require an unambiguous order to the transactions that occur on the ledger and orders require time. Ledgers have to make sure that transactions are sequential in time.
This is the double spend problem.
So a person in the real world, if they have a physical token, they can't double spend that.
If they give the gold coin to one person, they can't turn around and give it to somebody else.
I can't have my hat on my head and also on the dash of the bus.
Yes, very true.
Ledgers, though, you could do something like that in a sort of metaphorical sense.
You can give the token to somebody and keep in your hand if you just like do some creative accounting, right?
but if time is enforced on the ledger such that um there's an order to the transactions where if
you do transaction one at point one in time and you try to do it again at point two in time you're
barred from doing that if you have time to order your transaction that you can time stamp your
transactions then you can even on a ledger enforce and prevent the double spend problem
this is creating a before and an after
essential to time
usually this is done in a centralized way
with a ledger
we have a trusted party
one person determine what the true time is
operate the ledger
and also timestamp all the transactions on the ledger
again though this requires trusting a third party
trusting the source of time
not just the person who's doing the math
But also, if somebody's telling that person the time that a transaction occurs, you need to be able to trust that person telling you the time.
This is the very, very wild thing with this.
Any external source of time that's an input into the digital realm could potentially be manipulated.
This is a global distributed adversarial system.
Bitcoin is.
We have to assume everybody's an adversarial party.
If anybody tells you anything, you want to be able to verify that.
We can't then trust anybody to feed the time into Bitcoin to timestamp all the transactions.
This is the real central problem of Bitcoin.
Can a ledger that is not operated by a central entity take its time from somewhere that is not manipulable?
And again, this is like it's in digital space.
It's informational.
It's not in the real world.
There is no time inside the computer except for the time that we impose on it through external timekeeping mechanisms.
A distributed ledger needs to synchronize the state of the system without having recourse to an external trusted input of time.
Bitcoin's solution then is going to be to create time internal to it, to create its own sense of time in terms of its own internal functioning using only its own parts, anything that we put into it, any way that we interact with it.
Satoshi had to sit down at a desk and a table and say, how can I use existing hashing algorithms, existing cryptography, the way that we're going to interact with them to create time and digital space?
And he was able to do that.
This is quite the solution.
Bitcoin's own internal time as well.
we're going to see not to get ahead of ourselves we're going to see that that internal time that
it creates through its the functioning of its parts is going to bridge over into real world
time so that we can then measure it in minutes in a sense too um bitcoin solution that is overall is going to be to create an internal timekeeping mechanism which is itself yeah yeah and we had so we used to have bearer money we used to have
the gold coins and the silver coins and cash and then we moved to a system uh we could write drafts
we could have checks. And when we wrote a check, we instantiated our own timekeeping mechanism on
this by the date that we put on the check that we wrote it. And that, because we could control it
individually, that could be manipulated. When I grew up, I very distinctly remember my mother
writing checks that were future dated. You know, we owe you a hundred bucks or whatever. So
here's a check, but today's August 5th. I wrote August 10th on there because the money's not
there right now. And if you go try to cash that check, you won't get the money and I'll get an
overdraft or maybe you'll get the money and I will get an overdraft if the bank is going to back you.
But you're altering that timestamp on your own.
And people figured out a way, like, I'm sure it didn't take very long for people to figure that out, right?
They could future day checks.
And so we had to figure out a way to solve for that type of manipulation as well.
And so that's one part of it, which is the time.
But then the other part of it is this decentralized part. So we know that we can't trust any one source. We can't trust the pope. We can't trust the president. We can't trust the guy down the street only because they have their own priorities.
And those priorities, while maybe similar in the same direction to ours, don't perfectly match ours.
And by the way, maybe our priorities are not great either.
And so we have to have this decentralized thing.
And this is the thought that I had before about introducing this as like a psychedelic conversation is that thinking of the Bitcoin ledger as a mycorrhizal structure, as the root system of of mushrooms, which, you know, you you go out and you look and there's all these mushrooms, but they they're all one organism and they all share the same structure.
structure, much like there's a forest up in, I think it's a Utah that is, it looks as though
there are tens of thousands, hundreds of thousands of trees, but in actuality, they are all of the
same root system. And so you can't pull one tree out by its roots because it has no root. It has
roots that are embedded with all of the other ones. And so this is where I went back to this idea of,
you know, okay, so time is money. Money is the root of all evil, but I believe that money
has only been the root of all evil and described as such because it had a root. It had a centralized
ledger. And when we remove that centralized ledger and we replace it with a decentralized one,
I think what we do is we remove the evil from the system in that we give this sustainability
so that it cannot be violated by any one individual.
We remove the evil from the system by removing the humans from the system.
To a certain extent, we're going to see there's going to be a human input,
but the input is not going to be something that determines it.
Yeah, randomness of humans.
Yes, and it's going to be an essential part of it.
So I mentioned where we're going with this, where Dergigi is going.
Bitcoin is going to have to create itself into turn itself into an internal timekeeping mechanism because it can't trust external time.
But before we create an internal before Bitcoin can be described as a timekeeping mechanism, if you're in the digital realm, you need to understand what it is you are measuring.
That is, what is time? This is a very philosophical essay because Dear Gigi needs to inquire into what time is in order to understand what is it that Bitcoin is keeping a measure of through its operation.
How do you keep time digitally if time doesn't exist digitally? There is no kind of indigenous digital time. There is a timeless informational realm. It's eternal. It's instant. It's instantaneous. It's all these things except for sequential arrow of time type reality that we live in where there is a now, which is on one side the past that has happened and the other side the future that is to come and we're moving along the arrow of time into the future.
The digital realm is not like that. Time, Darjiji says, has two key aspects in the physical realm that Bitcoin is going to have to take account of if it wants to recreate some sense of time in the digital realm.
The first is causality.
There is a before and an after.
The before causes the after.
This arrow of time moves forward in a causal sort of way.
But that's not the only thing it is.
It also has to be unpredictable.
It has to be causal but unpredictable.
There needs to be, it can't just be a mathematical function of adding one.
One plus one is two, plus one is three, plus one is four.
That's predictable.
The future is not perfectly predictable.
If it was, it would collapse into the now, everything would be at once.
There needs to be entropy to have time, some sense of change, really, but we call it entropy.
We need something that is causal, but not predictable.
A good metaphor might be the scrambling of an egg.
You can't predict the exact resulting form of the scramble.
Even as you know, causally applying heat to the egg is going to result in the scramble.
You can't predict how that mush is going to look.
So how can we do this for the digital realm then?
We need causality and unpredictability.
I guess before we even go there to the solution,
is there anything you wanted to add to that as a notion of time requires causality and unpredictability?
Does that seem correct to you that if you want to talk about what time is in the physical world,
before we even get to the digital world, does it make sense to talk about it in those two key ways?
I think so.
The way that I'm thinking about it is just thinking about the life of a human is that the past is the causal.
The past is the chain of events that led me to be the person that I am.
But the future is the unpredictability that, although dependent upon who I am and therefore dependent upon the chain of events that led to this moment, in the future, I do have freedom.
I have unpredictability.
Freedom is unpredictability.
unpredictability. And so I have the freedom and the unpredictability to alter my course of actions,
do what I want. I can jump off the roof. I can take a bath. I can go for a run. I can do any of
these things into the future. So I sit here in the now at the intersection of the solidness of the
causality and the structurelessness of the unpredictable. And that to me makes sense. Yeah.
Yeah. That not just the
Yeah, that the future is unpredictable, even though it is causal. There's some seeming contradiction there, but we call it free will. Maybe we can call it entropy, too, in physical processes. And we're going to see how Satoshi did, in some sense, use for human free will, harness that to make Bitcoin unpredictable and therefore give it a notion of time.
So let's talk about that. How can this be done in the digital realm? How can we get causation and unpredictability? This is something that could take us deep into kind of the mathematical operation of Bitcoin, which is a realm we don't want to go into. So we're going to talk about it, not superficially, but we're going to maybe gloss over some things.
So first, how can we get causality in the digital realm?
We can create causality through one-way functions, trapdoor functions.
A cryptographic hash function is one of these, digital signatures as well, but let's focus on the former.
You have in a cryptographic hash function a before state, which is the data you want to hash.
You then hash that data and you create a unique fingerprint of that data, which is the hash.
You get an after state, which is that fingerprint.
I say after state because you cannot have that fingerprint reliably without having that pre-image prior state.
If you have that hash, that fingerprint, and then somebody produces the pre-image to show that if you place it into the algorithm, you get this hash state, you know they had that pre-image before the hash.
because otherwise it would have been just, you know,
practically impossible to come up with 256-bit hash
without having the pre-image that led to the hash.
So a cryptographic hash function gives us a one-way function,
gives us causality.
Like the scrambling of an egg,
it's easy to scramble an egg or do a hash function,
but effectively impossible to reverse the function or unscramble the egg.
The data that is hashed or scrambled had to exist before the resulting hash.
So now we have causality, the beginning of time through computational irreversibility.
Now we have to get to unpredictability.
We have causality in digital space with cryptographic hash functions, which are one-way functions.
How do we get to unpredictability?
Lucas mentioned it, like human free will.
How can we bring human free will into the digital realm?
Well, we can't predict the peer-to-peer transactions that are going to occur on the Bitcoin network.
So that's one way that the real world reaches in unpredictably into the digital world, into the digital protocol to add randomness is the peer-to-peer transactions that occur in a block in the next block.
We can't predict how all these human agents are going to transact, right?
So now we have a source of unpredictability we can feed into the protocol, the transactions.
What is the second source of unpredictability?
The resolution of the proof of work puzzle that mines a block,
the act of finding a solution for the target hash of the next block to be mined
can only be done by making guesses.
This is how mining works.
It's probabilistic because there is no approach to finding the right answer
that is quicker other than to have a miner that makes as many guesses as possible,
just trillions or whatever of guesses,
until you, by luck, solve the proof of work
puzzle. It's unpredictable. So now we have two ways to bring, to resolve causality and
unpredictability in digital space. We have rather mathematical ways to do that and ways that we can
bring the real world into digital space as a source of unpredictability specifically. So with
these pieces, we can have time in the digital realm. Causality through one-way hash functions,
unpredictability because transactions on the ledger will be unknowable in advance and because
proof of work as a way to add a block of transaction can proceed only by making guesses.
With that possible, we can then see how Bitcoin keeps track of time, how it is a time-keeping
mechanism.
But before we get to that, I mean, that's kind of the hairiest part of this essay, I
think, is talking about like the mathematical and practical ways that causality and unpredictability
can be established.
Does that all make sense, kind of?
I mean, the way I'm trying to think about this is, so you mentioned when we talked about this before that the naming structure is that there's the parent block and then there's the child block.
And much like you can take a mathematical proof and you look at the proof and you can't have the answer immediately.
But once you go through the proof of work to get down to the bottom and find the answer, you can put the answer in and you can see very quickly whether it's right or wrong.
And so I think of this kind of like having children where you have, you're bringing together the causality, the knowns, the parents, and then the child is coming out and you have something that you can look at a couple and you can go, oh, I might be able to kind of imagine maybe what their children will look like, but you can't really nail it down.
But once they have children, you're standing there and you're like, okay, these two people had two children.
Here's eight children.
Which two are theirs?
And you can go, oh, it's those two.
Children are.
You can identify them.
Children are a cryptographic hash function.
Yeah.
Nice.
Yeah.
And so, yeah, so that's the way that I'm like trying to visualize this and put it into my head.
Metaphors are good.
So that I can make it work.
But one thing I want to, and I hate that I'm putting you on the spot, but I have to because I want to make sure that not just me, but people that listen to this understand we're saying hashing a lot.
Yes.
Can we define hashing?
No, I can't.
I'll do my best, though.
So, again, as an emotional support animal or blanket, I've been cradling Mastering Bitcoin by Andreas Antonopoulos.
Define hashing.
Let's maybe talk around the definition.
So a hash, like hash browns, what is a hash?
It's literally like a chopped up mess, right?
Yeah, yeah.
And so a hash function is a way that you take a fixed set of data and then produce a scrambled up result that seemingly has no, it's just totally different looking than the data set that went in.
And yet that data set will always produce that same hash of that data set.
If you change one period in that data set, you will get a completely different hash.
Every part of it will be rearranged.
So the SHA-256, which is the hashing algorithm, SHA-SHA, simple hashing algorithm, is a 256-bit algorithm.
So there's 256 bits of information that are in this hash.
And so it's a one-way function, this hashing algorithm, because it's trivially easy to do to plug in what is called a pre-image.
and then get the resulting hash through this hash function.
But it's like, unless you have like a quantum computer, which does not exist,
you can't reverse it to get to the pre-image from the hash.
So we can take the potato or we can chop it up and we can make a hash brown
and we can take another potato and we can chop it up in the exact same matter,
but we won't get the exact same hash brown because we didn't have the same potato.
Yes, that's correct.
that's called second pre-image resistance when you have a hash you can't then come up with another
find another pre-image that will lead to the same hash yeah so there's hashes have certain
cryptographic properties there's also collision resistance where if you have a hatching function
it's not going to produce the same hash with different data sets yeah so there's all of these
things that make a hash function this very interesting thing and for the purposes of this
essay make it what we call a one-way or a trapdoor function you know we don't know we know what a
trapdoor is you fall to the bottom but you can you know get back through the trap that what a hash function is for the purposes of this essay um again just know we need causality to have time One way to have causality is a one function
So the closest way to approximate that aspect of time in digital space is through a hash function.
I don't know if that was like Satoshi's insight, but it's brilliant.
Whoever incited it, I don't know if that's a word.
So we really do hash children because we...
Cut them up?
Well, because we bring the same genetic material together and we have the first child.
Yeah.
And then we bring the same genetic material together again and we have a different child.
And we have a different child because no man walks through the same river twice because he's not the same man and it's not the same river.
You're down the road.
Yeah.
You're not the same potato.
Right.
You know?
I mean, so the way that a hashing algorithm works, how it does the math, I don't know if that's the same combinatorial math that's done with our genetics.
You know, I think it's...
Doubt.
Okay, there we go.
I do know that much.
But it's a good example.
And a lot of this, throughout this conversation, you probably, you have heard already and you will continue to hear that we're giving metaphorical examples to gloss over these very technical processes.
We're not that smart.
Because we're not that smart.
So, also, Dergigi does it too.
He is smart.
We have license to use metaphor.
Our metaphors are a lot more dumber than his, but we're doing our best.
Now that we have time as possible in the digital realm.
We have causality through one-way hash functions.
We have unpredictability through uncertain transactions and through the uncertain unpredictable resolution of the proof-of-work puzzle.
With that, time is possible in the digital realm.
We can see how Bitcoin keeps track of time.
Now that we have time, we can see how Bitcoin keeps track of time, how it is a time-keeping mechanism, right?
We had to establish time to get to the time-keeper.
I mean, what is a timekeeper?
A timekeeper is something that marks units of time, the ticking of a clock, the seconds, the pendulum swinging back and forth, a metronome, something that at regular intervals, I don't know what it does.
It measures entropic change or something.
You know, it's even difficult to say what's happening, but it's seconds, minutes, et cetera, something tick-tock.
Well, yeah, I mean, if you think of what a pendulum is, it is traveling a distance at a speed in order to have time.
A determinant speed that we think is kind of maintaining the same speed, sort of mark off the same.
Well, we know that it's not because of entropy and friction and wind resistance, barometric pressure.
Yeah.
Right. So that's why we have to go into things that have less, they're less affected by those things, which like you mentioned before, not this, but like cesium, like measuring vibrational frequency of a particle.
Yes. You'll notice that Lucas is saying, you mentioned this before, we had this conversation once and in true Christopher Nolan style, we wanted to do something interesting with time. So we trashed that conversation. So when Lucas says what you said before, he's actually referring to something that I will say in the future now.
This is correct.
Yeah. So we're kind of playing with a sense of time.
I love the movie Tenet. I actually understood it.
You were the only one.
So what Bitcoin does with time, how is it a clock?
How is it a timekeeping mechanism?
This is absolutely brilliant and stunning just to understand.
It's an insight into time itself.
The ticking of the Bitcoin blockchain is the processing of a block.
TikTok next block, we hear this phrase.
The internal sense of time that Bitcoin creates is just the processing of a block.
That is the tick of the clock.
So it's doing something at a regular interval at an interval.
We haven't established this regularity yet, but that is processing blocks.
It's doing something regularly, like a metronome swings back and forth regularly, so there is a ticking.
Now we have a type of clock, this type of ticking that is internal to the Bitcoin network,
that does not depend on appeal to an external clock outside of the network.
rather the solving of the hash function embedded in the next block to be mined
leads to the processing of that block and the ticking of the clock that is bitcoin
a ticking that is done probabilistically through the solving of this hash function
we're going to talk about why probabilistically in a minute
a way that relies on computation to generate guesses
Computation relies on energy.
And there's a lot of moving parts here.
I think we'll stop here, though, just to marvel or reflect on Bitcoin as a mechanism that acts as its own time and also creates time as such.
Yeah.
Does that make sense?
Yeah.
So to go back to something that we mentioned before is that digital space has no space.
Yes.
There's no physics.
There's no length, width, height, thickness.
It just is truly a realm ungoverned by the laws that we live by, the laws of physics.
And Bitcoin has done something that has never been done, which is bridge the digital realm with the physical realm and impose the laws of physics into the digital realm without introducing entropy.
which is, I can get on board with people that say that this is the singularity because there
is now a bridge between the physical world and the digital world where the laws of physics from
the physical world are imposed on that digital world. And so to take that a step further,
we talked a little bit just now about time. So when we're calculating time using, say,
a pendulum, or even when we're using measuring the back and forth motion of this cesium particle,
time is distance over, or sorry, speed is distance over time. And so since there is no distance
in the physical realm, we can just call that a constant. We can call that a one.
And so then we end up with speed equals one over time, and then we can invert that and we can say
time equals one over speed. And so the more speed, so the more guesses, the faster the guesses
are being guessed in order to solve the block, the less time it takes to solve the block.
And the less speed, the fewer guesses, the more time it takes to solve that block. So
So I think we've been able to have kind of an understanding of how our definition of time is applying here sans the distance without having that physical realm.
And this leads into the next intricate part of this whole mechanism. We're going to need a way to bridge the two times such that if we input more guesses into this intricate mechanism, we don't solve the blocks quicker and quicker such that we solve one block 10 minutes. The next solution comes in five minutes. The next solution comes in one minute because we're getting better and better at putting guesses into it.
So this part of the whole Bitcoin mechanism protocol is called the difficulty adjustment.
Digital time through the difficulty adjustment bridges over to our human world.
We need a way to make the Bitcoin protocol process blocks at an interval that stays roughly the same and is sufficiently long such that it can propagate transactions or block processing over all the network, all the nodes.
So we need to keep time at a steady human interval.
Can we riff on why do we have to have that?
do why is that why do we have to have um why do why does it have to be 10 minutes or it doesn't
have to be 10 minutes but i mean why does it have to be a roughly consistent time why is what is the
value of that and it's the value in that is that if we didn't have that then we wouldn't have
causality um that's maybe one way to look at it i would say we know that it has to be over a certain
amount of time it can't happen in half a second because that's not going to give because everything
would collapse into the now.
Yeah, and the Bitcoin protocol
needs to be able to propagate
new blocks throughout the network
and process the transaction,
get all the nodes up to date.
And so it's a global
distributed network, right?
So it needs to be sufficiently long.
Maybe 10 minutes is that.
Does it need,
I mean, this is an interesting question
I hadn't considered,
and I don't know that this essay does it.
Does it have to be 10 minutes?
Well, we do know that it's not
exactly 10 minutes.
It's probabilistic.
Durjiji points out that
this means really
every one second interval, there's a 0.16% chance that the miners on the network are going to
mine that block, solve the target hash. So 0.16% averages out to 10 minutes. That 10 minutes then,
over after a two-week period, there's a difficulty adjustment done to make sure that it's staying at
roughly 10 minutes. So if there's been more guesses happening over time in that network,
and so it's been solved faster and blocks being processed in less than 10 minutes,
then after a two-week period, the network readjusts itself to make it more difficult
to make it closer to 10 minutes again for a block to be processed.
I think keeping it irregular, it really doesn't have to be. I mean, it didn't have to be conceptually.
It makes it easier for us to plan around and use the network.
And so it's brilliant that he does that.
But again, like Bitcoin's internal time is tick-tock next block.
For its non-human purposes, it just measures block coming, block coming.
That's its tick.
The bridge to the real world makes it 10 minutes, right?
That difficulty adjustment, that makes it usable by humans.
And we do need to know that there is a now in Bitcoin time, which is the tip of the heaviest chain.
Current state of the ledger.
The current state of the ledger.
We do need to know that and then know how long it's going to take to confirm successive blocks in order to have confidence that any one transaction truly has been confirmed by the network.
And so if we know they're roughly 10 minutes apart, then we know maybe we can wait an hour, wait two hours and get a sufficient number of confirmations to have confidence that a transaction added in a block is not going to be a chain split.
And so then later on discarded by another heavier canonical chain.
There's a lot in that.
I don't know if it's worth to disentangle that.
Well, I think, no, I think it really is.
And I think the reason why it is hairy and why it is nasty and hard to understand is because we've come to a very important inflection where we are now being faced with the realization that we're talking about two times.
We're not talking about time in terms of seconds and hours.
We're talking about time in terms of work, time in terms of power.
Um, and so those are the reason why it is roughly 10 minutes and not definitively 10 minutes or three or 20 or two hours is because this is the mind blowing, you know, you need to be whatever, eight bong hits or 12 grams deep in order to understand this or even be able to like try and break yourself free from.
from this legacy idea that we're natively born into, which is that there is time, minutes,
seconds, hours, but then there is Bitcoin time and Bitcoin time is blocks and blocks are not
blocks are not, um, distance and speed dependent, um, which is where we get our time over here.
blocks are work dependent with a chance of with chance yeah with probabilistic um uh luck involved
in them and so no i think this is like it this is this is probably the hardest part for me to
understand which is that we probably need another word for it instead of time because like block
height is you know that's how jack mallers introduces it on his show he talks about block
height yeah um because it is a completely separate thing from the clock yep yeah and we are only
using the clock to understand it because that's we because we understand the clock yeah no there
was some consideration about the kansas city bitcoin summit so people were um time stamping
their real world reaction or interactions with the block height at which they occurred so instead of
referring to we process that would you know things happening at the bitcoin network talking about it
in real world time, talking about real world events in terms of Bitcoin time.
This event occurred at block height, such and such.
So it is a new notion of time that we can also, yeah, begin to describe our own reality
in terms of a clock that's not manipulable, but is different.
The Bitcoin protocol is a decentralized, probabilistic timekeeping mechanism.
It's just different, right?
And Satoshi, he knew how important this was to the Bitcoin network.
He called it a time chain in the code, not a blockchain.
We get that later.
Blockchain because, you know, that structure of causally linking blocks.
It's very helpful to picture it that way.
It's good terminology in that sense.
But really the main innovation of Bitcoin is how it enables us to independently agree upon a history of events without a central coordinator.
We have a distributed timestamp server, right?
We have a distributed notion of time where we can assign time to events in a distributed manner without a central coordinator.
And that's, it's just, it's mind-blowing that that is able to occur.
Again, something we talked about before in the last conversation was, you know, it's even brilliant to think, to begin to have the thought that we need to bring time into the digital realm because without time we get instant abundance, right?
It's a nice thing about digital and informational space.
Copy and pasting is good for many purposes.
We can copy value and you can get the value and I can still have it.
I can send you an MP3 and I can still have the MP3 and we can both have the song, right?
And so it's almost this like utopic nature to what happened in the early internet where it was unleashed free without central coordinators, database operators tying down their data.
where you could just give but also keep.
And that's not something that occurs in the real world.
In fact as we read Jeff Booth book The Price of Tomorrow that kind of the vision He thinks that we going to get in meat space is abundance through AI We going to kind of bring the digital into the physical almost in a sense even as in the digital we trying to bring the physical to constrain and tie down the digital
We want to bring the digital into the real world to enable abundance outside of time and space through machines that are going to do our work for us and AI is going to power them or something.
Yeah. What just to continue to hammer home the difference between time and block height or Bitcoin time is that we may have a hard time grasping the Bitcoin time because our definition of time is that it's something definite.
it's seconds it's minutes it's hours it's days but where did we get that from we got that from
how long it takes for the earth to circle the sun and also how long it takes for the earth to spin
on its axis yeah and those we know are not constant you know the earth's right the earth's
orbit does change over time due to the gravitational pull of the sun which is you know
degrading over time, things like that. Yeah. Or yeah. And also the Earth's axis, right?
The poles, we know that the poles eventually shift and that we get a different type of spin.
And so that, even though we believe time in the sense that we traditionally think about it,
we believe it to be constant. It truly is not. And it's based on something that has variability.
and that variability is dependent upon speed and distance yeah time is relative for sure exactly
and time is absolutely factually proven uh to be relative yeah um you know another way that that
block height is a good way to be able to consider time even in our real world meat space is biology
talks about this, we can watermark or stamp reality by putting on the blockchain a cryptographic
hash of an event, data regarding an event that has occurred to preserve a record that at block
height such and such, a thing had actually happened, that some random Joe stood in front
of a tank in Tiananmen Square or whatever, that this happened on X date, or at least by that date
it had happened we can use the block height structure as a way to create an indelible record
of something couldn't have happened later than this yeah yeah this really i mean brings us near
the end of the essay um the linkage with time is not arbitrary because time is money money must be
linked to time because it is only thing that we will never make more of gold is valuable because
it takes a lot i'm just reading my notes now i don't even understand um this was this is the
point i wanted to make bitcoin is time in two ways at least this is where we started the essay off
um it's units bitcoin coins whatever marks on a ledger are stored time um because we have
used proof of work and computation
causally with hash one-way functions
in an unpredictable way to import time into them
and make them valuable.
The Bitcoin network is time
because it is a decentralized clock.
I mean, that's an overheated brain way
to kind of try to summarize the essay
as I roll out of it with a melting down chassis
at the end of this, you know, 400-mile.
What do they call those races where you go like?
I think they literally call them like death races.
Something like that.
Like the 200-mile runs and stuff.
I just feel like how the engine to those cars must feel at the end of that,
just like overheating and melting, and they go rolling across.
I'm talking about like a Le Mans race.
Yeah, that's for like 24 hours.
Something like that.
And they just see who can go the furthest.
Yeah, and then just, yeah.
Yeah, and maybe that's actually kind of a good example is who can go the furthest
because so time is money, money is power, power is energy.
When you're a wage slave and you go to work and you trade your time for money,
you might incorrectly say, oh, I'm not trading my time, I'm trading my skill.
But what is your skills?
Your skill is just a function of your time.
You don't acquire that skill without time.
And you don't acquire that skill without the power that you put behind that time,
whether it's the power of studying or the power of lifting or shooting baskets or whatever you're doing that makes you valuable.
Yeah. So I think that's where we end up. It's like it's time is power.
Time is power to affect change. If I don't have time, I can't change anything.
But if I have if I have time, if I have a low time preference, then I can affect a lot of change in my life.
Yeah.
You know?
Yeah.
I can look far down the path and I can make long decisions.
Yeah.
Bitcoin is time.
So I wrote down some quotes as I was going through this for things that I thought were key, but that maybe I didn't understand perfectly.
I thought it would be good to hash out in real time.
So I'll read one of the quotes and we'll see if we can, you know, wring the insight from it.
Here's something Durjiji writes.
proof of work works in a peer-to-peer setting because it is trustless, and it is trustless
because it is disconnected from all external inputs, such as the reading of clocks, or
newspapers for that matter. It relies on one thing and one thing only. Computation requires
work, and in our universe, work requires energy and time. So I think what that's saying, and you
You can give me your interpretation.
So computation is like the digital substrate.
It's a digitally native thing.
And energy and time are things that happen in the real physical world.
Where these two meet then, computation requires energy and time.
It requires this real world inputs.
And so to power Bitcoin with computation through proof of work,
that's what proof of work is.
You're doing computation to try to solve a hash function, to try to reach the target hash by doing hash functions over and over again until you get the correct result, guessing essentially.
You're doing guesses over and over again to try to hit the target.
That can only be done through the expenditure of energy and time, which is a form of work.
And then that's what we're feeding into the Bitcoin protocol.
Does that make sense?
Kind of. One thing that I want to point out to the computation is not inherently digital. Like we're like the human brain is a computer, right? So we're computing. And we could very well conceive that instead of Bitcoin miners, we just have people sitting at a keyboard punching in numbers, making guesses, right? And so all the computer is doing is just that better.
Yeah. Yes.
One of the I do I do want to throw this in because this this helps me think about this is that we cannot undervalue or understate this difficulty adjustment.
I know we're past that.
Yeah, we're not past it.
Yeah, we're not.
No, I have a quote.
That's the next quote is about it.
So go ahead.
No, no.
Well, OK, so the difficulty adjustment, the way I think about the difficulty adjustment, this is so brilliant of Satoshi to be able to look into the future and understand that we are starting at a point where people were mining Bitcoin with a desktop computer.
And so it was better than you and me sitting there punching in numbers, but not by a whole lot.
Yeah.
By a lot, but not by the magnitude that we have today with ant miners and even your bid acts, even these more modern ones.
He looked into the future and he realized that what I'm doing is I'm essentially, I'm challenging whoever wants to participate in this competition.
I'm challenging them to do work.
I'm challenging them to like a feat of strength.
And I think of this as Sisyphus rolling the rock up the hill.
And he recognized that it wouldn't always just be Sisyphus, that soon there would be a hundred Sisyphuses.
Yeah.
And then there'd be a million.
Sisyphus.
And Sisyphus.
Yeah.
And then not only would there be more, that we would have Sisyphus on stairwells.
Yeah.
And BPC 157.
And they would be jacked and they would be using video cards and graphics cards in order to do this.
They would be stronger.
Yeah.
And so they would be able to, if that rock was, you push the rock up to the top and you get the reward of the Bitcoin.
if that rock was always the same rock, and then all of a sudden you've got, instead of the wimpy 90-pound weakling, you've got, you know, Thor, whatever the guy, the mountain, you know, the 6'9", 420-pound mega man pushing this thing up the hill, it'd go too fast.
And so we had to figure out a way to handicap that.
And it was so brilliant that he was able to do this.
And this is where I want to throw in the story about Bitcoin Pizza Day that I just learned this year, which is the reason we have Bitcoin Pizza Day is because one of the guys early in on the message boards who was mining Bitcoin, he thought, oh, maybe I could do this with a graphics card.
And turns out graphics cards are really good at mining Bitcoin relative to your regular desktop processor.
And so he starts just cleaning house and mining every block because he's able to do it so much more with so much more power.
And he got a message from Satoshi saying, hey, I know that we are going to enter an arms race.
And I know that it's going to be a huge competition to see if you can have the most powerful chips to mine Bitcoin.
I'm hoping to delay that as soon as long as possible in order to allow a greater diffusion and greater adoption.
You know, would you, you know, be a gentleman and just chill out for a bit?
And the guy was like, yeah, cool. No problem.
At this point in history, it's it's it's very important to understand that Bitcoin quite literally had no no value.
It had not been there. There was no price for. Yeah.
And so he created the first ever market for Bitcoin by saying, hey, I like pizza.
Bring me two of them.
It doesn't have to be.
It could be from Domino's.
It could be homemade, whatever.
And I'll give you Bitcoin for it.
And that was his way of giving back to the Bitcoin community and also staving off and somewhat delaying the inevitable arms race of chips as they accelerated to become more powerful and faster at making those guesses.
Yeah.
Yep.
In our last conversation, we talked about what it means for these miners to get better.
So the miners are not getting better at doing the math.
They're doing it faster and faster, making more and more guesses.
So it's not like they're learning how to solve this equation better.
It's just this is probabilistic.
There is no way to get better.
Yeah.
The only way to get better is just to make more and more guesses, do them faster and faster and faster.
Yeah.
Yeah. There's one other quote I wanted to read here because this, I think, summarizes a core piece of this.
We talked about causality and unpredictability as necessary to establish time.
There was a third thing that Derdigi mentions at the end, coordination, in order to turn time into timekeeping.
You have to have causality and unpredictability for time and then coordination.
So here, I'll just read the quote.
This puts a lot of this together, I think, and will make sense, hopefully, after we've now discussed all this material.
Quote, timekeeping requires causality, unpredictability, and coordination.
In Bitcoin, causality is provided by one-way functions, the cryptographic hash functions and digital signatures that are at the core of the protocol.
Unpredictability is provided by both the proof-of-work puzzle as well as the interaction with peers.
You can't know in advance what others are doing, and you can't know in advance what the solution of the proof-of-work puzzle will be.
Coordination is made possible by the difficulty adjustment, the magic sauce that links Bitcoin's time to ours.
We've talked about all those parts now.
I hope that paragraph makes sense because it takes a lot of work to get there to understand causality as a cryptographic hash function, a one-way function,
unpredictability being added through peer-to-peer interactions in the proof-of-work puzzle,
and then coordination being made possible by the difficulty adjustment.
Maybe that last portion is something we didn't.
What does that mean?
Coordination is made possible by the difficulty adjustment,
the magic sauce that links Bitcoin's time to ours.
I don't know.
Yeah.
I'll take a stab at that.
Coordination is made possible by the difficulty adjustment,
the magic sauce that links Bitcoin's time to ours.
So we talked about how the difficulty adjustment links Bitcoin's internal block height time
to the 10-minute approximately real-world time.
So we've seen that that's how at least Bitcoin's time is linked to ours
by a difficulty adjustment that keeps the mining of blocks at roughly 10-minute intervals.
This then allows coordination in that it allows all of the nodes
to be able to coordinate on receiving and propagating the reactions.
And it also, I guess, allows humans to coordinate in relation to it.
I don't know that I'm catching everything in that, but that's what I got from it.
Coordination, I think, would, yeah, I guess the way that I'm interpreting it from what you're saying is coordination allows for all the nodes to update to the current state of the ledger.
Yeah, that might be the best way to.
Yeah, and for the mempool to start taking in the new transactions or to take in the new transactions or create a new loop.
Yeah.
Yes.
Yeah?
Yeah.
Yeah. This is a great essay. What you saw was us working through it in real time a second time or a third time.
We talked about this eating Mexican food.
We did. And so this is such it's a great essay. It's very deep.
It's something that as all good philosophy does, it's something that you really need to break apart and work through yourself.
You can skim through this essay and feel like you have a superficial understanding.
but then as you go back through it and try to put the pieces together and pull them apart
you see the gaps in your understanding and as you explain it to yourself and hopefully as
you dear third party witness saw lucas and i doing you try to piece the argument together
and you know you just have to work it out so watch tenant watch tenant yeah or you can understand
that you can understand this what's the one where you have the tattoos on them like memento
yeah oh no hit stop record and watch this now my brain hurts yeah yeah no that's all i got a great
essay dear gg did a wonderful job of bitcoin philosophizing we need more of this um beautiful
essay fantastic we will see you guys next