Mr.
Mechanic, welcome back.
Hello.
Hi, Luke.
Telling my kids this was Luke Jr.
Thank you.
Yeah.
It sort of is from a certain perspective.
Yeah.
Well, welcome.
Great to have you.
great to have you back.
Thank you for having me.
I'm sorry if I'm a bit surly.
I'm a bit jet lagged, you know.
Um,
And we're a bit tired, so this is going to be our best episode.
We
it'll be really good.
Yeah.
This is gonna be great.
Ha ha ha.
Alright.
So.
I thought we'd start this by coming full circle to the thing that your wife asked
me when we first met, uh, like, or we, she asked me at the Horsepower Ranch,
which in, in Mexico, the Baja, which is like the middle of the middle of nowhere.
Uh huh.
or the outskirts
edge of nowhere?
It's right
of nowhere.
endless ocean.
yeah, yeah, yeah, that's that.
Ensenada, right?
Like, just below Tijuana.
yeah, well, the ocean is actually nowhere, isn't it?
So Hawaii would be in the middle of nowhere.
And
Yeah, I think so.
anyway, the thing she asked me is a very simple question, which I've been trying
to, like, refine the answer to over the years after, after she first asked it.
And it's the simple question, what is Bitcoin?
Yeah, I think it is whatever we make it.
I think that's, it, it changes, right?
It's a, it's a set of rules, uh, that can change.
It's a protocol.
And that's like, so my favorite analogy is always the language analogy
because language is a protocol that everyone will happily adopt and use
and correct people if they use it wrong and update their own understanding of
what the rules of the protocol are.
So that, that totally applies to Bitcoin.
So, rules change over time, you know, uh, it's a set of rules
enforced by voluntary participants.
That's what Bitcoin is.
It's a protocol.
It's a set of rules that is followed voluntarily by a bunch of people.
It's, it's, that's all it is.
Just a evolving set of rules,
Uh, it's close to my answers, uh, I, I,
and copy in my homework
copying your homework.
I usually answer, it's a, it's an agreement on a fixed set of rules
that are very hard to change.
And the reason we agree on the rules is that they're more
expensive to break than to follow,
Yeah,
creates, you know, absolute finite number and not being able to copy and all of
the other nice censorship resistance.
and no because breaking the rules isn't like The point is it's because
you're not breaking the rules.
I mean the implication here is doing something like a 51 percent attack
That doesn't violate the protocol, it just violates the expectation of
what other people think you might do.
And especially in current scenario, where Bitmain can 51 percent attack the
network, if they want, at any minute.
Like, it doesn't, importantly, that doesn't violate the protocol.
If it did, we wouldn't have to worry about it,
Please explain that.
Bitmain make all the hardware, and they run all the small pools, and they run a
big pool too, and if you add it all up, it's over 51 percent of pool dominance,
and it's over 80 percent of hardware dominance, which is all closed source
and backdoored, and, like, they just run that entire part of the ecosystem.
Unfortunately, there's Bitcoiners, and laser eyes, and like maxis, and
ideological bitcoiners, and this is the world I've been in forever, and mining
went off on its own tangent, and it's basically just run by one Chinese company,
and if you go and, like Viabtc is an old partner of Bitmain, and You go on
the CEO's Twitter page, and it's just a Bitcoin cash flag, and these guys have,
they would switch in five minutes to doing whatever gets them more fiat, right?
It's the idea that they're somehow part of the ecosystem, or the game
theory will magically keep us all in alignment, and it's all fine.
It's I'm, I'm rambling already, but this is the analogy I came up with
earlier, like, someone, someone was worried about something Bob Burnett
said at the conference right here, and they went and went to their
guru, Michael Saylor, and went, Bob Burnett's worried about centralization
of template construction in mining.
And, uh, apparently, this is like Chinese whispers here, but Saylor was
like, well, don't worry about that.
Because if the centralized template constructors ever did anything bad,
then all the miners would just switch, which is like the old cope from 2015.
And then the guy went back to Bob Burnett and went, yeah, okay,
apparently that isn't a concern, Michael Saylor says, because all
the miners will just switch, right?
And I was like, this is, this is like, my parallel for this is like, I'm
trying to explain Bitcoin as two no coiners, as a monetary network, a medium
of exchange, not a store of value.
And they're like, why do I need this?
I, I send my products.
Payroll Lil goes out over PayPal every month.
What's the issue?
Why do I need Bitcoin?
I'm like well because PayPal can de platform you they can cancel you and
they're like, oh, don't worry about that If they ever did that, I would
just use Venmo instead I'm like you you do not understand what building
a resilient system is or like why you create redundancy and you you
you Caught you caught inefficiency just as a means of You know, I
don't want one guy to do this thing.
I want 8 million people to do this thing.
Even though 7, 999, 000 was all redundant, it just means governments
can't stop it anymore, which is what the whole point of the thing is.
That's it.
So mining, mining is centralized.
At the end of the day, it's centralized and getting worse.
And people are now resorting to COPE.
They're no longer interested in anti fragility.
They're just saying, it doesn't matter because bitcoin somehow will just work.
Like, it's, it's literally just it is bitcoin to no coiners.
You're saying centralized payment networks are fine because if any one of them
messes around, free market will fix it.
And so that's, that is not a reliable argument.
System for you to build an economy on.
Okay, well, I'm, what I'm thinking of is that, that famous Antonopoulos
video where he explains the 51 percent attack, and he says that all they
could do was one double spend, and then we'll kick the fuckers off the network.
And so what would happen if Bitmain actually pulled off a 51 percent attack?
What do you see happening, like, if they actually do that?
I think, um, you'd see a disappointing and underwhelming reaction to it.
Um, at the moment, we're all boiling frogs.
Um, everything's gone way over the limit of what should have
been tolerable to bitcoiners.
Um, and comparatively, we're just not anything like as
vigilant as we used to be.
Bitcoin was always going to be a victim of its own success.
Um, and it's now inundated and diluted with people that Even if
they really care about it, they just don't understand it that well,
and they don't know the history.
So, GHash.
io was a big pool, got too big, spooked the network, and everyone
abandoned it, and it died.
Uh, Bitmain is in that position now, and they have this silly game they play, where
they pretend to not be as big as they are, via the use of proxy pools that make the,
I see that, but if they actually pulled
Yeah, yeah, I'm getting to that.
I'm just saying, Hmm.
If, given that we're already past the point where they can, which was sufficient
to cause alarm before, I don't somehow expect Bitcoinists to go, Alright,
that's too far, and all the frogs to jump out of the hot water because they,
they, you know, actually did that.
I know what Andreas was saying, he's saying, you know, just an economically
rational actor would never 51 percent attack if they were in a position to,
because why would they undermine Bitcoin?
The entire, why would they bite the hand that feeds them?
I get that, it's logical, but Bitcoin does not exist in its
own game theoretical vacuum.
Someone can come, I don't care what it is, if the, if the, if
the CBDC people are like, right, we're pulling the trigger today.
This is, if, if the, if the Chinese government wants to come to Bitmain
and say, right, you're doing this now, it's to, it isn't, I'm not going
to rely on Andreas video saying, oh, don't worry, they won't do
that, it's economically irrational.
Like, they have a gun to their head, and Bitcoiners can either, React strongly
to it and do what they need to do.
Or they can cope and say, Oh, it doesn't matter.
Someone else will include the, like it's, what are they doing
with the 51 percent attack?
Are they just mining empty blocks?
Are they double spending?
I would think it would probably be a censorship attack more than,
uh, a reorganizing of the chain, which does undermine Bitcoin more.
Um, so the former, um, in an, in a scenario where they do that, I think
Bitcoin is, would largely just stay boiling frogs in the pan and say, This
sucks, and then the publicly traded miners that are mining with this.
I mean, they tend to be more North American based, so they all go
to Foundry instead of Bitmain.
Foundry will pick up some of the slack, but then it depends
what's going on politically there.
If someone's holding a gun to Foundry's head too, and saying, you need to
censor, um, the idea that the, the riots and the marathons Not Marathon,
because they're their own thing.
The Hut8s, and the BitFarms, and the CleanSparks, and those publicly
traded companies, the idea that they would just all switch pool.
I don't know where they could even go, because the requirements that are placed
on them to be allowed to be miners in a publicly traded capacity mean that
they can't really move, and even if they could, they're not going anywhere quickly.
So, I think very quickly, what, how it would actually play out is Um, assuming,
you know, disaster scenario, you've got Foundry and you've got Bitmain, like,
conducting a censorship attack, those two alone are already around 50%, if
you don't even include the proxy pools, like Brains and all those guys that
are really just Anpool at this point.
If those guys are censoring and they're doing it according to some blacklist,
like OFAC compliance, something like that, um, Most Bitcoiners are going
to say, well, I'm not on that list.
So, you know, I'll carry on using it.
The price might fall a bit.
The price also might go up a lot, right?
Like when, do you remember when Silk Road got shut down?
The price, this was October 2013, or 2012, was it?
I don't even remember, but the price went like, The market had
a schizophrenic reaction to it.
It went extremely far down because a lot of people thought like Silk Road is
the killer use case for Bitcoin, right?
And then it went all the way in the other direction.
Like it was two God candles, like in both directions and everyone, because
a lot of people just appreciated like the new found legitimacy of Bitcoin.
We've shaken off this nasty drug stuff, right?
So if they're putting pools in a position, Like, are the, like, the billionaires
that are putting their company balance sheet on Bitcoin, are they gonna care if
there's a UTXO blacklist that's all these nasty drug dealers and Russian oligarchs?
They might see it as a good thing.
So, in, just to round off the point, um, I don't, you're not
going to see the publicly traded guys switch pool in that scenario.
They might even welcome it.
And even if they, with the best of intentions, wanted to switch, The
regulators have got them by the balls and they can't, like if, like, I work
for Ocean, if, if these publicly traded guys were like this sucks, Foundry is
censoring, we're gonna switch to Ocean.
They literally can't.
In most contexts, they can't because we don't have the necessary, we, they want
us to KYC all of our miners and we're not prepared to do stuff like that.
That is prohibitive for them.
So, I mean, in that scenario, I basically think this cope that Andreas has is
just, It's no more than conjecture, and I don't think it's based on any
sort of pragmatic understanding of what most Bitcoiners are these days.
No one is gonna dump their Bitcoin in that scenario that you might think, because
where, what are they gonna dump it for?
Bitcoin is still going to be the best thing, even with centralized mining.
This is what I mean with boiling frog syndrome.
Yeah,
I don't like the term circular economy, because as you say,
nothing exists in a vacuum.
Everyone's action influences everyone else's action, the Kevin Bacon numbers
and whatnot, like we're all connected in this, but, but to, to take it back
to the MT Gox thing, I, I remember how I reacted to that when it happened.
I mean, I wasn't deep into Bitcoin at all at the point, but I was very
interested in what was going on.
And to me, it was, uh, not that, oh, okay.
Bitcoin is legit because now the, the, the drug use narrative is gone.
It was more like, okay.
One entity, one large fucking entity went down and Bitcoin still works.
Therefore, number went up again.
And, and that's like what I hope will happen now.
If, if, uh, there's like a 51%, like, don't you think that
kind of mindset is still there?
that's a very good point.
That's one of my favorite things to sort of mention.
About like, bad things happening and Bitcoin surviving them and thus becoming
not theoretically anti fragile, but in practice demonstrating it's anti fragile.
perfect example.
Mt.
Gox is a good example, Gavin Andreessen is a good example, China
mining bans are great examples.
Like, I use this frequently when I'm like, you know, pontificating on this
stuff as I like to do, but I think when it comes to mining centralization,
No, I don't think that applies, sadly.
I don't think someone does a 51 percent attack, the community responds in an
agile way that's commensurate with the cypherpunk ethos, deals with
it, roots around it, and we go, hey, we dealt with the theoretical 51
percent attack and proved that the practical response to it actually is
something that we can expect to happen.
No, I think we'd be very disappointed in that space because of how
divorced mining is from Bitcoin.
They are super separate, like not just aesthetically, but this has been something
that's been just more and more obvious to me since working with Jason and Luke.
In, uh, Ocean, because none of the miners are really that well versed in what's
going on in the Bitcoin space, uh, with development, and with, like, these,
you know, the concept of not your keys, not your coins, okay, it's a big part
of hodl culture, it is not a big part of mining culture, because everyone is
happy just having all of their rewards go straight to the pool, and then the
pool pay them from some other source, And this is not even a, like when Ocean
comes out and says, Alright, our biggest 16 miners will get paid in the block.
So the money, the minute it exists, it's already yours.
Like, we can't even touch it.
And because we go from the top down, that results in 90 percent
of the new coins getting created by Ocean, never touch our hands.
And this was something I thought.
If the mining culture reflected Bitcoin culture, that would
be like, this is fantastic.
Instead, it barely moved the needle.
Because people are like, oh, why do I need, why do I need to take
custody of my coins immediately?
I'm like, for obvious reasons, right?
For Mt.
Gov, for not your keys, not your coins.
And it's like, no.
And then you have, you.
You know, who's going to run Bitcoin Core if it's closed source
and we find backdoors in it?
Who's going to accept that?
That would be a joke.
We'd get laughed out of the room.
Like, even shitcoins don't do that.
Whereas the majority of the hardware on the network is all made by one
company with closed source firmware that we found backdoors in before.
Antbleed was a thing.
We knew they had remote access.
They could shut down any ant miner in the world.
Bitmain could do it.
We caught them in the act and they went, Oh, this was supposed to be, uh You know,
like, how Apple can shut down an iPhone if you report it as stolen, and, uh,
but don't worry, we've got rid of it.
And like, we, we totally caught you, everyone is still doing it, and, like, the
ideology of, like, why would you run on your local area network at home, closed
source firmware by a malicious company that's tried to hijack the protocol
before, and everyone's just like, meh, you know, I, I, I spend this much on
electricity, I get that much back in sats.
You know, it's fine.
Like, most of the time they're dealing with electricity and
real world stuff like that.
So, like, just, I'm just trying to illustrate how divorced
the two mentalities are.
perfect illustration I saw today at the expo area in the conference.
I mean, this is one of the most high signal to noise
ratio conferences there is.
But, but it's not completely devoid of crypto, quote unquote, crypto.
There's some of it.
so I saw some mining, some, I don't even know what the company was, but there was
a couple of, of miners, a couple of ASICs, and they had each had a sign above them.
And when one said, uh, had the Bitcoin logo and 11 per day.
Another one had the Dogecoin logo and 27 per day.
And it's like, holy shit, are miners, is this how miners think?
Are they that, you know, low, short, short term oriented?
So, so that they just think like, okay, uh, I can make more money mining Dogecoin.
And therefore they do like, is that, is that how this works?
Well, people are scared of altruism and, like, ideological
commitment to Bitcoin inside mining.
And, like, You know, this was a big pushback from Ocean's anti spam
stuff, was like, you're, you're relying on the altruism of minors.
That's a no no, you've committed an ideological sin in the space.
We cannot ever go outside of, like, pure, like, just naive libertarian approach of
no one ever does anything unless there's, like, not only is it profitable for just,
like, for them, but it also has to be only in the short term that it's profitable.
Like, I'm not gonna sit here and discuss libertarianism, like, I find
it complete, it's incomplete, like all ideologies, like, obviously I like
it, and I'm partial to it, but, like, by this logic, no one is going to fix
bugs in Bitcoin, no one's gonna work on anything, no one's gonna educate.
Like, I hate it because you always have to backwards rationalize it
and go like, Like, I'm doing this podcast and I'm talking to you about
it because I care about this stuff.
That's it.
And like, yeah, you can, you can play this stupid game that libertarians always do
where they have to go, Yes, but you care about it because you have your money in it
and you need to protect your investment.
And also, Maybe it's good for your, like, you're gonna get more
followers from it, or, you're gonna, like, they just, they always have
to come up with some profitability
is an incentive too, I would say.
It's like a, to
able to look at yourself in the mirror when you get up is an incentive, so
I hate that they always exclude that.
So I'm like, miners, if you're aware of the fact that you're participating
in an attack on the network, it's self evident that you're not going to want to
do that once you understand what it is.
Ignorance is fine, but I don't, it's not, it stops being ignorance
after a while and it becomes active participation and willful participation.
Like, ignorance, like, who's that guy, I really like listening to him, he's like
a natural law advocate, Mark Passio, he talks about, you know, ignorance.
You know, put, describing it as like, you know, there's, there's
not knowing something, but then there's, when the information enters
the, the, the field, the field.
And you choose to ignore it.
That's why it's detestable.
That's why when you call people ignorant, it's like, it's not that you're not aware
of the thing, you know it's out there, but you're choosing not to think about it.
So this is why when miners do this, when miners participate in the ongoing
attack, that it's being, you know, mischaracterized and butchered and
you have these Former heroes, Bitcoin Magazine, turning into absolute
putrid, like, bottom of the barrel attackers, trying to undermine all
of these central characteristics.
When you have that stuff going on, and it boggles the mind, because you
know that if you surround yourself with snakes and shit coiners, it
leads to psychopathy pretty quickly.
You watch all these people unravel very quickly, like, in their own, you
know, Mess, but I'm like, I don't, I care about that, and I will help you
not do it, but, out of compassion, but I don't want you to bring down
the network while you're doing it.
So you have a hundred million UTXOs turn into two hundred million
UTXOs in the space of a year.
You have the implications for node runners.
And,
Please explain why that's a problem.
well, it just makes it harder to run a node.
It's, practically speaking, it seems like I'm still benchmarking, right?
Like, my initial horror around it was when I tried to do IBD, which
is, you know, the initial block download process for any new node.
Like, we want people to run nodes, we want a decentralized protocol, which,
like, for the language analogy, it's every node is a speaker of that language,
and the language is centralized unless enough people speak it, and then you
can have reliable, unchangeable rules.
So what is Bitcoin?
Like, it's rules that hopefully can't be changed in an unriggable game.
Because there's nothing worse than playing a game where someone keeps changing the
rules every time you start to do well.
That's what inflation is.
It's, hey, I worked hard, I saved money to do this thing, and it didn't work.
Because someone printed a bunch more money, and now I don't
have the thing I worked for.
That's like, I rolled a six.
And they went, well, that's actually, you move backwards instead of forwards, like,
on the, it's like, this is so annoying, and it makes you disillusioned and short
term preference and all that, so, wow, that was a tangent, you're asking me,
like, what the implications of the, like, you need the nodes, nodes are what makes
Bitcoin not a shitcoin, I've, like, I've been asking people this, like, Very open
ended question, like, in the space, like, why, what, why is Bitcoin not a shitcoin?
Like, what's your reason for that?
And that's a very good question, it's a very provocative question.
Because that's what we have to ask ourselves.
Why do we get to have maximalism?
Why do we get to have a superiority complex?
How do we justify that?
And, you know, people give different answers.
Immaculate conception is one.
Um, culture is another, um, but, to me, it's nodes.
Like, in, there is not a shitcoin in the world where they do more than do some
sort of dismissive gesture towards nodes.
Like, Solana's my favorite, because it costs literally six figures worth of
equipment to be able to run a node there.
So they're saying, this is not important to what we do.
Like, we don't need you running your fucking node.
Craig Wright said the same, like, fuck off with your node, unless you've got 20, 000.
I'm not trying to cater my, my protocol towards you guys.
Bitcoin, Luke, people like those were the champions of node running.
They're saying node running, everything is downstream from the nodes.
If you ever forget that hierarchy, then you can't, Bitcoin cannot
be controlled by miners.
It just can't.
They have to be employees of the network.
They cannot be dictators of the protocol.
There cannot be that case because if they ever get put in that position,
then it's just, you know, Obama putting a medal on his own neck.
When that becomes, when that becomes the system of checks and balances,
then Bitcoin is a centralized shitcoin.
Like, by definition, that's what it is.
and that's, that's why I think the block size wars were such a pivotal
moment and were like, where, where my conviction was ironclad was during that
moment, because it's like, this is sort of a proof that we were actually in
charge, the users, the node runners.
But, but, yeah, if that isn't the case anymore, so, I mean, how, how,
how, what's the, how big is this risk?
Like, will we, will we win?
Like, in your mind, like, what, what would it take for
Bitcoin to survive this attack?
Uh, because, uh, Yeah, another point there.
Uh, if Bitcoin is allowed to be something else than money, then, then
the incentive structure doesn't work.
Right.
This is like, yeah.
So, so, so, and it right now it's being used for, for a ton of other shit.
And it's just like how gold is not as good a money because it, because it is
used as jewelry and like this Hayekian
Yeah, right.
much of a, how big is this risk?
Like how, how, How endangered is Bitcoin by this, by this attack
from this, uh, absolute scammers?
Um, it remains to be seen.
It's like, to round off the, what I should have said for your previous question, the,
the attack, the Treating, increasing the scope of what a node does, which is run
a very low resource requiring computer to verify the entire financial history
of this network, plus a few op returns here and there, if you like, from weirdos
that want to do stuff in it, and, um, and for your own benefit, UTXO set in an
unscammable way of accepting money from anyone you've never met of any amount.
You know, for 600 gigabytes on a one terabyte solid state drive or whatever
that costs you a hundred bucks on a, you know, a, an a hundred dollar little
single board computer like a Raspberry Pi.
You know, that you manage to sync up to the network in two or three days.
All of that to me is like, alright, that's kind of become the standard.
And that was the Raspberry Pi 4, which was like the majority of nodes
on the network because of these projects like Umbrella and Start9.
And, fantastic, that was good, it was doing a lot, and a lot of it
doesn't even show up in the stats that people show because it's all Tor.
And, you know, so it, like the things like 21nodes.
com or whatever, they won't even see all those nodes.
So Luke, again, runs a much better service that shows there's around,
I don't know, it's like 60, 70, 000 nodes on the network at the moment.
That's credibly decentralized, it's good.
But what they're not, what they did not sign up for was to become redundant cloud
storage for people like Michael Saylor that have a great idea about another
thing we can do with Bitcoin's blockchain.
Like, you're abusing that resource, which is an unpaid resource.
That is just, you know, it's just like if you could magically say like I have
this like appreciate English for a minute It allows us all to communicate
like if you're if you're Austrian and you're meeting a Russian or something
English is probably going to be really useful because it's a common thing
that you probably both have now imagine if Like, the, the, the resources that
went into learning English as a child, or, you know, that happened, that we
gratefully, was useful to enough people that they did it of their own volition.
Foreigners that learned to speak English, they did this thing for their own
benefit, and as a result, we all get English, and it's fucking useful, we can
communicate, and it's great, and there's little attacks on languages around.
You know, woke ideologies that try to redefine words and stuff
like that, and we still laugh at them and dismiss what they do.
We still know men don't get periods.
All that stuff, because it's decentralized enough.
This is so useful as a fantastic, wonderful tool.
But imagine You found a hole in the, in, if the medium through which English
travelled, obviously it doesn't work like that, and you went, I can hijack
every one of those people that's got that set of rules in their brain,
all those English speakers, and I can force them To start storing irrelevant
crap and increasing the overhead of what it takes to learn English so a
three year old can't learn it anymore.
you need to learn Esperanto as well, like,
You're tacking it on.
You're increasing the scope of what all these, like, no one
is being paid to learn English.
Like, they are doing it for their own good and you're saying I'm going to abuse
the fact that you want to do it for your own good by making you have to do more.
That's such a fucking sociopathic thing to do, it's so undermining to it,
because you'll just get more and more people saying, I can't speak English,
I'm just gonna, like, rely on Google Translate to do it all, and I've got AI
to do it, and then, great, now there's OpenAI, and a couple of other things.
Companies that are the gatekeepers of all human communication.
That's what happens with Bitcoin.
No one can run nodes anymore So we all need permission to use the network.
That's the way you trend with
So, so, so, back to Sailor and this idea of,
did scheme.
So, yeah, the digital idea, whatever.
Uh, it's like Michael, uh, Michael Saylor as well, like everyone
has a learning curve, right?
And he has not been in the space for very long.
I mean, he's, he's got some great perspectives on it and
whatnot, but couldn't this just be like, I mean, nobody's perfect.
Couldn't this just be a flow in?
The understanding is anyone talking to him about this stuff?
Or does he get the wrong information because it's
connected to the wrong people?
Why, why isn't anyone like, uh, anti spam pilling him
There's, there's two ways with this.
Like, I was sort of hit with an idea today about it that I hadn't thought of before.
It can be 5D Chess, because his explicit position is Stop fucking
around with my money, stop with the opcodes, stop funding core developers
altogether, and, like, I agree with him far more than most with this.
I think there's deep wisdom in that.
Stop, and I said it on stage earlier at this conference, like, I was
the biggest proponent of SegWit and Taproot, and I was, like, a big part
of pushing these in every way I could, like, However, how helpful I was, I
don't know, but I was very enthusiastic about it, and shit happened as a
result of them that I did not expect.
And I took, I'm eating a humble pill from that, saying, I
don't fucking know everything.
Like, I will argue at B caches all day about how good Segwit is and all that,
and I don't regret that they happened, but some shit happened that I wish hadn't
happened, and Saylor is basically just having the wisdom to say, I don't care
how solid you think OpCat is, or OpCTV is, Something is going to happen as a
result of these things that you didn't account for and the bigger Bitcoin
gets, the harder it is for us to fix it.
So, I was saying, I wanted to, to posit to Selah, you have an
exactly correct position there.
It's reeks of wisdom and it's something that the intelligent people in the space,
but the naive young developer breed of people that are very intelligent,
like damagingly intelligent, but not very wise yet, Won't be aware
No, it's a move fast and break things mentality, right?
but the, the best example we have of an unintended consequence of
an otherwise good soft fork is what's going on with the spam.
And Saylor is saying, all right, I'm going to engage in the spam.
That's what he's doing.
He's using, he's not using OpReturn, he's using the grossest hack possible
to trick nodes into How into storing transactions that are, you know, they're
fake transactions that are tricking nodes into believing something is a
script that isn't a script, that's really just a bunch of arbitrary
we say he's doing it, we really mean that this is a potential, it's like a
suggested thing from MicroStrategy, right?
I don't, I don't know where they are in the process of
it, but they've laid it out.
They've said the mechanism by which they're going to add data into the
chain, like, and it's not op return.
This is what I asked him and he said, I don't know the mechanism.
And then they published it and it's like, wow, this is the mechanism.
This was the conversation that the three of us happened
to fall into on the Madeira.
Actually, we remember that.
But, uh, uh, can you quickly
we were all
Yeah, yeah.
Exactly
I've spoken to Saylor many times, but I never get more than 15 seconds, because
someone always comes along and shakes hands and talks about what a genius he is.
And I love Saylor, I think he is a genius, but, like, you're
asking about the psychology here?
If it's 5D chess, it's him saying, you want to keep doing upgrades?
Well, when there's problems with them, people like me will come
along and exploit those problems and there's nothing you can do about it.
So he is simultaneously A complete hypocrite for saying, don't fuck with
perfect money, and by the way, I'm using this new thing that's only possible
because someone fucked with perfect money that undermines everything.
Uh, or he's just, like, like, that's completely hypocritical,
or he's just saying, I told you, like, I don't know which it is.
But he's
if you're watching, like, have a conversation with these guys.
I've asked, I've reached out to him before to talk, I've never
managed to get, like, any kind of response or anything like that.
Busy guy, you know, I don't question his motivation and commitment, like, I really
think he's a sincere and good advocate.
Like, the only thing I take issue with is when he's telling people to
mortgage their house to buy bitcoin, and like, dude, do not buy Like, we don't
have 0 percent interest like you do.
Well, the rest of us have, like, like, this is credit card debt you're
getting people into to pump banks, like, this is really irresponsible.
Like, I don't know why he hasn't said, yeah, that was maybe not good.
Like, his, his, he borrows money at 0%, right?
So, sure, buy 21 million bitcoins at 0 percent interest, like, No brainer, right?
But your average pleb needs to not do that.
Like, they need to just earn and stack what they can and do their UTXO
management and like, don't be, don't be borrowing money to buy Bitcoin ever,
because then you have to sell it at some point to repay the loan and you'll
probably have to do that at a loss.
Like, even if you, 50 50 chance of Like, of being right or wrong with
the market, plus the interest on the loan means you, you're, you're down.
Most of the, you have a greater chance of losing than winning.
Sorry.
here.
I just want to.
So, I mean, everything in terms of sailors, specifically some,
some good points, but I think just for the sake of, uh, Explaining
what the difference is between Operturn and the new types of spam.
Can you do just a little TLDR on Operturn versus what all
the new types of things are?
Because there's a few of them, right?
So, OpReturn is, uh, was done as a compromise to try and, uh, make it so that
there was a, the least resource intensive, or, you know, the least expensive to the
network method of storing arbitrary data.
Um, it doesn't bloat the UTXO set like other methods.
Um, and everything in it, it's provably printable.
So even if you send SATs to an opera return output, which you don't have to
do, those SATs are never spendable again.
So as a node you don't need to care about it.
You can make an opera turn of one Bitcoin if you like, and the
every node can discard it 'cause that Bitcoin can never be spent.
So, that's, that's not true of other things like fake public keys, right,
which isn't, which was a thing people were doing before OpReturn, where,
even though those are also unspendable, your node has to do a bunch of
calculation to verify that those public keys are genuinely not true or not.
Um, and like, you know, as a, I think it's roughly 50 percent of, Out of
the total space of public keys you can generate, 50 percent of them are
spendable and 50 percent of them aren't.
And you don't know that trivially.
So, you can, you've seen that like one bitcoin ETA address don't send
address that people use as an example.
You can send bitcoins to that, you can't spend from that,
it's not a valid public key.
But, your node will treat them as the same because it's too
computationally expensive to verify.
Outputs, like we can soft fork to an address type, which you, in which
transactions are only valid in blocks.
If the node runs some calculations and says, yes, all these outputs are to
valid addresses that are spendable.
There's a computational cost to that, but it's not actually that undoable.
And this is like a controversial thing I probably shouldn't get into.
But if the assumption was that's not possible.
So to stop people using freaking fake public keys.
Uh, we're gonna create something which is provably the same thing
as a fake public key that can't be a real, like, spendable output.
That's what OpReturn is.
And it was a good compromise for a while.
I don't think it lasted.
And unfortunately, the witness discount that came with SegWit meant they found a
way to do, like, OpReturn was, you weren't seeing any bigger than 83 bytes because
that was the default on Bitcoin Core.
And they weren't getting any kind of discount versus real transactions.
So Segwit and Taproot come along and suddenly you have the 83 byte limit
doesn't apply to the bug they found a way to exploit and it gets to take
advantage of the witness discount too.
So,
the basics of the bug that's being exploited?
um, you're, you're creating something that looks like a script.
But you're using, like, in, you know, you have if, if conditions, right, where in,
you know, if, if this, then that, like, and you're creating, uh, uh, what are
the, they're putting the, the false opcode before the op if, and so the op false
says, ignore the following chunk of, if.
The following chunk of code can never execute, and then there's an if condition
that is, will never be, you know, called.
I don't even, or, I don't know the right thing, right?
Um, and that contains a bunch of arbitrary data.
And your bitcoin node doesn't mind that it's there, or that it's invalid as a
script, or doesn't make any sense, because the false has told it to ignore it all.
But it's, it's It's deliberately hacking its way into a script and like
it's it's just saying like It's like I want to I want you to I want to blab
a bunch of crap at you that you've never heard So I come to you and say
hey I got something interesting to tell you blah blah blah blah blah and
I force you to stand there and listen to it and absorb It all and then go.
That happens once.
mind.
Actually, I didn't have anything to say and then you walk off Do you know what?
I mean?
It's it's like you're forcing someone to listen to something that is irrelevant.
like when there's a Q& A section and someone says, yeah, I have a question.
And then it's not a question.
It's a rant for 20
Yeah, right, it's, and, but, the structure of what it is, and the sort of social norm
of that context, where someone's asking a question, forces you to listen to it,
yeah, yeah.
It's like a hack of that
it the case that and like ad rant,
Yeah, it's, it's a, it's just, it's, uh, it's data injection, like, this
is, as Jason put it, this is Computer Science 101, you're putting data
in a way that's not, uh, Accepted by the, you know, the thing.
It's like if you're typing in code into the login field on a website
that doesn't have like, what do they call it, sanitized inputs.
Like, there's a, and if you ever, like, tried to, like, create a
username or account with, like, with, like, database language and stuff in
it to try and, like, make Facebook dump all their users and stuff.
Like, you can try and do that, but they, they prevent you from doing
it because that's data injection.
Like,
even easier.
It's like when you put the web address in the search bar instead of the address
Yeah,
even that, like, it's like my mother using the computer.
Yeah, but I mean, it's just an, like, something about doing that.
It's, to me, it's just like, I used this bus analogy before, and it's a
good analogy, and I do stick to it.
It's like, you design a city, and people are just about getting around
it, and there's a bus service, and then FedEx figures out they can put packages
on the bus, and do that cheaper than getting their own vans and all that.
And, you know, you have the idiots that are like, So what?
Who gets to define what a package is versus a human being?
Like, I have a backpack, are you gonna not let me on the bus as part of your new
censorship thing to not let FedEx use it?
I'm like, but, look guys, no one can make it around the city anymore,
cause FedEx have all this money and they're using a bus service
for something that wasn't designed.
But now you have, like, Michael Saylor.
You've got a cardboard box that you've, like, put this scarecrow thing
around to make it look like a human.
To, to sneak it onto the bus, to trick the bus driver that this thing
really is a human, like, ask yourself why you have to paint this picture,
why are you playing this charade?
It's because the intentions of everyone involved in this wants this
to be a bus service, not a courier.
Like, the fact that you have to disguise your actions and hack stuff
and trick nodes should tell you that you're doing something untoward.
If, if Bitcoin was all about being a, a store, an arbitrary data storage
mechanism for like all these wild ideas we can do, like decentralized identity
and all that, it would be, you wouldn't have to hack it, you would just do it.
Like, nodes would just accept it on the off.
The fact that you have to like, trick it, It should betray to you the fact
that you're, you're using a, a tool that doesn't want to be used for that job.
And it's like, on the one hand you can go, wow, what a cipher punk you are
for figuring out how to hack a system.
On the other hand, you can just go, this is unethical.
Like, it's like it's, this is designed for a purpose and you're not using it
for that, and there's a reason for this.
Okay, okay, like, uh, so, so, there's this narrative that, like, Bitcoin
thrives in an adversarial environment and Bitcoin is for enemies and
It does if it's community is prepared to acknowledge that it's under
attack and actually fight back.
If it's not, then it just collapses.
Bitcoin cannot withstand it's own miners attacking it and thinking they're not.
Bitcoin, no one survives a drug addiction problem where they
start attacking their own body.
Sure, like, I can attack you and you can get stronger as a result,
but if you imagine the attack to be a good thing, and you totally open
yourself up to it, then you're fucked.
but my question is more like, if Bitcoin survives this attack, will
it be better off, uh, than if this attack wouldn't have happened at all?
Like, w is this less an in vigilance a good thing or a bad
If we survive this, great.
But the, uh, the reason I'm not optimistic is because we've already survived it.
And some attacks keep repeating, right?
Like, big blockers, they just keep, it's like a perennial,
eternal September kind of thing.
Like, you have big blockers from ages ago, we were all big blockers.
And then you have, like, the New York agreement big blockers, and the Roger
Ver big blockers, and the Bitmain big blockers, and now, now you even have the
Andreas big blocker, and the, and the
Yeah.
I heard that that was a surprise.
know, it's, it's painfully naive for someone of his intelligence.
Like, it's, I honestly can't believe
No, it's, it is
what I'm hearing here.
the way I see it is like, let's, we didn't get the like.
It's like the some of the early generation stuff like genius programmers
not understanding the economics like like that There's there's a
Well, they don't necessarily, like, just cause you're a fantastic developer doesn't
mean you know anything about economics.
And, like, you,
No, it's such a confusing field to so
Satoshi was like the perfect jack of all trades, because he understood enough
about each field to design a system, like, it's not, if he'd have just been like a
million times better at C and just not any good at, you know, economics, you
wouldn't have Bitcoin, it's, you have the specialist, but I think to answer,
what you just said is a really provoking question, because you have these like,
perennial issues that keep coming up over and over again, and you have to fight them
off every time, like, so, China banning Bitcoin is like a one off, where we've
gone good luck with a nation state banning mining, that we'll lose, and I think
that's one of those battles you fight once, and you've demonstrated you can
succeed, and you recover, the difficulty adjusted like it was supposed to, all
the miners in other countries just made twice as much Bitcoin suddenly, and it
Mm hmm.
we all laughed, and we all are happy, and I don't think it's gonna get tried again.
Rogue developers, we've done that, we've done exchanges collapsing, these
are things that will actually repeat.
So when an ETF gets caught doing its Enron shit and it turns out, like, they've got
no Bitcoin, and they've been selling fake Bitcoin on their balance sheet and all
that, and even though they ticked all the boxes, this is gonna happen, right?
One, one of these ETFs is going to not have the Bitcoin, it says it does.
It's, it's a, it's an accident waiting to happen.
That's gonna be Mt.
Gox 2.
0, right?
FTX was already that, right?
But, Like, these, these are inevitable, and unfortunately, those are battles
that you have to keep winning over and over again, and that's like, that's like
weeding in the garden, and if one day it becomes apparent that the weeders
are not paying attention anymore, then within six months, you're overgrown
with weeds, and that's what I think is happening with decentralization, and,
and because we, to round to, um, I'm endeavoring to, like, make a point here
when it comes to spam, we've fought spam and arbitrary data before, And we won.
That's why opera turn is where it is.
And that's why, that's why all of the shit Bitcoiners got the amp and went over
to Ethereum because we won those battles and we told them like, yes, you can still
put arbitrator in his fake public keys.
And yes, you can use opera turn, but go away.
And that that means you can't get, you can't raise money unless
you tell the venture capitalist.
Don't worry, we're doing it on Ethereum that actually wants us to do it.
Like the minute, like you're, if you've got millions of dollars to invest.
In, uh, something like the Taproot Wizards or whatever scam it is they're
doing, and any venture any VC is gonna do their due diligence and go, you're
doing it on Bitcoin, and as far as I can tell, these guys are hostile to it.
They might fork to prevent you from doing what you're doing, and it's gonna
take us months to raise the capital and build the thing, and gamify the
whole attack to the point where it becomes an actual problem for Bitcoin.
Right?
If you want to take your spam to that level, where you have enough NFT idiots
participating in and funding the attack, you need a relatively docile Bitcoin,
and a community that's demonstrated it doesn't really care that much, like, this
is why the spam is so easy to defeat.
Because you, you just, when you have Vladimir Van der Laan and, you know, and,
um, Jeff Garzik back in 2014 and Luke Jr.
saying go away with Counterparty, do it somewhere else, like there's no soft
fork, you don't need it, the developers go alright, well I'm not going to spend the
next six months writing a bunch of code for like an arbitrary data thing that,
on Bitcoin, that no one, that, Gets like shunned by the thing and it's not worth
my time Like now because we're ambivalent and we're flaccid enough as a community
it got to escape Velocity and rather than be the odd op return here and there it's
become like a massive systemic issue Like and you can root that out if you want,
but after a point of no return, it's like the garden with the inevitable weeds has
now turned into an absolute jungle and I can't really do anything about it anymore
in fact we've kind of lost this you know so it's you have to keep arbitrary data
in bitcoin spam mitigation in any protocol always requires active participation
and ongoing cat and mouse ish
So I love how you say that you were humbled by by
segwit and
Yeah, yeah, and that there were these unforeseen consequences that you
saw them later down the line, and I echo that with like, the view I
used to have of us winning the block size wars, us, I say us for lack of
a better word, but like, you know,
don't have this same yeah
Yeah, it's like, it's like, this is proof that the users are in charge of
Mm
But actually, like, in hindsight, my, my, how I see it now is like, it's
proof that we were in charge then.
It's not proof that we're in charge now.
Like, this is a, it's like Ronald Reagan of old people said, like, that freedom
is a battle each generation has to fight.
There's no, we can't become complacent because we're losing.
Eternal
yeah, that's what we need.
And like, so, so how do we instill eternal vigilance into the culture?
Well, I think benchmarking is quite revealing.
So when I, I didn't finish explaining what I'd done here.
So, uh, back in the day, working at Start9, I was like, my job, like,
I've synced Bitcoin so many times on low end hardware, and on a Raspberry
Pi 4, back in 2022, I could sync Using an SSD, a Raspberry Pi 4, with
8 gigabytes of RAM, and like default core settings, and a whole bunch of,
you know, like, no rigging the system, just like a normal node, firing up,
clear net connections, we're not, Tor is not the bottleneck, all that stuff.
Take 48 hours.
I did it on Mexican internet for like a whole year in 2022, like dodgy Wi
Fi, power outages, stuff like that.
You know, um, so now the Raspberry Pi 5 is out, it's two, the CPU is double,
two, twi, two times as powerful, you get the same SSD, and it's taking over
a hundred hours, rather than about 48, right, and that's one year's worth
of damage, so it's like inflation, it compounds, so when the government's
like, don't worry, inflation's back to 2%, I'm like, 2 percent on top of
what's happened these last few years, and people don't understand compounding,
um, You know, disasters like that.
So, if you carry on at the rate we're at, with the explosion
of UTXOs, then, it's, it's just degrading to what can happen on IBD.
Really, you want people to be able to run a node on an Android.
Like, that would be great, and you're not far off that.
But, you know, so, what were you talking about a second ago?
Because this was related to that, and that's why we're, so bench, that's it.
That's how you galvanize people and make them go, this is a problem.
People have to see the stats, they have to try and run nodes,
and then they have to go, this is fucked, I can't do this anymore.
If you can't run a node, then it's over.
Then you need someone else's permission to use the network.
That's it.
Like, you've undermined the core
Slightly philosophical question.
When should someone adopting Bitcoin run a node?
it depends what you want to do.
I think, when it comes to anything privacy related, This is like the elegance of the
whole thing, like Bitcoin is incredibly awful when it comes to privacy, that's the
trade off for like auditability, like, you know, and using trident to cryptography
rather than experimental things, like, so, you want to use Bitcoin privately.
If you want to do anything, like look up where your transaction is, is it
in the blockchain yet, if you want to run like a coin join coordinator,
if you want to do anything that might have any, like, hope of you preserving
your privacy, you have to run a node.
Because that's at the base of the stack.
If you want to, like, Lightning's great, and it's more private than
Bitcoin, and everyone uses LSPs, which means there is zero privacy.
If you want to use Lightning privately, like it allows you to do, then you need
to run a node, because your Lightning node has to sit on top of the Bitcoin node.
The Bitcoin nodes don't do anything at all by themselves.
The whole point is it needs to be something you use, and is
your gateway to the network.
And if you replace that with a human that does it on your behalf, then
Then, that, those coalesce into one big thing, like Phoenix is like the
dominant lightning provider now, and they have the potential to just be the
Google of Bitcoin in the future, like, no one runs an email server, everyone
has a Gmail account, it's a permissioned protocol, like, yes, SMTP is open,
permissionless, borderless, all that.
Good luck using email that way.
Like if you want, there's another social layer on top with like a closed system
that you need to be a part of the club to be able to participate in the protocol.
That can happen to Bitcoin too.
And the only way it doesn't is if you run the node and you, like it's, to Bitcoin's
credit, it's the best I've ever seen of people go like, I need to participate
directly with this thing at the protocol levels for it to remain permissionless.
Like, so, when should someone run a node?
The minute they want to do, I think privacy is the best example.
Running it as a mere virtue signal, when you don't actually use it, is
kind of, uh, that gives us a false sense of security, and I kind of
wish people just wouldn't do it.
Like, I wish everyone running a node wasn't just, you know, running it for its
own good, or for its own feeling, and all of their wallets didn't ever touch it.
Like, so they're using a phone wallet, like, I appreciate it.
You know, but it's like, this is, this is like a, like a problem since forever,
like Electrum's amazing wallet, and it, by default, does not use your own node, and
it's actually really difficult, because you need to run an Electrum server, and
even then, when you connect it to the Electrum server, it will still reach
out to other public Electrum servers, and you just have to assume these are
all spook run, like, and, that's a nightmare, like Samurai, who, everyone,
well, Anyone that's familiar with me knows I, like, despise that project.
To their credit, and to my sheer horror, they were the only wallet that if you
configured it to connect to your own node, and your node was down for some reason,
it wouldn't just go, alright, I'll connect to, like, a bunch of public ones instead.
It would just not work.
Which is probably an artifact of incompetence rather than ideological,
but like, nonetheless, I'm like, I can't believe other wallets, so with Francis's
bull bitcoin wallet that's about to come out, it's great, but I'm like, dude, it
needs to have like a hardcore mode where it doesn't work unless it's connected to
your node, because, and everyone's running Electrum servers, And Bitcoin nodes
using umbrellas and startnines, which means it's all Tor based, which means
it doesn't frickin work half the time.
So I need it to not connect to other stuff.
Like Blockstream Green, Wasabi Wallet, all of these things that give you the
option of connecting to your own node.
It's a little different with Wasabi because they use block filters and
all that, so there's still privacy even though you don't run a node,
but I mean, that's not great.
I mean, it's a compromise.
The point is, all of them will work and give you no indication that it's
not actually using your own back end.
They will just work anyway.
They'll reach out to other servers and half the time you Configure it to run on
your own node and it, it didn't even work.
It didn't even do what you think it did after you pressed save or okay.
It's not even using a node.
The fact that that's like the norm in, in our, like Zeus wallets, my
favorite lightning wallet, it still has an option, like the default of
it is to use someone else's backend.
Like, like, I don't want to bash it because it's such a good project.
And I've used Zeus to like.
I've never used it that way, it always connects to my own node, whether it's LND
or CLN, that should be just absolutely the default, and it's just not, and until
it is, no one has an incentive to run a node, so I used to do this whole thing
where I would set people up in Bitcoin, And it's like day one of Bitcoin, all
right, we're ordering you hardware to run a node, like, and people are like,
no, no, let them ease into it, just download, you know, green or blue wallet
on your phone, and they'll start that way.
I'm like, no, because they'll never not do it that way.
If you start them that way, that will be it forever.
And Spectre wallet, which is my favorite, was another great example.
Like, you download it, and it wants to know where your node is, and if you
don't have one, it just doesn't work.
Like, this is Moritz, who was working there at the time, I hope he still is.
Default settings define user behavior.
This is absolutely true.
So if you're Electrum Wallet and you don't push people to run their
own node, then no one actually will.
And even if they do run it, it won't have anything to do with their wallet
activities and their lightning activities.
They'll just be separated, so the node isn't really doing anything.
It's just providing a redundant copy of the blockchain.
But it's not part of your sovereign network.
approach as a bitcoiner.
So you have to, it's a mindful design process of everyone in the network.
saying I'm not prepared to Bitcoin unless it's going through my own node.
If that, if that's a dominant part of the culture, everything's downstream of that.
And this is all social, right?
And it's when we talk about we and everyone is allergic to any sort
of collectivism and you're even you, you're careful like us and we,
I don't want to use these words.
Sorry, like culture is like Bitcoin is a very powerful and strong
culture with powerful memes.
And these are, these are so essential for defining how people's actions are.
Like, running a node's not a thing you just do, like, no one runs a server.
Like, running a node is most people getting their feet wet in
running their first server, ever.
Like, no one would do that when you're signing them up to their
first email account 20 years ago.
No one's gonna be like, oh, I'm gonna run my own email server.
That wasn't a part of email culture.
It just wasn't.
Like, Bitcoin has this, and it's great, and it's why the network
has the resilience it does.
So celebrate it and keep pushing that way.
Yeah, but I, speaking for myself, I think, like, I can do more good, uh, encouraging
people to do these things than, than doing in, than doing them myself, basically.
If I spend my
Well, they're both valuable.
yeah, of course, I should do it myself and I should, like, deep
dive more into all the stuff.
But, but everything's a trade off and, like, you only have
limited time, so, like, yeah.
Run your node and, like, subscribe and brush your teeth.
Well, this is, like, the, the government is the biggest help with all this stuff.
Like, and, I mean, there's no eternal vigilance without an obvious enemy
who is trying to fuck you over.
Like, this is, you need tyrannical governments for people to
understand the Second Amendment.
Otherwise, they will just go, oh, guns are stupid, we don't need them.
Like, you know, it's like, it's, that's just so obvious, right?
So you need, you need You need like, you need Biden to win the election,
and you need him to be really stupid, like, you need him to go like,
Well, Trump's in favor of Bitcoin, I'm gonna make Bitcoin illegal!
And then everyone's like, shit, I have to run my own node now, because, like,
the best thing ever is, Samurai gets, uh, like, arrested, and privacy becomes bad.
Biggest overnight upgrade to Bitcoin's privacy that's ever
happened, thanks to the US government.
The broken privacy tool is gone, now everyone's forced to
use joint market and wasabi.
That was amazing, and everyone is like lamenting about it, and I'm like
it's awful, like in principle, these people should not be arrested for what
they were doing, it's wrong, but on a practical level, this was so good, like
I can tell people till I'm blue in the face, podcast after podcast, don't use
Samurai, but it doesn't matter, the government can come along and arrest
them, okay, great, like I'm sorry, like please don't get confused, like what
I'm, what my point is here, I'm no way think it's okay that they are facing The,
the awful shit they're facing, right?
And I, personal dislike aside, I hope they walk free.
Like I, I believe in the same mission.
I'm on the same team, but I'm just saying, so when it comes to other
things, we'll run a node, like I can tell people run a node forever.
If Biden comes along and says, that's it, Bitcoin's illegal, then you have
no choice suddenly, like, and, but it already happened is my point.
Like all of these wallets left America.
Like, so many companies just went, That's it, we're not doing it.
Wallet of
it's shutting down because it's not worth
CoinJunk Coordinator, no more.
Like, every single one of these was really good.
Now everyone that wants to use Wasabi has to run a coordinator.
Yes!
Now it like, do you know how good that is for decentralization?
Like, and you can't do stuff like that.
And it's like, Bitcoin itself can't even be demonstrably useful unless governments
print money and fuck up entire generations and hyperinflate and, like, rob your
savings account and, like, without that, no one is gonna understand Bitcoin.
So it's like, I can tell you, like, like, it's like Seyfriedian says, like, if
they get fiscally responsible and adopt a gold standard, then Bitcoin's fucked.
Yeah, yeah.
that's, that's it.
That's
is so funny because we ask a lot of our guests if they're, uh, like
more pro, a pro Bitcoin politician or an anti Bitcoin politician.
And like
It's so
I was so like seeing how the community reacts to Donald Trump all of a
sudden, uh, saying, saying stuff and like, And then everyone's like, Oh,
of course we should vote for Trump.
Like, are you mad?
Like, what this crony capitalist, like a guy who printed money to give
out to people during COVID and the lockdowns and stuff, and you think
he's Donald Trump of all people is gonna, you know, Keep his promise.
And like, you, you want his permission to run your node?
What, what, what the fuck?
What's wrong with people?
just can't, like, on an ideological level, like, I think
everyone's just seeking approval.
Everyone's insecure, and everyone's like, oh, Trump now says Bitcoin's good.
Like, now, look, dad, am I still an idiot now, dad, for being into Bitcoin?
Like, I think it's that.
I think, like, it's, like, people just, they're so used to being called crazy by
everyone in their family, and then when Trump comes out and says, Like, Bitcoin's
really good, I got a lot of Bitcoin, like, just, if it comes out like that,
everyone's like, I'm validated, yes!
Like, I'm validated.
Trump is running a node?
it's so naive.
Like, it's so naive.
First, like, it's such a horrible form of it.
Like, it's the public codes in mining again.
It's the high hash rate that has no discernible meaning.
Real effect on Bitcoin's overall security.
It just looks good.
Like, difficulty went way up.
So now an attacker will have more work to do to reorg the chain.
Yes, but what if that is the attacker?
Like, what if that, what if that person that's making it unprofitable
to mine, if for any pleb in the world, because that's, the higher the
difficulty, the more everyone else gives up mining, All of the difficulty
is only so high because of zombie pubcos that are losing money, spinning
nice narratives and selling, you know, being an artifact of the money printer.
Like, people are printing money, investing in garbage, and they don't know
anything about it, but they'll invest in a bunch of publicly traded bitcoin
mining companies that are mining at a loss, making the difficulty go higher,
and providing no network security at all because they will do exactly what
they're told by the regulatory bodies.
That allow them to exist.
These are not cypherpunks, they're not miners, and they're not a
line of defense for the network.
They, all they are doing is just making it less profitable to be all of those things.
That's an illusion of security, and Trump is the perfect example of, like, that.
It's like, he will approve of bitcoin, but it will be government approved
bitcoin, which is, which puts it in a set of confines that people are, It's
unprofitable to step outside of it, like if I want to buy, if I want to buy salt,
it's cheap, if I want to buy an illegal white powder, it's a hundred thousand
times more expensive because it's not operating within these confines, so
if they're going to create two classes of bitcoin, which is Approved bitcoin,
that implies an unapproved bitcoin.
And the minute, like, we have this with the KYC system.
It's like, I have these two types of bitcoin.
I have my, everyone's like, I have my KYC stash and I have my no KYC stash.
I'm like, that's, that's the government fucking us.
Because that's an attack on fungibility from the start, you have, you cannot have
two classes of this thing, because all sats are equal, one sat equals one sat at
the protocol level, the minute you corrupt that understanding, you undermine it, so
what you want is for governments to help us by saying there is only one bitcoin,
all of it's equal, and they can only do that by completely ignoring it, which is
impossible, or by making it all illegal.
And Those are the only two ways in which you can get their help.
So this is why it's so useful when they say, when they go hysterically
overreact, this is why I hope it happens, I hope they rig it again, I hope Biden
wins, and I hope he makes it a big part of his strategy to be hysterically
stupid when it comes to Bitcoin and go, That's it, it's all illegal.
Then all the LSPs are gone, everyone has to run a node.
Uh, all of the publicly traded miners are gone, so they all,
that just means plebs mining in their garage just make more money.
Like, it, suddenly everything gets way better, they fix everything overnight,
just like they did with privacy.
And, I'm just like, the, it feels psychopathic for me to want this.
I'm not in America, I don't live there, and I don't need
to worry about these things.
I don't want to be a martyr, and it hurts.
I get it, but I'm sorry, we just don't, you gotta, you gotta get hurt to grow, and
Bitcoin, anti fragility is inefficient, and we will always, no one is voluntarily
anti fragile, no one wants to have like, you know, I'll have 15 kids, and then I'll
ask someone to come in my house with a, like, you know, and start killing people,
and whoever the strongest are survive, and then I have a stronger offspring, like,
No one would voluntarily want that, right?
But it would be how you'd make your genetic lineage more strong, right?
Like, but it would work, is my point, like, but it's psychopathic, we want an
easy life, but the easy life is rotten, and it's, it's centralized, and it's
really efficient, and so, like, What I really want is everyone to use BISC.
I want everyone to use decentralized exchanges.
Everyone is just going to use Coinbase, right?
Because it's more efficient, it's cheaper.
And I'm like, again, Joe Biden can crush that in one minute.
He can say, you guys don't have permission anymore.
Bitcoin's illegal.
So I'm like, this is, if we have any sense, we vote for hostile
politicians or like complete Ron Paul types that will genuinely reliably
just leave us the fuck alone.
So, but, Trump is not that kind of politician.
He's someone that will create a sandboxed Bitcoin that's government approved as
a gesture to this particular portion of his voting base, and that's, that's not
going to help with resilience at all.
Is Bukele that person?
Good question.
Mele that person?
I don't know enough about Millet.
I think, Millet is like, certainly he talks the talk,
are hints that he's not walking the walk, that you need to
report your crypto holdings or
Yeah, I saw that, but again, I don't, I don't claim to understand
the, the, the residual laws and stuff of Argentina, right?
I don't know, like, I, I want to like Millet, I do, like, but that doesn't mean
I know, like, shit about fuck, so, like,
No, no, no.
I want to, like, everything he does and says is stuff that I like.
I mean, he quotes Rothbard, he dresses as a superhero, he has a chainsaw,
and he has the best sideburns ever, so how can you not love him?
Oh, well, he's a politician.
Oh, okay, that's
and he's got, like, foul language as well,
Yeah, yeah,
refreshing, it's very
I love it, yeah.
I don't think like, I don't, I think again the best thing Bukele
can do is just step out of the way when it comes to Bitcoin, like,
But it's not.
well,
He's, he's saying, like, legal tender laws is not stepping out of the way.
It is, like, dictating the way.
well it, the way they did it was not, uh, the way the law is written, and
the way it's interpreted, I'll pay more attention to the latter, until you
become a real like, you know, Nazi, like,
Yeah, yeah, yeah, I know, uh, there's libertarianism, Nazism, so, so, yeah, it's
it sets a bad precedent, but like, in theory, There's punishment for not,
no actually that's not even true.
There's a caveat in the law that they made around the legal tender where it
looked for a minute if you don't accept bitcoin in El Salvador you're in trouble
but there was something later on in the same document that said don't worry
about it and that was my experience when I'm there like 90 percent of merchants
don't accept it and they're not worried that they're about to get arrested
because they only take the dollar.
Like it's not, there's no enforcement on that level.
And I don't, the law isn't even structured that way anyway.
And to be honest, it's like a stupid social thing, right?
Like, all of the old political par Because he's like a weird,
out, left field candidate, right?
That miraculously won.
So all of the old political god, like You know, he's like, if the Libertarian
Party were to win in America, like, the Republicans and the Democrats are
gonna trash you, and all of the crony capitalists are gonna take part in that.
So actually, none of the elite in El Salvador are into Bitcoin.
Like, so, if you're like, at Bitcoin Beach, buying a banana,
yeah, they'll take lightning.
But if you're in a steakhouse, Up in the middle of the mountain
somewhere, they don't take bitcoin.
Because they're like old rich in the country.
They don't like Bukele.
He's like a, you know, he's like a, a populist candidate or whatever.
And they, they, he didn't make the right agreements with them.
They have their, you know, little things with the entrenched elite
that weren't doing anything about how crap the country was.
And so by virtue of that, they have to be anti bitcoin because
it's a Bukele initiative.
So this is politics,
Did you spend a lot of time there?
I spent two weeks there earlier this year, uh, we were in El Zonte for most of it.
Like, El Zonte, I didn't use my credit card once, but I never really went outside
El Zonte, so, but when I went, you know, but I spoke to John Attack a lot, who's
a core developer that lives in, uh, And he, he explained how it breaks down.
Like, all the kids there, like, the teenagers think Bitcoin's, like, gay,
and they don't want to touch it, right?
They're just like, aww, because it's like a government approved thing.
It's not a cypherpunk thing to them.
It's just like, oh, yeah, like, what's this shit?
Like, I don't want to use Bitcoin.
Like, the government told me it's good.
It's like It's just that level of like, mind, I'm not talking about like,
resilience for the overall network, like, Chivo is obviously just crap,
as far as I can tell, like it can't even, half the time it can't find an
on chain transaction, like, I mean it's a government IT project, how good
was it gonna be, like, no one, I, I've paid like 90 payments when I was in El
Salvador, not a single person used Chivo.
Yeah, well, that's good.
well, sure, but like, they're all still using Blink, um, which is
good, but it's centralized, and it's permissioned, and it's nothing like
what Lightning's supposed to be.
And, uh, one, a few people use Wallet of Satoshi, and that's the same, right?
I didn't, I never paid someone that was running their own node.
Like, that never happened.
So when it comes to custodial lightning, so like, how big of a problem is that?
Because the way I see it is like, okay, it's custodial, so they
could technically do fractional reserve banking on, on lightning.
Yeah.
it's still more monitorable than the old banking system.
So it's like, it's, uh, it's, it's harder to do a fractional reserve
on, on, on Bitcoin than to do it on
This was Lynn Alden's point, like, the more easy it is for
you to verify a thing, the less
Out of rebounds with reality, it can become.
Like, so, because gold is that hard to verify, you can have X amount
more gold, fake gold in the system.
Because bitcoin is this easy to verify, you can have a fraction
of whatever that X value is.
Like, like, how much gold is there supposed to be and how
much gold actually is there?
There's like a greater room for, for something like in theory, like in
theory, like the collective spreadsheets of the world with all the, the 21
million Bitcoins, like there's going to be more than 21 million because
someone is running a scam somewhere.
But in, in theory, I think, I think the theory is correct.
Like it can't get.
To run away, like, I'm sure if you add up all the spreadsheets in the
world, all the exchanges, there is too many bitcoin, someone is lying about
it, but it can't, yeah, the point is
so, so, so custodial lightning is bad, but it's still better
than the old banking system.
That's like, that's like my position.
And I, I'm just trying to verify that.
Yeah,
a complete and utter lie.
Utter waste of time, because if it's all in a centralized database, just
do custodial on chain, like, it's, either way it's off chain, like, there
is no benefit, like, apart from the fact that if I'm a real Lightning
user, which no one is, I can actually pay you and someone else can run the
back end and, you know, organize that.
But if every single person in El Salvador, which is basically the case,
is all just moving around Lightning, but it's all just in Blink's database, same
with Strike, if everyone is just doing that, why are we calling it Lightning?
It's literally just a database run by a company.
You might as well just do it on chain.
Like, it, it, it, it, it, it wouldn't be on chain is the point.
You're not using Lightning.
So, the point of Lightning is to not have an on chain footprint, but
if you're never touching the chain, uh, do you get what I'm saying?
I, I do, I do get it.
I don't get why it's called Lightning, it doesn't really,
but maybe it should be called something else, but still, still, like, it provides
a service if you're doing small payments and then you, or it's, uh, even more
importantly, receiving small payments, and then when you come home, you, you
send it to cold storage and you're fine, like, so, so, so, so, so, like, because
the convenience is the, the speed of it,
I think so, like, When you interact with the network, it helps that it's
a lightning wallet, like, because you can get in and out and, like, Blink
and Wallet of Satoshi are obviously running lightning infrastructure, so
they can pay and receive that way.
So it's useful, it's just the way it manifested is such a bastardization of
what the point of lightning was anyway.
The point was, you know, remain sovereign without an on chain footprint, but
they got rid of the sovereign bit.
So it's like, okay, so now it's just no one chain footprint, alright,
but then, you don't, that's not,
then what's
that point there's no point in lightning, just move money around
coinbase accounts, like, or whatever third party you want, like, you're
trusting a centralized third party to hold your bitcoin for you and move it
around, uh, internally, internally.
And it's, that's, that's good, that was always gonna happen, right?
It's just weird to call it lightning for me.
It's misleading, like, it, I don't, I don't want to say it's, like, pointless,
cause I'm saying that here and I take it back, it's not pointless, cause I was
able to use it, with my own lightning infrastructure, and you cannot, if you
can't set up a lightning node, and I need to pay you lightning, then great, use
Blink, or Wallet of Satoshi, or Phoenix, and they'll handle it for you, I'm just
saying, now most people's impression of Lightning has nothing to do with
what it actually is supposed to do.
It's supposed to be a way for you to aggregate all your on chain activity and
be more efficient with it, and that's not what they're doing with it, and
that won't be their understanding of it.
Still is better than a Coinbase account, because you can actually
interact with the real deal.
I mean, Coinbase have Lightning now.
Oh,
I mean, it is, at the end of the day, it just comes down to, like, I like
yeah,
like, but they're still in the same position.
I'm still not sovereign anymore.
So Sucks.
Like, I don't know, there's no solution to this.
My only solution is just like, someone needs to die.
It's like, it's just awful.
I'm sorry, but like, you need them to come and crack down on Bitcoin
and just be horrible about it and like, and then everyone is just
forced to go underground with it.
And the fear about it making the price tank, to me, is not valid at
all, because all the price discovery mechanisms also disappeared.
Like, how can the price tank if Bitcoin's illegal?
Like, that, where are you doing the exchange?
What's the, you're not on like, you know, CoinGecko.
Like, ooh, what's the price today?
Like, it's, those APIs will be gone.
Like, where's the price discovery mechanism?
It's the same as it is for illegal drugs, and now everything's
10 times more expensive.
Great, like, let's bring it on.
Like, Just do it!
Like, it's not They need to leave it alone completely, or they need
to go batshit insane and completely, like, make it all illegal.
The worst thing is this permissioned cucked.
That's like And that's where you're heading, because it's cheaper, and
it's easier, like Oh, I can do on chain Bitcoin, and then I've got, like That
was one time I had I did a DCA, and I had 45 UTXOs, and then I went to spend
it, and it was a high fee environment, and I wasted half of my, like, stacking.
Like in an on chain transaction, I don't understand what I'm doing, I need like an
exchange to do this for me, and there's, and don't worry, I just have to make an
account with these guys, and I upload a picture of my driver's license, and
today's date, and smile, or not smile, whatever the requirement is, it's like,
yeah, great, like, this is gold again, this is just, there's a reason we don't,
like, That we're saying this is gold 2.
0, like there's a reason for that.
Like, we know that if we went back to the gold standard, because the
fiat standard sucks, we know it will just end up as fiat again.
There's a way that that happens to Bitcoin too, and it's happening.
And I hate watching it, because it's such a disappointment,
it's such a betrayal of all the principles that created this project.
And it's like, it's always going to not be as good as it was with
like, a thousand cypherpunks.
It was always going to be a bit worse, but it's like, It's just
tanking at such a fast rate, like, and I, I just don't know of any
other method than hostile politicians that make life really difficult for
Bitcoiners who are then forced to go and become CoinJoin coordinators
and UTXO experts and all this.
Like,
we need to bring the optimism back here, I feel, so, so, so, yeah,
yeah, sorry about that.
There's enough of that.
I
no, no, no, but you, you need to, the, the night is darkest just before the
dawn and all of that, so, so, like.
I still have hopes we will win, I'm pretty sure we will, one way or another, like,
stuff like this helps, like, people are forced to listen to these perspectives
and like, do something about it.
Uh, I think that's great.
One, one, one point I wanted to make before, like to take this in a slightly
different direction, because I think people have gotten the point here,
Yeah, I'm sorry about all this.
no, it's nice.
I
sell your, everyone messages me after I do this and say, should I sell?
I'm like, no, obviously don't sell your Bitcoin.
There's still nothing else remotely as
No, no,
please don't take that from
you know, I, I like metal music.
I like darkness, like, so, so the other point we wanted to touch on is like, why
the fuck are you guys mining empty blocks?
Oh, that's fun.
Because it's better than mining no blocks.
All right.
And why is that?
Well, because if you mine no blocks, you don't even make the subsidy.
Not to give a Luke Jr.
style, unelaborated answer, but that's it, like, people don't understand
and, like, intuitively they go, there could have been transactions in that,
I'm like, that's not how it works.
Like I've seen people that run mining pools not understand this and it's, this
is the kind of part where I'm like I'm gonna start drinking again or something.
It's just so depressing that people that run like critical infrastructure
in Bitcoin don't get this stuff.
Like Poisson distribution, like an empty block is not a block
that could have been a full block.
It would, there would just wouldn't have been a block and
empty blocks are not useless.
Because if you've ever, if you open a Lightning Channel, by default, you're
waiting three blocks or six blocks after.
You know, it gets in a block, you still can't use the channel, it
needs to be in, every block gets confirmed by the block after it.
So if you find an empty block, it confirms everything.
It's more work for an attacker to do to reorg the chain, because there's
yet more work they have to replace.
Um, they're not, they don't, and they, resource wise, they're
fantastic, obviously, because they, they contain no data.
So, like, for a node They're the least annoying thing ever.
Obviously, you don't want loads of blocks to be empty, because, you know, that's,
that effectively makes there be less block size space, I mean, to be honest, that's
probably not a bad thing either, but someone's gonna cut this out of context.
The only reason, like, empty blocks exist is because you don't
want miners doing useless work.
And sending A block template full of transactions instead of an empty
block means they will just, the nature of that taking longer to get
to a bunch of ASICs means that they spend longer doing useless work.
So it's called the empty block speed up.
Like, you know, you, we, the network just found a new block.
As of this instant, all of the miners on my pool are now doing useless work
trying to find a block that already got found, or a competing block for that one.
I need to get them on new work immediately, and the only way I can
get, like a, this, this could be a tiny amount of data in the difference,
but, like, it's not, I'm not sending one chunk of data down one pipeline.
I've got 10, 000 ASICs connected to me.
Every byte matters here, so, you know, while there's packet size,
you do have, like, these notches.
But.
You know, people don't run the proxies that everyone thinks they do.
So, and miners like to mine in stranded energy scenarios where the internet is
not great, and they have hundreds or thousands of miners all pointed at a pool,
and I have to send a tiny bit of data to 10, 000 things over crap internet?
Yes, I need to save every single byte possible, because if I just don't do
the empty block and I do the full block, it might take another 300 milliseconds,
or like, sometimes multiple seconds.
And in a 10 minute race, multiple seconds add up.
And you can make miners do useless work for collective tens of hours every month
by not doing the empty block speedup.
And they don't hurt anything.
It just, they might become not worth it when subsidy is so low
and transaction fees are so high.
The, eventually, speedup.
But by then, all these big miners should be running proper proxy software anyway.
It is proxy, If there's a stratum proxy on the local site for the farm, then
you only need to send the slightly larger amount of data to one thing,
and then it deals with it all locally.
That's fine.
Then you don't need to worry about the m2box speedup, but a
lot of big minuses don't do that.
Okay.
I've, I've heard you talk about this on, on other podcasts.
We talked about the, the, um, the backdoor in the Bitmain, Miners, uh,
Oh yeah, this is fun.
also talked about on other pods, about, uh, about Bitmain deliberately making,
uh, the miners mine empty blocks for a longer time than necessary.
What
It's conjecture, right?
And I believe I wasn't over the top in this expose I wrote that, like, blew up.
Um, it's anyone else I'd give them the benefit of the doubt, but
because it's Bitmain, I'm like, yeah, it's probably malicious.
Like, so, this all kicked off because the understanding in the entire
Bitcoin space amongst even core devs like Matt Corallo, is wrong.
They don't understand why empty blocks actually happen, and it turns into
debate around why pools do the speed up, but not about why we manifestly
actually see so many get found.
Because, uh, Ocean's last block, we send out the empty template, this is
after we've verified the prior block, by the way, so the explanation is,
that's in the, the, the zeitgeist of Bitcoin is completely wrong.
It's, people, they are saying that, a pool, when it gets a block from
another pool, Before it verifies that it's a valid block, sends out new
work to its miners, and then once it's verified that the block is valid,
it, it, well, it updates, presumably.
But I mean, uh, or if it somehow discovers that it's not valid, it
then sends another update and says, oh, stop doing that work because
you're building on an invalid block.
This is This is not how any pool operates, because it's suicide.
You don't build a you could destroy a pool in ten minutes like that.
If I send to Foundry invalid blocks all the time, and it keeps sending
out work based on that, it's going to keep making its miners do useless
work, and it's and given how long it takes for miners to get old work out
of their system, that's that's suicide.
Like, you can have a a miner an ant miner will work for a minute, sometimes.
At, like, worst case scenario, They'll be working for a whole
minute on old work, right?
So, it would be suicide.
So that's not what happens.
In Ocean's case, and in any sensible mining pools case, and in all the pools
we've tested, when they send the empty block, they have already verified the last
block, but the and they already have most of the way there, the full block as well.
Like, they, they can, they can essentially send both of these things Because they're
both ready at the same time, but they still choose to send the empty template
because it will just get there faster.
And then they immediately, or basically at the same time,
follow up with the full template.
But the problem is, some chips on the miner are now working on the empty
template, and they don't just switch to the full template when they get it.
So, here's how the timeframe of it breaks down.
This Unfortunately I'm not doing a great explanation here, but
hopefully I'll clear it up.
So, you have, um, The pool has found a new network block.
It's verified that it's real, it immediately sends an
empty template based on that.
It doesn't It's not empty because it didn't want to put transactions
in there that might have been in the block it didn't verify before,
and thus mine an invalid block.
It's none of that.
It already knows all that information.
It already made sure that this is valid before it built on it.
It just wants to take advantage of the fact that the empty
template will get there faster.
Once it's done that, the, the antminer at the other end is still, it's going
to get a clean jobs equals true.
So you put true at the end of the stratum message, and that
makes it dump the previous work.
And this is really expensive.
The miner, the hash rate of the pool at that instant will completely tank.
All the antminers on the, on the pool will like, just, uh, what's
going on for a little minute?
it's doing something else than guessing a number.
it's very expensive and it's, it's hard on the hardware too, like you don't
want to keep doing that to hardware.
The clean jobs true is like a very expensive thing for a pool to do and
then within, within a couple hundred milliseconds, which is, you know,
tens of percent of a whole second, it starts to get itself back together and
start working on the empty template.
Then you send the full template without clean jobs true, because
true is really expensive.
And, the overall effect of it, again, this is all misunderstood.
It's really hard, because I'm not explaining a thing no one knows
about, I'm explaining a thing everyone has a wrong understanding of.
Um, which is like, really hard.
It's like explaining bitcoin to people that don't, you know, like it, for
some bullshit they heard in the news.
So, the full template comes along.
And it comes with clean false, because we're not doing that whole thing where
we nuke the Antminer for a second, and it like, struggles to find itself.
We say, alright, when it's convenient for you, switch over to this full
template, and Wattsminers and Reasonably Designed Miners, within a few
seconds, will switch over, completely.
But Antminers, we were finding, It just takes them a really long time if you
don't send clean jobs true to actually get this old template out of their system.
But the important point to realize is that the pool has long since
sent you an update for your work.
It contains transactions, but you're still working on the empty template.
So this was the criticism.
When a pool finds an empty block, everyone goes, Why hadn't the
pool sent a full template yet?
And we were saying, we had.
This empty block happened five seconds after we'd already
sent out a full template.
It's just the miner wasn't working on it yet, because they're not designed all that
well, they don't switch jobs that quickly.
And we don't want to run this expensive command that makes them just do
nothing for a little while, because it's a waste of the miner's effort.
It causes wear and tear on the hardware, and if it mines an
empty block, It's not that bad.
They could have made 10 percent more if it was a full block, but remember,
the alternative to an empty block is not a full block, it's no block.
So, this is, this, it's an entirely
but, but, but I think you said like, this was deliberate from, from
Bitmain's, um, side that they made
so to get into the controversy of it, right, we were like, so Watts miners do
a complete job change in max 3 seconds, um, and Ant miners would, the majority
of the chips would have switched in 3 seconds, but depending on where in
the cycle it is of grinding through.
Whatever it's doing to, I don't know where the ASIC boost part lies
in the circuitry or the like, just legitimately grinding nonce values.
It, depending on where it is in that process, one of the chips could just
be Still working on the empty template 30 seconds after you've already sent
it a full template and you've probably followed up with even more full templates
because pools keep updating, right, as new transactions show up, and they just
were doing old work for ages, and it makes pools look bad because it makes it look
like we're just slow to generate work when we're not, but the point is they released
a firm, like, We started explaining as Ocean why empty blocks happen, because
everyone thought, oh, it's just the pool, it's like being slow, like they
sent an empty template, and then they sent a full template, but before they
could do the full template, for whatever reason, someone found an empty block.
And we're like, no, in nearly all cases, everyone that found an empty block had
full work, it just wasn't doing it yet.
That's not the pool's fault, that's the, the, the hardware's fault.
And this, the minute this entered the fray, and we kept hammering home about
it, because we got blessed, if you want to look at it that way, with three empty
blocks, which is statistically impossible, like, not impossible, but very unlikely.
In all cases, it was not the fault of Ocean.
Because there was, in all three cases, the miners long since
had full work to be working on.
So everyone looked at Ocean and went, oh, it's because you fill a spam, so it takes
longer for you to verify incoming blocks.
No, of course that's not how it works.
We run a core, a core node which is aware of as many transactions as possible.
Spam doesn't make us slower to verify blocks than other
pools who don't fill a spam.
Doesn't work like that.
Any pool that gets a pool, a block from Mara pool.
Has to deal with a whole bunch of unfamiliar transactions,
and yes, it takes longer.
Right?
It's, that's just part of mining, right?
If you're the biggest pool, you don't need to do this verification
because you're building on top of your own block so often.
So, the biggest, this is one of the reasons we don't want big blocks, right?
Because, if you're the one that keeps finding the majority of the
blocks, everyone else has to spend like eight seconds downloading it
and verifying everything in it.
You get a head start.
So, I'm digressing.
The point was, you have, uh, Antminers doing this very slow process of updating
and then when we made all this noise about it and we started correcting the
narrative around why empty blocks happen and it's because Antminers suck, surprise,
surprise, yet another thing about them that's badly designed, they released
a firmware update for it and we were like, wait, this isn't a hardware thing,
this is a firmware thing that they have a fix for that they're releasing now.
This is very suspicious because what if they've been using this the whole time?
That would be a huge advantage.
They're going to be doing more.
The more up to date your work is, the more lucrative it is.
Especially in a high transaction fee environment.
If someone fat fingers a transaction fee, and, you know, every other pool
adds it to their template, but it takes 30 seconds for them all to start
updating, it's not going to be that long.
But if, you know, again,
more money than the other pools, so you get a market advantage over others.
the point is you're mining on better hardware than your competition, and
you're selling all of the hardware,
do you suspect these, them to be doing more like suspicious stuff?
Is it just the backdoor and the empty block thing?
Could there be other attack vectors from the hardware manufacturers?
But
Um, I mean, it's all closed source, and this is an adversarial environment,
so I'm never gonna say I mean, it's possible, and the likelihood is sort of
irrelevant, really, like, would we run Bitcoin Core if it was closed source and
binary only, and just be like, well, do we think Peter Wooller and, you know,
these people are malicious, like, it's just a silly conversation at that point,
I'm like, this, no, of course I don't trust Bitmain, right, like, I mean, but
I don't know, they're also, like, one thing I said in that expose thing that I'm
probably wrong about, that I would love to correct publicly, is the Covert ASIC
Boost, uh, allegation, because I took Greg Maxwell and what he said at face value,
which is, they're definitely using it.
And, it depends who you listen to here, but it looks like they
intended to use Covert ASIC Boost and couldn't actually figure it out,
because it's really complicated.
The hardware was totally designed for it, and they couldn't actually
do it at the software level.
And then, they never did it.
And then everyone hated them for probably doing it, even though
they probably actually never managed it, so it's like they had,
they had the intention.
yeah, they certainly had the intention, and I'm pretty sure it was a factor in
why they, uh, wanted, like, pushing for SegWit as a hard fork instead of a soft
fork is, like, completely illogical, it just, it breaks up the community,
it, it resets everyone's trust in what the network is, like, it, Ethereum is,
like, forever undermined by what they did with Ethereum Classic and Ethereum,
that's, like, That's a blight on that thing they will never recover from.
And like, trying to get Bitcoin to have that same compromise for no reason.
Like, the only reason it made sense was to be able to maintain COVA, AC Boost.
So I just assumed that they did it.
And that was a part of my rationale for assuming bad faith
with this firmware release.
So, again though, I want to reiterate.
That post was conjecture.
I don't have proof.
I don't know what would constitute proof.
Someone can decompile the firmware update and look if there's some
sort of smoking gun date in it.
If they had that update like a year ago, and they only released it after
all the noise around empty blocks, that would be a pretty good smoking gun.
But again, I'm not a mind reader.
It could just be a coincidence.
I don't, I don't, I'm not gonna give them the benefit of the doubt.
I'm like, it's possible that my, my, my hunch is wrong.
Benefit of the clout.
And all the, uh, and you, you said that it was statistically really unlikely,
but that's actually true, right?
There wasn't any reason for Ocean to have mined those three empty
Well, in all cases, as I said, the full template was already pushed out.
So everyone, like, the reason it could be the pool's fault that there's an
empty block is that it sent out an empty template, and then it couldn't
figure out the full template, or it just took too long to put it together.
And, like, you know, it might take us ten seconds to put together a
full template, and someone found a block after only five seconds.
Then you can go, this pool sucks.
Like, what are they doing?
Why aren't they caching enough transactions to be able to
verify blocks really quickly?
Like, why aren't they running sufficient infrastructure?
The minute the empty block happens after you've already issued the full template,
then it's the miner on the other side.
Maybe they have a network issue or something.
Like, I've seen empty blocks happen six minutes after the last block.
That can happen because there's just like a transient network issue or something.
Like one miner didn't get an updated template.
It can happen because the pool had a node go down, goes back up, and it
lost its mempool for some reason, and then it sent another empty template.
There are a whole bunch of reasons.
But, I'm just saying, all three of the empty blocks Ocean found,
in all three cases, we'd long since sent out a full template.
So it wasn't poolside that there was a, there was an issue.
It's not like we have a bad networking thing, or something like that.
It's, it's easy and intuitive to blame the pool, and it can be the pool's fault.
In our case, it wasn't.
Not in any instance.
I just wanted to reiterate that, and, uh, maybe it's time to take this into, towards
a soft landing, because we've already been going for a while, and, yeah, but, uh, um,
okay, so why does Ocean filter this spam?
Stuff, at least give the option in the, in the, uh, templates, and why should
miners consider mining with Ocean?
Um, not every miner wants to participate in the ongoing attack.
And they need an option to be able to do that.
And Ocean is the only option to do that apart from solo mining.
So no other pool has taken it upon themselves to do this.
heard about some other pool, like when this Dubai thing was
happening, there was talk about another pool doing a similar thing.
I don't remember the name of the pool, but like, but that would be
That would be amazing.
Yeah.
I would love to, you know, I'm not Competition is competition, but like,
if someone else would actually step up and do it, I would be very happy.
I'm doing what I do at Ocean because I think Bitcoin needs it, not because
it's like You know, I like having a job and an income and all that
stuff, but, like, you know, it is genuinely not the primary motivation.
Before I worked at Start9 or Ocean, I just had no job.
Like, I don't, I'm only gonna do something if it compels me.
Like, I'm not gonna go and work at, like, you know, some shitcoin
exchange just to earn more sats.
Like, it's just not, it's not necessary for me.
I don't want to do it.
Yeah, so, why, why do you want to mine with Ocean?
Because you don't want to actively attack the network, which is what
everyone's doing by default at the moment.
If you want elaboration on what the nature of the attack is, that's
a whole podcast in itself, right?
Like, we have spam filters in Bitcoin, we've had them forever,
It's never been censorship.
They don't work at the moment.
Ocean fixed them, so now it's just what it always was.
The unwillingness to fix these things comes from ignorance or confusion
or, you know, just gaslighting from spammers and David Bailey
and all these fucking assholes.
So it's like It's just, like, that's all it is.
And it doesn't, it, there's no, the context of it, beautifully,
as it always is with Bitcoin, if you're, like, principled and awesome
as a person, you make more money than shitcoiners and scammers,
they actually end up doing worse.
So, in the context of how mining works at the moment, Ocean is way more lucrative
for miners, which is really weird.
There are some caveats to that.
Um, but here's, here's like the sort of, the, the, the amazing layout of it.
So Ocean found three empty blocks.
At least 10 percent of what you could have got in a full block is gone because
the transaction fees aren't there.
We missed out.
We had incredibly bad luck during December 2023 and the halving.
We didn't find a single block during those two historically the highest
fee environments in Bitcoin's history.
We didn't find a single block in those periods.
Um, our luck at the moment is way below 100%.
Despite all of these things, Ocean miners have come out way ahead of
what they were paid in competing pools with Bob Burnett run his analysis.
He had 10 machines pointed at Ocean, 10 machines pointed at FPPS
pool 1, who will remain nameless, FPPS pool 2, and FPPS pool 3.
Not going to name names, but well known, respected pools that
everyone is using, despite Ocean having, and spam filtering, right?
So in, there's gonna be a transaction or two out there that is just a
shit ton of fake, Tapscript, or whatever, and it pays a whole high
transaction fee and it doesn't end up in Ocean's default template.
Despite all of these factors, Ocean Minus came out above.
So, that fact, like, we were shocked by that.
Because I knew there was some, some, some fuckery afoot, but I didn't
think it was going to be anything, like, as significant as that.
So, so, like we've said before, in conclusion, like, if, uh, if
you're a miner, be a miner, don't be a hash salesman and point your
node, no, point your miners to, um, to ocean and, uh, do the thing.
So you can see what's going on.
Otherwise you're probably getting fucked like, yeah,
yeah, you are.
Like, I mean, the only, there's a massive disadvantage to the ocean temporarily,
which is that we have very low hashrate, which means our variance is awful.
We'll go for weeks without blocks.
And that's impossible for some people to deal with, and
I sympathize with any miner.
That is like, oh, I get it.
I'm even ideologically aligned with you guys.
I just can't, I can't be two weeks late to pay my electricity bill.
This won't be a problem if we grow, but it's a chicken and egg problem.
And it's, it's dismaying, because it's very hard, like, you gotta
reach escape velocity as a pool.
We almost did, and then we didn't.
Because, you know, it just didn't take off the way it might have done.
And so now we're grinding out there trying to get that
bootstrapping problem finally solved.
We're nowhere near a year in, so it's not been long.
And, you know,
but the solution is that everyone who can't afford it pretends that they
afford it and just does it anyway.
Unless connects to ocean and the.
But you get the hashing
yeah, like, if everyone, like, made an irrational choice,
it would become rational.
That's like, yeah, like, it's, but it's chicken and
it's like playing, uh, playing Prisoner's Dilemma over and over again.
Because like, if you play it one time, you're supposed to defect,
and if you play it over and over again, you're supposed to Cooperate.
Read our upcoming book for an explanation of the Prisoner's Dilemma.
Exactly.
All right.
Anyway, yeah, go to Ocean X, Y, z to, to see what you're doing.
Anywhere else you wanna send our listeners?
I guess Twitter, but I mean, I'm not going to read an end pub out on here.
Like Nostr is great.
Like I'm starting to become a Nostr Max Hille.
are we, we we're like hypers,
yeah, yeah.
It's really
hypers fight or whatever.
, so, yeah.
That's awkward.
And if, if you haven't seen them, look at, check out Mechanic's other
interviews, an excellent one with McCormack a couple of weeks ago, a
A couple of months ago now, but absolutely fantastic interview,
yeah, that
Thank you.
That was a fun one.
and, uh, so was this one, so, thank you very much, yeah,
Always a pleasure, man.
to the conference.
And don't, don't sell your Bitcoin.
It's, it's fine.
It's going to be fine.
This has been the Freedom Footprint Show.
Thanks for listening.
Thanks again, Mr.
Mechanic.