Big mining pools and big businesses and exchanges don't want to play games of chicken with consensus
with plebs because plebs ultimately are the ones that won't compromise. That's the network's
greatest strength. As a payment network, it's fallen into complete neglect. No one is using it.
We don't have that much time. And I think it's more just like, who's driving this thing? Who's
got what direction are we going? It's grabbing the wheel and saying, all right, we're turning around.
I don't want the network to be like held to ransom by trolls unless people can actually coalesce around resisting it.
Your best strategy is ignoring it and hoping it goes away.
And the problem with ignoring it and hoping it goes away is that other people might not.
Whoever blinks first wins basically.
You have to be prepared for the nuclear option all the time.
Most failure scenarios there's no recovery from.
all right let's get into it then um mechanic good to have you back on the show man i uh i text you
like i don't know six months ago when i think it was still called bit 444 being like if you want to
come on and talk about this give me a shout and uh last week you texted me so why now i guess is
the starting point why is now the time that's a good question i don't know i feel like i'm not
really meeting the responsibility of it. It's kind of laziness on my part. In an ideal world,
no one needs to champion anything. Everyone can just, what is it, rational consumers making
informed decisions. Nothing actually works like that, does it? Like people have got to be motivated
to actually learn about it and figure it out. And something like a soft walk in Bitcoin, you need
people to pay attention to it and you need other people to go, oh, maybe I should listen and figure
out what this thing is. Because right now, most people are not against it. I will concede that it
doesn't have a great deal of support, but the people that don't support it typically are
ambivalent or have never heard about it, rather than are actively thinking it's a bad idea or
against it. So that means I should get off my butt and actually make some effort explaining it to
people and furthering the conversation because who knows maybe it's terrible and i didn't realize
and the last thing i want to do is make the kinds of mistakes i've made before where i've advocated
for things like segwit and taproot and they did have issues and i would never have noticed them
at the time because i was so gung-ho about supporting them i mean there's definitely a
sort of vocal minority that are very loud about this like under my video i get tons of comments
being like, why aren't I talking about this? And truthfully, probably for the last six months,
I've completely checked out of the conversation. I got sick of all the personal attacks. I felt
like it wasn't really going anywhere. And so I haven't really spent any time getting into it. So
maybe we should start with catching me up. Since last time we spoke, what's changed? Where are we
at now? Not a lot technically. So on a technical level, nothing's really changed from what it was
before. All it does is crudely look at the ways in which people are stashing arbitrary data in
Bitcoin at the moment and make them impossible for a year. It doesn't pretend that they won't
find other ways of doing that. And it doesn't pretend that it's been done in such a careful
and considered way that it's something we could permanently do to Bitcoin forever.
Now, that's a relief for me because every single upgrade in Bitcoin I've been excited about has
always had something up with it that I didn't anticipate and that we all didn't anticipate.
So temporary soft forks are a nice way for once where we can finally go, all right, if something
about this sucks, don't worry, the rules are going away after a year. So to be honest, that's about
it for the technical elements of it. It puts limits on taproot, broad strokes, no one is using
the things it does in Taproot apart from inscribers. To be honest, most people aren't
even using Taproot. I can't remember the last time someone gave me a Taproot address. Most people just
use native SegWit as opposed to nested SegWit. That's basically it for where it's at. The 444
numbering thing, that was just amongst the BIP editors. That's not Bitcoin Core, right? That's
a different group of people. We call it RDTS. That's what it's referred to in the latest release
of knots that merged it which means reduced data temporary soft fork and it's you can refer it to
that if you it's kind of like the artist formerly known as prince at this point like it's the bit
formerly known as 444 it's it's whatever like uh 110 is what most people know it as at the moment
yeah so and and give me the timeline like what what are you proposing now because i think you
only have like a few months left until this activates right yeah so uh around the 7th of
August is when miners must signal for it according to the rules of people running it. That doesn't
do, that's not the thing coming into effect, but it's effectively the start date of it.
In early September is when the actual full rules come into effect.
Where, you know, and at that point you can no longer make giant op returns.
But the rules effectively come into effect in early August because if everyone's signaling
for it, then that amounts to the same thing because the policy mirrors the incoming consensus changes
where if you have giant op returns, they remain consensus valid in August, but no one's going to
be relaying them at that point. So they wouldn't really get around the network assuming people are
actually running it. So it kind of soft activates around that time, but I don't mean to imply that
it's a thing a miner could ignore. Should it get enough enforcement, a miner would be crazy to mine
mine blocks that don't comply with it because then they risk, however many people are enforcing it,
throwing their block in the garbage, which no miner wants. And it's why miners do what they do.
It's why they respect halvings because at the end of the day, they want a network that will accept
their block. And that's how soft forks can win, even if miners aren't really particularly
interested one way or the other.
so i want to know like what you think the chance of this actually going ahead are because
like in my mind six months ago or whatever it kind of reached fever pitch it was like it was a
big talk on twitter and i don't know if it's because i checked out and then the algorithm
stopped feeding me stuff but i see this a lot less now like and i know in terms of like signaling
for this change the number of blocks mined with like signaling for this is something like six like
it's very very small like is there still demand for this yeah among node runners not really amongst
miners that we've seen but um that the miners aren't a great indicator of much because of how
centralized mining is and for the purposes of in indicating consensus changes you only really have
a few miners like because it depends how you define miner right there's a lot of hashes around
the world but most hashes have nothing to do with this they just work on templates that are sent to
them by their pool and there's only a few pools so that for all intents and purposes the incoming
signaling for a consensus change to Bitcoin with regard to miners is basically only down to a
couple of companies, Foundry and Bitmain, F2Pool and Viya. So it's a little bit of a stretch,
but it's a philosophical point I like to make anyway. If Foundry and Bitmain said, all right,
we like this fork, and they started indicating that it should go ahead, a lot of people in the
space would be like okay let's we're doing this then that's a foregone conclusion and i think
that's wrong um that's why i haven't been yelling at these guys to activate it because it's genuinely
not it's a convenient uh stopgap solution for it and this isn't me trying to pretend that foundry
would listen to me if i did yell at them i'm not saying that i'm just saying that if if a couple
of companies unilaterally decided to change bitcoin's consensus rules and most of the space
went, yeah, all right, we'll just go along with that. That wouldn't bode well for the future of
Bitcoin. And I like the fact that this thing has gotten, I called it a soft fork activation on hard
mode, because there is no support from miners pretty much, but we know that's a very, very small
handful of people. Businesses have said pretty much nothing about it, including ones that are
sort of formally quite activist in the space, like bull Bitcoin and, you know, the more based,
but smaller companies. So they've been quiet. But there's a lot of plebs out there that will run it.
And those guys are the ones with nothing to lose, really. They will run those nodes and they will
throw blocks in the garbage that don't comply with it. And that was, we've got some precedent for that
with BIP 148, right? So like people called it a bluff or whatever. But at the end of the day,
big mining pools and big businesses and exchanges don't want to play games of chicken with consensus
with plebs because plebs ultimately are the ones that won't compromise. And I think that's the
network's greatest strength because those are the people that will never bend in ways that could
compromise the network in bad ways. They will always stick to, you know, these absurd things
that Saylor would characterize as paranoid crypto anarchism, right? And I think that just encapsulates
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I've just realized we've kind of gone in at the deep end here.
And there'll be people listening that may not really know exactly what it is that you're kind of against and what Bit110 is going to attempt to do.
Do you want to just explain from a higher level what your issue is with Bitcoin at the moment?
Yeah, my issue with Bitcoin at the moment is, and there's so many ways to come at this and attack it.
I feel like we had a war in the past.
And everything in Bitcoin comes down to not understanding that it's two things at once.
It's the Bitcoin.
Like you have the dollar, which is the currency that people love.
It's limited to 21 million.
It's deflationary.
All these, you know, it's unconfiscatable.
It's, you know, uncounterfeitable.
All that great stuff.
But Bitcoin is also the name of a payment network where you move that currency around.
So there's a million payment networks where you can move dollars around,
but none of them are their own currency.
And the dollar doesn't depend on those payment networks exactly.
but it's nothing without them.
And similarly, Bitcoin is nothing without its payment network,
and that's the blockchain.
The blockchain is kind of this commons that serves a specific purpose
that's to facilitate this permissionless money,
this censorship resistance and all that,
but it's very, very neglected.
So with that framing, I'll go back to the prior blow-up
and civil war in Bitcoin where you had Roger Ver
and the big blockers who primarily loved Bitcoin because of this freedom to transact and peer-to-peer
payments, which is an entirely a celebration of Bitcoin as a payment network, which is beautiful.
But they saw it being limited grossly by the size of blocks and they wanted to make blocks larger
to facilitate more cheap, easy access, you know, financial activity for the world. Very admirable
goal, but it came at the cost of decentralization, of verification of the rules. And that's a
compromise just not worth doing because it unravels everything, including the store of
value element of it. And he famously said, Roger, the champion of that whole movement,
if we risk Bitcoin becoming PayPal 2.0 in order to scale it, I think that's a risk worth taking.
Apologies if I got the quote slightly wrong. Obviously, they forked and Bitcoin Cash and all
that history and all that, but this was a fight between the two prioritizing the two different
use cases. But the point I'm going to make is that you need both. They reinforce one another.
Fast forward to today, and you have the opposite war. You have Michael Saylor, you have, sorry to
keep Duncan on Saylor, but he definitely represents a kind of mentality where he will, on pizza day,
the legendary pizza day, which we sort of champion as the initiation of Bitcoin
as a way of paying people to do things rather than just, you know,
what can I really do with this?
You know, on Bitcoin pizza day, MicroStrategy said, you know,
we bought all these pizzas with dollars.
Don't ever spend your Bitcoins.
Keep your Bitcoins.
Spend dollars.
And that's the opposite approach of Roger, right?
It's don't spend Bitcoin.
It's not a payment network.
Ignore the blockchain.
Just hold it.
and use it as a hedge against inflation and the fiat system dying and all that stuff.
But the problem is, the life of Bitcoin is in its payments.
And that's what keeps 21 million alive.
Every single payment is a reaffirmation of the fact that there's only 21 million Bitcoins.
And that, because that's not a law of physics, it's a rule that needs constant reinforcement
and people to assert that that's true, because otherwise it can slip away.
so what's happening today I feel is that Bitcoin is being treated as an amazing store of value
without an understanding of where that comes from and what reinforces that and it's reinforced by
the other aspect of what it is which is this payment network now the payment network is the
blockchain and the activity on the blockchain is no longer being treated as something that
facilitates financial activity. It's being treated as a way of storing data on other people's
computers for free, as long as you can pay a miner to do it. Now that's a misunderstanding of what
it's there for and a misunderstanding of what would motivate a person to store it and actually
maintain decentralization. So all that context is how I view the problem. Because I've looked at
crypto and I've tried to ascertain why is bitcoin good and crypto isn't why do we get to say bitcoin
not crypto why do we get to make that distinction and it was always something around decentralization
and the decentralization in bitcoin is around the enforcement of its rules which is done by the
people running nodes who have to store the blockchain so we have to be honest with ourselves
about what motivates them to do that and they're definitely not motivated to store other people's
data for free. And Bitcoin is also anonymously uploadable data. And you have some, there was
some questions obviously around the kind of content people would put on cloud storage that
you could use anonymously. I'm not going to go into that because it's just horrible to talk about.
But it's also a distraction because it's so inflammatory. I don't really want to
harp on about it too much. All I'm saying is that crypto has an incentive problem.
none of the cryptos that compete with Bitcoin are genuinely decentralized because it's really
hard to motivate people to keep them decentralized. And Bitcoin, while I don't think arbitrary data
just kills Bitcoin overnight if you turn a blind eye to it, if your incentives become warped,
like Rogers were when he said, let's just make blocks huge, or like, you know, the store of value
maxis, I'll call them, so I can stop dunking on Saylor endlessly. If your values go in that
direction instead, then you neglect the payment network aspect of what it is, and you forget
about who's actually going to maintain the decentralization. So, example, you have this new
stretch, SRTC, whatever it is, Saylor's new thing. They are egregiously using Bitcoin as a way of
recording history of someone moving stable coins around on Bitcoin. I have no interest in storing
that. No one who runs a node does. That's not what the blockchain's for. And the only reasonable
assumption you could make for a network where that kind of stuff goes on is that a node is something
someone else runs, not a thing I need to run. I spoke to one of the biggest Bitcoin exchanges in
the world a few days ago, and they told me they don't run a node. A third party does that on their
behalf. And it wasn't even a thing that they felt like silly about. And I couldn't believe this.
You don't run a node. Like, if you're listening to this, and you know, you spoke to me a couple
of days ago, I'm not trying to dunk on you. You're an awesome person, and I like your company. But
you don't run a node. And that's becoming a thing that someone else does on your behalf.
That just turns Bitcoin into everything we're used to with the internet. It's third parties.
it's big data companies running things on your behalf and then they become the gatekeepers of
the whole thing so you already have that in mining you have crazy centralization with what
goes in the chain in the first place due to how centralized mining is then you have centralization
of enforcement and that that comes as a result of very specifically treating the blockchain
like something someone else has to deal with on your behalf and then you just need a username and
password to access whatever it is you need to do with Bitcoin as a payment network. For me,
that's going to only trend towards the crypto centralization end of things. And it stands to
reason that we would go down that path at some point. But we didn't back in 2017. And we need
to not do that now So I paint the positive picture of it just to kind of wrap it up The reason I support Bitcoin 10 is that it quite crudely looks at some of the things that have gone on over the last couple of years since 2023
and it says, so we made data carrier size bigger, which allowed much larger op returns.
Granted, not a lot of people have ended up using that because you can do witness stuffing with
taproot stuff more cheaply, but it was the wrong direction. And everyone knows the trend is much
more important than where you are. Like I would much rather watch Bitcoin go from $10 to $20
than I would watch it go from $100,000 to $90,000 because the trend is much more important, right?
So the trend towards abuse of the blockchain and usage of it for non-monetary activity
and resignation to people that would do such a thing is an issue because that only compounds and
gets worse and worse over time. You set precedent as you go and we have a long history of being
hostile to arbitrary data. We fought wars over it. We kicked Vitalik out and made him do Ethereum
elsewhere because of spam filters. So when we started getting rid of stuff like that in 2023,
to me, it spelt the beginning of Ethereum and Bitcoin would have just been one thing rather
than separate. And for me, I'm like that cycles back, it informs development. Bitcoin just becomes
infected with everything that made crypto, crypto. And then it becomes very difficult to defend it
because it's kind of dead on an identity level at that point.
What even is it?
And interestingly, there was some conjecture from Epstein
in the Epstein emails where he was talking to Peter Thiel
and saying, we can screw with Bitcoin
because there's confusion about what it actually is.
Some people view it as this, some people view it as that.
More when I see you.
And there's nothing more on that topic,
but it was very reminiscent of, you know,
if you want to destroy something, undermine its identity
so that people don't actually know what it is.
And I promise final point in this rant,
which is Bitcoin is money,
has been the mantra, a very crude sort of slogan
of the people on my side of the debate.
And it's been said in response to people on the other side
who are like, no, it's a database.
It's just a database.
It's just a chain of blocks.
It's just a crypto.
Any of these things that denature it
and make it a very difficult thing to identify and define
and place sensible boundaries on.
but i i think there's some semantics in that because like i i don't think the people that say
bitcoin is a database would disagree that it's money but like technically it is a database but
it's a database that acts as money but there's a few things in that because i agree with you in
terms of like the store of value side of things like i think that has been a dominant narrative
and it's one that i don't agree with like i think bitcoin is money and should be used as money
but i feel like that's changing like some of this needed technical improvements to become
usable money and i think the stuff like cash app have done with all the square terminals awesome
that's going to allow bitcoin to be used as money more and like as bitcoin is used as money more does
that not then solve the spam problem in the sense that they just get priced out of transactions
because like right now you can send a bitcoin transaction for less than a sat up of e-bike like
it's it's insanely cheap yeah and as more monetary transactions happen does that not just price spam
out anyway rather than trying to like gatekeep who can send bitcoin for what reason i think so two
points. I don't think there's gatekeeping involved. I think Bitcoin has been optimized. It is a
database, as you say, but it has been heavily optimized for financial activity. There's lots of
annoying things that would get in your way if you were trying to use it for other stuff. It's why
spammers pay 546 sats per output more than they need to because of the dust limit and things like
that that say you're not using this for financial activity. So gatekeeping is a perspective, but I
think it's that. I think it's not... there are different kinds of databases for different
purposes and Bitcoin is useless if you want to upload like a Blu-ray rip of some of Jurassic Park
or something. It's just not designed for that but you could do that on a different database.
So it is a question of optimization and I would never look at that as gatekeeping.
And your other point about pricing out the arbitrary data use case, that has been an assertion
that's been made many times and I just don't see any evidence for it ever becoming true because the
trend again is the opposite. I'm stunned at how much of a ghost town the blockchain actually is
and like we're paying 0.14 cents uh oh sorry 0.41 sats of e-byte to get transactions in the chain
and that's reliably getting in and there are miners that are still keeping the limit of one
sat of e-byte and you're paying only 14 percent of that and another miner will just pick it up and
put it in. And this is so nuts because a lot of nodes don't, I'll get a little bit technical here,
a lot of nodes don't relay transactions that are below one sat per vbyte, which means if you mine
a block that has transactions that are that cheap in there, your block runs the risk of taking a
little bit longer to verify and getting thrown away. So you're risking 3.125 bitcoins, you know,
250 grand worth of fresh bitcoins for the cheapest transactions possible. I mean, we're talking about
like 30 bucks worth of stuff, which is usually just op returns. And the trend here has been
really worrying. First off, I don't know why anyone thinks Bitcoin would naturally only,
why the people that would pay the most to use it for storage would be people engaging in financial
activity rather than people looking to store data on other people's computers. I don't know why you
would make that assumption. Lots of people do, and it's just because it's a monetary network,
So you'd expect that. But second off, the trend is just wrong. Like five years ago, there was higher fees. People were paying more and most of the stuff was economic activity. The trend is since 2023 has only gotten worse and worse and worse. We had a massive peak of spam and around the halving it went, it reached fever pitch. And, you know, there was like millions of dollars of transaction fees over a tiny little period. And then it just dwindled and it seems to be dying. And I'm just stunned by it.
Like on a Monday morning, when historically you'd pay a lot for a transaction fee, there's just no competition.
Like the only time you'll see expensive fees is if there's like an anomaly block where it took an hour and a half to find a block or something.
Outside of that, people are just not using it.
And to me, that just means like, yeah, it might be at $77,000 a Bitcoin.
The store of value aspect is doing fantastic, undeniable.
This is historically one of the bare years as well.
but as a payment network it's fallen into complete neglect no one is using it and the optimistic
stance there is okay well they're using lightning instead or something and i hope that's true but i
really just don't i don't think it is i i think people would much rather just use centralized
third parties we know that's what happened with el salvador like they'll just use stuff where
they're moving money around uh off chain because it's easier it was cheaper bitcoin's cheap now but
But I don't know. I don't see any evidence for the idea that Bitcoin wouldn't just become a tragedy of the commons or the blockchain, at least, where, you know, you can buy 100,000 Bitcoins and it's one on-chain, you know, one on-chain event.
And then you never touch the blockchain for years after that. Unfortunately, that's just not going to work.
But why do you think that is? Because it'd be easy to say, like, this is just like the monetization phase of a new asset.
And like you could make that argument if fees had always been low.
But fees, like you said, have been much higher in the past.
So like why do you think it's dwindling so much now?
Because like even if Bit.1.10 happens and like it's not going to fix that problem.
I agree.
I think this and this has nothing to do with my stance on Bit.1.10 or data or anything like that.
It's a cultural shift.
Back in the day, like I'll speak from my perspective.
I got into Bitcoin because of the payments, not because of the Austrian economics.
I didn't have a clue about any of that stuff.
I wanted to send money to Julian Assange and I wanted to buy drugs on Silk Road.
And all of those kinds of things were, you could only do them with Bitcoin because it was,
everything else was Visa or PayPal on and you couldn't use those kinds of networks for those
things. I didn't know anything about deflationary economics. So, and I think Roger and all those
early guys felt the same. It was an amazing, it was money on the internet. It was, it worked like
a network. You moved stuff around like emails. It was incredible. And I think, you know, and it had
no interest to the people, to a guy running a hedge fund that wanted to stop, you know, losing
money to inflation and stuff like that. It was way too risky and way too tainted with illegal
this, that and the other. So after a while, we fought and fought and fought and managed to make
the thing appear a bit more legitimate on the world stage. And then you have a very friendly
US administration to crypto rather than Bitcoin exactly, mainly just because Trump and his kids
want to scam as many people as possible, but I digress. So now we've got the money here,
and the money guys, they don't care at all. Everything they do is so publicly obvious.
If you've got a billion dollars worth of Bitcoin, you're not flying under the radar using a
permissionless payment system for that. It's completely no interest to you. So I understand
why it's a blind spot for Saylor. But unfortunately, that again is an essential part of it. And I just
think it's a cultural shift. So again, this isn't me wearing my Bitp 110 hat and advocating for that.
That's a different topic. I just think we've completely changed into this. We want a deflationary
currency. Fiat's broken. We can store in something that isn't a melting ice cube in our hands.
Wonderful. But this thing was a payment network too, guys. And you've never acknowledged it as
being one and you've never used it as one. And if you continue to champion only 50% of the story,
then you'll find out we have nothing. It just, it necessarily goes away. You have to have both
elements of it to reinforce one another. I don't know if you agree, but that's been a cultural
shift I've definitely noticed. No, I do agree with that. And I think, I guess maybe I don't
think, I hope that that sort of shifts. And I think stuff like Cash App allowing all Square
terminals to accept bitcoin as payment maybe that's like start of a change i think it's going
to probably be a long road but i hope it's start of a change because i want to see bitcoin users
money and and i guess like it is going to come down to merchants demanding to be paid in bitcoin
people like actually actively using this thing as money but again that's that's kind of not really
tied to the bit 110 stuff but to get back into that like you said before um like most nodes aren't
even allowing less than one sap v by transactions but they're still getting into blocks and this was
always kind of the argument about knots before the bit 110 conversation was that like even if you get
to like 80 of nodes running knots it's still not going to stop spam getting into the blockchain
um so was that basically the realization or the thing that you acknowledged to then move forward
with an actual consensus change to bitcoin no um it's a good question but it and it's very logical
i see why you'd see it that way but the bip itself says look after this thing activates we're right
back to having spam filters again because this is not how you fight spam. You can't have a fork
every time someone's doing too much of an activity that's causing harm to the network. It's not
realistic and it's not practical. That's why filters are there in the first place. So that is
acknowledged in the BIP itself. It's not something I wrote, but I do agree with the sentiment in it.
I think that it's a very good point that the intolerant minority, or the tolerant minority as they're referred to, can punch a hole through the network and say, right, none of you are relaying this stuff, don't worry, I will.
but that's more indicative i would say of how centralized mining is so sub sat sub sat per v
byte summer that happened last year which was a group of people decided all right core has this
spam filter of one sat per v byte and if you pay less than that for a transaction fee it's not
getting relayed and no miner will mine it um so they sort of colluded a group of people i'm not
sure who they were, most likely the Libra Relay guys. So Riordan and Peter Todd and I don't know,
probably Portland Hoddle and a couple other guys. And I guess F2Pool and Mara decided, all right,
we're just going to start putting this stuff in blocks. I don't think F2Pool participated actually,
but definitely Mara. And the problem is Mara is enormous. They're probably the biggest miner in
the world, depending on how you define miner. So you very quickly can make what nodes are doing
look very silly with regard to what they relay. That's the first point. You can punch a hole
through a network. And Peter Todd first did this with full RBF, right? And this kicked off that
whole argument between him and John Carvalho, who was like, no, we can't have full RBF because we use
unconfirmed transactions and we consider people having paid us on our business based on that.
and full RBF breaks that because people can double spend much more easily.
And, you know, Peter Todd made his point and went, I don't care.
Core aren't getting rid of that spam filter, so I'm going to blast through it
and take advantage of the centralized nature of mining and get one pool to accept it.
And that blows open the spam filters, and then the filters at that point might as well just go.
So that's point number one, is that if you have centralized mining,
you can make spam filters look ridiculous very quickly.
however bitcoin doesn't work if mining is centralized so we know that already i know it
is working today but the the reason that we don't trust it is because it just we know it's not
sustainable eventually foundry and antpool can come under the kind of pressure where they can
do things that we don't want them to do and they're just going to do it and their miners are
just not going to leave it's not 2015 so mining needs to be decentralized and spam filters work
much more effectively in an environment where mining is decentralized and we should be going
in that direction. That's point one that I'll mention in disagreeing with this idea that you
can just, you know, spam filters are useless, which I hope is a fair characterization of what
you're getting at. Number two is that it's beside the point because I don't want to relay certain
stuff around regardless. And that's just the end of it. And that comes down to a more sort of
moralizing position where, you know, there's $20 fell on the floor. It's not mine. I'll pick it up.
I can either walk off with it or just go, excuse me, someone drop this and figure out who they are.
Like you can always tell yourself, oh, you know, someone else, someone else will just pick it up.
If I don't like, I might as well just put it in my pocket and walk off. I don't want to do that.
And I don't want to contribute to making Bitcoin worse. And it's no skin off my nose. If I have
sensible mempool policies that take stuff that's obviously people doing NFT scams or whatever,
you know, clogging up the network, trying as good as possible to run some sort of
affinity scam where, you know, they would have got laughed out of town in crypto,
but they come to Bitcoin and pretend it's somehow, you know, legit at this point and
immutable and all that stuff. I don't want to participate in that. It cheapens what Bitcoin is.
I really do think Bitcoin is a beautiful, important technology, and I don't like denigrating it with this kind of stuff.
And I don't want to participate in it, and I'm not going to, and I don't have to.
And that's, like I said, people can call that sanctimonious if they want, but if you want to have any kind of quality of life,
you do have to have people adhere to these kinds of, I don't know what you would refer to it as,
but these kinds of not race to the bottom ethics.
That's all I'll say.
Like you want to live in a town
where people just don't litter.
It's not illegal.
You're not going to get in trouble for doing it,
but just don't do it.
Like stop making the place worse.
Like I know that's maybe not sustainable
in a thing with Bitcoin if it becomes huge,
but I'm not going to actively participate
in making it worse.
And it's undeniable that what happened
And with the UTXO set in 2023, where it went from like 80 million to 160 million, that messed
up stuff.
And it made it way harder for people to run nodes.
And I didn't want to participate that.
And that was when the beef started with Core because they just completely fell down in front
of it.
And we're like, all right, we'll just tolerate this.
There's nothing we can do about it.
And I really don't think that was true.
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so let's talk about the things that you won't be able to do on bitcoin that you can now um because
like i think we could leave jpeg aside like i'm not here defending jpegs at all but like what else
does it get rid of because like you won't be able to do bit bm stuff right no you can okay so what
can't you do the limits of bit.10 are big opera turns so you can't make an opera turn bigger than
183 bytes. Op return itself remains because it's completely how segwit works. Taproot, it puts a
bunch of guardrails on taproot. So op if and not if, which, you know, this conditional element that
you can put inside a script, that doesn't need to be in taproot. I made a video saying
if someone actually has a use for this, come and tell me I'm wrong about it. But as far as I can
tell there's no use for op-if. And I had a conversation with Nunchuck, who make a pretty
awesome wallet. And they're pretty pissed off about this whole thing. And they're saying, look,
Miniscript can compile to have op-ifs in it. And I was saying, all right, that does seem to be the
best argument you have for it. But you're not saying you need it. You're just saying that it
might accidentally show up in some of your scripts, in which case, fix Miniscript so that it doesn't
Like, you don't want to have wallets that accidentally
generate consensus invalid stuff or that you can spend and it be consensus valid I kind of going off way too far too fast It basically says here how Taproot is actually designed
which is that you have these different spending conditions
and rather than reveal them all when you go to spend your UTXO,
which is really expensive for transaction fees
because you've got to show all the different ways you could have spent it,
including the one you did,
the genius of Taproot as scaling technology was,
I only have to reveal the one leaf, the one condition that I actually chose to execute,
and the others might as well have not existed. But if you're using if statements instead,
then all of the other options, like if this happens, then that, if something else happens,
then that. When you're executing things in that more traditional way in Bitcoin,
then everything gets written to chain. So the reason Taproot was scaling tech in the first
place was that you only need to reveal one leaf. That's why it's good for privacy and it's good for
scaling. So there was no, there was an assumption that people wouldn't use it. People might push
back on that, but I think it was just an oversight. But then, you know, Casey Rodimore, inventor of
inscriptions, figured out, oh, we can use this to stash a bunch of data that gets ignored because
it's after a false. So you put op false, then you put op if, and then everything in the if condition
gets ignored. That's what an inscription is. And that all gets disabled. So you can't use op-if
anymore inside Taproot. You still can use op-if, but you can't use it in Taproot.
Let me ask you one quick question on that, because this is where I think you've had some pushback,
because for people who are using Taproot in a pretty obscure way, I'm sure it's a very,
very small number of people, but are the conditions where you can be using Bitcoin
in a real way that is going to get essentially frozen after this soft fork or hot fork or whatever
is. I think the technically true answer is yes, but it'd be misleading for me to just say that
because no one actually is. I think the conditions in which Bit.1.10 could activate and a Bitcoiner
could suddenly find themselves unable to spend their funds are so unbelievably contrived that
I have to acknowledge it. I can't just say no, because that would technically be a lie. But if
I say yes, it's definitely going to give you the wrong impression. First off, everything gets
grandfathered in. So if you have a taproot UTXO with no key path, which already is, you know,
one subset of taproot outputs, and then the only way you can spend it requires revealing something
that a condition with an if statement in it, you can still spend that UTXO provided it was created
before the activation height of bit.1.10.
So you're talking about a UTXO that very likely does not exist,
but can still be spent.
The only way you can get locked out of your fund
if you're sending money to a taproot address due to bit.1.10
is if you create the UTXO after the fork happens,
and then you just have to wait until it expires
before you can spend it again.
And here's the thing.
I'll say is that there are zero people in the world that know how to make the kinds of taproot outputs
that BIP 110 forbids who aren't well aware of how BIP 110 works. Most people are just not even using
taproot at all, let alone the last condition which I didn't mention yet, which is you can't have
a tree depth greater than 7 which gives you 128 leaves. You can't go deeper than that because then
then you get a control block that's bigger than 257 bytes, if I recall correctly.
And that's the final condition.
There's no op success.
There's no op if.
There's no op not if.
There's no big op returns.
And you can't have more than 128 leaves.
That's it.
But all I'm just saying to round off that point is no one using Taproot in that sophisticated
a degree is going to be unaware of what's going on here.
And if for some reason they are, the rules expire.
So they will be able to spend the UTXO again.
So this is kind of a hard circle to square, square to circle, whatever.
Because I agree.
I'm sure the people who are technically capable of making a transaction like that do know this is happening.
And I'm sure that people are going to make those transactions because this is happening to say, look, you're locking me out of my Bitcoin.
and and like bitcoin like changes to bitcoin shouldn't make people's coins invalid to spend
so like how do you try and square that circle well it depends how you want to look at it because i
can ruin any soft fork i can make a utxo today that if you activate ctv makes me unable to spend
that utxo i can do that just to mess with people and then i can and i can annoyingly grandstand on
principle and say you're not allowed to do this because you're violating a principle of bitcoin
by making a UTXO unspendable.
And I will say the people that are most concerned about that
also have floated the idea about the quantum computing fork
where they take all of Satoshi's coins,
which is a million real Bitcoins worth of real UTXOs.
So I'll point out the hypocrisy there.
But I will just say,
adhering to that as a principle is too crude, in my opinion,
because you can mess with people
and you can't have Bitcoin be so principled
that those principles can be weaponized against you
from making the system work properly.
You have to be quite pragmatic with it.
It's not being done in a gratuitous sense
where we're saying, you know,
here's a fairly normal use for taproot
or even something that happens occasionally
that we're making impossible.
But also I'll further say,
if I did troll you and you were a CTV advocate
or, you know, whatever it is,
like any one of the soft forks that people are excited about in the Covenants camp,
if you were an advocate for one of those soft forks,
and I decided to make UTXOs that made it impossible for you to activate it
without making my UTXO unspendable,
and you then took the extra step to grandfather in all existing UTXOs,
I don't think I'd have much left at that point.
And that's what BIP-110 did, right?
So when it first came out, people said,
this is technically confiscatory.
there are UTXOs that are going to be rendered unspendable by this so Dathan implemented a UTXO
height checker which said if you created the UTXO before this thing activates then you're exempt
so to me that was a good enough back and forth with the community saying all right if this is a
problem and a sticking point I'll address it with this and I think that was reasonable and I think
it's reasonable to be reasonable here rather than adhere to principles to the point where we just
can't ever do anything even if it's quite beneficial in other ways and so the other thing
on that is like you say they'll unlock after year after a year because it's a temporary soft fork but
like is that a bit of trust me bro in the temporary side of things not at all that's a very common one
because it feels like a government measure and there's nothing more permanent than a temporary
government measure but it's not there's no unilateral extension of it it is what it is if
people accept BIP-110, they accept the time limit of it too. I have no special power. If I had the
power to extend BIP-110 unilaterally, or a small group of us did, beyond the 12 months, then I would
have activated it today in the first place. I don't have that kind of power or influence. Bitcoiners
ultimately would have to agree to it and enforce it beyond the 12-month period. And if they do that,
then it was probably really good and it wasn't breaking anything but the the expiry to me is
just so we can get something done in a timely capacity that doesn't get bike shed for you know
for the next 10 years because we don't have that much time and i think it's more just like who's
who's driving this thing who's what direction are we going it's grabbing the wheel and saying all
right we're turning around like it's not it's not it doesn't need to be the most elegant thing ever
and that's why it works and that's why it's capable of establishing a shelling point and for people to
go you know what this is good enough and i don't think anyone should sit here and pretend that it's
a beautifully elegant fork that does everything that needs to be done it's crude and that's why
it's temporary but it is temporary and i don't i think at the end of the 12 months if people
decide to continue certain aspects of it there will be another fork proposed that would do that
so yeah i really do want to stress i do not have i wish i did but i do not have the power to to
unilaterally say all right we're carrying on past 12 months boys and then everyone just did it
i don't think i don't think anyone could do that unless it genuinely just was good and lots of us
agreed that it was good and and so when is so you at first you're trying to do this as like a minor
activated soft fork um let's actually start with that because you have a is it a 55 threshold that
you're trying to hit uh that yeah if you hit 55 in any difficulty epoch then it activates
so why have you gone 55 when normally it's like an overwhelming majority of like 90 plus percent
um i mean i will stress that wasn't my decision like so it's not a thing when i say you i'm
talking about like yeah yeah i don't know because it gets enforced as a user activated software
regardless of that and i think the bigger you go with it the trouble is like foundry regularly hit
like 35 40 so the the problem with mining being so centralized is that if you have like these
very comfortable thresholds that are like near 100 you just get one guy like wang chun from
f2 pool who's like no i'm not activating screw you or they even like what he did in segwit he
started signaling for segwit and then turned it off again and was like troll lol like he's just
I don't want the network to be like held to ransom by trolls. Like I can't, I don't think it's good.
I don't think that's a good idea. Like if mining was decentralized, then I think it would make sense
to have a much higher threshold. But in its current state, it's kind of a farce anyway. A miner
activated soft fork, like I said at the beginning of the rip, if Foundry and Antpool decided to go,
all right, 55% and we'll do it and turn it on. And there was clearly massive pushback rather
than ambivalence from the community, I would not consider that a good precedent at all. And I would
consider that a Faustian bargain. And if people said, you know, you're working for Ocean, you're
against centralization of mining, and here you are using a fork that was activated by two companies,
I would say fair dues. That's a fair thing to call me out on. So I'm not pushing for that.
I think minor thresholds, it's just an artifact of Bitcoin. You always have this beautiful,
graceful way of activating a fork where miners can do it by flipping version bits. And then it's
so much more objective. And everyone agrees it started at block height X. This is very elegant.
And it's why we always do soft forks with that kind of approach. It wasn't always done that way,
but it almost always is now. But you never want to put them in a position where they have
too much influence over the rules of the protocol because miners can't. The whole reason Bitcoin
works is because they don't get a choice in their 50% pay cut every four years. They have no say in
the matter. And when we start giving them a say in the matter, it creates problems. But we still do
it because we can't help ourselves because it's so elegant. If they all decide it's active at
block height X because we signaled with 55% within this epoch, then there's just no ambiguity around
it. And we like that because it's elegant. But with Bit.10, unlike SegWit and unlike how Taproot
was, you know, at least how Core activated it with a speedy trial, there is no option for Minus to
say no. There is just the option for them to activate it whenever they like, if they decide,
but they can't delay it beyond August the 7th. Okay, I'm going to come back to this. I'm sorry,
I'm jumping around a little bit, but I meant to ask a follow-up question on the BitVM thing before,
because you said they still can operate on this. How? Do they have to get their proofs
under a certain number of bytes?
And is that actually going to be possible?
So I'm not an expert in BitVM.
As far as I know, from SuperTestNet,
who has self-declared, he's pretty respected,
and he's a self-proclaimed expert in BitVM.
He told me not only does it not break BitVM,
it makes no difference to it at all.
So I think it breaks BitVM1,
but no one cares about that anymore
because we're onto BitVM2 and BitVM3.
So in BitVM3, I think everything is,
I think it's all done client-side. All of the proofs and calculations are done client-side,
and it all gets wrapped up into one leaf. I might be talking out on my rear end here, I don't know,
but I'm deferring to people, like SupertestNet is not in favor of Bit.110, and he's told me
it does not break BitVM, because I came out and said it was a trade-off and an unfortunate aspect
of Bit.110, and he said you're wrong about that, it doesn't break Bit.110. So I'm very happy to
take him at his word there. I think it breaks old versions of it, but I don't think anyone cares
about those. Okay. I just wanted to clear that up before we moved on. All right. So when it comes to
this like minor signaling, like it probably, it doesn't look likely that you're going to get 55%
anyway. Is that fair? No, I have no idea what's going to happen there. I think soft forks are one
of those things that just look insane and stupid and then suddenly they win. Like I wouldn't,
That's the game theory of it, and we also have practical ramification of, not ramification,
we have a sort of a case study of that. BIP-148 really did look really stupid. A lot of people
kind of that didn't have much to do with it at the time may celebrate it today and wear UASF hats
and things like that, but at the time it really was just a few of us looking like idiots, just
like BIP-110 does now. The burden of the whole thing is I have to look really stupid because
everyone's saying your fork's going to fail, you're a loser, all this stuff. That's fine. I'm
happy to carry that. But I'm just saying that's how BIP-148 went as well. Everyone was laughing
at us. You're stupid. There was more support amongst smaller businesses. And like the one
I mentioned before, Bull Bitcoin, they did support it. And there was a few statements from meetups
and things like that. But again, I talk back to the comment on culture. The businesses are a lot
larger and a lot more risk averse these days. And again, it's not that they think Bit.1.10 is bad,
it's that they do not want to touch it because it's reputational kryptonite. If, you know,
if bull Bitcoin comes out today and says we're running a Bit.1.10 node, then they have to deal
with flame wars and trolls and people attacking them all day on Twitter and they got work to do.
I understand why they want to avoid that, but it doesn't mean they're against it.
so I think it looks crazy until it doesn't that's what happened with BIP-148 and there was that
famous sort of political concession where James Hilliard wrote BIP-91 which replicated BIP-148
and then the miners all ran that instead and then they complied with BIP-148 and in the final weeks
of July suddenly BIP-148 won when it looked like it wouldn't and there was only like 500 nodes
running bit.48 back then. It was tiny. There's way more than that running bit.10. And I mean,
I know the node stats are not fully reliable, but I know a lot of people that genuinely run it.
And I know that a lot of the lesser statistics as well that are ignored, like the umbral downloads,
for example, who's paying attention and gaming the umbral downloads of the latest version of
Nots? I don't think anyone is, and I've watched it grow quite organically. We released the last
version of Notts on Friday, which finally contained Bit.1.10, because it was always a third-party
implementation until Friday. Now it's in Notts proper. And Umbral finally released the option
to update to that last Friday, and there's been around 1,700, 1,800 downloads of it since then.
I consider that mostly sincere. I don't think that's people Sybil attacking, because people
Sybil attacking the node counts on the Bitcoin network do so in a VPS, and they, you know,
They're not going to use stuff like Umbrell, a node in a box.
It's way too inefficient.
So I think those are real users.
And you can say they're not economic nodes, but I don't know how you define that.
Do they have a Lightning node?
Are they using it?
Do they have a Sparrow wallet they connected?
That's an economic node.
They might not be Coinbase, but they're still real.
So there's thousands of people running Bit.10, and that's real.
And those people, depending on how committed they are,
are quite prepared, presumably, to throw blocks in the garbage come August if they're not enforcing
Bit.10. So on the other side, you don't have any kind of, we hate Bit.10 and we're going to resist
it and we're going to actively oppose it. You don't have that on the other side. You just have
ambivalence. And every large miner I've spoken to when it comes to Bit.10 just says, what's this?
Do I need to do anything? They're never like, we hate this and we're against it and we're going to
URSF it. So that being the case, once you get a few miners, like we had a block today from a new
miner called SOV, and we've had, you know, 234 Alberta, and we've had barefoot mining. These are
small, but not insignificant miners. SOV has a couple of ex-ash, right? They're sitting at 0.3%
of the whole network. That's not nothing. And I don't know if that's the whole fleet or not. Maybe
they have, you know, single digit percentages of the whole network. Once a few of them go,
for everyone else they might as well go on board too because otherwise they're just running a bunch
of pointless risk for in order to oppose something that they don't actually have any quarrel with
i don't think there's any most bitcoiners if they are not advocates of bit.10 don't care so that
means they'll just go along with it because they have no yeah i'll round off there i think we look
at this the same thing from a different perspective like i think you see silence as potential support
and I see silence as potential resistance.
And the truth will be in the middle.
Like some people will be on either side of this.
But like what I want to know is what happened?
Like, so let's just assume,
and you might say I'm wrong here,
but I'm going to assume that you don't reach 55%
and get this as a minor activated soft fork
and that you end up doing like a user activated soft fork.
And what happens after that?
Like if you don't have many people
building on top of this chain,
like what do you get orphaned off the network?
Like what happens?
So the chain split scenarios are like technical rabbit holes and they're fun to go down, but I think they're really unrealistic.
I think the two most likely scenarios are BIP 110 completely dies and there's never a block on that UASF activated chain.
But I think that's the lesser of the two scenarios.
I think what happens is as you come up to that height, the tension rises, the temperature rises, more conversations start happening.
and the prisoner's dilemma type scenarios start kicking off.
Because at the end of the day, if you're foundry or ant pool,
you need to be ready for it to activate.
Because if the other pool activates it and you're not ready to activate it,
you're mining on a chain that can get wiped out.
And this is a very important point about the asymmetry of soft fork enforcement.
So when you said what I view as ambivalence, you view as resistance,
the problem is resistance is not the same thing as ambivalence because ambivalence to any consensus
rule in bitcoin means you're going along with it if you don't like a consensus rule in bitcoin
not talking about how enforced they are for the moment you have no choice but to go along with it
you might not like the you know the one megabyte block size limit but that doesn't mean you get to
pretend it doesn't exist you have to to get along with everyone else so this is a very important
point of it the pools can let me just ask a question on that because why why why do they have
to go along with it why wouldn't they just keep like keep going on bitcoin as we know it today
because they need everyone else to agree to do that too and if they don't then they can end up
on a dead chain but the vast majority does agree with that agree with what ignoring agree with
bitcoin as it is today like i think the vast majority of people are not in support of bitcoin you have to you have to just project forward a bit if your foundry and I don know how close these companies are right Let just talk in game theory abstracts If your foundry and
Antpool's looking for a way to screw you, if Antpool's ready for Bit.10 and they activate it,
say they're 25, 30 percent, all right, Antpool's actually more like 40 percent with all its little
sub pools. If the fork height hits and unbeknownst to you, they now start enforcing this, then your
blockchain where you were ignoring it slows down to 60% of what it was, which means the minute
ant pool gets longer than you, it wipes out your chain because you will accept all the bit.110
blocks. They don't break any of the existing rules. That is an enormously risky position to
put yourself in. So if that scenario were to happen, you want to be the one that brings it about.
and if either side has done this calculation they realize they have no choice but to go along with it
that's i don't know if that is well enough explained but you can't it is a classic
prisoner's dilemma situation where you need to be sure that the other person is going to do
the thing that doesn't cause you to risk having your blocks wiped out and if you can't be sure of
that then you need to be the one putting them in danger and then they assume you're putting you
that you're putting them in danger and they want to put you in danger. And then all that happens is
everyone enforces the rules of BIP-110 because no one wants to risk being on a chain that can get
wiped out. And if there's no indication about anything, like even if the CEOs meet and say,
don't worry, we'll ignore this stupid fault. We don't like it. The minute the backs turned,
they might just think they were lying to each other. And this is a very real fact of the matter
about the dynamics of soft fork activation.
And there has been concern raised about this
because what if someone comes up
with a really awful soft fork?
Can a minority always get a soft fork activated in Bitcoin
just because of these dynamics?
And I'm saying, yeah, actually they can.
And that's why you have to be prepared
to actively resist it, which no one is doing.
You need a URSF to commit to a chain
that cannot be wiped out by Bit.10.
And there's no energy around that.
so it's either it kind of wins in all scenarios and it sounds crazy to say that given what a
fringe movement it seems like at the moment but unless people can actually coalesce around
resisting it and saying we can't get wiped out by bit 110 because we are going to intentionally
reject that soft fork with a counter fork unless you can get energy around that your best strategy
is ignoring it and hoping it goes away and the problem with ignoring it and hoping it goes away
is that other people might not. And if they don't, then you get these last minute, like I said,
super charged, you know, emotionally, emotional conversations in late July, where everyone's
throwing things at each other. Some people choose to start activating. And then at that point,
everyone else just goes, all right, well, do I hate this thing enough to actually URSF it?
Or shall I just go along with it? And then the price stops falling. I think that's realistically
scenario we get into so you're obviously like optimistic on your side of this works like
personally from my side i i can't see it like i think people will just ignore it but like
time will tell um if they do ignore it what happens like do you hard fork i don't know what
people would want to do in that scenario if if everyone ignores it and their chain carries on
you know for if there's nothing suspicious going on right like if if foundry ignores it when we hit
the block height and there's suspiciously no blocks from ant pool for four hours or something
like that then that's not enough to concede defeat and that's going to be extremely uncomfortable for
foundry if the major pools are all mining blocks and carrying on as though nothing happened
i think i would be in a very disillusioned state because at that point the miners essentially said
there's a bunch of nodes enforcing a rule we decided not to care about those rules
I don't know what threshold the nodes have to hit
before they become respected,
but clearly BIP110 wouldn't have been high enough.
And unfortunately, you can extrapolate from that
and say the nodes actually don't matter.
And a lot of people really don't think they do.
They just say, look, if the miners activate it,
it's a rule.
If they don't, it's not.
At that point, the next halving is done, in my opinion,
because the miners are just going to do what they did in 2012
and say, we're ignoring the halving
and we don't care about a bunch of nodes
telling us that we have to have a 50% pay cut.
i'm pretty sure that uh the next halving would be called into question and because you also have
so strongly on that though like i i think that's a way too big extrapolation to make because like
the if the miners did that like they what they care about obviously they want to make revenue
but what they care about is the price of bitcoin going up as well and like if they did that they
have basically completely broken bitcoin what is the like what happens to the price of bitcoin what
happens to their business. I think that's a way bigger risk than anything else.
I don't think they would have broken it. I think they just would have called the network's bluff
and said it is broken because the only reason we accept this pay cut is, first off, I don't think
miners are really that cognizant of what keeps the network appearing healthy. Sorry to say.
But there's also developer push for this stuff. The transaction fee argument didn't work out.
right that miners aren't making any money they're making 250 grand in subsidy and 50 cents from
transaction fees right i'm exaggerating a little bit but it's it's ridiculous and you have peter
todd who was one of the main brains behind blowing out spam filters saying 21 million is a stupid
meme and it's something that idiot bitcoin is having tattooed on themselves but it doesn't work
satoshi made a mistake economically okay so he's getting pushback from people like greg maxwell and
stuff. But he maintains that just because it's politically impossible today to break 21 million
doesn't mean it will be in the future. And if people can be given a sufficient scare story
about, hey, look, hash rate death spiral, blah, blah, blah, from, you know, the subsidy is too low.
People can be scared by things like that. And people are compelled by having a very,
very high difficulty as a result of a very, very high hash rate. And you maintain that by
throwing lots of money at miners. And if you're not getting that from subsidy anymore, I don't
know. I can see a new generation of Bitcoiners not having any kind of, like, it seems inconceivable
to you today. I get that. But I can see in four years, eight years, 12 years, the culture completely
changing to the point where everyone's like, no, no, Bitcoin needs to have a steady inflation rate.
Otherwise, the miners won't get paid and, you know, there'll be no security for the network.
The security budget is a meme. Like, it's not that big yet, but it's a meme.
but i i just like i see this as fear-mongering like i think i think you're trying to say that
like bitcoin is like existentially broken if this doesn't happen because like when even when you say
like developers are talking about this i think that's way too broad a book brush like peter todd
is talking about this i don't think anyone else is and i don't think anyone's taking it that
seriously um and and if anyone did try and change that rule then that would take that would have some
serious backlash, way bigger than like Bitcoin 10. I think that you'd be surprised. Like I honestly
just think in 10 years, a lot can change. And I honestly, the fear mongering comment, I view it,
the fear mongering is the concern around security budget. I don't think there is a concern around
security budget. I think Bitcoin is long term hodlers mining. I ultimately think that's what's
going to secure it. I don't think mining is fundamentally supposed to be a profitable thing.
and most of the giant companies that do it are in the red.
So it's basically how cheap credit can you access
and how much can you scam shareholders.
It's never, oh, we actually made some calculated decisions
and we're able to turn a profit every month.
Most companies that can mine, can produce Bitcoin
for cheaper than buying its spot by paying less in electricity.
They just usually bamboozle you by never telling you
the cost of the hardware.
It's kind of that nuts.
But, look, point taken, I don't mean to pontificate in that too much. It could never happen. And Bitcoiners could be very adamant that the next halving must happen and they could never fall for some political narrative about how it should be cancelled and we should reintroduce Keynesian economics and all that stuff.
I'm pretty black-pilled so I can see people going down that path but I'm not gonna like you could
you could very well be right about that and I could just be being overly pessimistic so back
to the point around what happens if it fails yeah I think that would that would herald the failure of
the the hierarchy in Bitcoin I think if not if if a bunch of like pleb node hodlers can't bring
about the activation of new rules because they can't get over the inertia of the general Bitcoin
I think it would have lost something and I think it wouldn't be immediately obvious overnight.
I think Bitcoin would carry on like nothing happened for a while.
And then five years from now, everyone would just be like, do you remember when we used to say Bitcoin, not crypto?
And now the blockchain is just one long, you know, history of stablecoin transactions.
And like, like, I just think it would, those things you never get there in one night.
It's always just, how did it get so shitty?
Like the center of your town, it was good five years ago.
it sucks now no one really knows what law changed or what happened but it just sucks now but i think
that's basically what my assertion would be for bitcoin so if um if you make this change and the
miners don't come across so there's obviously a few people mining signaling for bit 110 now but
it's like i don't know let's say it's one two percent of the network of the hash rate like
that's optimistic i'll be honest it's not even that but it's suddenly it went up to 2x a hash
from like 200 per hash. So it 10x'd last night. So is that people like renting hash rate? Is that
where that's coming from? Sov, which was the miner that found a block last night,
if I did know who they were and what they were, like Ocean's permissionless, right? We don't have
accounts or any of that stuff. So it's not appropriate for me to talk about. Unfortunately,
I can talk about, you know, some useful heuristics. A lot of people have rented hash rate.
and they've been unbelievably unlucky, and you're just going to have to take my word for this,
because this is all Ocean's back end. They found, between the last block 234 Alberta found,
and the one at SOV found last night, they found a quadrillion shares, which is enough to find
around seven or eight blocks, and they found none in that time, which was super unlucky.
So realistically, with the hash rate, around four exahash at the moment, which is about half a
percent of the whole network signaling bit.110 at least through ocean there might be more signaling
for it in lotto pools and stuff like that we don't know but there's around 4x hash pointed at bit.110
at the moment around you know 0.4 percent of the network if you assume a zeta hash
that should give you a couple of blocks a week right and that's enough for people to say all
right i'll pay attention to this thing if it grows i'll need to pay attention and i do think that
most of the, if it were to activate, most of the people that would go along with it aren't going
to be diehard Bit.110 fans. They're going to be people that are like, oh yeah, this, I didn't want
to think about it anymore. And this made it, this, this got rid of all the ambiguity. It just made
everything a lot simpler. And I think that's what happened with Bit.148. I really do. Like,
SegWit could have just been ignored and expired, but people forced the issue and everyone went,
all right well if you're going to force the issue i'll just go along with it i i do genuinely think
that's how things play out but the people renting hash rate they're like they're making a statement
they're they're putting the money on the line to try and like signal for this but they're going to
be losing money right so that that's not going to be sustainable in the long term no because like i
said i think the network is ultimately secured not like a i don't think bitcoin mining is profitable
because the minute it is profitable the difficulty goes up and it's not profitable anymore it's
designed to lose money. And that's an uncomfortable truth, but a truth nonetheless.
B, I want to mine. And if you've ever met anyone that owns a BitX, they want to mine as well. And
renting hash rate is like a thousand times cheaper, you know, per terahash than buying a BitX.
Obviously, it's not sovereign, but that's the final point, which is that's basically how...
Yeah, right. Everyone has a BitX because it's fun and you want to mine.
like yeah i mean i i do it knowing that this is almost certainly never going to make me any money
i just do it because it's kind of a little cool but so do mara and so do so does everyone else
that's the problem like if if if you can buy a bit axe and it costs you 200 000 sats and you only
ever mine like 50 000 you're exactly the same to me as mara who will post a quarter losing 200
million dollars like it's the same thing it's just that you don't get to split it up into chunks and
be an executive that can walk away with a bunch of money while the shareholders all eat it like
like it's mining is lossy and it's necessary to secure the network and plebs want hash rate
and they're sick of look all love to scott 9000 in the bit axe project but i need some actual
hash rate and i have no ideological issue well i i do have ideological issues with everything on
the hardware side of mining but i have no practical issue with renting hash rate because
it's how mining works. Foundry is a miner by any reasonable definition, and they're paying people
to point compute at their servers. Foundry runs the node, they make the templates, they have the
mempool, they broadcast blocks to the chain. They pay miners for high performance compute who
couldn't care less. And we call them hashes, and those guys can all move into AI if they want,
and many of them are, because they don't fundamentally care about what they're crunching
in their centers. They just want to be told what to do, burn a bunch of electricity and get paid
for it. That's it. And why should the people who want to mine Bitcoin that live in cities,
who have no access to cheap electricity, not be able to take advantage of the fact that there's
someone out there, a hasher, who will go to Odessa, Texas and get cheap power and set up a bunch of
ant miners, and instead of pointing them at an FPPS pool, charges 1% more than they do to the pool,
to make a pleb mine and have them point, you know, an exahash at their node. Like this is
unbelievable power. Like you can, if you go on Brains and they're a rival pool, right? But if
you go on Brains hash power, they've got three exahash there. That's 0.3% of the whole network.
You rent the whole lot for fun, maybe burn, you know, maybe burn five grand for fun and rent
three exahash. Rent 0.3% of the entire Bitcoin network for, you know, a few grand for fun and
have it go through your umbrella sitting on your desk, you're just never going to experience that
kind of power. If you're talking about percentages of it, that's like temporarily coming into custody
of 150,000 bitcoins or something. That ratio versus 21 million, that's how much hash rate
you can have. People say, well, it's not yours, it's not sovereign. That's the norm for mining,
unfortunately. It would be great if everyone was running open hardware and all that stuff,
but no one actually is like even the bit axes themselves they still use the closed design
bitmain ASIC chips on them because there's no other game in town you can't beat that it's
it's just so efficient yeah but so so in the scenario though where this happens and you'll
have like some of the hash rate like I'm sure Bob Burnett he's going to be doing bit.110
compliant blocks like there'll be there'll be the people renting hash rate you'll have an amount of
the network let's just say it's like one percent um what happens then because like blocks are going
to be found every i don't know 15 hours or something and like difficulty adjustment period
will be huge like what what happens like what do you do you must have thought about this yeah for
sure again i do think these are all theoretical scenarios i don't if it comes down to dire
straits like that i think i think some of the bit.10 miners might just go like i can't do this
and go back like that's very real scenario but i also don't think if it's like plebs renting and
stuff. Like at the moment, they've managed to get 4x ash, right? So that's a couple of blocks a week.
So you're looking at 50 weeks, a year, before you get a downwards difficulty adjustment of 25%,
right? It's going to be difficult. But at the same time, they're mostly hodlers. And the transaction
fee pressure can build up enough. Like, people are going to laugh at this. But the problem is,
these are theoretical scenarios. So it makes sense to go over it. The transaction fee pressure would
be insane if you're only finding two blocks a week. So miners could make a fortune. But is there
even an exchange that lists it how would you even separate them because it's not a hard fork
so having an exchange track both tokens would be pretty complicated and i don't know that any of
them would so i don't know man like i i really don't think it's that likely i really do think
that if it's like okay we're finding a fairly common amount of blocks now like there's three
or four bit.10 blocks a day i don't know i think they all just start looking at each other and they
go whoever blinks first wins basically like i know that sounds crazy but if we didn't have bit 148
i would be like no you can't be right about any of this but we do have bit 148 so i'm like
maybe we get lucky twice and the network works the way we actually think it does and think it should
in that scenario though would you do something like an emergency difficulty adjustment like would
you even potentially change the algo like i know luke has talked about firing the miners like would
Would you take one of those more drastic steps?
I don't know. Because first off, it's kind of a question of what everyone else is prepared to do as well.
There's no point forking off by yourself, right? That's too reckless.
And it depends if it's failing in that kind of way where you'd have those conversations.
To be honest, I think discussions around power changes, they're totally valid, right?
if Bitmain turned hostile to the network and we found out their stuff was backdoored again and,
you know, they were like, you know, jerry-rigging stuff so that other pools were suffering and Antpool
wasn't, you have to be prepared to do a proof-of-work change just to say, no, you're not in
control of the network. Like, you have to be prepared for the nuclear option all the time,
right? I think that's, and if you're scared of doing it just because you want stability and,
you know, reliability and all that stuff, then you're, you know, you're turning in your firearm.
so to speak. That's not a good idea. You need to remain willing to push the nuclear button
if the time ever calls for it. Like you have two miners that can do 51% attacks at the moment.
They are not big enough to do it successfully for long, but they're big enough that they can
really mess with things that they want. And if you're not prepared to say,
if you do something like that, we will take the network back by force,
then you're kind of just waiting for that day, right? And I don't want to not have
a trump card up our sleeve. So I'm not trying to be evasive. I don't know what I would do in that
scenario. And like I say, it really would depend on what other people do. Because I don't, I believe
Bitcoin is a community. And that's the only thing that makes it strong. And I wouldn't want to be
completely on my own with it because it's money and money's useless unless other people use it too.
So I don't know. I would love to give you some soundbites, some fun stuff like I'm going to do
this i'm going to do that and but i don't like being i don't i don't want to posture about it
i don't want to sit here and be like i'm going to do this and screw anyone like and beat my chest
about it i'd rather just be honest with you i don't know what's coming in that circumstance
i'm genuinely not like i'm not after soundbites here like i disagree with you on the bit 110 stuff
but i think you you're good for bitcoin like i don't want to see you end up hard forking and
like rage quitting bitcoin like that that wouldn't be a good outcome i don't think um but like if it
If it did go that far, if this hard fork, would you sell your Bitcoin and move over to this new thing?
To the hard fork? Again, it would depend. There might not be a lot of point.
I think, to be honest, most failure scenarios there's no recovery from. I think if Bit.110 fails, I don't think there's any
to salvage anything from the wreckage, I think Bitcoin itself would just carry on,
but I think the foundation would be gone in a way that's not immediately obvious.
And I think, and this is like a painful thing to admit,
but I think I basically would just withdraw from the space
because it's increasingly becoming a thing that I don't resonate with.
And I don't like, I'm in Bitcoin because I love it, not because of anything else, right?
I really love this thing and I'm very grateful to the people in it that have made it what it is.
And that's why I fight the way I do.
So if it were to come to that kind of situation where I think something really did need to be done
and it failed to pick up adoption and we just carried on like nothing happened,
I think that would spell the end for me.
I don't know, like, I have a job in the space.
I don't know what the ramifications with that would be and all that stuff.
But at the end of the day, I have a YouTube channel.
It's not monetized.
I don't make any money off it.
I'll make a video once every six months if I feel like it.
It's not like I only do it because I'm compelled to do it.
And I think the compulsion would stop at that point, right?
So I think it would be sad is basically the point of it.
I'm not going to sit here and be like,
oh, we're all going to die immediately.
I think it can be a thing that carries on in perpetuity.
but I just would lose the love for it I think you kind of answered partly one of my questions I was
going to ask is like if let's say this doesn't go the way you expect it or hope it to go like
do you have to do you leave ocean like if this if like bitcoin isn't the thing that you want it to
be like do you carry on that job like how how does your life change after this I don't know I'd have
to reanalyze it I mean if if I can find a silver lining I'll try and work with it you know like
if there's a way like there is a lot of unknown unknowns here and i'm very like call it like uh
sort of wisdom or whatever like rather than technical knowledge or anything i'm pretty sure
that something is going to happen in the next couple of months that's going to be very humiliating
for the people supporting bit.10 and the people against it i'm sure there's going to be something
that emerges that no one could have predicted,
that's going to change the conversation.
And my entire purpose...
This is why I haven been on here telling you we need to do BIP 110 right now right now it the best thing ever because I want to have the humility and openness to the idea that there are better solutions that might enter the fray and I don want to be like blocked from noticing and picking up what they are
and I just feel like historically that kind of thing is what comes along and you never know what
it's going to be but the point is to be able to you know to not be too egotistically attached to
one idea that you can't listen to other good ideas so all that is to say I'm not going to like make a
commitment with regards to what I'll do specifically I can just tell you how I'll feel when it all goes
down if it goes down in the worst way possible. But with regards to what happens to Ocean,
what I would do within Ocean, and what other Bit.110 supporters would do, I think everyone
just needs to look and be very, very careful and pay attention to what everyone else is doing
and remain as agile as possible. So that, you know, there's some nasty stuff that can happen
and I don't like talking about it because it makes it more likely. And I really hope it doesn't.
Um, people can read between the lines on that, but you know, if you're thinking of doing sabotage on either chain, please don't be that person.
Um, cause that's just mutually assured destruction if we're in a chain split scenario.
And, um, I'm not going to say any more than that.
No, but like just to, cause I know, I obviously know what you're saying there.
Um, that's something that I really don't want to see happen because like, like we were talking about before with the taproot addresses where people are going to do it because they know that they're going to do it.
going to essentially become confiscated coins for a year or whatever like i think you could see a
false flag on the other side which is just not what anyone needs like i really hope people uh
people act a bit better than that but they probably won't i hope no i i think it's we're
saved kind of by how risky it is right like if you if you did try and do something like that you
better be very confident in your in your coin joining or whatever it is that that you needed
to make you anonymous.
But I don't want to even reason about this anymore because...
Yes, I agree.
Well, is there anything like on this Bit1 TensorFlow,
as I say, I've not been following it super closely.
Is there anything we've not spoken about in there?
Probably a fair few elements of it.
There's just, there's endless perspectives on it.
And I always realizing new and different things about it every day but I think we gone over pretty much everything I like to have talked about
And I appreciate you taking the time.
I know that you're not a fan of it.
But I also know that you're not dismissing
what me and others have to say on it, you know, frivolously either.
I know you're prepared to listen, and I appreciate that.
No, I'm glad you came on, because like I say,
say like even though i disagree with you i like you i i want i don't want you to rage quit bitcoin
um so it's going to be an interesting few months anyway and like i think the the block size walls
proved that even people who are not necessarily on the the side of the battle that won like still
came back to bitcoin so some of them some did roger never did well he kept all his bitcoin
but i don't know are you going to be the roger or are you going to be the mike belchy no because
Roger really was like, his heart was in the right place, but he was wrong, right? And he just can't
admit that he was wrong. Like, if I'm wrong, then it's me making a mistake. If I'm wrong about
Bit.10, hey, I'm open about there being mistakes with it that need to be fixed. And if it expires
within a year, relief. I'm not telling you it's like, I've done it enough now that I've advocated
for a soft fork and it had a mistake in it and then I look stupid. I did that with Segwit and I
did that with Taproot. I'm not going to do that with Bit.10 where I'm like this is the perfect
thing. Everyone needs to adopt it and then you just have to eat humble pie years later.
If you stay humble then you can fix it when it goes wrong and no one has to humiliate you over
it. So no, I'm not going to be like Roger about it because he can't admit the mistakes he made is
the problem, right? Like, everyone would welcome him back in five minutes if he was to eat humble
pie over it, but he won't. And he's busy inventing conspiracy theories about, you know, well, stuff
that actually comes out of a lot of the Bit.10 supporters mail these days around Blockstream and,
you know, Epstein contamination and all that stuff. Some of that did end up being a bit more
accurate than we'd have liked, but, you know, anyway, I appreciate the kind sentiment. I wouldn't,
Rage quitting's not my style.
I think it's genuinely just a passion thing for me.
I've always loved Bitcoin,
and I've always loved advocating for it.
And I don't want to be advocating for something
if I feel like it's not,
if it lost its sort of moral conviction or, you know, purpose.
And it just became like a thing that a bunch of Wall Street guys were really enjoying getting super rich off I like this is nonsense now Like there no way to passionately advocate for that Yeah No I mean I agree with you on a lot of this stuff
Like, I think we need to see Bitcoin be used as money more.
I don't agree with you on the Bit110 stuff.
I can't say I hope you win.
But thank you for coming on and talking about it anyway.
It's been cool.
And hopefully, well, we're going to see what happens.
I'm sure there'll be another podcast in it at some point.
Yeah, I think like in late July is when everything comes to a head, because you can totally ignore this fork. No one's going to throw your block in the trash until late July comes. And then you need to be like, what if like every mind is going to ask themselves that question? What if another giant pool goes along with this? We don't have any infrastructure set up with it. Right. Oh, let me I didn't quite finish making this point before. I know this is a natural place to end it. But I do want to make this one point.
if you're foundry or if you're ant pool and you're concerned about the other pool going with the fork
then you can't console yourself with the idea that if they do i can just flip a switch and i'm way
over you need to do a bunch of testing and build it out and make sure it works and that takes enough
time and energy that once you do it it's kind of a foregone conclusion that it goes that way
Does that make sense? Like some things are like, if there's, there's an analogy for this, but if you,
if you prepare for a scenario, you make that scenario more likely and you can't afford to
not prepare for it. I hope that sort of condenses it down. Like certain things that you can't,
like it can happen just due to people preparing for it, even though it wouldn't have happened if
they'd never bothered preparing. If everyone just ignores it, it's not going to happen.
but I don't think they can afford to do that.
I totally understand what you're saying.
And you know how these mining pools work far better than I do.
My gut is that they're not even going to prepare for it
and they're going to ignore it.
But I guess this is one of the things that only time will tell.
One of us will be right.
We will see.
And I'll be watching just like you.
Awesome.
Well, thank you, man.
I appreciate you coming on.
And yeah, I'm sure we'll speak again soon.
Thanks.
Thanks for having me.
Thanks, mate.