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All right. It's Friday and it's several minutes past noon. So it must be time for the PBJ show. Welcome.

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PBJ.

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I don't think we've started on time in months now, but this is our earliest, our closest to noon start.

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So I want to congratulate you guys for, I know Steve always has to fluff his hair a little bit.

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Yeah, you know. I got a haircut yesterday afternoon just for the show.

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Oh, wonderful.

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Looking sharp.

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I got mine about a week ago.

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Yeah, you also haircut.

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Kind of high and tight. Yeah.

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So speaking of the Navy, we were just talking.

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Because some people think it's like a military cut, right?

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But are Bitcoiners pirates or Navy?

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And you were saying, Max, I think you were saying you wanted to join the Navy.

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Hey, man.

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Don't quote me on that.

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No, it's an interesting topic.

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I've thought about more in my life, not just with Bitcoin, but with everything, right?

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It's like, you know, I think there are a few tweets out there that were kind of discussing

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this in general.

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I think maybe Chris Pike had an interesting tweet.

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I like a lot of his stuff just discussing has tech in general, you know, gone from being

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the pirates to the Navy.

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And, you know, I think that's certainly an interesting discussion with Bitcoin as well.

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And I think it's also an interesting discussion with just like, you know, is this just the

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way the world works and age?

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And like, there are certain exceptions, but, you know, most people follow a certain path.

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And I was joking.

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I was lifting some new weights yesterday and woke up very, very sore this morning.

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And so, you know, for what that's worth, I felt kind of old this morning.

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But, you know, I think that the question is applied to Bitcoin is for so much of the early

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days of this technology, probably the early days of the Internet, you know, it was all

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about, hey, guys, we're here to do something radically new.

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The system is broken.

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We're here to come up with a new system is extremely cypherpunk, extremely on the edges.

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Bitcoin got started literally on the edges with things like Silk Road.

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and you know increasingly we've seen more people discussing and i think nick carter had a tweet you

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guys were mentioning and i i've seen this with my own friends like one of my good buddies in mexico

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um you know who was like hey i love being a pirate for a long time but now you know i'm like about to

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get married and have a kid and like all of a sudden it's like i don't know man maybe some of this navy

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stuff is not so bad and i think one place we're seeing that is with people discussing do they

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really want a self-custody or would they rather just move into ETFs or similar, you know,

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non-custodial tax advantage things. And yeah, effectively just kind of retire and go their

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merry way. I think that would be sad if that's what happened to the whole movement. I think some

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some mix of that is probably inevitable. But and we also saw what was the eight billion dollars

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worth. I don't know if that was confirmed as Adam Back or someone else that moved.

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And I think part of the presumption was it was a conversion from self-custody to ETF.

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So it definitely seems like that's a that's a hot topic right now.

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But those are sometimes I think those are like the people who are seeding the new Bitcoin treasury company. So it's not necessarily like anti self custody philosophy, but it's more like this is how you seed a new Bitcoin treasury company for better or worse, you know, that everybody wants to do.

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Well, and to be clear, I'm not saying this is anti self custody, but more of just like seeing some of the benefits of not self custody. And in that case, I mean, it's a different flavor if it's a Bitcoin treasury company, but it is similar impact.

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I think the $8 billion, you're talking about the 80,000 Bitcoin or whatever?

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Yeah.

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That was confirmed that it was sold.

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Oh, never mind.

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Yeah, that was a...

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Who purchased it, though?

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How are they costing it?

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Unclear.

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Yeah.

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But I think it's a different entity.

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Yeah.

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Because it was for like estate planning or something.

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That's the official word from Galaxy.

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Yeah.

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Which apparently is an intentional release from the customer.

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I see.

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Because otherwise that's not a normal communication.

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Yeah.

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Yeah.

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I mean, the speculation was that the customer wanted to like give some explanation to like calm the market.

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Yeah.

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Yeah.

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Interesting.

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So what do you guys think?

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Pirates, Navy.

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And to be clear, even like in traditional tech, right, there are people that are outliers that stay, you know, sort of pirates forever.

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Like I, I would argue that, uh, I was reading this Buckminster Fuller book out of, no, Operating Manual for Spaceship Earth, one of my favorite books of all time.

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And his sort of argument is that in the past, we used to think that it was like the British sort of Navy that was actually ruling the world, but it was never nation states. It was always the great pirates behind them. And that's a fascinating rabbit hole to go down. To give you a flavor of what this might include, this might include the owners of the East India Company as an example.

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right? And, you know, he argued that I think around World War II, the great pirates started

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dying out because you needed to have enough sort of technological understanding of, you know,

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different fields, including seafaring, to be able to see that most human laws are in fact quite

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arbitrary and natural law is like what they were sort of ruled by is Bucky's argument. I would

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argue that we're seeing a reemergence of the great pirates right now in the AI race. And so some

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people have state pirates. Elon seems like he's, for better or for worse, I'm not making a normative

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claim on if being a pirate is good or bad, but at the edges. So it seems like getting rich and old

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has not made him lose that spark. And I hope enough Bitcoiners keep that too. But really,

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I would have gotten to him as like one of the most statist people out there.

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I mean, he's tried to embed himself with the government.

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Well, but that's where the claim of Bucky is that the really, truly great pirates just kind of like

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take the state from the inside.

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Okay.

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So.

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Steve?

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Church of Trojan.

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I was going to say the collared shirt guy may be among the most cyberpunk in this conversation.

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He's dressing up his status of the three of us.

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Now, in getting back to ETS, I heard Nick's comment on his weekly roundup a week ago.

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And he just said that I think it was in light of in-kind redemption.

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So if you could take your Bitcoin that you're self-custodied, put it in an ETF with no tax ramifications, he was just saying that's maybe attractive to him, might be attractive to a lot of the people.

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And he also said that we might look back in a few years and just sort of laugh at the silliness and craziness of seed phrases and all the shenanigans you have to do to try to self-custody.

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and he also pointed out that people make mistakes and lose their Bitcoin through self-custody.

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So all that's reasonable takes by him and I even have personal friends who did move their Bitcoin

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to hook the tax it into ETFs to get better security. But I think that would be a worrying

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if that's like a significant trend to worrying trend. What's the concern there? Well one if your

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Bitcoin isn't an ETF.

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If it's a,

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if the in kind is one directional,

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you're not two directional,

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then it becomes this tax trap.

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You can't get it out without paying a big tax bill.

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But I've heard from DK about 75 times that,

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and one of those times is actually legitimate.

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If you're one of three Wall Street firms, right?

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So if you're a big Wall Street firm,

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you can now do it.

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But, you know,

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and then how are you going to spend your Bitcoin?

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Right.

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So there's that concern.

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but we also don't know is that ever going to take

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I mean we talk about a lot

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we're excited about the future of

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Bitcoin payments and everyday

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Bitcoin is everyday money

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but in a world in which it just stays as a store of value

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and then

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there's a strong trend towards

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custodians, what does the world

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of Bitcoin look like?

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We talked a little bit about this maybe two weeks ago on the show

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and we need to keep talking about

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the importance of this

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for everyone, even for people who

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care about bitcoin is as um and only as an investment all they care about that um bitcoin

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becomes a larp if there's not network activity because what's the minor incentive to keep

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securing the network today it is primarily i mean from the beginning of bitcoin until today it's

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primarily the uh minting of new bitcoin but as we all know that goes to zero we talked about this a

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couple weeks ago. So if there's not Bitcoin network activity, it's not just for people who

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want to see Bitcoin as peer-to-peer cash, but even if you care about Bitcoin security. So we

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need to talk about that world. And just to clarify, when you say Bitcoin network activity,

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you're specifically just, I mean, I think we all know this, but just to clarify,

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this means not that you got your brother or cousin involved in Bitcoin. He went to Coinbase

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and bought some because that probably generates probably almost no network activity. But it's

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when you send Bitcoin from a self-custody wallet

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to another self-custody wallet

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that does generate network activity.

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Yeah, actual Bitcoin protocol usage,

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broadcasting Bitcoin transactions.

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Something gets mined.

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That's the number that needs to go up as well.

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If that number doesn't go up,

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then the other number that everyone loves seeing go up

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will go down eventually.

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Because then, you know,

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we'd wind up in a world with no security

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and it's just like,

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kind of a bogus system.

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So now there's many different scenarios

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where we'll see that activity.

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It doesn't, this is not,

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it's not like we have to have

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every human being on the planet,

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every payment they make

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being broadcasting on the Bitcoin network.

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A, it doesn't scale that way.

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And B, we don't need that level of activity.

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We just need some.

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And it could even be a world

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where no consumers do it,

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but just merchants.

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Bitcoin does become everyday money, at least for a portion of the economy. And again, it doesn't have to be the whole economy, just like a slice of the economy. Something meaningful, but it could still be relatively niche. But then if there are legitimate transactions going to merchants, some portion of them self-custody, that alone might be sufficient.

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or different layer two technologies that support consumer payments.

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Those systems also can, even if the end consumers aren't custodying their Bitcoin,

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these gateways basically to the network would be self-custodying.

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They'd be self-custodying.

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They'd be interacting with Bitcoin networks.

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Many different ways.

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We may just be at a very early stage.

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I've heard some people hypothesize that it's crazy to imagine consumers using Bitcoin long term and it's really the settlement layer for other stuff, almost like a new Swift.

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And all these other things would be built on top of it, you know, kind of maybe like lightning channels get kind of created and transferred.

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but like is it possible that the reason we don't see a lot is because it almost like is not going

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to grow up to be that but the layers like lightning or you know some sort of e-cache thing or some sort

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of other data that gets written is really what's going to be the like the mainstream you know

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transactional use cases and it's really going to be transactions and writing to and from the chain

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is going to happen more by like a bunch of different entities but maybe not by an end consumer

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Well, let's talk about a scenario where Bitcoin's only really a store of value. Like day-to-day payments, let's just say that never takes off. So then you have maybe hundreds or thousands of financial institutions that are holding Bitcoin, transferring Bitcoin. They need to do settlement, sort of like you mentioned, SWIFT. Is that going to generate enough demand though? I'm not sure.

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number one you know the you know bitcoin handles on the order of 300 000 transactions per day if

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you have thousands of financial institutions settling once a day with a bunch of partners

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or whatever is it really going to fill up the block space i don't know this is one thing we

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talked about off the air which is one solution is decrease the block size which to most people

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sounds absolutely absurd right i mean like you know what eight years ago whenever there's the

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block size wars and people wanted to increase it to 10 megabytes 100 megabytes gigabytes and

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increase the block size um one person in the entire space luke dash jr wanted to decrease the

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block size to 300k like shrink it by 70 most people completely dismiss that but there is

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definitely logic to it he was making that argument in 2017 yeah yeah okay um what was was he making

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for the same reason you would make it today?

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No, his was more like,

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he was focused on IBD time,

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initial block download,

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like how fast it would take to sync

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and like computing resource growth

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relative to the blockchain growth.

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And his calculation was that

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if you reduced it by 70%,

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then Bitcoin could keep up

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or, you know, with the pace of technology

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and otherwise it would grow too fast.

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This, by the way, makes me think of

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what I think would be two very interesting sort of, I don't know, research papers or academic

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studies, and maybe some people have done this. I didn't even realize Luke had published something

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about this. One day, perhaps our economists will actually be looking at Bitcoin and doing actually

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interesting, useful work. But one question I'd love to see is I've always kind of had my own

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mental model of the rate of growth of the chain versus the cost of consumer hardware and each of

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the different things, the bandwidth, the storage, and the computer or whatever you need to run that.

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I kind of have done my own back of the envelope math. It'd be interesting to see if anyone's done

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sort of a thorough study of that. I don't know. Are you guys aware of either of those?

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No. And I think that's very interesting, but it is orthogonal to the first thing we're talking

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about. I mean, because this is about centralization concerns as opposed to like,

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is there going to be sufficient demand and generate revenue?

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Well, and so this gets to the second question, which is more sort of on topic that I would also

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love to see is, I mean, this is an empirical question, right? So, you know, you basically

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asked, is there going to be enough transaction volume to give the miners the fees? Well, like,

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again, for an economist, this is something you could easily model out with different assumptions

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around value and number of institutions. So, I mean, I think it's going to be a spectrum,

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right? On the one end of the spectrum, like everything is custody to Coinbase, which is,

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that seems really, really, really, really concerning right now is if everyone, all the

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ETFs are using one provider and I know Fidelity is self-custaining and I think Anchorage has some

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adoption, but like, seems like that's, that's a real problem. On the other end of the spectrum,

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everyone has their own wallet, probably not going to happen. So somewhere in between is where we're

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going to land. I mean, in the early days, you know, Satoshi himself talked about Bitcoin banks,

231
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right? So it's not, it's not like it's, it's that, you know, if I just put on my most pragmatist hat,

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I bet there's some combo where people have individual spending money, maybe that's e-cash,

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maybe for some people itself, custodial lightning or whatever flavor spark. But I do think that

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The reality is we're going to see Bitcoin, kind of like you're saying, as more of a settlement

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layer for most people.

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There will be some sovereign individuals or the great pirates that are playing themselves.

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Great.

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But most people will probably still have financial institutions because, again, I think Nick

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has a great point.

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It's like if you have your whole life savings and you just fuck up a word or something,

241
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once you start having kids and stuff, that's really not a risk people want to take.

242
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And I think the interesting question to me is how many financial institutions do you

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need to keep the network sufficiently decentralized?

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I don't know.

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Is the answer 10?

246
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Is it a thousand, a hundred thousand, a million?

247
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Not 10, but let's talk about that.

248
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But I wanted to second your call out

249
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for economists to engage here.

250
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I'd love to see better modeling.

251
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I think it's impossible to completely model it,

252
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but don't let the perfect be the enemy of good.

253
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I think creating some better modeling would be interesting.

254
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But as far as what the world,

255
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yeah, we definitely don't need a world

256
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where every human is self-custodying and transacting.

257
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But, you know, I think a world in which somehow e-cash takes off and there's like hundreds of thousands of mints around the world, that probably alone would be enough activity and demand.

258
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But if it's just the, you know, 4,000 traditional financial institutions in the world that are doing it, I do worry that there wouldn't be enough demand.

259
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So we'd have to reduce the block size.

260
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And because just so everyone understands why that's the case, the way the fees work on Bitcoin, it's not like miners can't, the protocol is not going to insist on like a minimum fee.

261
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Although, having said that, currently, because Bitcoin consensus, there's no minimum fee.

262
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Bitcoin core relay policy right now does have a minimum fee of one sat per V-byte.

263
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And in fact, that's the current discussion right now because miners are starting to mine transactions that are below one sat per V-byte fee.

264
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How is that possible?

265
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Because it's consensus valid.

266
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So even if you do, can you do like 0.1 right now?

267
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Yeah, we're seeing that.

268
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What was the distinction you said?

269
00:16:52,080 --> 00:17:06,440
So just like the whole opportune debacle, there's a difference between standardness rules and what Bitcoin Core, one implementation of Bitcoin's policies are to relay a transaction in the network, and consensus.

270
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There's a delta there.

271
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And so just because something isn't relayed by default by Bitcoin Core doesn't mean it can't be mined.

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Just like people mining a Donald Trump JPEG taking up the entire four megabytes in the block or whatever, you can't relay that through Bitcoin Core by default, but it can get mined because its consensus valid.

273
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So there is no minimum fee.

274
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Interesting.

275
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And it's a free market, right?

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Like you as a miner, you might insist on like, I'm not going to mine a transaction unless it pays me a certain fee rate, but I can come online and undercut you.

277
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Right.

278
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And DK can come on and it just, it goes, it can go to zero.

279
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Right.

280
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So even if you have, so it's, it's disconnected from willingness to pay.

281
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So you could be a financial institution transferring a billion dollars where you'd be more than happy to spend thousands of dollars on fees to ensure the security of this payment to your adversary, maybe.

282
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Paying an oil fee between two adversarial countries or something.

283
00:18:15,060 --> 00:18:16,920
You'd be more than happy to spend a huge fee.

284
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But if you don't need to, why would you?

285
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So if there's not sufficient demand, if the market overall is not saying here's the minimum fee, you're not going to pay that. So that would be the rationale for decreasing the block size.

286
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if it turns out that the only people trying to transact are these big financial institutions

287
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with a large amount transfers and if you did shrink the block size to make sure that the

288
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demand exceeded the block space then you'd see actual economic willingness to pay play out.

289
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Okay so I'd like to go through two scenarios let's say there's one scenario where we have

290
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roughly the same number of financial institutions that we have today 4,000 or whatever that number

291
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is. If the price

292
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of Bitcoin is high enough, couldn't that

293
00:19:02,820 --> 00:19:04,760
still work? Like if whatever they're

294
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paying whatever, Bitcoin's $10 million a coin.

295
00:19:07,260 --> 00:19:08,760
Yes, they're only doing a few transactions

296
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a day, but they're paying, I don't know, a huge amount.

297
00:19:10,920 --> 00:19:12,880
I guess... I don't see how it's related to the price

298
00:19:12,880 --> 00:19:14,700
of Bitcoin though. Because let's say

299
00:19:14,700 --> 00:19:16,580
if there's 300,000

300
00:19:16,580 --> 00:19:18,580
transactions that can be

301
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sent in a day, if there's only demand

302
00:19:20,840 --> 00:19:22,620
for 250,000, then

303
00:19:22,620 --> 00:19:24,780
the transaction fees will be zero. They'll be zero.

304
00:19:25,100 --> 00:19:25,980
That's a good point. Or you're on

305
00:19:25,980 --> 00:19:27,500
like...

306
00:19:27,500 --> 00:19:28,440
So it's...

307
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One sat.

308
00:19:29,620 --> 00:19:30,760
Have we ever been in an environment

309
00:19:30,760 --> 00:19:32,300
that you would consider sort of like

310
00:19:32,300 --> 00:19:35,080
healthy transaction fee markets?

311
00:19:35,300 --> 00:19:36,920
I feel like I've seen...

312
00:19:36,920 --> 00:19:37,160
No.

313
00:19:37,320 --> 00:19:37,860
I've seen it spike.

314
00:19:37,860 --> 00:19:38,820
When the spammers are here.

315
00:19:39,360 --> 00:19:41,360
We've seen it spike and decrease, but...

316
00:19:41,360 --> 00:19:41,580
No.

317
00:19:41,960 --> 00:19:43,040
There's only...

318
00:19:43,040 --> 00:19:44,060
It's never been...

319
00:19:44,060 --> 00:19:46,360
I mean, this also gets to a topic.

320
00:19:46,760 --> 00:19:47,820
We should also...

321
00:19:47,820 --> 00:19:48,660
Well, but...

322
00:19:48,660 --> 00:19:48,840
Okay.

323
00:19:49,060 --> 00:19:49,800
So two things.

324
00:19:51,340 --> 00:19:53,580
Another thing we should discuss is security budget.

325
00:19:53,740 --> 00:19:54,880
Like how much is even needed?

326
00:19:54,880 --> 00:20:02,680
because we can't say history is the guide because history has nothing to do with like what actually

327
00:20:02,680 --> 00:20:09,500
is needed for security is completely driven by the price of bitcoin because it's a fixed amount

328
00:20:09,500 --> 00:20:15,980
of bitcoin that's minted each block so the only variable is the price of bitcoin which has nothing

329
00:20:15,980 --> 00:20:21,580
to do with security it's all about demand for owning bitcoin right so in the future when that

330
00:20:21,580 --> 00:20:28,840
minting goes away it's then it flips to a completely different system then it is demand

331
00:20:28,840 --> 00:20:35,840
based for to get your transactions into the block also having nothing to do with security

332
00:20:35,840 --> 00:20:44,820
so this is arguably a flaw in the entire system that the point of the fee is security right but

333
00:20:44,820 --> 00:20:47,020
it is not tied to the actual activity.

334
00:20:49,200 --> 00:20:51,320
No one's paying a fee for security.

335
00:20:51,480 --> 00:20:53,360
They're paying a fee to get their transaction mined.

336
00:20:55,420 --> 00:20:56,640
Why is that a flaw, though?

337
00:20:56,680 --> 00:20:57,860
I mean, it's a second-order consequence.

338
00:20:57,860 --> 00:21:03,000
Well, because let's say that we knew

339
00:21:03,000 --> 00:21:06,320
the security budget needed for Bitcoin

340
00:21:06,320 --> 00:21:09,940
was $50 billion a year.

341
00:21:11,040 --> 00:21:11,880
Let's just say we...

342
00:21:11,880 --> 00:21:12,600
When you say the security budget,

343
00:21:12,700 --> 00:21:14,700
you mean how much has to get paid out

344
00:21:14,700 --> 00:21:18,480
globally to miners in order to keep them wanting to run it.

345
00:21:19,340 --> 00:21:21,720
Yeah, and prevent 51% attacks.

346
00:21:22,240 --> 00:21:23,580
Like sufficient security defense.

347
00:21:23,700 --> 00:21:25,740
So let's just say, we don't know that, and we can talk about that,

348
00:21:25,780 --> 00:21:27,360
but let's just say that is actually the case.

349
00:21:28,200 --> 00:21:28,900
50 billion a year.

350
00:21:29,500 --> 00:21:32,260
But, so obviously if we're only paying,

351
00:21:32,980 --> 00:21:34,900
like if we don't get Bitcoin network activity

352
00:21:34,900 --> 00:21:36,420
and we're only paying a billion dollars a year,

353
00:21:36,420 --> 00:21:40,580
then we are at risk of 51% attacks,

354
00:21:40,740 --> 00:21:42,860
double spending and the whole system failing.

355
00:21:42,860 --> 00:21:48,560
um what if it's the flip though let's say that the security budget is actually only needs to be

356
00:21:48,560 --> 00:21:54,300
a billion dollars and we're spending 50 billion a year or 500 billion a year because there's so

357
00:21:54,300 --> 00:22:00,780
much demand right then that's just like a stupid economic loss like it's just friction in the

358
00:22:00,780 --> 00:22:06,580
economy unnecessary friction we're because we're paying 500 times more than we need to for the

359
00:22:06,580 --> 00:22:13,840
security we need. And number one, we do not know how much security we need. And we can go into why

360
00:22:13,840 --> 00:22:20,380
that's such a hard problem to model and understand. And number two, even if we did know, the way

361
00:22:20,380 --> 00:22:26,720
Bitcoin works is not aligned with that. Okay. So just to, I don't know if pushback is right,

362
00:22:26,820 --> 00:22:31,080
but the way that I think about this is in a complex adaptive system, like,

363
00:22:31,080 --> 00:22:42,759
And this is the reason I not worried about in the long run The security I think security almost is perhaps the wrong question to ask The question to start with is I mean is it providing value or not

364
00:22:43,179 --> 00:22:45,939
And so the way I think about it is when we say how much security is a need, well, that

365
00:22:45,939 --> 00:22:49,059
depends on how much value people are moving and how much value people are moving depends

366
00:22:49,059 --> 00:22:50,099
on how much value they get out of it.

367
00:22:50,319 --> 00:22:53,279
So let's say we said $50 billion for all of today's financial institutions.

368
00:22:53,679 --> 00:22:56,759
Well, if they're not getting enough value out of that, then I think what would happen

369
00:22:56,759 --> 00:22:59,059
is there would still be a security budget.

370
00:22:59,059 --> 00:23:00,179
It would just come way down.

371
00:23:00,259 --> 00:23:01,159
So maybe it's a billion dollars.

372
00:23:01,159 --> 00:23:02,319
And then who's still using it then?

373
00:23:02,519 --> 00:23:09,219
Well, you know, the dark web, Silk Road, like the edges of the internet, and it kind of goes back into another dark age and then maybe perhaps reemerges.

374
00:23:09,599 --> 00:23:15,679
So I guess it's almost like, to me, the fundamental question is, are people getting value out of it or not?

375
00:23:15,719 --> 00:23:16,799
If they're getting value, they'll pay.

376
00:23:17,159 --> 00:23:19,779
And then security is like a second order effect of that.

377
00:23:19,999 --> 00:23:20,719
That's the way I think about it.

378
00:23:21,279 --> 00:23:25,279
Are there any proposals for how you might correct this?

379
00:23:25,379 --> 00:23:29,539
Like, I mean, something like a dynamic block size comes to mind.

380
00:23:29,539 --> 00:23:31,099
It sounds crazy.

381
00:23:31,159 --> 00:23:37,319
but no there's been um some thinking around that and actually jameson lop just interviewed with

382
00:23:37,319 --> 00:23:44,879
haley in the studio on 21 and 21 and he's um he's sketching out a proposal on that i know uh aj towns

383
00:23:44,879 --> 00:23:48,819
is another developer who's done some thinking around this and it was certainly proposed in

384
00:23:48,819 --> 00:23:55,959
the past before but i do think that's an area ripe for um even deeper exploration that's that

385
00:23:55,959 --> 00:23:59,479
feels like it solves the problem I'm mentioning.

386
00:23:59,899 --> 00:24:01,759
Because even with what you said,

387
00:24:01,999 --> 00:24:03,359
my interpretation, what you said, Max,

388
00:24:03,419 --> 00:24:06,999
is like it speaks to the difficulty adjustment.

389
00:24:06,999 --> 00:24:07,439
Yes.

390
00:24:07,859 --> 00:24:11,419
But I still think that's orthogonal to what I'm saying.

391
00:24:11,679 --> 00:24:15,159
I'm saying that whatever the security budget is,

392
00:24:15,519 --> 00:24:17,599
the people's willingness to pay,

393
00:24:17,719 --> 00:24:19,039
they're not paying for security.

394
00:24:19,179 --> 00:24:20,919
They're paying to get the transaction mined.

395
00:24:21,599 --> 00:24:24,639
In other words, let's say that we needed

396
00:24:24,639 --> 00:24:30,979
in a given block, let's say we needed a million dollars to make sure that's secure.

397
00:24:31,219 --> 00:24:39,399
That's how the math works out. But there's just not enough demand. So you can get away

398
00:24:39,399 --> 00:24:46,179
paying a penny to get your transaction in. Are you going to be altruistic and pay, you know,

399
00:24:46,179 --> 00:24:51,799
a million dollars divided by 3000 transactions? So like, you know, 300, are you gonna pay $333

400
00:24:51,799 --> 00:24:54,999
because you know that's how much security is needed?

401
00:24:55,559 --> 00:24:57,239
Or are you going to pay a penny

402
00:24:57,239 --> 00:24:59,179
because you know that is going to get your transaction mind?

403
00:24:59,479 --> 00:25:00,779
And like, you know what?

404
00:25:02,219 --> 00:25:02,879
It's a good point.

405
00:25:02,959 --> 00:25:03,999
I guess what I would say that,

406
00:25:04,079 --> 00:25:05,079
and I need to think more about this

407
00:25:05,079 --> 00:25:07,719
because the adaptive block size is an interesting question.

408
00:25:07,859 --> 00:25:09,019
But to that first question,

409
00:25:09,059 --> 00:25:10,939
I would just say that Bitcoin's not valuable enough

410
00:25:10,939 --> 00:25:11,899
to like move a million dollars

411
00:25:11,899 --> 00:25:14,159
or like whatever amount you're trying to move,

412
00:25:14,199 --> 00:25:15,599
it's not the right tool in that world.

413
00:25:17,319 --> 00:25:18,179
Let's play that out.

414
00:25:18,319 --> 00:25:18,419
Yeah.

415
00:25:18,419 --> 00:25:24,459
So let's say that, let's say like Michael Saylor's dream comes true.

416
00:25:24,559 --> 00:25:26,859
Bitcoin's like $43 million a coin.

417
00:25:27,519 --> 00:25:30,679
It's like hundreds of trillions of dollars of value.

418
00:25:30,839 --> 00:25:33,079
It sucks up real estate and bonds and everything.

419
00:25:33,239 --> 00:25:34,059
Let's say all that happens.

420
00:25:34,559 --> 00:25:37,039
And it actually is, it's like true, it's real, it's sustainable.

421
00:25:37,299 --> 00:25:38,459
That's how things are working.

422
00:25:39,219 --> 00:25:43,419
So there's like real value delivered to the world.

423
00:25:43,719 --> 00:25:45,399
Let's just assume all that's true.

424
00:25:45,399 --> 00:25:53,659
right okay um but it's all just uh costed coinbase so there's literally no network activity

425
00:25:53,659 --> 00:25:59,459
or very little like a few institutions sending money back and forth again so there there'd be

426
00:25:59,459 --> 00:26:05,959
like tremendous value for the world it's one that but and also let's say even payment every let's

427
00:26:05,959 --> 00:26:12,079
say also everyday payments takes off but it's just like one company that um or one or a handful

428
00:26:12,079 --> 00:26:16,159
of companies dominate, like LightSpark and Coinbase and Block or whatever, let's say they

429
00:26:16,159 --> 00:26:22,759
dominate payments, then if there's, so they're just tremendous value for the world, but there's

430
00:26:22,759 --> 00:26:26,039
not enough Bitcoin network activity. So again, it's detached.

431
00:26:26,279 --> 00:26:30,479
Well, so what I would argue in that world is that Bitcoin's value actually like went

432
00:26:30,479 --> 00:26:33,219
down by like 99%. And so what happened?

433
00:26:33,299 --> 00:26:37,019
That's why we're talking about in the show. I totally agree. And that's why I think investors

434
00:26:37,019 --> 00:26:40,839
who only care about number go up, which is totally fine that that's all you care about.

435
00:26:40,839 --> 00:26:44,539
they also need to worry about the Bitcoin network activity growing.

436
00:26:44,819 --> 00:26:45,159
100%.

437
00:26:45,159 --> 00:26:47,159
But to be clear, my argument there is, again,

438
00:26:47,319 --> 00:26:52,379
you would have a nominal value where you say this is extremely valuable for the world,

439
00:26:52,499 --> 00:26:56,039
but the real market value, like what people are willing to pay,

440
00:26:56,579 --> 00:26:58,499
actually just fell 99.999%.

441
00:26:58,499 --> 00:27:00,279
And it was a strategic takeover.

442
00:27:00,439 --> 00:27:01,979
And that's how the quote-unquote state won.

443
00:27:02,059 --> 00:27:02,899
Well, that's what I call it.

444
00:27:03,019 --> 00:27:05,059
I've called on the show like a LARP or like XRP.

445
00:27:05,299 --> 00:27:08,859
I think it evolves into that because it's just like kind of bullshit at that point.

446
00:27:08,859 --> 00:27:09,139
Exactly.

447
00:27:09,139 --> 00:27:13,859
It's like we had this conception of Bitcoin being differentiated from all the other tokens.

448
00:27:14,859 --> 00:27:16,999
That's how Bitcoin dies, short term.

449
00:27:17,219 --> 00:27:18,619
Again, it would never, never die.

450
00:27:18,739 --> 00:27:22,799
So my argument is this would be like a generational thing where there would still be, I don't know.

451
00:27:22,799 --> 00:27:23,379
Back into the caves.

452
00:27:23,579 --> 00:27:24,299
Adam Backus.

453
00:27:24,499 --> 00:27:30,859
I mean, kind of jokingly, but like, yeah, there will be some class of hardcore cyberpunks that will never stop.

454
00:27:30,859 --> 00:27:39,559
And so, I mean, it wasn't he the one that famously said he put the stop order or whatever that he would buy all Bitcoin at like 0.01 cents or a penny, whatever.

455
00:27:40,739 --> 00:27:42,079
I'm happy to sign up for that.

456
00:27:42,199 --> 00:27:42,759
Yeah, exactly.

457
00:27:43,059 --> 00:27:48,539
But my point is like, I've got my stop order in for a penny.

458
00:27:48,739 --> 00:27:49,799
Exactly, a penny, a coin.

459
00:27:50,199 --> 00:27:53,279
And when we say a coin, we mean the old world big B Bitcoin too, right?

460
00:27:53,279 --> 00:27:59,159
So in that world, I think what would just happen is you would have Bitcoin would go underground for a generation again.

461
00:27:59,539 --> 00:28:01,679
And the status would be like, oh, cool.

462
00:28:02,019 --> 00:28:02,359
We won.

463
00:28:02,419 --> 00:28:04,059
And then you would just go back and forth.

464
00:28:04,159 --> 00:28:09,539
But to be clear, I think there's two threads for us to be that we are discussing and that we need to just keep discussing.

465
00:28:09,899 --> 00:28:13,699
One is if there's not enough Bitcoin network activity, Bitcoin dies eventually.

466
00:28:13,919 --> 00:28:16,719
Well, you said two years, but I think I mean, I think it's more like 20 years.

467
00:28:16,779 --> 00:28:19,399
But either way, we need to be talking about it.

468
00:28:19,599 --> 00:28:19,759
Yeah.

469
00:28:19,839 --> 00:28:20,759
We need to talk about it now.

470
00:28:21,099 --> 00:28:21,679
That's one thing.

471
00:28:21,679 --> 00:28:39,919
But even if we live in a world where awesome, Bitcoin is everyday money takes off and like self custody is valued, even if it's by merchants or intermediaries or there's like millions of financial, quote, institutions, maybe they're like self-sovereign, like e-cash mints that are like NIMS or whatever, AI agents or whatever.

472
00:28:40,319 --> 00:28:42,139
But there's millions of these.

473
00:28:42,419 --> 00:28:44,219
And then there's lots of network activity.

474
00:28:44,319 --> 00:28:45,859
Let's say all that actually happens.

475
00:28:45,959 --> 00:28:46,239
Great.

476
00:28:46,379 --> 00:28:48,979
Then one thread that we're discussing is solved.

477
00:28:48,979 --> 00:29:18,219
There's tons of network activity. But the second thread is it's still the economic activity on the blockchain is not a direct function of the security needed. And maybe that's maybe it's a who cares if enough money is paid. Exactly. That's a we don't know. The only way we know how much we need is when we start getting attacked. Exactly. And like that could happen. That's a possible future. It dips so low that it gets attacked.

478
00:29:18,219 --> 00:29:21,299
And then we're like, okay, well, that's too low.

479
00:29:21,459 --> 00:29:24,059
Again, we can't be like, okay, everyone pay up more.

480
00:29:24,919 --> 00:29:26,559
But we'd learn what it is.

481
00:29:26,639 --> 00:29:29,519
If we never learn what it is, we don't know what the threshold is.

482
00:29:29,699 --> 00:29:35,479
As long as we stay above the threshold, maybe we're 10% above, maybe we're 100x above.

483
00:29:36,519 --> 00:29:38,659
Then we'd be fine from a security perspective.

484
00:29:38,659 --> 00:29:41,719
Then it's just unnecessary economic friction.

485
00:29:42,719 --> 00:29:43,779
But I do think

486
00:29:43,779 --> 00:29:45,859
more exploration

487
00:29:45,859 --> 00:29:47,739
around dynamic block sizes

488
00:29:47,739 --> 00:29:49,419
is warranted.

489
00:29:49,939 --> 00:29:51,259
Maybe Spiral should fund this.

490
00:29:51,959 --> 00:29:52,919
I mean, it's a good question.

491
00:29:53,039 --> 00:29:53,719
Take an action item.

492
00:29:53,859 --> 00:29:54,659
I still think we need

493
00:29:54,659 --> 00:29:56,299
AI note-taking during our show

494
00:29:56,299 --> 00:29:57,899
to give me action items.

495
00:29:57,899 --> 00:29:58,859
Dear agent, please.

496
00:30:00,599 --> 00:30:01,899
But the dynamic blocks,

497
00:30:02,519 --> 00:30:03,919
let's say there was a proposal

498
00:30:03,919 --> 00:30:04,739
or a hypothesis

499
00:30:04,739 --> 00:30:05,739
that seemed to make sense.

500
00:30:05,859 --> 00:30:07,279
Do you suspect that such a thing

501
00:30:07,279 --> 00:30:08,719
would get a lot of pushback

502
00:30:08,719 --> 00:30:09,539
from certain players?

503
00:30:09,639 --> 00:30:10,279
Like I can imagine

504
00:30:10,279 --> 00:30:11,559
the miners would be like,

505
00:30:11,719 --> 00:30:13,659
oh yeah, like more transaction fees sounds good.

506
00:30:13,719 --> 00:30:15,359
I can imagine that, you know,

507
00:30:15,399 --> 00:30:18,699
maybe gut reaction from investors would be,

508
00:30:18,999 --> 00:30:20,579
I guess a little bit kind of who cares?

509
00:30:20,719 --> 00:30:22,039
Like if they're not spending it anyway,

510
00:30:22,099 --> 00:30:23,299
why do they care if they're just holding?

511
00:30:23,999 --> 00:30:25,719
So who would be like?

512
00:30:25,719 --> 00:30:27,439
Well, first of all, there'd be people

513
00:30:27,439 --> 00:30:28,559
who were around 10 years ago

514
00:30:28,559 --> 00:30:31,039
might be having aversion to this

515
00:30:31,039 --> 00:30:32,299
just because it was like so,

516
00:30:32,559 --> 00:30:33,759
such a nasty fight then

517
00:30:33,759 --> 00:30:35,339
and they don't even want to like broach

518
00:30:35,339 --> 00:30:37,519
the topic of changing the block size in any way.

519
00:30:38,379 --> 00:30:39,539
But whatever, we can get,

520
00:30:39,659 --> 00:30:41,699
I mean, if it's like a legitimate discussion,

521
00:30:41,719 --> 00:30:44,579
and potentially needed, we'll get over that.

522
00:30:45,079 --> 00:30:46,699
As far as the other stakeholders,

523
00:30:47,959 --> 00:30:49,259
their reaction to it,

524
00:30:49,319 --> 00:30:51,179
well, I think it's a function of two things.

525
00:30:51,459 --> 00:30:53,179
One, I mean, how good is the proposal?

526
00:30:53,479 --> 00:30:57,159
It does need to be evaluated along numerous angles.

527
00:30:57,299 --> 00:30:59,999
I mean, technically, does it work?

528
00:31:01,179 --> 00:31:02,879
Adversarily, can it be attacked?

529
00:31:03,479 --> 00:31:05,399
And that needs huge scrutiny

530
00:31:05,399 --> 00:31:06,859
because this kind of change

531
00:31:06,859 --> 00:31:09,639
could accidentally open up some vulnerability

532
00:31:09,639 --> 00:31:10,939
that can be attacked.

533
00:31:10,939 --> 00:31:13,919
So it needs like heavy scrutiny, technical scrutiny.

534
00:31:14,659 --> 00:31:21,459
And then economically, back to the point of like, let's get some economists focused on modern future money.

535
00:31:22,099 --> 00:31:22,439
Exactly.

536
00:31:22,699 --> 00:31:24,279
Like, I still don't understand why.

537
00:31:24,419 --> 00:31:24,999
I know, it's crazy.

538
00:31:25,239 --> 00:31:27,179
Economists at universities don't do that.

539
00:31:27,379 --> 00:31:27,759
Like, this is.

540
00:31:27,879 --> 00:31:29,359
The universities are part of the fiat system.

541
00:31:29,779 --> 00:31:32,419
It's such a novel, interesting challenge and problem.

542
00:31:32,559 --> 00:31:32,859
I think it would be.

543
00:31:32,859 --> 00:31:33,739
You're not going to get tenured.

544
00:31:34,319 --> 00:31:35,779
Intellectually so interesting, right?

545
00:31:35,779 --> 00:31:39,499
I think you need kind of an indie econ hacker.

546
00:31:39,499 --> 00:31:42,239
That would be something cool for spiral to fund is like indie economists.

547
00:31:42,479 --> 00:31:45,099
Because the people at the institutions, they care about tenure.

548
00:31:45,359 --> 00:31:46,159
Again, incentives.

549
00:31:46,279 --> 00:31:47,019
Incentives rule the world.

550
00:31:47,179 --> 00:31:49,919
Like they're not going to take the risk to study something that might get them like fired.

551
00:31:50,039 --> 00:31:50,679
Yeah, we'll do it.

552
00:31:51,519 --> 00:31:53,199
So indie economists, talk to this man.

553
00:31:53,199 --> 00:31:54,879
I'm committing to grants for that.

554
00:31:55,339 --> 00:31:56,679
But also a goal for.

555
00:31:57,299 --> 00:31:59,219
How much is free money to Steve give away on the show today?

556
00:31:59,639 --> 00:32:00,639
Yeah, we're up to a million.

557
00:32:01,239 --> 00:32:02,979
Can I get some of those sweet, sweet sass, please?

558
00:32:03,319 --> 00:32:04,039
Look under your chair.

559
00:32:04,819 --> 00:32:05,899
Oh, I love it.

560
00:32:06,399 --> 00:32:07,019
A big key.

561
00:32:07,019 --> 00:32:12,939
but uh princeton bitcoin also has a goal like bridging the gap between silicon valley right

562
00:32:12,939 --> 00:32:16,779
and silicon valley doesn't just mean google or venture capitalists but also universities like

563
00:32:16,779 --> 00:32:20,919
stanford and berkeley and local universities and eventually trying to crack that nut for like the

564
00:32:20,919 --> 00:32:26,939
whole world like hopefully we can have success here in the the the bay area um and then maybe

565
00:32:26,939 --> 00:32:32,379
that's a template for others to learn from around the world i love it and and not just computer

566
00:32:32,379 --> 00:32:34,199
science students, but also

567
00:32:34,199 --> 00:32:36,519
economists. Although, to be fair, the computer

568
00:32:36,519 --> 00:32:37,799
science students are probably better at this.

569
00:32:38,119 --> 00:32:40,259
And everybody studies computer science these days.

570
00:32:40,419 --> 00:32:42,419
Yeah, exactly. I think like

571
00:32:42,419 --> 00:32:44,279
70 or 80% of the Stanford

572
00:32:44,279 --> 00:32:45,919
class is computer science. Seriously?

573
00:32:46,259 --> 00:32:48,399
Yeah, it's like kind of ridiculous. And they're about to all be

574
00:32:48,399 --> 00:32:50,119
out of jobs. Literally? I think so.

575
00:32:50,239 --> 00:32:52,419
I mean, maybe the number is 60%, but it's not like

576
00:32:52,419 --> 00:32:54,399
I don't know. The majority of the entire student

577
00:32:54,399 --> 00:32:56,199
base is studying computer science. Yeah, everybody studies computer science.

578
00:32:56,479 --> 00:32:57,839
Meaning like as a minor?

579
00:32:58,179 --> 00:33:00,039
No, it's like their major. I think everybody studies computer science.

580
00:33:00,039 --> 00:33:01,979
What? I think it's more than 50%.

581
00:33:01,979 --> 00:33:03,439
I don't know what the number is, but it's...

582
00:33:03,439 --> 00:33:05,219
I know it's high, but that's very high.

583
00:33:05,219 --> 00:33:06,639
Well, I can, I'll fact check it.

584
00:33:06,759 --> 00:33:07,839
Don't take my word for it.

585
00:33:07,979 --> 00:33:10,019
Well, any, even if it was 20%,

586
00:33:10,019 --> 00:33:11,739
I think that's kind of crazy.

587
00:33:12,159 --> 00:33:13,879
So, okay, two thoughts that came out of that.

588
00:33:13,999 --> 00:33:15,659
One, on the adaptive block size thing.

589
00:33:15,779 --> 00:33:18,239
So my initial reaction is, you know,

590
00:33:18,279 --> 00:33:19,619
I think part of what makes Bitcoin

591
00:33:19,619 --> 00:33:21,179
so beautiful is simplicity, right?

592
00:33:21,239 --> 00:33:23,819
So like my, I'm kind of like initially allergic

593
00:33:23,819 --> 00:33:25,019
to anything, to your point,

594
00:33:25,099 --> 00:33:27,119
because again, complexity active system,

595
00:33:27,199 --> 00:33:28,239
it's very hard to model.

596
00:33:28,559 --> 00:33:29,499
Like, I think it's awesome.

597
00:33:29,599 --> 00:33:30,819
We should definitely have people studying it,

598
00:33:30,819 --> 00:33:32,619
do as much work as humanly possible,

599
00:33:32,979 --> 00:33:33,819
test net, whatever.

600
00:33:34,259 --> 00:33:37,219
But again, my fear is always like anytime you met,

601
00:33:37,279 --> 00:33:39,699
like the reason Bitcoin took off in my mind

602
00:33:39,699 --> 00:33:41,379
and so many reasons is Satoshi said,

603
00:33:41,459 --> 00:33:43,179
okay, like having a decentralized marketplace

604
00:33:43,179 --> 00:33:45,719
was basically having like decentralized bids and asks

605
00:33:45,719 --> 00:33:46,559
was impossible.

606
00:33:46,679 --> 00:33:47,539
So we talked a lot about.

607
00:33:47,659 --> 00:33:49,019
So instead he just says, okay, cool.

608
00:33:49,039 --> 00:33:51,359
We're going to give away whatever, a fixed amount.

609
00:33:51,479 --> 00:33:53,299
There's a fixed supply and we give away a fixed amount

610
00:33:53,299 --> 00:33:54,039
for block size reward.

611
00:33:54,119 --> 00:33:55,799
And that just solved the problem with simplicity.

612
00:33:56,159 --> 00:33:57,259
So anytime we mess with simplicity,

613
00:33:57,259 --> 00:34:00,679
it has a flaw and you could argue a flaw.

614
00:34:00,819 --> 00:34:02,279
it might be a fatal flaw.

615
00:34:02,399 --> 00:34:03,179
Totally, totally.

616
00:34:03,319 --> 00:34:03,879
And again,

617
00:34:04,079 --> 00:34:05,079
that's a very supportive study.

618
00:34:05,219 --> 00:34:06,159
I'm just saying in general,

619
00:34:06,379 --> 00:34:06,579
like,

620
00:34:06,699 --> 00:34:07,079
I'm like,

621
00:34:07,619 --> 00:34:08,079
again,

622
00:34:08,199 --> 00:34:09,239
in my old age,

623
00:34:09,239 --> 00:34:10,079
I'm becoming more,

624
00:34:10,139 --> 00:34:11,079
more concerned.

625
00:34:11,379 --> 00:34:12,039
I'm also with simplicity.

626
00:34:12,159 --> 00:34:13,259
I agree with the simplicity point.

627
00:34:13,359 --> 00:34:14,179
The second thing though,

628
00:34:14,179 --> 00:34:14,559
is like,

629
00:34:14,559 --> 00:34:16,839
there are empirical things to study here.

630
00:34:16,919 --> 00:34:18,519
So the Monero community already has this.

631
00:34:18,599 --> 00:34:20,339
So they argued this like forever ago

632
00:34:20,339 --> 00:34:21,479
and the Monero community,

633
00:34:21,619 --> 00:34:22,579
people think of it as a privacy,

634
00:34:22,779 --> 00:34:23,019
you know,

635
00:34:23,039 --> 00:34:23,559
coin or whatever,

636
00:34:23,919 --> 00:34:26,019
but it actually has two very interesting innovations

637
00:34:26,019 --> 00:34:27,859
or experiments that are very similar to Bitcoin.

638
00:34:28,579 --> 00:34:30,839
One is as a eternal tail emission,

639
00:34:30,999 --> 00:34:31,519
which is something interesting.

640
00:34:31,659 --> 00:34:33,179
I know Peter Todd and other people have called for that.

641
00:34:33,959 --> 00:34:36,759
It's like it starts as 1% and that's a fixed amount.

642
00:34:36,879 --> 00:34:38,699
So it goes, it's asymptotic with zero, but never zero.

643
00:34:39,099 --> 00:34:41,019
And the second thing is they also have adaptive block size.

644
00:34:41,119 --> 00:34:42,239
They also have like this like thing

645
00:34:42,239 --> 00:34:43,539
to like prevent ASICs from mining,

646
00:34:43,679 --> 00:34:45,079
which I think is extremely dumb.

647
00:34:46,279 --> 00:34:48,859
Dumb, interesting, dumb is my quick response

648
00:34:48,859 --> 00:34:49,679
to those three things.

649
00:34:50,159 --> 00:34:50,519
Agreed.

650
00:34:50,759 --> 00:34:53,079
So, but the point is like Monero is a real network.

651
00:34:53,179 --> 00:34:54,099
It does have real volume.

652
00:34:54,099 --> 00:34:56,339
It is the currency of the dark web, probably worth.

653
00:34:56,339 --> 00:35:00,039
If I were like a renegade economist applying for Steve's money, I'd probably start with there.

654
00:35:00,699 --> 00:35:01,959
And yeah, it would be fun.

655
00:35:02,259 --> 00:35:03,419
Actually, let's go through those.

656
00:35:03,579 --> 00:35:04,599
I'm already forgetting the three things.

657
00:35:04,799 --> 00:35:05,619
So the interesting, okay.

658
00:35:06,539 --> 00:35:06,959
Tail mission.

659
00:35:07,419 --> 00:35:07,879
Oh, tail mission.

660
00:35:07,999 --> 00:35:08,119
Yeah.

661
00:35:08,419 --> 00:35:09,319
Actually, that's a big topic.

662
00:35:09,459 --> 00:35:10,999
So let's dive into that in a second.

663
00:35:11,259 --> 00:35:14,159
But the third, your number three, I think is dumb.

664
00:35:15,139 --> 00:35:18,599
That's where they try to stay ahead of the ASIC development.

665
00:35:18,659 --> 00:35:18,999
So dumb.

666
00:35:18,999 --> 00:35:23,339
By hard forking every six months and changing the algorithm.

667
00:35:24,919 --> 00:35:26,099
I mean, I thought that's dumb for.

668
00:35:26,099 --> 00:35:27,819
Who gets to decide what your algorithm is?

669
00:35:27,819 --> 00:35:30,139
It's a very centralizing force, right?

670
00:35:30,459 --> 00:35:32,319
So it's a handful of core devs.

671
00:35:32,319 --> 00:35:32,499
Yeah.

672
00:35:32,659 --> 00:35:33,619
The high priest.

673
00:35:33,619 --> 00:35:38,419
They get to decide the rules of Monero every six months.

674
00:35:38,539 --> 00:35:48,019
And I'm sure from the day they started that until now, I'm sure they're earnest and honest and have made good decisions and nothing nefarious.

675
00:35:48,439 --> 00:35:52,139
But what about the next set of developers that come in?

676
00:35:52,139 --> 00:35:57,239
right and also i mean you guys have heard me make this you know call over and over and over and

677
00:35:57,239 --> 00:36:00,559
hopefully we'll talk more about mining and stuff but like to me bitcoin is energy backed money

678
00:36:00,559 --> 00:36:04,079
power backed money full stop if you get rid of the energy you've gotten rid of the system i would

679
00:36:04,079 --> 00:36:08,299
argue that monero actually could i don't i wouldn't say necessarily overtake bitcoin because

680
00:36:08,299 --> 00:36:12,779
there's so such strong network effects from back in the day but it had a shot to like i mean it's

681
00:36:12,779 --> 00:36:17,259
got the real adapt uh adoption on the dark web right like to actually be something with staying

682
00:36:17,259 --> 00:36:19,279
power, except for that one, in my opinion,

683
00:36:19,519 --> 00:36:20,939
super dumb decision.

684
00:36:21,319 --> 00:36:23,279
Now, what's the first thing

685
00:36:23,279 --> 00:36:24,559
you said? Remind me again. Tail mission.

686
00:36:24,779 --> 00:36:26,759
Tail mission, yeah. Let's talk about that.

687
00:36:26,859 --> 00:36:28,579
That was your dumb.

688
00:36:29,059 --> 00:36:30,199
I think that's dumb as well.

689
00:36:31,019 --> 00:36:32,539
Not as dumb as the other thing, but dumb.

690
00:36:32,559 --> 00:36:33,639
Not as dumb as the other thing.

691
00:36:35,679 --> 00:36:37,199
Dumb to introduce it, or dumb

692
00:36:37,199 --> 00:36:38,359
if it were created that way?

693
00:36:40,139 --> 00:36:40,979
Well, let's get into that.

694
00:36:41,039 --> 00:36:43,199
Because we've talked about that. I think we agree, but let's talk about it

695
00:36:43,199 --> 00:36:43,599
live here.

696
00:36:46,179 --> 00:36:46,539
So,

697
00:36:47,259 --> 00:36:50,119
I think, and I'm pretty sure DGA totally agrees with me,

698
00:36:50,119 --> 00:36:53,459
the most important thing about Bitcoin

699
00:36:53,459 --> 00:36:57,119
and its monetary policy

700
00:36:57,119 --> 00:36:59,819
is that whatever it started with,

701
00:37:00,639 --> 00:37:03,619
it's consistent, doesn't change,

702
00:37:03,799 --> 00:37:04,659
and is predictable.

703
00:37:05,339 --> 00:37:07,039
And there's high confidence.

704
00:37:07,679 --> 00:37:09,879
The game theory and system works out

705
00:37:09,879 --> 00:37:11,799
so that there's high confidence among everyone

706
00:37:11,799 --> 00:37:14,219
that in 20 years, 40 years, 60 years,

707
00:37:14,239 --> 00:37:15,239
it's going to be the same.

708
00:37:15,919 --> 00:37:17,079
And then we can plan around that.

709
00:37:17,259 --> 00:37:18,559
That's the most important thing.

710
00:37:18,839 --> 00:37:29,759
So whether it started with 21 million coins or 42 million coins, or whether it had a tail emission or not, is like second order.

711
00:37:29,759 --> 00:37:33,939
The most important thing is that it stays consistent in the certainty.

712
00:37:34,399 --> 00:37:36,759
So that doesn't even really seem that debatable.

713
00:37:37,719 --> 00:37:46,699
However, at this point, whatever it is, to change it now strikes at the heart of what it sounds like we're agreeing is the most important thing.

714
00:37:46,699 --> 00:37:48,859
so first of all

715
00:37:48,859 --> 00:37:49,439
I would argue

716
00:37:49,439 --> 00:37:50,219
adding a tail emission

717
00:37:50,219 --> 00:37:51,019
isn't even better

718
00:37:51,019 --> 00:37:51,519
but let's say

719
00:37:51,519 --> 00:37:52,599
it is better

720
00:37:52,599 --> 00:37:53,699
then

721
00:37:53,699 --> 00:37:55,079
but changing it

722
00:37:55,079 --> 00:37:55,359
just

723
00:37:55,359 --> 00:37:56,819
strikes at the

724
00:37:56,819 --> 00:37:57,679
most important thing

725
00:37:57,679 --> 00:37:58,559
so it's a bad idea

726
00:37:58,559 --> 00:37:59,559
at this juncture

727
00:37:59,559 --> 00:38:01,299
and when you say

728
00:38:01,299 --> 00:38:01,819
tail emission

729
00:38:01,819 --> 00:38:02,519
just to clarify

730
00:38:02,519 --> 00:38:03,159
that's

731
00:38:03,159 --> 00:38:03,879
that it doesn't

732
00:38:03,879 --> 00:38:04,379
in whatever

733
00:38:04,379 --> 00:38:05,519
2140 or whatever

734
00:38:05,519 --> 00:38:06,659
it doesn't stop

735
00:38:06,659 --> 00:38:08,019
having a block reward

736
00:38:08,019 --> 00:38:09,219
but it continues

737
00:38:09,219 --> 00:38:10,019
having a block reward

738
00:38:10,019 --> 00:38:10,639
after that point

739
00:38:10,639 --> 00:38:11,119
and the way that

740
00:38:11,119 --> 00:38:11,939
Monero does it is

741
00:38:11,939 --> 00:38:12,859
it starts off as

742
00:38:12,859 --> 00:38:14,259
1% of the total supply

743
00:38:14,259 --> 00:38:14,919
in the first year

744
00:38:14,919 --> 00:38:15,619
and then it's a fixed amount

745
00:38:15,619 --> 00:38:16,659
of the total supply

746
00:38:16,659 --> 00:38:17,659
of the entire thing.

747
00:38:17,659 --> 00:38:18,319
Yeah, so I don't know

748
00:38:18,319 --> 00:38:19,199
how many coins are,

749
00:38:19,259 --> 00:38:20,059
but let's say it's whatever.

750
00:38:21,079 --> 00:38:22,379
You took 21 million or whatever

751
00:38:22,379 --> 00:38:22,959
and then like

752
00:38:22,959 --> 00:38:24,839
you take 1% of that

753
00:38:24,839 --> 00:38:26,039
and I forget the exact details

754
00:38:26,039 --> 00:38:26,459
of how they do it,

755
00:38:26,479 --> 00:38:27,699
but they keep it as a fixed number

756
00:38:27,699 --> 00:38:29,419
so as a percentage of the supply

757
00:38:29,419 --> 00:38:30,499
it goes past the amount.

758
00:38:30,499 --> 00:38:31,299
What is fixed?

759
00:38:31,519 --> 00:38:32,479
The percentage is fixed

760
00:38:32,479 --> 00:38:33,179
or the amount is fixed?

761
00:38:33,179 --> 00:38:33,459
No, the amount.

762
00:38:34,059 --> 00:38:34,979
That's also done.

763
00:38:34,979 --> 00:38:35,699
It's been a long time.

764
00:38:35,819 --> 00:38:35,979
Yeah.

765
00:38:36,119 --> 00:38:37,919
Because it's literally the same thing

766
00:38:37,919 --> 00:38:39,439
in the long run.

767
00:38:39,659 --> 00:38:40,419
I could be wrong.

768
00:38:40,559 --> 00:38:41,199
Don't quote me on that.

769
00:38:41,279 --> 00:38:41,979
No, I think you're right.

770
00:38:42,179 --> 00:38:43,179
I definitely know

771
00:38:43,179 --> 00:38:44,999
many systems do choose that.

772
00:38:45,179 --> 00:38:45,379
Right.

773
00:38:45,379 --> 00:38:49,399
And I think that is so stupid because all it does is just defer the problem.

774
00:38:50,259 --> 00:38:54,499
Because ultimately, if it's a fixed amount, then it becomes 0% eventually.

775
00:38:55,199 --> 00:38:56,099
Effectively 0%.

776
00:38:56,099 --> 00:38:57,079
Effectively 0%.

777
00:38:57,079 --> 00:38:57,219
Yeah.

778
00:38:57,279 --> 00:39:01,479
I mean, like 1 divided by 2 to the 256 is effectively 0, right?

779
00:39:01,659 --> 00:39:04,019
So that's a dumb system.

780
00:39:04,159 --> 00:39:12,379
It would need to be a fixed percentage or something more advanced than a fixed absolute amount.

781
00:39:12,379 --> 00:39:13,119
Just a hard-coded number.

782
00:39:13,119 --> 00:39:16,499
but also let's talk about the differences there

783
00:39:16,499 --> 00:39:19,279
so the question is

784
00:39:19,279 --> 00:39:19,699
do you want

785
00:39:19,699 --> 00:39:22,799
so someone has to pay for the security of the system

786
00:39:22,799 --> 00:39:26,659
who's paying the decentralized bank

787
00:39:26,659 --> 00:39:27,459
the miners

788
00:39:27,459 --> 00:39:29,899
the ones that are doing transaction selection

789
00:39:29,899 --> 00:39:30,779
who's paying for that

790
00:39:30,779 --> 00:39:32,379
the way Bitcoin is set up

791
00:39:32,379 --> 00:39:34,059
is that it's transactors

792
00:39:34,059 --> 00:39:35,339
so if you want to transact

793
00:39:35,339 --> 00:39:36,179
you have to pay

794
00:39:36,179 --> 00:39:38,659
if you're just saving

795
00:39:38,659 --> 00:39:39,879
you don't have

796
00:39:39,879 --> 00:39:42,259
I mean you had to pay up front

797
00:39:42,259 --> 00:39:43,079
maybe

798
00:39:43,079 --> 00:39:46,879
either if you're self-custaining you pay up front and then you never have to pay again

799
00:39:46,879 --> 00:39:52,839
or if you're relying on a third party you pay just a tiny sliver of what's needed and then you never

800
00:39:52,839 --> 00:39:59,299
have to pay again whereas if you're a transactor using it as everyday money then you are um you're

801
00:39:59,299 --> 00:40:04,319
securing the system on a daily basis we can argue whether that's good or bad or who how it's aligned

802
00:40:04,319 --> 00:40:11,019
or whatever now with a tail emission where you keep inflating the supply everyone's paying

803
00:40:11,019 --> 00:40:17,939
right because everyone everyone who holds the coin i i think i've heard of this somewhere before

804
00:40:17,939 --> 00:40:22,819
like ideally you aim for about two percent per year you could have a basket of goods to measure

805
00:40:22,819 --> 00:40:28,159
slightly differently though you can change the basket whenever you want um but yeah so well

806
00:40:28,159 --> 00:40:35,819
everyone base although um if we simplify and say there's two categories of users like the people

807
00:40:35,819 --> 00:40:40,939
with the wealth and saving and then people who are just spending and let's say this to simplify

808
00:40:40,939 --> 00:40:47,579
the spenders are just earning their paycheck each week and spending it out on bitcoin they don't

809
00:40:47,579 --> 00:40:53,899
have they have no savings so i'd say that the the real cost then is born by the with with tail

810
00:40:53,899 --> 00:41:00,159
mission is born by the the holders the people with the wealth so it's interesting like that's two very

811
00:41:00,159 --> 00:41:05,659
different philosophies right do you tax the people spending or do you tax the people who have the

812
00:41:05,659 --> 00:41:07,979
Well, it's income tax versus capital gains tax.

813
00:41:08,459 --> 00:41:08,859
Right.

814
00:41:08,979 --> 00:41:09,999
We kind of have that system.

815
00:41:10,219 --> 00:41:14,539
And today's Bitcoin setup is income tax.

816
00:41:14,539 --> 00:41:17,059
Purely income tax and no capital gains tax.

817
00:41:17,159 --> 00:41:19,699
And I would argue it's actually a little bit of a reverse of the system.

818
00:41:19,839 --> 00:41:22,239
It's like the system that we have in name, but not in practice.

819
00:41:22,359 --> 00:41:22,459
Right.

820
00:41:22,519 --> 00:41:26,639
So like I always think of a meme that Justin Moon shared where it showed the Federal Reserve

821
00:41:26,639 --> 00:41:30,499
and it showed Robin Hood and it said steals from the rich and gives to the poor.

822
00:41:30,619 --> 00:41:33,699
It showed the Federal Reserve and said steals from the poor and gives to the rich.

823
00:41:33,699 --> 00:41:34,839
and then it showed Bitcoin

824
00:41:34,839 --> 00:41:35,739
and said doesn't steal,

825
00:41:36,379 --> 00:41:37,639
which I think sums it up perfectly.

826
00:41:38,459 --> 00:41:39,779
Well, but maybe, I mean,

827
00:41:39,879 --> 00:41:42,759
we're talking about doing that.

828
00:41:42,939 --> 00:41:43,939
But also I'd say it's not

829
00:41:43,939 --> 00:41:45,279
like capital gains tax,

830
00:41:45,359 --> 00:41:46,479
because capital gains is only

831
00:41:46,479 --> 00:41:49,019
when you choose to create a tax event

832
00:41:49,019 --> 00:41:50,139
by trading.

833
00:41:50,419 --> 00:41:51,899
It's more like a wealth tax.

834
00:41:52,139 --> 00:41:52,679
Yeah, exactly.

835
00:41:52,839 --> 00:41:54,119
So tail emission is a wealth tax.

836
00:41:54,259 --> 00:41:56,659
I do nothing and I'm getting...

837
00:41:56,659 --> 00:41:57,759
And this is my point.

838
00:41:57,859 --> 00:41:59,399
The current system in name,

839
00:41:59,499 --> 00:42:00,759
in theory, you sell things,

840
00:42:00,859 --> 00:42:02,019
but like we've talked about,

841
00:42:02,159 --> 00:42:03,459
and again, I'm happy things

842
00:42:03,459 --> 00:42:08,079
like lava give the superpower to everyone, but it's, you know, in practice, wealthy people

843
00:42:08,079 --> 00:42:09,659
don't actually sell things.

844
00:42:09,679 --> 00:42:10,299
They just get loans.

845
00:42:10,299 --> 00:42:14,119
And so in this system, wealthy people actually get taxed.

846
00:42:14,279 --> 00:42:19,199
So I think, um, and I'm not sure there's like, I don't think even if the three of us debate

847
00:42:19,199 --> 00:42:22,599
it and try to get to a conclusion, I don't think there's like a right answer to that.

848
00:42:22,799 --> 00:42:23,579
Like who pays?

849
00:42:23,719 --> 00:42:26,759
We can talk about the trade-offs and like economic system.

850
00:42:26,839 --> 00:42:30,439
And again, we could, you know, get a bunch of economists to think about this problem.

851
00:42:30,439 --> 00:42:33,019
I kind of like the Justin Moon meme.

852
00:42:33,439 --> 00:42:34,299
Just doesn't steal.

853
00:42:34,659 --> 00:42:34,899
It's a good one.

854
00:42:34,899 --> 00:42:35,559
I get it.

855
00:42:35,679 --> 00:42:35,899
And like,

856
00:42:35,959 --> 00:42:37,319
but help me understand again,

857
00:42:37,459 --> 00:42:37,679
like,

858
00:42:37,859 --> 00:42:42,019
like what does that mean in relation to the current Bitcoin system means the

859
00:42:42,019 --> 00:42:46,299
people paying for the system are the people spending their money daily.

860
00:42:46,559 --> 00:42:46,679
Totally.

861
00:42:47,439 --> 00:42:51,959
There could be this alternative system in which the wealthy people are paying.

862
00:42:52,259 --> 00:42:53,019
It's one or the other.

863
00:42:53,139 --> 00:42:53,979
So what do you mean?

864
00:42:54,019 --> 00:42:54,199
It doesn't,

865
00:42:54,279 --> 00:42:54,679
it's,

866
00:42:54,679 --> 00:42:57,379
it's quote stealing from one of these two groups.

867
00:42:57,419 --> 00:42:57,559
Well,

868
00:42:57,559 --> 00:42:58,139
it's not stealing.

869
00:42:58,139 --> 00:43:00,199
If you actually need to use the service,

870
00:43:00,199 --> 00:43:02,999
I know you could argue is saving the use case that you're going to pay for.

871
00:43:03,059 --> 00:43:04,119
And I suppose that's like an argument.

872
00:43:04,299 --> 00:43:04,479
But like.

873
00:43:04,619 --> 00:43:08,039
But if you're saving and you're not paying, you're, you're amortized the cost of the one

874
00:43:08,039 --> 00:43:08,419
transaction.

875
00:43:08,419 --> 00:43:11,599
He's saying that maybe saving isn't using, but saving definitely is.

876
00:43:11,679 --> 00:43:13,919
I mean, right now it is the use case.

877
00:43:14,119 --> 00:43:14,359
Yeah.

878
00:43:14,519 --> 00:43:17,719
It's the, like people aren't, it's a niche to spend.

879
00:43:17,819 --> 00:43:21,639
So like, I would argue strongly that saving is a use case.

880
00:43:21,719 --> 00:43:21,839
Yeah.

881
00:43:22,059 --> 00:43:24,839
So, so like, and that's where the value, that's where the value is today.

882
00:43:25,139 --> 00:43:29,019
It might be where, I mean, and I fully expect it to be where the value is in the future.

883
00:43:29,019 --> 00:43:31,579
It might be where all the value is in the future.

884
00:43:31,979 --> 00:43:36,879
So I would argue that actually opens an attack vector for Bitcoin, excuse me, to get out-competed

885
00:43:36,879 --> 00:43:39,439
by something that doesn't tax the holders.

886
00:43:40,459 --> 00:43:41,519
Just play this out for a minute.

887
00:43:41,679 --> 00:43:43,259
Let's say, I'm not saying-

888
00:43:43,259 --> 00:43:44,139
But Bitcoin doesn't tax the holders.

889
00:43:44,779 --> 00:43:45,119
Right.

890
00:43:45,179 --> 00:43:48,739
But in this new world where you have the tail emission, which is effectively a wealth tax,

891
00:43:49,079 --> 00:43:52,619
I think that potentially opens the door for something like Bitcoin to arise again, where

892
00:43:52,619 --> 00:43:55,499
it's like if you are storing your wealth in Bitcoin or you're storing your wealth in this,

893
00:43:55,499 --> 00:43:59,899
imagine there's a hard fork one fork taxes you just store one fork doesn't tax you to store

894
00:43:59,899 --> 00:44:04,259
as like a wealthy person i kind of know which one you're going to choose right unless you think that

895
00:44:04,259 --> 00:44:08,279
what depends if you believe i don't know what you think everybody else is going to do yeah well but

896
00:44:08,279 --> 00:44:14,479
also like and it is the budget let's put our let's say we are um we're we're wealthy savers

897
00:44:14,479 --> 00:44:20,099
we're that in that camp and then the day comes where it's like 20 years from now there's still

898
00:44:20,099 --> 00:44:23,099
no Bitcoin network activity. So everyone's freaking out.

899
00:44:24,239 --> 00:44:27,899
Right. Because there's not enough to pay for Bitcoin. So there's like the

900
00:44:27,899 --> 00:44:32,139
volume has been cranked up 100x on the we need to add tail

901
00:44:32,139 --> 00:44:36,219
emission. So on one hand, no, we don't want

902
00:44:36,219 --> 00:44:40,139
it because we don't want to be taxed. But on the other hand, we lose our

903
00:44:40,139 --> 00:44:44,199
entire investment because the whole system fails. So I think I'd rather

904
00:44:44,199 --> 00:44:48,119
be taxed than I'd rather lose. Yeah, I get it. You know, whatever. 10 basis

905
00:44:48,119 --> 00:44:52,079
points per year, then lose 100% of my money. And one could argue that at least this is a

906
00:44:52,079 --> 00:44:55,579
quote unquote, a fair tax, right? It's not like, okay, it's being funneled through some bureaucracy

907
00:44:55,579 --> 00:44:58,819
that goes to fund wars or whatever. It's like, okay, you can see exactly what you're being taxed.

908
00:44:58,959 --> 00:45:04,159
So to be clear, just for the audience, I'm not taking a position on this and I'm not arguing

909
00:45:04,159 --> 00:45:06,379
that we should do this. I'm just saying- Steve is pro-taxing.

910
00:45:06,379 --> 00:45:20,178
Yeah I think it under I think we on a path where it will be discussed a lot more because there be concerns about who paying for the mining security

911
00:45:21,078 --> 00:45:23,178
And so it needs to be discussed more.

912
00:45:23,419 --> 00:45:23,758
I agree.

913
00:45:23,838 --> 00:45:24,738
This should all be discussed more.

914
00:45:24,799 --> 00:45:25,799
We should see the renegade economy.

915
00:45:25,898 --> 00:45:26,479
So I'd love to see that.

916
00:45:26,618 --> 00:45:27,678
However, I don't know.

917
00:45:27,718 --> 00:45:28,419
It's just my gut.

918
00:45:28,539 --> 00:45:30,198
But like somehow I'm still just not worried.

919
00:45:30,198 --> 00:45:31,818
Like I just think I trust.

920
00:45:32,118 --> 00:45:33,678
And yes, we should always push forward.

921
00:45:33,818 --> 00:45:35,678
But that there will be one of two things.

922
00:45:35,678 --> 00:45:40,519
either like mass adoption for payments at some point, because we'll actually have services that

923
00:45:40,519 --> 00:45:44,078
you can only get there, whether that's on the gray edges or AI agents or whatever, or we're

924
00:45:44,078 --> 00:45:49,678
going to see enough financial institutions that it kind of solves itself. To me, that's a very

925
00:45:49,678 --> 00:45:53,218
interesting question. So let's assume for a minute you don't get the mass transaction case,

926
00:45:53,698 --> 00:45:58,979
or at least it takes a long time. So again, the renegade economist can maybe give us a better

927
00:45:58,979 --> 00:46:03,658
number. So we agree, based on what you were saying, if there's 3,000 transactions a day,

928
00:46:03,658 --> 00:46:05,499
There's 4,000 current financial institutions.

929
00:46:05,658 --> 00:46:07,258
Probably 4,000 is too low.

930
00:46:07,878 --> 00:46:08,738
300,000, right?

931
00:46:09,378 --> 00:46:13,499
Yeah, but 4,000 individual institutions, 300,000 transactions a day.

932
00:46:14,138 --> 00:46:16,279
4,000 is probably too low.

933
00:46:16,558 --> 00:46:21,479
So let's just say there's some number of institutions that are regularly transacting with each other.

934
00:46:21,539 --> 00:46:26,799
Let's say there will always be some sovereign individuals, but just for the sake of this, it's like 99% or 90% institutions.

935
00:46:27,258 --> 00:46:32,098
So let's say at least an order of magnitude more institutions is necessary, and obviously the more the better.

936
00:46:32,098 --> 00:46:40,058
So if you have 40,000 that are settling up with each other, you could, in theory, hopefully clear that 300,000 transaction per day hurdle.

937
00:46:40,558 --> 00:46:41,939
Obviously, 400,000 would be better.

938
00:46:42,058 --> 00:46:42,939
Four million would be better.

939
00:46:43,098 --> 00:46:46,779
The higher up you go, but probably at least 40,000 in terms of order of magnitude.

940
00:46:47,459 --> 00:46:51,058
Now, my big question is, what can we be doing?

941
00:46:51,158 --> 00:46:54,758
And I actually, I don't want to spill the beans on any companies that we've all been talking with.

942
00:46:54,758 --> 00:46:58,738
But what can we be doing to see, or let me phrase this another way.

943
00:46:58,738 --> 00:47:18,738
What are the incentives that would encourage at least 40,000 e-cashments, as an example, that are getting everyone to say, I don't want to use, you know, JP Morgan or Fidelity or whatever, the big guys. I want to use this smaller institution. Like, how do we basically see a true resurgence of free banking on steroids? Because I think that's probably enough to get us what we want.

944
00:47:18,738 --> 00:47:38,678
Well, I think also there's the trad fi and regulated class, let's say, and then there's not that. Another concern with traditional financial institutions is that they're very accustomed to signing legal agreements with partners.

945
00:47:38,678 --> 00:47:56,578
And if you do that and you trust the legal agreement and you trust your partner, you don't even need to use the Bitcoin network. You can just transfer value back and forth between each other on the Lightning Network or even your own proprietary technology if somehow the Lightning Network doesn't work for you.

946
00:47:56,578 --> 00:48:25,718
And then even if there's thousands of traditional financial institutions, a lot of their activity, even that doesn't have to hit the Bitcoin network if fees rise too much. Again, obviously they're paying a penny for the incredible value the Bitcoin network provides or even like $100 for like large transfers. They won't bat an eye. Of course, they'll use that. But if it rises too high beyond their willingness to pay, they'll just substitute with another system.

947
00:48:25,718 --> 00:48:44,658
So, okay, so we don't know what the exact number is, but let's just say, you know, we want at least 40,000, 400,000, 4 million financial institutions that people are choosing. I guess the question I pose is why is I, you know, I as an individual would prefer to use as an example, my local credit union versus Wells Fargo or a larger bank.

948
00:48:44,658 --> 00:48:48,858
one of the theses that we saw a couple of years ago from the Fediment sort of side was, hey,

949
00:48:48,919 --> 00:48:52,678
you could have like a local, you know, whatever community members that are cussing your money.

950
00:48:52,858 --> 00:48:56,858
Maybe there's some reason you want to keep the money local to the community or you trust these

951
00:48:56,858 --> 00:49:00,658
people because in your town, I've always been very skeptical that you would want like the random,

952
00:49:00,658 --> 00:49:04,218
like butcher or whatever being one of your signatories on your money. So I, I'm skeptical

953
00:49:04,218 --> 00:49:10,459
on like the super, super local community thing. I am more bullish on this idea that, um, I'm not

954
00:49:10,459 --> 00:49:14,059
exactly sure what's going to be the winning feature here, but that like you would rather a credit

955
00:49:14,059 --> 00:49:19,959
union where it's you and like the 10,000 people that you see every day versus some bank that's,

956
00:49:20,078 --> 00:49:24,178
you know, whatever, 10,000 miles away. What do you guys think are the incentives that get us,

957
00:49:24,439 --> 00:49:29,838
you know, let's say at least 4 million of these e-cashments or new version credit unions versus

958
00:49:29,838 --> 00:49:34,059
big banks? Well, I think trust, you know, as much as we talk about trustlessness, when you talk

959
00:49:34,059 --> 00:49:38,198
about a bank, you're establishing a trust relationship, but that's not a self-custody

960
00:49:38,198 --> 00:49:42,578
thing. So I think whenever you're establishing trust, you'd rather, you'd rather first trust

961
00:49:42,578 --> 00:49:47,718
yourself, then trust your family, then trust your neighborhood and community and town and

962
00:49:47,718 --> 00:49:51,959
whatever, you know? So I think it's just sort of concentric circle expansion. And so.

963
00:49:52,378 --> 00:49:58,459
Well, to be clear, I would much rather trust people that I can talk to, but probably not

964
00:49:58,459 --> 00:50:01,858
just like the local random community. Cause I like, again, self cut, like someone like

965
00:50:01,858 --> 00:50:05,358
loses their seat phrase or something like that's cute. I'd rather trust a professional

966
00:50:05,358 --> 00:50:08,779
that I can like interact with. But like, you can't talk to Sam Bankman-Fried,

967
00:50:08,779 --> 00:50:10,479
but you might be able to talk to

968
00:50:10,479 --> 00:50:12,358
if Steve were running.

969
00:50:12,959 --> 00:50:13,959
Yeah, to me

970
00:50:13,959 --> 00:50:16,178
it greatly matters

971
00:50:16,178 --> 00:50:18,979
which country or jurisdiction

972
00:50:18,979 --> 00:50:21,019
you're in. So if you're in a

973
00:50:21,019 --> 00:50:22,779
jurisdiction in which the

974
00:50:23,499 --> 00:50:25,019
legal

975
00:50:25,019 --> 00:50:26,479
system, the banking system is

976
00:50:26,479 --> 00:50:28,439
relatively good

977
00:50:28,439 --> 00:50:30,878
like the United States, then

978
00:50:30,878 --> 00:50:32,939
I think most people in the US

979
00:50:32,939 --> 00:50:34,779
would prefer to use a bank than

980
00:50:34,779 --> 00:50:36,738
local community members. It's like

981
00:50:36,738 --> 00:50:38,598
what's the best way to ruin family or

982
00:50:38,598 --> 00:50:44,118
friend, your community relationships is money. I lend, you know, I lend David money. I don't get

983
00:50:44,118 --> 00:50:54,298
it back and it ruins our relationship. Right. I mean, that's deadbeat. So, I mean, that's as old

984
00:50:54,298 --> 00:51:03,298
as time, like that kind of human dynamic. So if you have, if you aren't having major issues with

985
00:51:03,298 --> 00:51:08,298
your bank, I think you choose bank. But there are many places in the world where there's low trust

986
00:51:08,298 --> 00:51:12,618
in institutions, whether it be your government, your legal system, your banking system.

987
00:51:13,138 --> 00:51:15,999
And there, you know, it's a totally different answer.

988
00:51:16,279 --> 00:51:17,559
But to be clear, I think there's a spectrum.

989
00:51:17,698 --> 00:51:18,698
I 100% agree with you.

990
00:51:18,779 --> 00:51:21,378
Like, I'm not trusting like the random people in my community to custody the money.

991
00:51:21,539 --> 00:51:26,378
However, if it's someone that is a professional, like let's say, you know, I don't know where

992
00:51:26,378 --> 00:51:28,358
PB and Alex started a bank or whatever.

993
00:51:28,439 --> 00:51:30,898
It's like, well, I know he's doing this full time.

994
00:51:31,118 --> 00:51:31,898
There's investors back.

995
00:51:31,959 --> 00:51:32,878
Like, it's a real deal.

996
00:51:32,878 --> 00:51:35,878
But like, I can like chat with him on a day to day basis, IRL.

997
00:51:36,318 --> 00:51:37,559
That to me is important.

998
00:51:37,559 --> 00:51:39,898
And I also think you might see, even in the United States, right?

999
00:51:39,939 --> 00:51:43,798
Like even in the United States, I would prefer to be able to like call my banker than like

1000
00:51:43,798 --> 00:51:46,059
have like an automated system or someone in New York City.

1001
00:51:46,658 --> 00:51:47,999
I think that could be enough.

1002
00:51:48,078 --> 00:51:49,959
But I also think there might be other like other incentives.

1003
00:51:49,959 --> 00:51:53,658
Like imagine for a minute, you know, if you had a, you know, one of these credit unions

1004
00:51:53,658 --> 00:51:57,818
where I give them, you know, whatever my money, my Bitcoin, they custody it.

1005
00:51:57,858 --> 00:52:01,878
But also I know they're more inclined to give out loans like in the place that I live.

1006
00:52:02,718 --> 00:52:06,378
Maybe that's also enough where it's like, I want to encourage like, okay, like the place

1007
00:52:06,378 --> 00:52:07,999
where I live to thrive and, you know.

1008
00:52:08,578 --> 00:52:09,838
Or you might even just be able to assess

1009
00:52:09,838 --> 00:52:12,439
what a loan risk is

1010
00:52:12,439 --> 00:52:14,979
in a way that like a big national one can't, right?

1011
00:52:15,019 --> 00:52:16,618
Like you might know something specific

1012
00:52:16,618 --> 00:52:18,959
about the geography or the real estate

1013
00:52:18,959 --> 00:52:20,738
or your weird employment thing

1014
00:52:20,738 --> 00:52:21,698
that's actually very good,

1015
00:52:21,798 --> 00:52:24,138
but doesn't look good to the national purview.

1016
00:52:24,439 --> 00:52:26,398
Steve gave him the skinny on DK.

1017
00:52:27,919 --> 00:52:29,019
Don't trust that guy.

1018
00:52:29,218 --> 00:52:31,499
Come on, just don't, just don't.

1019
00:52:31,618 --> 00:52:32,878
Yeah, I think those are,

1020
00:52:33,019 --> 00:52:34,318
you're pointing out good reasons.

1021
00:52:34,738 --> 00:52:34,979
So I,

1022
00:52:34,979 --> 00:52:39,519
there's several different ways I could imagine

1023
00:52:39,519 --> 00:52:42,279
e-catchments taking off. They're all highly speculative

1024
00:52:42,279 --> 00:52:46,298
and lowish probability, I think,

1025
00:52:46,398 --> 00:52:50,039
but possible. And then if they do, that would be

1026
00:52:50,039 --> 00:52:52,578
phenomenal. Same way with

1027
00:52:52,578 --> 00:52:55,798
Lightning Network, Lightning Nodes

1028
00:52:55,798 --> 00:52:58,398
taking off, or Spark.

1029
00:52:59,519 --> 00:53:02,279
There's a myriad of Layer 2

1030
00:53:02,279 --> 00:53:04,638
technologies. If any of them take off because people

1031
00:53:04,638 --> 00:53:07,758
actually want to do payments, that's a good thing.

1032
00:53:09,118 --> 00:53:15,698
But to me, the key again is whatever the technology is, we just don't want a small cabal running

1033
00:53:15,698 --> 00:53:16,118
all of it.

1034
00:53:16,358 --> 00:53:19,618
To me, there's a spectrum between one company and everyone in the world.

1035
00:53:20,519 --> 00:53:21,658
It's probably going to be somewhere in the middle.

1036
00:53:21,738 --> 00:53:22,779
The closer we get here, the better.

1037
00:53:23,019 --> 00:53:23,279
That's right.

1038
00:53:23,578 --> 00:53:24,999
I mean, I agree with your net net.

1039
00:53:24,999 --> 00:53:32,039
I still believe that in the future, there will be sufficient demand for the properties

1040
00:53:32,039 --> 00:53:32,698
of Bitcoin.

1041
00:53:32,698 --> 00:53:37,459
meaning that people will want to do Bitcoin transactions

1042
00:53:37,459 --> 00:53:39,578
for the trust minimization in that transaction

1043
00:53:39,578 --> 00:53:46,678
that will then generate enough revenue to secure the network.

1044
00:53:47,238 --> 00:53:48,638
And even though it's going to be a mystery

1045
00:53:48,638 --> 00:53:50,358
what the security budget needs to be,

1046
00:53:50,658 --> 00:53:52,098
we'll be above that.

1047
00:53:52,419 --> 00:53:55,718
I do actually believe that's still going to happen,

1048
00:53:56,059 --> 00:53:57,818
but it's definitely not a certainty.

1049
00:53:58,318 --> 00:54:00,798
We really have no idea what the probability of that is.

1050
00:54:00,798 --> 00:54:03,138
and when I see

1051
00:54:03,138 --> 00:54:05,278
it's a disturbing trend when we see

1052
00:54:05,278 --> 00:54:06,138
more and more people

1053
00:54:06,138 --> 00:54:08,959
making comments like Nick did

1054
00:54:08,959 --> 00:54:11,118
and again definitely not shading Nick

1055
00:54:11,118 --> 00:54:12,818
at all I agree with his point

1056
00:54:12,818 --> 00:54:13,999
but

1057
00:54:13,999 --> 00:54:17,278
DK and I have a mutual friend

1058
00:54:17,278 --> 00:54:18,618
who moved

1059
00:54:18,618 --> 00:54:21,358
half his Bitcoin into an ETF

1060
00:54:21,358 --> 00:54:23,258
because it gives him more peace of mind

1061
00:54:23,258 --> 00:54:24,499
I have multiple friends that have done that

1062
00:54:24,499 --> 00:54:27,539
so I understand

1063
00:54:27,539 --> 00:54:29,198
in the near term

1064
00:54:29,198 --> 00:54:31,258
the logic and rationale behind it,

1065
00:54:31,338 --> 00:54:33,158
I worry about that trend long-term

1066
00:54:33,158 --> 00:54:35,378
if we don't see reasons

1067
00:54:35,378 --> 00:54:37,298
to increase the Bitcoin network activity.

1068
00:54:38,238 --> 00:54:39,258
So it always comes back to

1069
00:54:39,258 --> 00:54:40,539
we need reasons to use Bitcoin.

1070
00:54:40,979 --> 00:54:42,778
And the reasons are probably going to come,

1071
00:54:42,838 --> 00:54:43,419
I'm going to say it again,

1072
00:54:43,519 --> 00:54:44,479
but probably going to be

1073
00:54:44,479 --> 00:54:45,838
new applications,

1074
00:54:46,098 --> 00:54:46,778
net new things,

1075
00:54:46,898 --> 00:54:48,318
not the existing stuff we have

1076
00:54:48,318 --> 00:54:49,378
changing to Bitcoin,

1077
00:54:49,519 --> 00:54:51,039
but new things that get discovered,

1078
00:54:51,238 --> 00:54:52,678
invented, created.

1079
00:54:52,919 --> 00:54:53,398
100%.

1080
00:54:53,398 --> 00:54:54,919
And I think we've got a lot of people

1081
00:54:54,919 --> 00:54:56,098
out there vibe coding today.

1082
00:54:56,218 --> 00:54:57,979
We've got a builder product.

1083
00:54:58,118 --> 00:54:58,838
A lot of them in this very building.

1084
00:54:58,838 --> 00:55:03,118
We've got a builder once a month meetup where we actually talk about these things.

1085
00:55:03,238 --> 00:55:03,999
I think we...

1086
00:55:03,999 --> 00:55:04,459
Not just talk.

1087
00:55:04,858 --> 00:55:05,059
Show.

1088
00:55:05,178 --> 00:55:05,398
Show.

1089
00:55:05,479 --> 00:55:05,758
Yeah.

1090
00:55:06,079 --> 00:55:06,818
Actually make, right?

1091
00:55:07,258 --> 00:55:08,178
Make and show.

1092
00:55:08,238 --> 00:55:08,398
Yeah.

1093
00:55:08,658 --> 00:55:12,758
I'm not going to name names because I think it's against the rules, but we saw somebody...

1094
00:55:12,758 --> 00:55:13,898
We can't...

1095
00:55:13,898 --> 00:55:15,838
Because we want to get in a...

1096
00:55:15,838 --> 00:55:16,499
We live stream...

1097
00:55:16,499 --> 00:55:17,019
We want to...

1098
00:55:17,019 --> 00:55:22,459
We weren't set up yet, but we are going to live stream demos and showcases.

1099
00:55:22,638 --> 00:55:25,039
So I think it's okay to out the people who...

1100
00:55:25,039 --> 00:55:25,318
Okay.

1101
00:55:25,318 --> 00:55:33,019
Well, I was just going to mention Matt sort of from scratch built something in front of us, like with from the prompt to the actual working software.

1102
00:55:33,758 --> 00:55:37,738
And I think that's the kind of stuff when we see what can be done and it's easy.

1103
00:55:37,818 --> 00:55:41,439
I mean, we see which exact prompt we need to use to get the Lexi wallet installed.

1104
00:55:41,539 --> 00:55:44,778
I think that's the thing that helps these new things come to life.

1105
00:55:44,878 --> 00:55:44,979
Yeah.

1106
00:55:45,118 --> 00:55:50,178
And actually, by the way, we probably shouldn't commit to this because I don't know how regular it will be.

1107
00:55:50,298 --> 00:55:54,198
But Matt and I, did Matt tell you, or were you on the thread where Matt and I were talking about this?

1108
00:55:54,198 --> 00:55:58,658
I didn't hear about this, but I have an idea where the other day I, um, I tweeted some other

1109
00:55:58,658 --> 00:56:03,079
conversation I was having. I tweeted out, uh, uh, I was like, why start a, why start a podcast?

1110
00:56:03,158 --> 00:56:06,758
When you can start a vibe cast and Matt comes back to me, he's like, let's do it. And I was

1111
00:56:06,758 --> 00:56:11,178
like, do what? I was just like, I'm just like shit posting. I didn't really have something in

1112
00:56:11,178 --> 00:56:18,218
mind. So, um, so, so we have a document right now of some of our favorite ideas that we want to

1113
00:56:18,218 --> 00:56:23,039
build. Some of them Bitcoin related, some of them not. Um, but it's just stuff that we think we could

1114
00:56:23,039 --> 00:56:25,258
create on a live stream

1115
00:56:25,258 --> 00:56:27,559
in about an hour, probably going to use

1116
00:56:27,559 --> 00:56:29,098
Repplet and try to go from

1117
00:56:29,098 --> 00:56:31,738
scratch to a production deployed thing on a live stream

1118
00:56:31,738 --> 00:56:32,798
in about an hour. I love it.

1119
00:56:33,358 --> 00:56:35,878
We're going to do this, I think we're going to start

1120
00:56:35,878 --> 00:56:37,758
sometime this

1121
00:56:37,758 --> 00:56:39,439
coming week. I don't think we have a

1122
00:56:39,439 --> 00:56:41,378
specific date and time planned yet.

1123
00:56:41,898 --> 00:56:43,419
Let's go. Yeah, we're going to do that.

1124
00:56:43,499 --> 00:56:45,419
I think that'll be another effort

1125
00:56:45,419 --> 00:56:46,419
toward the builder

1126
00:56:46,419 --> 00:56:48,658
ethos.

1127
00:56:49,019 --> 00:56:51,019
By the way, real quick, our producer

1128
00:56:51,019 --> 00:56:52,318
let us know a while ago.

1129
00:56:52,459 --> 00:56:55,118
20% of kids at Stanford graduate with a CS degree,

1130
00:56:55,238 --> 00:56:57,959
but 95% take at least one CS class.

1131
00:56:58,198 --> 00:56:58,439
Okay.

1132
00:56:58,878 --> 00:57:00,959
Maybe I got the stat from somebody

1133
00:57:00,959 --> 00:57:03,698
who is a little less precise about there.

1134
00:57:03,898 --> 00:57:05,798
Even 20% remarked.

1135
00:57:05,798 --> 00:57:06,318
I think that's low.

1136
00:57:06,338 --> 00:57:06,959
When is that from?

1137
00:57:07,079 --> 00:57:08,258
Is that 2025?

1138
00:57:10,999 --> 00:57:11,439
2020?

1139
00:57:12,298 --> 00:57:14,439
We need to do a deep research.

1140
00:57:14,559 --> 00:57:14,778
Yeah.

1141
00:57:15,019 --> 00:57:16,278
We need a deep research query.

1142
00:57:16,479 --> 00:57:17,059
GPT-5.

1143
00:57:17,638 --> 00:57:17,798
Okay.

1144
00:57:17,798 --> 00:57:23,718
So we can nerd out on the security budget.

1145
00:57:23,878 --> 00:57:24,718
There's more to say there,

1146
00:57:24,838 --> 00:57:26,059
or we can move on to other topics

1147
00:57:26,059 --> 00:57:27,218
we're hoping to talk about.

1148
00:57:27,378 --> 00:57:28,338
I'll leave it to you guys.

1149
00:57:28,439 --> 00:57:29,499
There's this, did you guys,

1150
00:57:29,878 --> 00:57:31,439
we talked about this KYC thing.

1151
00:57:31,798 --> 00:57:32,698
Is there anything?

1152
00:57:33,479 --> 00:57:34,618
Well, I was going to say-

1153
00:57:34,618 --> 00:57:36,618
The KYC-ization of everything?

1154
00:57:37,158 --> 00:57:37,318
Yeah.

1155
00:57:37,939 --> 00:57:39,898
The answer is, let's move on.

1156
00:57:40,138 --> 00:57:40,898
Well, I don't know.

1157
00:57:40,999 --> 00:57:42,778
I'm just mentioning it's another thing that we-

1158
00:57:42,778 --> 00:57:43,939
I definitely want to touch on that.

1159
00:57:43,939 --> 00:57:45,298
Maybe one thing just to mention

1160
00:57:45,298 --> 00:57:48,898
that is a bit more of an evolution of this is

1161
00:57:48,898 --> 00:57:50,618
in addition to the security budget

1162
00:57:50,618 --> 00:57:51,798
and how much people are paying,

1163
00:57:52,338 --> 00:57:54,838
the other thing that I'm always obviously very interested in,

1164
00:57:54,878 --> 00:57:56,979
the thing I'm always tracking very closely is hash rate.

1165
00:57:57,579 --> 00:57:59,519
And I have been very encouraged.

1166
00:57:59,658 --> 00:58:00,398
I don't know if you guys saw,

1167
00:58:00,559 --> 00:58:01,718
I shared with you all this morning,

1168
00:58:01,858 --> 00:58:03,898
the Caprile tweet, Caprile's, he runs.

1169
00:58:04,898 --> 00:58:06,419
I rolled my eyes at it.

1170
00:58:06,439 --> 00:58:06,678
Why?

1171
00:58:08,039 --> 00:58:11,559
Because I don't think how much it costs to mine Bitcoin

1172
00:58:11,559 --> 00:58:14,079
determines the price of Bitcoin.

1173
00:58:14,079 --> 00:58:17,218
I think the demand for Bitcoin determines the price for Bitcoin.

1174
00:58:17,698 --> 00:58:17,778
Interesting.

1175
00:58:18,678 --> 00:58:20,979
I mean, not just interesting, obvious.

1176
00:58:21,278 --> 00:58:30,898
Well, I think, I mean, perhaps there's a causation correlation difference here, but it's been remarkably on the money for a long time.

1177
00:58:31,019 --> 00:58:33,318
To me, that's one of the things I'm always interested in, though.

1178
00:58:33,539 --> 00:58:42,318
That's because miners are rewarded with 99% of their revenue is the minting of new money, which is directly proportional to the price of Bitcoin.

1179
00:58:42,318 --> 00:58:44,698
so that would explain why

1180
00:58:44,698 --> 00:58:48,298
hash rate goes up

1181
00:58:48,298 --> 00:58:49,218
can measure it with

1182
00:58:49,218 --> 00:58:50,979
regardless I'm very happy to see

1183
00:58:50,979 --> 00:58:52,419
we went over 1x hash

1184
00:58:52,419 --> 00:58:53,598
or zeta hash again

1185
00:58:53,598 --> 00:58:55,338
and according to him

1186
00:58:55,338 --> 00:58:56,358
and his production costs

1187
00:58:56,358 --> 00:58:57,138
like what it costs

1188
00:58:57,138 --> 00:58:58,278
in actual just joules

1189
00:58:58,278 --> 00:59:01,618
we're at 140 or 145 again

1190
00:59:01,618 --> 00:59:01,858
so

1191
00:59:01,858 --> 00:59:02,718
I assume this is just

1192
00:59:02,718 --> 00:59:03,919
a bunch of estimates

1193
00:59:03,919 --> 00:59:04,539
because we don't know

1194
00:59:04,539 --> 00:59:05,118
what the actual

1195
00:59:05,118 --> 00:59:06,698
power cost is

1196
00:59:06,698 --> 00:59:07,758
like the energy input

1197
00:59:07,758 --> 00:59:08,618
public data

1198
00:59:08,618 --> 00:59:09,439
and some private data

1199
00:59:09,439 --> 00:59:10,698
two things that

1200
00:59:10,698 --> 00:59:13,718
one, I do not think

1201
00:59:13,718 --> 00:59:15,658
the cost of production determines

1202
00:59:15,658 --> 00:59:17,718
the demand for Bitcoin and thus the price

1203
00:59:17,718 --> 00:59:19,479
for Bitcoin. This was like a

1204
00:59:19,479 --> 00:59:20,818
popular argument

1205
00:59:20,818 --> 00:59:23,678
eight years ago and I never understood it. It makes no

1206
00:59:23,678 --> 00:59:25,698
sense. And then secondly,

1207
00:59:26,598 --> 00:59:27,718
I

1208
00:59:27,718 --> 00:59:29,358
don't think hash rate is actually the

1209
00:59:29,358 --> 00:59:31,858
most interesting metric.

1210
00:59:32,138 --> 00:59:32,878
It's the

1211
00:59:32,878 --> 00:59:35,318
cost.

1212
00:59:35,798 --> 00:59:36,898
The cost to produce a Bitcoin.

1213
00:59:39,218 --> 00:59:39,718
Yes,

1214
00:59:39,718 --> 00:59:42,298
but the cost to mine.

1215
00:59:42,939 --> 00:59:46,118
Meaning, let's say we're at 1,000x a hash per second.

1216
00:59:47,479 --> 00:59:49,838
It's an enormous difference if that costs

1217
00:59:49,838 --> 00:59:55,318
a million dollars to do versus a trillion dollars to do.

1218
00:59:55,698 --> 00:59:57,298
Because if it only costs a million dollars,

1219
00:59:57,678 --> 01:00:00,479
then we could go attack the network.

1220
01:00:01,278 --> 01:00:02,999
It doesn't matter how much hash rate it is.

1221
01:00:03,098 --> 01:00:04,098
It matters how much does it,

1222
01:00:04,519 --> 01:00:06,979
what's the financial cost to attack the network?

1223
01:00:06,979 --> 01:00:07,198
Right.

1224
01:00:07,939 --> 01:00:09,638
And that, of course, changes every year

1225
01:00:09,638 --> 01:00:11,298
because every year the equipment gets more efficient.

1226
01:00:12,519 --> 01:00:15,479
From a security perspective,

1227
01:00:15,758 --> 01:00:18,358
it's the cost to attack the network,

1228
01:00:18,559 --> 01:00:19,238
not the hash rate.

1229
01:00:19,358 --> 01:00:20,638
Although it's interesting,

1230
01:00:20,778 --> 01:00:22,638
if the cost to produce a Bitcoin right now

1231
01:00:22,638 --> 01:00:24,378
is $140 and people are still mining,

1232
01:00:24,519 --> 01:00:25,059
that's interesting.

1233
01:00:25,559 --> 01:00:27,618
It shows people are looking towards the future

1234
01:00:27,618 --> 01:00:28,439
and bullish.

1235
01:00:29,079 --> 01:00:30,079
Is that what he tweeted?

1236
01:00:30,338 --> 01:00:30,858
I think so.

1237
01:00:30,858 --> 01:00:31,758
The production cost.

1238
01:00:31,919 --> 01:00:32,338
That's not true.

1239
01:00:33,158 --> 01:00:33,318
Okay.

1240
01:00:35,738 --> 01:00:37,358
It's not very responsive.

1241
01:00:37,358 --> 01:00:42,738
even if like there's got to be a huge lag because you have to like acquire the hardware and deploy

1242
01:00:42,738 --> 01:00:47,439
the hardware and like you can't be responsive to just like the market price right well it was

1243
01:00:47,439 --> 01:00:53,019
long-term bullishness right like but also like there's a myriad of ways to measure how much it

1244
01:00:53,019 --> 01:00:56,959
costs and each public mining company gives different figures and they're always like

1245
01:00:56,959 --> 01:01:02,999
jockeying for like what makes me look best and worse you know and um so that all depends on what

1246
01:01:02,999 --> 01:01:07,479
they do well and what they do poorly. They want to hide what they do poorly, but you, you can,

1247
01:01:07,959 --> 01:01:12,118
you can, um, you know, you can have like sort of an all in cost or you can have like, what's the,

1248
01:01:12,118 --> 01:01:19,238
the marginal cost. And in reality, if the marginal cost is where you determine, do I keep the

1249
01:01:19,238 --> 01:01:24,818
equipment running or not? Like if I, if I've signed up, if I've already like prepaid four

1250
01:01:24,818 --> 01:01:29,718
year energy contract and I can't get the money back. Well, so from an accounting perspective,

1251
01:01:29,718 --> 01:01:32,878
I can amortize that and say, well, here's how much my all-in cost is.

1252
01:01:32,959 --> 01:01:35,499
But on a day-to-day basis, you just ignore that.

1253
01:01:37,059 --> 01:01:43,939
And well, I mean, if you've already prepared your energy and you've already bought the equipment, then you keep it running.

1254
01:01:44,378 --> 01:01:44,479
Yeah.

1255
01:01:45,238 --> 01:01:46,019
Well, yeah.

1256
01:01:46,079 --> 01:01:49,358
I mean, well, you calculate how much you're paying the security guard or whatever.

1257
01:01:49,499 --> 01:01:50,939
But I mean, like, you know, that's negligible.

1258
01:01:50,939 --> 01:02:02,298
So are miners pretty active with hedging strategies, like trading, say, options in public markets to try to reduce their exposure to fluctuations?

1259
01:02:02,798 --> 01:02:04,059
I know as much as you do.

1260
01:02:04,138 --> 01:02:09,858
My understanding is over time, a lot more that has happened, which is, by the way, one of the reasons I'm surprised we haven't seen more of a hashrate market emerge.

1261
01:02:09,939 --> 01:02:11,178
I think it's maybe starting to now.

1262
01:02:11,579 --> 01:02:13,898
But I mean, increasingly, more miners are trying to hold their coins.

1263
01:02:14,419 --> 01:02:15,419
That's definitely a trend.

1264
01:02:16,118 --> 01:02:19,198
But I think what's interesting about this is, well, there's a couple of interesting things on this.

1265
01:02:19,198 --> 01:02:22,878
one, I think he's getting just the electricity cost he's trying to estimate.

1266
01:02:23,039 --> 01:02:26,678
So if just the electricity cost of production is 140 a coin, people are still mining.

1267
01:02:27,358 --> 01:02:27,738
Very interesting.

1268
01:02:28,898 --> 01:02:30,559
Steve, no way.

1269
01:02:30,798 --> 01:02:32,258
You don't think that's a correct number?

1270
01:02:32,778 --> 01:02:35,118
Well, I mean, if you're using an S9.

1271
01:02:35,519 --> 01:02:35,758
Yeah.

1272
01:02:37,059 --> 01:02:37,459
Interesting.

1273
01:02:37,959 --> 01:02:38,818
I have to go back and check.

1274
01:02:38,898 --> 01:02:42,499
I mean, let's do, after the show, let's do a little bit of math and show how absurd that,

1275
01:02:42,638 --> 01:02:44,459
or I will, if he published some.

1276
01:02:44,999 --> 01:02:45,959
It's all open source.

1277
01:02:46,158 --> 01:02:47,079
So it's okay.

1278
01:02:47,079 --> 01:02:48,939
He's been tracking this for like seven years.

1279
01:02:49,198 --> 01:03:01,198
But anyways, I think the more interesting thing to me and what makes me excited about this is even in a world where the demand for obviously compute or electricity for AI is like going vertical and we've discussed is that going to potentially hurt Bitcoin.

1280
01:03:01,999 --> 01:03:03,618
It's exciting and good to see that.

1281
01:03:03,818 --> 01:03:05,439
Okay, I know Hashray is still coming on.

1282
01:03:05,519 --> 01:03:07,678
There's still people that actually it makes me want to sell my Bitcoin.

1283
01:03:07,959 --> 01:03:10,198
If people are that irrational, like why?

1284
01:03:10,599 --> 01:03:17,979
If people, if miners are paying $140,000 just for energy and they keep mining, the systems failed.

1285
01:03:17,979 --> 01:03:20,118
Like it's completely irrational.

1286
01:03:20,559 --> 01:03:21,559
I think the argument is like,

1287
01:03:21,599 --> 01:03:24,039
there's like only like brief periods where this holds true.

1288
01:03:24,118 --> 01:03:24,419
And like,

1289
01:03:24,479 --> 01:03:24,898
that's,

1290
01:03:24,898 --> 01:03:25,358
you know,

1291
01:03:25,358 --> 01:03:25,959
within whatever,

1292
01:03:26,079 --> 01:03:27,258
a couple of weeks or a month,

1293
01:03:27,298 --> 01:03:28,878
you end up like leveling out again.

1294
01:03:29,439 --> 01:03:31,479
We can look at this report back for next month.

1295
01:03:31,939 --> 01:03:32,138
I mean,

1296
01:03:32,198 --> 01:03:33,079
for next week.

1297
01:03:33,898 --> 01:03:34,198
But anyways,

1298
01:03:34,318 --> 01:03:35,898
but I agree if the,

1299
01:03:35,959 --> 01:03:41,818
if the cost of energy is 140 cave just for a brief moment and then resumes back to like 45 K or something.

1300
01:03:41,919 --> 01:03:42,039
Well,

1301
01:03:42,079 --> 01:03:42,278
this,

1302
01:03:42,559 --> 01:03:42,898
I mean,

1303
01:03:42,979 --> 01:03:44,099
but that's not interesting.

1304
01:03:44,218 --> 01:03:46,439
These two numbers kind of go like that over time.

1305
01:03:46,439 --> 01:03:46,638
Right.

1306
01:03:46,758 --> 01:03:47,939
But whatever.

1307
01:03:47,979 --> 01:04:12,059
Well, we'll report back next week, Steve Skeptical. What's also very interesting to me, though, one story I want to mention on the energy side that's got me very excited is your former alma mater, Google, made a very big announcement this week, which I think is pretty relevant to Bitcoin as well, which, you know, as some people know on the show, we're going much deeper on something, hopefully to be announced soon on the energy front.

1308
01:04:12,059 --> 01:04:16,178
And basically the thesis is just the demand for compute, particularly for AI has gone vertical.

1309
01:04:16,318 --> 01:04:18,218
There's no way to supply that much energy to the grid.

1310
01:04:19,278 --> 01:04:23,638
One possibility is going totally off grid, which is something that I'm increasingly interested in.

1311
01:04:23,798 --> 01:04:25,419
Something we've seen for some mining as well.

1312
01:04:25,838 --> 01:04:31,999
But another possibility is if you can keep data centers connected to the grid and you can actually have demand response, which means they turn off.

1313
01:04:31,999 --> 01:04:39,059
Now, this was a huge sort of part of the thesis from the 2021 paper that we put out with Square

1314
01:04:39,059 --> 01:04:42,539
about the ability to turn off miners when pricing will say to do that.

1315
01:04:42,678 --> 01:04:42,939
Awesome.

1316
01:04:43,118 --> 01:04:45,698
That's like a really well-covered phenomenon at this point.

1317
01:04:45,858 --> 01:04:49,338
In Texas, they'll shut off when it's really cold or really hot and you need all that electricity.

1318
01:04:49,758 --> 01:04:53,258
But one of the issues with data centers for compute has been that data centers traditionally

1319
01:04:53,258 --> 01:04:57,479
require the five nines reliability, like 99.9999% reliability.

1320
01:04:57,479 --> 01:05:02,939
and um google i think announced a major deal this week which was the first with two different

1321
01:05:02,939 --> 01:05:08,378
utilities including tva with tennessee valley authority on my old stomping ground that they are

1322
01:05:08,378 --> 01:05:15,238
uh i don't know all the specifics but that they're willing to either power down or shift compute

1323
01:05:15,238 --> 01:05:20,439
loads due to market uh signals which is a very big deal because now if you can start deploying

1324
01:05:20,439 --> 01:05:25,118
more of these loads that are data centers that you can actually power down whatever a few few

1325
01:05:25,118 --> 01:05:27,138
days of the year, then we can install

1326
01:05:27,138 --> 01:05:29,258
a lot more on the grid. But why do you need to power them down?

1327
01:05:29,358 --> 01:05:31,059
Is that because it gets too hot or there's

1328
01:05:31,059 --> 01:05:32,738
other consumer demand? For peak demand.

1329
01:05:33,858 --> 01:05:35,198
Whenever you see extremely

1330
01:05:35,198 --> 01:05:37,118
for example, imagine a super hot day

1331
01:05:37,118 --> 01:05:38,778
in Texas and everyone's got their ACs on.

1332
01:05:38,878 --> 01:05:41,278
You basically go and say the actual cost

1333
01:05:41,278 --> 01:05:43,059
of our electricity has gone

1334
01:05:43,059 --> 01:05:44,698
100x for just a few hours.

1335
01:05:45,138 --> 01:05:47,019
In that world, Bitcoin miners were always

1336
01:05:47,019 --> 01:05:49,118
really valuable because they can just shut off in a moment

1337
01:05:49,118 --> 01:05:50,579
as they're getting paid more to do that.

1338
01:05:50,579 --> 01:05:52,099
So it's like a demand response thing.

1339
01:05:52,439 --> 01:05:54,158
Demand response is now making its way to

1340
01:05:54,158 --> 01:05:55,439
large-scale AI data centers.

1341
01:05:55,439 --> 01:05:56,398
But a lot of people were skeptical

1342
01:05:56,398 --> 01:05:57,678
on if data centers would ever do this

1343
01:05:57,678 --> 01:05:59,118
because they had this like famous,

1344
01:05:59,298 --> 01:06:01,198
like, no, we need like perfect reliability

1345
01:06:01,198 --> 01:06:03,459
and we'll never play ball with demand response.

1346
01:06:04,178 --> 01:06:04,818
Several things.

1347
01:06:05,158 --> 01:06:06,358
First of all, thanks for sharing that.

1348
01:06:07,158 --> 01:06:08,979
But real quick, like ERCOT, yeah.

1349
01:06:09,318 --> 01:06:11,039
I mean, ERCOT's an interesting phenomenon

1350
01:06:11,039 --> 01:06:12,599
because it's a decentralized market

1351
01:06:12,599 --> 01:06:14,999
and it's like a free market, which...

1352
01:06:14,999 --> 01:06:15,758
The freest market.

1353
01:06:16,019 --> 01:06:16,979
Freest market, yeah.

1354
01:06:17,079 --> 01:06:20,039
I mean, so the prices really can go like 100X, right?

1355
01:06:20,039 --> 01:06:21,338
Yeah, or even 1,000X.

1356
01:06:21,459 --> 01:06:22,459
Like, you know, people get bankrupt.

1357
01:06:22,459 --> 01:06:24,059
Some people could complain,

1358
01:06:24,158 --> 01:06:26,358
because obviously if your energy bill

1359
01:06:26,358 --> 01:06:28,878
is 100 times more for a week or whatever,

1360
01:06:28,959 --> 01:06:31,198
that's pretty devastating to consumers,

1361
01:06:31,398 --> 01:06:32,238
businesses, et cetera.

1362
01:06:32,698 --> 01:06:34,138
But it reflects reality.

1363
01:06:34,298 --> 01:06:34,638
Exactly.

1364
01:06:34,979 --> 01:06:35,559
It reflects reality.

1365
01:06:36,118 --> 01:06:37,758
So I'm generally pro this

1366
01:06:37,758 --> 01:06:40,318
because ultimately we get solutions,

1367
01:06:40,519 --> 01:06:41,919
economic and technological solutions

1368
01:06:41,919 --> 01:06:42,718
like you're talking about,

1369
01:06:43,398 --> 01:06:44,599
which is way healthier

1370
01:06:44,599 --> 01:06:46,278
than some kind of subsidization

1371
01:06:46,278 --> 01:06:48,579
through taxes or something.

1372
01:06:49,818 --> 01:06:52,638
But I had not seen that article

1373
01:06:52,638 --> 01:06:53,579
until you sent it out.

1374
01:06:53,579 --> 01:06:56,678
First thing I'd say is a good use of AI.

1375
01:06:56,979 --> 01:07:06,278
Because I first read the article, like people would have done for decades, and I couldn't find the nugget I was looking for.

1376
01:07:06,338 --> 01:07:08,979
I wanted to see how are they doing the demand response.

1377
01:07:09,338 --> 01:07:13,599
Because like you said, historically, data centers are like, we'll never shut off.

1378
01:07:13,718 --> 01:07:13,838
Yeah.

1379
01:07:14,198 --> 01:07:18,898
So I wanted to find, and it's probably in there, but a quick scan by me didn't find it.

1380
01:07:18,939 --> 01:07:21,118
So then I just fed it into three different LLMs.

1381
01:07:21,118 --> 01:07:21,758
Yeah, that's cool.

1382
01:07:21,758 --> 01:07:29,158
And interestingly, one of the three gave me the answer right away.

1383
01:07:29,519 --> 01:07:31,178
So it's like, beautiful, right?

1384
01:07:31,258 --> 01:07:31,878
I actually forget.

1385
01:07:32,099 --> 01:07:32,838
I think it was Claude.

1386
01:07:33,718 --> 01:07:37,378
Claude beat out chat GBT5, which I've been disappointed with so far.

1387
01:07:37,439 --> 01:07:38,218
Yeah, we should have not.

1388
01:07:38,378 --> 01:07:39,999
And then Anne Grock.

1389
01:07:40,258 --> 01:07:43,818
But Claude pointed out, so I'll give you a couple of examples, and I learned really quickly.

1390
01:07:44,039 --> 01:07:55,558
One is YouTube like video processing That can be deferred and then the other is like with their AI So like if it inference or something

1391
01:07:55,698 --> 01:07:57,438
well, you need that to keep running

1392
01:07:57,438 --> 01:07:59,918
because literally people are typing in a query

1393
01:07:59,918 --> 01:08:01,238
like I didn't expect a response.

1394
01:08:01,338 --> 01:08:02,477
But if you're training or something,

1395
01:08:02,538 --> 01:08:05,698
that can be paused for two hours or four hours.

1396
01:08:05,918 --> 01:08:08,738
And so they do have a couple of examples.

1397
01:08:09,078 --> 01:08:11,398
So my takeaway from that, first of all, super cool.

1398
01:08:11,498 --> 01:08:11,938
Super cool.

1399
01:08:12,758 --> 01:08:13,638
Demand response.

1400
01:08:13,638 --> 01:08:16,518
it's going to be super economical for Google

1401
01:08:16,518 --> 01:08:18,297
because as we've seen with Bitcoin miners, literally

1402
01:08:18,297 --> 01:08:20,538
in the summer in Texas, Bitcoin miners make more

1403
01:08:20,538 --> 01:08:22,518
money off of ERCOT paying

1404
01:08:22,518 --> 01:08:24,498
them than they do mining Bitcoin.

1405
01:08:24,738 --> 01:08:26,018
Yeah. Because it's

1406
01:08:26,018 --> 01:08:28,158
so, there's so few

1407
01:08:28,158 --> 01:08:30,558
systems that

1408
01:08:30,558 --> 01:08:32,558
allow being turned

1409
01:08:32,558 --> 01:08:33,898
off during high demand.

1410
01:08:34,558 --> 01:08:36,797
But I actually am more bearish on Bitcoin

1411
01:08:36,797 --> 01:08:38,178
after reading the Google thing

1412
01:08:38,178 --> 01:08:40,538
because in my mind prior

1413
01:08:40,538 --> 01:08:42,458
to that, Bitcoin was like

1414
01:08:42,458 --> 01:08:43,317
unique.

1415
01:08:43,638 --> 01:08:53,797
And now all of a sudden, oh, there's some like legitimate things, expenses and activities that big tech's doing that can be turned off and competitive.

1416
01:08:54,058 --> 01:08:55,337
So that hurts Bitcoin.

1417
01:08:55,738 --> 01:08:58,837
Although I think it's going to be a massively growing market and they all win.

1418
01:08:58,998 --> 01:08:59,198
Exactly.

1419
01:08:59,238 --> 01:09:00,638
But it does introduce a competitor.

1420
01:09:01,058 --> 01:09:05,297
But it might help because often it validates a market as well.

1421
01:09:05,377 --> 01:09:08,498
And all of a sudden then, okay, it's acceptable to do that.

1422
01:09:08,498 --> 01:09:17,678
It's harder to decentralize the AI inference stuff compared to like going out to like the stranded energy in Africa and collecting some of that to do Bitcoin mining, right?

1423
01:09:18,857 --> 01:09:19,218
Yes.

1424
01:09:19,377 --> 01:09:25,258
Well, I mean, that's actually an open topic as well as can you have a lot more inference like really like distributed as well.

1425
01:09:25,558 --> 01:09:26,898
Today, obviously, yes, because you need the five.

1426
01:09:26,898 --> 01:09:32,398
I don't see how inference is a, like I just said, inference is not a demand response.

1427
01:09:32,398 --> 01:09:32,658
You can.

1428
01:09:32,837 --> 01:09:33,078
You can.

1429
01:09:33,078 --> 01:09:38,958
You can just have, instead of it taking you five seconds to generate an image you ask, you can have it generate 10 cents.

1430
01:09:39,058 --> 01:09:39,917
I know companies that do that.

1431
01:09:40,277 --> 01:09:41,078
It depends on the kind of inference.

1432
01:09:41,078 --> 01:09:44,098
But then you're actually hurting the consumer experience.

1433
01:09:44,218 --> 01:09:49,558
But the example I gave, AI training, it's not hurting the consumer.

1434
01:09:49,658 --> 01:09:51,138
I mean, only in a very abstract way.

1435
01:09:51,317 --> 01:09:53,958
Like, oh, they don't get the next generation model.

1436
01:09:54,118 --> 01:09:57,038
It's 20 seconds later, and I am so fucking pissed.

1437
01:09:58,398 --> 01:09:59,898
Well, I think you're going to see all of the above.

1438
01:09:59,958 --> 01:10:00,977
I think that's where they're going to start.

1439
01:10:00,977 --> 01:10:04,817
on the inference side, you're going to see, I think, two things play out. One, the deeper I'm

1440
01:10:04,817 --> 01:10:08,998
going in the energy rabbit hole, I have to say I have just increasingly more and more respect for

1441
01:10:08,998 --> 01:10:13,958
Google across the board. These guys are at the very cutting edge. They know what they're doing.

1442
01:10:14,038 --> 01:10:18,198
They've been doing this for a very long time. But you're going to see, I think, they're in

1443
01:10:18,198 --> 01:10:22,718
particularly uniquely position to be able to shift loads more. So as an example, let's say,

1444
01:10:23,098 --> 01:10:28,938
and I think this is the difference between, let's say, a Google search and the kind of inference

1445
01:10:28,938 --> 01:10:30,578
you would do with like a deep research

1446
01:10:30,578 --> 01:10:32,578
with a grok or whatever.

1447
01:10:33,118 --> 01:10:34,518
In a Google search, like they,

1448
01:10:34,938 --> 01:10:35,738
and again, there's probably,

1449
01:10:35,857 --> 01:10:37,458
my guess is they're going to have like tiers, right?

1450
01:10:37,498 --> 01:10:39,198
Like the data center that's providing the Google search,

1451
01:10:39,297 --> 01:10:40,178
they're never going to turn that off

1452
01:10:40,178 --> 01:10:41,998
because that is so core to their business

1453
01:10:41,998 --> 01:10:44,297
that you get that snappy response in 0.01 seconds.

1454
01:10:44,618 --> 01:10:45,738
But if you're having a conversation

1455
01:10:45,738 --> 01:10:46,857
and like a deep research

1456
01:10:46,857 --> 01:10:48,877
and like, let's say you needed to shift the load

1457
01:10:48,877 --> 01:10:50,377
to another data center from, you know,

1458
01:10:50,458 --> 01:10:52,417
Virginia to Minneapolis as an example.

1459
01:10:52,777 --> 01:10:54,558
And like, okay, that increases the latency a little bit.

1460
01:10:54,638 --> 01:10:55,958
Maybe it adds 10, 20 seconds.

1461
01:10:55,958 --> 01:10:57,498
But if you're already expecting

1462
01:10:57,498 --> 01:11:01,198
it's going to take three or four or five minutes for this deep research to come back, then adding

1463
01:11:01,198 --> 01:11:05,158
a little bit doesn't really matter. So I expect to see a lot more like shifting of the inference

1464
01:11:05,158 --> 01:11:09,477
lens as well in different tiers. But I agree.

1465
01:11:09,698 --> 01:11:13,598
If a deep research query is three minutes, 10 seconds

1466
01:11:13,598 --> 01:11:17,458
versus, or 20 seconds versus three minutes, 10 seconds, it's kind of marginal.

1467
01:11:18,578 --> 01:11:21,417
But I have noticed the more I come up with a question,

1468
01:11:21,538 --> 01:11:25,297
I fire off three or four AIs and like some respond

1469
01:11:25,297 --> 01:11:30,438
right away with like initial and like that that's I gravitate towards that so it really depends on

1470
01:11:30,438 --> 01:11:36,357
the use case um also the you know another way to distribute the load here is like well if it's

1471
01:11:36,357 --> 01:11:43,738
if I've got a data center in Texas and it's super hot in the summer I it's I don't I don't not

1472
01:11:43,738 --> 01:11:49,218
process stuff for my customers I just do it in a different location exactly exactly which which

1473
01:11:49,218 --> 01:11:53,837
adds a little bit of time for the latency but like again depending on the query and I that could

1474
01:11:53,837 --> 01:11:58,058
even be done at it i mean it's like you know it's gonna be hot on july 4th or whatever so it's like

1475
01:11:58,058 --> 01:12:03,038
you're already yeah and i think you know to your point i i think what i expect to see next and this

1476
01:12:03,038 --> 01:12:07,797
is my sort of big obsession is how much can you just take fully off grid and i think um you know

1477
01:12:07,797 --> 01:12:11,817
with certain training you might be able to go entirely off grid um if you have like a big enough

1478
01:12:11,817 --> 01:12:16,678
whatever uh like kind of what elon did with you know natural gas as a sort of the backup eventually

1479
01:12:16,678 --> 01:12:20,538
solar and batteries batteries are a huge part of that but i think for inference one of my big

1480
01:12:20,538 --> 01:12:24,718
sort of questions that I'm exploring now is, you know, instead of having like, okay, I've got one

1481
01:12:24,718 --> 01:12:31,477
gigawatt cluster, could I do whatever it is, you know, 205 megawatt little mini sites? And then the

1482
01:12:31,477 --> 01:12:37,258
question is like, for the inference, it still needs to be close enough in the city that you could still

1483
01:12:37,258 --> 01:12:41,158
get the data back and forth. And like, does it have to use fiber? Could it use satellite? I think

1484
01:12:41,158 --> 01:12:45,678
that that's a very interesting, you know, field for exploration.

1485
01:12:45,678 --> 01:12:50,398
Oh, and speaking of decentralized internet infrastructure, I was thinking, because we'd

1486
01:12:50,538 --> 01:12:55,377
chatted a little bit about the idea of kind of helium without the shit coin oh yeah right i would

1487
01:12:55,377 --> 01:13:01,877
love to see it and i wonder if we should be part of that change by like what can we do to create

1488
01:13:01,877 --> 01:13:07,658
something of like a like a presidio bitcoin i love it access point that you can access the internet

1489
01:13:07,658 --> 01:13:14,138
through say bitchat not not through our typical wi-fi but like a separate access point you can

1490
01:13:14,138 --> 01:13:19,958
access through bitchat to kind of demonstrate how to get to the internet without sort of having your

1491
01:13:19,958 --> 01:13:21,718
own direct access.

1492
01:13:21,898 --> 01:13:22,018
Yeah.

1493
01:13:22,357 --> 01:13:25,618
But you still need at least one hotspot.

1494
01:13:25,817 --> 01:13:25,958
Yeah.

1495
01:13:26,258 --> 01:13:30,498
Like what I'm saying is like Presidio Bitcoin could be a, a demonstrate like the Presidio

1496
01:13:30,498 --> 01:13:32,797
Bitcoin SSID, like a.

1497
01:13:32,857 --> 01:13:33,058
Okay.

1498
01:13:33,158 --> 01:13:36,738
So Presidio Bitcoin could run a Raspberry Pi or server or something like that that connects

1499
01:13:36,738 --> 01:13:39,598
to the internet and then it's running BitChat or even Starlink.

1500
01:13:39,598 --> 01:13:44,917
And then the only, I can't just like from my laptop or phone, Wi-Fi connect to it.

1501
01:13:45,198 --> 01:13:48,877
I have, the only way I can connect to it is through the mesh, BitChat mesh.

1502
01:13:48,877 --> 01:13:54,198
So I'm saying as a way to demonstrate it as like a viable thing.

1503
01:13:54,277 --> 01:14:03,118
And then you could imagine maybe it's subsidized because like we already have internet here, you know, but you can imagine that somebody could then take the unsubsidized version and say, pay me.

1504
01:14:03,477 --> 01:14:04,178
Well, yeah.

1505
01:14:04,398 --> 01:14:08,277
So actually, Steve and I were talking a little about this idea, even taking it further.

1506
01:14:08,398 --> 01:14:13,058
What would be super dope is you could have that upload point be potentially off grid as well.

1507
01:14:13,118 --> 01:14:14,218
So solar and battery powered.

1508
01:14:14,218 --> 01:14:18,758
So we can actually show a demonstration case where at PB, we have the ability to have the mesh.

1509
01:14:18,797 --> 01:14:22,718
And then we can even do like a cool thing where we have people like mesh all the way out into like the fields or something.

1510
01:14:22,977 --> 01:14:25,518
Like and see how we try and set a new world record or something.

1511
01:14:25,698 --> 01:14:25,777
Yeah.

1512
01:14:25,958 --> 01:14:37,857
And then you've got the off-grid solar plus storage powered either hotspot or potentially like a Starlink or something where you could just like, okay, you know, Alex is all the way in whatever the Baker Beach and send a message.

1513
01:14:37,958 --> 01:14:39,398
They got mesh all the way here.

1514
01:14:39,477 --> 01:14:40,758
And then we send it up to the satellite.

1515
01:14:40,917 --> 01:14:41,238
That would be.

1516
01:14:41,337 --> 01:14:42,998
And then have you guys seen Tollgate?

1517
01:14:42,998 --> 01:14:44,458
this is one of the cash

1518
01:14:44,458 --> 01:14:46,578
yeah so this is one of the cash projects where you can pay

1519
01:14:46,578 --> 01:14:48,817
e-cash tokens you can do this with bitcoin too

1520
01:14:48,817 --> 01:14:50,058
of course but for

1521
01:14:50,058 --> 01:14:52,777
accessing that so you can literally payment

1522
01:14:52,777 --> 01:14:54,797
gate it where like Alex needs to

1523
01:14:54,797 --> 01:14:56,777
pay to send it across the mesh and

1524
01:14:56,777 --> 01:14:58,817
then upload it yeah the vocabulary we

1525
01:14:58,817 --> 01:15:00,417
should use is just bitcoin payments

1526
01:15:00,417 --> 01:15:02,638
specific technology yeah sure

1527
01:15:02,638 --> 01:15:04,938
fair enough another way it's funny

1528
01:15:04,938 --> 01:15:06,917
you mentioned solar and then people watching

1529
01:15:06,917 --> 01:15:08,558
right now if you look outside

1530
01:15:08,558 --> 01:15:10,698
through the window it looks very cloudy

1531
01:15:10,698 --> 01:15:12,218
which is accurate

1532
01:15:12,218 --> 01:15:14,377
over the Golden Gate Bridge, but otherwise

1533
01:15:14,377 --> 01:15:15,098
it's just blue sky.

1534
01:15:16,098 --> 01:15:18,518
This is not Arizona or Texas.

1535
01:15:19,518 --> 01:15:20,598
We also talked about

1536
01:15:20,598 --> 01:15:22,598
I shared putting a

1537
01:15:22,598 --> 01:15:23,758
water tower on top.

1538
01:15:24,958 --> 01:15:26,638
Presidious Bitcoin could be completely

1539
01:15:26,638 --> 01:15:28,118
water tower. That's cool.

1540
01:15:28,178 --> 01:15:28,938
You didn't see my response?

1541
01:15:28,938 --> 01:15:29,218
No.

1542
01:15:30,218 --> 01:15:31,018
The whole

1543
01:15:31,018 --> 01:15:34,038
Presidious Bitcoin could be completely self-sufficient.

1544
01:15:34,098 --> 01:15:35,198
Our own water.

1545
01:15:35,857 --> 01:15:38,638
As long as we get the Costco treat delivery.

1546
01:15:39,138 --> 01:15:39,578
The snacks.

1547
01:15:39,578 --> 01:15:43,058
have to get fussed in from somewhere.

1548
01:15:43,258 --> 01:15:43,578
Take care.

1549
01:15:43,938 --> 01:15:44,977
Don't kill the bot, man.

1550
01:15:45,357 --> 01:15:48,317
Well, we need like a decentralized drone delivery service.

1551
01:15:48,398 --> 01:15:48,998
Or like a farm.

1552
01:15:48,998 --> 01:15:49,698
Or grow our own food.

1553
01:15:49,758 --> 01:15:50,118
Grow it.

1554
01:15:50,498 --> 01:15:50,738
Okay.

1555
01:15:51,058 --> 01:15:51,357
All right.

1556
01:15:51,538 --> 01:15:53,738
Dude, there's some land out here.

1557
01:15:54,498 --> 01:15:56,158
Have I told you guys I have my own garden now?

1558
01:15:56,238 --> 01:15:57,998
I've started growing spinach and mustard greens.

1559
01:15:58,058 --> 01:15:58,317
Oh, great.

1560
01:15:58,377 --> 01:15:59,018
I'll bring some.

1561
01:15:59,098 --> 01:16:01,558
We could start planting stuff on the roof.

1562
01:16:01,638 --> 01:16:02,198
I love it.

1563
01:16:02,297 --> 01:16:03,018
That would be dope.

1564
01:16:03,498 --> 01:16:04,357
Solar punk, baby.

1565
01:16:04,618 --> 01:16:06,218
We're going to have a solar punk future.

1566
01:16:07,118 --> 01:16:08,477
We're reclaiming it for Bitcoin.

1567
01:16:08,758 --> 01:16:09,198
I love it.

1568
01:16:09,198 --> 01:16:11,238
Okay, before we get on to our next topic,

1569
01:16:11,458 --> 01:16:12,277
you mentioned Google.

1570
01:16:12,377 --> 01:16:14,398
Have you guys played with Genie 3

1571
01:16:14,398 --> 01:16:15,958
or seen the demos of Genie 3?

1572
01:16:16,018 --> 01:16:17,258
No, I've seen the demos, yeah.

1573
01:16:17,477 --> 01:16:19,558
No, but I mean, we're living it right now.

1574
01:16:19,678 --> 01:16:19,917
I know.

1575
01:16:20,518 --> 01:16:21,298
I saw your tweet.

1576
01:16:21,698 --> 01:16:23,658
You believe in the simulation more now.

1577
01:16:23,718 --> 01:16:23,958
Oh, yeah.

1578
01:16:24,098 --> 01:16:24,678
Well, who doesn't?

1579
01:16:25,178 --> 01:16:26,477
So we are in Genie.

1580
01:16:26,598 --> 01:16:28,178
We're in Genie 97 or something.

1581
01:16:28,178 --> 01:16:29,438
And then the question is, who is?

1582
01:16:31,958 --> 01:16:33,218
Only some of us?

1583
01:16:33,498 --> 01:16:33,737
No.

1584
01:16:34,638 --> 01:16:36,498
Okay, do you want to move on to KYC?

1585
01:16:37,538 --> 01:16:38,078
Well, okay.

1586
01:16:38,078 --> 01:16:40,477
I mean, the one thing I think is just, let's do KYC next.

1587
01:16:40,558 --> 01:16:43,698
But I think the one thing that's worth touching for Genie is, for those of you who haven't

1588
01:16:43,698 --> 01:16:47,438
seen, and by the way, increasingly, I have to give more and more respect to Google the

1589
01:16:47,438 --> 01:16:48,258
deeper I go into stuff.

1590
01:16:48,477 --> 01:16:50,857
Like, you know, everyone else is kind of like, oh, we got chatbots and this and that.

1591
01:16:50,917 --> 01:16:54,698
And then Google's just always like, oh, by the way, like, here's like the virtual reality

1592
01:16:54,698 --> 01:16:56,357
world that generates in real time.

1593
01:16:56,377 --> 01:16:59,758
And if you haven't seen, it's crazy because it has world memory where you can literally

1594
01:16:59,758 --> 01:17:03,698
like paint walls what they show, step away for a minute, come back and the world is still

1595
01:17:03,698 --> 01:17:03,998
painted.

1596
01:17:03,998 --> 01:17:09,398
one of the so i i like read about this in the reddit singularity um uh subreddit rubber which

1597
01:17:09,398 --> 01:17:16,098
i like and one of the jokes in there was are we gonna get gta 7 before gta 6 which dk gets that i

1598
01:17:16,098 --> 01:17:20,357
mean the joke is it takes forever to program video games but like could we just like self-generate

1599
01:17:20,357 --> 01:17:27,638
that world you want before all the programmers are i totally buy that and like i mean yeah like

1600
01:17:27,638 --> 01:17:32,917
if we're about to go into a much more augmented world and let people have their own you know

1601
01:17:32,917 --> 01:17:37,698
whatever visions. I just want to say, I think it's increasingly important that there is a Nostra

1602
01:17:37,698 --> 01:17:41,678
Bitcoin alternative of that world. Because again, I'll never forget, even though I like some of the

1603
01:17:41,678 --> 01:17:46,417
things he's doing now, like photo of Zuckerberg got everyone strapped in with their like VR goggles

1604
01:17:46,417 --> 01:17:50,798
and just like eating the bugs or whatever. And like, if we're going to go into, you know,

1605
01:17:50,817 --> 01:17:56,538
an infinite recursive loop of simulations, which we probably are in, um, let's make sure that's free.

1606
01:17:56,538 --> 01:18:07,317
yeah it's okay we'll talk about kyc internet and this is a it's topical because the uk has a new

1607
01:18:07,317 --> 01:18:15,998
online safety act law that is having reverberations around the world and including british people who

1608
01:18:15,998 --> 01:18:22,817
are running into a bunch of obstacles but it's just a latest example of like a trend towards

1609
01:18:22,817 --> 01:18:25,298
KYC-ing just any

1610
01:18:25,298 --> 01:18:27,438
basic internet access

1611
01:18:27,438 --> 01:18:29,658
sort of flies in the face

1612
01:18:29,658 --> 01:18:31,258
of being able to participate

1613
01:18:31,258 --> 01:18:33,258
on the internet as a NIM

1614
01:18:33,258 --> 01:18:34,938
and anonymous.

1615
01:18:35,798 --> 01:18:35,817
So,

1616
01:18:37,277 --> 01:18:38,958
one major question,

1617
01:18:39,078 --> 01:18:41,298
it seems like I've started

1618
01:18:41,298 --> 01:18:42,857
to see a lot more of these things happen.

1619
01:18:43,138 --> 01:18:44,837
I've seen some more, let's say,

1620
01:18:45,337 --> 01:18:47,078
conspiratorial people

1621
01:18:47,078 --> 01:18:48,917
in Bitcoin Twitter, but is it really

1622
01:18:48,917 --> 01:18:49,758
conspiracy if it's right,

1623
01:18:49,758 --> 01:18:53,538
be like, okay, kind of closing off the exits,

1624
01:18:53,758 --> 01:18:55,357
shutting down more access points on the internet.

1625
01:18:55,398 --> 01:18:57,237
I don't want to get too hyperbolic about it,

1626
01:18:57,237 --> 01:18:58,618
but it does seem like a lot of this stuff

1627
01:18:58,618 --> 01:18:59,718
is accelerating recently.

1628
01:19:00,198 --> 01:19:01,578
And I think, I don't know what the trend is,

1629
01:19:01,678 --> 01:19:03,357
but my guess is it has something to do with AI

1630
01:19:03,357 --> 01:19:04,638
that a lot of people realize,

1631
01:19:04,758 --> 01:19:08,538
okay, we're about to have recursive learning AIs soon,

1632
01:19:08,618 --> 01:19:13,598
and somehow that's sort of increasing the urgency to do this.

1633
01:19:13,977 --> 01:19:14,817
I don't know, what's your take?

1634
01:19:15,038 --> 01:19:15,857
Well, I haven't studied it,

1635
01:19:15,898 --> 01:19:17,877
but my assumption is that Aukens Razor

1636
01:19:17,877 --> 01:19:20,817
is that it's like trying to save children.

1637
01:19:21,098 --> 01:19:22,578
Like well-intentioned.

1638
01:19:23,477 --> 01:19:23,618
Yeah.

1639
01:19:23,798 --> 01:19:25,417
I forgot, was this one packaged

1640
01:19:25,417 --> 01:19:26,618
is children or terrorism?

1641
01:19:26,758 --> 01:19:27,277
I forget which one.

1642
01:19:27,618 --> 01:19:29,118
But no, I mean, again,

1643
01:19:29,178 --> 01:19:29,917
I haven't studied it,

1644
01:19:29,977 --> 01:19:30,917
so like, I don't know.

1645
01:19:31,098 --> 01:19:32,817
But I just assume like the people

1646
01:19:32,817 --> 01:19:35,237
who are coming over these laws are,

1647
01:19:35,377 --> 01:19:36,357
I mean, because like in the UK,

1648
01:19:37,158 --> 01:19:39,877
like 80% of citizens approve this law.

1649
01:19:40,477 --> 01:19:40,718
Seriously?

1650
01:19:41,018 --> 01:19:42,038
Yeah, very popular.

1651
01:19:42,317 --> 01:19:42,798
The fuck?

1652
01:19:43,337 --> 01:19:43,518
Yeah.

1653
01:19:44,058 --> 01:19:46,877
Because it's shrouded in a

1654
01:19:46,877 --> 01:19:49,258
like save children or prevent terrorism.

1655
01:19:49,258 --> 01:19:52,038
It is a similar thing that I studied a little bit more about,

1656
01:19:52,138 --> 01:19:53,678
which is probably a similar pattern.

1657
01:19:54,038 --> 01:19:55,357
Remember a few years ago,

1658
01:19:55,458 --> 01:19:56,698
Apple chain,

1659
01:19:56,837 --> 01:19:56,977
you know,

1660
01:19:56,998 --> 01:19:59,477
Apple's always taken very strong privacy stances,

1661
01:19:59,658 --> 01:20:06,898
but they changed their software so that photos on your phone could be in the

1662
01:20:06,898 --> 01:20:08,298
background without your control,

1663
01:20:08,538 --> 01:20:09,178
uh,

1664
01:20:09,178 --> 01:20:14,178
scanned and then uploaded to the FBI and different intelligence.

1665
01:20:14,298 --> 01:20:14,877
I miss this.

1666
01:20:15,018 --> 01:20:15,578
I miss that.

1667
01:20:15,938 --> 01:20:16,178
What?

1668
01:20:16,178 --> 01:20:18,837
I didn't see it. You didn't share it in the group chat. It didn't happen.

1669
01:20:18,837 --> 01:20:19,258
Yeah, come on, Steve.

1670
01:20:19,258 --> 01:20:21,398
This is like two or three years ago.

1671
01:20:21,458 --> 01:20:22,398
That's pretty concerning.

1672
01:20:22,737 --> 01:20:25,817
And it's to save children. I mean, it's like child pornography.

1673
01:20:26,038 --> 01:20:33,718
So basically, there'd be a list of content that is illegal.

1674
01:20:35,477 --> 01:20:40,178
And they lead with child pornography, which the vast majority of people would agree.

1675
01:20:40,178 --> 01:20:41,118
Yeah, of course.

1676
01:20:42,098 --> 01:20:44,357
That that's horrible.

1677
01:20:44,357 --> 01:20:47,877
and if there's tools that we can use to prevent that,

1678
01:20:48,277 --> 01:20:49,277
let's use those tools.

1679
01:20:49,618 --> 01:20:50,658
What do they add next?

1680
01:20:50,898 --> 01:20:54,258
So the tool here was, okay,

1681
01:20:55,018 --> 01:20:57,538
a three-letter agency has a list,

1682
01:20:58,038 --> 01:21:00,837
is not provided to Apple.

1683
01:21:01,218 --> 01:21:03,357
They just get like hashes and they do...

1684
01:21:03,357 --> 01:21:04,018
Hashes of images.

1685
01:21:04,498 --> 01:21:04,977
Hash matching.

1686
01:21:05,178 --> 01:21:06,398
This is like an image.

1687
01:21:06,398 --> 01:21:07,678
So on your phone right now,

1688
01:21:07,877 --> 01:21:09,857
like it's matching against your photos

1689
01:21:09,857 --> 01:21:12,758
and if there's a match,

1690
01:21:12,758 --> 01:21:20,237
then like you get outed to the authorities and then they'd investigate it so that was um announced

1691
01:21:20,237 --> 01:21:25,758
and launched i think something like three years ago damn and then they faced massive backlash

1692
01:21:25,758 --> 01:21:29,518
because obviously that can be abused because then you know what you start with something that like

1693
01:21:29,518 --> 01:21:34,498
almost everyone agrees but then like you keep adding more crimes slippery slope and also it's

1694
01:21:34,498 --> 01:21:40,018
just like massively crosses a line where they're like analyze like i think most humans believe the

1695
01:21:40,018 --> 01:21:45,638
photos I take on my phone are my property. I don't want the government snooping them.

1696
01:21:45,998 --> 01:21:47,837
Yeah, I actually didn't think Apple could do that.

1697
01:21:48,178 --> 01:21:50,438
Of course, they control the software on the phone.

1698
01:21:51,237 --> 01:21:56,877
Just like with self-custody wallets, if they want, they can update the software to just

1699
01:21:56,877 --> 01:22:00,798
upload everyone's keys to the cloud. They can do that.

1700
01:22:02,917 --> 01:22:06,917
I've gone deep in the debates about server versus

1701
01:22:06,917 --> 01:22:09,737
a computer you hold in your hands

1702
01:22:09,737 --> 01:22:11,098
and a computer that's in the cloud.

1703
01:22:11,357 --> 01:22:13,058
It's not...

1704
01:22:13,058 --> 01:22:14,138
That seems very different to me.

1705
01:22:14,958 --> 01:22:16,798
But when you want a service like, hey,

1706
01:22:17,018 --> 01:22:19,337
we got to back up your stuff in case you drop it in the ocean.

1707
01:22:19,777 --> 01:22:20,958
Yeah, but I thought that was encrypted.

1708
01:22:21,178 --> 01:22:23,438
It sounds like it's in service of the user.

1709
01:22:23,817 --> 01:22:24,917
Okay, let's go there.

1710
01:22:24,917 --> 01:22:25,317
So like,

1711
01:22:25,777 --> 01:22:29,298
it is different in some ways,

1712
01:22:29,377 --> 01:22:29,857
but not...

1713
01:22:29,857 --> 01:22:32,138
Just because you hold your phone in your hand

1714
01:22:32,138 --> 01:22:34,078
doesn't mean you have full control over it.

1715
01:22:34,078 --> 01:22:37,098
A, you have no idea what software's running on your phone.

1716
01:22:37,398 --> 01:22:39,777
It seems like an opportunity for someone to build something that is like that.

1717
01:22:40,538 --> 01:22:43,237
I mean, they've been market failures, right?

1718
01:22:43,618 --> 01:22:46,458
Anyone trying to create something privacy-oriented is a market failure.

1719
01:22:46,458 --> 01:22:52,977
Anyway, the point is Apple introduced that and also with iMessage, some kind of child protection.

1720
01:22:53,857 --> 01:22:55,558
So it's just a similar pattern.

1721
01:22:55,798 --> 01:23:00,198
So I think it's well-intended to protect children.

1722
01:23:00,198 --> 01:23:08,477
my guess would be for this law that it is well intended trying to save children and it has like

1723
01:23:08,477 --> 01:23:14,737
massive popularity and support by the citizens um but all like within a week of launching i sent

1724
01:23:14,737 --> 01:23:21,357
that article out there's like 10 different examples of like probably unintended consequences

1725
01:23:21,357 --> 01:23:27,118
for adults um that make the internet like way harder to use or onerous or impossible to use or

1726
01:23:27,118 --> 01:23:33,377
you lose privacy, like situations where you want to ask a question or get information or communicate

1727
01:23:33,377 --> 01:23:38,758
without revealing yourself. And it puts you at physical safety risk. All of a sudden now,

1728
01:23:38,998 --> 01:23:43,178
it's like, oops, we didn't think of that. So we have someone in the chat that also says,

1729
01:23:43,398 --> 01:23:47,538
a bit simple, Julie Immigrant is Australia's e-safety commissioner in this role as she leads

1730
01:23:47,538 --> 01:23:50,998
the world's first government regulatory agent, being committed to keeping its citizens safer

1731
01:23:50,998 --> 01:23:55,058
online. So I guess something just happened in Australia too. I guess I would like to believe

1732
01:23:55,058 --> 01:23:58,498
that and maybe it's true maybe it's just occam's razor but it does seem like if it's happening in

1733
01:23:58,498 --> 01:24:03,998
britain it's happening in um uh australia i guess we kind of had brazil last year a little bit it's

1734
01:24:03,998 --> 01:24:06,998
like i don't know it does seem like it's accelerating maybe it's just the fact that now

1735
01:24:06,998 --> 01:24:11,598
they can do this but i guess i would question why is it happening today and not a year ago or two

1736
01:24:11,598 --> 01:24:17,798
years ago or well i think like again i don't know um but there's just more and more data and

1737
01:24:17,798 --> 01:24:26,038
information now about internet activity, social media, et cetera, and the harms it has on teenagers

1738
01:24:26,038 --> 01:24:31,258
and children. That's becoming more evident now than obviously like 10 years ago, it wasn't even

1739
01:24:31,258 --> 01:24:37,178
a thing. We now have a body of data. So I think there's plausible answers to all these questions.

1740
01:24:37,598 --> 01:24:43,298
Now, is it also conspiratorial part of the big reset? Maybe. Either way, it doesn't really matter

1741
01:24:43,298 --> 01:24:45,398
because like whatever the rationale is,

1742
01:24:45,438 --> 01:24:48,758
there are these repercussions and concerns

1743
01:24:48,758 --> 01:24:51,857
that we care about, I think,

1744
01:24:51,917 --> 01:24:52,837
and we should be discussing.

1745
01:24:53,198 --> 01:24:55,058
So that's what makes BitChat and Noster

1746
01:24:55,058 --> 01:24:56,638
very interesting.

1747
01:24:57,718 --> 01:24:59,018
I mean, because another,

1748
01:24:59,538 --> 01:25:00,877
I guess you mentioned AI,

1749
01:25:00,998 --> 01:25:02,158
that could be another driver, right?

1750
01:25:02,758 --> 01:25:04,678
So which gets to proof of human.

1751
01:25:05,237 --> 01:25:07,078
And we've talked about that on the show

1752
01:25:07,078 --> 01:25:08,598
and like, is it even important or not?

1753
01:25:09,317 --> 01:25:10,737
That's an interesting debate.

1754
01:25:10,737 --> 01:25:13,277
But we did conclude there's at least

1755
01:25:13,298 --> 01:25:18,798
certain use cases where it's very important, like dating apps or any kind of any app where you're

1756
01:25:18,798 --> 01:25:23,718
going to meet someone in person. You don't want to be tricked online where you're talking to a bot

1757
01:25:23,718 --> 01:25:29,317
and, you know, no catfish either. Yeah. Well, either like waste your time because no one shows

1758
01:25:29,317 --> 01:25:36,277
up or like it's some other shenanigan or something. Right. Or worse. So there it's valuable. And

1759
01:25:36,277 --> 01:25:43,198
there also might be sent like sentiment where you humans just want to know they're interacting

1760
01:25:43,198 --> 01:25:48,857
with humans independent of the rational argument that you should be judging it based on the quality

1761
01:25:48,857 --> 01:25:54,798
of the content or whatever um so how do we get proof of human we've talked about world coin we're

1762
01:25:54,798 --> 01:26:02,018
all very concerned about that another is government ids so another trend is like yeah you know and

1763
01:26:02,018 --> 01:26:09,558
so do we see uh social media requiring passport upload to even use it yeah like will we see a day

1764
01:26:09,558 --> 01:26:11,618
or X, just to

1765
01:26:11,618 --> 01:26:13,678
battle the bot, you have to

1766
01:26:13,678 --> 01:26:14,538
upload your passport.

1767
01:26:15,638 --> 01:26:16,138
And maybe even

1768
01:26:16,138 --> 01:26:19,558
your utility bill and super

1769
01:26:19,558 --> 01:26:21,438
owner's KYC just to participate

1770
01:26:21,438 --> 01:26:23,638
in social media. And is that going to

1771
01:26:23,638 --> 01:26:25,837
be driven by corporations or the law?

1772
01:26:26,357 --> 01:26:26,658
Or both.

1773
01:26:27,837 --> 01:26:29,377
It's a really good point.

1774
01:26:29,578 --> 01:26:31,718
And I think it gets to stuff you talked

1775
01:26:31,718 --> 01:26:33,658
about, which BitChat, like double opt-in

1776
01:26:33,658 --> 01:26:35,438
friending as humanhood is

1777
01:26:35,438 --> 01:26:37,638
a really important alternative web trust.

1778
01:26:37,638 --> 01:26:43,977
And similarly, I mean, I love this Cali tweet slash Nostra post where it's just like, look, Nostra is becoming so important right now.

1779
01:26:44,078 --> 01:26:45,917
It's the only free internet left.

1780
01:26:46,138 --> 01:26:47,118
I think that's probably true.

1781
01:26:47,218 --> 01:26:48,817
I mean, yeah.

1782
01:26:49,078 --> 01:26:49,758
And I don't know.

1783
01:26:49,817 --> 01:26:51,317
It makes our stuff more important than ever.

1784
01:26:52,518 --> 01:26:53,417
What's your take, DK?

1785
01:26:53,518 --> 01:26:56,698
Do you think this is all driven by trying to defeat the bots?

1786
01:26:57,837 --> 01:26:58,357
Which part?

1787
01:26:58,498 --> 01:26:59,477
Having KYC everywhere?

1788
01:26:59,498 --> 01:27:01,477
Yeah, like requiring everyone to put up their ID.

1789
01:27:01,477 --> 01:27:05,598
I think people, you know, there's always a good soundbite.

1790
01:27:05,598 --> 01:27:08,737
and I think a lot of people are very responsive to a good soundbite.

1791
01:27:09,058 --> 01:27:12,398
So if you say protect children, get rid of the terrorists,

1792
01:27:12,837 --> 01:27:16,498
I think a lot of people will hear that, they'll believe it, they'll repeat it.

1793
01:27:16,877 --> 01:27:18,438
So I think if you want to make progress on this,

1794
01:27:18,438 --> 01:27:23,317
I think you have to speak to somebody who would be kind of tricked by that soundbite

1795
01:27:23,317 --> 01:27:26,798
and not expect them to be one of us who kind of already gets it,

1796
01:27:26,857 --> 01:27:32,718
but kind of explain why KYC may have some benefits,

1797
01:27:32,718 --> 01:27:34,638
but it also has some severe drawbacks.

1798
01:27:34,638 --> 01:27:35,898
and what do those drawbacks look like?

1799
01:27:36,438 --> 01:27:37,857
So like, I don't know, like what,

1800
01:27:38,538 --> 01:27:41,498
imagine you have, I mean, I have a neighbor

1801
01:27:41,498 --> 01:27:43,998
who I think is generally a good dude,

1802
01:27:44,098 --> 01:27:46,198
but like, you know, every once in a while

1803
01:27:46,198 --> 01:27:47,898
we get talking about like fact checking.

1804
01:27:48,018 --> 01:27:49,458
He's like, well, let's just, if it's,

1805
01:27:49,737 --> 01:27:51,658
I want to have Facebook fact check things for me.

1806
01:27:51,678 --> 01:27:52,618
I'm like, that's crazy.

1807
01:27:52,758 --> 01:27:54,477
You don't want a fact check.

1808
01:27:54,618 --> 01:27:56,698
Like, well, things that are facts should be facts.

1809
01:27:56,777 --> 01:27:57,938
It should just be, you know, fact check.

1810
01:27:58,417 --> 01:27:59,678
It's like, well, yeah, but the interesting stuff

1811
01:27:59,678 --> 01:28:02,377
is at the edge of what is a known fact.

1812
01:28:02,817 --> 01:28:03,658
Like what year is it?

1813
01:28:03,658 --> 01:28:04,118
It's 2025.

1814
01:28:04,118 --> 01:28:09,498
it's a fact fine but the stuff that's not known it's the frontier of what is human knowledge what

1815
01:28:09,498 --> 01:28:15,078
can be verified that's what that's the only thing that's interesting like is covid a thing is our

1816
01:28:15,078 --> 01:28:18,477
vaccines i think like all of that those are questions that people should be asking and trying

1817
01:28:18,477 --> 01:28:23,998
to get answers on and i feel like it's the frontier of what is well known and what is not known

1818
01:28:23,998 --> 01:28:29,237
impossible where it's interesting to try to digest it and i think in the kyc discussion it's similarly

1819
01:28:29,237 --> 01:28:34,458
Like what is the frontier of where like, okay, if it's just child, you know, child, uh, pornography

1820
01:28:34,458 --> 01:28:36,518
or CSAM or it's, um, there's terrorist stuff.

1821
01:28:36,658 --> 01:28:37,718
Everybody can agree to that.

1822
01:28:37,898 --> 01:28:40,357
What is the frontier where people might start to disagree?

1823
01:28:40,357 --> 01:28:42,158
And then can we talk about those cases?

1824
01:28:42,158 --> 01:28:45,417
Cause that's the stuff I feel like I'd like to hear more about.

1825
01:28:45,417 --> 01:28:55,977
Like, like, is it, are, is, is KYC useful for like, are, are, I guess you're mostly proponents

1826
01:28:55,977 --> 01:28:57,398
of non-KYC everything,

1827
01:28:57,938 --> 01:28:59,578
but are there areas

1828
01:28:59,578 --> 01:29:00,698
where you'd be swayed to say,

1829
01:29:00,837 --> 01:29:02,178
like, let's KYC some stuff

1830
01:29:02,178 --> 01:29:03,118
and who should do that?

1831
01:29:03,498 --> 01:29:04,638
Well, I think, again,

1832
01:29:04,678 --> 01:29:05,198
the question is,

1833
01:29:05,258 --> 01:29:06,018
how do you KYC

1834
01:29:06,018 --> 01:29:06,658
and who's doing it right?

1835
01:29:06,718 --> 01:29:07,917
Like, I'm very much, I agree,

1836
01:29:08,038 --> 01:29:08,877
like, proof of humanhood

1837
01:29:08,877 --> 01:29:09,958
is a very interesting thing

1838
01:29:09,958 --> 01:29:10,598
or proof of, like,

1839
01:29:10,618 --> 01:29:11,258
someone I trust,

1840
01:29:11,658 --> 01:29:12,398
but I think there's ways

1841
01:29:12,398 --> 01:29:12,718
to do that,

1842
01:29:12,758 --> 01:29:13,737
decentralized bottoms up

1843
01:29:13,737 --> 01:29:14,598
and ways to do it tops down.

1844
01:29:14,678 --> 01:29:16,357
Now, like, are there certain,

1845
01:29:16,357 --> 01:29:17,337
you know, use cases

1846
01:29:17,337 --> 01:29:17,837
where, you know,

1847
01:29:17,898 --> 01:29:18,758
you do want that?

1848
01:29:18,958 --> 01:29:20,078
Look, I mean, I think, again,

1849
01:29:20,178 --> 01:29:20,658
getting older,

1850
01:29:20,737 --> 01:29:21,737
like, there are certain cases

1851
01:29:21,737 --> 01:29:22,377
where, I mean, like,

1852
01:29:22,618 --> 01:29:23,038
you're the pirate

1853
01:29:23,038 --> 01:29:23,357
and you're like,

1854
01:29:23,357 --> 01:29:26,237
the state's always evil and it's like, well, that's not always true. Like, you know, sometimes

1855
01:29:26,237 --> 01:29:29,357
the state actually does good things and like, it's, it's always messy. It's in between things

1856
01:29:29,357 --> 01:29:29,898
are always shifting.

1857
01:29:29,898 --> 01:29:39,777
Fair enough. Yeah, exactly. Steve's buttoning up his shirt there. Um, yeah, but, but I just think,

1858
01:29:40,337 --> 01:29:44,498
I mean, I think that's a good way of doing it, but I also think another way to win people over

1859
01:29:44,498 --> 01:29:49,758
is to offer again, incredible experiences that they'll just won't be able to get otherwise.

1860
01:29:49,758 --> 01:29:58,498
And so, you know, if KYC sort of shuts down the free and open internet, then, you know, I don't know, the kids want Skibbity Cash.

1861
01:29:58,618 --> 01:30:00,658
And Skibbity Cash is only available on Noster.

1862
01:30:01,917 --> 01:30:07,038
Because, I don't know, some lady, you know, who's 60 years old or something, thinks Skibbity Cash is bad for the kids.

1863
01:30:07,098 --> 01:30:07,817
Well, the kids disagree.

1864
01:30:08,198 --> 01:30:11,178
So let the kids, you know, kids have Skibbity.

1865
01:30:11,298 --> 01:30:11,598
I don't know.

1866
01:30:12,198 --> 01:30:12,977
Free Skibbity.

1867
01:30:13,158 --> 01:30:13,658
Free Skibbity.

1868
01:30:14,018 --> 01:30:15,277
That's a good way to end the episode.

1869
01:30:15,317 --> 01:30:15,777
Yeah, exactly.

1870
01:30:15,998 --> 01:30:17,898
All right, let people have their Skibbity Cash.

1871
01:30:17,898 --> 01:30:19,178
Yeah, Skibbity Cash.

1872
01:30:19,758 --> 01:30:20,837
get your skibbity.

1873
01:30:21,938 --> 01:30:22,498
All right.

1874
01:30:22,737 --> 01:30:22,958
Cool.

1875
01:30:23,158 --> 01:30:23,817
Next week then.

1876
01:30:23,977 --> 01:30:24,337
All right.

1877
01:30:24,458 --> 01:30:24,977
Till next time.

1878
01:30:25,078 --> 01:30:25,398
More soon.

1879
01:30:25,477 --> 01:30:25,817
That's fun.

1880
01:30:25,877 --> 01:30:26,078
All right.