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So the market will figure it out, but we are the market and everything that we do may change stuff in one direction or the other,

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especially if we are very influential by being, for example,

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ushrate controlling people that have some kind of ethics,

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or if we are developers that can code good code,

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or if we are so-called influencers that can change minds,

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or if we are teachers and we are good at explaining things.

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So in all these roles, we can accelerate the change.

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This is not interfering in the free market.

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This is being part of the free market.

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Today, that guest is Jacomo Zuko.

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Jacomo is a Bitcoin entrepreneur, consultant, speaker, and advisor.

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I wanted to talk to Jacomo about ordinals and inscriptions,

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because there's quite a debate raging around these topics right now,

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and I always appreciate Jacomo's perspective.

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We start the conversation off talking about what the purpose of Bitcoin is,

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and setting up some definitions which I think is crucial for us to have a constructive conversation in the Bitcoin space.

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To be honest, I've been pretty ambivalent about ordinals and inscriptions,

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trusting that things will work themselves out and it's really not that big of a deal,

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but talking with Jacomo changed my perspective a bit.

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I hope you enjoy this conversation.

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Jacomo is always both entertaining and informative,

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and this time is truly no different.

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As always, you can watch the video version of this episode on Rumble, YouTube, or X by searching at Walker America,

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or listen on Fountain.fm or wherever you get your podcasts by searching for The Bitcoin Podcast.

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If you listen to The Bitcoin Podcast on Fountain, consider giving the show a boost,

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or creating a clip of something you found interesting.

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If you have not checked out Fountain yet, I highly recommend it.

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You can send Bitcoin to your favorite podcasters when you find something valuable,

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and earn Bitcoin just for listening to another Bitcoin Podcast.

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And if you are a Bitcoin-only company interested in sponsoring another Bitcoin Podcast,

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hit me up on social media or through the website, BitcoinPodcast.com.

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Without further ado, let's get into this Bitcoin talk with Jacomo Zuko.

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I'm glad we were able to do this.

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I realize you are a very busy man right now running around,

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but it sounds like this is a good time for us to have this chat, too,

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but with all the drama going on of late in the Bitcoin, Twitter world, and elsewhere.

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So I think it'll be a good opportunity.

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I always like to pick your brain.

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And you have a very unique way of, I think, explaining things simply to people.

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And that is very much needed at this time, because clearly there's a lot of confusion

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around various things for talking about ordinals and inscriptions,

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and what is censorship, and what is spam, and who gets to define what is each,

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and do we believe in the free market or not.

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And so I want to chat about some of those things.

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And then we can go wherever this conversation takes us as well.

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There are no rules in this Bitcoin Podcast, so it is free range.

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So you're not going to censor me if I change subject, okay?

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I will not censor you one bit.

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You can say whatever we can talk about your thoughts about people who put pineapple

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on their pizza if you want.

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That can be honest.

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We can take up like a half hour with that if need be.

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Absolutely.

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Now, thank you for having me, and thank you for the patience at risk scheduling.

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I appear busy mostly because I am probably the most disorganized Bitcoiner ever.

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So yeah, that's our...

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Well, we were able to get some time together, and our time is scarce.

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And so I'll try to be respectful of yours here today.

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But so, I mean, if you're good with it, let's just dive into this.

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And maybe we can just sort of set the stage.

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I think that probably anybody who's listening to this will know who you are,

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probably has seen you speak.

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You know, you're an entrepreneur, a technologist, if I can use that word maybe.

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You advise a bunch of Bitcoin companies.

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You have spoken about Bitcoin in English and Italian all over the world.

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You are Italian.

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It's not really English, but it's...

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Yeah, some people say it's similar.

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It's better English than a lot of Americans still speak, so don't feel too bad.

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But let's just start out with a simple question.

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Let's take it back to the beginning to warm us up here.

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And that question is, who is Jaco Mozuko?

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How did he get here today to be this toxic maximalist that he is going around the world

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and educating people about Bitcoin?

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And what was that journey?

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So my journey was a journey initially of, let's say,

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multi-multiple multiplicity of interests and dispersivity of character.

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So like when I was a kid, I wanted to be an inventor.

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Then I wanted to be an archaeologist.

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So I did a high school about classical letters and archaeology.

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But then I realized that archaeologists are not like Indiana Jones,

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like Phyloid Nazis in the jungle.

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It's more boring.

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It's more like digging up fragments of Vasey's simple pay.

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And so I say, oh no, now I want to be a physicist.

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So I entered the university to do physics.

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I finished it.

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I got my degree in theoretical physics, but by then I was completely bored out of physics.

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And I wanted to study economics.

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I didn't want to do that in university, so I started to do it by myself,

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which was, I think, a lucky strike.

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And then I was changing all the time.

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In 2012, in the fall and winter of 2012,

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I was working in Accenture for my fourth year as a technology consultant.

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And part of my job was related with the Fiat payment system.

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So I was describing some flows in Fiat payment systems.

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So that was one part of my life.

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Also, I was an activist, a political activist in two different groups.

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One group was more related to, let's say, privacy issues.

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I was going to cheer about Julian Assange and WikiLeaks discussing stuff like,

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you know, anonymity online and stuff like that.

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The other group was mostly about economic issue, Austrian economics, central banks, inflation.

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And these two groups were not anyhow related.

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I mean, I was one of the very few people encompassing both groups,

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because at first it was very, let's say, left-leaning, left-libertarian-leaning,

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mostly like social libertarians with a very progressive mindset.

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The second group was actually very conservative groups

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talking mostly about the gold standard and stuff like that.

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So in December 2012, I heard about Bitcoin three times in the span of two weeks

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from the three different groups.

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First, it was about dark web and donation to WikiLeaks.

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Then it was about an article, I think, by Surda or somebody like at Mises Institute

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about Bitcoin as the new gold standard.

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And then one week later, there was an email in Accenture about the blockchain technology.

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So that changed my mind because I finally found one thing that was unifying

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all the different and very dispersive passions and interests that I had.

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But it was still just an interest.

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I got obsessed with that for several months.

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And then my wife in May 2013 told me,

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look, you're obsessed about Bitcoin.

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You talk about Bitcoin all the time.

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But your job is still legacy stuff.

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Well, we didn't use the term legacy back then or the term fiat.

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But your job is boring stuff.

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And your political activist goes nowhere.

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It's just costing you money and time.

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You're just wasting time to achieve nothing.

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Maybe if you do something which is Bitcoin related,

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you can do something which basically satisfies your desire for activism.

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But you can also make a profession out of that because your job is about

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describing technology and abstracting technology and modeling technology and using technology.

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So this is a technology.

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This is also a social revolution.

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Let's do it together.

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So since then, I'm still very dispersive.

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But I'm only dispersive within the field of Bitcoin.

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Now about the toxic maximalism.

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I was a shit coiner for all 2013.

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And great part of 2014.

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But then I started to basically meet people that were explaining me two sides.

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The first side was the technological reason behind toxic maximalism.

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That was basically the fact that all the other pipe dreams that I was being sold about

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repo, NXTs, all this stuff, they were all technologically unsound.

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People started to show me.

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I was coming from my job was related to computer science.

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Somehow I was using computers, but I was not at all doing anything related with open source

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software.

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I didn't know how to use Git.

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I didn't know really how to dig into this stuff.

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I was a Windows person basically.

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So it was very, very far from myself.

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So these people started to show me the technological shortcoming and the technological trade-offs.

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That was probably one year later.

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But somebody gave to me Andrea Postra, treaties on altcoins, which explains why altcoins seem

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a good idea.

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But 99.9% of the time they're just making wrong trade-off choices with a lot of examples.

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And the other side was economical.

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I met other people that told me why is Bitcoin important.

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And I said because Bitcoin is scarce.

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And, okay, why are cryptocurrencies important?

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And my first reaction, well, because they're just as scarce as Bitcoin, then I stopped.

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No, they are not.

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By definition, cryptocurrency is a global asset class that can be inflated in any possible way.

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They can be inflated because you can create more and more cryptocurrencies.

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They can be inflated because each cryptocurrency is very often inflationary in itself, like

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say, Ether.

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And they can be inflated because even if the cryptocurrency is not inflationary,

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it can easily change to become inflationary whenever the incentives will bring in that direction.

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So Bitcoin is scarce and disinflationary while everything else is not.

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So I basically reached my status of evil toxic maximalist around, I would say, half for 2014.

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And I have to say that the curse of maximalists is that since 2014 until now, almost 10 years,

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stuff keeps giving, like reality keeps avenging the maximalist position.

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It's always the same prediction that it keeps happening and happening.

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I met a lot of people at the heights of 2016 following ICOs.

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I gave a few presentations on why ICOs are bullshit and they just all collapsed.

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Then the last cycle, I did the same with DeFi and NFTs and now everything is finishing the...

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Basically, this is the bull market after the crash.

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And then the next bull market, everybody will forget about NFTs and DeFi and there will be

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some other bulls. So that's basically my entire life story.

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I love it. I worked at Accenture as well for, let's see, a little over four years.

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Different timeline than you. I came slightly after, but good to know we have the same,

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let's say, corporate alma mater. So that's always interesting.

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But I appreciate the background because I think it's good to set the stage and also,

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to your point about the curse of maximalism, you sound perhaps like this naysayer all the time

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because you're saying, look, this is a scheme. This is bullshit. This isn't going to work.

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This is going to crash. A lot of people are going to get wrecked.

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And then maybe things go okay for a while and a few people make a lot of money.

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And they say, see, those maximalists just want to keep you poor or keep theirs just so angry

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and toxic personalities with their dark triad. And then history just keeps repeating itself.

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And the new flavor of the month with regard to altcoins or DeFi or whatever it might be,

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turns out to just be a lot of vaporware again that enriches a few people at the expense of

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nearly everyone else. And so I think that that's maybe a good place to jump off and start because

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I think right now is very, well, I'm pretty new to this also. I'm pretty new to Bitcoin. I only

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started really learning about Bitcoin in 2020. So this is my first bear market. This is,

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it's all still new to me. I don't have all the historical context that someone like you does.

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I can read about it, but it's a very different thing to have actually been experiencing it

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as it was happening because hindsight's always 2020 with a lot of these things, right? But

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I'm curious, if we can start off with just, in your opinion, what is the purpose of Bitcoin? Because

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I think it's an important place to start so that we can be kind of a shared understanding with

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anyone who's listening about where you're coming from when you make the arguments that you do.

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So if your basic explanation for this is why Bitcoin exists, this is what it is meant to do.

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So I think that not only you had to make up for some historical context by reading coming in

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around 2020, but it was the same for me. I came in in 2013, let's say, a few months before, and I

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had to do a lot of readings before, but not just because Bitcoin existed since 2009, but because

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Bitcoin was the apex, there was the final point in a quest that was actually going on since many

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years or even many decades or in some interpretation, if you go to the story, the history of some money,

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even centuries, basically. So it's very interesting to me that Bitcoin is a very

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important one. So in order to understand Bitcoin properly, you cannot use something like the

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White Paper. If you read the Satoshi Nakamoto White Paper, it's very clear that the purpose of

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the White Paper was to explain to some people already aware of the objective of an anonymous

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decentralized digital cash, how double spending could be resolved. So I think that's a very important

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result. 99% of the focus of the White Paper is A, you guys were trying to solve double spending

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without centralization. Nobody managed to. I did. Here is why, but there is no point about, for example,

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the 21 million limits, which is a very important characteristic of Bitcoin, it's not even mentioned

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there. There is nothing about a smart contract system of Bitcoin that Satoshi was designing,

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nothing about script or all the consequences. The difficulty adjustment itself is mentioned,

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but it's not even clear that there will be exactly a 10 minutes block rate. So most of the

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important halving is not even mentioned. There is just one single sentence that says, by the way,

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the subsidy can eventually go away to be replaced by fees, but that's not the focus. The focus is

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how to avoid double spending. So if you read about Satoshi, there are some other, like in the White

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Paper, the only purpose which is commented is commercial peer-to-peer exchange over the internet.

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So it's just like e-commerce. This is just an e-commerce innovation, nothing else. But if you

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read Satoshi's email to the Linux Foundation, then you can find him talking about central banks

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debasing the currency. And when you select an article newspaper to prove the date of the Genesis

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Block, it doesn't select an article talking about e-commerce friction. It selects one talking about

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the bailout for banks by the UK government basically. And in many other, like there are some Satoshi

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posts about the Mises regression theorem. So the guy was or the guys or the guys or the gals

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were versed in Austrian economics or at least very familiar with economics. They knew about the

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Cypherpunk theory because they were quoting texts from Cypherpunk pioneers like Fini or Adam Beck.

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So there was a, there was all a story before. So given this context, my idea of what is Bitcoin for,

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what is the purpose of Bitcoin is basically to fold. I think that some people, especially people like

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Fonayek, were looking since a very long time for a way to put, to get hard sound money back.

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And you know, famously Hayek said in the 70s, we cannot do that against the government. So we need

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to create something that they cannot stop, is lie around about way. This is a very famous prediction.

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And this seems very far from Bitcoin, but it's not because just before Bitcoin was created,

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E-Gold was attempted by American oncologists. It was a fan of Austrian economics. It tried to make

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gold great again in the digital era. So it tried to take gold, physical gold, and have basically

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zero bureaucracy, email-based digital gold representation that could replace the US dollar

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in the, in the, basically in the internet domain. So there was that. And that was taken down right

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before the start of Bitcoin. So many Austrians started to realize that in order to do something

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like E-Gold, to achieve monetary goals, they did really have to find a round, a sly, roundabout way

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to create something that could not be stopped. So in a way, Austrian people were starting to discover

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was, was called the cypherpunk idea that you have to create the tools that cannot be stopped in order

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to, to manage to do monetary, monetary innovation or financial innovation or innovation of any kind.

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It's interesting that there was a very, like a similar parallel story on the other side of the

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coin. So you had the cypherpunks, they were not motivated by Austrian economics. They knew almost

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nothing about economics. They just wanted privacy as a tool to defend the little guy against the

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cyberpunk dystopian future. So they wanted to protect privacy anonymity. And the idea was we can,

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when we are in our physical lives, the government is basically screwing up anyway. But when we are

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on the internet, we can be free because nobody knows where we live and who we are. So they cannot

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come and hurt us physically. So this is the cypherpunk, the crypto anarchist dream. There is

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anarchism because if nobody can hurt you when you express an idea or when you provide the service,

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the only thing they can do is insult you or criticize you or give you a better reputation.

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That's the only thing they can do. So that's anarchism in a way. The non-aggression principle

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on the internet is by definitions, by default, because you cannot aggress somebody if not just

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metaphorically and verbally. So these people were studying about, they were discussing the

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stuff like black markets on the internet. And they realized they needed a form of digital cash.

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But some of them, especially Nick Sabo, he was the main guy behind this, they realized that in

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order to create something with value, they really needed to understand what constitutes good money.

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So Nick Sabo started to research from the cypherpunk perspective, the history of money,

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from shells to basically to beans, to everything. He wrote a lot of

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strategists about the labor-based theory of value and work as a proxy measurement for value

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and all this stuff. And you had other people like in 2001, you can see a cypherpunk mailing thread

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where there is people saying, how can we do reusable proof of work? And then somebody says,

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we can use the cash technology. And then Adam Beck says, okay, we can have hashback,

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hash cash with reusable addresses. And then Peter Todd, he was 16 by then. He was chiming in

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while 16 and saying, no, but this would be hyperinflationary. Because if you have a proof of

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work, proof of work can just increase because more people will want to create proof of work.

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And the evolution of physical machines will be such that you will have hyperinflation basically.

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So the cypherpunks were rediscovering, even without realizing it, all the baggage of

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Austrian theories. So basically reasonable economics principles from abstract first

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principle. And at the same time, people like E. Goldfans, so Austrian fans, they were rediscovering

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or discovering for the first time this kind of cypherpunk theory that uses privacy as a way to

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avoid government crackdown. And I think that these two things merge in Bitcoin. So to answer your

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question that seemed very simple, but my answer was very convoluted, Bitcoin is for me, and it's

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supposed to be hard money. So money, which is not easy to print and to inflate away like the

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bad fiat money, and also dark money. So money, which is not easy to track and confiscate and

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censor alike fiat money. So this is basically the magical combination. Since nobody is in charge,

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nobody can print more and nobody can stop you from buying goods on services with it. Of course,

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that doesn't mean, well, we can discuss about this later, but it doesn't mean that you can,

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that crypto anarchism is not the fact that you can use any software, however, how you want without

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consequences for you and for the others. Even in crypto anarchism, if you change on your browser,

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you go as a neem. So nobody can initiate violence against you, but you go in your crypto, crypto

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anarchist heaven, and you change your browser in a way that is not compatible with HTTP anymore,

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then this change will, even if you're free to do it, will have consequences like getting you out.

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If you go, if you connect to a server and you try to DDoS the server, even in crypto anarchism,

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the server will just ban your, your, it will just try to prevent DDoS attacks. So it will still be

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freedom because nobody is coming for you to initiate violence against you. But of course,

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it's freedom in the context of technical limitations. So it's not freedom like everybody can literally

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do whatever they want with the software without any consequence on their side, on another people's

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side. There is still the problem to managing DDoS. There's still the problem to managing

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scarce resources, all the debate about the block size. I remember that even, so we will talk about

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the current drama, but even the past drama, the drama about block size was also somehow politicized

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in this angle. I mean, are you for the free market? So how cannot you be for unlimited blocks? Because

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if you are dictating the size of the block, that's not the free market. Any transaction should be

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allowed. Otherwise you are censoring big blocks or you are censoring transactions that are larger than

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10 megabytes. Why are you censoring me if this is free speech money? So I was anticipating a

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little bit this, but anyway, I will go back to just the hard money and dark money.

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Now, I love it and I appreciate the historical context because again, context matters. And it

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matters especially in the context of these current discussions that are happening. Because I think

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there are also a lot of people engaging in these discussions who do not have the full historical

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context, not just for what brought Bitcoin about and kind of those two sides, the cypherpunk side,

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but then also the Austrian side and those two schools of thought sort of merging into this

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hard money, dark money paradigm, but also don't even have the more recent context of some of the,

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maybe they've read the block size wars or they've gone back and seen some old articles from the time.

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But they may be completely unaware of some of the other things, other discussions happening

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around Bitcoin, colored coins and all these things. Some of the things that you've,

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you gave a great talk at BDC Prague called Ordinals are Retarded. And you went through this whole

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kind of history and showing that, look, this is not necessarily something new. I think people

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also get very confused about the, they use the term ordinals to talk about everything when really

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there's kind of two things. There's ordinals, which is basically just a meta protocol. It's not,

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you know, not really on Bitcoin at all. It's just people agreeing to a set of rules for how

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they're going to do ordering. Then there's inscriptions, which are actually inscribing

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data into the Bitcoin blockchain. And so those two things, you know, I think language matters

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and the terms that we use matters, so we should be specific about those. And I want to dive into

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that. But I'll ask you for one more definition before we jump into that, which is, how do you

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define spam? Because I think this is really at the heart of a lot of these discussions.

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Right back to what you said about people making the argument that, and I've probably made this

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argument in some way myself at one point saying, look, if it's a transaction and it's valid,

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then how can it be spam? You know, and so I think it's important that we first start with,

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how do you define spam, you know, and to the people who say, well, if someone is paying fees,

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then it must be a legitimate transaction and therefore cannot be spam because, look, it's

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allowed. How do you think about that? How do you, how do you differentiate what is spam versus

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valid spam versus this is the free market? What's your framework for approaching that?

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So of course, spam is just a word. So we are free to switch the definition. But what I will try to

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give is the definition, which is historically consistent. Because sometimes when we define words

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in Bitcoin, we follow this kind of new redefinition that doesn't make sense outside. And so this,

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even if we are free to change definitions, this will carry over a lot of assumption that we have

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for the old definition of the word in the new, in the new context. For example, I give you an

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example that has nothing to do with this just to set the discussion and that it will enter into the

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spam discussion. Cash, when people are saying before Bitcoin, you are paying cash, that doesn't

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mean something which is cheap or fast to transmit at distance. It's the other way around. If you

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pay with credit, you can just basically take up the phone and say, I owe you these dollars,

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which is instant and very cheap. But if I have to send you a container with cash, then that would

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be very expensive and very slow. So somehow in the context of Bitcoin during the block size

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wars, there was this kind of distortion of the word in which if Bitcoin is peer to peer cash,

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in order to be cash, it must be very cheap to move at distance and very fast to move at distance.

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Otherwise, it's not responding to the definition of digital cash. But if you think back, there is

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nothing in the word cash that is about being cheap or fast. It's the other way around. Spam is

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something similar. Your first instinct was to consider spam something that must, something

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that by definition being spam must somehow violate the rules of the protocol. But in all the previous

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uses of the word spam, this was never the case. So imagine, for example, email spam that was the

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principal problem that we will analyze. In email spam, all the spam email were perfectly valid from

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the point of view of the peer to peer decentralized permissionless SMTP protocol. So the problem

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was that these transactions, these emails, these spackets, these data, they were valid from the

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point of view of the protocol. But people creating the protocol didn't consider or couldn't consider

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that somebody who created valid emails, absolutely valid emails, and put into these emails stuff that

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you didn't want to read if you are a receiver or you didn't want to relay if you were a

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voluntary remailer, because spam was especially bad at the beginning for people that were trying

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to help the network altruistically by broadcasting relaying emails. So the remailer, the problem of

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the broadcaster is that spam was making something altruistic, very, very expensive, because now you

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have to relay not only the message that you wanted other people to read, but also the message that

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the other people didn't want to receive in the first place. This goes on, even if we're not

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talking about decentralized protocols anymore, if we talk about Twitter, when you receive spam in

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your comments, when you have the spam bot, how is your training going, they are not violating

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any technical rule of Twitter. They are just giving you some information you don't want.

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And even if you say, okay, but if there is zero cost, then spam, but if it's expensive to do it,

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it cannot be spam, but that's not the case either in normal language. When you receive a spam phone

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call, they do incur in a cost. The problem is that the cost of actually paying for the call

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network is enough to make the call, but it's not enough to compensate for the gain that the spammer

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has by disturbing you. So you don't want to receive this phone call. It's bad for you. It's

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something that you didn't ask is consuming your time, is ruining your phone experience. So you

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have your phone, you are doing something, you answer the phone, somebody is selling you some

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shit you don't want. This is ruining your experience. But the telephone network is not

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concerned because they are receiving the payment. You are not paid to receive this phone call. So

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it's bad for you. But the telephone company is. So the spammer, and we always call this phone

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called spam because it is spam, but the spammer will sustain a cost not to pay the victim of the

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spam. They will sustain a cost to pay for just the middleman of the spam attack. And the spam

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attack will be somehow profitable to them because, for example, even if they have to both are one

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million people, the 10 people that are actually end up purchasing the service or whatever make up

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for all the expenses that they basically consume. So let's go back again to historical context.

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What is the genesis of the word spam? You know it, right? I guess being basically a Bitcoin

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comedian, you also know the origin of that. It's the Monty Python, the Monty Python fly in circles.

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So the initial setup is guys in a restaurant, they try to order to the waiter, but when they

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try to order, there is a table full of Vikings and these Vikings are basically, they're basically

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shouting spam, spam, spam, spam, spam. So the guy cannot make a normal conversation with the waiter.

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They cannot communicate information to the waiter and receive information from the waiter,

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waiter in order to order the food, because some other people that by the way, we don't know,

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but we may assume that these Vikings, they paid to get the table and to enter. So nobody's saying

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that the Vikings are not paying. Well, usually you can assume Vikings are just pillaging or

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something, but they seem like very polite Vikings and they are sitting at the table. They paid the

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restaurant, but they didn't pay you. So you are not the one being paid. The restaurant is and they

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are disrupting your communication with the waiter by shouting spam, spam, spam. Of course, from an,

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from a like incentive analysis point of view, Vikings have their reason to shout spam. They

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spend money to get into the restaurant. They are, they're spending their time to shout. They are

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consuming their vocal chores in order to shout spam, spam, spam. So they have some incentives to do it,

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but you didn't want that for a restaurant. You didn't enter in the restaurant for that.

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That's actually ruining your experience. So within this definition, if you think about spam in the

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context of Bitcoin, you don't have immediately to go to the on chain spam. There are many ways of

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spam. For example, when you start up Bitcoin Core, when you do it default without any change,

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Bitcoin Core will connect to some other peers. Now, if the peers are sending a number of

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basically requests that is above a certain threshold, your peer will automatically consider

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this peer spammer. So they will consider that there is either incompetence or malice into

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overhelming your node with the request. And in order to protect your node from the consequences,

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they will blacklist the peers. Now, we cannot say blacklist anymore. We have to say blocklist,

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but that's basically what's going to happen. So even in the context of IP, there are spam filters.

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Of course, Bitcoin is way more complex at simple IP rules. You also have blocks that are keeping

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all the on chain layer one transactions. And you can have spam in that as well. For example,

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if you accept all the microscopic transactions that have an economical content, which is lower than

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the amount of data that they transmit by some definition, which could be the Bitcoin Core

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standard definition or your definition, if you change the configuration file, then you will

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filter them out. These are, by the way, valid transactions. These are called, for example,

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sub dust transactions. So transactions that move such a tiny amount of Bitcoin that the main core

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developers decided to assume that it's inconvenient for a node to spend even the energy and the time

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to download it and validate it. Because they are so stupid that the effort for a node to validate

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it will be more than the economic weight of the transaction itself. So Bitcoin Core will exclude

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them. Of course, those are still valid by consensus because it's very hard to make, to bake that rule

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into the consensus because the concept of dust will depend on the price. It will change a lot. So

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if you find that in a block, you will accept it. Your Bitcoin Core will accept it. But if you find

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it in your mempool, your Bitcoin Core will reject it. And you may say, okay, dust is a special case

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because they are not paying much fees. So probably they will never enter a block. But they were also

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cases in which, for example, if you make a Bitcoin transaction with three operatons, so you have

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three outputs which are all operatons, and you put a huge fee on that, your Bitcoin Core currently

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will reject it, since always. Because the developer, they said, okay, this is not bad enough to be

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considered invalid. It will be messy to consider it invalid. But this is clearly something that

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is indicated that something wrong is going on. And this is going to consume a lot of, potentially,

417
00:38:06,000 --> 00:38:13,200
this can bring a lot, it can bring on a payload, which is very, very large. So let's eliminate it,

418
00:38:13,200 --> 00:38:19,200
let's filter it out from the mempool. Another case is if you create a transaction with a giant fee

419
00:38:19,200 --> 00:38:27,680
that has an operatone, which is only one, but it is, for example, 100 bytes, it will be deleted by

420
00:38:27,680 --> 00:38:34,160
your mempool by Bitcoin Core as a spam prevention filters. Now, there can be a lot of discussion

421
00:38:34,160 --> 00:38:40,560
about this, well, I'm going to add on myself, you only ask what is spam. So my definition will be

422
00:38:40,560 --> 00:38:47,040
spam is defined by two people, not the attacker. If you use the attacker as the person that can

423
00:38:47,040 --> 00:38:54,320
define spam, then spam cannot exist. Every kind of spam activity will be profitable in the eyes,

424
00:38:54,320 --> 00:38:59,120
will be useful, will have some economical utility in the eyes of the spammer, otherwise,

425
00:38:59,120 --> 00:39:05,680
it will not be spamming. So the only reasonable definition of spam are undesired information

426
00:39:05,680 --> 00:39:13,520
that are disrupting your communication experience as decided by either the final receiver that wants

427
00:39:13,520 --> 00:39:20,480
to just read emails and instead they will just keep receiving stuff, or they rely on the technical

428
00:39:20,480 --> 00:39:27,520
infrastructure that would like to help the others by relaying messages, but they cannot keep up with

429
00:39:27,520 --> 00:39:33,360
this. So they know that these messages are useless for the final user and they still see that these

430
00:39:33,360 --> 00:39:40,000
messages take up a huge percentage of their effort. So the typical in the email industry,

431
00:39:40,000 --> 00:39:47,200
the situation was like, I would like to re-mail, I would like to relay, but since 90% of my effort,

432
00:39:47,200 --> 00:39:53,360
which I'm doing for free, is happening because this email that nobody wants to read,

433
00:39:53,360 --> 00:39:59,760
are reaching a final recipient that doesn't want to read them, now I stop providing my effort,

434
00:39:59,760 --> 00:40:06,560
because this is not right. I'm wasting my effort to help attackers instead of helping other people.

435
00:40:06,560 --> 00:40:16,480
And this also has a very strong connection with Bitcoin, where you as an odd are not paid

436
00:40:16,480 --> 00:40:23,360
to your work of enforcing the rule and broadcasting the transaction. The miner that finds the block

437
00:40:23,360 --> 00:40:30,000
is paid for the block space, but only the miner. Every other miner that is not the lucky one will

438
00:40:30,000 --> 00:40:36,640
have to download and validate the transaction and even store them in many cases, for in exchange

439
00:40:36,640 --> 00:40:42,480
for nothing. And you if you are not a miner, you will have to validate and so download,

440
00:40:42,480 --> 00:40:48,400
validate and eventually even store in some cases the transaction for in exchange for nothing. So

441
00:40:48,400 --> 00:40:56,000
even if the spammer is paying one miner, the specific miner that includes the spam, he's not

442
00:40:56,000 --> 00:41:01,360
paying the victim of the spam and he's not paying all the other people that are putting resources

443
00:41:01,360 --> 00:41:07,120
for free in order to make this system work at the end. So it's very similar to the telephone

444
00:41:07,120 --> 00:41:13,600
company example, the phone spammer is paying the telephone line, he's just not paying you.

445
00:41:13,600 --> 00:41:19,760
And so you want him to stop and you will adopt any technical means that you can in order for him

446
00:41:19,760 --> 00:41:25,280
to stop spamming you. Honestly, I hate spam. When there's too much spam creating noise,

447
00:41:25,280 --> 00:41:31,840
it is hard to find the signal. Here's some signal I wish I would have tuned into much earlier.

448
00:41:31,840 --> 00:41:39,760
And that is Bitcoin only hardware. Go to bitbox.swiss slash Walker and use the promo code Walker

449
00:41:39,760 --> 00:41:47,280
for 5% off the Bitcoin only bitbox o2 hardware wallet. Again, it is Bitcoin only,

450
00:41:47,280 --> 00:41:52,640
it's fully open source just go to their GitHub and verify for yourself you don't have to trust me.

451
00:41:52,640 --> 00:41:58,400
It's also super easy to set up. And it's a great tool whether you're a seasoned psychopath or a

452
00:41:58,400 --> 00:42:04,800
new bit pointer. And when you go to bitbox.swiss slash Walker and use that promo code Walker for

453
00:42:04,800 --> 00:42:11,760
5% off, you also help support another fucking Bitcoin podcast. So thank you. Yeah, I think that

454
00:42:11,760 --> 00:42:18,800
it's a very good analogy with both. I mean, to compare it at the protocol level to email,

455
00:42:19,360 --> 00:42:25,600
and then to compare it at kind of the also the user experience, let's say level to phones.

456
00:42:25,600 --> 00:42:29,760
Because, you know, and there's a couple points I want to touch on in there, but maybe a good place

457
00:42:29,760 --> 00:42:36,880
to start is, I believe it's the case that with the advent of so much spam in email,

458
00:42:37,600 --> 00:42:43,600
this is ultimately what ended up leading to a great degree of centralization from email providers

459
00:42:43,600 --> 00:42:50,800
because the tools, the systems, the blacklists or block lists, excuse me, that were required

460
00:42:50,800 --> 00:42:56,160
in order to actually deal with the level of spam that there was were so much more expensive and

461
00:42:56,160 --> 00:43:01,840
onerous than any, you know, single, you know, person email relay operator could possibly deal

462
00:43:01,840 --> 00:43:07,600
with that we ended up centralizing email and centralizing more and more and more to the point

463
00:43:07,600 --> 00:43:13,200
where now there are what 10 different email providers, you know, if you're not using,

464
00:43:13,200 --> 00:43:18,480
you know, GM, like most people are probably using Gmail, but we got to this point where

465
00:43:18,480 --> 00:43:24,240
because we didn't have a good way to deal with spam because SMTP had ossified to a certain extent,

466
00:43:25,280 --> 00:43:30,480
there was no technical solution to this problem at the protocol level, and it had to be solved

467
00:43:30,480 --> 00:43:36,000
basically above the protocol level through centralization of providers. Is that a fair characterization?

468
00:43:36,480 --> 00:43:42,240
I think it is, and there is a very good presentation by by James O'Lough about this,

469
00:43:42,240 --> 00:43:48,960
the same problem that he gave in Lugano. It was a, it was very good, even if Jameson disagrees

470
00:43:48,960 --> 00:43:54,000
with me about all the discussion that we're having right now, I think Jameson fell into the

471
00:43:54,000 --> 00:43:59,920
semantical trap of defining spam as some something invalid. Still, the presentation itself is very

472
00:43:59,920 --> 00:44:06,080
good. I suggest everybody to see it. It's not like there was not another solution by by except

473
00:44:06,080 --> 00:44:11,440
creating white list. The problem is that this solution arrived slightly too late. This solution

474
00:44:11,440 --> 00:44:17,200
was a hash cash proposed by Adam Beck, and this solution was basically the starting point of

475
00:44:17,200 --> 00:44:24,400
Bitcoin in a way. So, so hash cash was a possible alternative solution from except other than

476
00:44:24,400 --> 00:44:33,040
centralization and white lists, that as you said reduced the the permissionless open email protocol

477
00:44:33,040 --> 00:44:39,040
to the fact to a permissioned closed centralized protocol. Right now you can start up your own

478
00:44:39,040 --> 00:44:44,720
email server. Nothing can prevent you from doing that, but nobody will receive your email anyway

479
00:44:44,720 --> 00:44:51,520
if you don't get white listed by by Google or or Microsoft or whatever. So that's a very

480
00:44:51,520 --> 00:44:57,040
that's a very good example. So it's not like even here people may think that the problem with email

481
00:44:57,040 --> 00:45:03,600
is that the attacker can attack for free, but that's not exactly the right framework in my opinion.

482
00:45:03,600 --> 00:45:12,160
The right framework is the way the cost grows with the volume of the information delayed. I make

483
00:45:12,160 --> 00:45:20,480
an example. If I want to send you spam physical snail mail, I can and actually you do receive

484
00:45:20,480 --> 00:45:27,360
physical spam. That does happen. It's just that nobody is so worried because the cost to send

485
00:45:27,360 --> 00:45:34,160
one spam physical email is let's say one. The cost to send two is not exactly two is a little

486
00:45:34,160 --> 00:45:39,600
bit less because of economies of state, but it's but it's almost two. The cost to send one million

487
00:45:39,600 --> 00:45:47,600
is not one million, but it could be like 9999 so it's very very close to one million. So the cost

488
00:45:47,600 --> 00:45:55,360
to sending physical email physical mail as a spam grows almost linearly with the number with email

489
00:45:55,360 --> 00:46:02,400
is not the case. The cost is basically very very basically almost flat to send one spam email. You

490
00:46:02,400 --> 00:46:08,720
do have a you do have an expense, which is X, but to send two email to two people, you don't have

491
00:46:08,720 --> 00:46:13,920
double the cost. You have slightly more than the first cost. So the cost always grows with volume,

492
00:46:13,920 --> 00:46:20,000
but but very very very very slow almost flat. So it's interesting that in Bitcoin, we don't have

493
00:46:20,000 --> 00:46:26,320
exactly in the telephone network where the wristband, the cost will increase with the number of phone

494
00:46:26,320 --> 00:46:33,440
calls, but maybe you can have some like flat deals. So the spammer will probably buy our time in a very

495
00:46:33,440 --> 00:46:42,080
great quantity so that making one thousand one million of phone calls will cost him not one

496
00:46:42,080 --> 00:46:48,160
million time as doing one. So he would the spammer will manage to optimize cost. And in Bitcoin,

497
00:46:48,160 --> 00:46:55,680
there is something weird. When you do manage to pay for your block space, basically, manage it to

498
00:46:55,680 --> 00:47:03,520
back to buy your block space, you will have redundancy of your data, not by one node, but by

499
00:47:03,520 --> 00:47:09,440
every possible node forever. Maybe they will not store it if they prune, but they will have to

500
00:47:09,440 --> 00:47:14,720
download it and they will have to validate it forever. So from the from the point of view of a

501
00:47:14,720 --> 00:47:21,520
spammer, somebody that wants his information to reach people that don't want this information

502
00:47:21,520 --> 00:47:29,040
on average, because even here consider the reason you are receiving spam email is that somebody

503
00:47:29,040 --> 00:47:36,240
among the receivers will will attribute some value on that. Otherwise, the spammer will eventually

504
00:47:36,240 --> 00:47:41,760
get tired to do something just because it's evil. He's not evil, but he's available to ruin the

505
00:47:41,760 --> 00:47:47,840
experience for everybody just to reach a tiny portion that think that that's actually available.

506
00:47:47,840 --> 00:47:53,760
So spam is valuable, of course, by definition for the spammer, otherwise, he will not spam,

507
00:47:53,760 --> 00:47:59,920
but it's also valuable for a very, very small portion of the receivers. But in order to reach

508
00:47:59,920 --> 00:48:07,840
him, the spammer is has no moral question to actually ruin the experience for everybody else.

509
00:48:07,840 --> 00:48:14,080
In Bitcoin, the situation is similar. You pay for just one block space. So you pay one person,

510
00:48:14,080 --> 00:48:20,000
basically, and now you can basically have a redundancy of this same information on any

511
00:48:20,000 --> 00:48:28,960
possible future Bitcoin node forever. So this is not close to the physical mail, where having

512
00:48:30,400 --> 00:48:35,440
an indeterminate number of people receiving your email forever would be infinitely expensive. So

513
00:48:35,440 --> 00:48:39,920
if you want to send a physical email, it's not just expensive to send it to many people, it's also

514
00:48:39,920 --> 00:48:45,200
expensive to send it forever. If you want the people to receive this mail forever, you will have to

515
00:48:45,200 --> 00:48:52,640
spend an unbounded amount of money. The telephone network, even if you can buy a minute as a good

516
00:48:52,640 --> 00:49:01,120
discount, in order to call people forever, you still have to pay an indefinite amount of money.

517
00:49:01,120 --> 00:49:06,640
And still, you do have spam in the physical mail, and you do have spam in the phone network. In

518
00:49:06,640 --> 00:49:12,400
Bitcoin, it's even closer to email in a certain sense, because by only paying one block space

519
00:49:12,400 --> 00:49:19,440
inclusion, participating to the auction, you will ride for free, you will basically piggyback

520
00:49:19,440 --> 00:49:27,920
for free, you will free ride the entire network of nodes forever, as far as the global consensus

521
00:49:27,920 --> 00:49:35,120
goes. And I think that that's a perfect segue here, because I think you've done an excellent

522
00:49:35,120 --> 00:49:41,040
job of establishing the fact that, yes, we can all agree from the Austrian point of view that all

523
00:49:41,040 --> 00:49:47,760
value is subjective, right? But when it comes to spam, we have to again clarify that, yes,

524
00:49:47,760 --> 00:49:53,120
there are people who are finding that valuable, else they would not engage in the spamming activity

525
00:49:53,120 --> 00:49:58,400
to begin with. There are also a subset of people who receive the spam who end up finding it valuable

526
00:49:58,400 --> 00:50:02,800
as well, otherwise there would not be the economic incentive for the spammer to spam in the first

527
00:50:02,800 --> 00:50:10,400
place. Where it becomes spam is when the vast majority of, let's say people utilizing that

528
00:50:10,400 --> 00:50:17,280
network, operating that network, view it as unwanted, where it is unsolicited, unwanted,

529
00:50:17,280 --> 00:50:24,480
and to them not valuable. No, go ahead. Go ahead. I would just, I think that it's perfect

530
00:50:24,480 --> 00:50:30,320
representation, perfect summary. The only thing that could be tricky is to define the majority.

531
00:50:30,320 --> 00:50:36,400
I think that the reason element of let's say democracy, like if many people think spam is

532
00:50:36,400 --> 00:50:42,320
spam, that could be the definition. But I think that traditionally, the definition of spam was

533
00:50:42,320 --> 00:50:52,960
also based on time order. Like to give you another example that would be considered trivial outside

534
00:50:52,960 --> 00:50:59,600
of Bitcoin. It is not trivial for Bitcoin only because we like to reanalyze everything, redefine

535
00:50:59,600 --> 00:51:07,280
everything. But for example, you go to the beach and you sit down to sleep. Somebody arrives with

536
00:51:07,280 --> 00:51:15,840
a very loud music and dance. Then you will consider this guy an annoying asshole. While if there is

537
00:51:15,840 --> 00:51:22,400
somebody dancing on a beach and you go there and you just throw down your robe and you lie down and

538
00:51:22,400 --> 00:51:27,600
you shout, silence, I want to sleep. Now you are the annoying asshole. So there is not just the

539
00:51:27,600 --> 00:51:33,040
element of, so the fact that the annoying asshole is one and the other is one, or one is 10 and the

540
00:51:33,040 --> 00:51:39,440
other is one. The pure democracy is not the only thing at rule when you talk about unwanted things

541
00:51:39,440 --> 00:51:45,040
in a system. There is also typically the assumption that people that were using the system, people

542
00:51:45,040 --> 00:51:52,240
that arrived first, they did some sort of on stating on the system. They joined the system

543
00:51:52,240 --> 00:51:59,120
based on some kind of social consensus that can be explicit or implicit. Now you are changing

544
00:51:59,120 --> 00:52:04,320
the social consensus. Now you have to basically prove that that could be good for everybody

545
00:52:04,320 --> 00:52:10,560
else, otherwise that would be considered abusive even if it's still free market in the sense that

546
00:52:10,560 --> 00:52:16,560
there's no, this is still cyber park. So you are not hurting me physically. So there is no violence,

547
00:52:16,560 --> 00:52:22,480
it's still free market, it's not an abuse, it's not a violation of the non-aggression principle.

548
00:52:22,480 --> 00:52:28,080
But it is an abusive behavior from the point of view of netiquette. It's something like, let me

549
00:52:28,080 --> 00:52:34,560
give another example. I create a forum which is about fishing. It's all about fishing, like how

550
00:52:34,560 --> 00:52:40,480
do you fish, the kind of fish, and that's it. Now you really love gardening and you come to my

551
00:52:40,480 --> 00:52:48,720
forum in the specific section of fishing equipment and you keep posting stuff about gardening. So

552
00:52:48,720 --> 00:52:54,720
it doesn't, so now I say you are spamming and now you call one under friends or maybe you just

553
00:52:54,720 --> 00:52:59,520
generate one under other accounts and you say no, no, let's make a vote. Who is spamming who?

554
00:52:59,520 --> 00:53:06,560
And your 1,000 suckpappas, they will vote for fishing guys being the spammers and the other

555
00:53:06,560 --> 00:53:11,920
not. So it's not just a matter of counting the heads, it's also a matter of establishing the

556
00:53:11,920 --> 00:53:19,280
history of the tool. You create a tool like a forum for fishers, fishermen, fishermen, and now

557
00:53:19,280 --> 00:53:25,760
you have the gardener coming in later. So this is not a matter of the purely majority, it's a

558
00:53:25,760 --> 00:53:34,960
matter of established use of the system. I know it's not perfectly, there may be some corner cases

559
00:53:34,960 --> 00:53:43,920
that are not clear-cut at all, but I think that using my Bitcoin node under Tor in Tunisia

560
00:53:43,920 --> 00:53:50,800
in order to open a channel to receive money after I am excluded by the financial system,

561
00:53:50,800 --> 00:53:58,640
and now I have to download and validate the dickpick of somebody, I think that's a very clear-cut

562
00:53:58,640 --> 00:54:06,000
example. So I think that's actually a really interesting clarification on that because obviously,

563
00:54:06,000 --> 00:54:14,800
especially nowadays when it is easier than ever to spin up many other people who may not actually

564
00:54:14,800 --> 00:54:21,040
be people but are just you operating a farm of bots and AI is going to make this even easier to

565
00:54:21,040 --> 00:54:29,600
generate human-seeming actors in a space, that there is some weight that needs to be given to

566
00:54:29,600 --> 00:54:36,080
those who have, well shall we say, the largest proof of work, the biggest history within the system

567
00:54:36,080 --> 00:54:42,080
because yeah, you may be overwhelmed by a new majority, that doesn't necessarily mean, I mean,

568
00:54:42,880 --> 00:54:48,240
as we see in our political democracy, the majority is not always the wisest.

569
00:54:49,440 --> 00:54:53,840
Yeah, so you are starting to interrupt the game, but you are touching two different concepts.

570
00:54:53,840 --> 00:54:59,760
One concept is a civil attack, so those can be fake people and that's true, that's a vulnerability

571
00:54:59,760 --> 00:55:04,720
of voting and that's even why Bitcoin had to introduce proof of work because of civil attack,

572
00:55:04,720 --> 00:55:12,000
but the other point is what you're mentioning now, majority is not always right. So if we are in a

573
00:55:12,000 --> 00:55:18,880
dark alley and there is three rapists and one victim, majority is clearly in favor of rapists,

574
00:55:18,880 --> 00:55:25,440
that doesn't make the situation fair in any way, even if you have the majority. So majority is not

575
00:55:25,440 --> 00:55:33,440
always a good account of who is right and who is wrong and in the case of spam or of topic in a forum,

576
00:55:33,440 --> 00:55:39,920
in the case of an internet tool, majority, even if it's made of real people, is still not always

577
00:55:39,920 --> 00:55:49,680
a long, necessarily good proxy of fairness and a good etiquette. So to get back to the

578
00:55:49,680 --> 00:55:56,080
previous example, now you are not faking up these accounts, you are really calling all your gardening

579
00:55:56,080 --> 00:56:03,680
friends to storm my forum and to only post gardening stuff in my forum. That's actually a very

580
00:56:03,680 --> 00:56:10,800
unethical behavior, that's an abuse of the system and we shouldn't be afraid to call abuse an abuse.

581
00:56:10,800 --> 00:56:17,840
We are not, I mean, unless we really want to redefine everything in a way that just closing

582
00:56:17,840 --> 00:56:27,120
the port 12 in your router is a violence because everybody is supposed to use any port on any

583
00:56:27,120 --> 00:56:34,800
other computer. We have to accept common sense definition of the word spam or abuse of a system

584
00:56:34,800 --> 00:56:38,640
that doesn't mean that we want to initiate physical force on these people. We can't,

585
00:56:38,640 --> 00:56:44,880
this is all cypher peg. It just means that I want, there is a technical vulnerability to some behavior

586
00:56:44,880 --> 00:56:52,000
that was not included in the use cases of the system that I joined for and now I want, as a

587
00:56:52,000 --> 00:56:58,480
previous utilizer, I want to somehow close this technical vulnerability. If possible, which is

588
00:56:58,480 --> 00:57:04,000
an entirely different discussion, there is a debate among the, so there is a debate about the

589
00:57:04,000 --> 00:57:10,000
fact that this vulnerability exists and that something can be defined spam and I am very strong

590
00:57:10,000 --> 00:57:14,960
opinionated in this debate and then there is debate about can we even do something about that

591
00:57:14,960 --> 00:57:21,120
and somebody says no, we can't and I'm completely open minded about this kind of objection. I really

592
00:57:21,120 --> 00:57:24,720
feel it and they may be right and I don't have strong opinion about this.

593
00:57:26,160 --> 00:57:31,600
Yeah and that's kind of the perfect segue because I think we've set the stage well in terms of

594
00:57:33,120 --> 00:57:40,000
how to actually, let's say, speak correctly. Because otherwise there's a lot of the discussion

595
00:57:40,000 --> 00:57:48,160
you see on Bitcoin Twitter which is mainly just some people calling anyone that are inscribing

596
00:57:48,160 --> 00:57:53,920
stuff, anyone who's arbitrarily inscribing data onto Bitcoin is being called a shit coin or a

597
00:57:53,920 --> 00:57:59,440
scammer and anyone who is saying that they're a shit coin or a scammer is being called an

598
00:57:59,440 --> 00:58:08,080
ADIQ maxi who doesn't know what they're talking about and a lot of arguments being made on both

599
00:58:08,080 --> 00:58:13,520
sides that are probably missing the mark because they're not actually arguing about the same thing

600
00:58:13,520 --> 00:58:18,000
when they're coming together. It's just a lot of people sort of shouting their frustrations

601
00:58:18,000 --> 00:58:24,160
into the void and so I think what I'd love to kind of hear from you because I've seen

602
00:58:25,280 --> 00:58:31,760
a lot of takes on inscriptions. I don't even know if it's worth our time to talk about ordinals

603
00:58:31,760 --> 00:58:38,960
because that's not actually in my mind what the debate is really about at all. If you disagree,

604
00:58:38,960 --> 00:58:44,320
let me know but it seems to me the thing that really... I will just disagree for one point

605
00:58:44,320 --> 00:58:51,920
which is this. Everybody could use or abuse if we accept this definition that I will accept

606
00:58:51,920 --> 00:58:58,640
the global consensus to force or push everybody else to replicate some information forever

607
00:58:58,640 --> 00:59:05,600
and some people did it for example the ASCII Bernanke back then and I did it when my

608
00:59:05,600 --> 00:59:11,760
daughter was born. I wrote in op-return welcome Amanda in a block and I used the website of my

609
00:59:11,760 --> 00:59:19,040
friend Ricardo Casata Eternity World to make it. This was still something that could be considered

610
00:59:19,040 --> 00:59:26,080
spam and indeed Luke was very angry with my friend Ricardo and me for promoting this website and we

611
00:59:26,080 --> 00:59:31,760
still disagree about the... because we don't really disagree but I understand that there is a lot of

612
00:59:31,760 --> 00:59:40,400
subtlety here because anyway in this case Luke's point is that I am paying the minor but I'm not

613
00:59:40,400 --> 00:59:48,160
paying his node to store welcome Amanda forever. He will gladly volunteer his node to pass my

614
00:59:48,160 --> 00:59:54,160
transaction even transactions he disagrees with but he will not volunteer for being a cheap

615
00:59:54,800 --> 01:00:01,920
replication of Google Drive for everybody else because that's an abuse but there was even if

616
01:00:01,920 --> 01:00:09,840
we did discuss this back in 2015 in this case there still was no strong incentive for me to write

617
01:00:10,960 --> 01:00:17,760
welcome Amanda. I love Amanda but if transaction cost was $1,000 I was not going to write welcome

618
01:00:17,760 --> 01:00:23,920
Amanda. I could write it on a wall instead of writing it on the Bitcoin type change. So the

619
01:00:23,920 --> 01:00:32,960
use of Bitcoin to encode the stuff was very tempting when the fees were very low but the

620
01:00:32,960 --> 01:00:39,840
fee market was going to solve this big time because when it's too expensive very few people will do it.

621
01:00:40,640 --> 01:00:48,000
The ordinal theory so the way that the fact that you can write something on the on the chain and

622
01:00:48,000 --> 01:00:54,000
now you can pretend that you are selling this content somehow. For anyone listening after the

623
01:00:54,000 --> 01:01:00,320
fact perhaps you just heard a slight interruption we are now back maybe we'll find out later we

624
01:01:00,320 --> 01:01:06,160
missed some of the brilliance that Jacomo just dropped on us but we were you were talking Jacomo

625
01:01:06,160 --> 01:01:14,480
just about incentives and ordinal theory and inscribing data and how the fact that incentives

626
01:01:14,480 --> 01:01:24,880
matter because what it allows you to do by selling a quote NFT is to make money by assigning that value

627
01:01:24,880 --> 01:01:29,760
to it and finding other people who are willing to buy it who then become willing recipients of

628
01:01:29,760 --> 01:01:36,080
what many other people in the network determined to be spam. So can we maybe just start there

629
01:01:36,080 --> 01:01:40,640
given that we're not exactly sure what was just captured at the last minute or so of the recording

630
01:01:40,640 --> 01:01:45,600
just just to set the stage again I do apologize. No no no no no problem no problem though so

631
01:01:46,720 --> 01:01:51,600
we always add we were saying before spam phone call so you're doing something else

632
01:01:51,600 --> 01:01:58,320
you receive a spam phone call but when you have some moment which is particularly rich of post

633
01:01:58,320 --> 01:02:05,040
schemes and scans and crowds of many kind like with Bitcoin now we have many friends that receive

634
01:02:05,040 --> 01:02:11,280
phone calls of people selling them some kind of Bitcoin business or even more crypto business or maybe

635
01:02:11,280 --> 01:02:18,800
NFT business or maybe in the 90s you had this kind of call to sell you blue chips of in the

636
01:02:18,800 --> 01:02:27,120
late 90s or stuff like that so when you have when there is a scam so a big crowd where you're trying

637
01:02:27,120 --> 01:02:35,440
to to basically sell the moon to somebody else without really having the moon so basically

638
01:02:35,440 --> 01:02:43,280
misleading them that the incentive to apply an aggressive spammy marketing campaign increase

639
01:02:43,280 --> 01:02:50,480
this is not unique to Bitcoin in general spammers they they have an incentive which is of different

640
01:02:50,480 --> 01:02:56,960
reasons but scammers have a very strong incentive to become spammers because if you have a non

641
01:02:56,960 --> 01:03:03,200
business then you also are very aware of your reputation you don't want to annoy people that

642
01:03:03,200 --> 01:03:08,560
may be interested in your business so you will not practice spam as a commercial meaning but if

643
01:03:08,560 --> 01:03:13,520
you are trying if you're just trying to select for morons and you are just trying to create the

644
01:03:13,520 --> 01:03:20,800
post scheme if you are selling one coin then spam is a great marketing tool for your scam so I

645
01:03:20,800 --> 01:03:28,160
partially disagree that the problem of inscription is only a problem of spam the problem of encoding

646
01:03:28,160 --> 01:03:35,680
data in the bitcoin time chain was only a problem of spam when I wrote a welcome Amanda when my

647
01:03:35,680 --> 01:03:41,360
daughter was born with that with the tool eternity wall by my good friend Ricardo Casata

648
01:03:41,360 --> 01:03:47,760
Luke Daschir got angry at us because he said you are spamming the blockchain and then we had all

649
01:03:47,760 --> 01:03:52,960
the spam discussion it was 2015 and we had the discussion like I said how I'm spamming I'm paying

650
01:03:52,960 --> 01:03:58,160
the fees and Luke is saying ah you are paying one miner you're not paying me to store to the

651
01:03:58,160 --> 01:04:03,920
lord and store your your your message welcome message forever and I say well but you don't have to do

652
01:04:03,920 --> 01:04:09,840
that if you don't want and he said by yes I chose to volunteer my node to help Bitcoiners all around

653
01:04:09,840 --> 01:04:15,040
the world including payments I disagree with I did not volunteer for you to write stuff that could

654
01:04:15,040 --> 01:04:21,600
just be written on Twitter with the same efficacy so when when I look say when I volunteer my node

655
01:04:22,400 --> 01:04:28,080
to help a bit corners paying with Bitcoin I know that there may be some payments that I disagree

656
01:04:28,080 --> 01:04:34,320
with but this payment have no alternative so I prefer that there is an alternative to traditional

657
01:04:34,320 --> 01:04:39,920
rates while when you write welcome Amanda you could just write that on a on a on a freaking

658
01:04:39,920 --> 01:04:48,720
postcard so don't use my node please so we had this the spam discussion but my incentive to write

659
01:04:48,720 --> 01:04:55,440
these were only sentimental so even if I love my daughter after the discussion with Luke I was less

660
01:04:55,440 --> 01:05:01,280
willing to write another well another message and even if I disagree with Luke I will still have not

661
01:05:01,280 --> 01:05:08,480
ever strong incentive to pay for a 50 well maybe for the burn of your daughter you can but you cannot

662
01:05:08,480 --> 01:05:15,520
every day write I will not use so eternity wall that this product was used basically as Twitter

663
01:05:15,520 --> 01:05:20,800
you could write whatever and you could comment other people and you could press like and in order

664
01:05:20,800 --> 01:05:26,400
to press like you created a non-chain transaction it was super spamming but that was not scamming so

665
01:05:26,400 --> 01:05:34,400
you could not really use it as inside the Ponzi scheme to sell something something ludicrously

666
01:05:34,400 --> 01:05:43,600
uh enriching to other people so uh so encoding stuff in the time chain is a problem in itself but

667
01:05:43,600 --> 01:05:52,560
it's self-mitigated to a degree while selling uh selling monkey jpeg is a problem of scam and not

668
01:05:52,560 --> 01:06:00,080
of spam and inscriptions are largely an overlap between these two and without the scam part the

669
01:06:00,080 --> 01:06:08,960
spam part could be way less serious than it is okay that's a really that's a really interesting

670
01:06:08,960 --> 01:06:16,080
distinction there because I my my initial reaction was to want to kind of separate the two and try to

671
01:06:16,080 --> 01:06:20,560
look at it just from the perspective of encoding on the blockchain but your point here if I'm

672
01:06:20,560 --> 01:06:28,640
understanding correctly is that basically without the scam incentive the spam is going to naturally

673
01:06:28,640 --> 01:06:36,000
be priced out much more quickly uh now that with even with the scam incentive to the spam

674
01:06:36,960 --> 01:06:41,840
it may still and likely yes definitely still will be priced out but it's going to happen

675
01:06:42,480 --> 01:06:49,600
over a much longer time frame and ultimately cause much more harm at the spam level because the spam

676
01:06:49,600 --> 01:06:56,240
or excuse me because the scam allows the spam to continue perpetuating is that a fair characterization

677
01:06:56,240 --> 01:07:04,320
absolutely fair the damage made by the spam attack will outlast the end of the scam attack

678
01:07:05,280 --> 01:07:12,320
okay okay interesting and and you know you uh I'll link to your talk from BTC Prague because I thought

679
01:07:12,320 --> 01:07:19,360
it was like fantastic and you went through so many different instances from uh from bitcoin's history

680
01:07:20,000 --> 01:07:25,600
like you know like colored sats and all these all these things that basically uh your your point being

681
01:07:25,600 --> 01:07:29,280
that there you know there's kind of nothing new under the sun here this is a slightly different

682
01:07:29,280 --> 01:07:35,200
flavor of something that if you've been around a while you've seen uh and but you had uh you had

683
01:07:35,200 --> 01:07:39,520
one slide in there and I just took a screenshot of it for this so that I can remember but you had

684
01:07:39,520 --> 01:07:44,320
you had six points where you said let's try to clarify you said have ordinals broken bitcoin

685
01:07:45,040 --> 01:07:50,480
have ordinals been enabled by taproot are ordinals and inscriptions the same are ordinals

686
01:07:50,480 --> 01:07:57,040
useful for censorship resistance are ordinals new or innovative and then are ordinals retarded

687
01:07:57,680 --> 01:08:02,320
and you said spoiler alert the answer to all of those questions is no except for the last one

688
01:08:02,320 --> 01:08:06,720
are ordinals retarded which is yes you also clarified the started out with a definition

689
01:08:06,720 --> 01:08:13,760
of retarded which was very useful because it has many meanings which for that nuanced speech were

690
01:08:13,760 --> 01:08:22,240
were quite appropriate so I think and you've touched on a couple of these already but I think

691
01:08:23,360 --> 01:08:27,120
where we ultimately come down to right now and where the conversation seems to be is

692
01:08:28,320 --> 01:08:33,920
a lot of people are saying what should we do and other people are saying well it's not a question

693
01:08:33,920 --> 01:08:41,200
of should at all you just need to let them the market will figure this out uh free market incentives

694
01:08:41,200 --> 01:08:47,120
will align and ultimately this kind of junk is going to be priced out because it's really not

695
01:08:48,080 --> 01:08:55,600
not as valuable as what will come which is the transfer of ever more large amounts of monetary

696
01:08:55,600 --> 01:09:02,880
value across a permissionless network but there are people who are actively doing things right

697
01:09:02,880 --> 01:09:13,520
now to try and deal with this problem as they see it now you mentioned Luke who with Ocean the

698
01:09:13,520 --> 01:09:20,560
new pool is basically you know they're taking some flak for basically filtering out some of

699
01:09:20,560 --> 01:09:25,600
these transactions are not in you know not including them in their blocks to which people

700
01:09:25,600 --> 01:09:30,480
are saying you know you're censoring these transactions to which they reply no we're just

701
01:09:30,480 --> 01:09:36,720
you know we just are not uh you know including spam in our blocks because we believe this is spam so

702
01:09:36,720 --> 01:09:42,240
we're not going to include that can you talk about that a little bit and and do you think this is the

703
01:09:42,240 --> 01:09:49,760
right approach what Ocean is doing do you think it's a step in the right direction because obviously

704
01:09:50,320 --> 01:09:56,160
you've you've made it very clear you believe that these inscriptions are spam that ordinals as a

705
01:09:56,160 --> 01:10:05,200
meta protocol is a scam that facilitates the spam so what is your thought on what Ocean is doing do

706
01:10:05,200 --> 01:10:09,440
you think that there's a better way to deal with this do you have faith that the free market's

707
01:10:09,440 --> 01:10:14,480
going to work this out but just it's going to take way too long how how are you approaching that right

708
01:10:14,480 --> 01:10:23,360
now so by on a very general uh on a very general level uh I made another speech a very short speech

709
01:10:23,360 --> 01:10:28,160
at the introduction of the launch of the ocean pool in South Carolina so I was there and I gave

710
01:10:28,160 --> 01:10:33,280
this speech maybe you can find it still on YouTube I think it was recorded and the speech was exactly

711
01:10:33,280 --> 01:10:41,360
about the idea of letting the free market decide and I mentioned a science fiction book uh by Isaac

712
01:10:41,360 --> 01:10:46,880
Asimov uh which is basically the first book of the foundation cycle and in the book there is a problem

713
01:10:46,880 --> 01:10:53,520
because this is a prophet this mathematical prophet Ari Seldon uh already had a plan trust the plan

714
01:10:53,520 --> 01:10:58,400
there is a great plan that that it will just solve everything and people are seeing something

715
01:10:58,400 --> 01:11:05,520
unpredictable which seems to go beyond the plan and which is bad and they are wondering there's

716
01:11:05,520 --> 01:11:12,720
like many factions and some some people are saying oh this is new so the plan has failed so pack it up

717
01:11:12,720 --> 01:11:18,160
go on the plan is failed let's panic the sky is falling some other people are saying no wait if

718
01:11:18,160 --> 01:11:25,680
this is happening it means that the plan was or also somehow uh pricing this in so no panic do nothing

719
01:11:25,680 --> 01:11:31,200
the plan is certain trust the plan the plan will take care of it and then some there is a third

720
01:11:31,200 --> 01:11:37,520
faction which is saying wait wait the plan still works and the plan did take care of that but

721
01:11:37,520 --> 01:11:44,560
Ari Seldon included us with our will to to to face this problem and act on this problem and

722
01:11:44,560 --> 01:11:50,880
change it as part of the plan so the plan will work but it doesn't need that we must do nothing

723
01:11:50,880 --> 01:11:57,360
we will do something and this is part of the plan and I think that even if I my Asimov is not

724
01:11:57,360 --> 01:12:04,160
ideologically my favorite uh writer but from the uh but this question is very very good

725
01:12:04,160 --> 01:12:09,360
and I think this is the same when everybody mentioned the free market that fixed stuff

726
01:12:09,360 --> 01:12:16,080
so the free market will fix stuff I'm sure eventually eventually free market means following

727
01:12:16,080 --> 01:12:22,160
justice and property rights and crime means violating property rights and I have faith that

728
01:12:22,160 --> 01:12:28,560
over the over time not stealing other people's stuff and not hurting other will figure out more

729
01:12:28,560 --> 01:12:34,640
things because you learn and you and you basically improve while when you hurt others or you steal

730
01:12:34,640 --> 01:12:41,280
their things everything goes bad eventually so eventually the united the united the soviet union

731
01:12:41,280 --> 01:12:47,600
will collapse but maybe it will take 90 years eventually people will discover a cure for

732
01:12:48,560 --> 01:12:54,400
aids in the market but maybe it will take I don't know how much so the market will figure it out

733
01:12:54,400 --> 01:12:59,760
but we are the market and everything that we do may change stuff in one direction or the other

734
01:12:59,760 --> 01:13:06,960
especially if we are very influential by being for example ashrate controlling people that have

735
01:13:06,960 --> 01:13:13,440
some kind of ethics or if we are developers that can code good code or if we are so-called

736
01:13:13,440 --> 01:13:19,520
influencer that can change minds or if we are teachers and we are good at explaining things

737
01:13:19,520 --> 01:13:26,400
so in all these roles we can accelerate the change this is not this is not interfering in the free

738
01:13:26,400 --> 01:13:33,680
market this is being part of the free market and the free market will figure it out because we may

739
01:13:33,680 --> 01:13:39,360
be part of the free market we may be part of the free market in very passive ways just don't do

740
01:13:39,360 --> 01:13:48,080
anything and and like intrinsic incentives without any plan will still fix it or it may require a free

741
01:13:48,080 --> 01:13:53,040
market initiative which is a little bit more active and a little bit more creative and a little bit

742
01:13:53,040 --> 01:14:00,400
more intentional so but it's still free market so about this specific problem ocean in particular

743
01:14:00,400 --> 01:14:08,720
doesn't want to fix the problem with with spam filters in a very special way ocean wants to fix

744
01:14:08,720 --> 01:14:16,480
the problem with other two tools one is the decentralized block template creation so makes

745
01:14:16,480 --> 01:14:23,600
so that it is the miner choosing the block and not the pool so that even if the pool may go bad

746
01:14:23,600 --> 01:14:29,600
they may have a very bad attitude towards bitcoin they may be more interested in making a quick

747
01:14:29,600 --> 01:14:36,480
back now at the expenses of bitcoin than keeping the system sustainable we can we can be more

748
01:14:36,480 --> 01:14:43,040
reassured that small individual miners they may they may have a more a long-term thinking

749
01:14:43,040 --> 01:14:50,160
they all made they may be less more resistant to some other kind of external incentives in the

750
01:14:50,160 --> 01:14:56,720
system especially think about the future in which the governments will pay miners in order to exclude

751
01:14:56,720 --> 01:15:03,920
all bitcoin transaction except for the US government validated ones in this scenario profit

752
01:15:03,920 --> 01:15:09,440
maximizing miners they will just get the bribe from the government and maximize their profit

753
01:15:09,440 --> 01:15:15,280
while more ideologically driven or long-term thinker miners that know that their investment in

754
01:15:15,280 --> 01:15:23,120
bitcoin will lose any significance if it becomes PayPal they will lose they will happily refuse

755
01:15:23,680 --> 01:15:29,440
this this bribe in order to include the transactions in the blocks so the first step is

756
01:15:29,440 --> 01:15:35,120
decentralizing this decision the second step is actually making all the payout

757
01:15:35,120 --> 01:15:42,880
non-crystallial which will be done by with lightning network this is probably definitely out

758
01:15:42,880 --> 01:15:50,800
out of the out of topic so ocean main ocean ocean looks big plan for the problems of miners

759
01:15:50,800 --> 01:15:57,200
not always having the best interest the interest of bitcoin at mine is not filtering at the

760
01:15:57,200 --> 01:16:05,040
mempool level it's just leaving people free because his idea is maybe we will end up with the majority

761
01:16:05,040 --> 01:16:11,680
of miners that are considering spam problematic and want to do something about that but as long

762
01:16:11,680 --> 01:16:19,520
as they will have to depend on on 11 or 10 pools to make the decision for them these minority or

763
01:16:19,520 --> 01:16:26,640
my majority of bitcoin loving miners will not manifest itself so the main point of ocean is

764
01:16:26,640 --> 01:16:32,400
make it possible for this kind of majority or minority to manifest itself it's interesting that

765
01:16:33,360 --> 01:16:40,320
even just a minority that will reject spam will include in exchange in the same space

766
01:16:40,320 --> 01:16:45,920
other transactions that the span will have outpriced so every time you make a selection you

767
01:16:45,920 --> 01:16:52,400
made the choice to exclude a dick pic you may include an economic transaction instead of it so

768
01:16:52,400 --> 01:16:58,720
even if eventually 60 percent 70 percent of the ash power will still include the dick pics

769
01:16:58,720 --> 01:17:03,840
having 30 percent on average of blocks that are including actual transaction instead is still a

770
01:17:03,840 --> 01:17:10,400
relieve on the network if you have 30 percent at least so the the bet of look is that there are some

771
01:17:11,200 --> 01:17:18,400
long third long term thinking miners and they can be enabled by by block template creation

772
01:17:18,400 --> 01:17:26,720
decentralization and that's here that's autobahn another thing is that look is as a while is working

773
01:17:26,720 --> 01:17:34,880
on this future evolution he just brought a legios back is old mining pool and his his old mining

774
01:17:34,880 --> 01:17:42,240
pool was always using looks fork of bitcoin core which is called bitcoin knots and because

775
01:17:42,240 --> 01:17:50,240
bitcoin knots always differed from core about spam management basically which is another very

776
01:17:50,240 --> 01:17:56,960
important thing bitcoin core as we said before we already said it will filter spam even spend

777
01:17:56,960 --> 01:18:03,440
that is paying a lot if you have two op returns if you have a 90 byte or 81 byte op return bitcoin

778
01:18:03,440 --> 01:18:10,720
core will filter it out but will not filter out things consistently so the policy of bitcoin core

779
01:18:10,720 --> 01:18:17,200
being the result of a very very complex political debate among many developers on

780
01:18:17,200 --> 01:18:22,800
or something up sub types and as not just a definition of spam which i think was very clear

781
01:18:22,800 --> 01:18:28,400
a few years ago but the best strategy to fight spam because you have this problem that for example

782
01:18:29,120 --> 01:18:37,440
op return is a is a spam where i wrote my message for my daughter is spam but is spam which is very

783
01:18:37,440 --> 01:18:43,840
easy to prune to prune from the u-tikso set so in your current database on us of us on spam

784
01:18:43,840 --> 01:18:51,200
transaction you see that op return and you can easily prune uh while if you use a bare multi-sig

785
01:18:51,200 --> 01:18:58,720
fake key in order to or fake signature or fake key in order to actually uh write the same message

786
01:18:58,720 --> 01:19:06,000
this will be in theory in principle unprunable from the u-tikso set forever so some developers

787
01:19:06,000 --> 01:19:13,840
were saying yes there is spam but if we try to block the most obvious way to do spam other ways

788
01:19:13,840 --> 01:19:19,760
will be used and the other ways are more damaging for bitcoin than this so let this let this more

789
01:19:19,760 --> 01:19:26,640
open so for example many bitcoin core developer decided to expand the uh the op return from 40

790
01:19:26,640 --> 01:19:33,040
which was initial to 80 because so they give more more space they they they allow some vent

791
01:19:33,040 --> 01:19:39,680
some venting to the spam so that it that may just less and or they decided to not extend

792
01:19:39,680 --> 01:19:46,160
to taproot all the script limits that were included for pre-taproot transaction so bitcoin

793
01:19:46,160 --> 01:19:53,040
not which is the know what they use by look uh is more opinionated in this is is making the same

794
01:19:53,040 --> 01:19:59,200
choice of core of filtering some spam even if it pays a lot of fees for the same reason but it's

795
01:19:59,200 --> 01:20:06,640
not but it's taking a more uh the size approach uh uh approach in that regard bit another proposal

796
01:20:06,640 --> 01:20:14,240
like peter tod is proposing a version of bitcoin core that doesn't filter out any spam if uh the

797
01:20:14,240 --> 01:20:20,880
fees are high enough to enter blocks anyway so peter tod's reasoning is okay this may be spam

798
01:20:20,880 --> 01:20:25,920
well actually i hope that peter was so clear about this is a little bit is a little bit more

799
01:20:25,920 --> 01:20:34,080
ambiguous on that but my still many of peter's proposal would be this is spam but as uh since

800
01:20:34,080 --> 01:20:41,600
it pays high fees it will enter the blocks anyway with high probability so if you filter it out

801
01:20:41,600 --> 01:20:47,760
you are just incentivizing people to go directly to the miner and pay off bet so let's remove any

802
01:20:47,760 --> 01:20:54,800
filter of spam when the spam is paying miners not because it's nice but because it will enter anyway

803
01:20:54,800 --> 01:21:02,000
and we have to minimize damage so this peter tod's patch is maybe problematic for example uke will

804
01:21:02,000 --> 01:21:08,080
say yeah but now if you use that as a miner you are not helping normal users so the blocks you

805
01:21:08,080 --> 01:21:13,840
will produce will will will contribute no relief and you are basically legitimizing spam from the

806
01:21:13,840 --> 01:21:22,400
protocol level so uh but these two policies looks policy of maximizing filtering and peter tod's

807
01:21:22,400 --> 01:21:31,280
policies of minimizing filtering are both consistent in a way bitcoin core though is not it's like a

808
01:21:31,280 --> 01:21:38,800
political compromise among these which is very uh it's very it's very inconsistent in a way it

809
01:21:38,800 --> 01:21:45,600
it was generated by a historical process of people fighting with each other and so now if you read

810
01:21:45,600 --> 01:21:52,240
the why should the bitcoin core filter these in the output but not in the witness when you use top script

811
01:21:53,040 --> 01:21:59,840
part spending it doesn't make any sense it was just a result of a negotiation of a debate of

812
01:21:59,840 --> 01:22:06,880
cross vetoes and it's just an historical historical really so the point here the point of ocean is that

813
01:22:08,160 --> 01:22:14,480
eventually the miners will decide and this is good for bitcoin even if they decide in a wrong way

814
01:22:14,480 --> 01:22:19,760
at least it's hard to take over all the decision and to coordinate the decision there will still be

815
01:22:19,760 --> 01:22:26,640
different entities that the deciding in different ways for the time being i will keep using the

816
01:22:26,640 --> 01:22:33,680
node that i created and i curate with the policies that i curate which are not a change of philosophy

817
01:22:33,680 --> 01:22:40,320
from bitcoin core it's the same philosophy just applied more consistently and peter tod's proposal

818
01:22:40,320 --> 01:22:46,400
would be another philosophy also applied more consistently while for is a little bit in between

819
01:22:47,760 --> 01:22:54,160
now i i appreciate that because i i think that really the beauty of all this is that it says you

820
01:22:54,160 --> 01:22:59,200
you alluded to earlier this is the free market in action right this is what the free market looks

821
01:22:59,200 --> 01:23:03,440
like it looks like people having different interpretations of what is valuable and what is

822
01:23:03,440 --> 01:23:11,120
not and when it comes to protocol level interactions in a free market it's still people trying to make

823
01:23:11,120 --> 01:23:17,200
sure that they observe the rules of the protocol at the very basic level but having different

824
01:23:17,200 --> 01:23:24,640
interpretations about how they think what they find valuable in terms of uses of that very finite

825
01:23:24,640 --> 01:23:29,680
block space so it's kind of a like it's one of the beautiful things about bitcoin is that there is

826
01:23:29,680 --> 01:23:35,760
so much debate about this there is so much argumentation and i think that that's a very beneficial

827
01:23:35,760 --> 01:23:43,280
thing like the opposite situation is you have the talak who decides to you know put out his roadmap

828
01:23:43,280 --> 01:23:48,560
for the next however many years with merging and purging and surging and whatever else and makes

829
01:23:48,560 --> 01:23:54,880
all the decisions top down and there's ultimately no recourse for that and you know i want to be

830
01:23:54,880 --> 01:24:00,160
conscious of your time here jocomo because i know we're we're getting up near the end but i wanted

831
01:24:00,160 --> 01:24:04,720
to just quickly read a tweet that you sent earlier today actually that i thought was very insightful

832
01:24:04,720 --> 01:24:10,720
which is centralization is always more efficient until it collapses decentralization is always

833
01:24:10,720 --> 01:24:15,840
less efficient until it's the only option left most decentralized thing solo mining

834
01:24:15,840 --> 01:24:20,800
too inefficient to live current efficient thing template producing pools too centralized to

835
01:24:20,800 --> 01:24:25,680
survive and then you gave a nice spectrum of bitcoin credit on paypal being maximally efficient

836
01:24:25,680 --> 01:24:31,200
but too gay down to solo mining being maximally badass but too efficient and i think that that's

837
01:24:32,480 --> 01:24:36,640
that's a good framework for approaching things because everything involves tradeoffs right

838
01:24:36,640 --> 01:24:42,640
like yes centralization is always more efficient but then it doesn't work at a certain point

839
01:24:42,640 --> 01:24:48,560
decentralization is less efficient but it might be all that is preventing you from

840
01:24:48,560 --> 01:24:55,040
trending towards a centralized totalitarian top down world so i appreciated that tweet and i

841
01:24:55,040 --> 01:25:00,000
appreciate the context that you've given here today again conscious of your scarce time

842
01:25:00,640 --> 01:25:06,880
is there anything else that you think it's critical that people know or understand or is a

843
01:25:06,880 --> 01:25:12,320
misconception you know well across any of these topics because i want to make sure you have a

844
01:25:12,320 --> 01:25:16,800
chance to kind of like get that out if there's anything that wasn't covered i will just elaborate

845
01:25:16,800 --> 01:25:22,400
a little bit more on the last point you made about my tweet because i will give you context about that

846
01:25:22,400 --> 01:25:27,600
that actually comes partly from the the discussion i was having on twitter but partly from a recent

847
01:25:27,600 --> 01:25:33,200
discussion a couple of days ago with people within ocean so some people within ocean they were a little

848
01:25:33,200 --> 01:25:39,600
bit uh they were having a black pill moment because they said wait we are doing all this

849
01:25:39,600 --> 01:25:47,040
but what if we decentralize block creation and then 99 9 percent of the block creation will anyway

850
01:25:47,920 --> 01:25:53,760
choose to delegate their policy to somebody else because it's more efficient so we are fighting

851
01:25:53,760 --> 01:26:00,080
against optimization economical optimization here because even if we give the chance to

852
01:26:00,080 --> 01:26:06,640
decentralize the process maybe the people will actually choose to run the same the same

853
01:26:06,640 --> 01:26:12,240
policies that the the decentralized pools are running now and so there will be no actual difference

854
01:26:12,240 --> 01:26:20,960
and that's where i started to think that uh this idea of maximizing so bitcoin brought a very good

855
01:26:21,600 --> 01:26:30,000
uh a very good tool to our fight for freedom which is considering incentives so if we consider

856
01:26:30,000 --> 01:26:35,120
incentives everything we're going to build will be more resilient will be more resistant it will be

857
01:26:35,120 --> 01:26:41,040
anti fragile it will become eventually unstoppable but this this fact that we consider incentives

858
01:26:41,040 --> 01:26:47,520
doesn't mean that everything which is popular economically at a certain moment is always the

859
01:26:47,520 --> 01:26:54,160
thing we want is always the thing we want to fight for so for example if you really want to maximize

860
01:26:54,160 --> 01:27:01,920
profit maybe you don't open a mining farm at all maybe you just get hired by goldman sex or even

861
01:27:01,920 --> 01:27:08,320
better by the federal reserve that's you maximizing process so by taking this this reason this

862
01:27:08,320 --> 01:27:16,480
really considering to the absurd limit if we really want bitcoin to be incentive compatible

863
01:27:16,480 --> 01:27:20,800
we should all just quit bitcoin and go to work for the fed because we make more money that way

864
01:27:20,800 --> 01:27:28,640
but it's clear that we are already choosing to forfeit some possible short term gains in order

865
01:27:28,640 --> 01:27:34,240
to have these long term gains it's not about it's not only about being altruistic it's not about

866
01:27:35,040 --> 01:27:41,840
being uh egoistic versus altruistic it's also about being egoistically long term thinking

867
01:27:41,840 --> 01:27:48,560
versus egoistically short term thinking so if we understand that the fiat model is broken that

868
01:27:48,560 --> 01:27:54,960
is unsustainable that there is internal contradiction that it will make it crash even if we are not

869
01:27:54,960 --> 01:28:00,400
altruistic we work on bitcoin because we think that we and our families and our children and

870
01:28:00,400 --> 01:28:07,200
grandchildren will be better off if we change the system from fiat to bitcoin we are going against

871
01:28:07,200 --> 01:28:12,960
the max the instant maximization of profit because we are going toward a future maximization of

872
01:28:12,960 --> 01:28:20,880
utility so if we think that miners if we if our only assumption is pure maximization of instant

873
01:28:20,880 --> 01:28:28,640
profit then there is no way that so as i said in the tweet uh solo mining is is an ideological

874
01:28:28,640 --> 01:28:35,760
stand that is very good for the future of bitcoin but it's so bad for immediate profit that that

875
01:28:35,760 --> 01:28:42,480
it's not realistic that anybody will ever face so solo mining means that you will get all your block

876
01:28:42,480 --> 01:28:48,080
but you will get it on average if you are a medium miner you will get it in 100 years and you will

877
01:28:48,080 --> 01:28:54,640
be dead by that so nobody is so forward-looking very very interesting to say solo mining is not

878
01:28:54,640 --> 01:28:59,920
unprofitable from an economic point of view it just that it's not you profiting is your grandchildren

879
01:28:59,920 --> 01:29:06,480
only because you have to wait for 90 years of of expenses in order to get one single block so

880
01:29:07,040 --> 01:29:13,920
solo mining is profitable but it's so forward-looking it's so forward-thinking so low-time preference

881
01:29:13,920 --> 01:29:21,840
that it cannot be realistically demanded from anybody so nobody will just get poor in order

882
01:29:21,840 --> 01:29:28,480
for their grandchildren to be super rich running a solo mining thing but on the other extreme

883
01:29:28,480 --> 01:29:37,440
not mining at all and just buying etf from gorma sax is the opposite right it is maximally maximally

884
01:29:37,440 --> 01:29:42,880
profitable now because you are not even running the uncertainty of mining but it really sucks

885
01:29:42,880 --> 01:29:49,600
it's really it's a very shitty bitcoin thing to do so in a way the centralized pool template

886
01:29:49,600 --> 01:29:55,040
is in between is it true that not doing the centralized templating and just delegate your

887
01:29:55,040 --> 01:30:02,080
choice for MEV or any other reason to somebody else is more profitable yes it is is it true that

888
01:30:02,080 --> 01:30:08,080
is though damaging for the future of bitcoin so some low-time preference entrepreneurs may decide

889
01:30:08,080 --> 01:30:13,440
and will probably decide to take back the power and to do the templates i think it's very realistic

890
01:30:13,440 --> 01:30:18,800
to assume because the other assumption under the other assumption that there are no forward-looking

891
01:30:18,800 --> 01:30:24,800
people in the world and that everybody's just a monkey following instant gratification under that

892
01:30:24,800 --> 01:30:32,880
assumption bitcoin cannot exist in the first place so we are still assuming that instant incentives

893
01:30:32,880 --> 01:30:39,120
do matter future incentive do matter and there is somehow an equilibrium in society and we have to

894
01:30:39,120 --> 01:30:46,640
aim for that so this tweet was not only about blockchain places it was more in general uh it

895
01:30:46,640 --> 01:30:53,840
bitcoin is always in this trade-off if you are too pragmatic you just remain fiat it's like market cap

896
01:30:54,480 --> 01:30:58,720
what is the number one in market cap it's not bitcoin it's the us dollar if you are really

897
01:30:58,720 --> 01:31:04,560
are a market cap absolutist go with the dollar not with bitcoin at all because we are the minority

898
01:31:04,560 --> 01:31:10,640
we are not optimizing for liquidity but if you are too unrealistic and you create your shitcoin

899
01:31:10,640 --> 01:31:16,480
tomorrow morning with the long or great ideas a very very altruistic idea but you don't face a

900
01:31:16,480 --> 01:31:23,280
reality of network effects your stuff will never work so if you maximize for for current profit

901
01:31:23,280 --> 01:31:29,280
you go fiat if you maximize for pure idealism without any technical consideration and actual

902
01:31:29,280 --> 01:31:35,760
real any realism constraints you go shitcoin if you stay in between you may discover bitcoin

903
01:31:37,760 --> 01:31:46,000
wow that's a uh that's a beautiful beautiful sentiment so is it uh is it safe for me to assume

904
01:31:46,000 --> 01:31:56,320
that your perspective on uh ordinal pushers would be that they are extremely high time preference

905
01:31:56,320 --> 01:32:01,040
or is there an argument to be made that that is probably the argument they would make that well

906
01:32:01,040 --> 01:32:06,160
actually we are saving bitcoin because we are driving up the fees and now people aren't talking

907
01:32:06,160 --> 01:32:10,720
about the security budget problem which was never really going to be a huge problem anyway

908
01:32:10,720 --> 01:32:15,200
it what's your thought on that or is you know is there a spectrum of people or do you think there

909
01:32:15,200 --> 01:32:19,920
are some people that are really think that this is genuinely helping but not perhaps realizing

910
01:32:19,920 --> 01:32:26,880
the damage that it may be doing from an incentive standpoint or is it all just high time preference

911
01:32:26,880 --> 01:32:32,960
behavior i think it's all just in preference for the people actually doing the stuff and it's a

912
01:32:32,960 --> 01:32:38,800
misguided economic analysis in my opinion from people condoning the stuff as helpful for the

913
01:32:38,800 --> 01:32:44,800
people condoning the stuff as helpful because of fee so think about the consideration so some people

914
01:32:44,800 --> 01:32:51,280
may think about a problem and then give a label to the problem and then they only think about the

915
01:32:51,280 --> 01:32:58,480
label and not the problem anymore for example why do we need high fees because in the future if we

916
01:32:58,480 --> 01:33:06,480
have high fees then we will incentivize with this fees a very high uh ush rate and a high ush rate

917
01:33:06,480 --> 01:33:13,840
what does it do it makes reorg in the chain expensive so if you receive a transaction in the future

918
01:33:13,840 --> 01:33:20,400
and this transaction you want to make be sure that is not reversed is not double spent is not

919
01:33:20,400 --> 01:33:28,640
censored is not reorg then you need uh well if you have a lower ush rate you have to wait more

920
01:33:28,640 --> 01:33:34,240
if you have a higher ush rate you have to wait less for the same result so this is it the security

921
01:33:34,240 --> 01:33:42,080
budget uh like uh buzzword is just a way to say that higher ush rate means that you will have to

922
01:33:42,080 --> 01:33:49,680
wait less to achieve the same security in 2009 bitcoin had a very low ush rate but it's not like

923
01:33:49,680 --> 01:33:55,680
it was generally insecure it's just that to have the same security of today uh with uh against

924
01:33:55,680 --> 01:34:01,360
double spending you had back then to wait more blocks uh the specific calculation is very tricky

925
01:34:01,360 --> 01:34:08,640
assumes a lot of details a lot of nuances but to keep it very very simple in 2009 low ush rate you

926
01:34:08,640 --> 01:34:16,320
have to wait many blocks for the same security for the same amount in 2023 high ush rate you have

927
01:34:16,320 --> 01:34:22,960
you you must wait less fewer confirmation to have the same security or even more so basically

928
01:34:22,960 --> 01:34:30,000
highs fee high fees means high ush rate which means which means that it's faster to get this kind of

929
01:34:30,000 --> 01:34:38,720
reorg insecurity but if this ush rate don't uh if this fees that subsidize the ush rate do not come

930
01:34:38,720 --> 01:34:44,160
from the people buying the anti double spending security but come from an exogenous market for

931
01:34:44,160 --> 01:34:51,280
example market for inscription and this market is not the market of the people paying for for a

932
01:34:51,280 --> 01:34:57,680
reorg resistance of payments then people paying for the reorg resistance they will get more reorg

933
01:34:57,680 --> 01:35:03,280
resistance but they will get it at a higher price because now they are all competed by an external

934
01:35:03,280 --> 01:35:11,520
demand to the same supply so this is like saying uh you go to the restaurant to eat now you have the

935
01:35:11,520 --> 01:35:17,840
Vikings that pay to go there to to shout spam spam spam and this this is good for you because the

936
01:35:17,840 --> 01:35:23,120
more money the restaurant make the the better they will be at hiring a new chef the chef that can

937
01:35:23,120 --> 01:35:29,120
give you good food but that's not true because your cost to access to the food now is higher because

938
01:35:29,120 --> 01:35:34,560
now you have to take more time to speak with the waiter and you have to shout louder so this is

939
01:35:34,560 --> 01:35:40,960
totally zero sum uh yes fees are paying the miners miners are increasing ush rate ush rate is reducing

940
01:35:40,960 --> 01:35:46,480
to your waiting time for security but now your waiting time is increasing because at the same

941
01:35:46,480 --> 01:35:53,040
fee level you will be included in blocks way later and it's zero sum if we are lucky and

942
01:35:53,040 --> 01:36:00,720
or negative sum otherwise so the only thing that can actually improve uh security for transactions

943
01:36:00,720 --> 01:36:07,600
is fees from transactions not fees from outside that those are these are an external demand

944
01:36:07,600 --> 01:36:14,000
which is yes subsidizing the the supply but also taking the demand away from the initial use case

945
01:36:15,280 --> 01:36:20,560
that's a really interesting distinction actually and i think it's uh being lost in most of the

946
01:36:20,560 --> 01:36:27,520
conversations because the general assumption is just that uh more fees equals good no matter where

947
01:36:27,520 --> 01:36:32,800
the demand for those fees is coming from let me let me give you another example that I think will

948
01:36:32,800 --> 01:36:40,160
happen eventually when uh governments will start to bribe miners to create empty blocks they will

949
01:36:40,160 --> 01:36:47,600
subsidize uh miners so in order to bribe miners back to come back to us and actually include

950
01:36:47,600 --> 01:36:54,560
transaction we as the black market we will have to subsidize miners more so that will mean a huge

951
01:36:54,560 --> 01:37:00,560
increase in fees but that will not be a good symptom that would be an actual symptom of an attack

952
01:37:00,560 --> 01:37:07,600
so is that so fees are like a high temperature fever it's a good thing fever is something that

953
01:37:08,480 --> 01:37:16,480
we want fever because fever will boil bugs so we want fever to heal so high fees is a fees are

954
01:37:16,480 --> 01:37:21,760
priced for censorship resistant and high fees means that somebody's paying a high price for

955
01:37:21,760 --> 01:37:27,760
censorship resistant but why the price is high could be because there is a high subsidy for

956
01:37:27,760 --> 01:37:34,160
censorship and so we have to counterbalance that with the high high fees so in the future where

957
01:37:34,800 --> 01:37:41,680
the government is giving 10 billion dollars to miners every day just to keep blocks empty

958
01:37:41,680 --> 01:37:48,480
then fees will be extraordinarily high because we will have to basically bribe some some dissident

959
01:37:48,480 --> 01:37:56,320
miner to include a full block but this fees very very high will not be a good thing so it's it's

960
01:37:56,320 --> 01:38:02,240
true that some bit currency high fees are good yes in the sense that our fee high fees are like

961
01:38:02,960 --> 01:38:08,720
you know like scars in your face that means that you are fighting and you are a warrior

962
01:38:08,720 --> 01:38:13,760
but it's not like it means that something bad is happening and you are reacting in a good way

963
01:38:13,760 --> 01:38:19,360
so censorship is arriving and you are reacting in a good way in a way even the existence of bitcoin

964
01:38:19,360 --> 01:38:25,200
is not itself very good it's a reaction to the fact that we were heavily censored and heavily

965
01:38:25,200 --> 01:38:32,640
inflated away so bitcoin is like a reactive thing that is taking back freedom from censorship and

966
01:38:32,640 --> 01:38:38,320
from inflation but it's not a good sign in the first place if everything was very good

967
01:38:38,320 --> 01:38:43,600
we would just have magic central banks that never inflate money and magic banks that never

968
01:38:43,600 --> 01:38:50,560
censor transactions so it's it's complicated sometimes you can get lost and you say uh so like

969
01:38:50,560 --> 01:38:56,720
yeah that's typically like the the the baby is uh the baby is learning how to work and he will

970
01:38:56,720 --> 01:39:02,320
and will fall down and will have some scratches on the on the knees which is good i mean they have to

971
01:39:02,320 --> 01:39:07,600
we can say it's good but it's not like i go around and i see babies and i take a knife and i

972
01:39:07,600 --> 01:39:13,920
start hurting them like me and that's good you know you are you're confusing the the symptom

973
01:39:13,920 --> 01:39:21,600
of a good reaction with something in itself like it becomes like a fetish like high fee fetish high

974
01:39:21,600 --> 01:39:29,200
fees are not intrinsically good they are good if they they signal a strong price a strong demand

975
01:39:29,200 --> 01:39:34,080
for censorship resistance but that's completely different thing from anything which rises the

976
01:39:34,080 --> 01:39:43,600
fees is equally good that's a a good i think thing to end on because you've you've wrapped that

977
01:39:43,600 --> 01:39:49,360
together really well and i i hope that people listening to this uh take a step back because

978
01:39:49,360 --> 01:39:55,760
it's it's really easy to have knee jerk reactions to things especially when you're talking about them

979
01:39:55,760 --> 01:40:02,480
on on twitter or on noster and this is clearly a very polarizing topic which again is a good thing

980
01:40:02,480 --> 01:40:10,320
it's good to have this debate but i i would encourage people to uh to check their assumptions

981
01:40:10,960 --> 01:40:18,640
and to get back to the uh let's say the core ideas you know people bitcoiners we love to

982
01:40:18,640 --> 01:40:23,760
talk about first principles right but i think that it is incredibly important and specifically

983
01:40:24,320 --> 01:40:30,480
here because we have to define i guess what is the purpose of the network and the point you

984
01:40:30,480 --> 01:40:34,720
made at the end i think is it's got my wheels spinning a little bit thinking about it but just

985
01:40:34,720 --> 01:40:41,520
you know high fees don't necessarily mean good it's a good reaction to have to something happening

986
01:40:41,520 --> 01:40:47,280
it's signaling that things are working properly but that doesn't mean that the disease that is

987
01:40:47,280 --> 01:40:53,440
causing it is necessarily good in the long run it still may be doing damage even if the immune

988
01:40:53,440 --> 01:41:01,600
response of the system is appropriate so that's a that's a good it's a good framework for looking

989
01:41:01,600 --> 01:41:08,320
at it so i appreciate that i'm going to be chewing on that one for a while now but jocomo again i

990
01:41:08,320 --> 01:41:11,840
want to thank you for coming here last question i'll ask you totally off topic but are you reading

991
01:41:11,840 --> 01:41:19,280
anything right now you'd recommend i am so i was uh i'm spending the last days of two months in a

992
01:41:19,280 --> 01:41:27,200
savador i'm in beautiful as zonter right now and i wanted to do two things uh learning spanish

993
01:41:27,200 --> 01:41:36,800
learning surfing and i failed miserably both but uh in order to learn spanish uh i did some duolingo

994
01:41:36,800 --> 01:41:44,640
and i bought from the bitcoin farmer market here in zonter the spanish version of the font and head

995
01:41:44,640 --> 01:41:51,200
of a in red so now i'm so this is a hard book even in english so now i'm trying every night very very

996
01:41:51,200 --> 01:41:58,800
small pieces of spanish font and head which is not trivial to do so that's my that's my challenge

997
01:41:58,800 --> 01:42:05,760
right now that is a bold way to learn spanish i've got to say as you said that book is not uh it's

998
01:42:05,760 --> 01:42:10,480
it's dense in whatever your native language might be even more so in a language you're trying to

999
01:42:10,480 --> 01:42:15,600
learn so more power to you uh it just and with regard to surfing it just sounds like you know you

1000
01:42:15,600 --> 01:42:19,600
just need a little bit more practice just got to get beaten up by those waves a little bit more

1001
01:42:19,600 --> 01:42:24,240
and then you'll maybe maybe i would give it i would give it another try i will be back here

1002
01:42:24,240 --> 01:42:29,840
soon so eventually we'll give it another try i i look forward to getting back there myself uh

1003
01:42:29,840 --> 01:42:35,520
sooner rather than later but jocomo thank you for coming on here bitcoin is scarce but bitcoin

1004
01:42:35,520 --> 01:42:40,080
podcasts are abundant so i appreciate you sharing your scarce time on another fucking bitcoin

1005
01:42:40,080 --> 01:42:45,600
podcast thank you so much and uh yeah looking forward to seeing you again soon hopefully in the

1006
01:42:45,600 --> 01:42:49,520
flesh next year absolutely thank you for having me speak soon

1007
01:42:55,200 --> 01:43:02,160
and that's a wrap on this bitcoin talk episode of the bitcoin podcast if you are a bitcoin only

1008
01:43:02,160 --> 01:43:07,600
company interested in sponsoring another fucking bitcoin podcast head to bitcoinpodcast.net

1009
01:43:07,600 --> 01:43:14,800
or hit me up on social media on noster head to primal.net slash walker and on twitter search for

1010
01:43:14,800 --> 01:43:21,920
at walker america or at titcoin podcast you can also watch the video version of this show on x or

1011
01:43:21,920 --> 01:43:29,200
on youtube by going to youtube.com slash at walker america or rumble by searching for at walker america

1012
01:43:29,200 --> 01:43:37,040
bitcoin is scarce there will only ever be 21 million but bitcoin podcasts are abundant so thank you

1013
01:43:37,040 --> 01:43:52,960
for spending your scarce time to listen to another fucking bitcoin podcast until next time stay free