Sept. 12, 2023

Adam Back on Bitcoin Adoption and Innovation - Freedom Footprint Show 50

Adam Back on Bitcoin Adoption and Innovation - Freedom Footprint Show 50

Joining us is none other than Dr. Adam Back: co-founder and CEO of Blockstream, the mind behind HashCash and a true OG bitcoiner.
In today’s, in person, interview, recorded at Baltic Honeybadger 2023, shoutout HodlHodl, we dive into plenty of importa...

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The Bitcoin Infinity Show

Joining us is none other than Dr. Adam Back: co-founder and CEO of Blockstream, the mind behind HashCash and a true OG bitcoiner.

In today’s, in person, interview, recorded at Baltic Honeybadger 2023, shoutout HodlHodl, we dive into plenty of important topics. We discuss Blockstream’s current projects, we explore the developments of Bitcoin’s second layer solutions and we debate their use cases after hyperbitcoinization. We even touch on the Drivechain debate. 

Connect with Adam on Twitter: https://twitter.com/adam3us
Check out Blockstream's website to see everything they're working on: https://blockstream.com/

00:00:00 - Intro - Welcoming Dr. Adam Back
00:12:04 - Blockstream's Current Projects
00:18:52 - Drivechains, Sidechains, Liquid, and More
00:35:43 - 80 IQ Plebs and the Bitcoin Community
00:41:13 - Liquid Adoption annd Updates
00:48:50 - What is the Biggest Threat to Bitcoin?
00:52:11 - Can Institutions Actually Own Bitcoin?
00:58:39 - Bitcoin Storage Innovations
01:00:16 - How has Bitcoin Changed?
01:05:03 - How do you Prove Ownership of Bitcoin?
01:08:56 - CBDCs
01:12:35 - Bitcoin Adoption
01:17:46 - Wrapping Up - Final Thoughts

The Freedom Footprint Show is hosted by Knut Svanholm and BTCPseudoFinn. We are concerned about your Freedom Footprint! Join us as we talk to #bitcoin philosophers about how #bitcoin can expand your Freedom Footprint and much more!

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The Freedom Footprint Show is a Bitcoin podcast hosted by Knut Svanholm and Luke de Wolf.

In each episode, we explore everything from deep philosophy to practical tools to emit freedom dioxide to expand your freedom footprint!

Transcript

1 00:00:00,082 --> 00:00:05,737 you know, prospect of 10 million Bitcoins being bought, it may not be possible for 2 00:00:05,857 --> 00:00:09,697 at all, like, for any amount of money because, you know, as more people try to 3 00:00:09,697 --> 00:00:13,237 do that, the price will go up and then they won't be able to afford to do it. 4 00:00:13,652 --> 00:00:19,581 I, uh, went to some kind of private meeting, like a bunch of like investors 5 00:00:19,581 --> 00:00:23,827 and a few tech people just like general discussion some years ago. 6 00:00:24,367 --> 00:00:29,765 And like a question I asked for the, in like Bitcoin holder investor or fund 7 00:00:29,765 --> 00:00:33,995 manager type of people is like, well, what features would you value most? 8 00:00:34,235 --> 00:00:34,415 Mm-hmm. 9 00:00:34,715 --> 00:00:38,175 From the technical side for Bitcoin? 10 00:00:38,735 --> 00:00:41,990 And their answer was surprising, which was like, Just don't break it. 11 00:00:41,995 --> 00:00:42,167 Yeah. 12 00:00:42,766 --> 00:00:45,390 Welcome back to the Freedom Footprint show, the Bitcoin 13 00:00:45,390 --> 00:00:49,150 philosophy show with Knut Svanholm and me, Luke the Pseudo Finn. 14 00:00:49,461 --> 00:00:51,981 For those of you who've been in the Bitcoin space for a while, our 15 00:00:51,981 --> 00:00:53,731 guest today needs no introduction. 16 00:00:54,351 --> 00:00:56,361 Joining us is none other than Dr. 17 00:00:56,371 --> 00:01:00,281 Adam Back, co founder and CEO of Blockstream, the mind behind 18 00:01:00,281 --> 00:01:02,671 Hashcash and a true OG Bitcoiner. 19 00:01:03,901 --> 00:01:07,111 In today's in person interview, recorded at Baltic Cottony Badger 20 00:01:07,111 --> 00:01:11,281 2023, shout out Hoddle Hoddle, we dive into plenty of important topics. 21 00:01:11,731 --> 00:01:14,921 We discover Blockstream's current projects, we explore the developments 22 00:01:14,921 --> 00:01:17,751 of Bitcoin's second layer solutions, and we debate their use 23 00:01:17,751 --> 00:01:19,691 cases after hyperbitcoinization. 24 00:01:20,301 --> 00:01:22,161 We even touch on the drive chain debate. 25 00:01:22,476 --> 00:01:24,366 You'll want to hear what Adam has to say about that. 26 00:01:24,816 --> 00:01:27,996 But before we jump in, a quick reminder that the best way to support the show 27 00:01:27,996 --> 00:01:30,946 is to send us a boost or stream us some sats using a value for value 28 00:01:30,966 --> 00:01:32,806 podcasting app such as Fountain. 29 00:01:33,296 --> 00:01:36,116 If you're listening to this show as a podcast, check it out on Fountain. 30 00:01:36,266 --> 00:01:38,516 You can earn sats from listening and you can support us and 31 00:01:38,526 --> 00:01:39,956 all your other favorite shows. 32 00:01:40,696 --> 00:01:43,836 You can also support us on Geyser Fund or send sats directly to our 33 00:01:43,836 --> 00:01:46,296 lightning address, freedom at getalby. 34 00:01:46,336 --> 00:01:46,736 com. 35 00:01:47,476 --> 00:01:50,496 And if you want to exchange your dirty fiat, you can support us on Patreon. 36 00:01:50,751 --> 00:01:52,111 All our links are in the description. 37 00:01:53,091 --> 00:01:55,201 If you're watching on YouTube, don't forget to like the episode 38 00:01:55,201 --> 00:01:56,281 and subscribe to the channel. 39 00:01:56,781 --> 00:01:59,091 Even if you're listening as a podcast, head over to our YouTube 40 00:01:59,091 --> 00:02:00,471 channel and subscribe to us there. 41 00:02:00,511 --> 00:02:01,561 It would be a big help. 42 00:02:02,371 --> 00:02:06,511 And finally, we want to thank today's sponsors, Wasabi Wallet, Orange Pill App, 43 00:02:06,621 --> 00:02:09,711 The Bitcoin Way, Zelonks, and bitcoinbook. 44 00:02:09,731 --> 00:02:10,141 shop. 45 00:02:10,811 --> 00:02:12,421 All their information is in the description. 46 00:02:12,441 --> 00:02:14,431 We'll be talking a bit more about them later. 47 00:02:15,571 --> 00:02:21,021 And now, without further ado, here is Adam Back on the Freedom Footprint Show. 48 00:02:21,581 --> 00:02:21,911 Yeah. 49 00:02:21,911 --> 00:02:26,741 So a man that needs no introduction, sat, I mean Dr. 50 00:02:26,746 --> 00:02:29,841 Adam back, welcome to the Freedom, freedom Freedom 51 00:02:30,011 --> 00:02:30,701 Footprint show. 52 00:02:30,701 --> 00:02:31,901 That's the name of a show, right? 53 00:02:31,931 --> 00:02:33,341 Yeah, that's correct. 54 00:02:33,346 --> 00:02:33,801 Welcome. 55 00:02:35,411 --> 00:02:40,061 Um, yeah, the c e o of Blockstream and mentioned in the white 56 00:02:40,061 --> 00:02:41,351 paper and all this stuff. 57 00:02:41,741 --> 00:02:42,221 Great. 58 00:02:42,341 --> 00:02:50,051 Um, I saw your panel, uh, yesterday with, uh, about, yeah, about things we 59 00:02:50,051 --> 00:02:51,881 don't usually talk about, like price. 60 00:02:53,051 --> 00:02:55,241 And it was a, a couple of takeaways. 61 00:02:55,301 --> 00:02:59,531 Uh, There was a question during the panel like, do we have to 62 00:02:59,531 --> 00:03:01,661 end the Fed before Bitcoin hits? 63 00:03:02,201 --> 00:03:06,491 A hundred K, which I think is slightly oxymoronic because if you end the fed, 64 00:03:06,491 --> 00:03:08,291 there's, there are no more dollars. 65 00:03:10,001 --> 00:03:15,671 But there was also this, this am amazing observation, uh, that you made that 66 00:03:15,671 --> 00:03:21,251 there are now, um, a million addresses with one Bitcoin or more in them, or 67 00:03:21,251 --> 00:03:23,321 like with around one Bitcoin, right? 68 00:03:23,321 --> 00:03:24,371 In, in each one of them. 69 00:03:24,371 --> 00:03:24,431 Yeah. 70 00:03:25,091 --> 00:03:30,161 So that's 1 21 of, uh, 21, is that a word? 71 00:03:30,251 --> 00:03:33,191 Uh, of the entire Bitcoin supply. 72 00:03:33,971 --> 00:03:38,831 So, uh, well, what happens when the next million people. 73 00:03:39,256 --> 00:03:41,206 Want to do that and yeah. 74 00:03:41,206 --> 00:03:42,826 That's good. 75 00:03:42,946 --> 00:03:43,026 Starting. 76 00:03:43,786 --> 00:03:44,066 Well, yeah. 77 00:03:44,066 --> 00:03:49,456 I mean, it was a statistic put out a few months ago, probably from Glass, 78 00:03:49,456 --> 00:03:52,546 no, or one of the analyst companies who are looking at on chain deer. 79 00:03:53,176 --> 00:03:56,986 And I thought it was like positive rate because there are people like develop 80 00:03:56,986 --> 00:04:00,256 a target so the, you know, the dollar cost averaging or they're buying as 81 00:04:00,256 --> 00:04:04,156 they sell things or get some money together and they're trying to get 82 00:04:04,156 --> 00:04:05,536 to a target of one Bitcoin another. 83 00:04:05,536 --> 00:04:09,766 There are a million people who've got there or, or more I think is the metric 84 00:04:10,396 --> 00:04:16,156 and say, you know, my initial thought was, well, 1 million is good, but that's 85 00:04:16,156 --> 00:04:17,626 bullish, but maybe we can do better. 86 00:04:17,626 --> 00:04:19,516 Like maybe we can get to 10 million in the future. 87 00:04:19,756 --> 00:04:23,866 And I was like, wait a minute, that's probably not possible because 88 00:04:24,466 --> 00:04:26,236 there are only 21 million Bitcoin. 89 00:04:27,036 --> 00:04:29,256 And many of them are not on the market, right? 90 00:04:29,256 --> 00:04:32,556 They've been cold bought and cold stored by people who've 91 00:04:32,556 --> 00:04:33,546 already held them for years. 92 00:04:33,546 --> 00:04:34,626 They're probably not selling. 93 00:04:35,076 --> 00:04:38,796 And the people who just, you know, saved up and managed to buy a whole 94 00:04:38,796 --> 00:04:41,076 Bitcoin, they're not gonna sell it because that was the target 95 00:04:41,081 --> 00:04:43,146 they took some years to achieve. 96 00:04:43,151 --> 00:04:43,326 Right? 97 00:04:43,326 --> 00:04:43,386 Yeah. 98 00:04:43,986 --> 00:04:49,476 So, you know, prospect of 10 million Bitcoins being bought, it may not 99 00:04:49,476 --> 00:04:53,736 be possible for at all, like, for any amount of money because, you 100 00:04:53,736 --> 00:04:57,276 know, as more people try to do that, the price will go up and then they 101 00:04:57,276 --> 00:04:58,476 won't be able to afford to do it. 102 00:04:59,346 --> 00:04:59,526 No, 103 00:04:59,526 --> 00:05:00,606 that's, uh, yeah. 104 00:05:00,611 --> 00:05:05,376 That's fascinating because like, the way I see the volatility in, in Bitcoin, 105 00:05:05,381 --> 00:05:10,916 it's, it's mainly because the, the, uh, What Raheem said rest yesterday. 106 00:05:10,916 --> 00:05:15,476 Like the, it it comes from the existing stock and not from the flow part of it. 107 00:05:15,476 --> 00:05:19,076 So not from the newly minted or newly mine Bitcoins. 108 00:05:19,706 --> 00:05:26,846 Uh, so the hard thing to to know though is what is that ratio like, how much of the 109 00:05:26,876 --> 00:05:32,006 liquidity comes from the existing stock and how much is the newly mined bitcoins? 110 00:05:32,456 --> 00:05:32,546 Hmm. 111 00:05:33,326 --> 00:05:33,536 Yeah. 112 00:05:33,541 --> 00:05:34,616 I mean there are a few like. 113 00:05:36,266 --> 00:05:37,586 Positive reinforcements. 114 00:05:37,586 --> 00:05:40,466 So one is, well, they could be negative in a down sense as 115 00:05:40,471 --> 00:05:42,746 well, is the, uh, the miners. 116 00:05:42,746 --> 00:05:48,026 So, you know, many of the miners are like prop miners, people mining for themselves 117 00:05:48,056 --> 00:05:51,956 with a, with a company, uh, either public company or private company or individuals 118 00:05:51,956 --> 00:05:53,486 with, you know, a garage full of miners. 119 00:05:53,966 --> 00:05:55,676 They're trying to actually keep the coins right. 120 00:05:55,706 --> 00:05:57,896 But they're having to pay the power bills. 121 00:05:58,376 --> 00:06:03,266 And typically what they do is to spend all their money on miners and then 122 00:06:03,266 --> 00:06:05,936 they sell a portion of the Bitcoin to pay for the power bill mm-hmm. 123 00:06:05,936 --> 00:06:07,376 On their operation costs. 124 00:06:07,466 --> 00:06:13,736 And in a bull market, you know, maybe they can keep 50, 70% of the 125 00:06:13,736 --> 00:06:15,086 coins they mine and that's good. 126 00:06:15,146 --> 00:06:20,141 But in a, in a bear market, Uh, they never have to sell 70% of the 127 00:06:20,141 --> 00:06:22,421 coins just to pay the power bill. 128 00:06:22,421 --> 00:06:23,651 So they're not keeping much, right? 129 00:06:24,191 --> 00:06:30,491 But as soon as the price starts to go up faster than the hash rate can grow, then 130 00:06:31,031 --> 00:06:33,221 they stop sell, they start selling less. 131 00:06:33,341 --> 00:06:38,771 And so they, they take coins that were like regularly being sold on the market. 132 00:06:38,771 --> 00:06:39,821 They take them off the market. 133 00:06:40,361 --> 00:06:45,731 And so it's kind of an effect, a bit like a halving sort of a boost to, you know, 134 00:06:46,091 --> 00:06:47,681 it creates some price momentum, right? 135 00:06:47,681 --> 00:06:50,831 So price goes up for some random reasons, some good news, or 136 00:06:50,891 --> 00:06:54,701 like a string of positive media coverage or something like that. 137 00:06:55,331 --> 00:06:57,851 Then the miners will stop selling as much and you'll, and 138 00:06:57,881 --> 00:06:59,081 it'll boost the price further. 139 00:06:59,111 --> 00:07:00,941 'cause now suddenly less coins will sale rate. 140 00:07:01,601 --> 00:07:05,711 So that's a kind of positive, uh, reinforcement. 141 00:07:06,716 --> 00:07:12,086 So, so do you expect a a, a like Heinz catchup type moment, uh, 142 00:07:12,416 --> 00:07:17,396 during the next cycle where, where there's not as much of a selloff 143 00:07:17,396 --> 00:07:20,426 because there's just too few coins? 144 00:07:20,426 --> 00:07:25,376 Like, is there going to be a well gradually then suddenly type moment? 145 00:07:25,676 --> 00:07:25,826 I mean, 146 00:07:25,826 --> 00:07:29,996 it looks a bit like it because the, uh, dollar cost average army is 147 00:07:29,996 --> 00:07:34,926 just gradually, you know, it's like a tug of war game where they, they 148 00:07:34,946 --> 00:07:38,426 keep buying every day and like the coins on exchange are just shrinking 149 00:07:38,426 --> 00:07:41,666 and shrinking and shrinking and like, if it gets too low, something 150 00:07:41,666 --> 00:07:43,376 explosive is gonna happen somewhere. 151 00:07:43,466 --> 00:07:43,766 Right. 152 00:07:43,796 --> 00:07:46,646 'cause you know, yeah, you can't, like if there are no, if a coin, 153 00:07:46,706 --> 00:07:50,006 if an exchange gets out of coins, you can't buy coins for any money. 154 00:07:50,011 --> 00:07:54,236 You've gotta temp somebody to deposit some coins that they intentionally 155 00:07:54,241 --> 00:07:55,946 took off exchange to cold store. 156 00:07:55,951 --> 00:07:56,006 Yeah. 157 00:07:56,066 --> 00:07:57,806 Like an intent for that to be some time. 158 00:07:57,806 --> 00:08:00,926 So the price might have to be quite high before they would do that. 159 00:08:01,436 --> 00:08:05,036 So, you know, I, it is interesting, like also the. 160 00:08:06,161 --> 00:08:09,821 It seems like, you know, there are different types of trading activity. 161 00:08:10,421 --> 00:08:12,491 One is what I call price formation. 162 00:08:12,491 --> 00:08:17,321 So it's people who are, you know, buying for the long term mm-hmm. 163 00:08:17,561 --> 00:08:21,191 Or selling for tactical reasons where they, they don't have 164 00:08:21,196 --> 00:08:22,091 the money to buy them back. 165 00:08:22,091 --> 00:08:22,391 Right. 166 00:08:22,391 --> 00:08:26,081 Like they're minor and they need to pay off some debts, or they have to 167 00:08:26,081 --> 00:08:29,021 cover their power bills so they're not buying 'em back tomorrow. 168 00:08:29,111 --> 00:08:33,101 And then, but then there's a lot of speculation and that's zero sum game 169 00:08:33,101 --> 00:08:34,721 and doesn't really change the price. 170 00:08:34,721 --> 00:08:35,771 It just adds liquidity. 171 00:08:36,251 --> 00:08:45,521 And apparently, um, the, like, the price volume is, is more in a 172 00:08:45,521 --> 00:08:49,421 derivative, like in the, I mean, in the sort of perpetual futures, so in 173 00:08:49,421 --> 00:08:51,281 the high leverage area these days. 174 00:08:51,281 --> 00:08:51,611 Right. 175 00:08:51,611 --> 00:08:56,561 So that's, that's actually relatively zero sum, uh, I would say typically. 176 00:08:56,561 --> 00:08:56,801 Right. 177 00:08:56,831 --> 00:08:57,551 'cause it's high leverage. 178 00:08:58,121 --> 00:08:58,361 Hmm. 179 00:08:59,381 --> 00:09:01,751 So, um, Hmm. 180 00:09:01,811 --> 00:09:06,611 Yeah, I've, I've heard a statistic from, from glass node that the, not only are 181 00:09:06,611 --> 00:09:11,591 the, the addresses with one coin or less in them growing in numbers, but also 182 00:09:11,591 --> 00:09:15,731 the, uh, addresses with 10,000 bitcoins or more are shrinking in numbers. 183 00:09:16,331 --> 00:09:16,661 Hmm. 184 00:09:16,751 --> 00:09:22,361 Uh, so the, the way I see that it is, this is a redistribution of wealth, really. 185 00:09:22,721 --> 00:09:23,231 Yeah. 186 00:09:23,411 --> 00:09:25,781 That sounds like the genie coefficient is improving, huh? 187 00:09:25,841 --> 00:09:26,111 Yeah. 188 00:09:26,111 --> 00:09:26,171 Yeah. 189 00:09:26,951 --> 00:09:32,621 It's, it's a little hard to know for sure because, you know, some 190 00:09:32,621 --> 00:09:37,152 of the bigger wallets turn out to be, Exchange balances or mm-hmm. 191 00:09:37,158 --> 00:09:39,821 Funds or custodians that represent many users. 192 00:09:40,421 --> 00:09:48,101 And also some of the more privacy conscious users will store their 193 00:09:48,101 --> 00:09:51,491 coins and break them up into, you know, hundreds of parts. 194 00:09:51,496 --> 00:09:51,761 Right. 195 00:09:51,761 --> 00:09:52,021 So, yeah. 196 00:09:52,061 --> 00:09:52,451 Yeah. 197 00:09:52,451 --> 00:09:54,941 They've got a hundred Bitcoin, they store like one Bitcoin a 198 00:09:54,941 --> 00:09:56,681 hundred times in different UT XOs. 199 00:09:57,041 --> 00:10:01,031 So there's, there's error on both sides, but still, I think the 200 00:10:01,061 --> 00:10:06,701 public data is useful because it's a indication of a generalized defect. 201 00:10:06,911 --> 00:10:07,151 Yeah. 202 00:10:07,151 --> 00:10:08,381 It's hinting at something. 203 00:10:08,381 --> 00:10:08,771 Right. 204 00:10:09,131 --> 00:10:13,451 So if you try to extrapolate this far ahead into the futures, like 205 00:10:13,511 --> 00:10:19,481 two generations from now, like how big is the how, how, how big of a. 206 00:10:20,126 --> 00:10:25,016 Portion of the total amounts of bitcoins are gonna be squandered away by this, 207 00:10:25,526 --> 00:10:30,446 you know, reckless first generation of Bitcoiners that we are like, are we gonna 208 00:10:30,451 --> 00:10:33,386 be able to make up inheritance plans? 209 00:10:33,386 --> 00:10:40,076 Or like, how many bitcoins will there actually be available in say, 2050 or 20? 210 00:10:40,076 --> 00:10:40,496 A hundred? 211 00:10:40,526 --> 00:10:41,066 Like 20? 212 00:10:41,396 --> 00:10:46,961 Well, I mean, if they spend them, it's uh, I mean, it's redistribution rate 213 00:10:46,961 --> 00:10:49,121 because they'll spend them at a business. 214 00:10:49,121 --> 00:10:52,751 It will either keep them or sell them on the market, which, you know, gives 215 00:10:52,751 --> 00:10:54,191 somebody else an opportunity to buy. 216 00:10:54,731 --> 00:10:55,991 So I'm thinking more 217 00:10:55,996 --> 00:10:57,581 in boating accident terms. 218 00:10:57,581 --> 00:10:58,361 Like how, how 219 00:10:58,361 --> 00:10:59,021 reckless are people? 220 00:10:59,021 --> 00:11:03,971 Oh, actual, actual, like backup failure, inheritance mechanism failure. 221 00:11:04,091 --> 00:11:04,391 Yeah. 222 00:11:04,391 --> 00:11:05,981 I mean, probably some. 223 00:11:06,101 --> 00:11:08,861 I, I think, you know, the technology's improving slowly. 224 00:11:09,521 --> 00:11:15,401 Um, but yeah, I mean, key management is, you know, not that easy, right? 225 00:11:15,401 --> 00:11:17,111 I mean, the mechanism's easy enough. 226 00:11:17,116 --> 00:11:20,801 You know, you write down the words, you do it on some kind of fireproof thing. 227 00:11:20,801 --> 00:11:24,431 Maybe you make multiple, like, so there's redundant backup 228 00:11:24,431 --> 00:11:25,691 or two or three or something. 229 00:11:25,691 --> 00:11:26,801 Put 'em in different locations. 230 00:11:26,801 --> 00:11:32,471 But I think what's harder is, um, intuition about where 231 00:11:32,471 --> 00:11:33,521 is a good place to store it. 232 00:11:33,581 --> 00:11:36,761 That's still gonna be there in like, 50 years or 20 years, 233 00:11:36,761 --> 00:11:37,721 depending on how old you are, right? 234 00:11:38,191 --> 00:11:38,611 Mm-hmm. 235 00:11:39,111 --> 00:11:43,271 Um, like the physical world suffers bit raw. 236 00:11:43,301 --> 00:11:46,031 People's memory is not as good as they imagine it is, so. 237 00:11:46,031 --> 00:11:46,121 Mm-hmm. 238 00:11:46,361 --> 00:11:51,311 You know, and some people actually have accidents, you know, like they have a 239 00:11:51,311 --> 00:11:56,501 car crash or a boating, like literally they lose the, the backup or they forget 240 00:11:56,771 --> 00:12:00,341 the extra good password they made and didn't use for five years or something. 241 00:12:00,341 --> 00:12:02,411 So there can be losses too. 242 00:12:02,441 --> 00:12:03,551 Yeah, for sure. 243 00:12:04,241 --> 00:12:04,541 Yeah. 244 00:12:05,141 --> 00:12:08,051 So, uh, from one thing to another, what is, what is 245 00:12:08,081 --> 00:12:10,121 Blockstream working on right now? 246 00:12:10,121 --> 00:12:11,531 What is the current projects 247 00:12:11,531 --> 00:12:11,831 there? 248 00:12:12,311 --> 00:12:13,301 Uh, lots of things. 249 00:12:13,301 --> 00:12:15,641 So we're working on, um, lightning. 250 00:12:15,671 --> 00:12:20,921 So we have this, um, protocol called Greenlight, which is a kind of client. 251 00:12:21,251 --> 00:12:27,221 So, so when a, a Lightning Wallet interacts with the Lightning 252 00:12:27,221 --> 00:12:34,076 Network, it, um, You know, it, it does certain network things, right? 253 00:12:34,076 --> 00:12:38,066 It, it, it syncs with a gossip network, which gives it a map of the network. 254 00:12:38,066 --> 00:12:39,626 It is a source row protocol. 255 00:12:39,626 --> 00:12:43,436 So each client needs to know the full map of how to route to other people, 256 00:12:43,826 --> 00:12:48,176 and it, it does various kinds of network information and to keep up with 257 00:12:48,181 --> 00:12:52,406 the network, understand which routes are reliable and things like that. 258 00:12:52,406 --> 00:12:55,136 So there's a certain amount of overhead and you can think about that 259 00:12:55,136 --> 00:13:01,796 as the kind of analog of a, um, a full node wallet like bitcoin core. 260 00:13:01,796 --> 00:13:02,066 Right. 261 00:13:02,589 --> 00:13:06,348 so yeah, you, you've got a full node, kind of Bitcoin wallet and 262 00:13:06,348 --> 00:13:07,518 a full node lightning wallet. 263 00:13:07,818 --> 00:13:14,468 And then there are sort of client server modes where, you know, you, you trust a 264 00:13:14,468 --> 00:13:19,208 custodian and it, it runs the node, or you have remote control wallets where 265 00:13:19,208 --> 00:13:22,478 you run a node and then your, your phone wallet actually remote controls it. 266 00:13:22,478 --> 00:13:23,478 The remote control. 267 00:13:24,803 --> 00:13:29,003 But, um, so Greenlight is a, is another kind of protocol, 268 00:13:29,633 --> 00:13:32,153 which is still self custodial. 269 00:13:32,153 --> 00:13:35,903 You have your keys and you, you know, you verify the information you get from 270 00:13:35,903 --> 00:13:39,263 the network and so you know, you know you have a good degree of security that 271 00:13:39,263 --> 00:13:42,953 somebody can't trick you into spending the money in a way you didn't expect. 272 00:13:43,913 --> 00:13:49,013 But it's sort of server assisted and so it makes a much lighter client. 273 00:13:49,073 --> 00:13:51,323 The client doesn't need to sync as much data. 274 00:13:51,328 --> 00:13:52,703 It doesn't need as much storage. 275 00:13:53,063 --> 00:13:55,463 It can connect to the network, reconnect to the network after being 276 00:13:55,463 --> 00:13:59,663 offline for a few days and immediately transact with high reliability and 277 00:13:59,663 --> 00:14:02,363 normal, like full node type of line. 278 00:14:02,513 --> 00:14:06,203 Lightning wallet will sync a lot of data and analyze it before it can do that. 279 00:14:06,383 --> 00:14:11,423 So it makes a sort of lower bandwidth flow of storage faster, more reliable. 280 00:14:11,423 --> 00:14:12,743 Lightning wallet basically. 281 00:14:13,013 --> 00:14:17,918 Um, And so we've, uh, you know, worked with a few companies. 282 00:14:17,918 --> 00:14:22,508 So Breeze is adopting that as a protocol and we're integrating 283 00:14:22,508 --> 00:14:24,278 it into the Green Wallet too. 284 00:14:24,278 --> 00:14:28,238 And that's available in, uh, kind of early access beta program. 285 00:14:28,268 --> 00:14:30,458 And it should be live as well soon. 286 00:14:30,458 --> 00:14:37,448 So that's, uh, interesting for, uh, like recent developments in Lightning, 287 00:14:37,718 --> 00:14:42,968 um, and from a Core Lightning, which is the implementation of Blockstream 288 00:14:42,968 --> 00:14:45,578 works on, and there are lots of open source contributors as well. 289 00:14:45,668 --> 00:14:45,758 Mm-hmm. 290 00:14:46,003 --> 00:14:53,228 Um, we have, um, some kind of, uh, user interface to control a node. 291 00:14:53,228 --> 00:14:56,378 So if you do run a Core Lightning node, there's a user interface to, 292 00:14:56,798 --> 00:14:59,738 you know, so you'd have to like come online, change the configurations 293 00:14:59,828 --> 00:15:00,878 as the user interface for it. 294 00:15:00,938 --> 00:15:05,768 And that's been, uh, it was already on Unreel and now it's available 295 00:15:05,768 --> 00:15:08,228 on Start nine as well, which is another kind of Bitcoin full 296 00:15:08,228 --> 00:15:09,758 node where you can install apps. 297 00:15:10,913 --> 00:15:14,363 Uh, so there's a new app, which is Core Lightning with the user interface. 298 00:15:14,543 --> 00:15:23,453 Um, and so there are a number of, um, interesting developments 299 00:15:23,458 --> 00:15:29,543 between sort of this evolution of lightning becoming a bridging 300 00:15:29,543 --> 00:15:31,313 protocol between other layer twos. 301 00:15:31,373 --> 00:15:39,533 So there's another company called Bolt uh, bolts, which is doing submarine swaps. 302 00:15:39,533 --> 00:15:44,933 So a kind of trustless swap historically between a Bitcoin U T X 303 00:15:44,938 --> 00:15:47,303 O and a lightning Challenge balance. 304 00:15:47,783 --> 00:15:50,903 So if you're a merchant and you're selling a lot of things and 305 00:15:50,903 --> 00:15:52,073 you've got, you know, a lot of. 306 00:15:52,868 --> 00:15:54,488 Bitcoin stacked up on a lightning channel. 307 00:15:55,088 --> 00:15:58,118 You can swap it with bolts who will give you a U T X O. 308 00:15:58,118 --> 00:15:58,208 Mm-hmm. 309 00:15:58,668 --> 00:15:59,028 On chain. 310 00:15:59,438 --> 00:16:02,588 And then you'll get your capacity back so you're ready to accept more payments. 311 00:16:03,098 --> 00:16:05,768 So you can use it to take capacity out or you can do the opposite as a 312 00:16:05,768 --> 00:16:07,988 user, you can use it to buy capacity. 313 00:16:08,348 --> 00:16:11,888 And so you pay them A U T X O and they add balance. 314 00:16:12,698 --> 00:16:20,708 And with the, uh, sort of rapid increase in on chain fees from, you know, the orals 315 00:16:20,708 --> 00:16:24,818 and the descriptors and all that stuff, it created a natural problem for them. 316 00:16:24,908 --> 00:16:28,178 You know, they were having trouble making these transactions complete. 317 00:16:28,298 --> 00:16:28,478 Yeah. 318 00:16:28,478 --> 00:16:29,408 And reliability. 319 00:16:30,308 --> 00:16:33,368 And then a very short period of time, like in a week or two, they implemented. 320 00:16:34,358 --> 00:16:37,538 A submarine swap between liquid Bitcoin, so on a liquid side 321 00:16:37,538 --> 00:16:39,488 chain layer two and lightning. 322 00:16:39,698 --> 00:16:43,658 So now you could rebalance an on chain lightning channel using a 323 00:16:43,658 --> 00:16:48,488 different layer two Bitcoin, liquid Bitcoin, and it's, it's cheaper. 324 00:16:48,493 --> 00:16:52,298 Like the liquid is not as congested as the main chain, and it's 325 00:16:52,298 --> 00:16:55,958 faster because the blocks are one minute and two blocks is final. 326 00:16:56,618 --> 00:17:00,278 And so then they had a way for you to basically rebalance 327 00:17:00,283 --> 00:17:00,908 your lightning channel. 328 00:17:00,908 --> 00:17:02,798 So the same kind of behavior, but using liquid. 329 00:17:03,158 --> 00:17:07,909 And even after the fees, you know, the orals and the scripters, mm-hmm. 330 00:17:08,478 --> 00:17:13,418 Phase like that fad faded, I guess when the feed fell to normal levels. 331 00:17:14,198 --> 00:17:18,158 Apparently they were saying that the, uh, liquid Bitcoin swap remained 332 00:17:18,158 --> 00:17:21,638 like a significant proportion of their ongoing swap traffic. 333 00:17:21,638 --> 00:17:25,808 So people found that a convenient and faster way to rebalance channels 334 00:17:26,318 --> 00:17:27,758 once they got used to it, basically. 335 00:17:27,878 --> 00:17:32,438 So, so when the wizards broke Bitcoin, so to speak, they they actually helped. 336 00:17:32,948 --> 00:17:33,398 Yeah. 337 00:17:33,428 --> 00:17:39,668 Well it, it's, it is interesting 'cause like it seems that, um, there's 338 00:17:39,668 --> 00:17:47,138 not so much proactive sort of work by service companies in Bitcoin like 339 00:17:47,138 --> 00:17:50,498 exchanges and wallets and payment providers and swap suppliers. 340 00:17:50,978 --> 00:17:53,648 They don't necessarily like proactively plan for what would 341 00:17:53,648 --> 00:17:56,078 happen if the fees increase in the future, but when they increase. 342 00:17:57,128 --> 00:18:02,018 They take some, uh, sort of disaster avoiding action quickly. 343 00:18:02,023 --> 00:18:02,358 Uhhuh, right? 344 00:18:02,358 --> 00:18:02,598 Yeah. 345 00:18:02,738 --> 00:18:07,358 And so they just look around for what, what's the quickest, the quickest fix. 346 00:18:07,448 --> 00:18:10,448 And they'll look at, you know, recent technology developments 347 00:18:10,448 --> 00:18:11,708 or things they can do quickly. 348 00:18:11,798 --> 00:18:12,578 And this is one of them. 349 00:18:12,578 --> 00:18:16,898 So, yeah, I mean actually, you know, we can thank the, uh, inscriptions 350 00:18:16,898 --> 00:18:21,518 for that, which is they created a fees spike, which made Bitcoin 351 00:18:21,518 --> 00:18:23,858 more robust and, uh, scalable. 352 00:18:23,858 --> 00:18:24,068 Right? 353 00:18:24,098 --> 00:18:26,828 'cause people adopted another kind of technology that 354 00:18:26,828 --> 00:18:29,288 offloads capacity draw on a 355 00:18:29,318 --> 00:18:29,858 main chain. 356 00:18:30,458 --> 00:18:33,818 It's, it's, uh, akin to the lockdowns driving the development 357 00:18:33,818 --> 00:18:35,048 of video conferencing apps. 358 00:18:35,048 --> 00:18:35,138 Mm-hmm. 359 00:18:35,378 --> 00:18:35,678 Like, 360 00:18:37,118 --> 00:18:41,693 well, here it's good because, you know, it means that, Now there's more U T X 361 00:18:41,693 --> 00:18:44,783 O space for cold storage and censorship resistant payments on the main chain. 362 00:18:44,783 --> 00:18:44,873 Mm-hmm. 363 00:18:45,113 --> 00:18:47,783 Because, you know, if there're the same number of lightning channels, 364 00:18:47,783 --> 00:18:50,783 you can rebalance 'em without touching the main chain, which is great. 365 00:18:50,783 --> 00:18:51,053 Right? 366 00:18:51,223 --> 00:18:51,513 Yeah. 367 00:18:51,683 --> 00:18:52,103 Yeah. 368 00:18:52,553 --> 00:18:56,813 And, uh, so what about the latest fad, this BIP 300 debate? 369 00:18:56,873 --> 00:19:01,643 And like, I, I won't go to, into the details of that very thing, but there's, 370 00:19:01,673 --> 00:19:08,003 there seems to be this eternal battle between, uh, Bitcoin conservatism, if 371 00:19:08,003 --> 00:19:10,553 you will, and, uh, Bitcoin progressivism. 372 00:19:10,583 --> 00:19:10,673 Mm-hmm. 373 00:19:10,913 --> 00:19:14,873 Like, so, uh, have we already oscillated like what, what, 374 00:19:14,873 --> 00:19:17,003 what's, what's your angle on that? 375 00:19:17,183 --> 00:19:22,343 Uh, is it worth, like, how much should we resist change and how 376 00:19:22,553 --> 00:19:26,003 much should we push for change and how hard is it to change it? 377 00:19:26,003 --> 00:19:28,793 Like, do you see bitcoin ever hard forking again? 378 00:19:28,793 --> 00:19:32,873 I know there are some issues that need to be resolved, but 379 00:19:32,878 --> 00:19:33,323 Yeah. 380 00:19:33,353 --> 00:19:36,413 I mean, I think technically most of these are soft forks 381 00:19:36,413 --> 00:19:38,543 and, and there's a surprising. 382 00:19:39,623 --> 00:19:40,973 Amount you can do with a software. 383 00:19:41,033 --> 00:19:44,813 Like it turns out to be more powerful than people originally thought. 384 00:19:44,873 --> 00:19:49,973 But I think nevertheless, the question is like, historically 385 00:19:50,153 --> 00:19:57,023 Bitcoin has resisted any change that has not got widespread technical 386 00:19:57,053 --> 00:20:00,053 Konsensus, like all the technical people agree it's the best approach 387 00:20:00,053 --> 00:20:02,693 to a given like problem or mm-hmm. 388 00:20:03,533 --> 00:20:04,433 A new feature. 389 00:20:05,303 --> 00:20:09,023 And that, you know, the ecosystem like it, i e the Bitcoin investors. 390 00:20:09,023 --> 00:20:15,803 Like it, 'cause the way I look at the, the fork was, is, you know, I 391 00:20:15,803 --> 00:20:18,713 think a lot of people, everybody from different viewpoints learned from it. 392 00:20:18,743 --> 00:20:21,473 I think, um, weren't sure how that was gonna resolve. 393 00:20:21,473 --> 00:20:24,533 Some people thought miners had a lot of control, and so they lobbied miners. 394 00:20:24,533 --> 00:20:26,033 It turned out they had very little control. 395 00:20:26,333 --> 00:20:28,823 Other people thought developers had control, but, you know, the solution 396 00:20:28,823 --> 00:20:29,933 didn't involve the developers. 397 00:20:30,443 --> 00:20:33,323 And really it turned out that the market won. 398 00:20:33,443 --> 00:20:37,283 You know, so the people that, I mean, I, I look at it like the. 399 00:20:38,078 --> 00:20:39,968 Labor theory of value fallacy, right? 400 00:20:39,998 --> 00:20:45,758 If, if I'm a Goldberg and I'm buying gold and some miners have a revolt over there 401 00:20:45,758 --> 00:20:48,698 and decide they're gonna dig up some lead and expect me to pay for it for, 402 00:20:49,088 --> 00:20:51,578 because it costs money to dig outta the ground, I'm like, I don't, I don't care. 403 00:20:51,578 --> 00:20:52,778 I don't, I want gold. 404 00:20:53,318 --> 00:20:55,688 I don't care how expensive it was to wind the lead, I don't want it. 405 00:20:56,288 --> 00:20:58,568 And they're either gonna go bankrupt or they're gonna stop, right? 406 00:20:59,018 --> 00:21:05,438 So I think that is ultimately what happened with, you know, with this 407 00:21:05,438 --> 00:21:09,248 fork drummer, which is that, you know, the miners and the people lobbying 408 00:21:09,248 --> 00:21:13,118 them were philosophically wanting to make a different trade off of 409 00:21:13,123 --> 00:21:18,158 bitcoins, sort of dilute Bitcoins immutability and sensate resistance 410 00:21:18,158 --> 00:21:20,588 and like decentralized robustness. 411 00:21:21,308 --> 00:21:23,858 Trade that off for some cheaper, like on chain transactions. 412 00:21:24,218 --> 00:21:24,278 Yeah. 413 00:21:24,338 --> 00:21:26,708 And the investors said, no, we don't, we don't want that. 414 00:21:26,798 --> 00:21:32,018 And they have a way to usay the digital gold, which they run a full node, and 415 00:21:32,018 --> 00:21:35,138 if you mind something they don't like, it's automatic, they don't even see it. 416 00:21:35,138 --> 00:21:35,408 Right. 417 00:21:35,468 --> 00:21:36,608 And they certainly won't accept it. 418 00:21:36,668 --> 00:21:38,978 So, and they set the price. 419 00:21:39,038 --> 00:21:43,268 So, you know, the miners will just, it turn out, will mine whatever 420 00:21:43,268 --> 00:21:46,208 is, uh, more profitable to mine when it comes to the crunch. 421 00:21:46,208 --> 00:21:46,388 Right. 422 00:21:46,388 --> 00:21:46,448 Hmm. 423 00:21:47,078 --> 00:21:52,568 So now, um, I do think the. 424 00:21:53,528 --> 00:21:59,888 The concept of Bitcoin immutability or ossification is important for long 425 00:21:59,888 --> 00:22:02,918 term because change implies risk. 426 00:22:03,188 --> 00:22:09,248 And you know, you want to like reduce risk as more value piles up on Bitcoin. 427 00:22:09,548 --> 00:22:13,688 And um, I mean if you look at, let's say other internet things like T C 428 00:22:13,693 --> 00:22:18,368 P I P, basic T C P I P version four hasn't changed materially in decades. 429 00:22:18,638 --> 00:22:18,968 Right. 430 00:22:18,968 --> 00:22:20,078 And like it still interoperates. 431 00:22:20,298 --> 00:22:20,718 Mm-hmm. 432 00:22:20,798 --> 00:22:22,178 It's essentially the same protocol. 433 00:22:22,658 --> 00:22:27,968 Um, and so, you know, ideally you'd want bitcoin layer one to 434 00:22:27,968 --> 00:22:29,978 be like that after, you know. 435 00:22:29,978 --> 00:22:30,248 Yeah, yeah. 436 00:22:30,278 --> 00:22:32,798 Various limitations are, are improved. 437 00:22:32,858 --> 00:22:39,248 So the question is what changes minimally need to be there to get to that point? 438 00:22:39,818 --> 00:22:42,879 And that's like not so clear 'cause it's still in a bit of r and d. 439 00:22:43,388 --> 00:22:46,959 So, you know, um, I think. 440 00:22:48,713 --> 00:22:55,643 You know, like recent op codes that's been discussed are like, uh, a p 441 00:22:55,643 --> 00:23:00,473 o, so something to make, um, a more efficient variant of lightning possible 442 00:23:00,623 --> 00:23:03,803 l symmetry and APOs any previous sale. 443 00:23:04,163 --> 00:23:06,923 Um, another one is covenants. 444 00:23:06,928 --> 00:23:10,643 So they're sort of a attached to use cases that people think are useful. 445 00:23:10,643 --> 00:23:16,133 So, um, and that the, the second one, the sort of covenant use 446 00:23:16,133 --> 00:23:18,413 case is attached to vaults. 447 00:23:18,623 --> 00:23:18,713 Mm-hmm. 448 00:23:18,953 --> 00:23:25,343 So I think, and I think that is a, uh, a significant improvement in cold storage 449 00:23:25,343 --> 00:23:34,493 security, which means that if you have some Bitcoin in a safe and, you know, 450 00:23:34,493 --> 00:23:37,223 you go away for a few days and when you come back, the safe's not there anymore. 451 00:23:37,553 --> 00:23:40,103 You know, somebody's taking it away and like cut it open or something. 452 00:23:40,103 --> 00:23:40,163 Yeah. 453 00:23:40,943 --> 00:23:43,103 Now you need to be able to undo that transaction. 454 00:23:43,898 --> 00:23:46,208 Like send a coin somewhere even colder. 455 00:23:46,508 --> 00:23:46,898 Right? 456 00:23:47,168 --> 00:23:49,118 And so a vault enables you to do that. 457 00:23:49,268 --> 00:23:49,358 Mm-hmm. 458 00:23:49,748 --> 00:23:52,538 And to share the undo transaction with other people. 459 00:23:52,748 --> 00:23:57,188 So you could give it, you know, to your friends, it'd be kind of like a anti 460 00:23:57,188 --> 00:23:59,108 kidnapping possibility also, right? 461 00:23:59,108 --> 00:23:59,109 Mm-hmm. 462 00:23:59,115 --> 00:24:03,698 Because, you know, if, if the, if you can give the cancellation instructions and 463 00:24:03,698 --> 00:24:09,068 pre-sign transactions to third parties, they can say, well, uh, you know, I 464 00:24:09,068 --> 00:24:10,808 can't reach the guy for a couple of days. 465 00:24:11,018 --> 00:24:12,008 I'm getting nervous. 466 00:24:12,013 --> 00:24:13,388 None of his friends have heard from him. 467 00:24:13,388 --> 00:24:16,538 So we're gonna cancel all these transactions, and that will kind 468 00:24:16,538 --> 00:24:18,278 of, so that's the vault concept. 469 00:24:18,283 --> 00:24:22,578 So I think that is quite hard to do properly without, you know, 470 00:24:22,718 --> 00:24:23,888 like a covenant, like op code 471 00:24:23,888 --> 00:24:24,248 or something. 472 00:24:24,253 --> 00:24:26,618 Couldn't, couldn't it be done with time locks? 473 00:24:27,668 --> 00:24:34,418 Um, well, the thing is you need to sort of, I mean the, the, you 474 00:24:34,423 --> 00:24:36,098 need another variable, like Yeah. 475 00:24:36,098 --> 00:24:40,448 I mean, the effect you want is that, You can devolt. 476 00:24:40,478 --> 00:24:44,198 So I can take some coins out of a vault and they're kind of stuck 477 00:24:44,198 --> 00:24:48,458 in a time lock situation where I can spend them with a key, I have 478 00:24:48,458 --> 00:24:50,288 access to after a week, let's say. 479 00:24:51,068 --> 00:24:55,029 Um, and, you know, if I have the keys, I could spend 'em in a different way, right? 480 00:24:55,034 --> 00:24:55,128 Mm-hmm. 481 00:24:55,588 --> 00:24:56,588 In the meantime. 482 00:24:56,678 --> 00:25:01,298 And so I need, I need to like pre-sign it with some keys I don't have anymore. 483 00:25:01,418 --> 00:25:04,628 So then you have to kind of, the, the be, I think the best you can do to simulate it 484 00:25:04,628 --> 00:25:10,148 is, you know, I have my cold wallet and I pre-sign all the ut XOs and then I delete 485 00:25:10,148 --> 00:25:12,728 the keys, which is kinda scary right now. 486 00:25:12,728 --> 00:25:15,968 Now my cold, now my wallet is a bunch of pre-sign transactions 487 00:25:16,808 --> 00:25:17,858 and I have to back those up. 488 00:25:18,218 --> 00:25:20,378 So that's, that's hard to do with a seed. 489 00:25:20,378 --> 00:25:25,148 I have to like back up a lot of, so it's, it adds its own risk. 490 00:25:26,123 --> 00:25:31,043 It's a bit of a difficult trade off because you are, on the one 491 00:25:31,043 --> 00:25:33,593 hand, trying to have a good backup of the keys until you use them. 492 00:25:34,193 --> 00:25:38,153 On the other hand, trying to be very sure you've deleted them so that you 493 00:25:38,153 --> 00:25:40,283 can't override your vault mechanism. 494 00:25:40,283 --> 00:25:41,783 So it's kind of a bit of a conflict. 495 00:25:41,873 --> 00:25:41,963 Mm-hmm. 496 00:25:42,263 --> 00:25:46,163 So it's hard to get to do it in a robust and like reliable way, 497 00:25:46,493 --> 00:25:47,663 whereas the vault can do it. 498 00:25:47,783 --> 00:25:51,623 'cause you can, you know, write a covenant allows you to write a sort of 499 00:25:51,628 --> 00:25:56,093 restriction, which is to say, well I have the keys, but you know, the coins 500 00:25:56,093 --> 00:26:00,053 are set so that I'm not able to spend them unless I spend 'em like this. 501 00:26:00,653 --> 00:26:05,033 And so you can add the, the vault, the de vaulting as a restriction on the coins. 502 00:26:05,753 --> 00:26:07,913 And then you don't need to delete keys basically. 503 00:26:07,913 --> 00:26:09,473 So that's the, okay. 504 00:26:09,563 --> 00:26:09,863 Yeah. 505 00:26:10,493 --> 00:26:13,943 So you can simulate here, but not, not that well. 506 00:26:14,708 --> 00:26:18,518 And like covenants also, I mean, most Bitcoin op codes are very low level. 507 00:26:18,548 --> 00:26:21,548 It's kinda like a machine instructions in A C P U. 508 00:26:21,548 --> 00:26:25,238 It doesn't do very much like each op code is like, you know, push a 509 00:26:25,238 --> 00:26:30,038 number on a stack or add two numbers together, or verify signature. 510 00:26:30,043 --> 00:26:32,228 They're like very low level things. 511 00:26:32,228 --> 00:26:32,738 Mm-hmm. 512 00:26:32,748 --> 00:26:37,418 Um, and so a volt is like the, sorry, the, the covenants are a bit like that, 513 00:26:37,448 --> 00:26:41,258 you know, it, it requires a certain structure in the output transaction. 514 00:26:41,528 --> 00:26:42,788 So it's a relatively simple thing. 515 00:26:42,788 --> 00:26:45,278 And so of course once you have it, you can, you can do 516 00:26:45,278 --> 00:26:46,358 other things with it as well. 517 00:26:46,358 --> 00:26:46,598 Right. 518 00:26:47,108 --> 00:26:47,528 Alright. 519 00:26:48,098 --> 00:26:49,178 So yeah. 520 00:26:50,138 --> 00:26:54,938 So what separates, um, liquid from, from these other proposed side 521 00:26:54,938 --> 00:26:56,468 chains and drive chains and whatnot? 522 00:26:56,468 --> 00:26:58,448 Like what, what's the, what's the key difference? 523 00:26:58,868 --> 00:27:03,188 Yeah, so liquid is the sort of side chain you can build without. 524 00:27:03,638 --> 00:27:04,238 New op codes. 525 00:27:05,108 --> 00:27:12,278 So, and the way, the way it works is there's a federation, so a number of 526 00:27:12,278 --> 00:27:18,818 exchanges and service providers operating a hardware security module that is, you 527 00:27:18,818 --> 00:27:20,498 know, participating in a liquid network. 528 00:27:20,798 --> 00:27:24,608 So they're running a liquid full node, which is a kind of extended 529 00:27:24,608 --> 00:27:26,378 version of Bitcoin protocol. 530 00:27:26,408 --> 00:27:30,368 So like liquid side chain is Bitcoin plus some extensions, basically. 531 00:27:30,373 --> 00:27:30,698 Right. 532 00:27:31,178 --> 00:27:36,518 And then they, and, and from the Bitcoin's perspective, the coins 533 00:27:36,518 --> 00:27:37,838 look like they're in a big multisig. 534 00:27:38,288 --> 00:27:43,643 Um, And these hardware security modules will, you know, accept 535 00:27:43,643 --> 00:27:46,793 coins in and let people claim them on liquid as liquid Bitcoin. 536 00:27:46,793 --> 00:27:47,663 Mm-hmm. 537 00:27:47,723 --> 00:27:52,973 And if on the liquid side somebody requests to peg them out or like freeze 538 00:27:52,973 --> 00:27:57,083 them or burn them on liquid and request them back on the Bitcoin side, then 539 00:27:57,083 --> 00:28:01,883 the, uh, the hardware security modules will sign to follow that instruction 540 00:28:01,883 --> 00:28:03,203 and give it back to somebody on Bitcoin. 541 00:28:03,803 --> 00:28:12,623 So it has, um, you know, it's not as censorship resistant or. 542 00:28:13,478 --> 00:28:17,168 Like, and, and not as good a place to do cold storage as Bitcoin, but 543 00:28:17,168 --> 00:28:21,218 for its kind of general purpose of like medium sized transactions, 544 00:28:21,878 --> 00:28:23,828 short term trading or transacting. 545 00:28:24,158 --> 00:28:25,448 But it has some advantages. 546 00:28:25,453 --> 00:28:32,198 So, uh, for example, one of the extensions is, uh, stable coins. 547 00:28:32,318 --> 00:28:32,438 Mm-hmm. 548 00:28:32,444 --> 00:28:35,708 So you could have other assets and so that's convenient because now you can 549 00:28:36,398 --> 00:28:42,818 do kind of limit orders and atomic swaps between, you know, different assets. 550 00:28:42,823 --> 00:28:44,838 Whereas on Bitcoin, there's only one asset is Bitcoin, right? 551 00:28:44,858 --> 00:28:44,948 Mm-hmm. 552 00:28:45,578 --> 00:28:46,448 So you get that. 553 00:28:46,868 --> 00:28:50,708 Um, and so the difference is really that, you know, if something goes 554 00:28:50,708 --> 00:28:54,098 wrong on liquid, Bitcoin doesn't really know or care about it. 555 00:28:54,128 --> 00:28:55,688 All it sees is a multisig. 556 00:28:55,693 --> 00:28:56,038 Mm-hmm. 557 00:28:56,123 --> 00:28:56,408 Right? 558 00:28:56,468 --> 00:29:01,733 Whereas I think there are a few different types of, Um, 559 00:29:02,213 --> 00:29:04,283 merge mine, side chain ideas. 560 00:29:04,283 --> 00:29:06,743 The original one evolved fraud proofs. 561 00:29:07,193 --> 00:29:11,843 So the idea there was with the merge mining there would be, you know, the 562 00:29:11,848 --> 00:29:19,013 Bitcoin miners would be also hashing the, uh, the side chain, so they wouldn't 563 00:29:19,013 --> 00:29:23,423 like look at the side chain and see if it's valid necessarily, but they would 564 00:29:24,053 --> 00:29:25,793 like put a timestamp on it or something. 565 00:29:25,793 --> 00:29:26,123 Right. 566 00:29:26,123 --> 00:29:28,283 So dedicate hashing power to it. 567 00:29:28,793 --> 00:29:28,973 Yeah. 568 00:29:28,973 --> 00:29:31,403 I mean, it's merged mines, so, you know, they mine bitcoin and then 569 00:29:31,403 --> 00:29:34,193 they put the checks on off the most recent side chain block mm-hmm. 570 00:29:34,613 --> 00:29:35,873 Into the main Bitcoin block. 571 00:29:36,413 --> 00:29:39,803 But it doesn't, you know, if, if the side chain like has a bug and 572 00:29:39,803 --> 00:29:41,693 forks like experimental or something. 573 00:29:41,753 --> 00:29:42,053 Yeah. 574 00:29:42,203 --> 00:29:45,953 It won't fork the Bitcoin network, you know, they can ignore it and 575 00:29:47,003 --> 00:29:52,433 uh, typically the side chain could be, you know, the Bitcoin chain can 576 00:29:52,433 --> 00:29:56,933 be progressing forwards, processing transactions, adding new blocks. 577 00:29:57,728 --> 00:30:01,268 While the merge mining is doing a reorg, you know, like undoing 578 00:30:01,268 --> 00:30:05,078 a transaction or oring something that was a mistake on a side chain. 579 00:30:05,078 --> 00:30:09,128 So there's not really any pressure on a side chain to want to undo 580 00:30:09,308 --> 00:30:12,668 Bitcoin blocks just to undo something on a side chain, because that's, 581 00:30:12,673 --> 00:30:13,778 that's one of the concerns, right? 582 00:30:13,778 --> 00:30:13,779 Mm-hmm. 583 00:30:13,785 --> 00:30:17,468 It's like you get a lot of economic activity on a side chain and something 584 00:30:17,468 --> 00:30:20,108 goes wrong and then they desperately wanna undo it, and then they come and 585 00:30:20,108 --> 00:30:23,798 try to plead with the miners to okay, pay them to undo the whole chain. 586 00:30:23,798 --> 00:30:24,008 Right? 587 00:30:24,008 --> 00:30:27,278 And you, you want Bitcoin to like never go backwards. 588 00:30:27,398 --> 00:30:29,948 Um, you don't want people 589 00:30:29,948 --> 00:30:31,598 to shit Bitcoin on Bitcoin, right? 590 00:30:32,108 --> 00:30:32,438 Yeah. 591 00:30:32,438 --> 00:30:36,188 Well, I mean, you don't want to import the, the incentive 592 00:30:36,188 --> 00:30:37,538 to undo mistakes onto Bitcoin. 593 00:30:37,538 --> 00:30:38,768 It's just kinda like Ethereum, right? 594 00:30:38,768 --> 00:30:41,288 They, they made some god awful mess. 595 00:30:41,288 --> 00:30:45,578 They like screwed something up big time and the people affected 596 00:30:45,583 --> 00:30:49,823 financially were the insiders and so they like, Undid a bunch of stuff. 597 00:30:49,883 --> 00:30:50,093 Yeah. 598 00:30:50,363 --> 00:30:52,043 And now there are two Ethereums. 599 00:30:52,103 --> 00:30:52,403 Right. 600 00:30:52,523 --> 00:30:57,953 And uh, so you know, if that was a Bitcoin side chain and not Ethereum, you 601 00:30:57,953 --> 00:31:01,793 know, what would they have come and, and one that's tied to Bitcoin, like Yeah. 602 00:31:01,823 --> 00:31:02,453 Block height. 603 00:31:02,513 --> 00:31:05,363 Now would they, and they want to undo it, would they do come to the miners? 604 00:31:05,368 --> 00:31:06,503 Is like, could you please undo that? 605 00:31:07,043 --> 00:31:10,073 I mean, I think it's very difficult in Bitcoin, you know, people have tried that, 606 00:31:10,073 --> 00:31:12,383 like a number of exchanges have got hacks. 607 00:31:12,893 --> 00:31:16,703 For large amounts of money like Bitfinex back in 2015. 608 00:31:16,763 --> 00:31:16,973 Mm-hmm. 609 00:31:17,273 --> 00:31:19,823 They, they, you know, they resolved it now, uh, they got, you know, 610 00:31:19,823 --> 00:31:22,733 they raised the money like long time ago, so it's long resolved. 611 00:31:22,733 --> 00:31:26,243 But, you know, at the time people were wondering, and more recently, I 612 00:31:26,243 --> 00:31:30,383 think last year or two, Binance had some hack and they came and talked 613 00:31:30,383 --> 00:31:34,313 to you, tried to talk to developers or miners, like, could you undo it? 614 00:31:34,553 --> 00:31:36,063 Like, I mean, not really, no. 615 00:31:36,243 --> 00:31:39,443 You know, I mean, just, just imagine the chaos if it was undone, 616 00:31:39,443 --> 00:31:40,623 you know, like the Yeah, yeah. 617 00:31:41,093 --> 00:31:42,383 Just the accounting costs. 618 00:31:42,413 --> 00:31:46,793 Like, 'cause other things could get replayed or double spent if something was 619 00:31:46,793 --> 00:31:49,403 redone, it's, it's not remotely worth it. 620 00:31:49,483 --> 00:31:49,863 No, no. 621 00:31:49,863 --> 00:31:50,813 So it doesn't make any 622 00:31:50,813 --> 00:31:51,173 sense. 623 00:31:51,563 --> 00:31:54,323 So, so it would mess with the incentive structures basically. 624 00:31:54,323 --> 00:31:54,683 Yeah. 625 00:31:54,983 --> 00:31:55,703 So that's one concern. 626 00:31:55,703 --> 00:31:56,873 And, and then the drive chain. 627 00:31:57,053 --> 00:32:00,353 So the, the original side chain is like merge mind and it, and it 628 00:32:00,353 --> 00:32:04,493 presents a compact proof to Bitcoin, so it adds a soft hook to bitcoin. 629 00:32:04,913 --> 00:32:06,023 This is the concept, right? 630 00:32:06,203 --> 00:32:06,293 Mm-hmm. 631 00:32:06,533 --> 00:32:12,473 To, to verify a proof that most of the merge mining work like that 632 00:32:12,473 --> 00:32:14,813 there's a certain amount of merge mine work on the side chain that 633 00:32:14,813 --> 00:32:16,523 approves this withdrawal request. 634 00:32:16,643 --> 00:32:16,763 Mm-hmm. 635 00:32:17,003 --> 00:32:21,173 So it doesn't verify the whole side chain, but it can see that, you know, there's 636 00:32:21,178 --> 00:32:25,583 a lot of merge mining that seems to be saying that the miners agree that this 637 00:32:25,583 --> 00:32:27,473 guy should be able to withdraw this coin. 638 00:32:27,923 --> 00:32:31,643 And then there's a time lock, kinda like with lightning, where somebody else 639 00:32:31,643 --> 00:32:35,483 can sort of provide an even more work, like a, a higher block height mm-hmm. 640 00:32:35,783 --> 00:32:39,173 With something that contradicts the first one and then they can cancel the withdraw. 641 00:32:39,623 --> 00:32:42,263 It's kinda like a reactive security, like lightning. 642 00:32:43,163 --> 00:32:44,993 So that was one version. 643 00:32:44,993 --> 00:32:50,993 And a drive chain is a simplified version, so it uh, has no fraud proofs. 644 00:32:51,083 --> 00:32:58,493 It just says, well, they make the peg out slow and so, If the users see 645 00:32:58,973 --> 00:33:03,263 coins being stolen by a big conspiracy of miners, they have three months or 646 00:33:03,263 --> 00:33:05,633 six months to do something about it. 647 00:33:05,813 --> 00:33:09,563 And if you think about it, the, the scenario is that there's a 648 00:33:09,563 --> 00:33:11,213 conspiracy between most of the miners. 649 00:33:11,453 --> 00:33:15,683 So now the users, you know, Bitcoin users and investors can't really get the 650 00:33:15,683 --> 00:33:19,013 miners to help prevent that because the miner's already in the conspiracy, right? 651 00:33:19,018 --> 00:33:19,073 Mm-hmm. 652 00:33:19,158 --> 00:33:25,283 So now Bitcoin basically has to undertake a U A S F like situation. 653 00:33:25,288 --> 00:33:25,393 Mm-hmm. 654 00:33:26,468 --> 00:33:30,458 To say, to like, sort of, you know, save that to the miners. 655 00:33:30,458 --> 00:33:34,868 Look, we're gonna block this, this theft, and if you try to do it 656 00:33:34,868 --> 00:33:36,938 anyway, you know, we changed the code. 657 00:33:36,938 --> 00:33:39,908 If you change that, if you do it anyway, you're gonna fork off 658 00:33:39,908 --> 00:33:42,638 the network and we're not gonna honor your coins, so don't do it. 659 00:33:43,178 --> 00:33:46,748 And that, that was kind of like what happened with the Segway activation. 660 00:33:46,898 --> 00:33:47,048 Mm-hmm. 661 00:33:47,288 --> 00:33:52,178 And it was a very dramatic and kind of scary thing with some, a fair bit of risk. 662 00:33:53,108 --> 00:33:54,698 So people don't want that kinda risk. 663 00:33:54,698 --> 00:33:55,028 Right. 664 00:33:56,078 --> 00:33:59,138 And so that's, that's the challenge for drive change. 665 00:33:59,138 --> 00:34:06,638 Like the, the sort of disincentive to steal is kind of, uh, an expensive 666 00:34:06,638 --> 00:34:08,618 exercise in risk terms mm-hmm. 667 00:34:08,863 --> 00:34:09,308 For the main chain. 668 00:34:09,308 --> 00:34:10,688 And people don't like risk on the main chain. 669 00:34:10,693 --> 00:34:12,068 So that's, that's the problem. 670 00:34:12,068 --> 00:34:16,358 I think, uh, like people wanting to opt into things is generally fine, but if 671 00:34:16,363 --> 00:34:18,128 it, if it creates a cost or a risk, then. 672 00:34:19,283 --> 00:34:20,483 It starts to be undesirable. 673 00:34:20,488 --> 00:34:20,603 Yeah. 674 00:34:21,173 --> 00:34:21,413 Sounds 675 00:34:21,413 --> 00:34:23,093 way easier to just not temper with it. 676 00:34:24,053 --> 00:34:25,823 Well, I mean it, it's interesting. 677 00:34:25,828 --> 00:34:30,143 I mean, I think it's always interesting to discuss ideas because by discussing 678 00:34:30,143 --> 00:34:37,163 them, people like invent new things or change their perspective. 679 00:34:37,583 --> 00:34:40,853 Because I think before, like the last few weeks of Drivechain 680 00:34:40,853 --> 00:34:46,883 discussion, people would've said they prefer hash rate controlled 681 00:34:46,883 --> 00:34:48,803 side chains to federate side chains. 682 00:34:48,803 --> 00:34:49,013 Mm-hmm. 683 00:34:49,883 --> 00:34:51,413 Liquid and rootstock. 684 00:34:51,503 --> 00:34:55,643 But I think if you ask them now, they'll change their, they will swap their view. 685 00:34:55,823 --> 00:34:59,633 So now they're like, actually the federated side chain is much less 686 00:34:59,633 --> 00:35:01,253 likely to create a problem for Bitcoin. 687 00:35:01,283 --> 00:35:05,423 And it's much less likely that the, you know, the collection of dozens 688 00:35:05,428 --> 00:35:10,043 of exchanges would have a conspiracy and try to steal the pegged coins. 689 00:35:10,133 --> 00:35:11,273 'cause we know who they are. 690 00:35:11,363 --> 00:35:11,453 Mm-hmm. 691 00:35:11,453 --> 00:35:13,553 I don't involve a massive conspiracy and there'd be legal 692 00:35:13,553 --> 00:35:14,663 problems and stuff like that. 693 00:35:14,663 --> 00:35:14,873 Right. 694 00:35:14,963 --> 00:35:18,503 Whereas if miners do it, it is kind of anonymous. 695 00:35:18,773 --> 00:35:19,583 Um mm-hmm. 696 00:35:20,693 --> 00:35:22,673 And it's more difficult to do anything about it. 697 00:35:22,823 --> 00:35:25,343 So you don't know who to blame, for example. 698 00:35:25,343 --> 00:35:25,673 Right. 699 00:35:25,793 --> 00:35:32,723 Um, so I think even the discussion changed the perception and like, 700 00:35:33,173 --> 00:35:37,943 it's instructed to look at what people don't like about it and why. 701 00:35:38,183 --> 00:35:40,103 'cause maybe there's a way to. 702 00:35:40,478 --> 00:35:42,008 Like make a safer mm-hmm. 703 00:35:42,248 --> 00:35:42,968 Type of supply chain. 704 00:35:43,628 --> 00:35:48,458 So, so how big a part of the discussion and how much influence does the 705 00:35:49,028 --> 00:35:54,278 infighting on Twitter have on Bitcoin's development, like the A T I Q people 706 00:35:54,278 --> 00:35:58,508 and all this stuff, uh, that we're talk, we talk about and like, uh, 707 00:35:58,718 --> 00:36:02,408 um, well, I mean, I think there's like a mixture of people so. 708 00:36:02,768 --> 00:36:06,518 You know, some people will just react, like, don't change Bitcoin. 709 00:36:06,518 --> 00:36:08,408 It's like so morph as a philosophical, right? 710 00:36:08,408 --> 00:36:08,798 Like Yeah. 711 00:36:08,858 --> 00:36:12,338 Based on conservative, uh, you know, well, I mean, it's, it's true actually. 712 00:36:12,338 --> 00:36:19,418 I, I, uh, went to some kind of like private meeting, like a bunch of 713 00:36:19,423 --> 00:36:23,888 like investors and a few tech people just like general discussion for a 714 00:36:23,888 --> 00:36:25,988 weekend kind of thing some years ago. 715 00:36:26,528 --> 00:36:32,408 And like a question I asked for the, in like Bitcoin holder investor or fund 716 00:36:32,408 --> 00:36:36,638 manager type of people is like, well, what features would you value most? 717 00:36:36,878 --> 00:36:37,058 Mm-hmm. 718 00:36:37,358 --> 00:36:40,818 From the technical side for Bitcoin? 719 00:36:41,378 --> 00:36:44,633 And their answer was surprising, which was like, Just don't break it. 720 00:36:44,638 --> 00:36:44,873 Yeah. 721 00:36:44,878 --> 00:36:45,263 Yeah. 722 00:36:45,293 --> 00:36:46,343 That was the number one feature. 723 00:36:46,343 --> 00:36:46,673 Right. 724 00:36:47,063 --> 00:36:48,173 And so that's very interesting. 725 00:36:48,173 --> 00:36:48,353 Right. 726 00:36:48,353 --> 00:36:50,633 'cause like they didn't even care about lightning actually. 727 00:36:50,638 --> 00:36:52,823 It's like, it is like payments. 728 00:36:52,883 --> 00:36:53,993 No, they care about investment. 729 00:36:54,053 --> 00:36:54,983 Oh, that's good to hear. 730 00:36:55,403 --> 00:36:58,043 So like if, if there's something like about key management or vaults 731 00:36:58,048 --> 00:37:01,523 like, okay, like now I'm listening, but it's like about micropayments, 732 00:37:01,523 --> 00:37:02,393 I don't really care about it. 733 00:37:02,753 --> 00:37:08,093 So, no, I think like really you want a bit of both because, you know, 734 00:37:08,093 --> 00:37:11,813 ultimately the value proposition of Bitcoin is the ability to, you know, 735 00:37:11,813 --> 00:37:13,463 do the censorship resistant payments. 736 00:37:13,553 --> 00:37:15,863 And we can get more of those by using something like lightning. 737 00:37:15,863 --> 00:37:21,263 So if we can make lightning better, that also helps the kind of value proposition. 738 00:37:21,293 --> 00:37:21,473 Mm-hmm. 739 00:37:21,953 --> 00:37:25,793 And it also frees up space for cold storage, which is good too. 740 00:37:25,883 --> 00:37:26,273 So, 741 00:37:27,083 --> 00:37:27,323 yeah. 742 00:37:27,383 --> 00:37:32,288 Alright, so, so what's this, uh, This unavoidable bug that is in 743 00:37:32,288 --> 00:37:36,638 the code that needs to be fixed for the hard fork in like 2050 or 2090. 744 00:37:36,638 --> 00:37:38,338 Or, I mean, what is that called? 745 00:37:38,618 --> 00:37:42,608 I, I for, I think the name escapes 6 21 0 6. 746 00:37:42,608 --> 00:37:42,758 Yeah. 747 00:37:42,763 --> 00:37:43,028 Yeah. 748 00:37:43,028 --> 00:37:43,328 That's the 749 00:37:43,328 --> 00:37:43,568 one. 750 00:37:44,138 --> 00:37:49,778 Uh, yeah, I think, I think it's kind of like, you know, the year 2000 bug. 751 00:37:50,138 --> 00:37:50,228 Yeah. 752 00:37:50,228 --> 00:37:51,518 Like some counter wraps around. 753 00:37:51,518 --> 00:37:54,728 'cause it's a 31, it's a 32 sign, 32 bit integer. 754 00:37:54,728 --> 00:37:55,028 Right. 755 00:37:55,033 --> 00:37:59,738 So, so like, but I don't think it's an issue because it's like, you know, 756 00:37:59,798 --> 00:38:04,598 so many decades away that you can just make a technical hard fork that was 757 00:38:04,598 --> 00:38:07,868 fixed, you know, like five decades before it could become an issue. 758 00:38:08,288 --> 00:38:11,798 And then nobody's running like five decades old code and nobody notices. 759 00:38:11,798 --> 00:38:12,098 Right. 760 00:38:12,098 --> 00:38:12,788 Or something like that. 761 00:38:12,788 --> 00:38:14,078 So think it's very simple to fix. 762 00:38:14,228 --> 00:38:14,648 Okay. 763 00:38:15,128 --> 00:38:18,218 But it's like a technical curiosity that like, whoa, we can't fix that without, 764 00:38:18,553 --> 00:38:18,818 okay. 765 00:38:19,238 --> 00:38:22,148 So everyone's sort of relying that we will fix that just 766 00:38:22,148 --> 00:38:24,248 because the sheer amount of time 767 00:38:24,278 --> 00:38:25,178 that we have to fix it. 768 00:38:25,568 --> 00:38:29,378 I mean, I think, I think the thing is if you make some in pop change, 769 00:38:29,888 --> 00:38:31,148 It's very hard to coordinate that. 770 00:38:31,148 --> 00:38:33,698 Everybody would upgrade and then nobody would accidentally like get 771 00:38:33,698 --> 00:38:35,138 left off the network or something. 772 00:38:35,228 --> 00:38:38,918 But you know, if it's coming in like a hundred years, okay. 773 00:38:38,918 --> 00:38:40,508 Like they're not even in a rush to fix it. 774 00:38:40,513 --> 00:38:40,838 Right. 775 00:38:40,838 --> 00:38:46,628 Because you know, as long as you can fix it so far ahead that it's 776 00:38:46,633 --> 00:38:49,358 implausible, anybody would still be running that old software. 777 00:38:49,718 --> 00:38:49,838 Mm-hmm. 778 00:38:50,078 --> 00:38:51,308 Then it's pretty easy to fix. 779 00:38:52,053 --> 00:38:53,963 So how are you enjoying this episode so far? 780 00:38:54,413 --> 00:38:57,433 Before we dive back in, first a little bit 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The best part is, you know it's high signal. 804 00:40:04,938 --> 00:40:07,938 There's no spam on OrangePill app because everyone pays to be there. 805 00:40:08,018 --> 00:40:09,428 It's just 3 a month. 806 00:40:09,908 --> 00:40:12,888 So download OrangePill app on Apple or Android and get connected 807 00:40:12,908 --> 00:40:14,398 to the Bitcoin social layer. 808 00:40:14,598 --> 00:40:17,098 Next up, our new sponsor, the Bitcoin Way. 809 00:40:17,688 --> 00:40:20,988 Their mission is to onboard, educate, and remove barriers to 810 00:40:20,988 --> 00:40:22,588 taking self custody of your bitcoin. 811 00:40:23,158 --> 00:40:27,468 They cover everything from cold wallets to nodes, no KYC bitcoin purchases, 812 00:40:27,518 --> 00:40:29,928 inheritance planning, payments, and more. 813 00:40:30,468 --> 00:40:33,278 Whether you're new to bitcoin or you're an experienced bitcoiner looking to 814 00:40:33,278 --> 00:40:37,128 expand your freedom footprint, or you know someone who this 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you see there and what do you 828 00:41:22,107 --> 00:41:23,062 predict in the future? 829 00:41:23,122 --> 00:41:27,442 Yeah, so I mean, unlike, uh, it's, it's mostly kind of organic. 830 00:41:27,442 --> 00:41:30,532 So I guess like a little bit analogous to Lightning. 831 00:41:30,532 --> 00:41:32,542 There are different types of startups involved, right? 832 00:41:32,542 --> 00:41:36,712 So people who are building like the Lightning protocol and then the LSPs 833 00:41:36,717 --> 00:41:39,502 and then, you know, applications and games and things like that. 834 00:41:39,502 --> 00:41:42,742 So there's that kind of thing happening with liquid, with multiple startups 835 00:41:42,742 --> 00:41:47,362 building on it and you know, some of them more organic and just, you, you never hear 836 00:41:47,362 --> 00:41:51,232 about them and then they have a products, nobody new and it's in market and now 837 00:41:51,232 --> 00:41:52,642 people are talking about it and using it. 838 00:41:52,762 --> 00:41:55,732 So a number of things like that have happened over the last year. 839 00:41:55,732 --> 00:41:59,422 So, I mean, one is, uh, site swap, which is mm-hmm a liquid 840 00:41:59,422 --> 00:42:08,393 wallet, uh, and um, a kind of, uh, non-custodial central order book. 841 00:42:09,262 --> 00:42:10,342 So you can. 842 00:42:11,647 --> 00:42:15,577 From your wallet, you can, uh, place a limit order to buy 843 00:42:15,577 --> 00:42:18,487 Bitcoin, like below this price. 844 00:42:18,967 --> 00:42:22,627 And you, you sort of sign part of the transaction and you give 845 00:42:22,632 --> 00:42:24,727 it to the server through the app. 846 00:42:25,147 --> 00:42:30,817 And now, um, you can switch your phone off for your desktop app or what have 847 00:42:30,817 --> 00:42:34,477 you, and somebody can come along and decide they wanna sell it to you. 848 00:42:35,257 --> 00:42:39,127 And they'll give their partly signed part to the server, and a server just 849 00:42:39,132 --> 00:42:43,657 combines them, takes its commission and sends it to liquid chain to sell. 850 00:42:44,257 --> 00:42:46,957 And it's a kind of a trustless limit order. 851 00:42:48,097 --> 00:42:55,027 So it's a way to do trading or buying or selling without custodial risk. 852 00:42:55,387 --> 00:42:56,977 And actually they're integrating. 853 00:42:57,832 --> 00:42:59,092 Hardware wallet support. 854 00:42:59,092 --> 00:43:03,202 So you could even, you know, you could use a web experience to like click on the 855 00:43:03,202 --> 00:43:07,282 prices you want and you scan a QR code and then you approve the transaction on your 856 00:43:07,287 --> 00:43:10,522 hardware wallet saying, you know, yeah, I wanna buy Bitcoin at that price, and 857 00:43:10,522 --> 00:43:15,352 I have some liquid tether in my hardware wallet and when it, when it transact. 858 00:43:15,352 --> 00:43:18,442 So basically funds move between two hard or wallets. 859 00:43:18,922 --> 00:43:22,642 So it's an extremely safe way to do trade without the kind of, you 860 00:43:22,647 --> 00:43:27,412 know, tgo, uh, F G X, uh, quadri, all that kind of exchange custody risk. 861 00:43:28,012 --> 00:43:29,272 So that's very interesting. 862 00:43:29,452 --> 00:43:35,812 And you know, they even have, um, so on liquid, there are two types of assets. 863 00:43:35,812 --> 00:43:38,302 There are like liquid Bitcoin and liquid tether things that are 864 00:43:38,302 --> 00:43:40,072 just peer-to-peer transferable. 865 00:43:40,072 --> 00:43:46,522 And then there are sort of, there's an option to make an asset, a security, 866 00:43:46,582 --> 00:43:49,432 it's called amp, uh, a managed asset. 867 00:43:49,432 --> 00:43:57,592 And so, um, The, the thing there is you can't, like, receive it or send it to 868 00:43:57,592 --> 00:44:00,442 somebody who is not like whitelisted. 869 00:44:00,952 --> 00:44:03,562 And a way you get whitelist is your role, like, uh, with an 870 00:44:03,562 --> 00:44:04,552 exchange or something, right? 871 00:44:04,612 --> 00:44:04,732 Mm-hmm. 872 00:44:05,462 --> 00:44:09,692 so yeah, the, the, the way that you, you interact with it is, is like that. 873 00:44:09,692 --> 00:44:13,502 But once you are whitelisted, it's curious because now you are transacting 874 00:44:13,502 --> 00:44:16,592 something which is like a licensed registered security, but you're 875 00:44:16,592 --> 00:44:18,452 transacting in a very pi feel, right? 876 00:44:18,457 --> 00:44:24,542 Like, You know, send somebody 100th of a share as a gift or they can like, 877 00:44:24,542 --> 00:44:27,392 you know, give me 10 euros for it in person, I can send it to 'em or I 878 00:44:27,392 --> 00:44:30,122 can like agree an O OTC price mm-hmm. 879 00:44:30,392 --> 00:44:31,562 And swap it with side swap. 880 00:44:31,562 --> 00:44:35,792 Or I can put it on a market, on side swap all in a sort permissionless way, 881 00:44:36,302 --> 00:44:39,062 but still like compliant with securities laws 'cause of the white listing. 882 00:44:39,122 --> 00:44:43,742 So it's a kind of novel kind of merge of unlikely things. 883 00:44:43,742 --> 00:44:44,042 Right. 884 00:44:44,042 --> 00:44:47,372 Which feels like very permissionless, but like behind the scenes permissions. 885 00:44:47,372 --> 00:44:50,492 And it's very simple from the blockchain, like from a liquid blockchain point of 886 00:44:50,492 --> 00:44:52,412 view because all it sees as a multisig. 887 00:44:53,432 --> 00:44:57,512 But, but, but all these things aren't, they like the, these are sort of bridges 888 00:44:57,512 --> 00:44:58,712 between the Bitcoin world and the 889 00:44:58,712 --> 00:44:59,852 fiat world as I see. 890 00:44:59,852 --> 00:45:00,002 Yeah. 891 00:45:00,002 --> 00:45:03,002 That one is, I mean another, another example is, I mean there are, there 892 00:45:03,002 --> 00:45:06,782 are lots of, there are some like startup derived things and there are 893 00:45:06,782 --> 00:45:08,582 some user behavior derived things. 894 00:45:08,582 --> 00:45:12,542 So one user behavior derived thing is dollar cost averaging. 895 00:45:12,542 --> 00:45:16,982 So we came across users who were, uh, dollar cost averaging on liquid. 896 00:45:17,507 --> 00:45:18,887 Because the fees are low. 897 00:45:18,917 --> 00:45:19,247 Mm-hmm. 898 00:45:19,487 --> 00:45:22,067 And if they're, you know, buying $5 at a time, like if you withdraw from 899 00:45:22,067 --> 00:45:23,357 an exchange, is expensive, right? 900 00:45:23,387 --> 00:45:23,477 Mm-hmm. 901 00:45:23,807 --> 00:45:26,537 And so their dollar cost averaging on liquid and then they'll get to a, to a 902 00:45:26,537 --> 00:45:29,807 target, you know, like 10th of a Bitcoin or whatever the threshold is, and they'll, 903 00:45:30,407 --> 00:45:33,797 they'll take it off onto cold storage on the main chain and they'll do it again. 904 00:45:33,857 --> 00:45:39,317 So it's a kind of way to do something frequently and like amortize 905 00:45:39,322 --> 00:45:41,777 the cost of going to A U T X A. 906 00:45:42,347 --> 00:45:43,787 So that's one kind of use case. 907 00:45:43,787 --> 00:45:48,452 And the other one was the, um, The bolts, like liquid atomic swaps, so 908 00:45:48,482 --> 00:45:52,322 sort of connecting liquid and lightning, which was also like organic, right? 909 00:45:53,642 --> 00:45:56,132 I mean, a startup decided they had a problem and like within a 910 00:45:56,132 --> 00:45:57,392 week or two they had a solution. 911 00:45:57,482 --> 00:45:57,872 So. 912 00:45:58,032 --> 00:45:58,112 Hmm. 913 00:45:58,532 --> 00:45:59,822 It's quite interesting things. 914 00:45:59,912 --> 00:46:06,122 Um, and, you know, they're continuing sort of people issuing different assets on it. 915 00:46:07,142 --> 00:46:10,322 Um, more wallets, adding liquid support. 916 00:46:10,322 --> 00:46:13,502 So there's a new one that was announced at this conference called, uh, wbe, 917 00:46:13,532 --> 00:46:16,352 which is a kind of a super app. 918 00:46:16,352 --> 00:46:20,282 So it's a Bitcoin wallet and it's a liquid wallet and it's a root stock wallet. 919 00:46:20,287 --> 00:46:20,312 Mm-hmm. 920 00:46:20,972 --> 00:46:22,472 And I think they're adding lightning too. 921 00:46:22,472 --> 00:46:27,092 So it's kind of all Bitcoin related layer twos and, and maintain in a single wallet. 922 00:46:27,632 --> 00:46:29,672 Uh, green is a bit like that because it has. 923 00:46:30,872 --> 00:46:34,802 You know, it has liquid Bitcoin and Bitcoin and more recently we have the 924 00:46:34,802 --> 00:46:36,992 beta integration of lightning as well. 925 00:46:36,992 --> 00:46:38,342 So kind of all three. 926 00:46:38,522 --> 00:46:38,612 Mm-hmm. 927 00:46:38,882 --> 00:46:40,772 But the wall be super app is even more, right? 928 00:46:40,772 --> 00:46:43,682 'cause it includes root stock and plans to go between them. 929 00:46:44,102 --> 00:46:48,992 But, but all of these, these things, like do they, do they 930 00:46:48,992 --> 00:46:51,152 exist post hyperbitcoinization? 931 00:46:51,182 --> 00:46:55,082 Like if in a, in a fully colonized world, is there a use 932 00:46:55,082 --> 00:46:56,762 case for these things still? 933 00:46:57,002 --> 00:46:58,352 Uh, yeah, potentially. 934 00:46:58,352 --> 00:47:05,132 I mean, I think that, you know, the layer twos are sort of 935 00:47:05,137 --> 00:47:07,682 a bit like T C P I P, right? 936 00:47:07,682 --> 00:47:10,412 So they're sort of specialized protocols on top for different, 937 00:47:10,412 --> 00:47:11,552 like application domains. 938 00:47:11,557 --> 00:47:11,762 Mm-hmm. 939 00:47:12,092 --> 00:47:14,792 So I think, you know, if, if lightning is specialized for retail 940 00:47:14,792 --> 00:47:19,202 payments, then liquid is specialized for like maybe trading has some 941 00:47:19,207 --> 00:47:22,292 additional confidentiality because of confidential transactions. 942 00:47:22,802 --> 00:47:26,672 And I think another configuration that might come about in the future, I. 943 00:47:27,347 --> 00:47:31,127 Is because Core Lightning works on top of liquid as well, so you can 944 00:47:31,127 --> 00:47:36,212 have like liquid Bitcoin channels and then instead of rebalancing, Bitcoin 945 00:47:36,212 --> 00:47:42,152 lightning channels with liquid, you can have liquid Bitcoin channels, right? 946 00:47:42,152 --> 00:47:42,242 Mm-hmm. 947 00:47:42,242 --> 00:47:48,992 And so, you know, for the risk, if, if the amounts are that are involved 948 00:47:48,997 --> 00:47:52,892 in lightning are very retail, like not, not huge amounts of money, right? 949 00:47:52,892 --> 00:47:56,762 Like maybe, you know, the phone is more expensive than the, than the 950 00:47:56,792 --> 00:47:58,472 Bitcoin on it kind of situation. 951 00:47:58,562 --> 00:47:58,742 Yeah. 952 00:47:58,892 --> 00:48:05,852 Then maybe it makes a good deal of sense to anchor lightning channels in liquid, 953 00:48:05,852 --> 00:48:09,362 which is kinda layer 1.5 and then that frees up even more space from the main 954 00:48:09,367 --> 00:48:13,922 chain for cold storage because you don't get all of the lightning, you know, 955 00:48:13,922 --> 00:48:15,662 transaction anchors and stuff like that. 956 00:48:15,722 --> 00:48:20,912 And I think liquid, you know, liquid's, uh, capacity is sort 957 00:48:20,912 --> 00:48:22,562 of similar to bitcoins because. 958 00:48:23,457 --> 00:48:25,367 You know, the blocks are 10 times as fast. 959 00:48:25,397 --> 00:48:28,337 'cause they're every minute they're the same size, but the confidential 960 00:48:28,337 --> 00:48:31,637 transactions are about 10 times bigger 'cause of all the mm-hmm. 961 00:48:31,817 --> 00:48:32,987 Uh, crypto stuff. 962 00:48:33,077 --> 00:48:39,077 Um, but, you know, I think that would be, uh, an interesting trade off and 963 00:48:39,077 --> 00:48:44,057 the sort of thing that somebody might, you know, like s did, somebody might 964 00:48:44,057 --> 00:48:49,247 adopt and, you know, a, a future prolonged fee spike or something. 965 00:48:49,247 --> 00:48:49,577 Right. 966 00:48:50,467 --> 00:48:55,867 Yeah, you, you, your panel about, uh, when 100 k, you know, the nice provocative, 967 00:48:55,927 --> 00:49:01,897 uh, title, lots of bullish energy in there in terms of, uh, the timeframe and, uh, 968 00:49:01,927 --> 00:49:03,787 when the fiat price is going to go up. 969 00:49:03,787 --> 00:49:07,387 But what do you see at the moment as the biggest long-term threat to 970 00:49:07,387 --> 00:49:07,597 bitcoin? 971 00:49:09,607 --> 00:49:11,677 Um, I'm not sure. 972 00:49:11,677 --> 00:49:18,907 I mean, you know, for people who were involved, you know, 20 13, 973 00:49:18,907 --> 00:49:23,227 14, 15, you know, banks didn't want to hear about Bitcoin. 974 00:49:23,232 --> 00:49:26,737 Like if, if you were a business development person since talk to banks, 975 00:49:26,737 --> 00:49:29,647 they would tell you before you go into the room, don't use the word Bitcoin, right? 976 00:49:29,647 --> 00:49:29,927 Yeah. 977 00:49:30,097 --> 00:49:33,427 And that all changed, you know, then every bank on the planet had 978 00:49:33,427 --> 00:49:35,317 a blockchain r and d lab, right? 979 00:49:35,387 --> 00:49:35,807 Mm-hmm. 980 00:49:35,892 --> 00:49:40,507 And, you know, come forward a few more years and they're all vying to provide 981 00:49:40,747 --> 00:49:42,607 Bitcoin related financial products. 982 00:49:42,667 --> 00:49:47,767 And like, so I think in that same kind of timeframe, like 2013 to 2015, a lot 983 00:49:47,767 --> 00:49:53,857 of people were quite worried and even before about, you know, regulatory bans 984 00:49:53,862 --> 00:49:57,817 like, you know, China bans Bitcoin, but like thinking well maybe Europe 985 00:49:57,817 --> 00:50:02,767 and the US or also ban Bitcoin and that, that would be a risk, right? 986 00:50:02,767 --> 00:50:03,637 But I think I. 987 00:50:04,747 --> 00:50:08,527 You know, that risk has receded a lot because, you know, the 988 00:50:08,527 --> 00:50:12,487 regulators have regularized, you know, Bitcoin is property legally. 989 00:50:13,297 --> 00:50:17,137 Um, I think a lot of technical risk has receded, like, you know, Bitcoin's 990 00:50:17,137 --> 00:50:18,607 quality assurance has improved. 991 00:50:18,612 --> 00:50:21,787 The re, you know, the, the changes have become more conservative and it got 992 00:50:21,787 --> 00:50:27,487 through to block size wars and showed that, you know, the investors ultimately 993 00:50:27,877 --> 00:50:33,157 were able to enforce immutability despite like, you know, a lot, a big array of 994 00:50:33,157 --> 00:50:37,627 financial interests, wanting to change it for like, you know, uh, the economic 995 00:50:37,627 --> 00:50:40,027 benefit of startups, I guess ultimately. 996 00:50:40,567 --> 00:50:45,427 Um, so I'm not sure, like, I think the risks have receded on, on most 997 00:50:45,427 --> 00:50:51,442 fronts, so I'm not really seeing like, You know, a big threat. 998 00:50:52,192 --> 00:50:53,992 Um, so I'm not sure. 999 00:50:54,082 --> 00:50:59,122 Yeah, it seems, it seems like, you know, I mean, of course, uh, a different 1000 00:50:59,122 --> 00:51:03,562 kind of threat I think, or risk could be that Bitcoin succeeds, but 1001 00:51:05,032 --> 00:51:12,832 emphasizing the investment asset use case and losing some sort of momentum 1002 00:51:12,862 --> 00:51:16,342 on various censorship resistant mm-hmm. 1003 00:51:16,582 --> 00:51:17,752 Soft ownership of keys. 1004 00:51:18,292 --> 00:51:23,932 And I do think it's like potentially a problem if too big a proportion 1005 00:51:23,932 --> 00:51:29,182 of Bitcoin's economic base is held by ETFs with like mm-hmm. 1006 00:51:29,452 --> 00:51:32,812 Corporate lawyers and fund managers reduce duties and stuff like that. 1007 00:51:32,812 --> 00:51:36,532 So, you know, I mean, ultimately the value is. 1008 00:51:37,457 --> 00:51:41,047 The, the use case, like the digital gold, the cold storage, 1009 00:51:41,527 --> 00:51:45,127 the ability to spend, that's the thing that banks can't compete with. 1010 00:51:45,397 --> 00:51:49,207 So, you know, the banks offering financial products is kind of 1011 00:51:49,207 --> 00:51:54,367 like, you know, VCs buying, or investors buying internet stocks. 1012 00:51:54,397 --> 00:51:56,887 'cause they thought mm-hmm the internet, the permissionless chaos 1013 00:51:56,887 --> 00:51:58,357 of the internet would be popular. 1014 00:51:58,867 --> 00:52:01,447 You know, they may not have liked the permissionless chaos, but they could 1015 00:52:01,447 --> 00:52:02,527 see they could make money from it. 1016 00:52:02,527 --> 00:52:02,797 Right? 1017 00:52:02,797 --> 00:52:06,157 So you don't want the guys that are writing a trend to. 1018 00:52:07,012 --> 00:52:10,102 Like break the trend or like erode the permission. 1019 00:52:10,552 --> 00:52:10,822 Right. 1020 00:52:11,122 --> 00:52:14,302 But this is a slightly more philosophical question. 1021 00:52:14,302 --> 00:52:17,542 Does we, can institutions actually own Bitcoin though? 1022 00:52:17,542 --> 00:52:23,032 Because like, not your case, not your coins and custodial, like the real 1023 00:52:23,032 --> 00:52:29,062 possessor of the Bitcoins is some guy or some guys with a multisig thing. 1024 00:52:29,062 --> 00:52:29,422 Yeah. 1025 00:52:29,872 --> 00:52:34,012 So, so how, how do you see that, like the relationship with between 1026 00:52:34,012 --> 00:52:35,872 ownership and possession in the future? 1027 00:52:35,877 --> 00:52:41,092 And like is, is Bitcoin, is owning Bitcoin more than just keeping a secret? 1028 00:52:41,872 --> 00:52:43,882 Like how do you see 1029 00:52:43,882 --> 00:52:44,312 that coming up? 1030 00:52:44,312 --> 00:52:49,132 I mean, certainly an indirect and more fragile ownership claim, right? 1031 00:52:49,137 --> 00:52:49,232 Yeah. 1032 00:52:49,252 --> 00:52:55,612 So, you know, if you, if you assume there are, um, very much more 1033 00:52:55,612 --> 00:53:01,222 credible like custodians, like, I mean already Fidelity is a, I think 1034 00:53:01,222 --> 00:53:03,772 has a custodian service that's probably the one of the highest tier. 1035 00:53:03,772 --> 00:53:05,482 But there are other like fairly high tier. 1036 00:53:06,547 --> 00:53:09,487 Uh, established financial players and provide Bitcoin custody 1037 00:53:09,487 --> 00:53:12,037 for a fee to corporations, but it's still indirect, right? 1038 00:53:12,037 --> 00:53:15,877 Because, you know, if you are an individual and you can get access if they 1039 00:53:16,027 --> 00:53:20,497 sell to individuals, or you're a company and something happens, like a court makes 1040 00:53:20,502 --> 00:53:24,787 a judgment against you, or law enforcement makes a judgment against you, then the 1041 00:53:24,787 --> 00:53:26,257 custodian doesn't listen to you anymore. 1042 00:53:26,317 --> 00:53:27,937 They listen to the third party. 1043 00:53:27,937 --> 00:53:27,938 Yeah. 1044 00:53:27,943 --> 00:53:28,027 Yeah. 1045 00:53:28,027 --> 00:53:28,867 It freezes your assets. 1046 00:53:28,867 --> 00:53:29,077 Right? 1047 00:53:29,077 --> 00:53:31,327 So then well, did you really own them? 1048 00:53:31,357 --> 00:53:31,717 Mm-hmm. 1049 00:53:31,962 --> 00:53:36,907 Well, kind of, you, you know, you, you had a a right to request them, which 1050 00:53:36,907 --> 00:53:41,587 they have this question to refuse if there's some overriding claim, right? 1051 00:53:41,587 --> 00:53:44,497 So yeah, you don't really have full possession of them anymore. 1052 00:53:44,497 --> 00:53:45,547 That's, that's the, 1053 00:53:45,552 --> 00:53:45,907 the risk. 1054 00:53:45,907 --> 00:53:46,087 Yeah. 1055 00:53:46,087 --> 00:53:51,307 And, and, and also if, if a custodian feels threatened by a government or 1056 00:53:51,307 --> 00:53:56,707 whatever, uh, I mean the, the one guy or the three out of five guys can, can just 1057 00:53:57,457 --> 00:54:01,887 bus off and go somewhere else and live their lives without them ever knowing. 1058 00:54:03,262 --> 00:54:09,532 Yeah, I mean, I guess the, um, probably the big custodians have, 1059 00:54:10,612 --> 00:54:15,892 you know, because they are custodying other things which are hard to undo. 1060 00:54:16,012 --> 00:54:16,162 Mm-hmm. 1061 00:54:16,402 --> 00:54:20,422 Like maybe artwork or like physical vaults for valuables. 1062 00:54:20,427 --> 00:54:27,202 And they have developed over, you know, centuries, like quite good, uh, what 1063 00:54:27,202 --> 00:54:30,352 do you call it, like cross checks and governance and procedures to make sure 1064 00:54:30,352 --> 00:54:34,732 that it's difficult for like, A small group of insiders who get corrupt 'cause 1065 00:54:34,732 --> 00:54:37,852 it, 'cause banks do have like tellers that go rogue and like Yeah, yeah. 1066 00:54:37,882 --> 00:54:41,542 People that try to steal, so they try to make a lot of, uh, cross checks and 1067 00:54:41,547 --> 00:54:45,892 controls in there to catch it early or to prevent it without like a huge 1068 00:54:46,072 --> 00:54:47,302 collusion or something like that. 1069 00:54:47,992 --> 00:54:52,492 Still, if, if this, um, you know, catch catchup effect thing 1070 00:54:52,492 --> 00:54:55,042 happens and Bitcoin a hundred Xs. 1071 00:54:55,102 --> 00:54:55,522 Yeah. 1072 00:54:55,582 --> 00:54:59,152 Like, so all of a sudden those 10 bitcoins are worth more than that. 1073 00:54:59,542 --> 00:54:59,842 Right. 1074 00:54:59,842 --> 00:55:01,462 Mona Lisa type pen look. 1075 00:55:01,492 --> 00:55:05,392 Well, I mean that's, that's a case for, for like the vault situ, I 1076 00:55:05,392 --> 00:55:09,412 mean the, the smart contract kinda script vault, which is that, you 1077 00:55:09,412 --> 00:55:11,332 know, the day-to-day operations. 1078 00:55:12,137 --> 00:55:16,217 The people operationally in control, you know, can DeVol and then 1079 00:55:16,307 --> 00:55:20,447 spend money out of the devolt or maybe manage a kinda warm wallet. 1080 00:55:20,807 --> 00:55:20,957 Mm-hmm. 1081 00:55:21,317 --> 00:55:25,967 But you know, there will be other people, a much wide array of people potentially 1082 00:55:25,967 --> 00:55:29,657 including people with coins in the custody who can like blow the whistle, 1083 00:55:29,657 --> 00:55:33,707 like, Hey, these coins are moving and nobody approved them and have like a 1084 00:55:33,707 --> 00:55:35,387 week's time or something to cancel it. 1085 00:55:35,392 --> 00:55:35,517 Mm-hmm. 1086 00:55:35,602 --> 00:55:36,407 And send it. 1087 00:55:36,932 --> 00:55:40,112 You know, somewhere much colder, which is like maybe extremely inconvenient to 1088 00:55:40,112 --> 00:55:47,882 access and you know, that that would be impractical for a day-to-day service, but 1089 00:55:47,882 --> 00:55:49,772 is a fallback if something weird happens. 1090 00:55:49,772 --> 00:55:50,042 Right. 1091 00:55:50,462 --> 00:55:51,482 But, but that's not in 1092 00:55:51,482 --> 00:55:52,262 place now. 1093 00:55:52,267 --> 00:55:53,822 Like No, I, it isn't. 1094 00:55:53,882 --> 00:55:57,632 I mean, but I think that's one of the reasons you, we probably should try 1095 00:55:57,632 --> 00:56:02,282 to build them, like either using the pre-sign transactions or with some 1096 00:56:02,282 --> 00:56:05,132 kind of vol, I mean, some kind of covenant technology to build them. 1097 00:56:05,342 --> 00:56:09,482 But we, as in, well, I mean like people who build stuff like 1098 00:56:09,482 --> 00:56:11,852 startups, technologists, companies. 1099 00:56:11,852 --> 00:56:12,182 Yeah. 1100 00:56:12,272 --> 00:56:13,532 So there's a mar Yeah. 1101 00:56:13,622 --> 00:56:15,782 You foresee a market for that, those kind of 1102 00:56:16,212 --> 00:56:16,292 services. 1103 00:56:16,292 --> 00:56:19,622 Well, I mean, as, as somebody who's like, you know, been involved in like the 1104 00:56:19,622 --> 00:56:23,912 technical part of custody and thinking, so if you actually do something, then 1105 00:56:23,912 --> 00:56:27,482 you start to think much more clearly and pragmatically about the risks. 1106 00:56:27,482 --> 00:56:27,542 Yeah. 1107 00:56:28,067 --> 00:56:31,457 You know, so if you think, even on a personal case, you know, you, you 1108 00:56:31,457 --> 00:56:34,697 make steel backup and you put it in a home safe, and then you think, well, 1109 00:56:35,207 --> 00:56:38,027 you know, what if I went away for the weekend and somebody swapped the safe? 1110 00:56:38,117 --> 00:56:38,177 Yeah. 1111 00:56:38,507 --> 00:56:42,707 For one that looks the same and I don't notice for a while, and then I find 1112 00:56:42,707 --> 00:56:45,287 I don't know the code and I'm pretty sure I haven't forgotten the code. 1113 00:56:45,287 --> 00:56:46,997 And then I realize they've swapped the, 1114 00:56:47,237 --> 00:56:48,977 or they just open the safe and look at 1115 00:56:48,977 --> 00:56:51,797 the words like, yeah, well, I mean, like, let's assuming they cut. 1116 00:56:51,857 --> 00:56:55,157 I mean, I think typically consumer safes are actually not that good. 1117 00:56:55,157 --> 00:56:59,177 So a, a skilled safe bracket can open them anyway, like bypass it. 1118 00:56:59,507 --> 00:57:02,087 But even if you assume it's good quality and they can't bypass it, 1119 00:57:02,087 --> 00:57:04,907 it could, you just take it and swap it and maybe you don't notice. 1120 00:57:04,912 --> 00:57:05,177 Right? 1121 00:57:05,177 --> 00:57:11,957 So if you start thinking about some of those things, then it's, uh, you 1122 00:57:11,957 --> 00:57:14,662 know, The physical backup can be taken. 1123 00:57:14,872 --> 00:57:15,862 That's the problem, right? 1124 00:57:15,867 --> 00:57:15,912 Mm-hmm. 1125 00:57:15,997 --> 00:57:17,182 So what would you do about that? 1126 00:57:17,242 --> 00:57:19,372 Well, you need to be able to cancel it, and then you need 1127 00:57:19,372 --> 00:57:20,512 this kind of digital vault. 1128 00:57:20,542 --> 00:57:24,112 And then if you have that extra technology, you would have an answer. 1129 00:57:24,142 --> 00:57:26,352 You know, obviously got security cameras everywhere and you, 1130 00:57:26,542 --> 00:57:27,832 and you see that it happened. 1131 00:57:28,672 --> 00:57:32,182 Now if it, if it was today, it is too late, you saw them get stolen. 1132 00:57:32,182 --> 00:57:32,662 So what? 1133 00:57:32,662 --> 00:57:34,612 They've cleared on a chain and they're gone, right? 1134 00:57:34,612 --> 00:57:34,672 Yeah. 1135 00:57:34,852 --> 00:57:35,812 And you can't undo them. 1136 00:57:35,812 --> 00:57:39,022 But if you have a, a vol process, yeah, you can undo it. 1137 00:57:39,022 --> 00:57:41,362 You have a week to like take it back. 1138 00:57:41,362 --> 00:57:41,662 Right? 1139 00:57:42,592 --> 00:57:45,892 So, but, but like, I mean, steel plates and all whatnot are. 1140 00:57:47,272 --> 00:57:50,452 The, the, there's sort of the normies now, but, but really what? 1141 00:57:51,262 --> 00:57:54,862 It's just your imagination that, that counts when come, when it 1142 00:57:54,862 --> 00:57:56,422 comes to, uh, storing Bitcoin. 1143 00:57:56,427 --> 00:58:01,582 I mean, a private key is a, a, a set of characters and, uh, a 1144 00:58:01,582 --> 00:58:03,022 seed phrase is a couple of words. 1145 00:58:03,022 --> 00:58:08,092 So say you hide the, in a poem, uh, and you store that poem in three different 1146 00:58:08,092 --> 00:58:12,142 locations, in three different countries, and nobody even knows that it is a seed 1147 00:58:12,142 --> 00:58:13,672 phrase, and it's impossible to tell. 1148 00:58:13,672 --> 00:58:16,852 I mean, there it is literally just your imagination, setting these 1149 00:58:16,852 --> 00:58:18,352 boundaries for what's possible. 1150 00:58:18,352 --> 00:58:23,242 And yeah, I think we, the, the bitcoin space is sort of like, 1151 00:58:23,332 --> 00:58:24,592 okay, this is the normies. 1152 00:58:24,592 --> 00:58:29,212 Now we're, we're doing steel plates and we're, where it's blatantly obvious that 1153 00:58:29,212 --> 00:58:32,902 the Bitcoin are there because it's a steel plate with seed, seed phrase on it. 1154 00:58:32,902 --> 00:58:33,322 So like, right. 1155 00:58:33,322 --> 00:58:33,482 Yeah. 1156 00:58:33,622 --> 00:58:34,702 It's not hidden at all. 1157 00:58:34,702 --> 00:58:36,682 It's like, it's like a gold bar, 1158 00:58:37,192 --> 00:58:37,552 right? 1159 00:58:37,557 --> 00:58:37,562 Yeah. 1160 00:58:37,642 --> 00:58:38,162 I mean, it is. 1161 00:58:38,162 --> 00:58:38,322 Yeah. 1162 00:58:39,022 --> 00:58:40,702 So, uh, so how do you see that? 1163 00:58:40,852 --> 00:58:47,422 Do you see like, uh, Other developments in the, like Bitcoin storage space? 1164 00:58:47,422 --> 00:58:50,302 Like are people using their imaginations enough? 1165 00:58:51,352 --> 00:58:55,252 Yeah, I mean, I think it's, um, I mean, certainly people have tried lots of 1166 00:58:55,257 --> 00:58:59,422 different strategies including, you know, having a password and memorizing 1167 00:58:59,422 --> 00:59:03,202 it or splitting things up and storing 'em in different locations or trying 1168 00:59:03,202 --> 00:59:04,792 to hide things very effectively. 1169 00:59:05,392 --> 00:59:11,242 Um, and I guess there's always a trade off between, you know, hiding it too well. 1170 00:59:11,452 --> 00:59:11,542 Mm-hmm. 1171 00:59:11,782 --> 00:59:13,672 So that, you know, if you have an accident, then people 1172 00:59:13,677 --> 00:59:15,142 can't find them or something. 1173 00:59:15,202 --> 00:59:15,292 Mm-hmm. 1174 00:59:15,562 --> 00:59:18,922 And that's probably happened a couple times and like in the last few years 1175 00:59:18,922 --> 00:59:22,132 to people who unfortunately had an accident and people couldn't figure out 1176 00:59:22,132 --> 00:59:26,182 like the backup strategy or, I think the other thing that could happen is 1177 00:59:26,182 --> 00:59:28,312 people can get like very creative. 1178 00:59:29,272 --> 00:59:33,802 And make some kind of complicated trail to solve for themselves and then forget 1179 00:59:34,432 --> 00:59:36,112 parts of it 'cause they didn't try it. 1180 00:59:36,142 --> 00:59:40,012 So I think it turns out that people's memory is a little bit 1181 00:59:40,012 --> 00:59:43,552 fallible if they don't frequently exercise it for a few years. 1182 00:59:44,062 --> 00:59:45,562 So I think that's, that's a trade off. 1183 00:59:45,562 --> 00:59:45,802 Right? 1184 00:59:45,952 --> 00:59:49,072 And, and I think for companies like somebody doing like a custodial 1185 00:59:49,072 --> 00:59:52,822 service, it's a little bit more complicated because they have to, 1186 00:59:53,872 --> 00:59:56,242 uh, manage the change of stuff. 1187 00:59:56,332 --> 00:59:59,812 So somebody leaves for another job and you need the security to remain. 1188 01:00:00,142 --> 01:00:03,232 So you can't, you can't like place, you have to make it somehow physical 1189 01:00:03,237 --> 01:00:07,552 so that, you know, not control that you can like, have somebody leave as 1190 01:00:07,552 --> 01:00:11,152 a documented standard and that person doesn't take part of the secret with 1191 01:00:11,152 --> 01:00:12,322 them sort of thing or something. 1192 01:00:12,322 --> 01:00:12,592 Right? 1193 01:00:12,892 --> 01:00:13,132 Mm-hmm. 1194 01:00:16,612 --> 01:00:17,332 Well, I think the only 1195 01:00:17,332 --> 01:00:21,652 other thing I've kind of got on my mind is, is with some talks about threats 1196 01:00:21,657 --> 01:00:24,142 and, and, uh, things that could go wrong. 1197 01:00:24,712 --> 01:00:26,272 Uh, what are you seeing. 1198 01:00:26,737 --> 01:00:29,647 Positively about how Bitcoin is doing in the world. 1199 01:00:29,647 --> 01:00:34,987 Is it, is it, is it doing the thing that you thought when you first heard about it? 1200 01:00:35,047 --> 01:00:35,827 Does that make sense? 1201 01:00:35,887 --> 01:00:36,307 Yeah. 1202 01:00:36,307 --> 01:00:40,957 Has your, how much has your view changed over the years of what this thing 1203 01:00:40,957 --> 01:00:41,347 is? 1204 01:00:41,827 --> 01:00:46,147 I mean, um, my view is, is is basically the same sense, like, I don't know, 1995 1205 01:00:46,147 --> 01:00:47,887 or something with electronic cash, right? 1206 01:00:47,887 --> 01:00:52,747 So, you know, David Chaum had developed this kind of cryptography for electronic 1207 01:00:52,752 --> 01:00:55,297 cash in 1985 in his PhD thesis. 1208 01:00:55,867 --> 01:00:58,897 And he's still around in the crypto space, but a older guy now, right. 1209 01:00:59,077 --> 01:01:00,397 He's a very clever cryptographer. 1210 01:01:00,397 --> 01:01:04,327 But I think in the mid nineties, there was a startup in the Netherlands that 1211 01:01:04,327 --> 01:01:09,247 David Schumer started to, you know, commercialize and make available 1212 01:01:09,307 --> 01:01:11,197 electronic cash using this technology. 1213 01:01:11,197 --> 01:01:14,617 And effectively in today's terminology, you would call it like a stable coin. 1214 01:01:14,707 --> 01:01:18,667 'cause that was like, you know, not dollar denominated, but euro or something, right? 1215 01:01:18,667 --> 01:01:18,757 Mm-hmm. 1216 01:01:18,897 --> 01:01:24,817 And, um, But yeah, so I think the thing that like, at least the Cipher punks 1217 01:01:24,817 --> 01:01:30,847 thought was exciting about that kind of technology was the bearer finality of it. 1218 01:01:30,847 --> 01:01:30,937 Mm-hmm. 1219 01:01:31,177 --> 01:01:31,567 Right? 1220 01:01:31,567 --> 01:01:34,417 That it's, you know, it's digital, but it's physical too. 1221 01:01:34,422 --> 01:01:37,537 Like, I, I own it and own it, I own it and nobody can take it off me. 1222 01:01:37,957 --> 01:01:40,627 Nobody can sense to me, nobody can prevent me transacting. 1223 01:01:41,047 --> 01:01:44,707 Uh, maybe nobody can even kind of detect of who paid who 'cause it, 'cause 1224 01:01:44,707 --> 01:01:46,327 that technology was extremely private. 1225 01:01:46,327 --> 01:01:46,567 Right. 1226 01:01:46,567 --> 01:01:50,197 And so to, to those people, that was extremely exciting. 1227 01:01:50,197 --> 01:01:55,507 And then the concept of smart contracts involving bearer finality 1228 01:01:55,507 --> 01:02:01,477 was extra interesting because it meant that a contract was final. 1229 01:02:01,987 --> 01:02:04,927 You know, if, if there's a, if there's a smart contract that says, 1230 01:02:04,927 --> 01:02:06,547 you know, you get paid when this. 1231 01:02:07,087 --> 01:02:11,677 Event happens, or when this task is completed and it's ver like it's machine 1232 01:02:11,677 --> 01:02:17,467 verifiable, then the fact that the payment is ve final means the contract's final. 1233 01:02:17,497 --> 01:02:19,237 So you can't, you know, you can't dispute it. 1234 01:02:19,242 --> 01:02:19,337 Mm-hmm. 1235 01:02:19,422 --> 01:02:27,367 So it's sort of extremely efficient, low cost, sort of, um, centralized reputation 1236 01:02:27,367 --> 01:02:32,017 based commerce on the internet, kind of in a, you know, in a gray market, fully 1237 01:02:32,017 --> 01:02:33,637 permissionless and global and anonymous. 1238 01:02:33,642 --> 01:02:33,967 Right. 1239 01:02:33,967 --> 01:02:37,837 So we thought that was really interesting for, we like the 1240 01:02:37,867 --> 01:02:39,217 people on the cyberpunks list. 1241 01:02:39,247 --> 01:02:39,997 Really interesting. 1242 01:02:39,997 --> 01:02:42,457 And like Bitcoin realized it. 1243 01:02:42,487 --> 01:02:42,847 Right. 1244 01:02:42,847 --> 01:02:45,397 So, you know, here we are and it's, it's working. 1245 01:02:45,427 --> 01:02:47,827 I mean, it's not quite as private as that tech was. 1246 01:02:48,847 --> 01:02:54,217 It's, um, that was, that had a, a side effect of being centralized and mm-hmm. 1247 01:02:54,397 --> 01:02:57,187 Vulnerable to that company shutting down, and then the central database 1248 01:02:57,187 --> 01:02:58,777 was lost and it was all gone. 1249 01:02:58,777 --> 01:02:59,107 Right. 1250 01:02:59,107 --> 01:03:06,187 So, yeah, I mean, I think the reaction to digit cash winding down and 1251 01:03:06,187 --> 01:03:10,537 seeing that fail if you held some of the coins was, wow, that central 1252 01:03:10,537 --> 01:03:11,677 point of failure is really bad. 1253 01:03:11,677 --> 01:03:12,967 It needs to be decentralized. 1254 01:03:12,967 --> 01:03:13,767 Like, how would you do that? 1255 01:03:13,767 --> 01:03:14,167 Mm-hmm. 1256 01:03:14,257 --> 01:03:18,637 And then, you know, there's all the discussions in the, I guess late 1257 01:03:18,642 --> 01:03:22,237 nineties, early two thousands about, you know, how, how could you possibly 1258 01:03:22,237 --> 01:03:24,277 build a decentralized electronic cash? 1259 01:03:24,277 --> 01:03:27,847 And I'm like, there were, there were things that sound like vaguely similar 1260 01:03:27,847 --> 01:03:31,927 to Bitcoin, like about mining and proof of work and smart contracts 1261 01:03:31,927 --> 01:03:35,257 and, you know, bynine in general's problem, all these discussions, but 1262 01:03:35,257 --> 01:03:36,307 nobody figured out how to do it. 1263 01:03:36,427 --> 01:03:37,747 And so Bitcoin. 1264 01:03:39,352 --> 01:03:40,672 Really, uh, made it happen. 1265 01:03:40,672 --> 01:03:41,872 So, yeah, I think it's great. 1266 01:03:41,932 --> 01:03:47,032 Like, you know, and like, I think that it, uh, changes people's viewpoint who 1267 01:03:47,032 --> 01:03:54,622 come in like, you know, the attraction of the kind of pure mathematical elegance of 1268 01:03:54,622 --> 01:03:59,632 having piece of digital property that's yours and can't be taken from you, can't 1269 01:03:59,632 --> 01:04:03,922 be eroded, can't be seized, can't be, you know, frozen, canceled or undone. 1270 01:04:04,672 --> 01:04:06,982 It's like super cool, right? 1271 01:04:07,282 --> 01:04:08,122 People get their head around now. 1272 01:04:08,127 --> 01:04:09,532 Of course we wouldn't be here if it wasn't. 1273 01:04:09,537 --> 01:04:10,192 That's amazing. 1274 01:04:10,192 --> 01:04:10,552 Right? 1275 01:04:10,882 --> 01:04:12,892 And so people are just like, it's quite interesting. 1276 01:04:12,892 --> 01:04:16,282 I went to PNI PS Oh yeah. 1277 01:04:16,672 --> 01:04:21,592 You know, in Prague and, um, They have a coffee shop in 1278 01:04:21,592 --> 01:04:23,782 the, uh, in the grand floor. 1279 01:04:24,022 --> 01:04:24,352 Yeah. 1280 01:04:24,412 --> 01:04:25,702 And you have to buy with Bitcoin. 1281 01:04:25,912 --> 01:04:29,482 And so, you know, we were talking to some people after the event, they 1282 01:04:29,482 --> 01:04:31,012 organized and they were like, yeah. 1283 01:04:31,012 --> 01:04:33,232 Their first interaction with Bitcoin was they came into the 1284 01:04:33,237 --> 01:04:35,632 coffee shop to buy a coffee and they knew nothing about Bitcoin. 1285 01:04:35,632 --> 01:04:39,442 They wanted a coffee rate, but after they learned about it, they got like 1286 01:04:39,442 --> 01:04:40,942 very philosophically interested. 1287 01:04:41,272 --> 01:04:45,412 So it, so basically it doesn't matter what angle you came from it, like whether 1288 01:04:45,412 --> 01:04:49,882 it's a friend or as an investment or it was a, you know, casual payment. 1289 01:04:50,482 --> 01:04:55,222 Like just how it works is super interesting and like, you know, the 1290 01:04:55,227 --> 01:05:00,232 wine virus that keeps everybody super enthusiastic for years and years. 1291 01:05:00,262 --> 01:05:00,652 Yeah. 1292 01:05:00,652 --> 01:05:00,892 Yeah. 1293 01:05:00,892 --> 01:05:01,642 Tell me about it. 1294 01:05:03,772 --> 01:05:03,982 Yeah. 1295 01:05:04,012 --> 01:05:05,452 Uh, yeah. 1296 01:05:05,452 --> 01:05:05,722 So. 1297 01:05:07,102 --> 01:05:07,642 What was that? 1298 01:05:07,642 --> 01:05:09,262 I, I just had something on my tongue. 1299 01:05:09,292 --> 01:05:09,772 Yeah, yeah. 1300 01:05:10,072 --> 01:05:11,182 About ownership. 1301 01:05:11,602 --> 01:05:17,752 I mean, since, since we've established that owning Bitcoin is nothing but keeping 1302 01:05:17,752 --> 01:05:21,532 a secret, how do you prove ownership? 1303 01:05:21,532 --> 01:05:24,532 Like in, in a ethical sense? 1304 01:05:24,532 --> 01:05:28,162 I mean, of course the legal systems are flawed and whatnot, and they can 1305 01:05:28,162 --> 01:05:32,572 prove all, quote unquote, prove all sorts of things that aren't necessarily 1306 01:05:32,572 --> 01:05:34,312 true, but like from a strict. 1307 01:05:36,052 --> 01:05:40,072 You know, information technology perspective, how do you really 1308 01:05:40,072 --> 01:05:42,622 prove that someone owns a Bitcoin? 1309 01:05:42,622 --> 01:05:46,102 Since it's just information in someone's head at the end of the day? 1310 01:05:46,732 --> 01:05:47,962 Is it, is it even possible? 1311 01:05:48,022 --> 01:05:48,382 Well, 1312 01:05:48,382 --> 01:05:54,412 I mean, I suppose the close analog is if, if they're willingly proving they could 1313 01:05:54,412 --> 01:05:56,782 sign a message or spend to themselves. 1314 01:05:56,782 --> 01:05:56,842 Yeah. 1315 01:05:56,842 --> 01:05:58,672 And that would be pretty convincing, right? 1316 01:05:58,972 --> 01:05:59,212 Yeah. 1317 01:05:59,212 --> 01:05:59,542 I can 1318 01:05:59,542 --> 01:06:03,922 think of a case where that would've been, uh, the right thing to do 1319 01:06:03,922 --> 01:06:07,492 to prove you're a certain person, but, but it never happened. 1320 01:06:07,822 --> 01:06:14,212 Uh, but, but still, if they refuse to and, and just use the boating 1321 01:06:14,212 --> 01:06:15,862 accident excuse or whatnot, like 1322 01:06:15,862 --> 01:06:16,402 how, yeah. 1323 01:06:16,462 --> 01:06:18,832 I mean, there's nothing you can do to prove it, right? 1324 01:06:18,832 --> 01:06:26,782 I mean, it, it even happens in some unrelated to Bitcoin court cases where I. 1325 01:06:27,442 --> 01:06:29,362 People have encrypted hard drives. 1326 01:06:29,662 --> 01:06:30,082 Yeah. 1327 01:06:30,172 --> 01:06:35,032 And you know, there's some investigation, uh, their equipment 1328 01:06:35,032 --> 01:06:40,012 is seized and the court demands that they decrypted data and they refuse. 1329 01:06:40,522 --> 01:06:40,792 Yeah. 1330 01:06:40,882 --> 01:06:44,512 And like basically after some kind of prescribed legal limit, they have to 1331 01:06:44,512 --> 01:06:51,262 let 'em go because no decryption, no evidence, presumption of innocence and 1332 01:06:51,262 --> 01:06:55,042 like some kind of prescribed legal limit on holding people for contempt of court. 1333 01:06:55,582 --> 01:06:57,112 If they refuse, you have to let 'em go. 1334 01:06:57,112 --> 01:06:57,412 Right. 1335 01:06:57,412 --> 01:07:00,322 So I think that's, that's kind of a precedent, right? 1336 01:07:00,322 --> 01:07:03,742 If you, if you can't prove it, like what are you gonna do? 1337 01:07:03,742 --> 01:07:04,102 Right? 1338 01:07:04,792 --> 01:07:05,212 Yeah. 1339 01:07:05,362 --> 01:07:10,162 And even like if I, if I do an non-chain transaction to obviously 1340 01:07:10,162 --> 01:07:13,282 buy a cup of coffee and there's a note in it saying, well, you bought a 1341 01:07:13,282 --> 01:07:14,782 cup of coffee and you bought it here. 1342 01:07:14,782 --> 01:07:20,332 And at this point, like still to me, even that is impossible to actually 1343 01:07:20,337 --> 01:07:23,002 prove that, that I made that transaction. 1344 01:07:23,092 --> 01:07:25,432 It could have been anyone else keeping the same secret. 1345 01:07:25,702 --> 01:07:26,062 Right. 1346 01:07:26,062 --> 01:07:26,152 Right. 1347 01:07:26,152 --> 01:07:26,422 Yeah. 1348 01:07:27,292 --> 01:07:27,892 Yeah, it's true. 1349 01:07:27,892 --> 01:07:27,952 Yeah. 1350 01:07:28,882 --> 01:07:29,362 Yeah. 1351 01:07:29,482 --> 01:07:35,212 So, well, I think it's important to keep identity out of the blockchain. 1352 01:07:35,632 --> 01:07:35,872 Yeah. 1353 01:07:35,962 --> 01:07:41,782 And you know, some people got excited about, uh, digital IDs and like having 1354 01:07:43,582 --> 01:07:50,332 kind of KY c certificates on chain and Ethereum even got on the train. 1355 01:07:50,332 --> 01:07:50,962 What was this? 1356 01:07:50,962 --> 01:07:53,392 The, uh, soul bound tokens. 1357 01:07:53,692 --> 01:07:53,782 Mm-hmm. 1358 01:07:54,022 --> 01:07:58,042 Another word for a digital certificate basically make a lot of sense to me. 1359 01:07:58,042 --> 01:08:01,012 But I think you wanna keep that stuff as far away from the blockchain as 1360 01:08:01,012 --> 01:08:05,812 possible because banks particularly, you know, the technologists that come 1361 01:08:05,812 --> 01:08:11,722 from the banking world, they're used to the concept that the, um, you know, 1362 01:08:11,722 --> 01:08:13,312 people could lose their online login. 1363 01:08:13,612 --> 01:08:17,902 And so as long as they have, you know, their passport and utility bill, that 1364 01:08:17,907 --> 01:08:20,332 individual is the owner of the asset. 1365 01:08:20,422 --> 01:08:24,532 Uh, so they, they kind of just gravitate by. 1366 01:08:25,252 --> 01:08:30,652 Instinct and momentum to wanting to like put identity stuff a blockchain and make 1367 01:08:30,652 --> 01:08:32,182 it a condition of the spending, right? 1368 01:08:32,182 --> 01:08:35,422 It's like, well, the guy with this passport or the guy with this fingerprint 1369 01:08:35,422 --> 01:08:37,132 or something, I'm like, no, no. 1370 01:08:37,132 --> 01:08:39,532 Like it should be, it's bearer. 1371 01:08:39,592 --> 01:08:40,702 It's a bearer asset. 1372 01:08:40,702 --> 01:08:45,052 Like it's, it's a bad idea to put identity anywhere near the blockchain. 1373 01:08:45,052 --> 01:08:48,412 And I like, so I don't even like people making decentralized. 1374 01:08:48,412 --> 01:08:51,712 Itd 'cause if they're in a blockchain, then sooner or later somebody's 1375 01:08:51,712 --> 01:08:53,272 gonna use it as a spending condition. 1376 01:08:53,277 --> 01:08:55,762 So like, keep it away from the blockchain if you ask me. 1377 01:08:56,242 --> 01:09:00,352 So in the same vein, like, uh, do you think we'll see cbdc 1378 01:09:00,832 --> 01:09:02,752 playing out, like as a real thing? 1379 01:09:02,752 --> 01:09:06,322 I mean, are are they already, like, what are we living in 1380 01:09:06,322 --> 01:09:07,372 and what are we looking forward 1381 01:09:07,372 --> 01:09:07,492 to? 1382 01:09:07,492 --> 01:09:10,432 I mean, that is, um, dystopian dark stuff, isn't it? 1383 01:09:10,642 --> 01:09:11,392 It seems like the. 1384 01:09:12,922 --> 01:09:18,892 The sort of Europeans and the American, like central bankers are getting FOMO 1385 01:09:18,892 --> 01:09:22,822 for, you know, the dystopian Chinese Yeah. 1386 01:09:22,852 --> 01:09:24,772 Kind of social credit score. 1387 01:09:24,772 --> 01:09:30,322 Freeze your money like, you know, uh, disfavor you financially if you 1388 01:09:30,352 --> 01:09:32,992 don't like conform kind of thinking. 1389 01:09:33,652 --> 01:09:43,462 And you know, I think they kind of want the, um, microeconomic control, right. 1390 01:09:43,462 --> 01:09:47,782 So, you know, they printed so much money and it kinda lost control of inflation. 1391 01:09:47,787 --> 01:09:51,442 And, and you like the levers they have to influence inflation 1392 01:09:51,442 --> 01:09:52,552 are super indirect, right? 1393 01:09:52,557 --> 01:09:52,612 Yeah. 1394 01:09:52,617 --> 01:09:55,342 So they, they put money into the system and it just flows into 1395 01:09:55,342 --> 01:09:56,782 banks that lend less or something. 1396 01:09:56,962 --> 01:09:57,142 Yeah. 1397 01:09:57,202 --> 01:10:00,232 And say, you know, if they could reach into your pocket and say, well you've 1398 01:10:00,232 --> 01:10:03,772 gotta spend this money in a week, or we're gonna take it back, you know, or you're 1399 01:10:03,772 --> 01:10:04,762 only allowed to spend it in this way. 1400 01:10:04,767 --> 01:10:05,512 They would love that. 1401 01:10:05,542 --> 01:10:10,252 'cause it'd be kind of like microeconomic control, but it's like extremely dark, uh. 1402 01:10:10,822 --> 01:10:11,632 Kind of concept. 1403 01:10:11,632 --> 01:10:16,342 So I'm just hopeful that democracies will just like say no. 1404 01:10:17,152 --> 01:10:17,242 Yeah. 1405 01:10:17,242 --> 01:10:19,582 The term programmable money is wrong. 1406 01:10:19,587 --> 01:10:23,242 Like pro programmable money is the same thing as programmable people. 1407 01:10:23,962 --> 01:10:25,192 That's what it is, right? 1408 01:10:25,312 --> 01:10:26,512 Because people use money. 1409 01:10:26,572 --> 01:10:28,102 Like it's just us. 1410 01:10:28,162 --> 01:10:31,522 At the end of the day, it's Bitcoin going to help 1411 01:10:31,522 --> 01:10:32,182 us avoid 1412 01:10:32,182 --> 01:10:32,422 that. 1413 01:10:33,712 --> 01:10:34,102 Yeah. 1414 01:10:34,107 --> 01:10:38,962 Well, I mean, I think there are some countries which have tried to phase out 1415 01:10:38,962 --> 01:10:43,132 cash, like to go cashless or even some European countries that have placed 1416 01:10:43,132 --> 01:10:44,902 legal limits on cash transactions. 1417 01:10:45,022 --> 01:10:45,112 Mm-hmm. 1418 01:10:45,352 --> 01:10:48,142 Or taken like 500 euro notes out of circulation. 1419 01:10:48,262 --> 01:10:50,632 And other countries that are still heavily cashed, like 1420 01:10:50,632 --> 01:10:51,892 Maltra is very heavily cashed. 1421 01:10:51,892 --> 01:10:54,472 Switzerland is very heavy cash, but Switzerland has like a 1422 01:10:54,472 --> 01:10:57,262 thousand frank note, which is worth like double that or something. 1423 01:10:57,742 --> 01:11:01,672 And they use it, you know, like Switzerland has, I think so many 1424 01:11:01,672 --> 01:11:05,182 thousand frank notes that there is like about six or 7,000. 1425 01:11:06,472 --> 01:11:10,162 Frank's worth a thousand frank notes or like six or seven notes per man, 1426 01:11:10,162 --> 01:11:11,392 woman, and child in the whole country. 1427 01:11:11,392 --> 01:11:14,662 So just imagine the amount of like high denomination currency 1428 01:11:14,667 --> 01:11:17,152 they have, uh, floating around nice companies and individuals. 1429 01:11:17,152 --> 01:11:18,952 It's very cash like Outlook. 1430 01:11:19,642 --> 01:11:26,332 Um, but yeah, so if they try to outlaw cash, like by policy and regulations, 1431 01:11:26,332 --> 01:11:28,492 then Bitcoin is a natural outlet, right? 1432 01:11:28,492 --> 01:11:28,612 Mm-hmm. 1433 01:11:28,852 --> 01:11:31,762 Well, we have global bearer bitcoin, electronic cash. 1434 01:11:31,762 --> 01:11:33,232 So what do we care? 1435 01:11:33,262 --> 01:11:39,202 I mean, we still care that you don't like make, uh, money a dystopian, 1436 01:11:39,207 --> 01:11:43,912 like fear money, a dystopian control point, but we have a, an outlet, 1437 01:11:43,912 --> 01:11:47,602 a safety valve, which is we can use the bearer Bitcoin and there's 1438 01:11:47,902 --> 01:11:49,402 basically nothing they can do about it. 1439 01:11:50,152 --> 01:11:50,392 Yeah. 1440 01:11:50,602 --> 01:11:56,242 Like the, um, banning of cash in, in Sweden or like going cashless was at 1441 01:11:56,247 --> 01:11:59,213 least played a part in why I made the decision to leave and like mm-hmm. 1442 01:11:59,302 --> 01:12:03,142 The, the cash is much, much more common in Spain and then, Yeah. 1443 01:12:03,142 --> 01:12:04,042 In, in, yeah. 1444 01:12:04,042 --> 01:12:04,792 The Mediterranean 1445 01:12:04,792 --> 01:12:05,482 countries in general. 1446 01:12:05,482 --> 01:12:05,632 Yeah. 1447 01:12:05,632 --> 01:12:09,562 I mean, I was always, uh, thinking like even before like Bitcoin 1448 01:12:09,562 --> 01:12:12,022 existed that you should really, I. 1449 01:12:12,262 --> 01:12:17,632 Use cash, even if it's inconvenient on principle, any way you can, 1450 01:12:18,292 --> 01:12:21,952 just so that, you know, governments don't get the idea that, well, 1451 01:12:21,952 --> 01:12:23,782 everybody's using debit cards anyway. 1452 01:12:23,782 --> 01:12:24,922 We could probably phase it out. 1453 01:12:24,922 --> 01:12:25,132 Right? 1454 01:12:25,132 --> 01:12:30,112 So if, you know, if I use cash for like hotel, for taxi, for train, for anything, 1455 01:12:30,202 --> 01:12:35,122 um, for a lot of people do that, it becomes difficult for them to, uh, change. 1456 01:12:35,692 --> 01:12:39,022 Uh, another thing about Sweden that I brought up with all the other 1457 01:12:39,022 --> 01:12:44,302 guests this, uh, this weekend is, is that I, I, uh, talked to Christiana, 1458 01:12:44,302 --> 01:12:47,782 the, the C E O of B T C X, if you're familiar with that exchange. 1459 01:12:47,782 --> 01:12:50,872 It's the oldest Swedish exchange and one of the oldest in the world. 1460 01:12:51,232 --> 01:12:57,832 Uh, so, uh, uh, overall, the, um, over the years they've had over 300,000 customers 1461 01:12:58,642 --> 01:13:00,652 and there's another big exchange as well. 1462 01:13:00,652 --> 01:13:03,742 And of course there's some overlap and, but then there's also like people 1463 01:13:03,742 --> 01:13:08,182 buying from international exchanges and getting their Bitcoin some other way. 1464 01:13:08,632 --> 01:13:15,917 So if you assume that, Uh, half a million Swedes have Bitcoin or 1465 01:13:15,917 --> 01:13:17,417 have access to Bitcoin somehow. 1466 01:13:17,717 --> 01:13:18,527 That's, it's quite a lot. 1467 01:13:18,527 --> 01:13:18,737 Right. 1468 01:13:19,032 --> 01:13:21,077 That's quite, that's 5% of the population. 1469 01:13:21,082 --> 01:13:22,697 It's 10 million people in the country. 1470 01:13:22,702 --> 01:13:22,757 Yeah. 1471 01:13:23,027 --> 01:13:28,217 So, so when I think about that, it's like, okay, so 5% of the population 1472 01:13:28,217 --> 01:13:33,407 have the, uh, ability to pay other people in Bitcoin right now. 1473 01:13:34,007 --> 01:13:39,077 And the entire population has the ability to receive them because, right. 1474 01:13:39,107 --> 01:13:39,437 Yeah. 1475 01:13:39,557 --> 01:13:40,517 Within the minutes. 1476 01:13:40,967 --> 01:13:41,207 Yeah. 1477 01:13:41,207 --> 01:13:47,867 So, uh, to me, the conclusion I draw is like, this economy is already here, 1478 01:13:47,897 --> 01:13:53,677 it's just below the surface, and it's just, If shit hits, hits the fan even 1479 01:13:53,677 --> 01:13:57,877 harder than it has, like, then it's just bound to pop out and just happen. 1480 01:13:57,877 --> 01:13:58,537 Like, yeah. 1481 01:13:58,567 --> 01:13:59,167 How do you see that? 1482 01:13:59,347 --> 01:14:01,987 Is there are, are we close to the boiling points 1483 01:14:01,987 --> 01:14:07,777 or like Yeah, I mean, I was, I was describing it as, um, a bootstrap 1484 01:14:07,777 --> 01:14:14,017 threshold where even like where there's enough people that own Bitcoin, that 1485 01:14:14,047 --> 01:14:20,437 even if all of the sort of k y c official businesses had to stop immediately mm-hmm. 1486 01:14:20,887 --> 01:14:24,997 That it would keep going with a gray market because, you know, it's 1487 01:14:24,997 --> 01:14:27,637 kinda like marijuana or something. 1488 01:14:27,697 --> 01:14:34,897 Now, you know, if, if, if enough people do that you can, you know, 1489 01:14:34,902 --> 01:14:37,627 ask a friend of a friend, like within a social network mm-hmm. 1490 01:14:37,867 --> 01:14:39,397 You can find somebody to trade Bitcoin. 1491 01:14:39,757 --> 01:14:40,027 Right. 1492 01:14:40,027 --> 01:14:40,087 Yeah. 1493 01:14:40,117 --> 01:14:42,127 So, and that's, that's clearly the case now. 1494 01:14:42,127 --> 01:14:42,367 Right. 1495 01:14:42,367 --> 01:14:42,607 You know? 1496 01:14:43,432 --> 01:14:46,252 You know, you are, you are in Bitcoin, but if you are not in Bitcoin, 1497 01:14:46,702 --> 01:14:49,432 you probably know who to ask for, who might know somebody who you 1498 01:14:49,432 --> 01:14:50,842 could trade some Bitcoin for cash. 1499 01:14:50,902 --> 01:14:51,322 Yeah. 1500 01:14:51,502 --> 01:14:53,482 It's the Kevin Bacon number equivalent. 1501 01:14:53,487 --> 01:14:53,722 Like, 1502 01:14:53,932 --> 01:14:56,782 so I think like clearly it's boost wrapped and like potentially 1503 01:14:56,782 --> 01:14:57,982 even internationally, right? 1504 01:14:57,987 --> 01:15:03,502 Because yeah, there are like unofficial international swap markets Yeah. 1505 01:15:03,502 --> 01:15:04,942 For delivering cash rate. 1506 01:15:05,542 --> 01:15:08,602 And that's the experience I have with traveling around to all these conferences 1507 01:15:08,602 --> 01:15:10,102 and meetups and stuff is like that. 1508 01:15:10,222 --> 01:15:11,962 It's, it's still small everywhere. 1509 01:15:12,382 --> 01:15:16,372 Then you have to take into account that not every Bitcoin wants to go to a 1510 01:15:16,372 --> 01:15:18,322 Bitcoin meetup or a Bitcoin conference. 1511 01:15:18,327 --> 01:15:20,722 It's just a small portion of us that do these things. 1512 01:15:20,722 --> 01:15:20,812 Right. 1513 01:15:21,262 --> 01:15:27,052 So, and, but even those things are, they're small, but they're everywhere. 1514 01:15:27,052 --> 01:15:28,072 Literally everywhere. 1515 01:15:28,612 --> 01:15:29,542 So, yeah. 1516 01:15:29,932 --> 01:15:30,742 Insanely bullish. 1517 01:15:31,402 --> 01:15:31,702 Yeah. 1518 01:15:32,902 --> 01:15:38,812 Well, I mean, I think the, the million, uh, U T x like full corner situation is 1519 01:15:38,817 --> 01:15:43,432 like insanely bullish because you're think like, well, could we get to 10 million? 1520 01:15:43,462 --> 01:15:46,042 It's probably not like economically possible. 1521 01:15:46,102 --> 01:15:46,402 No. 1522 01:15:46,432 --> 01:15:47,662 Like, could we get to 2 million? 1523 01:15:47,752 --> 01:15:48,412 I don't know. 1524 01:15:48,412 --> 01:15:50,602 Like the price might get pretty high before that could happen. 1525 01:15:50,602 --> 01:15:50,842 Right? 1526 01:15:50,842 --> 01:15:50,902 Yeah. 1527 01:15:50,932 --> 01:15:55,642 So like, it seems like we're not that much more adoption without 1528 01:15:55,647 --> 01:16:00,292 any like institutional buying or us spot ETFs or anything for just, 1529 01:16:00,742 --> 01:16:03,322 you know, things to get crazy. 1530 01:16:03,322 --> 01:16:03,592 Right. 1531 01:16:03,622 --> 01:16:03,982 Weird. 1532 01:16:03,982 --> 01:16:04,272 Yeah. 1533 01:16:04,277 --> 01:16:08,842 Yeah, because it's not, it's not that you double amount, the doub, the amount 1534 01:16:08,842 --> 01:16:11,362 of whole corners and price doubles. 1535 01:16:11,902 --> 01:16:12,112 Yeah. 1536 01:16:12,112 --> 01:16:12,202 It's 1537 01:16:12,202 --> 01:16:13,162 exponential, right? 1538 01:16:13,162 --> 01:16:13,252 Yeah. 1539 01:16:13,252 --> 01:16:13,912 It's much worse. 1540 01:16:13,912 --> 01:16:14,242 Yeah. 1541 01:16:14,332 --> 01:16:17,947 And, and it's getting worse over time because, The, um, 1542 01:16:17,977 --> 01:16:19,237 by worse, you mean better? 1543 01:16:19,447 --> 01:16:20,007 Yeah, yeah, better. 1544 01:16:20,007 --> 01:16:24,007 Like, like, I mean the, the uh, the liquidity, like the number of coins 1545 01:16:24,007 --> 01:16:27,037 that are available to get bought on exchange are like shrinking and 1546 01:16:27,042 --> 01:16:27,877 shrinking and shrinking, right? 1547 01:16:27,882 --> 01:16:28,087 Yeah. 1548 01:16:28,092 --> 01:16:28,127 Yeah. 1549 01:16:28,132 --> 01:16:32,347 So, you know, that means, you know, 'cause there's some kind of metric people 1550 01:16:32,347 --> 01:16:37,087 try to put like, well, you know, if a hundred million dollars of Bitcoin are 1551 01:16:37,087 --> 01:16:39,787 bought, how much does it put the price up? 1552 01:16:40,237 --> 01:16:44,647 And like, it's gonna put the price up a lot more if there are very few coins Yes. 1553 01:16:44,647 --> 01:16:45,547 Left on exchanges. 1554 01:16:45,547 --> 01:16:45,787 Right. 1555 01:17:46,299 --> 01:17:50,139 I, I think this has been a great talk, great discussion. 1556 01:17:50,139 --> 01:17:54,669 Talked about some, uh, kind of downsides, you know, things that 1557 01:17:54,669 --> 01:17:58,179 are risky going on right now, but also incredibly bullish at the end. 1558 01:17:58,179 --> 01:18:02,679 So, uh, is there anything else on your, your mind in the Bitcoin space these days? 1559 01:18:03,609 --> 01:18:07,029 Um, well, I mean, we're like a blockstream, we're interested 1560 01:18:07,029 --> 01:18:12,354 in like, Anything that, uh, has potential to improve Bitcoin. 1561 01:18:12,354 --> 01:18:15,354 So we're kind of got our fingers in lots of stuff, you know, like layer 1562 01:18:15,354 --> 01:18:22,614 two and manufacturing miners, but also simplicity, which is a kind of, sort of 1563 01:18:22,614 --> 01:18:27,774 long-term ossification technology, if you like it start the kind of technology 1564 01:18:27,779 --> 01:18:32,394 arc started in like before blockstream in like 2012 i r c discussions. 1565 01:18:32,934 --> 01:18:41,514 And so that, that is a sort of low level micro code self extensibility for Bitcoin. 1566 01:18:42,114 --> 01:18:47,604 And the idea is because of the formal semantics and formal proofs 1567 01:18:47,604 --> 01:18:51,774 that it could be a more secure, dependable kind of script than 1568 01:18:51,774 --> 01:18:53,124 the current Bitcoin script even. 1569 01:18:53,424 --> 01:18:53,904 And. 1570 01:18:54,204 --> 01:18:57,564 It's not fable by, you know, I think something like that is like, you know, 1571 01:18:57,564 --> 01:18:59,154 probably five years out at least. 1572 01:18:59,844 --> 01:19:05,994 But it is interesting to consider that there is, you know, a very credible, 1573 01:19:06,504 --> 01:19:11,634 serious engineering effort that could, you know, as a strong contender to get us to 1574 01:19:12,354 --> 01:19:14,244 ossification and, and like mean it, right? 1575 01:19:14,244 --> 01:19:15,204 Like the last soft fork. 1576 01:19:15,204 --> 01:19:19,284 We don't need to do like the kind of soft forks we do today after that. 1577 01:19:19,374 --> 01:19:25,344 Um, that's, that's like to me an extra bit of comfort because I feel that, 1578 01:19:26,154 --> 01:19:31,764 you know, the drip drip of ongoing soft forks is like a little bit of persistent 1579 01:19:31,764 --> 01:19:36,954 risk that mm-hmm would sooner like, you know, find a way to either modularize 1580 01:19:36,954 --> 01:19:42,594 like, so people can do things in like safe, you know, safe contained areas or. 1581 01:19:43,389 --> 01:19:44,679 Finalized bitcoin script. 1582 01:19:44,679 --> 01:19:47,289 So like it does what it does and you don't need to change it anymore. 1583 01:19:47,349 --> 01:19:48,489 And simplicity could do that. 1584 01:19:48,939 --> 01:19:53,229 Is it, is it inevitable to that you, uh, change the incentive structure 1585 01:19:53,229 --> 01:19:55,239 somewhat when introducing any soft 1586 01:19:55,239 --> 01:19:55,659 fork? 1587 01:19:55,719 --> 01:19:58,029 Like Yeah, I think so slightly. 1588 01:19:58,119 --> 01:20:03,279 You know, because I mean, even the fact that it, you know, like the, any previous 1589 01:20:03,279 --> 01:20:05,439 sound enables more efficient lightning. 1590 01:20:05,559 --> 01:20:06,099 Okay. 1591 01:20:06,099 --> 01:20:10,239 So maybe lightning uses less block space per mm-hmm. 1592 01:20:10,839 --> 01:20:13,719 Transaction or change changes, like I said, they, they're all gonna 1593 01:20:13,719 --> 01:20:14,949 change something a little bit. 1594 01:20:14,949 --> 01:20:18,969 Like maybe vaults change to cause storage behavior or maybe probably like 1595 01:20:18,969 --> 01:20:21,259 sell small things of course, but yeah. 1596 01:20:22,299 --> 01:20:22,599 Yeah. 1597 01:20:22,659 --> 01:20:23,319 Always a risk. 1598 01:20:23,859 --> 01:20:28,599 Adam, thank you so much for coming on and, uh, have a good, whatever 1599 01:20:28,604 --> 01:20:29,919 the rest of the conference is. 1600 01:20:30,369 --> 01:20:30,519 Yeah. 1601 01:20:30,519 --> 01:20:30,969 Thank you. 1602 01:20:30,999 --> 01:20:31,659 Thanks for having me on. 1603 01:20:32,636 --> 01:20:34,836 So what did you think of that episode with Adam Back? 1604 01:20:35,386 --> 01:20:36,686 We really enjoyed this one. 1605 01:20:36,746 --> 01:20:40,466 Adam clearly understands everything he's talking about, even if he's not Satoshi. 1606 01:20:41,066 --> 01:20:43,076 Can't blame us for thinking he's a likely candidate. 1607 01:20:43,576 --> 01:20:45,776 Anyway, let us know what you thought about this episode. 1608 01:20:45,796 --> 01:20:48,886 You can send us a boostergram on Fountain, leave us a comment on YouTube, 1609 01:20:48,926 --> 01:20:50,516 or get in touch on Noster or Twitter. 1610 01:20:51,016 --> 01:20:53,166 If you're watching on YouTube, don't forget to like the episode 1611 01:20:53,166 --> 01:20:54,256 and subscribe to the channel. 1612 01:20:54,806 --> 01:20:58,096 Our show's sponsors are Wasabi Wallet, Orange Pill App, The 1613 01:20:58,096 --> 01:21:00,806 Bitcoin Way, Zelox, and BitcoinBook. 1614 01:21:00,826 --> 01:21:01,226 shop. 1615 01:21:01,646 --> 01:21:03,246 Check out their details in the description. 1616 01:21:04,011 --> 01:21:07,981 That's all for now, see you next time, and thanks for listening.