Chat_127 - The Hijacking Bitcoin Debate [Liberty Lockdown]

[00:00:00] Speaker A: Satoshi designed something called SPV Simplified Payment Verification. What is that? That is a system where you do not need to run your own node and you can verify that your own transactions are valid. Okay, Satoshi, that this is in the white paper. I don't know why you're shaking your head. This is literally in the white paper and this is why this was. [00:00:22] Speaker B: You're wrong about what it does. [00:00:26] Speaker A: How am I wrong? [00:00:26] Speaker B: It does not prove. Does not prove that you're following a network where the rules are consistent. They do not. All they prove is that your. [00:00:33] Speaker A: All they push is that your address. [00:00:34] Speaker B: Is in a block. [00:00:35] Speaker A: All they prove is that your address. [00:00:37] Speaker B: Is in a block and that your hash is valid. That's it. Somebody could have printed that billion dollars worth of coins back in 2010 and your SPB will have no idea. [00:00:45] Speaker A: Okay, so. So will that. [00:00:47] Speaker B: I'll. I'll ask that question. If, if the, if the network went off and there was a billion coins created in that bug and you were using that, would your wallet node. Would your wallet know what is up? Guys, welcome back to Bitcoin. Audible I am Guy Swan, the guy who has read more about Bitcoin than anybody else. You know, we have got a chat episode. I'm bringing this back. This is. I was on Liberty Lockdown with Steve Patterson who wrote the Hijacking Bitcoin book. I tried to do my best to explain the. The no fork argument and why it was specifically that the small blocker side won and what the big blocker side was constantly ignoring or failing to understand about Bitcoin. We did not intend to get into it. The show was supposed to be about Roger Ver and a bunch of stuff around the libertarian and the situation with Trump and all of that. And it just ended up being a block size war recap. But I had a number of people who said they really enjoyed it. So I figured it would be good to share it with you guys in case you had missed it. Do not forget to pick up your jade. Plus I got a 10% off discount code. I had a number of people under my unboxing say oh crap, I just bought this. Didn't realize you had a discount code. Guy G U y gets you 10% off your jade. Plus this is a fantastic new hardware wallet. This is their updated version of the Jade and it is a solid little guy. Then also download the BitKit wallet BitKit. It is a non custodial on chain and lightning wallet and we are going to be giving away 50,000 sats. Keep an eye out for a post on Twitter. I want to make sure the listeners actually know about this so it's not some rando on Twitter that wins it. So a shout out to blockstream and synonym for the really cool things they are building in the space and then also for reaching out and supporting the show. It means a lot and I've been a big fan of both of them for a long time. And with that, let's get in to today's episode. This is myself and Steve Patterson on the Liberty Lockdown podcast with Clint, all about the war for bitcoin. [00:03:23] Speaker A: Why don't you break this down simply. [00:03:25] Speaker B: For people like me that don't fully understand it? Okay. You were if you went out the yield curve on bonds or if you. [00:03:38] Speaker A: Went in, sure too is constantly growing. [00:03:50] Speaker C: It's happening as all of these new companies new. [00:03:54] Speaker A: So let's just start at the beginning, if you don't mind explaining what is it. [00:03:58] Speaker C: Sure, yeah. That's how I feel after this. This brutal debate today I have on Steve Patterson, the author of Hijacking Bitcoin, along with Roger versus along with Guy Swan. Now I am breathing like that, not out of exasperation because I enjoyed it tremendously, but rather I. It's frustrating that two people, or three people in this instance that are so similarly aligned can have such contentious, heated arguments. But at the end of it, I feel like there's a bit of a Kumbaya. A little bit. A little bit. You guys are going to love this one. This is really, really interesting. Entertaining. Uh, I. I learned a lot as even though I know a decent amount about this stuff, I am definitely the layman in the group and I'm sure many of you feel similarly to me. This is not going to be a rudimentary Bitcoin 101 debate. Okay. Or explanation. You're not going to have to sigh like Michael Saylor. This is going to be interesting as fuck. Even the stuff you don't understand, some of which I didn't understand, you will find it interesting and entertaining because they are so passionate and they are going at each other. Man, I did not expect this to be such a long debate. I didn't even want it to be a debate. But when you have a big block and small blocker on, even if you're not talking about block size, it's inevitable. That's the direction things are going to go. At the tail end of this, we get into Michael Saylor, the microstrategy strategy and whether or not it's viable long term. I think that it's, it's, it has the potential. I'll save the conclusion for the end, but I, I, I will say this. It has the potential to make him the richest man in human history or it's going to, you know, blow up and damage a whole lot of people. And I think that it's very important because for those that don't know what he's doing is, in my opinion, totally revolutionary. He's essentially serving as a central bank, but just for bitcoin, it's amazing. I, I, I'm very intrigued by it. We will explain a bit about it later on so you'll get a handle on what he's doing and whether or not it's something that you want to look into further. I would encourage everybody to look into it further. Certainly none of this is financial advice, but the world, it is a changing, this is a great conversation between two very intelligent, very passionate people. I think you're going to enjoy it a lot. Let's do it. Fuck it. Go. [00:06:23] Speaker A: Well, Keith, like, once I understood bitcoin, I would go to bed with anxiety at night, feeling short because I worried. [00:06:32] Speaker B: That somebody else would figure out what. [00:06:35] Speaker A: I'd figured out and they would buy it all and I wouldn't be able to buy anymore. [00:06:39] Speaker B: And so once you get something and you look out decade or decades, the only issue is how do I buy more of it? [00:06:47] Speaker A: Yeah. [00:06:48] Speaker C: What's going on, fellas? We have big breaking news in the bitcoin world. Aside from the fact that it hit six figures in fiat terms, Roger Ver went on Tucker Carlson just a couple days ago now and, and basically pleaded his case to the world. I thought it was fantastic that, that he had that opportunity to, to get that message out there to such an enormous audience. Thank God for that. Hopefully he can be added to the list of people to be pardoned, including Ross Ulbricht. But I am joined today by Steve Patterson and Guy Swan. Guy Swan, who's been on the show a trillion times. And Steve, Steve, who's a. But thank you both for joining me. [00:07:26] Speaker A: Thanks for having me. [00:07:27] Speaker B: Yeah, man. Good to be here. [00:07:28] Speaker C: Yeah. So Steve, you wrote a book with, with Roger. Go ahead and tell us about that briefly, if you don't mind. [00:07:35] Speaker A: Sure. So book's called Hijacking Bitcoin. I co wrote it and Roger is the author and unfortunately, less than a month after it was released, he was arrested. So we had plans to do, you know, a little tour together and that was, that was cut short. But that's how, you know, you Wrote. [00:07:51] Speaker C: A hell of a book. You could get arrested right after you, I'm telling you. [00:07:55] Speaker A: Yeah, I was, I got a little paranoid when, when it happened, we were actually scheduled to go on a show and I was talking to the guy and he was like, hey, is everything good? Like, Roger's not showing up, He's a little late. And I'm like, if you know Roger, he is punctual. He's like very straight laced guy, super soft spoken, super nice. And I was like, hey, listen, I'm sorry, you know, I'm sure he'll be here, maybe with a time zone error. So anyway, like an hour goes by and we do this impromptu fun podcast discussion. And then I didn't hear from him. Disappeared. I get a message from somebody in his team at 11pm saying, hey, are you free? I'm like, yeah, is everything okay? And he go, and the person says, you know, Roger has been arrested. Like, it appears like the U.S. government is going after him. And this was 11pm So I was like, oh geez, am I, am I in trouble? I'm about to get a knock on the door as well. [00:08:48] Speaker B: Yeah, yeah, yeah. [00:08:49] Speaker C: He was, he was in Italy, was it? [00:08:51] Speaker A: He was in Spain. He was off the coast of Spain. Yeah, there was a crypto conference for some privacy coins that he was going to speak at. And then that's where they got him in Spain. And apparently they held him in the same jail that they held John McAfee. So people were scared that maybe some funny business is going to happen while he was there. Fortunately, that didn't happen. [00:09:08] Speaker C: Yeah, that is nerve wracking. I mean, just to steel, man, the, the state's case here, they're, they're claiming that he did not pay the proper amount of exit taxes on his crypto holdings. Is that correct? [00:09:21] Speaker A: That's correct. So when he didn't they say like. [00:09:25] Speaker B: $300 million or something bonkers like that? [00:09:28] Speaker A: Yeah, I don't know what the exact number is. I think it's been a while since I read the indictment. I think they're looking initially for like 54 million. But the argument is when Roger renounced his US citizenship because he was harassed by the government many years ago and decided that he was going to renounce. He's like a hardcore libertarian on the spectrum of libertarianism. He is a true believer, hardcore guy and was like, I don't want to live in the States anymore. They're going to be persecuting me. I'm out of here. And so when you renounce, you have to Pay what's called an exit tax, which is essentially you have to take stock of all of your assets and then give the government a cut for permission to renounce your citizenship. In fact, that can be. You literally have to ask permission to renounce. They can deny it, which is kind of a crazy concept. [00:10:15] Speaker B: But you already have to pay anyway. You have to pay like $2,500. [00:10:18] Speaker A: Yeah, you have to pay $2,500. Yeah. And I think it's like if your net assets are more than a million or a couple million, then you have to do this exit tax. And so at the time this was 2014. So if you are around at the time with bitcoin, like the rules, there were essentially no clear rules from the government how you're supposed to handle this for taxes. So anyway, he like hired this top law for law firm to say do it absolutely perfectly. Because I know this is going to be an issue. They've already harassed me in the past, like make sure you make sure we do everything perfectly. And yeah, 10 years later, now he's not even a US citizen. They're saying you didn't file them correctly. And rather than it being like a civil fine or whatever, they're trying to imprison him and the maximum sentence is like 109 years in jail. So it's conceivably possible they could throw him away for life for this, this tax. [00:11:09] Speaker B: Stupid. [00:11:10] Speaker C: But my understanding is that he did pay an exit tax, so. [00:11:13] Speaker A: He did. Yeah. So it just wasn't enough. [00:11:16] Speaker C: Okay, so they're claiming that he had, he had crypto holdings that he didn't report, I guess. [00:11:21] Speaker A: Yeah, yeah. No, so what it was, again, this is from my understanding, I don't have all the best knowledge. My understanding is it was something about with how many bitcoins he owned personally versus his companies. And so in hindsight they're saying you didn't pay enough taxes because it was like the coins that your company held were still held, but the company was a US Company and so you had to pay some amount more. [00:11:50] Speaker C: So basically they're saying he. Yeah, I get it. Well, yeah, they're, they're fucking leeches and I despise them. [00:11:57] Speaker A: And there's other, if people want to look into the case, there's other like crazy aspects of it. Like this law firm that he hired was apparently raided by armed agents trying to get documents related to his case. And he had, he previously had this case about, you know, attorney client privilege that went all the way up to the Supreme Court about What happened? So it. It appears that this is just another example of political persecution. There's a bunch of people like Tucker, you know, who has seen this pattern many times. He says the same thing. The lawyer, Robert Barnes, just came out and a couple weeks ago saying. I think he said it was the craziest tax case he's ever seen. And his thing is, you know, tax cases. [00:12:37] Speaker C: Yeah. [00:12:37] Speaker B: So. [00:12:37] Speaker C: Yeah. Yeah. [00:12:39] Speaker B: I highly suspect that, you know, had nothing really happened since 2014, 2015, is. Nobody would have cared. It's the attention that bitcoin got and the unbelievable success that now they see. Look at the money. Look at the money. We could have had. No doubt he went out of his way, as he should, as he's morally obligated to pay as little as he can. [00:13:04] Speaker A: Yeah. [00:13:04] Speaker B: And, you know, put it with the company or, you know, whatever it is, that the, you know, a different entity owned it. [00:13:09] Speaker C: Right. [00:13:10] Speaker B: But, like, that's how. That's literally how the tax law works. [00:13:12] Speaker A: Yes. [00:13:12] Speaker B: You're like, he has every. Not only obligation, but he has every right to do that. And it just. And they just came after him because, like, now they see. Now they see dollar signs. [00:13:21] Speaker A: Yeah. Well, I'm not exactly sure what the exact motivation was. I do think it's. It's plausibly connected to the book. So the story we tell in hijacking bitcoin, that there's a bunch of evidence that bitcoin, as it was in 2013, is completely different than Bitcoin as it is in 2024. It's a much less threatening invention now than it was then. And we make a pretty careful case for that. Extremely well documented and cited. There's like 280. More than 280 citations in the book. And so if our suspicion is correct that in fact bitcoin has been largely neutered and there's almost nobody out there telling this story, then it might be not a coincidence that literally, like, three weeks after the book. Three or four. Yeah. Three weeks after the book goes live, they arrest him. So I don't know. It's hard to prove these things, but I would suspect there's more trickery afoot than just trying to get, like, $50 million. If you think of the money involved. $50 million is a lot of money to us, but to the US Government, that's like, I don't know, what, do they spend that in a second or something? [00:14:22] Speaker C: Yeah. No, Tax. Tax charges are always about sending a message because they have the printing press, so. And they have unlimited borrowing capacity. So it's really not about actually getting the individual taxes because as you said, they will burn it in the same hour that they receive it. So it's totally irrelevant. But I do think that it's about sending a message. And I think in Roger's case, certainly being an outspoken advocate for, you know, just cryptocurrencies, broadly privacy, hard money, speaking out against the government for a decade plus. Yeah. Like, whether, whether or not it was actually the book and the timing of the book, or if it was just broadly his efforts over his. The second half of his life, either. [00:15:04] Speaker A: Way, it does appear, no doubt he's been on a list for a long time. And it's not just that he's. [00:15:09] Speaker B: Yeah, he was, he was dealing with problems before Bitcoin. [00:15:13] Speaker A: Yeah, yeah, no, they, they, they went after him. They imprisoned him. He was the first person ever to be imprisoned for selling firecrackers online because he didn't have a license for it. And then this is, this is one of these crazy cases where, like, you look in the details and apparently there's, there's like, documented evidence of the prosecutors who were, who were trying to say, like, look, don't throw the guy in jail, just give him a fine, or this is unprecedented. And apparently, like an ATF agent said. You didn't hear what he said about us because he was lambasting the ATF as being like a bunch of murderers for what happened in Waco, you know, in the 90s. [00:15:51] Speaker B: It's personal, man. It's always, it's always about, do you, do you challenge their authority? [00:15:57] Speaker A: Right. [00:15:58] Speaker B: And, and you make them look like they aren't the ones in charge. And. [00:16:03] Speaker A: Yeah, of, of all the people on planet Earth who are powerful and loud about, you know, challenging their authority, Roger Ver is up there in like, the top three. This guy's been around for a long time. He's also been funding dissident projects. Like, there's, there's no doubt in my mind he's been on that list. And they're just gonna, they just seized on the opportunity to try to finally shut him up, throw them away and send a message to anybody else who wants to speak up. [00:16:28] Speaker C: Just for the record, I am not interested in this becoming a block size debate, however, because you guys are on, I think, different sides. [00:16:37] Speaker B: We're on different. [00:16:38] Speaker C: Yeah. [00:16:38] Speaker B: Ends of the aisle for that one. [00:16:40] Speaker C: Yeah. Yeah. And I think that it would just be interesting to not. Not even get into it, because I think my audience who's had, I've had guy on and we've I've hashed this out because I wanted to understand the debate myself. But what do you make of the claim at least, guy, that that Bitcoin is no longer the threat to the system that it would have been in 2013? 14 health insurance is confusing, expensive and frustrating, and claim denials are becoming more and more common. In fact, one in five Obamacare claims were denied last year. That's unacceptable. The headache of health insurance is exactly why crowd health was created. It's not health insurance. It's a better way to pay for health care through crowdfunding. So stop sending money to big insurance companies who profit off of not paying your bills and check out crowd health. I personally cannot stand health insurance or the health insurance process, which is why I'm so glad to be partnered with Crowd Health. For $175 for an individual, or $575 for a family of four or or more, you'll get access to a community of people who are willing to help out in an event of an emergency. You'll get access to telemedicine visits, discounted prescriptions, and so much more without doctors networks getting in the way. And of course, you'll join the crowd, a group of members just like you who want to help pay for each other's unexpected medical events. Let Crowd Health help with your healthcare needs. Get started today for just $99 per month for your first three months by using code LOCKDOWN@Join CrowdHealth.com Crowd health is not insurance. Learn more at JoinCrowdHealth.com that's JoinCrowdHealth.com code LOCKDOWN. [00:18:08] Speaker B: I mean, I obviously don't adhere to that. I think it's a misunderstanding as to what Bitcoin is versus a narrative that we tell ourselves about what it is. Because ultimately what happened during the block size war is the protocol was a certain way and the highest value is that it is able to maintain consensus in spite of disagreement like that the the network itself can actually maintain a set of rules and a consensus of who owns what even like Steve and I, a great example actually is the fact that the large blockers versus the small blockers, which I don't. I don't really see that as the correct dichotomy. I see it as the people who wanted to normalize hard forking as a as a means of changing consensus in the protocol and the people who saw the difficulty and how dangerous it was to do that and why it is that that is actually the highest value of Bitcoin that we disagree we disagree on everything. We disagree on cultural issues, social issues. We disagree on exactly how we should set this up, on what the exact parameters are. We can disagree all day and all night about a billion different things and trying to figure out how to get a set of rules that is actually a baseline, where even in the midst of disagreement, it remains consistent that it can still be defensible. I've, I have always felt that the, the quote, unquote block size war, that the protocols wars in Bitcoin's early history was actually proof that the product, the how the protocol worked was actually more important than narratives we told about it because they. The only thing like fundamentally from a technical level, what was attempted was hard forking the protocol away and the consensus was too hard to change and therefore it didn't change. Okay, the protocol remained the same. [00:20:16] Speaker A: We're definitely going to have to have a bit of an exchange on that. So in response, I'd say consensus is a very, very dangerous word that has a very bad track record pretty much every time it's wielded. So there's a consensus of experts and consensus everywhere. And that consensus is very frequently wrong and almost always the result of social engineering and manipulation. So, for example, in Bitcoin, the closest thing we ever reached to an actual consensus was in like 2015, where there was an agreement from like 90% of the miners and virtually all of the biggest businesses that we were going to raise the block size limit. It was going to scale on chain. That was the closest thing we ever reached to a real consensus. [00:21:02] Speaker B: But you're saying that the social consensus of them trumps what the actual nature of the protocol was. I think you're just saying that it's. [00:21:14] Speaker A: Got to be a back and forth. [00:21:15] Speaker B: Consensus, which is a consensus problem. It's, it's a, it's a definitional problem. [00:21:19] Speaker A: Okay. [00:21:20] Speaker C: It's. [00:21:20] Speaker A: Sorry, it's got to be a back and forth here. Okay, I strongly recommend everybody read Hijacking Bitcoin because there has been deep, deep social engineering for years. [00:21:29] Speaker B: And also read the block size war. [00:21:31] Speaker A: Please do read them both next to each other. I strongly recommend everybody do that because if you only hear one side of the story that's been shouting down the other side for a decade, you're going to be very confused. So I think what you're confusing is consensus with veto power. So what happened in Bitcoin is that there is a social layer, a small group of people who are the software engineers in Bitcoin, it's really a handful of people Especially at its critical time from about 2013 to 2017. And they took upon themselves veto power. They said, if we don't agree, then there is no consensus and therefore upgrades won't happen. So for people who don't know, in Bitcoin, there's a thing called a block size limit, which is essentially like a transaction throughput limit for the network. And the person who put the block size limit in place was Satoshi Nakamoto, its creator, who put it there as a temporary spam prevention measure. And he wrote about it. And the person that he gave the protocol to after he left wrote about this. This was supposed to be a temporary throughput limit for the network. Everybody knew in bitcoin that this limit was supposed to be removed or massively increased in the future because bitcoin could not scale and be peer to peer cash with this throughput limit. So what happened is a small group of software engineers, after Satoshi left, wound up creating for them. They made themselves the experts. And it's literally recorded in the book, this small group saying, look, if we don't agree to increase the transaction throughput limit, there isn't consensus. And therefore this protocol is not going to scale the way that it was designed to scale. And what was the result of that? The result of that is that there was a massive fracturing in Bitcoin because we had this change of. Bitcoin was going to be cash for the world. It was going to be low transaction fees. You can send and receive to anybody anywhere in the world and will cost you less than a penny. And it was forced into this weird new system which is like, you buy it and you hold it and there's like high transaction fees. And maybe sometime in the future there will be new technology that will be developed that you can use it as cash. And so by vetoing the ability of the protocol to upgrade the way that it was designed to upgrade, that forced bitcoin to its current system. So you say there wasn't a consensus. Just let me just finish this thought and we can continue. There was effectively a consensus that we were going to scale the way it was supposed to scale. And then there was a small group that vetoed that and literally turned it into a different system. So you may think that's a strength, that nobody was able to change it, but that is a profound weakness that was exploited that nobody was able to change it even when there was this temporary spam feature that was turned into this thing that will never be upgraded. [00:24:18] Speaker C: Well, I know Guy's chomping at the bit. Despite the fact that I have a lot of questions, I'm going to let Guy go. [00:24:24] Speaker B: So. [00:24:29] Speaker C: We weren't supposed to do this, but I. It was inevitable. [00:24:33] Speaker A: Gotta be done. [00:24:34] Speaker B: It was inevitable. So, Clint, you Do you understand the idea of a broadcast network? [00:24:41] Speaker C: Yes, I think so. [00:24:43] Speaker B: A broadcast network is one where every single message by every single peer is broadcasted to everybody. There is no unicast routing, there is no direct point to point. The entire network must consume and deal with the messages from every single person, every other person. It doesn't scale by nature. It does not. And it is the problem of all networks since forever is the idea of how do you make something that when it is small. It's the same thing with culture, it's the same thing with all social networks. When you have a small cohesive group, it's really easy to have the same values. It's really easy to keep in check if somebody tries to introduce new or change the values. But when that scales to a million people, you completely lose those, those beginning properties and the cohesion of those values and those rules. Now let me ask you another question. Can you have a successful market economy without the. Without having a consistent set of rules about property rights? No, property rights come first. You can't have retail. It doesn't matter. [00:25:54] Speaker C: I have, I haven't seen one that works without, without property rights. [00:25:57] Speaker B: Yeah, it doesn't matter. Anything downstream requires property rights to be defined first. Necessarily. [00:26:06] Speaker C: Yep. [00:26:06] Speaker B: Now when Satoshi first launched it as you know, peer to peer electronic cash, while the system is small, it works perfectly exactly like that. And its defense mechanism is the fact that everybody, it's a triple entry accounting system. Everybody can check the work and therefore for themselves, they can decide which quote unquote bitcoin they follow. They can do the math. So like a good example is that like if you and I, if the three of us are all working in an economy and we're trading and Clint, you're the only one keeping control of the ledger. Well, if you add some new points to it to your account and Steve and I aren't actually doing the work to check it, well then we're just going to listen to you and we're just going to. Suddenly you're going to be able to buy all of our stuff. Like that's the nature of inflation. The idea of Bitcoin was that we're all going to check it so that when Steve and I see that you added two extra points, we literally reject you from the network. Like this is Fundamentally, this is in the code. Like you disconnect and you strong bias. You do not connect to this node again because this node has. And it's actually how you define a fork. That's the whole reason that forks happen is because one node software disconnects from the other node. [00:27:25] Speaker C: I think this is the important point here is that Steve is saying that a handful vetoed. Is that true? [00:27:33] Speaker B: No, that's not true. That's not true. [00:27:35] Speaker C: Okay, well then I would like, I. [00:27:37] Speaker B: Would like for you, you guys need. [00:27:39] Speaker C: To hash that out because, because I. [00:27:41] Speaker B: Don'T know what's true from the block size war. A good example back from that period is Coinbase was added themselves to this segwit2.x agreement, the new York agreement. And when they said, they said we represent like 40 million users or 40 million accounts. And which I was one of and said that, you know, we're going to get together and on behalf of all of these users and on behalf of our companies or whatever, we, we decide that this was the way it was and people were furious. It ended up, like myself included, there's this huge, these threads of people, like, I am one of your users and I do not agree with this. We have been fighting about this for like three years already. Everybody was so exhausted and annoyed with this whole thing. There were like 200 different proposals. I remember because I started out as a like, obvious. The most naive assumption as to how you could make bitcoin include more people is to just make it bigger. I guess the most obvious, like if you don't think about it just, of course we would just make it bigger, except that you immediately start introducing two huge risks is that if you, you just normalize the change in consensus protocol and the change in the rules themselves as a way to fix a problem, well, then you undermine the fact that the reason Bitcoin is powerful is, is it's because it's a set of rules that people cannot change. It's a set of rules that stay fundamental and you will never solve electronic cash for the whole world if you cannot rely on the property rights, on the ownership system, the system of rules that actually define that. You have to have a global consensus system that can squeeze through any firewall in the world. They can squeeze through any network that you can possibly get and maintain its integrity. It is the settlement assurances and the integrity of the rules that make it the most valuable network in the world. [00:29:39] Speaker C: Steve, go. [00:29:41] Speaker A: So just a couple of things here. [00:29:43] Speaker C: Round two. [00:29:46] Speaker A: We'Re going to have to shorten the Monologue time between us both. Because what happens is converse with these chains of reasoning. If you make an error down here in the bottom of the chain, when you're going to keep going and you're way, way, way, way, way, way, way, way off base. Okay, so it's got to be a little bit more of a back and forth. I just want to bring up two things. Here's a question for you. So you say that this critical idea of Bitcoin is that the rules never change. Okay. So if I were to find the bitcoin code from 2009 and run it on my computer, would I connect to the bitcoin network since the rules have never changed? [00:30:28] Speaker B: 2009? [00:30:28] Speaker A: No, I don't think what happened? Why not? I thought the rules never changed. [00:30:33] Speaker B: The. The fundamental consensus rules are the same, but messaging standards on the network. [00:30:41] Speaker A: No. What do you mean consensus rules? What does that mean? [00:30:45] Speaker B: The 21 million signatures determine ownership. The what creates transactions like Satoshi's coins are still there. The client itself. The client itself. It's like saying that if I opened up a podcast app from 2005, will it connect and read everything? No, it won't. It won't work. It won't connect to the right networks. But is RSS still the same protocol? Yes, it is the same. [00:31:10] Speaker A: Okay, so. So that's not how. That's not how people use the term consensus. Because. So the, the idea of what consensus is supposed to mean, if you booted. [00:31:20] Speaker B: Up an email client from 1997, would it work plausibly? [00:31:25] Speaker A: So if you don't know the history. If you don't know the history, Bitcoin has already had one hard fork in like 2010. This nasty hard fork with the rules changed. Why? Because there was a bug that was called an inflation bug and somebody printed like 10 billion Bitcoin. So if you don't know that already happened, that's already in Bitcoin's history. That already happened. And the reason that we're not on. [00:31:49] Speaker B: That chain, because it's an existential bug. And it actually was not an alteration of the consensus rules either. [00:31:57] Speaker A: It was actually a reverse. You can't. Sorry, you can't run over me there. All right, so when you say, oh, 21 million, that's the consensus. I'm saying, well, no, hang on. There was the majority chain said, we're going to have 30 some odd billion bitcoins. So what happened was there was a group of people that got together and made some changes. And then a bigger group of people said, yeah, These are the changes we're going to go with. So the rules actually on a technical level, if you want to say what are the consensus rules in Bitcoin software? What that actually is supposed to mean is the set of parameters that your system, your nodes, if you like, are following, that if you change those parameters, you're on a different network. So for example, if you're running Bitcoin software and the user interface is blue, that's not something that's going to fork you off the network because you could have a white interface or a blue interface, but if you make an invalid transaction that will fork you off the network. Technically speaking, the consensus rules are different in 2020 than they were in 2010. That's just one point that's very important to understand. Second, this is a very critical problem here. You say we're all going to check that the rules are the same and that like the transactions are valid for everybody on the network. Right. Can you, can you take a second to restate what you mean by that when you say we're all going to, we're participating in the system and we're all going to check. What are we all going to check? [00:33:21] Speaker B: It's a triple entry accounting system. It's the idea that there is a public ledger. This was the same thing that E Gold and or not E Gold Bitgold from Szabo. It was what Hal Finney talked about in the Ecash system is how do we create a server where everybody can actually enforce and understand and see what's happening. How can you attest to exactly what's being run on the server and how can you check? Because these were the ideas of the Cypherpunks is like, okay, well how do we reinstitute trust in the system? Well, let's try to figure out how to make it so that the user can know what is happening in the system. Okay, hold on. I need to be, I need to explain the analogy and the reason and why. This is a 20 year history that led us to Bitcoin. [00:34:04] Speaker C: First, if you own gold, you've probably been happy to see prices hitting new all time highs this year. But your gold can do more than just sit there waiting for the price to go up. It can generate passive income for you. With monetary metals, you can earn up to 5% interest on your gold and silver paid in more ounces of metal. And accredited investors can achieve double digit returns in their bond offerings. All interest payments are made in ounces of gold and silver stored in your account free of charge. Whether Your metal is gathering dust at home or costing you annual storage fees. It's time to stop paying to own gold and start getting paid to own it and put it to work with monetary metals. Check out monetary-metals.com lockdown. Again, that's monetary-metals.com lockdown. To learn more about how you can start growing your wealth in ounces today. [00:34:50] Speaker B: Because it would be as if. Imagine you could run a piece of software that was like a partner software, the Federal Reserve and you could say in your own computer that the Federal Reserve isn't able to create trillion. A trillion dollars out of thin air. And then when the Federal Reserve created a trillion dollars out of thin air, you disconnected from them because they violated the rules. And then everybody else could continue running the Federal Reserve software and keep using the Federal Reserve software without the Federal Reserve because they started cheating. That is how. That is how the Bitcoin system works. That's why it was designed that way. [00:35:22] Speaker C: It seems like that's you're saying that's what happened in 2010. It seems as if Steve is saying that's not what happened. Can you guys try and reconcile those. [00:35:31] Speaker B: Two positions in 2010? There the only, the only first, the only reason justification in which there is obvious reason to do a hard fork. It would be a existential bug. Quantum computing broke the signature. We got to change the signature or broke shot256 or an inflation bug. Inflation bug is clearly existential. Also, Bitcoin was like a hundred people back then. You could just email everybody and be like please upgrade. And the fork that occurred back then was actually a rollback to make sure that the bug was fixed. And then they remind to catch back up so that it was the most proof of work chain. So that did not actually break the rules. It fixed the bug and then they rolled back like 13 hours worth of blocks in order to maintain the network state as it was without the bug. Okay, not actually a hard fork in the way that he is suggesting like bcache. [00:36:33] Speaker A: No, it's definitely a hard fork in. [00:36:36] Speaker B: That those other networks are. [00:36:38] Speaker A: Sorry, sorry. [00:36:39] Speaker B: But regardless, an existential bug is a perfectly acceptable reason for 100 people. [00:36:44] Speaker A: WHO defines what an existential bug is? What is existential? [00:36:48] Speaker B: When it destroys the entire value and the system of rules for the network. [00:36:52] Speaker A: Okay, so, so this is going to end up being a social personal judgment. Because if I'm going to say here's a network that has a maximum of seven transactions per second, say, well, that's. There's an existential flaw there because that Actually destroys the whole point of using it as cache. It's fine if you disagree with that, but the point is this is a social thing. [00:37:11] Speaker B: You will never have an. You will never have a. A retail cash system for the world, okay, that is both decentralized and is a broadcast network where the messages are. [00:37:21] Speaker A: Very confused about how Bitcoin was originally designed. Okay? I have to say, you think that. [00:37:27] Speaker B: Your subjective idea of how we should use it should determine how the code is. [00:37:31] Speaker A: No, no, no, no, no, no. What I'm saying is you are fundamentally confused about the basics of the Bitcoin network. [00:37:38] Speaker B: Okay? [00:37:39] Speaker A: What you have articulated is explicitly what Satoshi did not design. And he wrote about and explained why he didn't design it that way. Okay? Okay. The idea of the small block people is that everybody has to run their own node to verify all transactions on the network. You're not running your own node. You can't verify all the transactions on the network. And that's a problem. Okay? You're not supposed to run your own node, every individual, because that system that you have described doesn't scale. For obvious reasons, Satoshi wasn't so foolish to try to make Bitcoin into that system. What he said and is quoted at length in the book and could not be misinterpreted is that the system is not supposed to be like where a email user has to run their own email server in order to send an email. There's this technology, people, maybe they haven't heard of it. [00:38:35] Speaker B: It's called you can rely on trust and have a likeline. [00:38:37] Speaker A: Please don't interrupt me. No, you're wrong about that. Okay? Satoshi designed something called spv, Simplified payment verification. What is that? That is a system where you do not need to run your own node and you can verify that your own transactions are valid. It. Okay, Satoshi, that this is in the white paper. I don't know why you're shaking your head. This is literally in the white paper and this is why this was. [00:39:03] Speaker B: You're wrong about what it does. [00:39:07] Speaker A: How am I wrong? [00:39:08] Speaker B: He does not prove. Does not prove that you're following a network where the rules are consistent. They do not. All they prove is that you're. All they push is that your address is in a block. All they prove that your address is in a block and that your hash is valid. That's it. Somebody could have printed that billion dollars worth of coins back in 2010 and your SPV will have no idea. [00:39:26] Speaker A: Okay? So. So will that. [00:39:28] Speaker B: I'll ask that question if if the. If the network went off and there was a billion coins created in that bug and you were using network, would your wallet node. Would your wallet know with spv? [00:39:38] Speaker A: What do you mean if the network went off? If the. [00:39:41] Speaker B: If there was a bug exploited and there were suddenly 21, quadrillion Bitcoin in existence, would your SPV wallet know? [00:39:49] Speaker A: My SPV wallet would sync up to the longest chain. And if there's a one like that. [00:39:55] Speaker B: 21 quadrillion coins, and if there's a. [00:39:58] Speaker A: Bug like that, the same thing would happen in 2024. Please stop interrupting me. This is crazy. Okay? I. I really can't. I really can't have this conversation because what happens is it's. It quickly devolves into shrieking. Okay, I'm telling you, you are confused about the basics. Let me just give one monologue here, okay? Part of my motivation for writing hijacking bitcoin is so that I wouldn't have to have these conversations anymore. I wrote this book Fair Exaggeration, because the quality of ideas is so poor, it is infuriating to keep having these conversations with people who think that everybody has to run their own node. They claim that lightning is going to solve the problem and it doesn't and it's a failure. And even the people who are developing lightning are acknowledging that it's a failure. So part of, literally, truly part of the reason is I could say, listen, if you actually want to hear the words of Satoshi Nakamoto and Gavin Andreessen, who was the lead developer after Satoshi left, and Mike Hearn, who was his right hand man, talk about the system as it was designed. They run the numbers. The thing can scale. We see that empirically hard forks aren't that big a deal. We say that empirically Ethereum has hard forks all the time. Nobody says anymore that this is a problem. [00:41:22] Speaker B: Ethereum is trash. They're proof of stake. [00:41:25] Speaker A: As I said, this frequently devolves into shrieking. And this is not a very. Come on. [00:41:29] Speaker C: That was not shrieking. [00:41:31] Speaker A: Let's just say Ethereum is trash. [00:41:33] Speaker B: Yes, trash. [00:41:34] Speaker C: I mean, okay, shrieking. I guess I usually say that's a high pitched. [00:41:39] Speaker A: Just okay, that's like laser eyes. Everything that isn't us is wrong. Buy our coin. If it's not shrieking, it's incredibly foolish and arrogant. [00:41:49] Speaker B: Did bitcoin cash solve the problem? [00:41:52] Speaker A: What problem? [00:41:53] Speaker B: Scaling, decentralized, trustless money, peer to peer. [00:41:57] Speaker A: For the whole world. For people that don't know bitcoin cash is an interesting altcoin. Because its history goes all the way back to the beginning of bitcoin in terms of its blockchain history of transactions going all the way back to the genesis block. And in terms of the network design they are trying to build the system that Satoshi envisioned where you have scaling with big blocks, which it actually isn't a technical problem. And we run the numbers in chapter seven. It's like the BTC people are orders of magnitude confused about the relative cost involved and they don't understand that regular users aren't supposed to run their own name, which there are multiple quotes of. Satoshi. So in terms of does, does the. Do the fundamentals of bitcoin cash have the ability to scale to mass adoption? I think they do, yes. They don't have as much retail adoption right now. They've been, there's been a smear campaign that bitcoin cashers are the anti vaxxers of crypto. Where you go, oh, surely you're not one of these crazy people that wants to raise the block size limit. Yeah, yeah, okay, we've seen, I've seen this pattern many, many times. And yeah, am I now? Am I? [00:43:01] Speaker B: And I'm a laser eyed bitcoin maxi. Like, don't get on a high horse about that crap. Like you just told me I was shrieking and you've insulted me. Not go subtly. [00:43:11] Speaker C: Like you both have derogatory opinions of one another. [00:43:14] Speaker B: This is the social environment. This is why the rules are so important. [00:43:19] Speaker A: No, no criticism. Just because you and I have sharp things to say one another doesn't mean that we're saying equally foolish things. You realize that the people who are the anti vaxxers and the people who are the pro vaxxers also have very sharp things. They say one another to one another and one of them is right and one of them is wrong and one of them actually earns the. The sharp derogatory language directed at them. And I'm saying you think yours is. [00:43:45] Speaker B: The one and I think I'm the one. [00:43:46] Speaker A: No, no, no. I'm saying you're factually mistaken. You have a, you have a belief stack of like 15 different beliefs that you bring out and all of them are wrong. And I spent multiple years of my life carefully documenting this, explaining it in the book once and for all so that I wouldn't have to keep having these conversations. Because how many times can you say to somebody, not every vaccine is safe and effective? And they go, every vaccine is safe and effective. It's like, I can't. What I can do is give you 400 citations that tell you vaccines are not all safe and effective. And if you can't handle that, I'm going to write the book and then we're just going to have to let it be. [00:44:22] Speaker C: Okay, well, Jesus Christ. I, I find this, this conversation. I know, I know. [00:44:30] Speaker B: I mean, I want you to know, like, I have no bad blood. Like, I don't care. I tried to bury the hatchet with Roger like a couple times, but then it just turned back into that argument and like, I would love it to be over. Like, I, I want nothing more. [00:44:45] Speaker A: Okay, but imagine. Let, let's, let's role play. Let's imagine I'm the anti vaxxer and you're the pro vaxxer and you're like, you know, I've not. I've spent decades smearing, like, I just think you're like, totally wrong about everything, but I wish we could bear the hatchet. Sorry, you're factually mistaken. And finally, for the first time in like seven years, this story, this perspective is being told for the first time with somebody as prominent as Roger so that people can pick up the book. Read it very carefully. Read the. Please read the, the. What was it called? The block size war. [00:45:17] Speaker B: The war by Jonathan Beer. [00:45:19] Speaker A: 100%. Please read them both side by side. In fact, I'm not even trying to pitch the book. You can get a free copy online. Somebody upload ripped the audiobook and uploaded to YouTube. Listen to it. It's eight hours of your time. And I'm telling you, I'm so confident in these ideas because they're factually true. I don't have to, I don't have to pitch the book. Listen to. Please, everybody do a deep dive on what this gentleman is saying, that you're supposed to run your own node. Do a deep dive on what I'm saying and then we'll let the chips fall where they will. [00:45:47] Speaker C: Well, I think, I think there are. [00:45:49] Speaker B: Let me say something really quick, is be careful about when somebody has everything as an appeal to authority is the entire argument rather than how something actually works at a technical level. It's just like Satoshi, let's talk about. [00:46:01] Speaker A: The tech level said this. No, no, you don't get to say. Look, nobody knows that the system was redesigned. People, a small group came in. Let me finish. A small group just after the fact. The original design doesn't work. Satoshi was wr going to do something new. People don't even realize that this, that the fundamental technical design of bitcoin was Changed because scaling was vetoed. So it's not an appeal to authority. It's a very important fact. And if you think bitcoin was a breakthrough technology, then you probably want to hear what the creator of the technology had to say about it. It's not an appeal to authority. I'm very happy to talk about the technical details. [00:46:46] Speaker B: So you think the cash, though, can. Can scale to the whole world and provide a trust list. Let's go back. I want to hear you say about the spv, because what Satoshi talked about with SPV was something that he suspected would be invented, that we could have a simple payment verification that was able to prove everything necessary to know that you were on the same Bitcoin. But all it is able to do is prove the existence of it in the network that you are connected to. And you can follow the proof of work, but it does not know. The proof of work does not tell the rule, does not define the rules. In fact, the node itself is what requires a proof of work be attached to the block. It is because I, again, the way I have it, I have my wallets connected to my node. You have your wallets running SPV. If a bug happens and there are 21 billion Bitcoin created out of thin air, will your wallet know and will my wallet know? [00:47:51] Speaker A: My wallet will be following the longest chain. And if there is a temporary bug on the network, then it will follow the bugged blockchain until it's corrected, just like what happened in 2010 or 2011, whenever the inflation bug was. [00:48:06] Speaker B: And mine will not. Okay, mine will stay. [00:48:08] Speaker A: Here's an interesting. [00:48:10] Speaker B: Mine will stay on the chain with the accurate rules. [00:48:13] Speaker A: Oh, will it? Will it? Well, let me ask you a couple of questions about that. Okay, so let's say in your chain you've got a bunch of nodes. Let's say all the miners go over to a big blad. Big blocker chain, and you've got a network of a bunch of nodes that haven't switched over. Does that blockchain work? [00:48:29] Speaker B: I just wait. [00:48:31] Speaker A: What do you just wait? What would you wait for? What would you wait for? [00:48:34] Speaker B: I would wait for the shelling point to return back to the bitcoin that I'm using. [00:48:37] Speaker A: The shelling point. What are you talking about? I'm sorry, let me speak about shelling points. [00:48:42] Speaker B: So the network. You asked me a question. [00:48:44] Speaker A: Yeah, please explain. What's a shelling point? [00:48:47] Speaker B: Shelling point is the basis of the rules. That it's like. It's the. It's the. [00:48:54] Speaker A: Please Tell me. [00:48:55] Speaker B: Oh, this is difficult. [00:48:55] Speaker A: Eager to hear. [00:48:56] Speaker B: Easily. [00:48:57] Speaker A: Take as much time as you need. [00:48:58] Speaker B: Steve, please calm down. Is the idea of the consistency or the. The tendency to coalesce around a single set of rules and networks in networks specifically have a very, very powerful shelling point. This is why it's so hard to take out Facebook or Amazon or replace TCPIP as. After they become like a dominant thing is, you know, like the. The quintessential example or whatever is if you're meeting somebody in New York, where do you go? And it's like Grand Central Station at noon or something. Is that like two people from completely different places will just come up with the same answer, are likely to come up with the same answer. [00:49:43] Speaker C: And this is all based on adoption, just mass adoption. [00:49:46] Speaker B: It's just about kind of like a network phenomenon of things kind of coalescing towards like some sort of a standard is. It's basically a claim that standards tend to exist. [00:49:59] Speaker C: Yes. [00:49:59] Speaker B: And it's the exact same reason why we don't have tons of innovation in TCPIP is because the Internet would break if a whole bunch of people were running like it is literally because we were all using the exact same system of communication. Right. [00:50:12] Speaker C: Because otherwise we couldn't communicate with each other. Steve, please. You're shaking your head. Basically every word guy says, you're shaking your head. [00:50:21] Speaker A: I would love to know. That was really bad. So there's a bunch of minefields here. Thank you. Something that happens in bitcoin in particular, which is funny because I harp on the shelling point thing because the same thing happened in BCH when people were abused using this term. They don't understand. There are a few. There are a few minefield. Minefield words. Let's say that people will bring up when they don't know what they're talking about and they try to sound very intelligent. One of them in bitcoin is shelling points. And I say that. And let me say specifically, there was this guy named Amari Sashay who essentially said that, oh, I'm a shelling point. [00:50:54] Speaker C: I've had him on my show. [00:50:55] Speaker A: Great. Okay. This is a great, great individual. He probably doesn't know what schelling point is. Points means. Or if he does, he's just using it because he understands people are intimidated by that term. [00:51:04] Speaker B: Okay, so wasn't he the one that forked off of bitcoin? [00:51:08] Speaker A: He was the one that forked BCH into his own project. [00:51:11] Speaker B: Gotcha. Yeah. [00:51:12] Speaker A: Because he thought he was a shelling point. Okay, so yeah. So the general idea of a schelling point is collaboration in the absence of communication, the whole. Repeat that again. The whole point of the concept of shelling points comes from game theory where they're trying to model how do people collaborate with one another in the absence of communication. So interesting. It's an interesting concept. If you're trying to meet somebody in New York City and you have no way of communicating with them, where do you meet up and when? Great. Interesting thought experiment. The trouble is people use this concept to try to say a bunch of silly things in Bitcoin where you can communicate with one another. There's nothing preventing people from communicating with one another and saying, I'm going to run this software, I'm going to run that software. So schelling point is a big red flag. The question I ask you, which schelling point is a non sequitur, is what happens if the miners are on one chain and then you with your node say, you know, I'm not going to accept that block. I'm going to be on my own network. And you said you're going to wait until a new shelling point emerges. Okay, here's the correct answer. [00:52:26] Speaker B: I'm not waiting for a new shelling point. I'm just betting. I'm betting that the cohesion, that the rules will be more valued by the people that there's. If there's enough people running nodes on my network, then we just wait because miners are running a fork and hoping that like, I mean, I'll mine, I'll still be mining I mind to heat my house. So, so, so eventually get a block and I can just wait as long as I want to wait. I don't care. [00:52:52] Speaker A: Okay, so what you're, what you're saying is, okay, so people don't know what, what's going on. Nodes, as we're using that term in this conversation, do not have the ability to produce blocks. They don't have the ability to move the network forward at all. So this amazing network of nodes that are. They're agreeing to the rules, but they don't have miners behind them literally will not be able to progress one block at a time. And you say you'll wait as long as it takes. [00:53:22] Speaker B: And miners that don't have a node network will have nobody to sell their crap coins to. [00:53:26] Speaker A: That's probably true. So there's an interesting connection. There's a dynamic and neither one control there certainly is. And it's not the case that you are somehow upholding the rules of the Network yourself for me. And if the. No, you're not. Because in the network that you fork off, because it's. If you fork. If you are forked off the network, you don't have much. I didn't say you're forked. My goodness. Okay. If you are forked off the network in this theoretical scenario where you say, I want these rules and the miners and the majority of the network says, we're going with these rules, if you don't have mining power, you won't get one more block on your network work. That's how the system works. Now you can say, aha, I have these coins. But you can't even sell your coins because you can't create a transaction because there aren't miners. So in bitcoin, when you're. When you're trying to analyze the network dynamics, miners turn out to be very, very, very important. So in the circumstance in which I'm using spv, I'm following the longest chain, as is explained in the white paper. If there is a 51% attack of the hash rate, that's a problem in a bitcoin, no problem. So there could be a situation which Satoshi understood, in which using Satoshi's design could mean the network is attacked and there's funny business that happens on the network. Yeah, that's fine. No problem there. Because the miners are the ones that are key here. And in the history of bitcoin, at one point we had more than 90% of the hash rate in bitcoin saying, we're going to upgrade our block size to increase them either twofold or fourfold or Eightfold, but even just twofold, 90% of the people that are actually the ones producing blocks and all of the biggest companies in the space were saying, we're going to move forward. We're kind of sick of the 7 transaction per limit situation. And then a very small group of people with concentrated power said, we're going to veto. That doesn't matter if there's 90% of the network. And that's the story. [00:55:41] Speaker B: I thought you just said the miners had the power. [00:55:43] Speaker A: I do think the miners have the power. And, you know, why didn't they just do it? It's a wonderful question. So I highly recommend people read the full article that is quoted a lot in Hijacking Bitcoin by a guy named Mike Hearn. And he had this. He was puzzling, puzzled about this. Why is it that if the miners here in this situation have the power, that they didn't just put their foot down and say we're not going to listen to the bitcoin core people anymore. We have to upgrade the network the way that Satoshi envisioned. Wonderful question. His conclusion was, and I think there's a lot of truth to this, is that a huge amount of the hash rate, the majority of the hash rate was in China. And he said for there are a handful of technical reasons why this might have played a role. But he just said straightforward. I think that the Chinese psychology is such that if there is a one is being perceived as being disobedient to authority, you're going to put your head down and you're going to run the software that's given to you. And so he was saying just historically speaking, miners, even if they thought they knew their power, that doesn't override the power of culture where they said, we don't want to be the ones who are seen as directing the network. We're going to take our instructions from this small group of people, the bitcoin core developers. But it's a fascinating question. I agree with Mike Hearn. There's maybe some other things going on here, but good question. [00:56:57] Speaker B: Yeah, I think it was more that they were going with the New York agreement because it appeared as if all the companies wanted this and then everybody else, the users, myself included, were not happy with this. [00:57:10] Speaker A: And. [00:57:12] Speaker B: The idea that this was going to be forced and that I was going to be forced to download a fork chain. Here, here's a. Here's a really interesting 10 bit tidbit. This left out of this conversation almost invariably is that there's a pretty easy dynamic to see that it is the network that survived, the network that is currently dominant. Where people really understood the dynamics and the trade offs of bitcoin from a foundational level is because SegWit2x, the one that all of those 90% of miners and all of those companies and corporations got together to support support, never produced a block because it had a off by one bug and it failed on arrival. It was DOA out the gate. And then Bitcoin Cash broke one of the most elegant parts of the consensus rules by making the difficulty adjustment lopsided. Which there were even conversations that I was having with people that we were like this is going to be a disaster. And they were so angry and there was so much like vitriol that they talked openly about the. It was called the Emergency Difficulty Adjustment. The EDA is that because it was lopsided to the low side, is that it was actually going to steal hash Power from Bitcoin. And they were going to kill the Bitcoin network when they forked off. And we would have like, like just kind of like private discussions in our little rooms. And we were like, they don't understand how this works. This is going to work against them and this is going to be a disaster. And it was just kind of like, well, don't tell them. And so they forked off. And for like the first month, the network went crazy. They went between like four hour blocks instead of like the, the consistent ten minutes. And then they'd have like a thousand blocks in like 20 minutes or 30 minutes because it would get lopsided. And then, even then the developers were saying, don't worry, this will even back out. And we were talking about it again. It's like, no, it's going to get worse because they're going to get good at gaming it and they can jump back and forth between networks. And that's exactly what happened. It got progressively worse. They had to hard fork again like a few weeks after they hard forked to fix the network that they created. I think therein lies. And they were also aggressively against segment. Like, we did get bigger blocks. We did get bigger blocks. Doubled, essentially doubled the block size at the time. [00:59:39] Speaker A: Another landmine. [00:59:40] Speaker B: It did it in a backwards compatible way so that the people who were running nodes weren't being kicked off the network and forced to download a new client. Which of the two options, both would have caused a disaster? [00:59:52] Speaker A: There's three. I just hit three points. As I said before, there's like a belief stack that's very thick. Like pretty much all of these beliefs are wrong and misleading and like just, just go through them quickly. You say, oh, as evidence, the failures of segwit, they didn't produce a block. Yeah, the code was abandoned before segwit2.x because the person that was developing said, we're calling it off. Two weeks. Imagine. What do you mean two what? Two weeks? [01:00:20] Speaker B: It was two weeks before, before the launch. [01:00:22] Speaker A: Sorry, just to clarify your position, the developers who were developing SegWit2x abandoned the project two weeks before it was designed to go live. And then the project didn't go live. Oh, the embarrassment. I can't believe such a thing would happen. Sorry, point number two. You're talking about the difficulty adjustment algorithm. It was decentralized. Stop interrupting me. Stop interrupting me. Okay, I'm responding to three of your points. You're talking about Bitcoin Cash and the difficulty adjustment algorithm. Yeah. This was also predicted by the people in Bitcoin Cash. And you know what happened? They fixed it. They said this is going to be unstable for a little bit. It was unstable and they fixed it and yeah, they do. Are you aware that you talk about hard forks? Bitcoin Cash had a development rollout schedule of like every six months there's going to be a hard fork upgrade. You're pretending like this is some grand failure. When there's a hard fork upgrade, virtually every single coin except for Bitcoin goes through regular hard fork upgrades. [01:01:23] Speaker B: Okay, look how well they do in the lack of consistency. [01:01:28] Speaker A: Oh, brilliant. Yeah, great point. Okay. [01:01:30] Speaker B: I mean, it was one more thing. [01:01:32] Speaker C: Contend with the argument though. [01:01:34] Speaker B: I mean, we talked about it a lot, is we called it live by the fork, die by the fork. And this is exactly why they split off into Omri's ABC client. It's exactly why they split off into abc. They just, we just went into a never ending battle of internal fights until all of the forks kind of became irrelevant and most of it just flooded back to. [01:01:54] Speaker A: Okay, and the last thing I want to say on that is you stepped on another landmine. I can't believe people are still making this argument. It is embarrassing to listen to. You said, oh, we did get a block size increase because Segwit is a block size increase. No, you are literally just repeating propaganda. There are exactly zero big blockers who have ever existed in history who want big blocks for their own sake. Hey, I'd like for blocks to be bigger. No, no, it's that the block size is supposed to correspond to the transaction limit on the network. Segwit technically did actually increase the block size limit. That's correct. And did we get a corresponding corresponding doubling of transaction throughput on the network? [01:02:40] Speaker B: No, there's about no. [01:02:42] Speaker A: Right. [01:02:42] Speaker B: So that is embarrassing. [01:02:46] Speaker A: You should not say that. Please. Out of your index of arguments that you make, that is incredibly disingenuous. And the people that made that argument knew that it was disingenuous. It's not about bigger blocks. It's about more transactions. [01:02:58] Speaker B: If you want to save in better money and you want 20,000 sats for free, right now it's about 20 bucks at $100,000 of Bitcoin. Check out. Fold. Every time I swipe this card, I get 0.5%, sometimes one, sometimes even one and a half percent. I can get two, three, five, even 10% on gift cards with major merchants. Between the roundups, the gift cards, the auto stacking, the sats back on every single swipe fold, literally does all of the work for me and it is denominated in bitcoin and I have more savings just by using this card than like 90% of the United States normal consumer. I've got a referral link for you right here. Shout out to fold for sponsoring my work and honestly being the most important service for my being on a bitcoin standard. [01:03:48] Speaker C: Well that was fun. All right, so I just want to get 1, 1 point of clarification since I haven't talked for half an hour. Is it true? [01:03:59] Speaker B: Steve, I literally. I hold no ill will, man. [01:04:03] Speaker C: Don't even try. Don't even try. Don't even try. I just want clarity on one point. Steve is making the claim that a minority but apparently powerfully controlled the non forking. Please, please have a conversation with each other to get to the bottom of whether or not that's true because I don't know. [01:04:28] Speaker B: So the idea of the bitcoin network in general is its defensibility is the ability to prevent the rules from changing out from underneath the network. And it's funny actually going back to the idea of schelling. Point is he's right that it is about in the lack of communication and the idea that the entire world can use a network where they have to check in on the developers and they have to know what's going on and they have to be in the discord channel to ask questions in which client they're going to upgrade to is crazy. The whole idea is how do we like nobody has to keep up with the TCP IP developers. That's why the Internet works is because we all build on top of it. And bitcoin is about the highest value proposition. The unbelievable multi trillion dollar deca trillion dollar problem is how do you have a system of money where the rules are consistent and everybody in the world can know that there is no other person that can rug pull them on what those rules are. [01:05:30] Speaker C: I agree, I agree with that. [01:05:31] Speaker B: A never ending problem of like you have to, you have to email the devs. That's never going to happen for something that scales to the world. It doesn't socially scale because it's inconsistent. [01:05:42] Speaker C: I agree, I agree with the value proposition. My question is specifically was there consensus that was violated? Like was there consensus to fork and then a minority prevented that because that. Am I, am I misunderstanding your claim Steve or is that what you're saying? [01:06:00] Speaker A: My claim is that there was effectively the consensus that there was the largest group of, there was the largest agreement we have ever had in bitcoin. That said we were going to raise the block size limit to at least two megabytes. Yes. And that is extremely well documented in the book with a bunch of numbers. But I'd be interested to hear your thoughts on that as well. [01:06:20] Speaker B: Oh me, sorry. Yeah, so the, the idea of there was consensus was based on the fact that a bunch of big companies in bitcoin and a handful of miners in bitcoin got together. Any core developer, we were going to do this. [01:06:35] Speaker A: Any core developers do that was Peter. [01:06:41] Speaker B: Todd and Luke in that, I can't remember. There was, there was a bunch of disagreement among a bunch of different groups and some people said like, because I think it was Luke who was like commissioned to write the client if I'm not mistaken. But he wasn't who was it? [01:06:58] Speaker A: So I'm just gonna, I'm just trying to search the book because there's a. We talk about consensus a bunch. Let me just give you a quote. In August 2015, the CEO of Blockstream, Adam Back, wrote My suggestion is 2 megabytes now, then 4 megabytes in 2 years and 8 megabytes in 4 years and then reassess. And later in December of that year he added, there is consensus from developers and miners that 2 megabytes is the next, next step. End quote. That's added back. [01:07:26] Speaker C: Okay, so, so I'm not getting a clear answer here. Was their consensus that was basically reverted because there was disagreement. But like a majority of, I don't know, hash power dictated otherwise. Like I don't, I don't understand how this didn't work. [01:07:44] Speaker B: Basically the, the thing that prevented it was more than anything I think was the user activated software work because it essentially forced their hand that what they were trying to do was during all of this disagreement, it was kind of like earmarking a bill is. You know, you're like, okay, you want Segwit. Well, on the back of the bill we're also going to add a 10% tax and nobody wanted the 10% tax or we weren't agreed on the 10% tax. So there, this again, this had been going on for years and years. There was no consensus on exactly what to do on what client to do or what path to take. There were like 50 different options. There was Bitcoin Unlimited, there was Bitcoin Classic, there was Bitcoin Cash, there was segwit2.x. And nobody could come to agreement on exactly what to do. Everybody just kind of had this general idea that like, okay, maybe we should do something and then Somebody would come up with a plan and nobody liked it. And there was always a argument being had. This is exactly why it didn't change. This is exactly why after the fork, Bitcoin cash was like 20 the size as Bitcoin. Okay, but Steve is claiming economic players. [01:09:02] Speaker C: Steve is claiming otherwise. So Steve, why, why are you claiming otherwise? [01:09:06] Speaker A: Okay, so wrote a book on that. That's like all parts I know is explaining. Okay, but let me give you the, the spark notes. Okay, first of all, he's like, like there was a bunch of different options and we couldn't choose. Okay, that's just completely incorrect. Like the history is. [01:09:21] Speaker B: Remember when Bitcoin unlimited nodes shot up to like 5, 000 and you realize you not remember this. [01:09:28] Speaker A: Okay, listen, I don't know. I'm. I, I don't want to embarrass you, but I literally just wrote a book about the history in. [01:09:36] Speaker C: Come on, just, just answer. Just, just deal with actually what he's saying. Was there bitcoin unlimited nodes that. I mean, is he making that up? [01:09:44] Speaker A: I'm sorry, Maybe this will explain. Okay, so what happened was there was the first attempt to do this to increase with a block size limit increase. That was Bitcoin XT. That was in like 2015. And that's when a bunch of the censorship and propaganda started online where the two biggest conversation channels about Bitcoin were mass censored by the same one person that owned them both. That was Bitcoin xt. Okay, that failed. There was a bunch of fud and that failed. And then it was either Bitcoin Unlimited came about as a possible replacement for Bitcoin XT, nobody was working on. And it wasn't, wasn't 50 different options. The big blockers, the people who were trying to scale like Satoshi intended, went to Bitcoin Unlimited. They thought maybe, maybe, maybe that could do it. Nope, that one failed. That didn't work. And so then there was mass industry agreement around segwit2.x. Now for people, Sorry, this is why my reaction is like, what are you talking about? Okay, Bitcoin cash didn't exist before 2017. The reason that Bitcoin cash came into existence is because the largest miner in the world, his name was Jihan Wu, he said, we need a backup plan. If SegWit2x, the scaling proposal that 90% of the network agreed to. If this doesn't work, if somehow the core developers lie again and break their agreements again. Because the core developers had already agreed on multiple occasions to this increase he said, we need a backup option because this isn't working. And believe it or not, segwit2.x failed. And an unbelievable story that we tell and document in the book. And what was going on, like the core developers going to the government and saying, hey, you guys need to investigate the segwit2.x people. Oh, you don't. You don't know that part of history. I'll gladly read you a quote in just a minute. It. So when that segwit2.x failed, the. Then the big blocker said, listen, we have to do our own thing. We have to fork off this backup. We have to use this backup option. And that was Bitcoin Cash. Okay, that's the story of where Bitcoin cash came about. Now, there's a few quotes I want to read you from the book that might blow your mind here. There's one. I wish I could find it where I'm. I think it's Greg Maxwell on the subject of consensus. It's in there. I just can't find it. He says, I'll paraphrase. He says, how do I know there isn't consensus to upgrade to larger blocks? Because Peter Todd and Vladimir von Der Lawn disagree, and therefore there's no consensus. That's a rough paraphrase. There's, like, a handful of people that disagree, and so there's no consistency. It's literally in the book. Okay, I do. You were laughing before. I'll let you speak. I have to find another quote, and then I'll jump in. [01:12:23] Speaker B: Okay, this is where it constantly gets into it, into quotes and, like, who said what? And holy God, the mess of the. The years of this, like, can I get through? And I could be like, quote that Roger Ver said, and I don't want to. I don't want to dig it, Roger. I did not want to do that. [01:12:44] Speaker C: And I don't want to do that either. [01:12:45] Speaker A: I just. [01:12:46] Speaker C: I want to. Let me ask a question. [01:12:47] Speaker B: I am okay with risking that it becomes PayPal 2.0 and everybody else was not okay with that, that they were not okay with risking the. The core fundamentals of the network and throwing it in the trash. And it did. It simply didn't have consensus. It obviously didn't have consensus because it didn't change. He's constantly saying it's a perfect example of mistaking real consensus for the people who are important in the social environment. It's like saying that Twitter has consensus because Elon and. And, you know, like, 10 of the biggest accounts on Twitter all say we're going to do this. And they think that they all agree and then suddenly everybody doesn't upgrade their Twitter client. And all 10 of these people are all by themselves. And there's a huge fight about it online. And then it doesn't happen. They were like, well, we had consensus, we had, we had 80% of the follower batches in all these, you know, 20 million accounts. And that's what it was. It was, and it, and it was why it pissed me off so much is why it pissed so much of us off, because a whole bunch of corporations got together with a bunch of big mining pools and said, we're gonna do this. And I was just like, what the, We've been arguing about this for like five years. We've been arguing about this since the beginning. And you're just gonna fucking decide. No, you're not. And so I spun up a user activated soft fork and I said, go to fuck yourselves. I'm not gonna do it. Go mine your coin. And they bailed two weeks ahead. And there was a DOA bug in their client which just vindicated the fact that you did. They didn't know what they were doing. They were about to, they were about to push software that would have shut down the whole network for the first time since 2010. Like, they were not safe, they were not conservative. They were not thinking about this as a huge high integrity settlement assurance system. This to them was not nuclear grade software. It was just a toy for their retail business. Like, this is the whole argument. And you know what the first response to Satoshi when he released the white paper essentially was? This is a great idea, but it doesn't scale. This has been the whole thing. The whole thing, the whole time. Holy God. [01:15:00] Speaker A: Yeah, so, so there's just so much in there, right? I, I, I guess if nobody has heard these ideas before, please be aware this is because there is a mass social engineering attempt that we document. [01:15:14] Speaker B: It's always a conspiracy. It's always a conspiracy. It's always like, you've manipulated me and you've censored the conversation. It was a Reddit, man. Roger Burr owned Bitcoin.com. roger Burr owned the Bitcoin Twitter handle. You act as if nobody knew the arguments. We've been doing this for years. [01:15:33] Speaker A: Calm down, calm down. Deep breath. Okay, so for people who don't know, because a lot of people came into this, like post 2017, there are by far the two largest discussion platforms in the world for talking about bitcoin. One was Reddit by far the biggest. The other one was a site called bitcointalk.org. those two, I don't know the specific numbers. I would say conservatively, 80% of the conversation was happening on those platforms. Could be higher than them. Okay, turns out, talking about conspiracies, would you believe it, the same individual named Famous, we don't actually know who he is, owned both of those discussion platforms. And in 2015 when there was this Bitcoin XT fork, because big blocker said, okay, people are stalling progress. Maybe people who have bad intentions and maybe a bunch of useful idiots, that's also possible. They're stalling progress. We have to scale this technology. We're going to use Bitcoin xt. He made a big. A big post saying that you can't actually talk about this anymore and if you do, you're going to be banned. And so there in bitcoin's history, the two major discussion platforms owned by the same person were mass censored essentially on the same day. Why is this interesting? Okay, well, obviously it should be important for libertarians. Something else happened later. There's another weird pseudonymous person named Cobra. Bitcoin. Who's that? Well, he is at least a partial owner of Bitcoin.org and this gentleman, Thamos and Cobra had a conversation, again recorded in the book that people will probably be shocked to hear, where they said, I kid you not, paraphrasing. They said, you know, newcomers are being misled about bitcoin by reading the bitcoin white paper. Paper. They're lit. They're reading Satoshi's words and they're being confused. So you know what we need to do? We need to change the white paper. Do you think that's a good idea? That literally. I'm not exaggerating. It's literally quoted in the book. There's a conversation between this famous character and Cobra saying maybe we should rewrite the white paper so that newcomers aren't misled. [01:17:36] Speaker C: Yeah, no, I don't think that's a good idea. [01:17:38] Speaker A: That's not a good idea. [01:17:39] Speaker B: That was stupid. Everybody thought that was stupid. That's why it didn't happen. [01:17:43] Speaker A: Okay. And we know, we know they had a private conversation. [01:17:46] Speaker B: You know, Peter Todd talks about raising the 21 million limit all the time. I like the guy and I disagree with him on a whole bunch of things. He's just a dude who said a thing. [01:17:55] Speaker A: Oh, interesting you bring up Peter Todd. So again, the other story we really do have about the censorship, but, but we should Talk about. [01:18:02] Speaker C: Hold on, hold on. Before you do the Peter Todd thing, because I. I think this is important. Yeah. You know, two platforms. If, like, it's very. It's very reasonable to assume that he didn't agree with the split or the fork. And. And therefore. Therefore he censored the argument that. That went against his preference. That does not demonstrate a conspiracy. That demonstrates a guy who had self interest. [01:18:24] Speaker B: That he's an. And. He was an. [01:18:27] Speaker C: He was. And to be. To be clear, I'm not saying it was. [01:18:31] Speaker B: I spoke out against that. [01:18:32] Speaker C: Yes. I'm not saying it was. Right. [01:18:34] Speaker A: Yeah. Let me. Let me. [01:18:35] Speaker B: Sorry, sorry. [01:18:36] Speaker C: Let me just be very clear. Yeah, I'm not. I'm not saying that it's a good thing. But. But the claim that Roger hinted at and what it seems as if you're hinting at is that essentially the government has taken over bitcoin. So how. How do you connect those dots? [01:18:49] Speaker A: Great, great. Yeah, great question. So you're right. If you're. If you're pointing. [01:18:52] Speaker C: When I'm allowed to talk, I ask really good questions. [01:18:54] Speaker A: That was an excellent point. So, yeah. It is not conclusive proof that there was this mass censorship. 100%. It's a. It's a red flag. And I think a general policy should be, when there is mass censorship at that scale, that talking about coordinated action is like talking about. You know. You know, you got to talk about it as if it's a conspiracy, that it's not conclusive proof. But there's a bunch of other stuff we document in the book of them coordinating effectively propaganda campaigns. And this actually plays into the John Dillon thing. Okay. So what I wish Roger could have gone to in a little bit more detail in the Tucker interview. There's just so much to cover. Cover is this will be fascinating to people who haven't heard it before. One of the bitcoin core developers is a guy named Peter Todd, an interesting character. He has been involved since very early days. And he was. [01:19:49] Speaker B: HBO said he was Satoshi. [01:19:51] Speaker A: Yeah, that was. That was pretty shocking. It's definitely not. I'll bet money on that one. Me too. [01:19:56] Speaker B: We agree. [01:19:57] Speaker A: So, yes. [01:19:58] Speaker B: You're the man, Steve. [01:19:59] Speaker A: All right. Likewise. So he was one of the earliest proponents of the most extreme version of this small blocker concept. And he produced a video in 2013. I want to say it was. That was. It was like the slick animated video. And it said, like, this is why you should never increase the block size limit, because such and such, it'll keep the network decentralized. And at the time, oh yeah, virtually everybody said, this is insane. This is a crazy idea. In fact, as we quote in the book, even Greg Maxwell, of all people, the probably the most influential bitcoin core developer in terms of his Net impact on the direction of the project, said essentially like, yeah, people are going to be confused by this one. Anyways, it was one. It has been called propaganda video. It appears to be a propaganda video. He was also supporting this. This thing called replaced by fee, which has since, since become propaganda, aside from. [01:21:02] Speaker B: The fact that he made a video to explain. [01:21:04] Speaker A: I'll explain exactly, because it connects to John Dillon. Okay, so there's this feature in bitcoin called replace by fee, which is that if you have a transaction that you have broadcast and it's not been confirmed into a block, you can essentially make a different transaction with a higher fee to try to get your transaction changed. Okay, Part of the problem of this replace by fee is that it sort of breaks the security of what's called zero confirmation transaction, which is you want like instant payments. And you don't really get that in bitcoin. You get something that is okay, security with zero comp. But this Peter Todd character said, almost verbatim, we're going to try to break zero confirmations now because it's theoretically insecure. Okay, so Gavin Andreessen, one more name. When Satoshi left the project, he gave the development keys over to this guy named Gavin Andreessen. And Gavin Andreessen is on the record, weird, quoted in the book, saying, I have start to. Oh, sorry, sorry, One more name. Forgive me, forgive me. I know a terrible storytelling. All right, so there's this other. There's this other guy directly connects to Peter Todd and his name is John Dillon. We don't know who John Dillon is. John Dillon, apparently, it was revealed, was paying Peter Todd a little bit of money to one, produce this propaganda video and two, to produce the replaced by fee thing. And he, John Dillon is. Is recorded in the forums also arguing, you need to break this ability for zero comp transactions. Because that's very, that's very important. And Gavin Andreessen, the heir of Satoshi, said, you know, I start to become suspicious that John Dillon is like a very sophisticated troll who has an ulterior motive of breaking bitcoin. That's almost a verbatim quote from Gavin Andreessen. Well, isn't it interesting? John Dillon's account was hacked some years ago and it revealed private conversations that he was having with Peter Todd, the bitcoin core Developer John Dillon claimed to be in private conversation. He claimed to be high up in intelligence. But he said, I had a change of heart. I'm not like the intelligent, like the people that want to throw away Assange and the others. I've had a change of heart and really I'm looking out for Bitcoin. So just to, just to articulate what's the connections of government, here's one. There are others. Peter Todd, bitcoin core developer, was privately getting funded with, funded by and having private conversations with John Dillon, who self identified as somebody in intelligence. And when Gavin Andreessen said, I sort of suspect this guy might be trying to break Bitcoin, that was before the hack had happened. Okay, does that. When I would you say, Clint, that qualifies as a little bit of evidence? [01:23:57] Speaker C: Yes. Yeah, yeah, it does. But I would, I would like obviously additional information as to what. Like, was John Dillon taking marching orders from the federal government to do this? [01:24:09] Speaker A: Oh, yeah. I mean that would be amazing, right? I don't think that we have anything that, that is a small smoking gun like that. Let me just say something we haven't talked about at all. And it's another piece of the puzzle here. So a big part of the bitcoin core developers formed their own company in, I want to say it was 2014, called Blockstream. Okay. Blockstream has leveraged more influence over the network than any single company in Bitcoin's history, by a large margin. Because they were the people that effectively said, we're going to try to scale Bitcoin with multiple layers and we're going to abandon Satoshi's vision. We're going to bring about the new vision. Okay? Now Blockstream is an interesting case because they're a for profit company that is working on nonprofit software. And this is a possible entry point for government leverage or any, any leverage, even corporate leverage over the Bitcoin protocol. Is when you have bitcoin core developers that form their own company, like if you control that company, you can, you can influence the development of Bitcoin. Bitcoin, well, over time, despite not really making a profit, they don't really have a profitable product. They have raised at this point over half a billion dollars from venture capital. Now, it's not just venture capital, it's also the financial establishment. Now this is very suspicious considering that's an enormous amount of money for, for any company. And these are the people that are the closest to working on the protocol. It should also be mentioned, I'm not exaggerating this Is this is going to blow people's mind when they read it in the book. I promise you this is actually factually true. Blockstream company that employed the most important bitcoin core developers. One of their products that they do offer is called the liquid Network. And the Liquid Network is an alternative blockchain on which they make 100% of the transaction fees. Potential conflict of interest where you have a company employing the core developers who are saying, we're not going to scale on chain, we're not going to scale a satoshi design, we're going to scale with layers. And the CEO of that company is Adam Back, who is on record quoted in the book saying, you know how those bitcoin fees are really high. You can be part of the solution by using the liquid network. I'm not exaggerating, I swear. That actually is a fact. So this is another. This is another thing that people aren't talking about. You want to talk about leverage and power and bitcoin, Blockstream is another. A lot of smoke around that company. [01:26:38] Speaker C: I would love to hear from Guy as to. Does any of that that you just heard concern you? Because I imagine some of it does. [01:26:47] Speaker B: Well, John Dillon saying he's high up in intelligence. First off, that would not surprise me, just in general, because that was pretty common in cypherpunks. Like cryptographers are usually hired by the nsa. Like, it's a very, very small community. Adam Back in particular. [01:27:04] Speaker C: It's not a smoking gun, but it is interesting. That's all I'm saying. [01:27:07] Speaker B: For Adam Back had been a cyberpunk for 20 years. Like, he'd been doing this practically his whole life, trying to build. I mean, he's cited in the white paper because he's been trying to make this work the whole time. My question is, what would it look like if Adam Back, who also originally hoped that we could get a block size increase and then did a deep dive onto how you could, quote, unquote, make bitcoin better. And then literally, publicly said, like, I did everything I could, I changed and tweaked everything and I could. Everything just had some other trade off. There was no clear, I can make it better. It was just there was always some other problem that arose. It was like government, I'm going to intervene and fix something. Well, then it just causes another. The problem over here. And he said, and at the end of the day, I could not figure out a way to make it do its job better. And the only thing that we know how to do to actually extend this is to build layers. And what if it just so happens that the cypherpunk who thought that like the only reason it looks suspicious to him is because he doesn't believe him is he doesn't believe that this is the way to actually do something on top of Bitcoin is to build layers is to build federated side chains or lightning network and like smart contracts layers on top of it. Like that was the whole point of Segwit is to give more variety and more capacity to the ability to do something interesting in the signature so that you can have a larger signature and have more complex transactions and more like smart contracts and pre signed networks which will allow you to work off chain which is exactly what we do. Like I'll zap somebody right now. I have a lightning node and it works. It doesn't scale to the whole world, it won't scale to 8 billion people. But it is about a 50x increase in the capacity to have self custodial payments on top of Bitcoin. It's a, it's a great cryptographic network technology and it's actually based on channels which were Satoshi's original idea. He talked about how you could have a one way channel and you could have off chain transactions. His design, he never worked out all of the details. Same as he didn't figure out everything about stuff SPV is that you actually had to publish every single history, the entire history of the channel in order to enforce it. And so it wasn't until 2015 or whatever that they figured out a way to, to tweak the, the contract where you could actually only hold the, the latest one. You only had to publish one transaction to enforce your ownership. So it's basically the idea is like do we build networks on top of this and use this as a consensus system as to who owns what and what the rules are and then we can leverage that. Do we use this as a court system, essentially a global decentralized court system so that we can build billions of networks on top of it and scale this to the whole world or are we just gonna, just gonna make 2020 gigabyte mega giga blocks like Craig Wright said? And a great example of everybody's wrong and everybody says something stupid. This is such a perfect example. He like points out somebody who said one thing or that he wanted to do this, this, but this is literally the problem is nobody agreed on what the hell to do. Everybody had different ideas about it. This is like this whole argument is proof as to why it's so valuable to have a consistent set of rules is because we can't agree on anything else. [01:30:24] Speaker C: I, I actually agree with. [01:30:25] Speaker B: You cannot agree. [01:30:26] Speaker A: Okay, so, so there's like a lot, a lot of claims in there that I have to go over because we were talking about like Peter Todd and stuff and then we went into lightning. Definitely need to talk about lightning. I'd love to talk about lightning. You say I don't believe Adam back. Okay, that's right. I don't believe Adam back. I understand the basics of how this system was designed. I know that it works. I know that it scales. We now have empirical evidence that Satoshi system works fine. So when somebody who is the CEO of Blockstream, which has massive leverage over the bitcoin core protocol, is pitching me an alternative blockstra, an alternative blockchain on which he makes 100 of the transaction fees, I'm going to say that's definitely a conflict of interest. And you mentioned maybe we could have federated side chains. Okay, so what is a federated side chain? This is very important for people to realize. It used to be. It used to be. In fact, I wrote a book, I got it here. I wrote a book in 2014 called what's the Big deal about Bitcoin? And in what's the Big deal about Bitcoin it mentioned sidechains. And this is another great example of how things change over time. So the original idea of what a sidechain is is essentially like an entry point into the blockchain. So you can think like you've got this one super secure ledger, but maybe you want to experiment with different protocol rules and have different networks. Can you connect them all to the one, the one central chain? That was the idea of a sidechain and the hope was that we were going to get side chains. In fact, Blockstream was going to help develop sidechains and it has to be done in order to maintain network security and keep the things, sensors, censorship resistant where you're not. You don't have to go through a trusted party to get to a sidechain to and from a sidechain. That's the whole point. If we're going to do layer two scaling, that's the idea of a sidechain. Well, the great Blockstream did release their sidechain and now there are a bunch of side chains out there which are called federated sidechain. And what a federated side chain is, is one which depends on trusting some hand selected group of people to not mess with you and steal your money. So in Blockstream's case, as we document in the book, there's like 15 hand selected companies which you have to, which you're going to trust are the good guys and they're not going to take your money. And then you can use the sidechain. So the idea of a federated side chain kind of deflates the notion of what a sidechain was supposed to be. The Only other real layer 2 scaling option that has been presented is the Lightning Network. And I strongly recommend, if people want to pick up one, one chapter that will poke holes in this narrative of bitcoin, pick read chapter nine, which is on the Lightning Network. Because this was effectively the technology which prevented, let's say promises of its wonder, prevented bitcoin from scaling. Because we don't have to scale like Satoshi said, to scale, we're going to have the Lightning Network. And it took way longer for us to actually see anything deployed with the Lightning Network. But it's here and it's awful. It is awful. In fact, it's insecure. Just yesterday there was another bug that was discovered that in which people can lose their funds by using the Lightning Network. There's many such bugs. One of the problems, there are so many fundamental theoretical and practical problems with lightning. It is extraordinary. Not least of which you have to run your own node. You have to download a copy of the entire. [01:33:57] Speaker B: Somebody a dollar. [01:33:59] Speaker A: Yeah, so. So what's interesting? [01:34:01] Speaker B: Somebody else a dollar. [01:34:03] Speaker A: Yeah, so please don't interrupt me anymore. So if people. What, what's the wallet that you're using? I'm curious. [01:34:09] Speaker B: My node. [01:34:11] Speaker A: Oh, you're connected to your own node. Great, great example. So lightning is this technology that in order to have, in order to pretend like it's a good idea, the, the hope is that everybody is going to be running their own Bitcoin node. And, and that also means if your node disconnects from the Internet, you're at risk of losing five funds. In fact, if you aren't running your own Bitcoin node and you're not online, you can't even receive payments on Bitcoin on the Lightning Network. That's one problem. Like you literally can't even use it unless you're online. And that's also a security risk. But anyway, let me say just a couple of the, of the problems here with lightning, not least of which you have to make on chain transactions. So people don't know this. [01:34:58] Speaker B: That's true. [01:34:59] Speaker A: And so in order to open a Lightning node, you have to connect to the, you have to hit the bitcoin blockchain. And if bitcoin transaction fees are $50, $100 or as envisioned by the core developers, $1,000, you can't even open a single Lightning. No, a channel at all can't be used with high, high fees. If you, if you have to connect to the bitcoin blockchain when blocks are full. Okay, that is factually correct. That's not even controversial. There are other problems, like for example, your node can run out of liquidity. So the idea is I have $50. You know, I have a payment channel open with you, Clint, and that means we can route payments back and forth. But the problem is if all of my coins go to you temporarily, so the balance is that you have all $50 and I have zero, effectively I can't route payments anymore because I don't have any money in on my side of the channel. So what do you have to do? [01:35:59] Speaker B: You need proof of that problem. [01:36:00] Speaker A: So what do you have to do to solve that problem? You have to make another on chain transaction to top up your bitcoin balance. Okay, so there's, there's a litany of these critical design flaws that are documented in the book. The, the actual real world effect of Lightning is that almost everybody who's a normal person is going to be using custodial wallet wallets. That means they're going to have some company that's running their, the Lightning node for you. And if you don't behave yourself, you can be shut down from them. It's no different from PayPal. Once again they have created this type of new PayPal system that they say is going to make everything decentralized and great, but it's literally just pushing people into fake bitcoin which is just like an account app, PayPal. [01:36:40] Speaker C: I, I agree, I, I do agree with, with some of the critiques of, of Bitcoin in terms of like, yes, it is not being used as peer to peer money very often compared to the custodial use, which is enormous. I don't know the percentage, but it's. [01:36:56] Speaker B: Just how you know that's always been the case. [01:36:58] Speaker C: Yes. [01:36:59] Speaker A: No, always been. [01:36:59] Speaker B: Okay, since the very beginning. Custodians with Coinbase with Mount Gox, like it has always been the case. The only time is when there were a thousand cipher punks. Punks, 10,000 cipher punks. Well then you didn't even have custodians as an option. Right, because they didn't exist yet with adoption. They're always going to go to custodians and that is a problem, that is a huge problem and we want to solve around that. The problem with the idea like that he can complain about the lightning network. I can make, I can make 10 times as many complaints about Bitcoin. I can make 10 times as many complaints about everything. None of this is perfect. Everything has a trade off. The question is, is how do you extend to, how do you extend the trust of the base layer to more payments? Like he talks about like, well, when you're lopsided and you can't send a payment, that's when you go on chain. Well yeah, that might have been 50 transactions ago. So you turn 50 payments into two on chain. Like that's literally how it works. It's not an endless scaling solution. It doesn't work for infinity, but it does probably give us plus a 20 to 100x and you can continue to optimize, you can continue to add new layers. [01:38:10] Speaker C: What are transaction fees these days? [01:38:12] Speaker B: People like a buck. [01:38:15] Speaker A: Why is, why is that though? This is another point that has to be articulated because people, I've seen people mislead others about this. Imagine I'm just saying, you know, what's the traffic like in Los Angeles? Well, if you go out and it's 3am you can say there's no traffic in Los Angeles. If you go out in rush hour, are you going to say this is terrible. It's the same situation with bitcoin. So if the blocks aren't full, generally the fees are, I mean, larger than I would like them to see. You know, they might be like a lot less than a dollar, maybe they go up a little bit more. [01:38:45] Speaker B: But what happens is we'll go between a dollar or two and then it'll spike with you know, NFTs or like temporary traffic. [01:38:53] Speaker A: It'll spike with usage. So once it hits that seven transaction per limit, limit as a hard limit, suddenly the fees can go from literally to $50, $100. If you're a business for example, that has, you're taking a lot of payments for people who have a lot of inputs. So you're going to have a lot of outputs or one output, but a lot of inputs, you might literally be spending a thousand dollars plus on transaction fees. It's just the way because effectively it's like if it's, if the average fee for one input is $50, but you have, have a hundred inputs, that's $5,000. [01:39:25] Speaker C: So can I interject because I, I think we've, we've had a debate between you Two that has been vicious and entertaining. However, I would like to to just ask briefly about Michael Saylor's business model from both of your your two camps perspectives because as of now it appears to be extraordinarily successful. But, but that does not mean that it will remain that way in perpetuity if it does. He is the Carnegie of our time or whatever. Whatever Baron of our time. So whoever has the strongest opinion, start first as to what you think about what they're doing over at MicroStrategy. [01:40:03] Speaker B: If you don't mind. [01:40:04] Speaker A: I see. [01:40:05] Speaker B: Strategy. Yeah. So basically what's been happening for the last 50 years in TradFi is major corporations and financial institutions take advantage of the fact that they can get debt at stupidly low rates. Rates that don't make sense for an actual economy. They're manipulated rates from the Federal Reserve and then they arbitrage newly printed money and then they arbitrage. They buy up houses, they buy up, they buy back their own stock and all of that stuff goes up 7, 10% in price while they're only paying 2% interest rates. That play only exists because of the manipulation of interest rates. Saylor is doing the exact same thing except he's doing it on an asset that you can't make more of. So it's heavily exaggerated because he is issuing his own debt from equity at 0% in a lot of this because then they get the stock, then he buys Bitcoin. It literally just stops working when the interest rate is real again like and that's fundamentally what a sound money does, is it? It reprices risk and it reprices the price of time so that if the CAGR on Bitcoin is 23% per year for whatever your can't inflate it money is, well then that becomes the interest rate or people are going to arbitrage until the, until the price of Bitcoin goes up or the price of whatever your sound money instrument is. [01:41:28] Speaker C: Current trajectory of things. He's absolutely fucking crushing in a way that I never even thought possible. And God bless him, it's zero percent. [01:41:35] Speaker B: What the like, yeah, no, I mean hold through a bear market. [01:41:39] Speaker C: It's just, it's just genius. But I will say I am very, I am very interested to see that all of his, his you know, stop loss or whatever protocols he has to to deal with a bear market. Will they actually work in a bear market? And a bear market as far as I'm concerned is inevitable. I am not a to the moon type of guy and I know, you're very realistic as well. Before I bring Stephen, I would like to hear from you, guy, do you think he can actually weather a serious bear market or not? [01:42:07] Speaker B: Well, it. He has specifically talked about this first. He's already weathered a bear market doing this. He started this in the last bull market. [01:42:16] Speaker C: But it seems as if he's taking on a lot more in this cycle. [01:42:19] Speaker B: A lot more. But he also doesn't seem to have. He's. He's doing it at the rate that. I mean, according to what his claim is. I haven't looked at his book, but he's a profitable. They have a profitable business and he is lit. If he can literally manage it with the profit of the business and keep it, which again, I think he's getting it at rates that just don't make any sense. If it's like 1%, like what's the obligation on that? Like there could potentially be some sort of a cascade in like people selling equity because along with the bitcoin price. [01:42:55] Speaker C: But my understanding. [01:42:57] Speaker B: Has he over leveraged because again, from the last bull market they did. Like this happened so well. [01:43:03] Speaker C: My concern is that this is a very rudimentary understanding, but it seems as if he's attempting to spin off the risk to other people that want additional upside. But anytime you try and divert your risk or sell off your risk, there is still, there is still an aspect of counterparty risk that like, is that risk actually off your books or is it only off your books if these people don't go bankrupt and like that? And you know what I'm saying, like, that's the question I have. So anyways, I want Steve to hop in here. What are your thoughts? [01:43:37] Speaker A: You know, I think crypto went totally crazy in 2017. I remember with the ICO craze, I was around then people were literally making fake white papers and like raising millions of dollars on them and people knew that they were fake. So I think there's an unbelievable disconnect between prices and rationality right now. I really don't have super strong opinions. I did. I was, I was trying to pull this up. This is a, this is my. This is a summary of what I think is going on in crypto markets. Breaking news. This is yesterday. Fartcoin's market cap is now greater than 38% of all American publicly traded companies. [01:44:19] Speaker B: It hurts so bad. [01:44:20] Speaker A: So I think, I think this is sort of representative and like, if you're gonna give me my. [01:44:24] Speaker C: That's not a good sign. [01:44:26] Speaker A: Yeah, like I'm gonna go out on. [01:44:27] Speaker C: A limb and say, that's a terrible sign. [01:44:29] Speaker A: Yeah. And fart coin is not alone in this. Right there. There are. If people, you know, aren't tracking, there's these meme coins where I'm not. From what I can tell, the pitch is that there's, like a cute picture on the coin and that's why you buy it. So there's like, there's one that's called Dog with hat. Hat, and it's a dog with a hat. And it's like a top 20 coin, top 30 coin or something. [01:44:51] Speaker B: Now, here's. Here's one thing I just. And I'm not trying to. I'm not arguing with you, I just wanted to do a tidbit, is to remember that a lot of these market caps are sold as like, this is. This is our market cap. [01:45:02] Speaker A: Yeah, yeah, yeah. [01:45:03] Speaker B: Stupidly gamable metric. [01:45:05] Speaker A: I was just gonna say that. [01:45:07] Speaker B: Sorry. [01:45:08] Speaker A: This was actually an argument that I remember back in, like, 2013 when people were talking about market cap then. It's like, this is a really weird metric. So it is a very, very, very weird metric. [01:45:18] Speaker B: Highly dependent on liquidity. [01:45:20] Speaker A: But the fact of the matter is, market cap aside, you know, if you were betting on fart coin or on the dog with hat, you could make, you know, 100x or, I don't know what the actual number 50x, you know, preposterous returns on your 100x is probably not unrealistic. [01:45:34] Speaker B: Yeah. [01:45:34] Speaker A: So. So I don't pretend to. I can't. I can't. I don't see evidence that the market is rational right now. And I have no idea what the future brings. I will also say, you know, just as an economic point, there's a very deep connection between information and prices. Like, prices are supposed to be playing an information game or coordinating information across an economy. And I do know from many conversations that I've had over the years that the information quality in crypto is abysmal. In fact. In fact, when I wrote what's the Big Deal About Bitcoin in 2014, I wrote it because I was getting people who were asking me questions about Bitcoin back then, and they were saying a bunch of silly things. And so I address quite normal questions in that book. And I would say the average knowledge level and quality of knowledge level of people in Bitcoin is significantly like an order of magnitude worse than it was in 2014. And the reason for that is because in 2014, they didn't have a bunch of ideas that, like a handful of ideas that were wrong. So it's like, okay, you can decide it, you can work with that. But in 2024, people have been propagandized hardcore for like a decade to pump other people's bags. They're very confused about the basics of the system, basic network design, the basic history. And so like the, I could, what I could say is in a very abstract sense, like if there's a deep relationship between information and prices and the information state is really bad, that tells me the price state is also really bad. That's about as much as I can. [01:47:01] Speaker C: Well, and I mean it makes perfect sense logically that the earliest adopters would be probably the most tech savvy, the most intelligent. They're the ones that understood and recognized this earlier than everybody else. That makes them unique in that regard as mass adoption or I don't know, not mass adoption, but larger adoption occurs, which has happened over the past few years or, or you know, five years really, or I guess since 17, there's been, you know, it's been increasing a lot. You're gonna have a lot of people that are silently, that don't have a clue what they're doing. They just see, never go up and they hop in there. Obviously that's going to dilute the intelligence on average of, you know, crypto participants. [01:47:39] Speaker B: It's the Nigerian prince when everybody finally gets an email. [01:47:42] Speaker C: Yeah, yeah, but, but I would like to, I would like to get your opinion, Steve, as to MicroStrategy's strategy. [01:47:49] Speaker A: I think it's just gambling. Okay. He's just playing high leverage gambling game and I think it's gonna work for him. I don't know who's going to end up holding the bag, but yeah. [01:47:58] Speaker C: So you think someone's gonna get hurt? Yeah, I, I tend to, I tend to agree. Just as a, you know, you don't know me from anybody, but I, I ran a hundred plus million dollar mortgage company and so I know when you see things that are too good to be, you know. No, no, I'm just, I'm just saying, I'm just saying like when you see an investment like I, I, because of that, I was always presented with tons and tons of investment opportunities. Because of that experience, I am able to recognize when I go that seems too good to be true. So my instinct is, while I listen to Michael Saylor and he's incredibly compelling and his argument seems rock solid, my gut tells me this cannot be as fail safe or as, you know, fail proof as he's, he's advertising it to be but at the same time, I'm not as smart as Michael Saylor, so I can't possibly, you know, refute him. I just, my. My instinct is to say there will be. There will be blood, there will be pain down the road. I just don't know if it's him and his investors or if it's somebody else. [01:48:59] Speaker A: Anyways, just one more thing on that. So crypto is this really interesting case where culture matters a lot and they're really the. The meme of buy and hold forever. And the point of, you know, the idea that, like, if we're just speaking realistically, the overwhelming majority of people are getting involved in crypto because they want to make money. Okay, there's like some ideologues here and there, but it's really about chasing gains. And what's interesting is that the buy and hold meme has been really successful. And it. And if you think about it in terms of what that can do to the price, I think this is the reason that it has caught hold so deeply, is that I really don't know what the upper limit is on here. Like, I remember in 2021, after. There was a big price spike in 2021, and it was right after they printed money for the COVID stimulus checks. And I remember seeing Tom Brady advertise on TV for crypto, and I thought to myself, okay, this has got to be the peak, because how do you get bigger than that? How do you hit a bigger pool of money? Then here's Tom Brady talking about why you should buy crypto. And then, you know, I'm pretty sure it was ft. [01:50:09] Speaker C: It was ftx, wasn't it? [01:50:10] Speaker A: It was ftx. [01:50:12] Speaker B: Yeah. [01:50:12] Speaker A: And we know how that one worked. So there. I was wrong, though, because there is, like, way more pools out there of money. One of them is the US Government. They're going to try to pitch the, you know, bitcoin strategic reserve. So why don't we spend taxpayer money or just print off a bunch of money to buy bitcoin for national security. Security. That's a racket that. I think it might work, I don't know. But that's a bigger pool of money. Also people all around the world, the record. [01:50:38] Speaker B: I think that's kind of stupid. Yeah, I think it's inevitable that, that governments start playing the. I'm holding more, more of this new digital money than you are. But I'd also just. I don't know, I don't like governments. [01:50:53] Speaker A: So, like, wait, back in the day, there was a. There were interesting Discussions taking place place of what does national competition look like in bitcoin? Because there was the idea that, well, people are gonna, this is gonna be the world's money. It's gonna be used as a global medium of exchange. There's a lot of power and money. So what does that look like? And I remember having some of these discussions and it was, it was mo. It was a little bit about like buying and holding coins, but it was mostly about hash rate. People were saying, well there's going to be like the government, the US government is going to have a massive amount of the hash rate and then they're going to be competing with the Chinese. We're going to have a massive amount of the hash rate. Because miners at that time seemed, it seemed like they were the big shots in the network. So it's interesting that now in 2024 it's very appropriate that it's like competition. Bitcoin is maybe who's going to have the bigger stack of coins. [01:51:40] Speaker B: Well, I think it actually makes sense that the stack comes first because you have to care about actually owning it and its value to then think, oh, now I have to do something to, to defend it if, yeah, but why. [01:51:51] Speaker A: Do things have value, right? [01:51:52] Speaker B: My transaction or whatnot? Well, money is a record keeping system. So the value of Bitcoin is the integrity of the record keeping system. [01:52:00] Speaker A: Well, so, so why would my bitcoin over like the other 10,000 cryptocurrencies, because they're also record keeping systems because it. [01:52:07] Speaker B: Has the highest integrity, so the highest settlement assurances far and away. [01:52:11] Speaker A: In terms of hash rate or by, like how, what, by what metric? [01:52:14] Speaker B: In terms of everything, consistent rules, hash rate. The, the fact that in 20 years we expect it to not be any different. 21 million. Because everybody who says, oh, it's going to be different, it's like, okay, well good luck. You couldn't even change the block size, you know, like, like, like simple. Like is it going to be, is it still going to be tcpip? Am I going to be able to run a node? It's all about distributing that trust. And that's why I think it's obvious that bitcoin remains the, the dominant player. [01:52:45] Speaker A: I, I think there's an interesting argument that can be made that says the value of Bitcoin in particular is because it's got super high hash rate and so like super duper high security. It's, it's, it's an interesting, or there's something there, there's some value there. [01:52:57] Speaker B: But I Mean, sure, I think, I think it's circular too. At the same time, you know, it's like, you know, it's because you have the best chickens that you have the best eggs, you know, like, like it's, it feeds back on itself. But that's like, like I, I also. [01:53:09] Speaker A: Think like talking and having these conversations over the years, almost everybody will acknowledge at the end of the day, well, the idea is it'll have value because at some point it's going to be a medium of exchange. And I agree with this idea. If at some point you get the thing that is the digital cash medium of exchange, that thing's going to be super valuable. But it's one thing to, to be like, oh, that'll happen at some point in the future. But I've just seen this pattern so many times in Bitcoin where there are great technical promises. They say, oh, the lightning network is going to take us into the promised land. They go, oh no, it's going to be, it'll be sharding on Ethereum or no, it's going to be Covenants will do it or Taproot will do it. Just wait a few more years and we're going to get the thing. I don't see evidence of actual genuine progress in the world on, on the, on the technical front. The only thing that I see that has a real chance at being the medium of exchange thing, the digital cash thing, are like big block cryptocurrencies or variations there. Like Solana is kind of an interesting case where you have these really high costs of running a node, but you get the gazillions of transactions per second. That type of system makes a lot of technical sense to me and I haven't seen any, anything from the BTC folks that are, are genuinely making progress towards cash. It's all about, well, maybe, maybe lightning. But like I should say. Sorry, one last point. Just in the last couple of months, I'm talking the last three to six months, there have been a ton of people in Bitcoin, technical people who are effectively admitting failure on lightning. So this trend will continue, especially because there was just another bug discovered yesterday on the network. So I don't think people are going to be experiencing cognitive dissonance because we've been told for so many years it's lightning, it's lightning, it's lightning. And if lightning doesn't do it, there's not a whole lot of depth on the bench in terms of what other ideas are going to work to get us to digital cash. [01:55:06] Speaker C: Well, I assume Guy disagrees that Lightning is, is failing. [01:55:09] Speaker B: But do you disagree, Guy, Lightning is failing? Oh yeah, yeah, for sure. [01:55:15] Speaker C: Okay, so you don't think there needs to be a replacement for it because you think it can be fine, the same thing. [01:55:22] Speaker B: Those don't mean the same thing. Like I do not believe that Lightning is failing. I believe Lightning is part of a solution that's going to have a million solutions. Like the, the whole idea that there is one solution, like, I mean he actually explained it really well, is that it's sharding. It's this network, it's, it's mimble, wimble. Like everybody's got their own, you know, just, just dice, cyclic accelerated graph, the dags. I can't even remember the hell that thing is. But everybody's got like their solution and everybody's trying to figure it out. But like that's the thing we still don't have and have never had something that scales to 8 billion people retail payment level for everybody to use dayto day in a completely trustless, completely costless, instant payment way. Like, I mean he talks about like, you know, the Lightning network is that you have to enforce it or whatever and you have to go back on chain. And then there's rbf. Well that's literally because the blockchain is designed, designed as an open auction system and auction is not a great place. Like nobody uses ebay to make payments on Amazon. Like it's literally a global auction. You just push stuff out to the network and whoever pays the highest fee gets in. So it literally has weather like there's like the traffic gets really crappy and then the traffic is not, is nothing at another time. So it is not. This is why it's not the structure for retail payments. [01:56:53] Speaker C: See, I don't, I don't. So I don't so much mind a, an auction style because here's the alternative. As an entrepreneur myself, I'll tell you, I'll tell you what I would propose. I would say, well, you guys are sick of the fluctuation in transaction costs. I'm going to come in here, I'm going to basically guarantee it as a, you know, MasterCard or Visa or some, you know, I'm going to come in here and I'm going to guarantee it and the fees are going to be 50 cents per transaction. And when it's less, we profit and when it's more, we take the hit. But you, you now have consistency go. [01:57:27] Speaker A: Through Visa to make the transactions. [01:57:29] Speaker C: Well, this is what I'm just talking. [01:57:30] Speaker B: About like the business opportunity, like. [01:57:32] Speaker C: Yeah. I'm just saying. [01:57:33] Speaker B: From a more market standpoint. [01:57:34] Speaker C: Exactly. I'm just saying, like, I could see, I could see big players trying to get involved to do that, to give consistency. I'm not saying it's, it's preferable. In fact, I would prefer that they stay the out, just as I would prefer central banks and, you know, the federal government to stay the out. I'm just saying that I think that if you guys, if you guys don't solve it, you're going to have a bunch of players that get involved that, that you probably don't want to be. Be the solution. That's what I'm arguing. [01:58:01] Speaker A: Oh, yeah. I mean, so on point like that. Not. That's not just theoretical like, that is how this system is becoming custodial. Yes, in fact. Exactly. Right. There's a better solution than that, Clint, and this is what like PayPal is using. It's that you have an account at a company and when you move Bitcoin to somebody else that has an account at the company, the Bitcoin doesn't move. It doesn't actually hit the blockchain, so you don't even have to pay the fee. Right. That's the system. But, but that is custodian. That's. But that's unnecessary is the crazy part. Like, there's another. What a crazy idea. Maybe we just scale it on chain and you don't need the companies to do that and the fees are less than a penny. And it should be noted, I, I know there are a couple of. Like, the thing is, when you talk about scale scalability like this, people will go, oh, there's no way that can work. They don't. A lot of these people don't even know that pruning is a thing. Like to people. If people don't know, there's a bunch of these technical things that like, somehow they get glossed over. Like you don't have to keep the entire blockchain history even to run a node. [01:59:03] Speaker B: Pruning specifically applies to. After you have done the check, you can hold the last state and you can get rid of it because you've already done the verification. [01:59:11] Speaker A: That's right. So when people are making. [01:59:13] Speaker B: Somebody is adding to the network, if somebody joins the network to actually know that the prune state is valid, you have to do the work again. So this isn't about, this isn't about just. [01:59:25] Speaker A: You jumped in to try to add a feature that I was talking about that. Okay, that's the that is the point. There is pruning. And it doesn't mean you don't have to download any block. What it means is you don't have to keep the historical record. So when people are thinking, oh, you can't, it wouldn't scale. If you have to keep the entire world's transaction history on the note. Yeah, you don't, that that's part of the design is pruning. There's a bunch of features like this where what you need, you're going to need the ability to get the block, the latest block, the latest state. That's true. But that this is a relatively small amount of bandwidth. And again we run the numbers in chapter seven. If people want to actually work through the basics of how it might work cost wise with scaling on chain, if. [02:00:07] Speaker B: You want to actually join the network trustlessly and importantly, if you want to recover the network from a disaster or from a attack by a government entity, you need somebody holding the entire history. And when it, when or if that happens, you're trusting that entire history. [02:00:25] Speaker A: Okay. [02:00:26] Speaker B: From them. [02:00:27] Speaker A: Okay, so let's play that out. So the idea is somebody somewhere has to have an archive of the entire blockchain. [02:00:36] Speaker B: And the idea is have as many people as possible. [02:00:38] Speaker A: Okay, why, why is that idea? Because actually technically all you need is one. Right? Because if you've got the entire record, you can show that the current blockchain, they violated the rules. [02:00:45] Speaker B: Somewhere there's like one trusting that one. [02:00:50] Speaker A: Yeah. [02:00:51] Speaker C: So how do you prove that the one is the right one? So if you have multiple people or thousands of people that have the same. [02:00:57] Speaker B: Copy, then you know the right one. And like, if you're not checking for yourself and the whole thing goes offline, then we're recovering from, we're trusting whoever we recover from. [02:01:06] Speaker A: Okay. Okay. The point I'm trying to make is the scenario, the disaster scenario that's being painted is refuted if there is literally one node in the entire world that has the archived chain. Why, why did. You don't have to trust them per se, because they've got the, they can actually mathematically prove it to you. So, so the disaster scenario of what happens if somehow the whole thing falls apart and like, you better make sure you have a backup copy. That's a very unrealistic argument. That's very easy to refute that argument. That's not something we really have to worry about because somebody somewhere is going to have an archive of what's going on. [02:01:50] Speaker B: The only way to check and know that the archive is right is for everybody to download and check the whole thing, which we come right back to the exact same problem. Or you just accept the last block. And if the thing is as large as Visa's database, which note, Visa is not the only network in the world, like a lot of us, like, like to compare to retail and Visa. And I think that's like trying to predict how many emails we're going to need based on snail mail, like how many letters go through the mail. [02:02:21] Speaker A: So again, I don't want to get bogged down too much in this, but this is an important point. Okay, here's a question for you. Do you actually, in this situation you're describing, do you actually need all of the transactions going back from the very beginning? Or could there be a way where we say, you know, right now, let's, let's bring up the, the transactions that we agree are valid in the last year. Would that work? [02:02:48] Speaker B: I mean, not if you want to know that there's exactly 21 million. Like, the only way to verify a UTXO is actually been created within the rules is to go back to the UTXO in which it was created. And the overwhelming majority of the coins were distributed in the first, like two to three years in those block headers and so. Or in the, the coinbase transaction. And you have to go all the way back to know that those are real bitcoin according to the bitcoin rules. [02:03:12] Speaker A: No, no, what I'm saying is, is, yeah, if we, if we were to agree that the network over the past year is not under attack, so I don't know how many blocks that would be 50, 000 block. I don't know. I don't know what the actual number is. Can we say, hey, listen, this is effectively the point that you have to download the blockchain too. You got to get the last year of transactions. Because the way that bitcoin works, you. [02:03:34] Speaker B: Have, is you have consensus and you trust, like you just said, that we agreed. [02:03:39] Speaker A: I'm fine with that. [02:03:39] Speaker B: Look, what if we don't agree? Agree. What if we don't agree? [02:03:43] Speaker A: Look, I'm, I'm conceding, I'm conceding your point. If you think it is a problem that you have to trust that the last one year of transactions were actually valid, then I will concede. I will, I will bite the bullet on that one and say, yes, there could be a situation where you're saying that, you know, for the last year it's not been the case that there has been an ongoing 51% attack for the last year. Year. Yes, that, that's. [02:04:12] Speaker B: I'll give you an example, I'll give you an example of real world. It actually happened. So there was a, there was a fork called Bitcoin Dark and they added in a pool of privacy coins which they were fixing Bitcoin by making it more private. And they created a two part network and you could move coins into the privacy batch or you could move coins into the normal Bitcoin batch. And this was making Bitcoin better. And now it's going to be like Monero and all of this stuff. And not very many people ran a node. Ironically, it was actually a bitcoiner who was just interested in shitcoins who was running a node and discovered that this happened after about a year and a half or so after it launched because you could not see balances and you could not see what was going on inside the privacy batch. Suddenly, 300,000 coins that did not exist according to the rules were trans. Were, were transferred onto the open Bitcoin Dark network and they had, they had issued. The only reason they were able to issue these fake coins was because they forked the network. And the only reason that nobody who was everybody was using a light client and they're using all SPV and they're just trusting the rest of the node network. That's why they were able to get it onto the open Bitcoin network network. And it just so happened that somebody was watching who was running a full node and noticed that the, the supply of the coins were off. And then of course, you know, they tried, they, they sold and tanked everything and the whole project went up in smoke. But it was literally the hard fork that allowed them to do the exploit because the. Now everybody's on that same piece of software in which they added in this explicit like malicious bug. It was over a year after they had launched. They waited as long as they could to hopefully that nobody would see what was going on. And it was only the people who saw who actually had a full node who even saw what the hell was going on because they had to check that the Bitcoin were real and according to the rules and they weren't. [02:06:08] Speaker A: You're talking about a, a coin that forked off of the main chain. Yeah, this is so, so let me talk about the dynamic, let me reinterpret. [02:06:17] Speaker B: What you're saying, how the technicals work. [02:06:19] Speaker A: And we know, I understand. Let's. Let me rephrase what you're saying thing just so it's clear there was an altcoin in a super minority that, that virtually nobody's heard of. And on that altcoin they had a bug. And in that bug it allowed for coins on that chain to be created out of thin air. And for that reason we're saying we need to make sure that bitcoin has, we have a bunch of people which have an archive of the bitcoin network going back to 2009. Is that right? [02:06:58] Speaker B: Yeah, I'm just talking about the dynamic of whether or not, you know, the coins are real. [02:07:01] Speaker A: Yeah, so. So what? [02:07:02] Speaker B: I have to run and check the whole history. [02:07:05] Speaker A: Okay, so, so Bitcoin, the, the bitcoin network and the amount of bitcoin hash rate that exists is not comparable in any way to a random crypto project that had a bug in it. [02:07:16] Speaker B: No. Unlikely. [02:07:18] Speaker A: Yeah, so. So it is not a fair comparison to say that. [02:07:23] Speaker B: Okay, but when you're talking about, when you're talking about China and the US entering this game, I want a nuclear grade network. I want to know because I'd like. [02:07:33] Speaker A: I'd like a network that I don't. [02:07:34] Speaker B: Trust them to not one hundred do a hundred billion dollars. I want again, this is about how do you extend the trust? Because as soon as this, as soon as Visa is the only one who can do the whole check, you just trust Visa. Like it's whether the base network becomes Visa or you build, you, you for the short term have to compromise and build Visa on top of it. [02:07:53] Speaker C: I don't know. [02:07:54] Speaker A: I don't. [02:07:54] Speaker B: You actually have an open permissionless network. I don't run my lightning node for like five of my friends. I can't do that in finance anywhere. [02:08:03] Speaker C: I don't understand, I don't understand the con, the contentious nature of this because maybe you guys can, can clarify you like this is, this is the beauty of the free market. [02:08:12] Speaker A: Right? [02:08:12] Speaker C: Like you guys have, have gone your separate ways, but there's this unbelievable vitriol between these two camps. Like are we not seeing the market play out? [02:08:23] Speaker B: Is that like PTSD from those days is crazy? Like we're like, like we're still having this conversation. It's. [02:08:30] Speaker C: Yeah, like what? Why can't you. If you believe that you're right, then, then why does, why does bitcoin matter to you? Why is bitcoin cash not the, your focus entirely? [02:08:41] Speaker B: Bitcoin cash should win in the end, right? Like if, like, like it would be the, the better option when it came from. [02:08:48] Speaker C: That's exactly what I'm saying. Yes. [02:08:49] Speaker B: Yeah, I Mean, sure, maybe bitcoin wins for the short term, but I, I think the fundamental dynamics would swing that way in the same way that like nothing holds a monopoly if it sucks at its job. If there's something, if there's something that's just better, it just will. I, I, I don't think so. And I think there's a misunderstanding, but, you know, I don't, whatever, like, yeah. [02:09:13] Speaker A: Okay, so it's, it's not about bitcoin cash, right? Bitcoin cash, I'm just, I'm sorry, I'm. [02:09:17] Speaker B: Just using it as an example because it was like prominent in the block size where I don't, I don't mean to like. Yeah, yeah, Bitcoin cash on you as like the thing. So I'm just. [02:09:24] Speaker A: Right, so, so I think it's fair to say in the long run one would expect that digital cash that is cheap, reliable, international, permissionless is going to end up making the world a freer place than a cryptocurrency, which is slow, expensive, unreliable. The people have to get permission to use it because it's custodial, akin to PayPal. Now in terms of price, I have no idea. I have no idea. If you were to say winning would be a bigger market cap for the peer to peer coin, I wouldn't use that metric. The reason that I care about it, I wouldn't either. [02:10:02] Speaker C: For the record. I would say especially because that's not even the, the real sales point of bitcoin cash. It's to have kind of more consistent pricing, is my understanding. It seems that it should win out in terms of utilization, in terms of transactions. [02:10:16] Speaker A: So I would agree with that. So long as it's not about bitcoin cash. If you want to say utilization for other projects that you can use use as a medium of exchange, ideally it would be projects maybe that have better privacy. So like Monero is a very interesting one. There's a new one that people are talking about, Xano, that apparently is getting some hype that has some privacy features as well as token features and maybe there's going to be a bridge between the two. So yes, I would imagine in the long run we're going into a world in which cryptocurrencies are going to be used, used as money. And those cryptocurrencies I hope will be freedom enhancing and not freedom detracting. [02:10:55] Speaker C: Question for you real quick. Because of the privacy aspects of Zano and Monero, can we even know the amount of utilization or is that not. [02:11:06] Speaker A: Yeah, that's A great question. [02:11:08] Speaker B: Yeah. Technically. I'm sorry. [02:11:09] Speaker A: Yeah. So there, so there are, there are some payment processors which you would be able to try to get a read on how much they're going to be used. Like corporate payment processors in terms of. You could you get an act. You know, it doesn't have a public blockchain or if it does, the transactions are obfuscated. So you don't know how many transactions are actually made from real retail usage versus somebody sending money to the. [02:11:33] Speaker B: You can see general updates though, right? You can see like ring signatures in Monero. [02:11:37] Speaker A: Like as in Monero. Yeah, yeah. And like things like Mimble Wimble, which are more ambitious from my understanding. There's like not even a public blockchain. I don't know how, I don't know how that works. Yeah, it's a cool idea. Maybe that'll work. But no, I, I don't, I don't know if there's a rely. I don't know if there's like an objective metric we could look at and say, oh look, this, this is the coin that is actually being used as cash as a medium exchange. [02:11:58] Speaker C: That's, that's why I was asking because it's like I, I assume that Bitcoin is. Because it's, it's the one that everybody talks about the most primarily because it's the most highly valued in fiat terms. But I don't know factually and I was just curious. So as of now, is the assumption that Bitcoin is the predominant coin being used or do we know? [02:12:17] Speaker A: Oh, oh yeah, yeah. So we do have a little bit of numbers on that. So like I haven't checked in years to be fair, but like BitPay is the, was the biggest payment processor in the world. My wife worked there and by far it was. Bitcoin was really. Yeah, it was, it was like last I checked it was like I think 50 or more of the. All the cryptocurrencies and they do, do they do like Ethereum? They do Bitcoin cash. They do other ones. The vast majority it was for, it was for Bitcoin and it was for high value payments, as you might expect, of course. [02:12:45] Speaker C: And that looks like that'll be the future of it. Go ahead. [02:12:48] Speaker A: I did just want to answer your question about why to care about it. So imagine, imagine for a moment that I'm right. Imagine that. Have mercy and try to see things from my perspective. Right. [02:12:59] Speaker C: For the record, I've spent years trying to imagine that you're right and I'm not even sure. Like, I am. I am genuinely. [02:13:06] Speaker B: I try to. I. I've always tried to temper like. Like I, I even identify with a lot of the arguments that there's a bunch of idiots in bitcoin who don't even entertain the argument and just repeat, like, just regurgitate. But I also just kind of think that's how all social groups are. And the bigger the social. Social group, the more likely it's going to happen. All of that crap in it. [02:13:30] Speaker A: So especially if. If one of these. The groups has this narrative that, look, just buy our asset and it'll. And you're going to make money and everybody else is stupid for not buying it. But I just. [02:13:39] Speaker B: Yeah, but that's all of them. [02:13:41] Speaker A: Well, fair. That is pretty much most of them at this point. Yes. [02:13:44] Speaker B: Fart coin. [02:13:45] Speaker A: That's true. Fart coin is the greatest example. [02:13:47] Speaker C: I literally had not heard of fart coin until today, and I am distraught that that exists. [02:13:51] Speaker A: You were better and you're pumping my bags, everybody. I actually don't have any fart. I could mint it though. No, never mind. So personally, for me, right, I got involved in this early. I was tracking it. I remember I went to Mises university in like 2011 or something and heard about it. And it was. What I remember is I thought it was a cool idea. The price was less than a dollar. And then I was like, maybe I'll get some. The next time I checked, it was like $10. I was like, screw that. [02:14:20] Speaker B: They're like the right time. It was like, like, like this is literally the same thing. It was just like, bonkers. [02:14:24] Speaker A: Yeah. And I was like, ah, I'm no schmo. I'm not gonna buy this thing for 10x. Yeah. And so I didn't get intel later because I thought I had seen a 10x. And then who would be so irresponsible to buying at that time. But I've been involved and interested in this very early, right. Wrote an early book on it. My family's been involved in it, you know, connected to the companies in this space. I can say. And Roger says this, and people who've been around in the actual industry will say this, this. There was a vision. The vision was bitcoin is supposed to be used as cash and it can fulfill that vision. And because of that, it has a bunch of awesome libertarian properties. We saw this narrative change from the course, especially from 2013 and accumulated in 2017. And so why is there bad blood? It's because myself and people like Roger Vere Think that this current version is not threatening to the system. If you read what the bitcoin core developers say, how the system they envision is that you are going to be going through intermediaries in order to use blockchains. And that is infuriating because we had a chance to potentially put the world making, put the world on a hard money currency and it does not appear that that's the direction that we're going. And we also went through massive social attacks, social engineering attacks like as we document some of them in the book. But it was hell in 2017 because the small blockers, not on many of them, not only were they censoring discussion, they were also character assassinating and harassing the businesses that wanted to upgrade a particular way. For example, an example we give in the [email protected] the bitcoin.com mailing email address was put on a list where they would get bombed with like, like 10,000 emails a day. And they still deal, they still deal with some of this spam because there was a bunch of dirty tactics that were involved at that time and there's a bunch of bad blood and a bunch of attacks that is naturally infuriating. And so when we see, when we see what the, what the original vision was, what happened to it, how far off the narrative is and the people who are trying to represent the narrative really aren't knowledgeable about the basics and they don't really seem to see what's going on. They don't, they don't maybe aren't great systems thinkers. That's why I still care about it. And that's also why we're returning back to what I said. That's why I literally wrote this book thinking I'm going to write this book, I'm going to say it one more time and then I'm done. [02:16:47] Speaker C: Yes, well, and for the record, I think, I think a ton of people are going to read this book after, after this interview. And despite the, the contentious nature of the conversation, I found it, it very, you know, educational and interesting. And I think that, you know, I, I am genuinely, even though I, I am invested in bitcoin, I, I'm a late adopter because I was a hard money, you know, old school fiat guy. But because I'm late, I am basically like, I'm trying, I'm, I come with more of a blank slate than, than you two do. And I think that having me here, even though I didn't talk much, was valuable because I'm able to, to Basically play the middle man here and be like, all right, that's an interesting idea. All right, now let's, let's, you know, bounce it off of him. Can he, can he actually refute that? Sometimes we got refutations, sometimes we got smears. But, you know, we, we made some progress here, I think. And, and I do, I genuinely believe a lot of people will learn a lot from your book. And I, and I think all three of us agree wholeheartedly. Roger Vere needs to be freed. I don't believe in an exit text that much. [02:17:50] Speaker A: Right. [02:17:51] Speaker C: Yeah, yeah. I mean, I don't believe in an exit tax to begin with. I don't believe in taxes to begin with. But it does seem as if he paid his taxes and he definitely shouldn't be getting persecuted. And I think that there are very interesting arguments as to why he's being persecuted. I do think that we need continued investigative reporting on bitcoin core developers that may or may not have been involved with the federal government. Are they in fact trying to derail things as you guys, you know, allude to? I think that you have demonstrated smoke. Is there fire? I think that's all very interesting. And we will, we will wrap with this because we spent two hours without talking about the price of bitcoin, which I am proud of us for not doing. Are, are we, are we. I mean, I think I already sense from both of you that we are near the end of a bull market. That's, that's my instinct. However, I will throw in the variable that there is a distinct possibility that because the, the, the sovereign debt crisis is so significant, I could see a major central bank. We've already seen some, but I could see some major central banks getting involved. Do you guys think that, that that happens this year or are we still a ways out? What are your thoughts? [02:18:59] Speaker B: What do you mind if just add something real quick? So we still to this day have not invented a decentralized scales to the whole world digital categories, cash. And the goal of bitcoin is and always has been to do that. It still is to do that. The question is, what foundation do you need to make that possible? Bitcoin, after understanding and seeing its trade offs and seeing how it exists in the wild, ended up being the trade offs, ended up weighing towards the direction of having an open, permissionless, censorship resistant, essentially monetary court. What if without any central bank, without any government in the world, you could prove that you were the right owner, that you are the one, and that this thing was so sound that even With a nation state attack it could still be recovered, you could still verify it from the very beginning that it was sleek, that it was lean enough, that even if China put up their firewall you could still get all of that information out through a crack. You could still get it out through the Tor network in one node like that is the idea is that is this thing nuclear grade? Will that consensus and those rules be maintained in the face of the fact that we know we are going to be up against the biggest adversaries in the world? And because it is open, here's an interesting thing. 100% it doesn't. None of this is a scaling done. I don't think it will ever be scaling done. I think as soon as we, it's, it's what's the, the as soon as you have a capacity you just figure out a way to use it. What's the, what's the economic law? Anybody know? Whatever is that basically as this thing goes it will scale to another point. Then we will figure out how to use up all of that scale and then we will figure out another 5%, another 10%, another new tool and another new network. And there have been tons of different networks like statechains, Ark, like all of these things. The question as to whether or not they get adopted or the trade offs of those networks are good enough to be a retail system is always up in the air. But I don't think this ever ends and I don't think we have a solution yet. What Satoshi did invent is an unstoppable monetary court that we can all go to to settle our disputes and somebody in China and somebody in the US can actually settle that in a real way and know that it is defended and it is real. And interestingly there's no way to use the dollar without Visa and the Fed being behind it for the last like 10 years. Outside of a couple of my main services that literally integrate with Fiat, I have only ever used services run by a friend by like somebody I know in bitcoin, a financial payment service. Like that's not possible on any fiat network. Like and even though this is not a permanent end all we're done with it solution, we still have an ungodly amount of work to do. But I can run a service, Kali BTC could run my lightning node for me and I used it for a few months. You know, like this is, it's, it's just, it's very similar to the going from three broadcast channels to the Internet. Yeah, we still had Like a bunch of websites, because we didn't figure out how to solve. Everybody runs their own server and everybody has their own thing, but we, we're way better now with a lot of the technology, with Nostr, with peer to peer, with Pears and BitTorrent and all of these things, we're getting closer. And now bitcoin exists. Now we have a monetary foundation to build on top of. And I just think we're just not done. We're so not done. And I think the 10 million altcoins that again, have all of their problems and all of their supposed solutions that haven't worked are a testament to the fact that we're just way not done with this and we have a lot of work to do. But I think bitcoin is the most trusted, most not going anywhere foundation for us to build on top of. And it remains open and permissionless because I can run a node and host a quote unquote service for all of my friends. And I think, you know, you get another 2x scaling technology on top of that. There is no limit to human innovation. We will always be able to build and create something else. And if it's a fork and, you know, some altcoin does it, by all means, I don't really care. I still just think bitcoin is the best solution and it's the only one that can maintain it. [02:23:37] Speaker C: But, but I, I have not. [02:23:38] Speaker B: The other thing. [02:23:39] Speaker C: Yeah, I have not checked my, my fountain account in a year because I'm just too busy. And I just looked and I've got 213 supporters on there, so I've got bitcoin just being flooded to me through lightning. God bless you guys. [02:23:52] Speaker B: I should zap your own fountain more often. That's my bad. [02:23:54] Speaker C: Yeah, you should. [02:23:55] Speaker A: Yeah. [02:23:55] Speaker C: Yeah, you should, guy. [02:23:56] Speaker B: You need more zap. [02:23:59] Speaker C: But I just, I, I do think that this is a, you know, despite all of the contentious aspects of this conversation, I do think that your hearts are headed in the same direction. So hopefully we can, you know, realize that at the end of the day. [02:24:11] Speaker B: Steve is being malicious or anything. Like, I think he literally just thinks that a different path is the better path. [02:24:19] Speaker C: And for the record, for the record, I totally understand because I just went through the Libertarian Party where, you know, I ran for the vice presidency, and I was like, like there is such anger over the difference, like the 5% of difference in our, our, you know, our messaging style. Like, these people are focused, like they want to harp on racism. I'm like, yo, World War iii. All Right. Like, that's what I'm gonna talk about. I'm not talking about racism. I don't know what you're like, but they hate me for it. [02:24:46] Speaker A: Right. [02:24:46] Speaker C: Even though, like, compared to Biden or Kamala or Trump or anybody else, we're so close to one another. So, anyways, I'll. I'll give Steve the. The last comments here, and yeah, maybe. Maybe I'll have one more question, but I don't think so. [02:25:02] Speaker A: Okay, thanks. So my. My summarized position is that, you know, the. The bitcoin narrative is amazing. The BTC narrative is amazing. That's why it's had so much success. But the narrative is not grounded in reality. And we should expect as libertarians that the state would be targeting this technology if it could do a fraction of what the things libertarians say it can do do. We should expect the state will. Will be targeting it. And they have been targeting it for a long time. And the way that it appears that has been taken over is that it's in the social layer. And there is a critical. That people talk about bitcoin as if it's a feature of nature. There's Mount Everest, and then, like, there's a big, you know, there's a. There's a moon over there, and then there's bitcoin, and nobody can touch it. That's not how bitcoin works. I promise, any person who reads Hijacking Bitcoin will be dissuaded of the idea that bitcoin is separate from humans. It's not. The fact that it is connected to humans means politics is involved. Human politics, and the fact that human politics is involved means that the state, which has, you know, the last century, people involved in this state, have gotten very sophisticated in understanding group manipulation, psychological manipulation, social engineering. And there's a whole lot of evidence that that's happened in bitcoin. And I should say I have had conversations since the book has been released with somewhat prominent individuals who have big platforms who will tell me that effectively. Listen, if. If we have you on Steve, and we don't have counterbalance to you, I'm gonna get so much shit this happens. I have heard this now from several people, and that should be a red flag. And I hope that those individuals, if they happen to be listening and others will say that, because it's an important. It would be evidence that there really is high pressure social engineering that has been happening in bitcoin for a long time, and people aren't talking about some very critical things. And isn't that interesting. [02:27:11] Speaker C: So can I, Can I. Let me interject real quick because I had reached out to Guy to have him on the show before you and I had booked this. [02:27:20] Speaker A: Oh, yeah. I'm not saying this was that. [02:27:21] Speaker C: No, I know. I just want to clarify. I did not bring on Guy. Guy as a. As a counterbalance because anyone was telling me to or I was gonna get. [02:27:28] Speaker B: Yeah, yeah, yeah. [02:27:29] Speaker C: No, I didn't, I didn't, I didn't. I swear to God. [02:27:32] Speaker A: Thank you for clarifying that. That would have been a really shitty thing of me to do do if that. If that had been the case. But no, it wasn't. I did not. I did not get that impression. I'm just saying, you know, it should be. You've probably felt this, though. I don't know how much you've been talking about Bitcoin, but I would imagine you've sensed that this is very, very hostile territory. Yes, yes. [02:27:51] Speaker C: I just. I just don't care. Like, you're, you're right. [02:27:54] Speaker A: Good. And props on you, but it should. At least the signal should go out that just like during COVID and just like with the back of the vaccine rollout, people could sense, they could feel that something is wrong here. And if I talk about it, I'm going to be attacked and maybe even deplatformed. And like, I'm going to kick. I'm going to step on a hornet's nest. And that was a. That was a. That was pointing to something. There's a reason that was happening. That was not actually organic, that was artificial. And there's some evidence that something like that we should expect something like that is happening in Bitcoin. [02:28:28] Speaker C: I think it would actually be naive not to think that they would be doing that. I mean, what we're talking about is a challenge to their entire control structure. Like, the mechanism by which they control us is, at the end of the day, 99% fiat, like the central banking apparatus. So if you're doing anything to undermine that, you would be fucking out of your mind. Particularly like, this is. This is the one thing that I can't understand because game theory wise, if you have access to a printing press and unlimited debt capacity and you're looking at Bitcoin and you're like, this thing is gonna fucking destroy us. Well, either you take out a trillion dollars and you destroy it first, or you take out a trillion dollars and you buy 80% of it. And that's like, I don't know why it hasn't happened yet. So I Guess the, the natural conclusion that you should come to is that because they haven't bought it yet, that means that they're, they're using their, their resources to destroy it. [02:29:20] Speaker A: It. [02:29:20] Speaker C: So I think that your thesis is compelling. [02:29:23] Speaker A: Right. Or, or they aren't. [02:29:24] Speaker C: Or the, or that. Yes. Which is, which is also an aspect of your argument which I think is interesting too. So I just wanted to demonstrate I am thinking about this very open mindedly because I, I very much want us to break free of this. And I think that if you're like, you have to understand how challenging that's going to be. That's all. [02:29:41] Speaker A: Yes, strongly agree. And, and in conclusion here I would say if you haven't yet read Hijacking Bitcoin, you are not going to understand how large the gap is between the narrative and reality. And I say that there are again 287 citations. I wrote this book with extreme care, extreme precision. I had multiple people say, wow, you didn't say this, you didn't say that, you didn't speculate very much. No, I stand behind the, the facts that are in that book. And if you are your, if you've just sort of heard about bitcoin and people are talking about it and you haven't done deep diving yet, I guarantee your eyes are going to be opened by this book. And don't take my word for it. Find a free copy. And also the last thing I have to say is I do appreciate that despite the rancor on this conversation, that Guy and I really are on the same page with regards to Roger Vere because that's a man's life, life that is in the balance right now. And I think it is a very, very good sign that libertarians who maybe, you know, have, can have strong disagreements, can agree this is unjust and the world will be a much better and much freer place if, if we can get Roger Veer secured a presidential pardon by making waves, which we have had great success so far. Realize it's not an insignificant thing that Roger was on Tucker and that's, that's a very good sign. Things are going the right direction. [02:31:04] Speaker C: Huge and, and great timing. And let me also add that the, the same group of people that are likely going to be the ones that are responsible for getting Ross Ulbricht freed are now turning our attention to Roger Ver's struggle as well as Dexter Taylor. There's a handful of others that are, you know, very important. And when it comes to our worldview and what we want to see in the world and I mean there's thousands of people that are unjustly locked up in America. But, but particularly these are egregious and I think that everybody will be driving in that same direction. If you guys enjoyed this episode, please do hit the like button. Subscribe, share it around. I did not expect it to go this long. I really appreciate your guys time. Bitcoin audible well actually I'll let you guys do your plugs. Go ahead guy. [02:31:45] Speaker B: I want to say just one thing, just to Steve, as someone who has tried to write a book and has put so many different things together. I mean, I mean obviously I've done a good number of articles on my own show and I've read a thousand different pieces through bitcoin and narration for 100 books I don't even know. But I just gotta, I always gotta say props to somebody who finishes a damn book because that is not easy. That is not easy at all. So just, just. And I, and I listened to it so. And it was a well written book. I didn't agree with like 80 of it, but I, but I liked it. [02:32:20] Speaker C: Oh, you already listened to it. [02:32:21] Speaker B: I enjoyed it with, with, with like I, I enjoy getting heated and like passionate like wanting to rant and it definitely got me riled up. So that's a, that's a good, awesome. [02:32:30] Speaker C: Well I didn't, I didn't know you had already heard it. So that's, that's amazing. [02:32:33] Speaker B: Yeah, yeah. And then block size war also highly recommend for understanding. And also Jonathan Beer actually does an excellent job of not really taking much of a side of just kind of observing what happens and breaking down how he saw the technical element. And the, the thing that I, I hate is that you know, things are constantly being positioned as like, like everybody was being an, like everybody was being a piece of crap. Like there's, and if you want to just go through Reddit and like point at all the people being like pieces of crap. Like this is kind of how protective protocol wars have always been. Linux did the same thing and I. [02:33:19] Speaker C: Can'T tell you how, I can't tell you how similar this is to the Libertarian Party takeover. [02:33:23] Speaker B: It is the liberty. [02:33:25] Speaker C: It's a protocol. It's a protocol war. That's what we were doing. [02:33:28] Speaker A: That's what we were doing. [02:33:29] Speaker C: Was it that way? That's what we were doing. It was a protocol war. We were deciding what are our protocols as a party. Are we interested in actually changing federal policy or do we want to get 3% of the vote about like what Are we doing like, what is the protocol here? That's exactly what this debate sounds like to me. It's fascinating. [02:33:45] Speaker B: Anyways, I, but I genuinely think both sides are completely on the same mission. I really do. Just like generally libertarians are on the same mission. They just disagree with Hal and, but I try my best to explain it all, including a lot of the block size war stuff and the history, cypherpunk history and stuff. You know, I'm the guy who's read more about bitcoin than anybody else, you know. That's right. And hopefully, hopefully I can be of use in the conversation. [02:34:18] Speaker C: Steve, any final comment? [02:34:20] Speaker A: If people are interested in my work, you can find my stuff. Steve-patterson.com I've got a YouTube channel. I, I'm in the process of starting an institute called the Natural Philosophy Institution. We're actually doing a bunch of scientific research and I was supposed to get all of this done, get all the interviews finished and then I'm going to be focusing full time on that research. So you can, you can sign up for the mailing [email protected] n a t p h I.org if you're interested in more scientific stuff. [02:34:47] Speaker C: Awesome. Well, despite the fact that all three of us agreed that this would not be a debate, it ended up being one. I thought it was a productive one and, and I, I enjoyed it. I found it very educational from a more layman's perspective. I think that my audience is probably even more of a layman than I am, so it's going to be interesting to see what they actually picked up on and understood and, but I hopefully it'll drive them to both of your. Your work and, and they can go deeper. Thank you guys so much for tuning in. Again, do share it around and I will catch you guys next time we're out of here. Peace. Well, I wasn't lying, was I? I was a spicy one. I enjoyed the hell out of it. I don't know if it's just me that enjoys fiery debates between intelligent people. I thought there was some unfair, derogatory commentary as well as dismissive, you know, slights that were thrown at from both sides, but overall I thought it was very productive and it's very hard to have productive conversations in this arena, but I think we managed to do it. I hope you guys came out with a better idea of why there's such a passionate battle and, and maybe have an opinion as to which one you think is right. I have my opinion. I'll save that for a future episode. But as you can tell as a bitcoin investor, I kind of put my money where my mouth is already. So take it for what it's worth. I will end by saying yes. Please continue to advocate for Roger Vers freedom. Same with Ross Ulbricht, Dexter Taylor, anybody else that's unjustly locked up. I think that's the least we can do for our brethren that have been incarcerated on, you know, junk charges. It's totally, totally ridiculous that we even have to do this, but we do. So please continue to lend your voice in their fight. Hopefully we will get some good news in about a month and a half. Fingers crossed. If you enjoyed this, please do share it around down like subscribe, comment and I will, I will respond to your comments. Please be nice though. See you guys soon. Oh and leave a, leave a five star review wherever you're listening. Spotify, Apple Podcasts, you know, or, or yeah, sign up and donate on on Fountain because I got, I'm sure I got a bunch of bitcoin listeners right now. Yeah, Fountain guys, where you at? [02:37:00] Speaker A: Only got a couple hundred supporters. [02:37:02] Speaker C: Let's go Fountain. Let's go lightning me some, some, you know, small black money. See you guys later. Peace. [02:37:12] Speaker B: So I'm really curious. I've had a couple of people send me messages. I really wish you had brought this up or I wish you had said this in response to something that Steve said or a question that Clint and I actually really value those for a couple of different reasons. One, it's really hard to know what someone else's perspective is and which arguments actually seem to turn the light bulb on a little bit when you're in the heat of a discussion and you're talking for God knows how long, three hours and things are constantly being brought up. Your mind is being taken down all of these threads and it's really good to have other perspectives on things I should have said or to go back through and try to come up with a cleaner or more succinct argument for some of the things brought up. So I want you to know that I actually really appreciate those and it keeps me fresh and it keeps me thinking about other people's perspectives and how it is that I can paint the picture so that they can understand the importance of a set of characteristics and considerations in a really nuanced topic. So it's very much appreciated. Shout out, by the way, to everybody who boosts and sends me a message or stream sats on Fountain. That has been amazing. And I don't check it super often but when I do, like, I love going through it and also just realizing there's a bunch of NOSTR posts about my podcast that I didn't even realize. That's just really cool. And thank you guys so much for zapping on NOSTR as well. It's actually not an insignificant amount. It actually makes a difference. And it also means more than a lot of the other money that comes in, because I know it's direct from people who actually care or who are interested in the show and actually participate. So thank you guys. And on that note, do not forget to check out socials on Twitter. We are going to have a giveaway with the BitKit wallet for 50,000 sats. And I really want it to be someone who listens to the show, not just someone who bumped into it on Twitter. Follow, retweet, all that good stuff, and basically enter to win 50,000 SATs. And of course, if you want to save money. Oh, on your J, on this little baby. 10% off with code guy G U Y. Don't forget, I've already gotten a couple of messages from people who bought it without the discount, and that makes me sad. Link in details in the show notes. If you're ever looking for it, just come to the podcast. You'll see it in the description. All right, anyway, thank you guys so much for listening. Thank you so much for watching. Thank you so much for subscribing. And share this out with everybody you know who believes something really stupid about economics and needs to be corrected. And I'll take care of it. All right, guys, till next time, take it easy.