Take_096 - Hijacking Bitcoin

[00:00:00] Roger Ver went on Tucker Carlson recently to discuss how the government infiltrated bitcoin development, took over the protocol, and killed its potential to ever be electronic cash. He even wrote a book titled Hijacking Bitcoin to lay out his version of the story. But there's actually another story of a small group who tried to hijack bitcoin, who sought to force out the developers who wouldn't go along with what they wanted, who used leverage over miners to keep them in line, who tried to hold bug fixes hostage to pressure the network to fork, who had a significant portion of bitcoin companies, exchanges and the majority of the mining pools ready to get in line to fundamentally change bitcoin. This is a story of secret advantages, natural evolution of protocols, backdoors and half truths. It's time to talk about the people who tried to hijack bitcoin and failed. It's time for a Guy's Take episode. [00:01:04] The best in Bitcoin made Audible. I am Guy Swan and this is Bitcoin Audible. [00:01:22] Foreign. [00:01:28] 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, and we are doing a Guy's Take episode today. This show is brought to you by Fold. Fold has the. I think of fold as bitcoin banking. I think of fold as a way that I can completely use bitcoin. I can earn bitcoin back on everything that I do. Like, we've gotten. We had to get groceries and we bought some stuff on Amazon today. And I got like, I got like 15,000 sats. Like I got like 15 bucks today in bitcoin just because I switch all of my banking over to fold. And a couple of people ask me how much, like, you know, I have to switch it and I have to move $500 at a time or whatever. Like, no, just switch your banking to Fold. You can actually do that. Just. I'm just saying you get lots of sats and you know where you can keep those sats? You can send them to your Bitkit wallet. Bitkit is a software wallet. So this is just something you download on your phone or your Android. You are holding your keys. You're not. It's not a custodial wallet of any kind. And it has bitcoin and lightning integrated and something really cool they have. You can pay contacts directly. So you can add me as a contact and you can send me sats directly just through my contact list. Or I could send it to you like that's the. The really cool thing is that the payments are built into your profile, like who you are in the app. I don't think that gets enough love because that's really cool. You don't have to send a bunch of addresses and invoices and all that stuff. You can just pay in the app anyway. Check it out. Links and details in the show notes and also my identity so that you can add me as a contact. Now, today I have gone back and forth about what to do with this episode because I am so tired of this topic in a lot of ways. And I just recently did a. And I may use have some part of this follow up. I don't think we've even published this yet on the feed. Maybe we did. I can't even remember. But I was on Liberty Lockdown with Steve Patterson, who is the author of the book Hijacking Bitcoin. And we were not intending to debate the block size war, but it ended up being two hours of debating the block size war. But Steve, and with the help of Roger, they put together a book called Hijacking Bitcoin. And Roger ver was on Tucker Carlson. And my original intent for this episode was to go through the Tucker Carlson episode and just basically respond to a lot of his claims with the truth, with what actually happened and also explain why he believes his narrative and what it tells, what it can tell us about how he thinks bitcoin works and why that is wrong. And what's funny is we actually know he is wrong because it is specifically this disbelief about how bitcoin works that is why they lost the block size war. There's a reason why he is on. He's all in on bcash and the fork failed. And it is to the base nature of how bitcoin works and, and the fact that he doesn't understand it. Well, there's probably a little bit of dishonesty. I think there is a. I don't. I don't have a lot of respect for Roger. I think he's shown himself to be an incredibly poor character. He has lied numerous, numerous times about numerous things. I mean, just watching the first 15 minutes of the interview and he does something multiple times that I've known about him, I've known about his character for a really, really long time. Is the staggering amount that he uses appeal to authority to basically attempt to convince people that they should listen to him and that he's necessarily right. Like he literally goes through a couple of different claims that are totally ridiculous, but then goes on this really long, like, punch, punch, punch, punch, punch. Point of. I own Bitcoin.com. i'm the first ever to do this in bitcoin. I got everybody on this. I'm. I'm Mr. First Cryptocurrency. Blah. I was bitcoin. Jesus. Like, he just goes through this whole bunch, bunch of stuff and then basically he follows it immediately after some claim that he makes, because he literally thinks that that is evidence as to why you should just listen to whatever he says and that he is right about it. Now, I'm not saying that having experience isn't relevant, but I just put that as someone with very poor character who brings that up instead of actually arguing the point, actually arguing something about how it works. And, and the whole ridiculousness of Peter Todd had an email thread. This is a literal part of the whole story is that Peter Todd had an email thread with one person. [00:06:24] I don't know why I cannot remember his name. It's like John Bolton or something. It doesn't really matter because it wasn't a real name anyway. But in that conversation he says or alludes to. I think it's kind of. I think it's direct. He basically says he works in the government and because that he had influence and was in the ear of Peter Todd, he could take over and control what Peter Todd. Peter Todd's decision, or he influenced Peter Todd's decision. And then Peter Todd controls Bitcoin, I guess. And then that meant that they hijacked, they took over Bitcoin and it was the Feds. Now understand back during all of this time, this wasn't the running conspiracy theory. The conspiracy theory was that Blockstream was owned by an insurance company, which it's not owned, it's partially invested in by an arm of an insurance, by an investment arm that literally just goes out and invests in random tech stuff. And they have like a thousand, like the ridiculous list of things. I went and looked. I kind of dug deep into this because I was like, I've really got to know what this is. I kind of have a fondness for conspiracy theories anyway, but partially in disproving them and partially just in exploring them because they're kind of like fun, like naturally organized. I don't know. There's. There's something really fun about. Conspiracy theories is like social stories that just kind of emerge. But anyway, so I took a deep dive into their conspiracy theories and it was like axa, which is like some insurance arm that is also. So they have like a tech side, like a Subsidiary or whatever that's just investing money and all sorts of quote unquote edgy tech. And it really is. When I went through the whole list of all the things that they were investing in, it's like a bunch of weird stuff. It's like they're all looking for a unicorn of just like this thing's going to be some wild thing about thinking differently. So it doesn't surprise me at all that cryptocurrency ended up in it and Blockstream ended up in it. But then this is a subsidiary of a really big insurance company, axa, or it wasn't insurance. [00:08:30] I, I can't, I can't remember. But AXA was the company. This was the one that they say Blockstream, slash, axa. It was part of the, like, this is the stuff that you post on Reddit to, to. To prove the conspiracy. And then that was owned by or partially owned by some company. Basically it was connected to the Rothschilds at some point. I can't remember exactly the whole stack, but it was essentially that this investment, this company being part of the funding round of one of the Blockstream investment rounds, that this meant the Rothschilds had taken over Blockstream and they were controlling Bitcoin development and they were stopping Bitcoin. Now I don't really know if that theory has just disappeared now, if they really latch onto that anymore. I don't really know how the conspiracy winds are blowing in that whole social circle. But Steve, on the whole, the Fed, somebody in the government is talking to Peter Todd. This was a big part of the evidence in our conversation. Like he seemed really kind of jazzed and energetic about bringing out the big guns that there was an email thread with the dude who spoke to Peter Todd says, oh, this is definitely a Fed. Feds took over Bitcoin. Just so you know, I'm not totally could have been a guy in the government. I mean, I don't know what else it would be. I'd take his word for it. But the idea that there wouldn't be numerous people who had worked in academics, in the government as a part of or around the community. And I don't even mean as like spooks. I mean just like people working in government, like people who have worked, like cryptography is a pretty small community and there's a good section of it that is very tight with academia and the government. There are a lot of people who have been made cypherpunks because they worked in the government. Like that doesn't surprise me. And I also don't care. Peter Todd also said that we should have inflation and Luke Jr. Thinks we need 300 kilobyte blocks. And Adam Back seemed to kind of decide and want to do a 2 megabyte block increase with a very. With kind of the simplest hard fork you could do. I mean, he changed his mind later, but that was kind of the conversation angle during the whole block size or at least leading up to it. Like, if you think that like none of these people control bitcoin and I don't understand how like. And again, the appeal to authority, I think is such a good indication of how they see it. They just. And it's, it's exactly in line with what they talk about with. Everybody had agreed is there was a meeting called the New York Agreement where a bunch of big miners and a bunch of big exchanges and a few of the bitcoin devs got together and they all agreed on the path that this was going to take and it was referred to as the New York Agreement. And we were going to do a hard fork with a 2 megabyte block increase and segwit. But Roger and Steve, and everybody thinks, literally thinks that this is consensus, that that's how it works. And the fact that that didn't happen is because some. The feds came in and subverted it to stop bitcoin from being something that could change, rather than recognizing how shallow and how such a tiny, tiny group of people that that actually was. They think that because there are 20 people who have social influence that necessarily the entire protocol must follow that social influence. When the whole point of bitcoin, and the reason it is fascinating and revolutionary is that that social influence doesn't matter. And it did not succeed because everybody who ran nodes was like, I'm not doing that shit. The hell if a bunch of exchanges and miners are going to get together and tell me what bitcoin is. And the audacity, the. The fact that there was this kind of error and Coinbase literally said it, that they represent 40 million users or something stupid like that. I can't remember what it was at the time, but they just listed the number of user that they had on Coinbase, which I was signed up with Coinbase, they were one of the few exchanges at the time or places to buy bitcoin that they said that because they made this decision, this has 40 million votes behind it. And this is what everybody thinks and this is what everybody wants. I want you to, I want to try to paint you a picture of the people's Perspective on Reddit and on the bitcoin talk forums and on Twitter, which there wasn't a ton on Twitter at the time, but it was there. Nobody saw them as in charge. They. We saw bitcoin as ours. This was us making this decision. And if you didn't get our agreement, then we weren't going to do something like things. You were not going to be forced to do anything in bitcoin and there was going to be a fight if you thought that you could. And here's the kicker. For years, years we have been viciously fighting about this and there was no way to come to terms. There was no. Everybody wanted something different, Everybody wanted to use it for something different. Everybody thought about it in a different way. Everybody. We couldn't even agree on whether or not we wanted to make a short term fix or we wanted to put something in permanent for the long term that was going to fix this problem forever. Nobody agreed about whether or not a soft fork or a hard fork was even the way to go at all. Nobody agreed. And it was clear the disagreement and the fighting had not been resolved. There had been no consolidation on what was going to happen. And then they got together and said, this is what we're going to do. It's over. Do you understand when people have put years of emotional weight into this, in arguing, in trying to figure stuff out, in trying to understand this better, to be told that this is how it's going to be and we're going to update the ticker and you're going to update your software and your network isn't going to survive, which was explicitly said, this was discussed, that the people who didn't go along with us were going to be punished. [00:15:26] Can you imagine the amount of anger the. [00:15:32] Are you kidding me right now? That this stirred in the people who had been having this fight for this long? And what's funny is the bitcoin developers, even in the New York agreement, they discussed it and for some reason none of these people could get it through their heads that us making this decision now doesn't mean anything. This does not mean that it works. And this is what the results are. This was a very simple. Similar to. I think it was Luke, I think it was Luke Dasher who was like commissioned to make the bitcoin classic. [00:16:12] I can't remember one of the hard fork clients Luke was going to make and he said, yes, we can make this code. I can. It was him and somebody else. I can't remember who exactly, the details, but him and somebody else were going to make the client for these, for the hard fork, but that the miners wanted. But they specifically said, this doesn't. This doesn't mean that we're going to get the fork. And they would come back. It's like, no, the bitcoin core supports this. And then Luke would try to explain, no, we are not bitcoin core. Like, we are not here representing as an institution. We can't just go back and tell all of the developers that we work with with that this is how we're going to move forward. Now, there will. There would instantly be a civil war. There would be a bloody awful fight. I can't say me, Luke, I will do this for you, and you can have this code and do whatever you want with it and try to get people to move to this piece of software. But I do not decide what bitcoin does. He literally, I remember so much about trying to get that through to people. And for some reason, the miners, the Chinese miners could not understand this concept. They could not understand that they weren't talking to the people who ran bitcoin and that they weren't supposed to just do what they said. No, you are bitcoin core. You have to do this because you agreed to it. This was a huge fight a couple of months later when Luke gave them a client, and then there was no bitcoin core. Like, bip that. Okay, well, now we're going to issue this as a soft fork and here's the date and we're gonna push it all through or hard fork. And they were. They were pissed. This was like this huge thing that they've reneged. They. They went back on their deal. We said we were gonna do this. And Luke, again, everybody trying to explain this freaking situation were like, this doesn't mean anything. Like, you just have a client if you want people to run it. But bitcoin core isn't gonna. Luke isn't going to agree to something that then bitcoin core is going to be held to and that they're going to put in the client and then that somehow magically everybody is going to install and run it. And that there won't be any argument because you and I made a decision somewhere in some room. [00:18:32] But it literally, to this day, it has never gotten through their head that that's not how bitcoin works. [00:18:42] Steve even says it in our conversation on Liberty Lockdown that there was consensus to change it. There was consensus to make bitcoin bigger. And I don't if he's not like really listening, like calming down and thinking about trying to learn that bitcoin doesn't work like that, that his ego isn't tied to this idea. [00:19:09] The idea that people want something to change is not consensus. You could have 99, you could have every last person in bitcoin say, I want Bitcoin to upgrade. And that has nothing to do with deciding on what upgrade to do. Everyone has to agree on the exact specific down to the basic bit change that they want explicitly at the expense of all other possible changes, quote, unquote. Everybody wants to change. It is not consensus on anything. It could not be less relevant to the protocol or how any of this works. That is not consensus. That's like everybody saying, oh, we want lightning to be better. And then thinking that means that there isn't an argument about whether it's opcat or opctv or l enhance or checksig from stack or the 1300 other proposals about making lightning better, about making it easier to scale bitcoin through some sort of an opcode or soft fork or smart contract or whatever system it is that everybody's got that we would just be like, okay, well, yeah, we want it to be better for that. Therefore we have consensus. And this argument is literally made. And it's so. Oh my God, it's so frustrating. But I wanted to take the rest of this episode to lay out the story of hijacking bitcoin that is not told about the hijacking that failed. And rather than answer all the things that they say because we've done that a bajillion times, I just kind of want to tell the story from the side. From my perspective, what I saw happening during that time and what it meant from my perspective. [00:21:05] First things first. I do not think there was a measurable or meaningful conspiracy in any way from any parties related to the government were trying to take over bitcoin outside of the fact that we had a ton of people who disagreed and what they wanted to do and all cared about bitcoin and wanted it to be better. They had their vision that they wanted. They. They wanted to see bitcoin fulfill. And that includes all of Roger Ver's dishonesty. That includes all. Like, I think. I genuinely think Roger Ver wanted the best for bitcoin and still does. Even though he does not even give the slightest concession that people actually disagree with him honestly and think that there is a better course for bitcoin, he will not admit that he can only ever frame it, that there are stupid people who listen to people who are literally trying to kill bitcoin and that this was the explicit goal and that they are corrupt, they are evil, they are government. And there is no honest debate of any sort that could make their side have any merit whatsoever. This is exactly why he's telling this story, that the government is persecuting him because he wrote a book. Now, I will say that there are three main reasons why I think they have gone after him and they are trying to get him for tax evasion. Which, by the way, even though I bet that what he was trying to do is get out of paying any and all of his taxes on any and all tax taxes on bitcoin and everything that happened during that entire era, I do believe that that's what happened and that's why he went to St. Kitts, and that's why he was trying to get away and that there was probably an enormous tax burden that he owed, according to the irs. Mind you, I do not believe that he should go to jail for that. I believe that destroying someone's life over taxes at all. Like, I think taxation is theft. I never believed anything differently. And I think. I think Roger is a piece of crap. And I still think they are doing something terribly wrong to him that is evil, especially when he renounced his citizenship. He is not a citizen of the nation. And I think an exit tax is the stupidest possible tax and most unethical of all taxes, which is crazy because every tax is unethical. But imagine telling somebody that, oh, you don't like it here. You don't think you're being represented. You don't think your government is here to serve you in any way, shape or form to the point that you literally do want to leave, that you literally do feel like there is nothing for you here that could make it worth you calling yourself a citizen. Well, you have to pay for the privilege to leave. [00:24:02] Everybody literally says, okay, well, then leave. But you can't leave. You still owe them. Like, the idea of paying taxes is that you live here, you are a citizen, and you are getting services from the government. Yes, it is a compulsory, corrupt, evil service, but nonetheless, it's like if I live in a neighborhood and I am getting, you know, satellite TV from Comcast, sure, it's deeply unethical for them to force me to pay for Comcast, but there is at least some logical sense that I am getting a service that can't be separated out or itemized out because, you know, for some reason just broadcast out to everyone. Like, I would be a freeloader and I would get the TV service anyway. There was at least some modicum of logic that I at least have to pay for the service that is provided as a citizen. That, you know, there's some sort of a system that you are a part of, evil and mafia like or not. But the idea that I would leave the system and still have to pay for the service, that even if I sold my house, I left the neighborhood because I was so sick of it and I felt like I was being completely cheated out of everything that I was being forced to contribute, then I have to pay a tax to exit that even makes all. Even if you believed all of the stupid logic about government and we are the government and they're providing us with services and we're their boss and you know, I'm just a bill sitting here on. Everybody's just trying to figure out what's the best rules for the nation. Even if you believed all of that religious nonsense about the government, it would at least be dependent on the fact that you chose to be here and chose not to be under some other government because this one was better. And therefore you have to pay for this government services because you are benefiting from their service. If somebody leaves the nation and renounces their citizenship, they shouldn't have to pay anything. So I want to go ahead and get that out of the way is I completely agree. As much as I dislike Roger, I believe that is insane. And even if he left to avoid taxes specifically for the purpose of paying as little or hopefully nothing at all in taxes, he literally renounced his citizenship and left the country. If there is any possible right at all in regarding taxes, in relationship to taxes, the one, the just one should be that if you choose not to leave the country, you choose to renounce your citizenship and you feel this country does not represent you in any way whatsoever, that, that, that would at least be the one scenario in which, yes, as not a citizen of this country and feeling totally and completely unrepresented, such that you would pick yourself up and leave it forever and never return, that is the situation in which you do not have to pay taxes because how utterly have we failed you that that's the course of action you want to take. [00:27:23] So anyway, I think that's crazy. I think the fact that they've arrested him in Spain and it's crazy. And I also think. I think there are three, probably at least in my mind, I think three main reasons why they went after him. One, he was very, very public. Two, it's a whole heck of a lot of money. And three, he has been very vocal and he has made enemies in the government. And no, I don't think it has anything to do with him releasing the book hijacking Bitcoin because I can't think of anything that would be more ineffectual as far as even slightly mattering in the big picture as to what happens with bitcoin or bitcoin cash or anything like that. And I think again it lends itself to the perspective that he has on this is that if you can get all the quote unquote important people on Twitter or Reddit to agree and that's what the social wins seem like they are, then bitcoin can just be whatever you want it to be. And it just needs to have new leaders. And if they, if you know, they took bitcoin core out and they put Roger Ver and Steve or whoever in and they were running bitcoin core, everything would be great and we'd hard fork and it all be consensus. But I do understand that it's not exactly intuitive as to why that is the case. [00:28:48] So let's wind the clock back to the first that I was getting involved in the block size war. First we were seeing full blocks, we were seeing, you know, fees spike. We were, we were first learning about the fee weather on the bitcoin system and it was really a wake up call to a lot of people and how they were used to using bitcoin. There had been companies, there were really popular apps and websites and there were entire business models that basically relied on being able to send bitcoin for free and being able to make as many UTXOs as you can possibly want. The idea of like good stewardship and not bloating the chain was essentially non existent because it was just use it. It was just about like whether or not people would even use it. Like this was very early on in bitcoin that this really kicked off. And so what seems like the obvious approach, if there's not enough block space and fees are going up and things are changing based on people aren't able to continue using it the way they're used to using it. What, what's the obvious next step? What's the obvious fix? Well, the most naive and simplistic possible course of action is make the blocks bigger. I also want to emphasize that, that there is no like less intelligent, less obvious way to solve the problem. It is the very first and most absent of thinking about any trade offs or any costs or Anything at all. That is the. If you are thinking about it for eight seconds, you can come up with that answer. That is actually an important piece of information. And honestly, 8 seconds is too long for most people. [00:30:48] It was my first impression as well. It seemed the obvious course of action and there was very much a conversation and I was at least aware of it then thinking about okay, well how far can you go with that? And to be conservative about that change. But it wasn't really being conservative in the context of a hard fork or a soft fork or how the change might happen. It was really more of just, okay, well we don't want to do it too much because obviously there's could be a trade off or some sort of cost, so what's the smart way to do it? And we just went for at least a few months there. It was just one proposal after another. I mean, just like you've heard on this show when we've gone through this stuff. It's CTV. CTV plus TXHash. Well, TXHash does a lot of things that CTV does. It's a little bit different, but it does let you do this other things thing. OP Cat, OP Cat. We can do covenants with opcat. But then you kind of need cfss. [00:31:54] Like you just. It's one thing after the other. There's probably like 40 freaking opcodes on the table right now for what everybody's thinking about in advancing layer two and making layer three. Well, imagine this level of variety and approaches and conversations just about the block size. Like there was really one. There was literally one called Bitcoin Unlimited that proposed because a lot of people were saying it's like, well this would just get huge and you wouldn't be able to run a node. And this ended up leading to people saying that doesn't matter, you're stupid. Even though for the longest time it was very clear that running a node was very important. [00:32:37] They didn't actually dig their heels in and go into the like, I really, I'm just going to reject some basic ideas about how bitcoin works and how bitcoin is actually secured and why it's distributed at all. That didn't happen till later when they just got really, really mad and they just decided that anything that is said on the other side of the aisle was just wrong and stupid. And it got them to embrace things that are just deeply wrong about how bitcoin works. But for a long time there was a lot of honest discussion about what the limit of those trade offs were, is, was 4 megabytes too much was 8 megabytes too much was how, how rough there was. I can't tell you how many thousands of calculations on how many people would be able to run a node, what this would mean in 15, 20 years. Like this was all of the conversation. It was the overwhelming majority of the debate for quite some time. And one of the things that I heard, or this is specifically why one of the things that I really, really liked about Bitcoin Unlimited, because it was starting to get become a really heated argument and it was clear that we could not decide on anything that there was, there was going to be a very, very difficult capacity to reach agreement. There was beginning to be a question as to whether or not we could even agree on what to do. And I felt this pretty early on. And this is why one of the things that I got really interested in was Bitcoin Unlimited. This seemed like a decent like middle ground trade off from a naive perspective as to what to do. It was a immediate 2 megabyte block size increase and then I think it was 17% per year. Though I believe there was another proposal of a version that actually did it. Every era, every like having era that you know, every 210,000 blocks it bumped up again like some percentage or amount. And the idea here actually was to keep it in line with what we have historically seen with Moore's Law and hopefully keep it safely underneath the trend of Moore's Law so that it doesn't get that much more difficult to run a node in the future or that it can roughly stay at the current difficulty or the current cost. Maybe we could figure out a way to do some sort of a balancing act that kept it at the current cost indefinitely and we could predict the degree of cost and progress in the technology that will allow the node to be run. Now that didn't seem like that's a perfectly simple thing to do. There's a very difficult nuance there on, you know, what to where that line is and whether Moore's Law will continue in the future. And there was a lot of depth debate about that. But of course arguments ensued. Every, everybody had an argument against every single proposal. And one of the things about this, and this one actually was beginning to shift my perspective was the hyper focus on storage. It's just like how big is this thing? And then realizing, and I don't remember who it just conversations with dozens and dozens and dozens of people that it is not just, it is not a simple matter of how much hard drive space do you have it's how much RAM do you have to load the UTXO set into memory efficiently? How much bandwidth do you have in order to download the entire chain and continue to upload the entire chain? What is the latency on the computation in verifying each block when it comes in, when it's 10 megabytes, 20 megabytes, and also might have much more complex transactions in the future. And also in digging into the understanding there, you realize that these problems negatively compound on each other. So even if storage more than kept up with Moore's law, if bandwidth just didn't keep up with it, well, then it wouldn't. It was basically, there's a lowest common denominator is that whatever the weakest link is is the degree of security and autonomy and distribution in the, in the node network. So it wouldn't matter if everybody could run a node because, you know, you could get a 20 terabyte hard drive for 50 bucks if it still required, you know, a huge prosumer computer to handle all of the ram. But this whole period was just an incredible learning period for Bitcoin, for bitcoiners, specifically because you couldn't. People were having all of these arguments and like really nuanced perspectives on all of this stuff. And I. This was when I was really, really, really digging into all of these different things and how it works. And I remember there was a really great analogy by Greg Maxwell about how this thing had to scale because so much. And one of the big kickers that made me realize is how completely and utterly irrelevant the discussion of 2 megabytes, 4 megabytes and 8 megabytes was in the context of using this the way that we had been using Bitcoin, that we were just going to use this as direct cash payment, quote, unquote, cash payments, that every single time I wanted to do anything and anytime you wanted to do anything in the whole world wanted to do anything and pay for anything, we would do micro payments over Bitcoin. We would, I would do my groceries over Bitcoin. Everything was just going to be on chain Bitcoin. When I realized that that vision was so utterly unrealistic, like fantastical to the point of absurdity that it was ever going to work like that, I realized that all of the argument about what we were going to do was the difference between, like, this was a huge political fight over a metric that could not have been, in the grand scheme of things, less relevant to the actual problem. Like if we did not have two layers of 100x capacity increase in how we used and secured the transfer of bitcoin from me to you, two layers, as in like a compounding, like a hundred X on 100X, then the conversation wasn't. Was a complete waste of time. And it's important to understand lightning is a 100X. It is a. It shifts. It can completely shifts the capacity question of Bitcoin from how many transactions can bitcoin handle to how many people can own their own utxo. That is a fundamental shift in the question of scaling. And it is only a shift that changes the conversation that much. That's really even worth talking about in my opinion. And the longer it went on and the more vicious it got, the more I was just coming to the conclusion that we're wasting time because there should be something. We need a fundamentally different approach. Like this approach just is failing. It was clearly failing. And all it had done was basically split the bitcoin community apart and got us throwing swords at each other and wanting to kill everybody when we hadn't even started, like honestly started the fight with the government. And I remember this was something that Jonathan Beer talked about in the blog Block Size War is that there was this moment after he when there was this huge fight and debate and everybody was at each other's throats and he was thinking, you know, is this even going to work? Like he had this moment of reflection when I think he was looking over the city in Hong Kong and he was like, if we can't solve this, how are we going to fight governments? How do we intend for this to be an apolitical money that can stand up to the most powerful nations on earth? [00:41:24] We can't make one agreement about this issue. [00:41:29] And I kind of had a similar moment. There was. My shift in thinking was beginning was occurring during this whole period as well. And I think it was generally a lot of people were kind of waking up to this just isn't working. [00:41:45] And in the midst of this, the lightning network had been proposed and it was growing in interest and more people were looking into it. And then I finally took a deep dive down the lightning network rabbit hole. I read the entire white paper a couple of different times because it was very difficult to follow what the hell it was doing. But then when I understood the whole security model of it, I was like, this is the only thing that is worth talking about because this utterly changes. This fundamentally changes the way we think about Bitcoin and the way we use Bitcoin to enable an entirely different type of transaction that has none of the same costs and none of the same elements as to. It just, it just changes the dynamic completely so that the number of payments really isn't the problem anymore. It's the number of connections in a network. And when I, when I was digging into it, it triggered something in the past of my Internet history rabbit holes that I'd gone down and read a bunch of books on this and it triggered the whole, oh, this is the broadcast and unicast idea. And that conversation was beginning to come up and it just hit me that like, no, this makes sense. This is the natural progression and evolution of foundational protocols. We've seen this happen before in the Internet. This makes sense to me. And this isn't the previous conversation of saying, you know, arguing about whether or not a bucket or a glass can hold the ocean better. And there was a proposal for Segwit called Segregated Witness because there was a problem in Bitcoin or a limitation in Bitcoin that didn't allow the lightning network to natively work without some difficult trade offs in security that could actually be solved. And it is essentially a bug. It's the ability to post the exact same transaction with a different transaction ID that's still valid. So it was not deterministic that the transaction ID and the transaction were exactly one in the same that you could arbitrarily change the transaction in which it was still the same one. Like I was still spending the same UTXO to the same party with the same signature and all that good stuff. Well, I think it was actually the signature that changed just a tiny bit, but it was all still valid and same rules and everything. But here's the thing is that if you are looking on the blockchain for your transaction ID for your utxo, you wouldn't see it because you would already be looking for one that you had previously signed with a different transaction id. It's like being able to. So how this related to the Mt. Gox hack back in the day, it's referred to as transaction malleability. So think about it is that if you're just going by the validity of the transaction details is it's like being able to. If somebody comes in to your store, they've bought something and they have a receipt and it's a valid receipt and all you did was check the receipt number to see if that receipt had been refunded or not is that somebody comes in and tries to refund and you check the receipt number and it hadn't been refunded. So you're like, okay, well here's your refund and you send them the bitcoin. But then they manage. There's actually a trick in which they can change something arbitrarily on the receipt. Basically bring back the exact same receipt, but the receipt number has changed, but everything else is still valid. Well, they're going to look it up by the receipt number and they're going to say, well, this one hasn't been refunded, even though there was a different one that was exactly the same that was refunded, but it has a different id. And so they send you the bitcoin again. This is what happened to Mount Gox. Somebody exploited this bug. But you can easily get around this. But some of the elements of this without getting too much into it. But this and a couple of other technical reasons were why there needed to be a change in signatures and how transactions were built so that they were deterministic that would make it easy, a much easier to do lightning securely and specifically channel constructions. So it wasn't really just lightning. It was, it was about doing this enforcement via time lock and revocation keys system. This idea which is actually relevant to tons of different proposed L2s. This is even relevant to, you know, obviously channel pools because they're built with a Lightning style construction, but also the CTV pools, like so many of the different things, are about holding pre signed transactions with a script with combination of signatures and time locks that allows you to unilaterally exit or to enforce your ownership against a different party trying to defraud you. And Segwit was important to making sure that worked because there were some oddities in how transactions were done that allowed for this wiggle room, this degree of ambiguity in what the transaction is going to look like that made it really, really hard to enforce those contracts. And so this was all happening at the exact same time as the vicious, horrible block size debate. And so it started making its way into the conversation, into the center of the conversation, because lightning ended up becoming this pivoting totem, so to speak, about the conversation, where everybody, essentially everybody in the social sphere who wanted to not fork for a block size essentially started touting that lightning was necessarily the end all, be all and it was going to solve scaling. And that's not entirely true. Like, not everybody was saying that like most people were giving or a lot of informed people were giving. The obvious reality of Lightning, even the light, the white paper itself talked about limitations. There were tons of genuine people going into what the limitations are and what the Next era or layer of innovation and extension of this would need to be but the social sphere. But tons of people on Reddit were just like, everybody on the opposite side was saying that everybody was going to be on chain. It was, everybody's going to be on lightning. And there was kind of this dichotomy that like you either went into the now you went into the batch of lightning is stupid. It's fractional reserve and it's. It's vaporware. Or lightning was the greatest thing ever since sliced bread. And everybody was, everybody in the whole world was going to have a lightning node. So this made it really easy. Even though there were more deep and genuine arguments on both sides, this made it really easy to point at the other side and say, you're an idiot, you have no idea what you're talking about. [00:48:58] Then Luke came up with the idea of making Segwit getting, pushing us towards lightning and making Segwit. Importantly, there was very little contention about the Segwit change itself. Generally speaking, people thought it was a good idea. It wasn't super controversial. The debate had. Lightning had become controversial because it was the thing to use when you were saying, we don't need a hard fork. But Segwit wasn't until Luke came up with a way to also make Segwit a block size increase as a soft fork. Now, this made the people who wanted a fork, a hard fork, really, really mad. And this is really when things started getting super vicious, because I think there was a tendency to believe that we were going to have a hard fork. It was just going to be a really long time to figure out what kind of hard fork. And I think this is when the hard fork community suddenly realized that they might not get anything, they may not, they might not get their way at all. And the conversations that we're having, the things that were said, there was absolutely this sense that bitcoin core had betrayed them, that they, they were dishonest and they had no integrity because they had agreed to make this change and do this client. And again, Luke is trying to explain ever. All the people there were trying to explain like, we don't control these people. We can't just say, this is what we're going to do. And then that's what happens. And they were in the other side were just like, you're backing out, you're just cowards, you're liars, you're a fraud, you're captured, you've been, this is. You're the feds and the Conversation literally became, we are going to fire the developers and we are going to fork off and we are going to destroy your network. You will not be. We will take all of the miners with us and we will not allow your bitcoin to survive. And verbally, they had the overwhelming majority of miners on their side. But here's the interesting this is when Jihan Wu, the CEO of Bitmain, now Bitmain, had the largest monopoly. They still have an incredible amount of power over the market, but they had the most power and relevance. They dominated the ASIC market completely. And importantly, if you are a different miner, if you were a small mining pool or a small mining operation and you did not have the favor of Bitmain, then the bitcoin mining community and industry was in such a huge amount of flux and the hash rate was changing so quickly that if your order for miners was three months later than you had anticipated, it could be the difference between making a fortune and making nothing, losing tons of money. And this was regular. People were constantly promising. I almost bought a butterfly labs and I watched people desperately, like infuriated, wait, desperately wanting their miner to get shipped and watching that profitability plummet day by day by day while the bitcoin price was going up. So the cost that they paid to pre order one of those butterfly labs miners had was going up and up. So what they, you know, paid $3,000 for this miner and now it was suddenly $8,000 that they had paid for the miner and the hash rate had gone up and the cost had gone up, everything had gone up and they still did not have a miner. So understand, if you did not have the favor of Jihyun Wu, he could kill you as a company. I don't mean it like he would go get a hit put out on you, but if you were a mining company and you needed miners and Jihan wasn't in an in a hurry to fulfill your order, you didn't get miners and you probably lost all your money. Now I'm not saying this was a common occurrence or anything. I'm simply saying this was the power dynamic and I think it had a massive amount of reason or amount of influence over the fact that all the miners were just kind of going along with jihad. And it's also really important to remember that the entire debate was really happening in the US Bitcoin community and there was, there still is a huge separation between what is going on in China, what the conversation is in China, what the social dynamics are in China versus the US the east and the west are not very connected at all today. And it was even less so back then. They honestly did not have a lot of information, and vice versa, as to what was going on and what they were thinking. Some of these times in which they got together in a big room and, you know, hashed it out for hours and hours on end, was literally trying to catch up on months worth of differing narratives and decision making so that we could find some sort of a common ground. [00:54:27] But Jihan was very, very, very, very much against the whole segwit thing. And he latched on to Roger and everybody on the big blocker, the we want to fork it side of the conversation, and started throwing his weight around. I mean, this was the era of f your mother. If you want to f quote from Jihan when how in how bad and how just direct insults and attacks this whole debate got. But his adamants about this came off as slightly odd. It was, it was throwing up some flags for people and it got things churning in conversation as to why he was so horribly against this. [00:55:17] Now there's another thing called ASIC Boost. If you haven't been in Bitcoin for very long, you probably don't know about this because this whole situation was resolved and now every ASIC has ASIC Boost like it's not, it's not a thing anymore. But mining margins are tiny. They are incredibly, incredibly thin. So if you have a 4 or 5% advantage on the efficiency of your hardware or you have a 5% advantage on the price of energy that you get, that's a make or break. That could be a huge opportunity that keeps you out in the lead for a long time. [00:56:01] Well, ASIC Boost was this method that had been uncovered that allowed anywhere between like a 15 to 30, 30% energy efficiency advantage on their ASIC machine. But it was patented, which means that if somebody used it, they were violating somebody's patent. And therefore the government could basically be the deciding factor. There could be a. The. Basically they'd have the government goons to go after everyone who used it or paid and didn't pay the patent owners, and therefore the patent owners could completely own the entire Bitcoin proof of work ecosystem with an advantage that wasn't actually a real. It wasn't a advantage that nobody else could replicate. It was simply one that the government would enforce and they could use the government as a weapon to go after everybody who attempted to use it to match them in the market. Now also, there was a overt and covert flavor of ASIC Boost, so to speak. You could do it in a way that it was visible on the chain, in the way transactions and blocks and everything were construction, in the way the data was that you mined. It was obvious that you were using ASIC Boost. You were basically announcing it to the world. [00:57:33] But there was also a covert option, a way that you could get this same advantage and nobody could tell that you were doing it. The Bitmain machines were configured to be able to do both overt and covert ASIC Boost, but nobody was using it overtly because that would infringe on a patent. But here's the thing. ASIC Boost wasn't common in the thing. So it wasn't known that Bitmain had configured their miners had built in the circuit for ASIC Boost because this wasn't being used on the network. It was being debated and maybe, maybe there was somebody using it. I can't remember exactly the details, but it wasn't a common thing. People didn't know that Bitmain miners could do this. And, and the overwhelming majority of the market was using Bitmain miners. In fact, there was this period of time where everybody was like, why isn't, why isn't Bitmain saying anything about this when this was becoming like a big part of the controversy? And then they finally released a statement saying, yes, our circuits have a design that would support ASIC Boost technology or something like that. Very corporate statement. So why was this a big deal? Because they were aggressively against Segwit. And the Segwit upgrade made covert egg. ASIC Boost not compatible anymore. Just a technical oddity and how it worked made the COVID version of ASIC Boost no longer compatible on the Bitcoin network. No longer possible. You had to do the overt one. [00:59:16] So let me hit those points again. There's a 15 to 30% mining advantage that nobody can use because it's patented. There's a huge block size debate. [00:59:26] Segwit is proposed as a potential compromise to try to get something for both sides of the aisle and still fix the problem that we've been needing to fix. Jihan Wu goes super Saiyan mad. And Segwit is the worst thing that has ever existed. And we must stop this at all costs and we must fork Bitcoin. Bitmain owns the ASIC Boost patent inside of China. It is revealed and admitted that Bitmain machines actually can run ASIC Boost even though Bitmain released a statement saying they don't use ASIC Boost for the good of the Bitcoin network. And then it is discovered that the way SEGWIT is being implemented, makes the COVID version the way to secretly use ASIC Boost no longer possible. [01:00:21] That's a suspicious confluence of incentives. [01:00:25] And so people were trying to figure out, okay, can we, can we find out if Antpool, so Bitmain's Antpool, and they're mining a bunch of their machines. In fact, there was a lot of things about their mining stuff, but before they send it to the customer and they're actually delaying shipments because they're mining with everybody's ASICs while they're still most profitable and they can delay for a week or two and make all this extra money. But the question was, are they using ASIC Boost? Even though they're adamant about we're not doing ASIC Boost. But then they also said that ASIC Boost is actually a super positive and it would be great and we shouldn't be mad at ASIC Boost, but then also for the good of the network, we're not using ASIC Boost. So people are trying to figure out how do we find out if they're using it covertly and they have a 30% advantage on everybody else? Well, probably like a 15%, realistically, after you tally everything up and deal with other costs, probably 15, maybe 20% max. Are they taking advantage of this? Are they doing this secretly and have a massive leg up? And this is part of why they have an unshakable dominance over the entire industry. And how do we find out if they are doing this and then gaslighting everybody into think that they aren't? Well, even though the COVID version is really hard to spot, there are some things that could indicate they are in fact using it. And it's still something that there could be other explanations for. Like empty blocks is part of an indication, like nearly empty blocks, just like very few transactions, even though there's a big mempool or completely empty blocks. But there are other reasons, specifically completely empty blocks, there are reasons why those pop up from time to time, even today. But then there's odd transaction transaction ordering that wouldn't make sense. From the context, the mempool and all the basic filterings, it would mean you had very custom software specifically trying to make a bizarre transaction ordering, which, which would suggest there is some other reason or incentive for doing that. And then there's no obvious reason for doing that, but it does actually align a lot with the use of COVID ASIC Boost because you would have to do those sorts of things in order to make it work. Well, a bunch of Reddit investigators started going through blocks and finding nearly empty blocks, a lot of odd transaction ordering, basically a lot of the little flags and empirical evidence and suggestions that no, yeah, they're totally doing this and they're gonna take like a massive revenue kit if we get the upgrade that things are push. Things seem to be shifting toward. And he has gone all in on attacking that upgrade with everything that he has and pushing for a hard fork and jumping in line between the firing of the core devs and taking over the client, moving the entire power of the client and development into a new repo and forking off into the network. Forking off the network. But things kept falling out like things slowly were just being more and more uncovered. [01:03:38] In fact, there was one thing that somebody realized, found somehow, and I don't even remember how this happened, but that they actually had stratum commands for ASIC boost running on their servers. So they'd actually put it into their, the software that runs it. And all the while all of this is happening as the block size debate is getting worse and worse and worse. And now this is where, you know, conspiracies and everybody's like, you're, you're lying, you're, you're a fraud. And the, the. But the real tomato throwing and backstabbing was really getting into full swing here. And then there was another thing that happened is during one of these amiable, nice debates where a whole bunch of people got together and then they screamed and insulted each other and failed to come to any agreement at the end of it. [01:04:37] There was one and there were a lot of these that we were watching online. [01:04:41] Gian even said at one one of these big kind of roundtable get together things where all this was being debated. He said something along the lines of. And I believe this was actually in person, if I remember correctly. [01:04:59] Not like I was there in person, but I mean like it was like a. He was there and he said it to people in person. And it wasn't like a comment on Reddit or Twitter or anything like that, but when there was conversation about the, the fact that there might be two networks and there was going to be a battle or that there could be a battle because a lot of people might not download the fork client and this might not work at all. Like they thought think he basically kind of flexed nuts a little bit. He had this comment or remark that we can take care of that. [01:05:41] And it was odd enough because there were conversations. And again, that's not like a direct quote. I don't remember exactly what it was, but I just Remember, something about the way that he said it made it stand out specifically to a lot of people who were having this conversation online because it was less like a, oh, we're gonna 51% attack your network, and we're gonna. We're gonna, you know, we're gonna outpace you, because we've been having that conversation for a while. Or at least that was part of the conversation because obviously it was on the table that this could just turn into a fork. And what happens? What's the outcome if there's two completely different networks with two groups of bitcoiners fighting each other? But something about the way Gi Han said it got a lot of people suspicious. Kind of similar to the whole overt ASIC Boost, how the ASIC Boost stuff was getting uncovered. There seemed to be like another thing that almost. Almost hinting dig a little deeper. [01:06:42] And it wasn't too long after that that somebody was digging into the firmware and found a remote command function that Bitmain could actually exploit. [01:06:55] In other words, in every mining machine that had been delivered to their customers, there was actually a command, a system still in place that Bitmain had access to do, to use, that would remote shut down all of the miners on the network. [01:07:15] It got called Ant Bleed. [01:07:18] And so the storm cometh again. And everybody jumps on him. This blows up all over the Internet circles, and everybody's like, is this true? Is this true? Is this real? And I feel like it was like Bitmain was quiet for a while, and then finally they released a statement and said, this was a feature that we had put in so that the users could toggle their miners remotely that we just never turned on. And it just so happens that we were still able to control it because that was just the default setting. [01:07:54] But all of this was just so admission. Oh, yeah, it's totally there. That's exactly. You interpreted it exactly as it is. And now everybody's asking, is this why he's been so arrogant, so confident in the fact that there were not going to be two different networks? Because he literally thought, I can just turn the other one off. [01:08:16] Oh, man. This threw gas on the fire. And the shift around the whole conversation, everything around the conversation shifted again and goal posts were moved. And one of the things is that Jihan Wu and everybody on that whole camp started to say they would support Segwit if it was done as a hard fork and if. And. Or if a hard fork was agreed upon later for a block size increase, which again, just shows how much they did not understand how this worked as if you could just unilaterally say they just thought they were like a couple of businesses getting together and making a deal because they run the industry and they control everything and the users don't matter and it doesn't matter what they think or if they disagree with this. As long as I'm all the hash power and you're the, you know, 10 most important companies. We are Bitcoin. So if we make the choice and somebody, any spokesperson from Bitcoin core says, we're going to do this, well, what we said in the Hong Kong agreement, you still have backed out on it. You know, you haven't kept up your end of the bargain because the bitcoin network hasn't forked yet. And so we will only support segwit. Basically, we're gonna hold it hostage. We're going to reject segwit even though we now don't have a good reason to reject it unless we get a hard fork with it or a little bit later down the road. And that was part of the conversation. But then, you know, things switched to SegWit2.x, which was a proposal for SEGWIT and a hard fork right out the gate. Jihan Wu still was kind of pushing extension blocks and stuff, which would not coincidentally, would not have screwed up covert ASIC boost, all the big blockers in general. Roger Ver is kind of like the spokesperson over there. He's kind of the poster child of all of this and he's just attacking everything. And now everybody's saying nodes are crap and they don't matter. And so everybody's like calling their bluff and be like, we don't want a hard fork. We're not going to get a hard fork. We do want segwit. You're admitting that SEGWIT is perfectly fine, it's safe and it's desirable. You have run out of logical or real reasons to not want segwit, and now you're attempting to hold it hostage by forcing the network to do a hard fork, which is exactly what this entire conversation is about. [01:10:53] So now running a node is stupid and you're all idiots. And running a node doesn't do anything. If you don't have miners, your network is dead. And all the miners agree at the New York agreement that we're going to move over to this segwit2.x, we're going to do this hard fork plus segwit compromise, and everybody else can suck it. Your nodes don't matter, and so everybody us who were running nodes said, well, fine, we're going to do a user activated soft fork, we're going to force activate SEGWIT on our nodes and we are going to kick you off. If you don't support segwit and we're not going to do your hard fork, we're explicitly going to reject your hard fork because that is literally not the deal. We have finally come to consensus on the fact that SEGWIT is a positive upgrade and you are trying to hold it hostage for a change that literally tons of people don't want. So we are going to run our nodes, we are going to activate it and we are going to ignore your client and we think we are going to win. Good luck. [01:11:53] They screamed louder, got even angrier. No, you're not gonna do that because even though your nodes don't matter, you suck and you're stupid and you're evil for running those nodes. It's like, well, if running nodes don't matter, then what? User activated soft fork is nothing. What are you, what are you worried about? You just said nodes don't matter. Let's see who's right. Do they matter? Do they not? And this escalated and people are backing this thing. And people are backing this thing. [01:12:21] Conservative core devs are being like, this user activated soft fork thing is not very safe or optimal route to go about this. But the memes are so good. We started selling hats. Everybody was like, screw it, we're all running a node. The node count on the network started to shoot up. The users are all beating their chests. It's like, we're stupid autists and this is our network and you can suck it. Hashtag delete coinbase, hashtag Bitcoin Judas. And they're trying to go forward with segwit2.x and trying to pretend all this isn't happening. And then like two weeks before the network was supposed to activate, they said, we're not doing it anymore, we're backing out. A subset of. Oh, and also futures markets came up during all of this. And Bitcoin fork forked Bitcoin, SegWit, SegWit2.x. Excuse me. [01:13:18] The, the Jihan Wu flavor basically was trading at like 20% of the traditional of actual Bitcoin. And this futures market was basically like, all of this bitcoin is going to fork at some point and you will get one coin or the other coin, which one do you want? And so that basically took all of the steam out of the. We've got all the big exchanges and we've got all the miners on our side. Our coin is the real coin. And then it started trading on Bitfinex futures and the market set a very, made a very different conclusion as to what the value of their fork really was going to be or suggested at least. And that took the wind out of the sails and they bailed on it two weeks before it launched. And because some people still had those futures contracts, they, a subset still tried to scramble and bring it together and run the client. And it turned out the client, it was by Jeff Garzick. Yeah, I'm pretty sure it was Garzick. No, wait, had Hearn, had Mike Hearn bailed on us by then? I think he had Rage quit already. So I think it was Jeff Garzick who developed the client for segwit2x. There was an off by one bug and the node crashed. The entire network crashed dead upon arrival like it never produced a single block. This made a combo of Jihan and Roger Ver and even Craig Wright and everybody just super mad. We're going to get our fork and they're like, we're going to make the real bitcoin and we're going to fork off to bitcoin cash. And then they forked off and they thought still that they were going to kill the network by starving the bitcoin network of miners because they had this eda, this emergency difficulty adjustment which was going to be lopsided so that if the hash rate fell too fast, the difficulty could drop very quickly, but that it could not increase very quickly. It wasn't balanced to either direction. And this was going to make bitcoin cash more profitable to mine in comparison to the price versus the difficulty adjustment. Because every time it fell, it would fall very, very quickly and the miners would want to come back to bitcoin cash and then they would want to and it wouldn't raise quickly enough so it would stay profitable and then if they left, it would immediately become profitable again very, very quickly and they'd come back. So the idea was that they were going to starve bitcoin of miners by manipulating the literal protocol level and the difficulty adjustment, the balancing act of the network, in order to explicitly spoke this out loud, which there was also a conversation about the fact that if the hash rate fell too much, it would need to adjust quickly. But rather than just having a quicker adjustment or maybe even since they're hard forking, a one time adjustment to allow balance to be restored, there was a whole Nother arm of the conversation of that. Like, we could just, we could starve the bitcoin network of hash power. But instead of this actually working the way that they thought, an imbalance actually just got exploited. And it turned out that if you stayed off the network long enough, you could wait until the difficulty dropped so low that blocks came in like once every like five seconds on the bitcoin cash network. And then you could flood onto the network and go through like a whole epoch. You go through hundreds and hundreds of blocks in very short amount of time, a very short amount of time. And then it would be maximally profitable because the price of bitcoin cash was low enough in comparison to bitcoin, there was just no reason to stay over there unless it was really profitable. And as miners were realizing this, it got more and more optimized until when the difficulty was low, it got. Or when the miners left, like basically the fluctuation wasn't so bad at the beginning because some miners didn't get that how this was going to be. But once they realized, oh, there were times where it's optimized and this isn't really important to mine over here, and then otherwise we can just leave and it will drop really fast and it become profitable again. Well, it just made the volatility of the difficulty on the bitcoin cash network absolutely insanely. Like, just insane. There were periods where every block, block only came in at like every two hours. And then there were periods, like I said, where they were creating blocks every 10 seconds or something like that. And so they just machine gun blocks for two hours or something until the difficulty finally leveled back out. And this required a hard fork to fix, so they had to hard fork again like a couple months later. And then there was, you know, they split off. I actually thought this was going to, to be a positive. I was actually super stoked about when bitcoin cash finally broke off because in my thinking it was, you know, maybe, maybe I am wrong about this. Now we at least get to see these two things be compared and maybe we can just bury the hatchet because it was like we were so done with this crap, like three years of arguing. I was actually really happy that they had their network to test it out on. The feeling wasn't really mutual. Generally speaking, though, when the fork happened, I actually think there was a bit more optimism from both sides. Even though bitcoin was still kind of the head, some people were still very convinced in the big blocker sort of argument. But then the, the fork that happened just right after that. And the bit of a disaster that they had on their launch and then they had another fork a little bit down the road that got a little bit contentious. And then there was a huge split in the community and they went down a whole nother debate and a whole nother like vicious fork war in their own little world. And you know, one of the client devs said, I am the consensus now on bitcoin abc. And then they forked off and bitcoin Satoshi's vision forked off. And then so many of the things that bitcoiners have been saying this entire time was live by the fork, die by the fork. Like if you think that this political, this nasty, horrible, vicious, social political process is the way that we should determine changes in the protocol, you're going to get exactly what the consequences of that are, which are a nasty, divisive, forking, forever vicious fight over how to actually move this protocol forward. And there's never going to be a stable consensus. Immutability is going to be a joke. And you only ever actually work as long as you're small enough to stay centralized. And then bitcoin didn't go this route, did not have this problem because we just saw that everybody was sick of it and that that was a terrible way to do things. Things and that a fork just wasn't going to be successful. We watched them fail to hijack bitcoin, which is exactly what they wanted to do the whole time. It was pretty damn explicit and there was a lot of incentives as to why they were all pushing for it together. And Roger Ver just was unbelievably stubborn and certain that everything was going to work out as long as he had the right people who mattered the most on his side. And the only reason it didn't work is because somebody messaged Peter Todd somewhere in the mix of it and he was working in the government. And then Peter Todd made his decision different and that's why they hijacked bitcoin. They took it all over and all the other stuff is just kind of irrelevant. It's evil. Bitcoin is controlled by the government. And the whole reason it's super successful is because they destroyed it. Yeah, because that makes sense. And remember, this was originally that was not the argument. It was that the Rothschilds took over it through an insurance company that had an investment arm that invested in Blockstream, which funded most of the, a number of the very key core developers at the time, even though that dwindled pretty quickly. And it switched to a couple of other companies. There's still a lot of funding. And also that Blockstream was going to monopolize Lightning and everybody's gonna have to use their Liquid network and all this stuff and. Yeah, because that's. That's happened. Neither is Blockstream even slightly monopolizing Lightning. Their client isn't even as widely used. It's. I like. I like Core Lightning a lot, actually. I wish it was more used, but it's far and away the minority on the network and Liquid isn't super successful. So for a government that was in Rothschilds who completely took over Blockstream and had this conspiracy to take over Bitcoin and this clear plan that everybody's gonna be stuck using Liquid, it's funny how that didn't work out at all. But somehow they. They were able to control Bitcoin, but they weren't able to make everybody use Liquid. I don't know. I've just. I've dug in their conspiracies numerous times. And because Lightning was at the center of the conspiracy for a while and then that went away and it kind of shifted to Liquid. Then it was that the government took it over. But those are kind of at odds. Is that the government was trying to keep the blocks small through Peter Todd. But really the reason everybody wanted to keep the block small was because Blockstream controlled everything. So is Blockstream the government and the government was trying to make money on Liquid. It just. It's just moved quite a bit over the course of this. It's still kind. It's the same rough narrative, but what matters in the conversation seems to change a lot. [01:23:19] But that's a side of the whole debacle that I feel like doesn't get as much coverage when I just spend all the time refuting or responding to all of the things he says. It just kind of feels like. [01:23:36] It feels really reactionary when I feel like what I just explained was a really important part of the incentives and why there was such a vicious argument. And I will also admit there. There were incentives and things towards the other way that still had other people, that had certain people on the let's not fork and let's keep blocks small. Probably want to make. Make that argument. But the entire story of the block size debate can actually, after all of this. Yes, it can actually be summed up in like three sentences. And I actually think Mandrake summed it up better than anybody else, which was funny because this was actually in a response to the Tucker episode with Roger Ver. On it. And this is what he said, Roger. The community decides what Bitcoin is. [01:24:33] Well, the community decides, Roger. Not like that. [01:24:38] That's basically what happened. They attempted to change the Bitcoin protocol fundamentally such that they would have to fork the entire industry away from the base client that everyone was running. They tried to get everyone to install this new client that would fork away from the old network and change the consensus rules. They failed to get everyone to fork away to these consensus rules and the market directly, before any of this even happened, put like an 80% discount on the price of their fork in relation to Bitcoin. And then the users rallied against their attempt to change this. A whole bunch of people ran nodes. They enforced the Segwit soft fork, which was backwards compatible and which everybody had run out of good arguments to fight or at least all of the ones that were relevant to the debate. Now it was just trying to be held hostage and thus the fork failed and SEGWIT was activated by the nodes on the network. The end. [01:25:48] Every single thing that the hijacking Bitcoin narrative relies on is a narrative, if you accept the narrative that Bitcoin is defined by the narrative that we say about what it should do and not what it technically is and how the decisions of whether or not it changes are actually made in the software that is being run. But no, if the narrative, if his perspective that the words electronic cash typed by Satoshi necessarily mean that everybody in the world is going to be on chain making transactions for groceries and everything and it's going to scale infinitely, we don't have to change anything and there are no trade offs and that's how it's just always going to work. If you believe that, then it makes sense that it was hijacked and changed, but in no technical way, in no concrete realistic protocol and consensus rule way was Bitcoin hijacked and altered. In fact, that is explicitly what did not happen. They attempted to alter all of the layers of the Bitcoin stack and failed to do so. Thank you and good night. And we will actually end that right here. Don't forget to check out fold, don't forget to check out bitkit and also on fold, actually you can get 10% back on blockstream gift cards and they just announced the Jade plus which is like a real slick new hardware wallet, just the upgrade to their Jade and I am going to be getting, getting one and I am 100% going to be using Blockstream gift cards because that means I can get like 15 bucks immediately back in SATs discounts in SAT rewards for the win. Check them out, link in details in the show notes to sign up for fold and for a wonderful, very user friendly smartphone wallet. Mobile wallet. Bitkit is a really, really solid one. I really do love bitkit and I will have my ID tag or my public key, whatever, whatever it is in the show notes so that you can add me as a contact when you check it out. All right, thank you guys so much for listening. I am out. I'm gonna go put Rad to sleep and I will catch you on the next episode of Bitcoin. Audible until then, everybody take it easy. Guys, there are no solutions. [01:28:36] There are only trade offs. [01:28:40] Thomas Sowell.