{ "episodeId": "SLP21", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "stephan_livera": { "name": "Stephan Livera", "role": "guest", "tag": "STEPHAN" }, "guest_2": { "name": "Guest 2", "role": "guest", "tag": "GUEST" } }, "segments": [ { "speaker": "stephan", "time": "00:04", "start": 4.43, "text": "Welcome to the Stefan Livera podcast." }, { "speaker": "stephan_livera", "time": "00:12", "start": 11.51, "text": "Hey guys, welcome to the show, and my guest today is the great Jimmy Song. Thanks for coming on, Jimmy. Thank you for having me. Excellent, it's great to have you here. And just to intro Jimmy to anyone who's new, although he barely needs an introduction for anyone who's into Bitcoin. Jimmy Song, he is a Bitcoin core contributor. He was the former VP of engineering for Armory, which is a very popular, well-known Bitcoin wallet. He was previously principal architect at Paxos, and nowadays he's really known as one of the great educators in this space, and also is, he is also a venture part- partner at Blockchain Capital. So he's very highly regarded, and we're v-very lucky to have him on the podcast today. we've got a few topics to touch on, but I think first we should touch on the recent Roger Veer debate that you had, with, yeah, that you had with Roger on the cruise. So, maybe you wanna just give us a quick kind of background on how that, how you felt that went, Jimmy?" }, { "speaker": "guest_2", "time": "01:13", "start": 73.02, "text": "Well, so we, we set this up a while back. I, I made a video on YouTube that said Roger Ver is a Keynesian. He, he emailed me and said, \"That's like a straw man argument. I'd love to be back on your show so we could talk about it.\" And, and I was gonna do that, but then this, this cruise came up, and I saw that he was one of the speakers, so I told the organizers, \"You know, that might be a good time to do it,\" and I'm That would be the talk of the entire cruise. they loved the idea, Roger accepted, so we ended up, you know, go- agreeing to do it. I wanted like, much higher level debate 'cause I've noticed that pretty much every debate between Bitcoin and Bitcoin Cash, sort of devolves a little bit and you end up, you know, talking like at a very, like, way too technical level for the lay audience or like sort of like lots of name-calling or something like that, very, like it, it doesn't change anyone's mind. So I, I purposefully- wanted the debate to be very much like a Lincoln-Douglas style debate, and the orga-- it was my time slot, and Roger was, like, had talked before in, in, in another thing. So, you know, the organizers were like, \"You know, you can do whatever you want with it.\" I wanted a Lincoln-Douglas style debate, and I purposefully focused on the economic stuff because I wanted his best argument. I, I knew that he wasn't a very technical guy, and he's not gonna be able to tell-- talk Of RBF or SegWit or something like that, but something like, you know, talking about, you know, Austrian economics or something, I figured he would be better suited to debate me for. So I, I try to keep the conversation at a high level and not have it devolve into sort of like Jerry Springerish debates that we're so used to seeing in this space. Unfortunately, it ended up being more Jerry Springer, and, like, it's, it's unfortunate, but I, I mean, I could tell you that, you know, during the entire cruise, he was, he was kinda itching for a fight. He brought a bunch of his employees with him. They're always like sort of with him wherever he went. he had one guy with a camera so he could like record at any time. He was ambushing people like TMZ style. He, one of the things that doesn't show up on That's out there, is that he, he ambushed me right before the, the, we went on stage, like he, he ambushed me for like ten minutes, trying to like record like something before the actual debate, I, I don't really understand why we, we were gonna debate up there and he, he wanted to like change some things. He, he hadn't contacted me about Any of the terms of the debate or anything up until that moment, despite me trying to contact them several times. So, it was, it, it was this weird situation, and then, you know, we had what happened, everyone saw what's on the video. but I wanted it to be a higher level debate, it didn't really end up that way." }, { "speaker": "stephan_livera", "time": "04:33", "start": 273.0, "text": "Yeah, it's an interesting point, and I think, it, perhaps, i-i-i-there should have been a moderator from the start. However, I think there would have, there, there were still a lot of points that I think, you know, Roger didn't really respond very well to you on, and I think some of the key arguments that just kind of came out, it- I, I mean, let's, let's kinda go into a few of them actually. One key argument I think that Roger and, and the team, and his team tend to make is they say, \"Oh, Blockstream's influence is so big,\" but really they're dramatically overstating the level. And I think you came back to them on that, and you, you've pointed out that really there's, you know, there are many different developers, all of whom, you know, may are free to contribute. could you outline a little bit around some of the different teams who contribute aside" }, { "speaker": "guest_2", "time": "05:24", "start": 324.11, "text": "Yeah, there's, there's a lot, I mean, there's only like a couple of Blockstream developers at this point. Most of them have either left Blockstream or, you know, aren't really contributing to core. you have, I think Peter Wulfe and, maybe Christian Decker or something like that. but a lot more developers come out of Chaincode Labs and MIT Digital Currency Initiative. There's a lot of other independent contributors like Johnson Lau and Kalyan and Vladimir Vanderlon and, and like they, they're, they have a lot more influence than I would say like Blockstream does. but, you know, I mean, the, it's like kind of a nice story, right? Like the, and that's- that's what I'm noticing is that they-- none of those people have actually contributed to core, but they act like that's, that's who actually controls it, and, and that was my main argument is that you don't know what you're talking about. You haven't ever contributed, and you seem to like be so certain of something. yeah, doesn't that sound much more like a conspiracy theory than actual fact? and I don't know, like, I, I'm, I'm starting to realize that that's not really The, their, goal is, is the truth. Their, their goal is to sort of discredit, Bitcoin, and they, they want to be known as Bitcoin instead, and, they'll, they'll do whatever to get it, and they, they made up this weird conspiracy theory with no basis in fact, and I, I, I don't understand who they think will actually believe it, unless you're holding a lot of Bitcoin cash bags, in which case you're More or less forced to believe that with the wishful thinking in your mind. There's, like, it doesn't really make any sense. So, I, yeah, that's, that's my thought on what's going on there." }, { "speaker": "stephan_livera", "time": "07:22", "start": 442.06, "text": "yeah. And I think one interesting thing with that is also, it just strikes me as a denial of the way Bitcoin's network, network governance works, and it is a denial of some of the key factors that help determine, you know, which, which one is kind of more important or which one really is Bitcoin, like for example, the Hash power, the price, the number of nodes, the number of developers, the number of transactions, all are much, much greater on Bitcoin than they are on Bch. So how then is it that they can claim that, you know, Bch is the real Bitcoin?" }, { "speaker": "guest_2", "time": "08:02", "start": 481.56, "text": "I, I mean, I, it, that's sort of a weird marketing term that they came up with, and, I, I don't think even a lot of Bch people really believe that. the, the thing that they, they keep- Pointing to is that like Blockstream controls it or that it's, it's, it's kind of an article of faith on that side and you can't really convince them of it, with any sort of rational argument. and, you know, it's very hard, difficult to convince people against, you know, their economic interests, right? Like, if, if you're a BCH bagholder, you're not gonna look at things objectively. You're, you're, you're, you bought the BCH for whatever reason and you're Where your sort of main goal is to pump up BCH and, and I, this is something that I've noticed about a lot of those guys, is that they don't really care about the truth, they, they just wanna pump their bags, that's it. And th-this is true of a lot of ICO people, a lot of people in, in a lot of these altcoins. they're, they have a clear economic incentive to pump their stuff, and a lot of times that means, you know, disparaging other stuff, whether or not it's true or not. to me, that completely discredits whatever it is that they're trying to say, and, and I, I just sort of leave it at that and, The, their claims are almost all based on the economic situation that they find themselves." }, { "speaker": "stephan_livera", "time": "09:36", "start": 576.35, "text": "Yeah. And I think the other thing is this absurd focus on the so-called Bitcoin dominance figure, which really is-- it's absurd. It's treating Bitcoin like it's a business, it's counting all the ICO scams and all the altcoins alongside with Bitcoin. This whole metric should just be thrown out the window. Other people such as Brendan Bernstein have commented, and he had a good way of putting it. He said, \"Cryptocurrency is a scam. Tokens are money, not equity, and likewise, counting in all these ICOs and all these other coins, it, I, I think the metric itself should be retired. What do you think about that?" }, { "speaker": "guest_2", "time": "10:09", "start": 609.12, "text": "Yeah, I, I, I mean, I, I would like to know just how many bag holders there are, and it, it's difficult to tell 'cause a lot of the, the stats are kind of manipulated. They try to, you know, adjust them and so on. but there, there was a post a while back about how like the Bitcoin, like pretty much Much every line in Coin Market Cap is like off in some way, and, and it's hard, difficult to determine what the truth is there. it's just sort of the, their obsession with that, again, is based on, you know, what can, what they perceive to be something that can hurt Bitcoin or, it's, it's not about the truth, it's, it's very much a political thing, and I, I, and I think this speaks to their centralization, is that, You know, they, they think this is sort of a political game, where you have to pump up your leader, and disparage all other perceived leaders. if you were in a really decentralized system, there wouldn't be any leaders, and if they got discredited, it wouldn't matter. and the-- and I think this is a big disconnect in that debate is, you know, like everything that Roger did, it was, it was very clear it was to try to discredit me Personally, and not anything about my argument. the entire time he was speaking, it was about, okay, like I could see through his thought process. It's almost like, how do I discredit Jimmy? How do I make him look bad? How do I, take away his credibility? It wasn't about the ideas at all, which is the kind of debate that I wanted to have, but it wasn't of interest to him. And, you know, that's why he asked the question about, you know, have you read Keynes' General Theory or, you know that, that only really works in sort of, in a centralized, that works well in a centralized system, right? Like this is how politics is done. You discredit some leader and then you get to be that leader. In Bitcoin, it doesn't, like, I don't matter that much to Bitcoin, right? Like, if, if I, if I get discredited, that Bitcoin keeps chugging along. but when you do have a leader like Roger in BCH, and he gets discredited, oh, that's a big deal. That, that means that that coin might collapse. And it's not just him, there's like multiple single points of failure on that coin. There's like Amory Sache, Ji Han Wu. you know, like they, they have to, they have Lead basically, right? They're the centralized party, and this is true of every altcoin, right? Vitalik and Ethereum and, you know, whoever's leading all these other ICOs or whatever. they are the person that everyone sort of in that coin defends because this, this is the nature of a centralized system. For me, like, I like, but for Bitcoin, it's like completely different, right? Like, you're, you're there to defend the idea, you, you don't care, like Like I don't matter, right? Like a particular, any particular person in Bitcoin like doesn't matter 'cause it's a decentralized system. and that's the, I think mental, mental difference and like, I, I think that's, evidence that Bitcoin is actually decentralized, whereas Bitcoin Cash clearly isn't." }, { "speaker": "stephan_livera", "time": "13:35", "start": 814.77, "text": "that's a great point, and I think the other one that really ties into that is Roger, during that debate, kept saying, \"Oh, look, I did it with Bitcoin, and I'll do it again with Bitcoin Cash.\" Yeah, yeah," }, { "speaker": "guest_2", "time": "13:46", "start": 826.48, "text": "there's a new meme going around" }, { "speaker": "stephan_livera", "time": "13:48", "start": 828.3, "text": "with that, it's kind of funny. Yeah, yeah, I've seen some, some of that just this morning actually. I've seen a few where it's basically saying, \"Oh, look, I did it with, you know, Squirtle, and now I'll do it with Charmander or whatever,\"" }, { "speaker": "guest_2", "time": "14:00", "start": 839.77, "text": "right?" }, { "speaker": "stephan_livera", "time": "14:00", "start": 840.49, "text": "Yeah." }, { "speaker": "guest_2", "time": "14:02", "start": 841.81, "text": "Like, yeah, I, I, I, but he, he seems to, be taking credit for Bitcoin's success, and, and I think that he actually believes that, that, that He's a very successful businessman, you know, like he, he, he's responsible for the success of Bitcoin. He, he really thinks that he, he created this thing, when in fact it was a lot of other things besides him. I mean, like credit to him, right? Early on, he, he did do a lot of evangelism for Bitcoin or whatever, but like, there's no universe where Roger didn't do it and then we can see like the difference that he made or something like that. we, we don't really know. and he seems to be thinking that he was the reason and that his marketing or his ability to argue for it or something like that was the reason for Bitcoin's success, and that he's gonna bring all those powers onto Bitcoin Cash and that's going to make the difference. I think he vastly overestimates his own importance. but, you know, I mean, I don't know that either. that's, it, it just seems kinda funny 'cause it's, it reminds me of a megalomaniac." }, { "speaker": "stephan_livera", "time": "15:15", "start": 914.82, "text": "It may be that part of the reason Roger, it like, it's like, it might be the other way around, right? It might not be that Roger made Bitcoin big, but that Bitcoin made Roger big, right? So, yeah. So that's" }, { "speaker": "guest_2", "time": "15:26", "start": 926.0, "text": "another kind of aspect. Yeah, yeah, absolutely. And, and like, I don't know, multiple people have told me like he, he's sad that he doesn't have the reputation that he once did, 'cause I mean, if, if you think about how Roger Vera was perceived by this community even like three or four years ago I mean, people called him Bitcoin Jesus, right? Like he was going on all of these new shows and, you know, advocating for Bitcoin. I think he had like very much a purpose in his life, you know, like advocating for Bitcoin and, and, you know, he felt like he was, doing something for the cause of liberty and stuff. and he's trying to get a little bit of that back, but, you know, I mean, obviously he's r- lost a lot of reputation in the Bitcoin community. And he's trying to build up this sort of cult of personality again. It's kind of sad, 'cause I, I, I do feel like he squandered a lot of the, the goodwill that he used to have and- I don't know, it's, yeah, Bitcoin helped make him, but he doesn't, doesn't seem to see it." }, { "speaker": "stephan_livera", "time": "16:37", "start": 997.11, "text": "One other particular argument that I think maybe I haven't really seen a good response from him or the other B-cashers is just this idea that money progresses in stages. It seems that they, under this impression that everything should just all happen at once, whereas really the understanding that I think you, you and I might share, as put out by other people, such as Vijay Bohra, party, and so on. One, who've explained that it moves from, s-in pro-in a process of stages, from collectible to store of value, then to medium of exchange, and then to unit of account, and I think that's one area where a lot of the becahes are trying to jump straight to that medium of exchange point before we've even got to store of value. Yeah," }, { "speaker": "guest_2", "time": "17:18", "start": 1037.52, "text": "it's, it's, it's re-like they don't seem to, they seem to take it as an article of faith that you need to have it as a medium of exchange before, or method of payment It becomes a store of value. And I, I wrote an article about this a couple weeks ago about how I expect Bitcoin to actually become a method of payments, only at the point when merchants are absolutely demanding Bitcoin for payment and only Bitcoin and won't take anything else, that it actually becomes a method of payment. Doing it before then is kind of dumb because, what you end up doing is having a method of payment that's very, very, you know, bad in terms of user experience. Experience, merchant acceptance, all the things that matter for method of payment. you know, you, you have literally dozens of different options for, method of payment right now. You have, you know, Amex, Visa, Mastercard, you also have like PayPal, Venmo, Cash App, you also have like checks, and you have Samsung Pay and Apple Pay, and you have Google Wallet, and all, all of these things. Everybody's been trying to get into that space, and it's, it's much, much more- More convenient than any, any of these other things, like, like Bitcoin or Bitcoin Cash or, you know, Litecoin or whatever, even to some degree Lightning, right? Like, the, these things are something that everyone knows how to use. It's very convenient and they know exactly what to expect. From a method of payment perspective, at least right now, those, those are way more convenient. and Roger's been like pushing the method of payment, you know- Use case since almost the beginning, but I think it's very misplaced. It's, it's putting the, like, he's trying to accelerate, you know Adoption that way, but in, in a sense, that's trying to get someone to like you by, like, being in their face all the time. It, it doesn't really work. they have to like you first, then you can ask them out on a date. Yeah, I like that, it's very funny. Yeah, i-it's, he, he's gotten it like all the, like it's like, oh, if only they can see how great I am, then, you know, then they'll start liking me. But like, as anyone that's" }, { "speaker": "guest_2", "time": "19:41", "start": 1181.29, "text": "much, they're gonna get annoyed with you and like wonder why you're in their face so much. like if you are actually like, somebody that was, you know, in high demand as you, as like You, you would like to claim, then you wouldn't be hanging around all the time, you'd actually be like away from them and doing your own thing instead of like, you know, desperately seeking their attention. It's, it's, it's just, it, it's kind of ridiculous. And I, I think all of them at, at, like, at a deep level kind of know it's just like sort of an argument that they use in, in the wishful hope that they too will, they will, you know, dethrone Bitcoin, like that's sort of- The article of faith for them." }, { "speaker": "stephan_livera", "time": "20:26", "start": 1226.13, "text": "Yeah, yeah. and I think it, related is this whole sea lion meme. Can you explain the sea lion meme for the" }, { "speaker": "guest_2", "time": "20:33", "start": 1232.86, "text": "listeners? Yeah, the sea lion meme is hilarious. I, I didn't actually know what it was until, a few days ago, but, but the idea is it's, it's someone that debates you is like unfailingly polite, but that's the only metric that they, that they measure the debate against. It's, it's always like, oh, That's, that, that's sort of the attitude of seelioning, and that's something that Roger does very often, right? It's always about, civility or something like that. And again, that matters in a centralized system because, you know, it's about picking leaders. Bitcoin doesn't have leaders, so I don't really care about that, right? Like, I'm not a leader of Bitcoin, I don't want to be a leader of Bitcoin. I, I, if somebody wanted to appoint me, I would tell them no, because that, that, but for him, you know, he's a leader of Bitcoin Cash, so it's very important to be perceived a certain way and, for, like, for him, like being, being nice or civil or appearing that way is more important than the actual argument or the ideas or the policies of, of either coin. And that, that's, that's something that, I mean, like nobody really, like, explained that that was a thing to me, until like after- After the debate, and I was like, \"That is exactly what he is.\" There, there's a, there's a cartoon I posted on my Twitter, that explains this pretty well. It's, you know, just someone being like polite but really annoying, and it's like, you, you know, you, you kind of have to be rude to them to get rid of them, and then they, they declare victory right afterwards. That's, that's kind of how Roger is." }, { "speaker": "stephan_livera", "time": "22:19", "start": 1338.69, "text": "Yes, I think someone has done a meme where they've basically used that sea lion meme but then put in Roger in that. So I will, share the sea lion meme or the Roger one if I can find it in the show notes for this episode. and then that brings up the question, is it time to stop debating, Roger?" }, { "speaker": "guest_2", "time": "22:35", "start": 1355.14, "text": "I think, I think so, perhaps. I like, 'cause he's not really interested in actual debate. He, like, he, he, he's gotten to the point where he's, you know, carrying, you know, he has his crew with him, including somebody that's got like a video camera at all times. he's becoming the TMZ of Crypto, like he, he just like goes around and tries to instigate people so he can look better. He thinks that's honestly the way that he can gain influence. I, I think somebody needs to tell him that Bitcoin's decentralized, it's not about leaders or, you know, like people are a lot smarter than just looking at civility. I mean, there, there are certainly people that are stupid enough to just judge based on, you know, how people react to a camera and that's it. but, you know, generally the people that get into crypto know what And know at least what, what they're investing in, and that's not really an argument, that's, that's really an appeal to civility or something like that, and it's, it's, that's, that's not a very good indicator of whether or not you're making a sound investment. Like, lots of scammers are unfailingly polite, doesn't mean that that's a very good investment. So, I, I, I don't know, I'm, I'm definitely questioning whether or not I should have done this, and, you know, I- Actually, several people like messaged me and said, \"Why are you giving this scammer a platform? You know, you really shouldn't have done this.\" I'm like, \"Well, you know, I thought he was sort of this naive but sincere person and all that, but I met him at the cruise. I don't think he's a naive, sincere person.\" And they're like, \"Oh, you never met him? That explains it.\" \"Yeah, yeah, yeah.\" And, and they, they seem to sort of understand, my predicament there." }, { "speaker": "guest_2", "time": "24:23", "start": 1463.34, "text": "I don't think he's really worth debating 'cause he, he's, he doesn't really wanna debate, he just wants to, he wants to, like basically defame your character and, enhance his own, and that's, that's not-- it's not a discussion of ideas, it's a, it's, it's a tearing down of each other's, it's, it's a, it's a fist fight sort of in a reputational sense, and I'm not really interested in that. And maybe other people would be, and I, I don't begrudge them the opportunity to do that, I'm not gonna tell anyone what to do. But that's, that's my current assessment." }, { "speaker": "stephan_livera", "time": "25:04", "start": 1504.33, "text": "yeah, yeah, and look, in fairness to you, with the people messaging you, in fairness to you, sometimes, you know, arguments should be rebutted, right? If you sort of leave it out there, then it, you know, might look like, \"Oh, your side doesn't have an answer,\" kind of thing. But eventually, I suppose, you know" }, { "speaker": "stephan_livera", "time": "25:23", "start": 1523.22, "text": "Have been discussed, and in fact, you know, I think there are various arguments from the, you know, non-Bitcoin side that have really not been answered well by the Bitcoin side. yeah, it's a good point as well you make around scammers being unfailingly polite, you know, so people have to be wary. Yeah, no matter what, yeah." }, { "speaker": "guest_2", "time": "25:42", "start": 1541.57, "text": "Yeah, I, I mean, I, I, I, I do have that one thing over him, which is that he offered to bet me a million dollars, and, and I, I've That he won't follow up at all, and, and that's something that I'll always be able to use every time he brings up like, \"I wanna debate somebody,\" and I'll just be like, \"Okay, then put your money where your mouth is, 'cause you, you've never followed up with this bet, so why should anyone debate you?\" So I think, that will keep him sh- shut up for a while. he may still do like the TMZ-style ambushes on random core devs or something like that, in which case, you Be hopefully the go-to line. It's like, why should we talk to you? You, you can't even like, you, you offer a bet and you don't even follow through. Like, I, I, I don't care how unfailingly polite you are, you're a scammer if you, if you offer or you're, you're completely insincere and you're, you're a hypocrite if, if you don't. So, I don't know, we'll see. that's, that, that seems to be like a decent way out without, you Yeah, I, he's not interested in debating, what can I say?" }, { "speaker": "stephan_livera", "time": "26:56", "start": 1616.44, "text": "Okay. Yeah, well, let's, let's change topics now. one area that you're famous for, and I think you, you've really articulated this very well, is the position around blockchain skepticism. So just to set the scene, there are a lot of, y-y, there's a lot of hype about the use of, quote unquote, blockchain technology, and I think you've done well to help explain Where it might make sense to use it and where it doesn't. So could you help, just articulate that for the listeners who are a little newer, what, when does it make sense to use a blockchain and when does it not?" }, { "speaker": "guest_2", "time": "27:28", "start": 1647.93, "text": "So blockchain is a combination of a lot of different technologies. You have proof of work, you have, you know, public key cryptography, you have Merkle trees, you have the solution to the Byzantine generals problem, you have network consensus and stuff like that. and what's weird is that, it, this was specifically- Built for Bitcoin, it was a very specialized set of technologies. What people are trying to do is use that very specialized set for their own problem. Now, this wouldn't be so bad if it was a general purpose tool, but the blockchain, at least as conceived in Bitcoin, is not generalized at all. It's, it's a very specific set. It's purposefully expensive. It's purposefully slow. and to utilize For almost anything else, just doesn't make sense. It's too expensive, it's too slow. Now, for money, it makes a lot of sense, for, for Bitcoin, you need it to be this way because, it allows for decentralization, it, it, it allows, it's so that there's no central party that can print money and so on. but for something like healthcare on the blockchain, it makes no sense whatsoever. All of the, all of the data is in the clear in a blockchain, right? In, in a database that everyone Stored locally, when you have that with something like healthcare data, that doesn't make any sense. You're, you're not supposed to reveal anyone else's healthcare data. There, there are like all sorts of laws against that, and it shouldn't really be, the business of anyone but the person and their doctor and possibly the insurance company, something like that. It, it, it, like the patient, the person that owns that data, should have full, capability of Sharing it with whoever they like, it shouldn't just be on the blockchain. So, i-it's, i-it's this ridiculous thing where a lot of hype has built around blockchain, probably due to people like Don Tapscott that tell everybody that this is like the new thing and that it's going to change the world or whatever, and I blame him for a lot of this hype, but it, it doesn't really make any sense if you look at it from a technical standpoint, even to a little bit of Depth. It's just, you know, you can utilize maybe parts of the technology that build up what a blockchain is, for particular industries. Like, for example, public key cryptography would be useful in a lot of places. That, that's a good way to issue receipts, for example, without, you know, like fraudulent copies and stuff like that. Like a lot of Nigerian scammers, for example, will copy like a PayPal email and make it seem like it's, arrived in your inbox. But if you had like public key cryptography, it's For something like that, you'd be able to verify that it actually came from, PayPal, which is, I think, there's a particular standard that lets you, lets you do that, though, I don't think it's utilized very much. So, I mean, there, there are things like that that could work, but when people say blockchain technology, they almost always mean, you know, utilizing it in this weird fashion. It's, it's, akin to like, using a bulldozer to go pick up your groceries at the store. It's, tool for the job, and this particular tool is extremely specialized. It's, it's for Bitcoin, and if you use it for almost everything else, you're gonna have all kinds of inefficiencies and stuff. It's probably gonna be too slow, it's probably gonna be too expensive, and, and you're not gonna be able to change it very much. So it, it's, it's kind of crazy to me that people have built it up to be this thing, and I, I really thought that big, blockchain not Bitcoin was like dead back in two thousand fifteen, It just keeps like, coming back from the dead like a zombie, and we have to kill it over and over again." }, { "speaker": "stephan_livera", "time": "31:27", "start": 1886.82, "text": "Yeah, that, that's true, it does keep coming back. How, how, on, on this topic of, you know, blockchains, how do you distinguish between some of the what we might call the enterprise blockchain projects and some of the, the other distributed blockchain type projects?" }, { "speaker": "guest_2", "time": "31:45", "start": 1904.77, "text": "I'm, I'm not actually sure there's a difference. I guess one is, one is supposed to be private, one's supposed to be public, and they, they always sort of claim that the private blockchain has all these use cases and stuff. I will note with prejudice that vast majority of the time, you know, these private blockchain projects come from like the lab, you know, arm of some large company. So, you know, you'll, you'll hear about like Fidelity has a blockchain Chain, lab or something like that, and, you know, IBM has a blockchain lab and, et cetera, et cetera. And these labs are always the ones that put out press releases about how awesome their, you know, private blockchain is. it's almost never by like an actual customer, right? and you gotta understand like for a lot of these companies, they, they put a lot of money into these labs, and these labs have to constantly like justify their existence, and oftentimes they'll- They'll just sort of come up with something based on like the newest buzzword and claim to have done something when they actually haven't, or like claim to have done something interesting when they haven't, and claim to have, you know, gotten customers to use something when they actually haven't. It's, vast majority of the time it's like one press release and then it quietly goes away forever. and that's what it seems to be, and somehow that's gotten a lot of press, a lot of- Conference attendees or, people curious about it, I honestly like, I blame like people like Don Tapscott, that's sort of like Made all these promises, about like what blockchain is without understanding a lick of the actual technology. yeah," }, { "speaker": "stephan_livera", "time": "33:33", "start": 2013.09, "text": "and I think part of what you've done with some of your articles and your talks on this is you've helped outline that there's an increased cost of data processing, storage, network costs. So are these things unlimited or are they scarce? Could you outline a little bit on that? Yeah, I" }, { "speaker": "guest_2", "time": "33:48", "start": 2028.04, "text": "mean, they're, they're definitely scarce. Almost everything is scarce, right? Like, there's only a certain amount of space on your hard drive, there's only a certain amount of bandwidth that you have, there's only a certain amount of CPU power that you have. and all of those things go into, you know, any sort, any sort of blockchain as we, we, as they're utilized in Bitcoin. Now, for checking money stuff, that's absolutely critical. You, you need to know how many, bitcoins there are. Have a, an accurate UTXO set, and in order to do that, you need to, you need to be constantly going back and forth and, you know, checking every block, for, you know, absolute, consistency with everything else. And, you know, I mean, people, people that are pretty good at finance, do the same thing with their books, right? Like they, they double and triple check everything, and make sure that like not a, not a penny is misplaced. And that makes sense for money, it, it doesn't make sense with a lot of other stuff, like, like paying that much cost. Like, if I am, you know, I don't, like, say gambling, right? Like, a lot of people, like to say that's like a use case for something like a blockchain. if you actually talk to gamblers, they're totally fine with a centralized entity, or a neutral third party that, you know, deals the cards or, you know, does the sports Facebook or whatever, they're totally fine with that because they don't want to have to assess the trustworthiness of every other counterparty that could exist. now, like, the argument is, oh, okay, well, you know, smart contracts will make that, like, it, you know, better or whatever. But that doesn't make really make sense either, because for the gamblers, they'd rather-- you need a market anyway. You need, you need somewhere where you can figure out who to bet against and so on. You don't, you don't like some, you, you don't, you don't have a market to, you know, play with, until you have some central place to go find that stuff anyway. So i-in a sense, like all of this is, i-is very," }, { "speaker": "guest_2", "time": "36:03", "start": 2163.48, "text": "like what they're trying to do with blockchains, it, it just doesn't really make any sense. and a lot of the stuff that, they're trying to decentralize, you don't really need to decentralize. There's, there's no real problem there. people make it out like there is, but vast majority of the time the, the actual problem is an i-IT infrastructure is too old, and they just generally need an IT infrastructure upgrade, it's not nothing about actual blockchain." }, { "speaker": "stephan_livera", "time": "36:32", "start": 2191.54, "text": "Yeah, so, Basically, if you-- if a company were to try and, you know, put in some kind of blockchain system, let's say maybe even a trade finance blockchain across different companies, then this system now becomes harder and diffi-- more difficult to update in the future. Could you outline a little bit around the technical difficulties that would be associated with that?" }, { "speaker": "guest_2", "time": "36:55", "start": 2215.2, "text": "Yeah, yeah, absolutely. so when you have a decentralized blockchain, if it's actually really decentralized- Then you can't force everyone to upgrade. So every upgrade has to be backwards compatible, and, and programming that is a giant pain, right? Like, and testing that is a giant pain. And this is something that Bitcoin developers have known for a while, is that, you know, like, you know, forcing everyone to upgrade, that, that makes it a lot easier to do the code, but it's unfair to the network, and there's no guarantee that it won't split things. if you have- Had, you know, if you have a product that is, you know, blockchain based supposedly, and you, you can't really iterate on it very easily. i-if you, if you are going to iterate at all, it has to be voluntary and backwards compatible. So if there's like a bug in there, then you just sort of have to keep it in order to keep it backwards compatible. and this is, this is in fact the case for Bitcoin. There, there's several bugs that Satoshi put in at the very beginning That we still have with us today, because we, we have to keep the consensus rules and because we have to keep things backwards compatible. and, and that, from a technological standpoint, that's a, that's a very hard restriction to have to go around, right? Like, if you have something that's always backwards com- have, has to be backwards compatible, it's a lot harder to do, and, and there's no real appreciation of that because- you know, in tech, the motto tends to be move fast and break things. You can't do that with a blockchain, it's just impossible." }, { "speaker": "stephan_livera", "time": "38:40", "start": 2320.19, "text": "Yeah. And I think the other point to make there is, in these cases of, say, the enterprise blockchain where maybe it's permissioned, e-even there, there are still differences across different countries, and they-- and there's, there might be a reason some of these countries run different software, it could be cultural differences or peculiarities of the region or the regulation or the business practices. How could these things be encoded? Into such a blockchain or an enterprise blockchain." }, { "speaker": "guest_2", "time": "39:05", "start": 2344.64, "text": "Yeah, I, I mean, you, you have, you certainly have different regulations, and this, this is one of the stupidest things about blockchain. Vast majority of the time, there's some central entity that wants to be able to override whatever the blockchain says. So I, I discovered this like whenever they're like, \"Okay, we wanna do stock trading and we wanna put, make a blockchain for it,\" the SEC sometimes wants to stop certain trades because they think it's, you know, market- manipulation or it breaks some law or they think it's like some, funds for terrorists, I don't, I don't know, wha- whatever it is, the central authority wants to be control-- able to control it. That's exactly why Bitcoin was made with a blockchain to be completely decentralized, so there's no single point of failure, so a government entity can't come in and regulate it like that. But a lot of these like private blockchains are created with that obvious security like, hole Right? Where, where some central entity can, you know, censor transactions, for example, oh, you're not allowed to trade that stock because it's, you know, it's being suspended or something like that because, insider trading or whatever. and that, that's like completely a-- like, again, this is wrong tool for the job, right? Like, if you need that capability, then blockchain is exactly the wrong thing. And vast majority of these, IT infrastructures that need Upgrading have lots of regulations, and that's partly why they need, they, they haven't been upgraded in a while is because, you know, everyone's afraid that everything will break as soon as they upgrade, and for good reason. A lot of these, you know, like if you think about like the IT infrastructure of a hospital or something like that, there are more CEOs fired for trying an IT infrastructure upgrade and failing than any other reason. and this, this isn't just true of hospitals, but almost any- Enterprise, that's the number one reason CEOs get fired. So of course they're gonna be risk-averse when it comes to, you know, upgrading their IT infrastructure. Somehow they think that by adding the word blockchain, that, these CEOs will be more assured and be more likely to buy their product. But, you know, the minute the CEOs go take a look at what it actually means, they realize this isn't really the right technology or that they're just, spouting a bunch of buzzwords that Don't mean anything." }, { "speaker": "stephan_livera", "time": "41:35", "start": 2495.2, "text": "yeah, yeah. And so from the point of view of, let's say you're a business person and you're thinking to implement a new technology, what would be some of the alternatives, the cheaper, more technologically suitable tools that would work instead of a blockchain? So a couple examples you've raised are receipts or a central database with an API or the use of backups. Could you, could you, elaborate on those?" }, { "speaker": "guest_2", "time": "42:01", "start": 2521.44, "text": "Yeah, so, Something like supply chain, right? Like the, the big problem seems to be nobody can really tell where something came from because it gets mixed up all over the place, and they're like, \"Well, if we use a blockchain with RFID tags, then we, we will know that this mango came from this particular farm in New Zealand.\" And that, that's sort of like the, the idea behind that is, okay, we can tell if this coffee is actually fair trade versus, you know, having to trust the label or something like that. you know, we can tell that these aren't conflict diamonds, that they're actually from like, region that doesn't, you know, that, that isn't supporting, you know, some military junta or something. That, that's the idea, right? if that's what you want, then blockchain is the wrong tech. What you can have are triple signed receipts. Now, triple signed receipt is, is what it sounds like. I, i-it's three signatures. You have the signature of the person that's selling it, you have the signature of the person that's receiving it, and you have the signature of somebody that's auditing it, so some third party, right? Like some accounting firm perhaps. and the- The three of them sign it and they, they testify that this transaction happened. utilizing that, you can, you can have a chain of custody, and that, that's, that's a lot more appropriate, rather than having everything everywhere, 'cause, you know, whether or not Yeah, whether or not a particular mango comes from New Zealand or from some other place doesn't, you know, like it, it shouldn't only affect the people who care about that particular mango, shouldn't be, like available for everyone to see, you know what I mean?" }, { "speaker": "stephan_livera", "time": "43:54", "start": 2633.94, "text": "Yeah. And then, so that would be the example of using receipts. How about in the example of using a central database with an API?" }, { "speaker": "guest_2", "time": "44:02", "start": 2642.44, "text": "Yeah, and that's, that's something that most companies- Companies already have, and vast majority of the time that works really, really well. So, if you want to know about, you know, your Amazon order or something like that, I, I don't know, so some people wanna put everything on a blockchain. you know, you, you, you get an email about your order, but if you had an API, well, you can, you can verify at any point whether where something is or something like that. you don't need the data to be in lots and lots of different places places, because most of the data in most applications, you don't really actually care about. You only care about the stuff that belongs to you, like your order at Amazon. I don't really care about everyone else's order. In fact, that's kind of a privacy concern if I could see everyone else's order, because that means everyone else can see my order. I don't want them to know about what I ordered from Amazon, right? I don't want them to know about what surgeries I've had at the hospital or whatever. so like making sure that you, you have the right- Privacy silos, generally means that it's a lot easier if you have it in a centralized database. Now you could have it in a decentralized database, but now you have to encrypt everything, and that, that, that itself could be very difficult. but you can, you can also do that in a centralized database to give people an extra layer of protection. But wh- if you have an API key to whatever it is that only should be interesting to you, then you can, you can- You can get everything that you're interested in, but not anyone else, and, you know, utilizing, that API, you, you, you can go and learn whatever it is, and it can, it can be backed up, it can be redundant or whatever. And you can have the same data, right? Like, a lot of these blockchain projects, that's all they're really asking for is some central place that they can go and query for the stuff that they're interested in, because, you know, they got like a shipping container full of like shirts or something like that, they just wanna make sure that it's, you know, it came from the factory that it said it did, instead of some other place. I mean, that, that sort of thing is very easily done in a centralized database. It, it really sense to have a decentralized database for it. So on the question" }, { "speaker": "stephan_livera", "time": "46:25", "start": 2785.09, "text": "of backups, backups can done centrally can be much cheaper than using a blockchain. So could you just outline what are the typical costs associated for that compared to a blockchain?" }, { "speaker": "guest_2", "time": "46:36", "start": 2795.86, "text": "Yeah, a blockchain is gonna be very expensive. You, you have to constantly get a copy of everything that's happening, and put it into your blockchain. Not only that, you have to verify that and you have to store that, right? Like so there's- Three cost, the bandwidth cost, you have to receive it, then you have to verify it, that's a CPU cost, and then you have to store it, that's like a database cost. with like a typical backup, on like Amazon Cloud or something like that, you're, you're going to be able to do it way, way cheaper, like orders of magni-magnitude cheaper, 'cause you can just copy the same data that's already been verified. So instead of receiving the data, like a thou- if you have a thousand nodes on the network, then every one take up bandwidth to at least receive it. every one of them has to expend CPU power to verify it, and every one of them has to expend database space to store it. instead, i-if you're looking to back stuff up, instead of doing that, you can just verify and receive just once and then back it up, and that's a lot cheaper because, you know, backup technologies, you know, already exists. it doesn't need to be very close, like It doesn't need to have, low latency or anything like that, 'cause you can, it's a backup. You can, you-- as long as you can get to it, that it's usually fine. so from a cost perspective, it's, it's just much, much cheaper. And, you know, this is one of the things that, you know, advocates of blockchain say is that, \"Oh, yeah, you'll, you'll have copies of it everywhere.\" Well, yeah, but it's, it's costing way more than it needs to be." }, { "speaker": "stephan_livera", "time": "48:21", "start": 2900.62, "text": "Then to sort of summarize the thoughts then, because what we see is we see a lot of news stories about companies who are doing a blockchain trial or look, we've done a bond on a blockchain, blah, blah, blah, right? and so where they might have potentially saved some money, I guess it's, first of all, do you think these are legitimate savings or perhaps if they are legitimate, but maybe they could have saved even more if they took a different engineering or IT architectural approach?" }, { "speaker": "guest_2", "time": "48:48", "start": 2928.16, "text": "Yeah, I, I, I, I think you're right. Right, like, most of the time I think it's complete BS. I think it's, it's just sort of a press release to make the, their lab program look better or themselves more innovative or something like that without actually having to prove that they've done it. and even if it is true that they have done it, then it's completely ripe for disruption by somebody that can do it easier, cheaper, faster, by centralizing a lot of it and not utilizing this, you know, a bulldozer to go pick up your groceries, you can Use your bike or your car or something like that, it, it, it just makes way, way more sense. so doing it that way is going to be way, way better, and I, I, I think that's, that's the, the crux of this like that's the real evidence is that most, most companies aren't willing to buy any of this, and it's because they don't see the value. and, you know, like the market sort of tells all. If, if blockchain really were useful, there would have been something by now. It's been like five years of blockchain hype, there would have been something by now that's getting actual use that, companies rely on, that they're willing to pay for, It's just not the case, like they're, they're, they're all sort of just still projects that no one's actually bought." }, { "speaker": "stephan_livera", "time": "50:15", "start": 3014.9, "text": "yeah, that's a great explanation. I think there's just a lot of hype at the moment, and it'll take some time for people to understand why it's valuable. I think that's pretty much all we've got time for, but, Jimmy, did you wanna maybe, just outline any projects you've got coming up or anything you want the listeners to, come and find you at or sign up" }, { "speaker": "guest_2", "time": "50:37", "start": 3037.17, "text": "so I have a Programming Blockchain seminar. That's a two-day course for developers to learn all about Bitcoin. You're, I, I teach them how to code a Bitcoin library from scratch, and by the end, you're able to, not only create a transaction on testnet, but, you know, communicate it on the network and get all the data that you need from the network instead of like a block explorer or something. So, it's very exciting, a lot of people really like it. The next one is in Prague in October I, I'm also, you know, you know, writing a book, based on that class, for O'Reilly. you can find me on Twitter at jimmy song, Medium at jimmy song, GitHub at jimmy song. I also have a YouTube channel, Off Chain with Jimmy Song. So, yeah, that, that's, I, I can show more stuff, but I think that's" }, { "speaker": "stephan_livera", "time": "51:28", "start": 3088.03, "text": "enough. No, that's fine, that's fine, guys. definitely, you know, Jimmy is one of the most Interested in learning more, he, he is one of the best guys to learn from, so definitely go and check him out. Well, I think that is pretty much it, so thanks for coming on, Jimmy. Well, thank you for having me. Alright, guys, hope you enjoyed that conversation with Jimmy Song. As always, rate, review, subscribe, come find me on Twitter, my handle is at stephan livera, I'm always happy to take questions or feedback on potential suggestions. Otherwise, that's it from me, thanks guys, see you next time." }, { "speaker": "stephan", "time": "52:04", "start": 3124.02, "text": "Thanks for listening. You can find the show notes on stephanlivera dot com and please share the podcast on social media." } ] }