{ "episodeId": "SLP535", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "stephan_livera": { "name": "Stephan Livera", "role": "guest", "tag": "STEPHAN" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.14, "text": "It's really because she recognizes that Bitcoin, attacks her chartalist fantasy. She wants the US government to have a total and complete monopoly over the issuance of currency. If you go to Elizabeth Warren's Twitter page, you know, she lists out her children, and she includes as, you know, humorously tongue in cheek, right? But I think that it reveals a tremendous subconscious thing here. She lists the Consumer Financial Protection Bureau as one of her children." }, { "speaker": "stephan_livera", "time": "00:42", "start": 41.98, "text": "Pierre, welcome back to the show." }, { "speaker": "stephan", "time": "00:44", "start": 44.16, "text": "Thanks for having me back, Stephan. Happy to be here." }, { "speaker": "stephan_livera", "time": "00:48", "start": 47.52, "text": "So I think there's been a lot of talk recently about Elizabeth Warren's proposed bill, and I know you've been commenting on this and, are a noted critic of the FATF, and AML, regime or BSA, Bank Secrecy Act regime, as it's known in the US. do you wanna just give us a bit of an update on your thoughts? What, what's the latest here with this newest bill?" }, { "speaker": "stephan", "time": "01:12", "start": 71.55, "text": "Yeah, absolutely. So the original Bank Secrecy Act was passed in 1970, so as Bitcoiners, we als-also know that that's, you know, around when we went off the gold standard. So, what happened in 1971, right? That's the, the famous, question. So this really was unprecedented legislation in the sense that, there was not a, a structure around, countering, quote-unquote, money laundering During, before 1970 in the United States, certainly not at the federal level. Instead, they had to catch criminals, like Sherlock Holmes, you know? They had, they had to gather evidence to find probable cause to get a warrant to subpoena a bank, which to me just sounds like good law enforcement and, you know, good prosecutorial skill, but I think that for, for some who wanted to have more control, over the financial system, and per- Perhaps also maybe some consultants along the way who wanted to make money off of, AMLKYC, consultancy. so they, they passed this law and it really had two goals, in nineteen seventy. One was to try to catch people who were cheating on their taxes. so you'll recall, the US was in a fiscal problem, in nineteen seventy and, inflation was running hot and they needed to bring in more dollars to Essentially, lower inflation. so that was one. The other was, around narcotics, right? So, illegal drugs were flowing into the country and they wanted to stop the financing of this. but I think that when we look at the data and the statistics, most money laundering is really about tax evasion. It's not about, the boogeymen of terrorists and, criminals, you know, I mean, violent criminals or something like that or, drug smuggling. So the Bank Secrecy Act essentially forces banks to be deputized as, agents of the state, that they have to constantly spy On their customers. So it really establishes a system of mass surveillance saying that every bank, if you perform some kind of activity that is- was deemed high risk. Now, interestingly, back in nineteen seventy, they put the dollar amount at ten thousand dollars. So they said, \"Hey, if you're doing weird things with more than ten thousand dollars, we're going to proactively report you to the Treasury Department, to the government.\" the bank won't. and back in nineteen seventy, ten thousand dollars, that was a lot of value, right? That you could actually buy things with ten thousand dollars. now you'll be lucky if you can get a loaf of bread for ten thousand dollars, right? due to, hyperinflation here in the United States. now I'm exaggerating, but, they never changed the number, and they certainly didn't adjust it for inflation. So an increasing amount of data has been going to the Treasury. and, you know, they've also amplified it with, IRS, ten ninety nine forms and so there's all sorts of automated data reporting happening where it, it really is kind of dystopian and Orwellian. It, it makes me laugh when people say that they are opposed to, CBDC because of the government surveillance on financial transactions. we're already there. we've been there since nineteen seventy, and it's gotten worse and worse. Now, the great dismay of The proponents of this system, I mean, first of all, let's keep in mind there's zero empirical evidence showing that, this regime since 1970, has resulted in less financial crime, right? that- That presumably would be the purpose of, AMLKYC would be to reduce financial crime. There's zero evidence that it has done so, financial crime has actually increased. and, and perhaps Thanks to this framework, in particular, because the aggregation of data, has, I think, amplified the proliferation Of, identity theft. And so, it has, opened up a new avenue of financial crime, of stealing people's identity, taking out a fiat loan, and, you know, go, going and spending their value. So that's, that's one thing. We do know that the harm, yeah, has-- the harm is intrinsic, right? Because the harm is saying that, we're going to violate your constitutional rights, your civil liberties. we're going to, make it so that You know, the Fourth Amendment, which says that the government should get a warrant in order to, you know, be able to search and seize, your effects, that has been gutted and It, it, there, there's a sleight of hand that's been done by, constitutional scholars and, and, the Supreme Court, in order to kind of, enable this but ultimately, it's an example of judicial activism that goes contrary to the original intent of, the founding fathers and, and those, you know, who, who ratified the Constitution. So the, the harm is intrinsic in, in this, framework, and there's no discernible benefit to it. and on top of that, it has repeatedly been politicized. So we have examples of treasury insiders leaking suspicious activity reports out to the public. relating to transactions that they personally don't like, right? That, you know, it's driven by their, their political animosity rather than, you know, rather than actually embarking on a criminal prosecution based on that evidence, right? instead they kind of just leak it out to the press and create a scandal. so now the, the other fascinating, part of it is that, the, the government has so far Not applied, this thinking to Bitcoin. And within the Bitcoin community, there's been a lot of conversation about, AMLYC over the years. I remember there, you know, there, there were threads about it, decade ago, and it was a subject of debate because some even floated the idea of Bitcoin, Bitcoin Core, the node software, voluntarily adopting Some kind of, ban list, you know, hard coding in which addresses you shouldn't be allowed to use with Bitcoin, and ultimately that was rejected. it for a number of different reasons, but I think that primarily it's about the users of open source software, that is, that if The developers of the open source software published this new version of Bitcoin Core, would the users adopt it? What's the incentive for the users to adopt it? there really isn't one when it comes to, to this question of trying to, list out all the bad addresses that you can't send to. there's no benefit to the users. there, there can only be a cost to the user, right? Which is that they were going to send money to that address or it has zero effect because they don't care Sure. Right? you know, the, the, there's not, any kind of benefit. and so I think that that ultimately, d-d-d- that long term, hopefully would, you know, drive the decisions on open source projects, but we've seen examples of p-open source projects trying to override the interests of their users, and immediately what happens is that you see the project get forked, right? So, the-- I remember this happening in, in JavaScript land, with Node.js, there was a commercial dispute about the open source, and immediately Fort, it caused a schism, it within the open source community, and the users went to where they have more freedom, right? It's just intrinsic to, to the value proposition. So now that that voluntary approach has really fallen flat, there, you know, would be an opportunity for a mandatory approach, and, and what that would look like is indeed what we're seeing Elizabeth Warren propose here with this, bill that would say that these requirements that historically have only applied to centralized financial- Financial institutions in the fiat world, or that are interfaces, you know, the, the, on-ramps and off-ramps between the fiat world and the real world, like Bitcoin, that those requirements ought to be extended to open-source wallet software, to open-source node software, and to Bitcoin miners a-and mining pools. and so it really would mean that, let's say, let's say you run a Bitcoin node and you have a transaction that is of greater than ten thousand dollars of value is being verified by your Bitcoin network. This happens every ten minutes, I, I, I think it's been a long time since there's been a block that, you know, didn't have a transaction that was worth over ten thousand dollars. And so that means that you would have to collect the personal information, right? The KYC information of the sender and of the recipient, before you can have your node software verify that transaction." }, { "speaker": "stephan_livera", "time": "10:38", "start": 638.17, "text": "Yeah, that's a joke. So," }, { "speaker": "stephan", "time": "10:39", "start": 639.43, "text": "yeah, it's- complete insanity. furthermore, for example, if, if you were to use your Bitcoin wallet to send or receive more than ten thousand dollars of value, you would have to, you know, file a report to the treasury, on yourself. and you would have to KYC the person that you're sending or, you know, receiving from, and, and your KYC information as well, of course. So, it really-- a-and of course, for a Bitcoin miner, same concept, right? If they're gonna include a transaction in a block, they have to KYCAML, the transaction. So, At every layer of kind of the Bitcoin stack, Elizabeth Warren is creating, unworkable, and, just, you know Completely unconstitutional, completely totalitarian and dystopian requirements, because now when she's and her staffers and, you know, other people involved with this bill are confronted with the objection that, \"Hey, look,\" This doesn't work. This won't work. It's not, you know, so, effectively what you're doing is you're banning Bitcoin in the United States. Their response is, \"Yes, good, that's what we want. That is our goal, right?\" So it's not like their response is, \"Oh, What a terrible mistake we've made. Let's negotiate and let's try to carve out some exemptions so that we don't accidentally ban Bitcoin in the United States, right? No, their policy objective is to stop everyone from using Bitcoin, right? Because A number of different reasons. you know, we could start with their, their, their stated motivation is that they're just trying to stop terrorists and criminals, right? and so, that's why they have to, put Bitcoin under this, authoritarian regime. But the reality is that their regime doesn't stop criminals and terrorists since 1970, there's been quite a lot of crime and terrorism that's been committed, so, obviously the, the theory is flawed, and something else is Happening right now that, is being underreported. One is that Senator Menendez from the great state of New Jersey is under investigation by the government for Corruption and bribery, because apparently, allegedly, let's keep in, you know, presumption of innocence, right? we, let's, let's keep the moral high ground here. he is being accused of being an agent of the, the Egyptian government. That, he has taken bribes from the Egyptian government in order to represent their interests in Congress rather than for him to uphold his oath of office. And so, you know, even his people in his own party, like Senator Fetterman are calling on him to resign in disgrace because the evidence is just so overwhelming, the, the case seems pretty open and shut. He-- Senator Menendez wasn't using Bitcoin for this money laundering activity, he was, you know, he wasn't taking bribes to his, cold card. he wasn't running a Bitcoin node, he wasn't mining in his basement. No, he was doing things with hard cold cash, right? Dollars, US dollars, fiat paper currency, gold bars as well. so gold is implicated in, in, story, two, and of course, cars, right? Cars, ultimate store of value, very mobile, so in real estate, why would real estate not be involved as well? so, you know, th-this, this scheme, Obviously, you know, banks were involved in this, and banks didn't stop Senator Menendez from taking bribes from the Egyptian government. so, clearly their, their system is flawed. Now So perhaps what's more troubling is another news item, with regards to the President of the United States, Joe Biden. his son, Hunter Biden. There's evidence that he has also been taking bribes and been involved in corruption. and there's also evidence that The president himself has been involved in these schemes, that, this would be the biggest corruption scandal in the history of the United States, that, At the time, he was vice president, Vice President Joe Biden, was using his office in order to, follow through on bribes, that were being paid, to his family. and, that, this has been happening through the banking system. In fact, one clear piece of evidence in this case is the suspicious activity reports. Hundreds of them that were filed by banks to the US Treasury Department, naming Hunter Biden and pointing out, \"Hey, these payments are in excess of ten thousand dollars, and, you know, they're coming from Chinese f- Foreign bank accounts. They're coming from Ukrainian foreign bank accounts, right? So clearly, and, and they're going through a complex network of shell companies in order to benefit The Biden family. And so these suspicious activity reports were being filed by the banks and were being sent to the US Treasury Department. Now, seemingly they weren't followed up on, and so perhaps there's a question of was, was there a cover up or- Is this system completely flawed? Is it just profoundly ineffective and so, thus, utterly useless, right, that it couldn't catch the greatest corruption scandal in the history of the United States right under their nose? you know, with hundreds of suspicious activity reports, it really boggles the mind. So we have this proposed legislation that would bring Bitcoin into this framework, and it just-- it doesn't make any sense at all. The only way it makes sense is if the goal isn't about stopping criminals and terrorists, the goal is about stopping Bitcoin. And Elizabeth Warren, she used to talk about The carbon emissions of Bitcoin. All right, she even had the New York Times put out a piece, a hit piece against Bitcoin miners emitting CO2. Now, she got, sh-- she got ratioed and the New York Times got ratioed, by a video Showing that Bitcoin mining doesn't emit any CO2. So it destroyed her credibility. She had to go back into her, you know, mastermind evil layer, and come up with a different approach. And so this is the new approach she's going with, is that now she's hard on crime, now she's an anti-terrorist warrior. Right? Be-before she was progressive, right? She wanted to defund the police, and, decriminalize everything. now she's turned into, you know, she's, she's far right. She's like with Tom Cotton. She's like trying to, stop Iran. which I, I'll get into the Hamas story, I mean, if, if we have time, but it's really because she recognizes that Bitcoin, attacks her totalist fantasy She wants the US government to have a total and complete monopoly over the issuance of currency, and, you know, by extension, the commercial banking system, so that it can finance her, welfare warfare state, right? These massive deficits that, you know, nobody would pay the taxes for this stuff, but if it's financed through inflation, then, you know, it's possible. And she recognizes that Bitcoin threatens, this overall, ideological, position. And the other part of it that it threatens is her life's work. If you go to Elizabeth Horn's Twitter page, you know, she lists out her children, and she includes as, you know, humorously tongue in cheek, right? But I think that it reveals a tremendous subconscious thing here. She lists the Consumer Financial Protection Bureau as one of her children. So this, Consumer Financial Protection Bureau, which sounds-- I mean, it sounds like something straight out of the Soviet Union, right? It's, very, but it's basically trying to micromanage the financial services industry in order to benefit consumers, right? Presumably. now, it also tremendously benefits everyone involved in, the whole, rigmarole, right, of, micromanaging all this, which involves lots of lawyers, lots of politicians, lots of- Lobbyists, lots of fundraisers, you know, lots of influence peddling. and so the Consumer Financial Protection Bureau, it was so controversial that they had to find a very Schemey way of funding it through the Federal Reserve. So if you look at how the money flows, it goes from the Federal Reserve that just prints money out of thin air to the Consumer Financial Protection Bureau, and then this bureau you know, they're, they, they go after like, \"Oh, we're going to lower the late fees from thirty-five dollars to eight dollars, aren't, aren't we good?\" You know, it's like, \"Okay, now the rest of us have to pay more, beca- right? We, we have to pay more for our credit cards because, you're kind of just subsidizing people who are late on their payments.\" and it's also, you're just managing the symptoms of late-stage fiat, right? That, the whole system is" }, { "speaker": "stephan", "time": "20:15", "start": 1215.38, "text": "And then you're raising interest rates on them, and, you know, the ultimate consumer financial protection would be to prevent the Federal Reserve from raising interest rates, right? It's all very, ironic. but Elizabeth Warren believes deeply in this system, and she wants to protect the system almost more than she wants to protect consumers, right? This is her baby. and so this is, I think, another reason why, you know, when she looks at Bitcoin, Bitcoin doesn't need her, right? Bit-Bitcoin doesn't need her to save Bitcoin, right? Bitcoin holders don't need her to save them. We don't need any consumer financial protection bureau. yes, transaction fees are volatile, but the CFPB, I don't think it would be appropriate for them to crack down on ordinals, right, in order to protect, third world consumers trying to use Lightning. but maybe, maybe if Elizabeth Warren kind of saw what's going on with, that, maybe she'd be interested in it. But in any way, you know, she wouldn't-- I, I don't think that there would be an effective solution that would come out of, that, that angle, like taproot. Yeah. Well, let's, let's get" }, { "speaker": "stephan_livera", "time": "21:26", "start": 1286.44, "text": "to this question Elizabeth Warren doesn't have a very good record in terms of actually getting bills passed. So some people have been making that kind of argument. Do you believe there's a realistic chance that Elizabeth Warren can get this crazy bill passed by attaching it to some other legislation?" }, { "speaker": "stephan", "time": "21:48", "start": 1307.64, "text": "Yes, and that if- She's able to, so, I mean, look, everyone has a first bill, right?" }, { "speaker": "stephan_livera", "time": "21:59", "start": 1318.7, "text": "how many years has it been, has she been in there, but, you know, first time for everybody." }, { "speaker": "stephan", "time": "22:03", "start": 1323.21, "text": "Yeah, and if she's able to put together a bipartisan coalition that cracks down on illicit finance, and it's possible, it's possible that she could get this passed. So now, what do I think the odds are? This is where I'll use a metaphor. Let's say That we had a, a soccer game. And, the soccer field is kind of tilted in one direction, right? and so if you have two equally good teams whichever team, is uphill would win, right? because, pushing the ball uphill would be harder than pushing it downhill, right? So nevertheless, the team who is favored still has to play. otherwise they, they will lose, even if, if they have the upper ground. and so I do think that Bitcoin has the upper ground here but we still gotta get out and play, and we have to, score points against Elizabeth Warren and her cabal, and, defeat, this, you know, bill So how do we do that? I think that first of all, what we're doing right now is really important, right? Communication, for, for, for us to get the word out, there's a bad bill Elizabeth Warren is personally lobbying for it very hard. She's gotten quite a few co-sponsors on it. now she's having trouble finding somebody in the US House of Representatives to carry water for her. so I think that right now the House is kind of- preventing her from moving forward, with the bill. But as you point out, she could attach it to, to a must-pass, legislation. There was some concern that she would attach it to the NDAA, the The National Defense Authorization Act that, just passed, that had a very controversial FISA, authorization thing in there about, warrantless wiretapping, so it's all very apropos. but ultimately she didn't-- she, she failed to get it in the NDAA because I think that she didn't have the support on the House side. Now, I'd argue that, you know, if there's a headline that comes out that, \"Oh, look, Bitcoin financed this, horrible, horrible terrorist attack,\" you know, that Give her more momentum, right? To, to, pass the bill. so we have to constantly be vigilant. so I think that, you know, on top of the education of, getting folks to, to understand the issue and to not go along with Elizabeth Warren's thing, you know, there's direct, communication with elected officials, with regulators, with staff and I think that there's a tremendous role for the public to do that, right? So you can call your senator and you can call your representative and ex-ex-explain that, hey, look, Bitcoin is the most important strategic asset in the United States. this bill is completely inappropriate. It's un-American. It's paving the way to CBDC. It's, you know, it's part of- A broader Marxist, communist, takeover. So, you know, it, it has to be opposed in the strongest terms. now, the other thing to keep in mind though is that I like the game theory of Bitcoin, right? That, okay, let's imagine Elizabeth Warren did succeed somehow in passing her bill, what would happen? I do think that, nothing bad would happen to Bitcoin. I think Bitcoin would be just fine. I think that a lot of Bitcoiners would move to El Salvador, right? So, we would see kind of the, geostrategic implications play out pretty quickly, like they did in China. But But having said that, like personally, I like living in the United States. I'd like to continue living here in Texas. I don't really-- I mean, I'd like to visit El Salvador. I haven't made up my mind about moving there. It would be nice if Elizabeth Warren wasn't the one forcing me to move to El Salvador, you know, much like the French socialists essentially, you know, forced my family to move to the United States, so, you know, forced migration. I'm like a refugee, you know? I'd like to-" }, { "speaker": "stephan_livera", "time": "26:19", "start": 1578.96, "text": "You'd rather, yeah, you don't have to go and become another refugee again, you know?" }, { "speaker": "stephan", "time": "26:22", "start": 1582.34, "text": "Yeah, exactly. So Elizabeth Warren created a lot of refugees. and the other thing too is that we have to stand up for what's right. You know, we, we have to have, some, some moral backbone here, because this is an assault on our liberties and it is driven by a totalitarian instinct. and personally, you know, as a person of faith, I, I really do think that it's just not part of God's plan, for us to be reporting all of our financial information to the US Treasury. I, I, it, it, it's, it's, you know, I, I, I think that it does, fundamentally fr-infringe on religious liberties, including, in addition, in addition to freedom of expression, right? That here they are defining-- now, the, the language here is Orwellian. An unhosted wallet, unhosted wallet, what is? How do I find an unhosted wallet? Well, an unhosted wallet is any kind of software or hardware that can store a public or private key. That is every computing device, but it's also Why would you limit it to hardware and software? You can store a private key on a paper wallet, right? So" }, { "speaker": "stephan_livera", "time": "27:31", "start": 1650.74, "text": "you can memorize twelve words." }, { "speaker": "stephan", "time": "27:33", "start": 1652.64, "text": "Yes, it is, it, there's really no limit to this, the scope of this law. And so I really do see it as just an attack on a, a really fundamental principle, here. So, private property. Right? I, I think that this is basically a bill that says there's no longer any such thing as private property. Now, you know, any, anything, that could be a Bitcoin unhosted wallet, which is literally anything, including your brain, is now- you know, subject to search and seizure without a warrant by the government. Anyway, tangent there, but," }, { "speaker": "stephan_livera", "time": "28:11", "start": 1690.57, "text": "back to the show in a moment. CoinKite dot com are the leading producer of Bitcoin security hardware. So for most of us, we might start out with a phone wallet for our Bitcoin, but over time, once, once we get a larger amount of Bitcoin, it's time to think about hardware that can help us secure our coins. So notably, the Coldcard Mark IV is the latest version. Which is out from CoinKite, and they also have the TapSigner, which is a cheaper device, which is not as secure, but ob-obviously it's cheaper and offers some different trade-offs that you might be interested in. With these devices, you can do things like generate your Bitcoin private keys, and you can use these devices to sign the transactions that relate to spending Bitcoin. So this is a great way to help segregate your Bitcoin private keys, keep them offline instead of keeping them on hot, online, internet-connected devices. And they have a range of features features and ways that you can interact with your Bitcoin. So for example, you can use the cold card in airgapped mode, you can use the SD card, which is this little feature in here, to move transactions in and out of your cold card. Or of course, if you are a beginner, just get a cold card and get the USB-C cable, and you can plug that in directly to your computer, which you can use that with apps Apps such as Sparrow Wallet or Specter Desktop or Electrum. So to get your cold cards for yourself or for your friends, go to coinkite dot com, use code Livera, and you'll get a discount on your cold cards. Now, the lead sponsor of this show is Swan Bitcoin, and if you are thinking about gifting this Christmas or this holiday period, think about swan dot com slash gift. You can give the gift of Bitcoin along with Swan's world-class education and customer support. So the minimum is twenty-one dollars. Your recipient will receive an email on the day you choose along with your custom message, and they will then be able to convert the USD value of the gift that you've given them into Bitcoin. They set up their account. And remember, Swan is going to be continually educating that person, so this is a great way to leverage the efforts of Swan to help educate your family and friends. So if you are thinking about gifting this Christmas or holiday break, maybe you've got a last minute gift or somebody you forgot to give a gift to, think about swan dot com slash gift. And now back to the show. But I guess, I mean, moral of the story fundamentally is that, you know, for-- Okay, I understand. Lot-- Not all listeners aren't Amer-- aren't Americans, but probably forty-five percent of my listeners are Americans, so it's worthwhile for you guys to, you know, consider that, call your senator. are there-- What other ways are, you know, Bitcoiners connecting on this to sort of find out what they can do and how they can get, involved here?" }, { "speaker": "stephan", "time": "30:52", "start": 1851.79, "text": "Yeah, I'll point out too, though, that this isn't just about the United States. The Financial FEDF, Financial Task Force, actually, actually," }, { "speaker": "stephan_livera", "time": "31:00", "start": 1860.0, "text": "yeah, they're a project out of the OECD, yeah." }, { "speaker": "stephan", "time": "31:03", "start": 1863.42, "text": "Yeah, they are an international terrorist organization, right? So they are interested in terrorizing anybody from, away from using Bitcoin. And, you know, their goals are being, you know, enacted by Elizabeth Warren in the United States or trying to, but this is- This is also happening in Europe and throughout the world. FEDF is applying pressure on governments to adopt stringent regulations around unhosted wallets. That would in effect ban these wallets, because they are seen as a loophole in their money laundering schemes. That is, that you having the freedom to control your own money is a loophole, right? Right. Yeah. Because the system is about the banks and the government controlling your money. So it's, you know, any time you're controlling your own money, well, that's, that's a bug in the system, alright? and so, this is an international struggle of freedom against, A really tyrannical, takeover of our lives. so even in Europe and, and other countries, we have to push back on this, and I think the, another way that we push back is By voting. I know it's unpopular among many of the anarcho-capitalist, libertarians, but I actually do think that this is a single issue thing, that is that I'll vote for anyone who is pro Bitcoin. That to me is the ethos of accelerationism, that I don't have to agree with them on every topic. I, I'll never find a politician I agree with on every topic, right? Or even agree with them on tactics or rhetoric or whatever. But If I can get comfortable with the fact that they want Bitcoin to be illegal, and that they are opposed to Elizabeth Warren's shenanigans and fed up then I'll vote for them. And I think that if we all come together and agree on that, then what we'll see is that politicians will stop promoting these terrible agendas because they know that it jeopardizes their ability to get reelected. And ultimately, that's how things work in a democracy. So we can debate about, you know, does my vote count or not, but to- Together as a group, our vote does count. there are millions of Bitcoin holders and kind of the wider crypto industry, and I'll point out, Bitcoin I've been talking about Bitcoin, this, this is a ban on the whole crypto industry, right? they're-- it's not just like, they're citing Bitcoin specifically or they're saying, \"Hey, SHA two fifty-six squared is, is banned.\" No, this is- Broad sweeping leg- legislation, that would also, ban Ethereum, ban Dogecoin, ban Cardano, and we can debate endlessly, you know, the, the securities laws or the censorship resistance or whatnot, and we can also debate Who would survive a ban, right? Who would thrive in a ban? but nevertheless, I think that, there should be quite a lot of voters who are opposed to, A ban on Bitcoin and cryptocurrency. So, I think that together we do pose a threat to the reelection of politicians, and, that's why I think the, the communication part is important as well. We have an election here coming up in the United States, and The current incumbent president of the United States, Joe Biden, you know, his administration has been pointedly anti-crypto, anti-Bitcoin and that it's interesting because, they, I think are still more moderate than Elizabeth Warren is, because I think that they are responsive to the fact that they have a lot of donors And, voters that they could jeopardize by really, adopting, Elizabeth Warren's radical, fiat maximalism. And, in fact, we can actually see this act and, Other things Elizabeth Warren has done, for example, she sent letters to the White House, right? The only time you send a letter to the White House is when they're not listening to you. if they are listening to you, then you have private meetings and, you know, they do what you tell them to do. And" }, { "speaker": "stephan_livera", "time": "35:34", "start": 2133.67, "text": "they'll pick up your phone, phone calls, yeah. Yeah." }, { "speaker": "stephan", "time": "35:36", "start": 2136.19, "text": "It sounds like, or it appears from the outside, that the White House has kind of given Elizabeth Warren the cold shoulder of, \"Hey, look, you're an extremist. I mean, you're--" }, { "speaker": "stephan", "time": "35:49", "start": 2149.34, "text": "What the White House can do is, ban Bitcoin mining specifically, and they put that in their budget proposal, right, that they were gonna put tax on Bitcoin mining that would ban the industry essentially, because that they feel like is narrow enough that they can, kind of stake out the position, but to put a ban on- All of cryptocurrency, all of Bitcoin, I think that's too, too aggressive for the White House, even if it is, you know, very a-appealing to Elizabeth Warren. So, I think that there is still some, some nuance and it speaks to the wisdom of the founding fathers, right, that they created a system of checks and balances, three branches of government I think this Supreme Court would be very preferable to, a lot of the arguments I've been making today about the constitutionality of, the Bank Secrecy Act, but judicial process takes a long time and it's very expensive. arguably it's less expensive. I think the shortest time is executive action. So the executive branch can sign an order, you know, in one day, of, \"Oh, we're, you know, doing whatever.\" Legislative process takes longer, and then judicial process takes longest. So Next year, perhaps if Joe Biden is replaced with a president who is pro Bitcoin. then we would see a sudden and massive shift, especially, I mean, some presidential candidates like, Vivek Ramaswamy, I think, have pointed out that The AMLKYC stuff is kind of, the administrative state run amok, that is that, a, a lot of this stuff just needs to stop happening and these people all need to get fired. and I think that's aligned with reality, right? That, Hopefully, you know, if somebody, if Vivek or somebody like him were to be elected, all of these Treasury Department, AMLKYC, Bank Secrecy Act people would just get fired on day one. and all this activity would stop, and nobody would notice, right? Because they don't actually stop the productive people. Yeah, they aren't productive" }, { "speaker": "stephan_livera", "time": "38:06", "start": 2286.23, "text": "people. Yeah, they are just leeches, parasites." }, { "speaker": "stephan", "time": "38:10", "start": 2289.75, "text": "Only good things would happen. the cost of banking would decrease in the United States And it's funny because Elizabeth Horn asked Jamie Dimon, \"Should Bitcoin have to follow the same rules as J.P. Morgan Chase?\" And of course, Jamie Dimon answered yes, right, because he wants a level playing field. But the correct and appropriate question is, should JPMorgan Chase have to follow the same rules as Bitcoin? And I would say yes, that's the truth, right? That JP Morgan Chase should have to run a Bitcoin node and should have to follow the rules of the Bitcoin network. They shouldn't be able to print money out of thin air, right? And they shouldn't be able to- trap people into, proprietary payment systems, right? You should have a right to withdraw and deposit Bitcoin at JPMorgan Chase. Now, I don't think that the government should force that onto JPMorgan Chase, I think Jamie Dimon should voluntarily adopt that. and that he would if the executive branch would get out of his way, right? Because currently they're dragging their feet on putting forward kind of guidance on how banks can adopt Bitcoin. Because of all this AMLKYC stuff, if they were to essentially roll back all those regulations and say, \"Hey, look, free market, if JP Morgan Chase wants to c-uh, compete against Coinbase and Kraken, sure.\" Sure, yeah, they can do it. No problem. They can offer checking account, you know, with Lightning and Bitcoin on-chain deposits and withdrawals. I think that that would, be a tremendous benefit to consumers, right? and I think that, i-it's, it's something that's really easy to do, because all you've gotta do is just delete useless regulations that are costly and, completely ineffective" }, { "speaker": "stephan_livera", "time": "40:05", "start": 2405.12, "text": "Yeah. Alright, well, I think we'll leave that section there. obviously, listeners, if you are able to get involved, I, you know, I believe it's not contrary to libertarianism to try to act at least within the system that does exist. I think it's okay to, you know, vote for the person who's most pro Bitcoin. I don't see any conflict in terms of libertarian ideology personally. I understand there are some people- Can I" }, { "speaker": "stephan", "time": "40:24", "start": 2424.21, "text": "drive on public roads?" }, { "speaker": "stephan_livera", "time": "40:26", "start": 2426.03, "text": "Yeah, I mean, if you're gonna be one hundred percent consistent, you gotta, I don't know Whatever. But I mean, I, I, the thing, the reason I'm saying that is there are some Bitcoiners who maybe they're just kind of against everything, or they're just kind of maybe are too blackpilled to the entire world where the, the, that they're not able to actually stay and be effective in the real world that exists today. And so I think that's, you know, it's, it's, we can have our libertarian ideology, but we can also put that into practice by actually, you know, trying to push things in that direction rather than sort of expecting this Bitcoin action. but I think the other thing I wanted to get your thoughts on while we're here, and I'm sure listeners will be interested, is there's been a lot of chatter online, and I'm sure you can anticipate the, the audinals, inscriptions, stamps, BRC20, you know, the-- and, and there, these things are different concepts, to be clear, but people just kind of loosely call them all audinals. Now, what we've seen is that the, the block space dynamics have really changed recently. We've seen that the fee, fees have We saw some fee spikes, you know, up to, I think, even six hundred, maybe even seven hundred sats per vbyte, or in fiat terms at the time, maybe fifty, sixty dollars for a transaction. I think as we speak, it's maybe two fifty sats a vbyte, something like that. I'm curious if you have any thoughts on what's causing all this. Is there, is there a reason to be concerned or not really?" }, { "speaker": "stephan", "time": "41:56", "start": 2516.16, "text": "Yeah, great question. So last year, before ordinals, were a thing, I co-published a research paper on transaction fees with Joe Burnett at, he was at the time at Blockware, now he's at Unchained. congratulations, Joe, on that. I, the research report we put together laid it out that transaction fees are really about two functionalities. One, a-and You know, I, I would actually, I'd go further. you can boil it down to one, really, is-- it's, it's about, it's about preventing DDoS attacks, right? That, essentially you're able to, Have a congestion pricing mechanism, that prevents censorship. Now, the censorship part, I think is well under-- or it's poorly understood, very poorly understood, that is that, censorship is when a Bitcoin miner doesn't include your transaction in a block. Right, just fundamentally. I would extend censorship to also be when a miner, includes a transaction in a block that double spends you. that essentially, the, that's, that's a form of censorship, or, or that excludes a transaction for the purpose of double spending, right? by removing a valid transaction and replacing it with a different one. the, the, The counter to that censorship is essentially payment, that is that, if you want your transaction to be in a block, you're just going to have to increase your transaction fee until a miner includes it in a block. And there's a highly competitive market on both sides. So on the miner side, they're trying to maximize their revenue by including as many And as high fee paying transactions as possible into their block. Now, the miners are constrained by the one megabyte block size limit, which then, you know, was converted into the four million weight unit limit. That is, was Segwit. Now, this weight unit limit and, and block size limit, it's obviously been hugely controversial. Satoshi Nakamoto put it in place in two thousand and ten before he left the project, in order to prevent, Bitcoin nodes from being DDoS'd, with spam and essentially crashing, all the Bitcoin nodes or causing them to centralize into just Amazon, Google, Microsoft data centers, right? So which would allow big tech giants to rewrite the rules of the Bitcoin protocol and give themselves Bitcoin. So keeping the cost of running a Bitcoin node low is critical for the decentralization and security of the money supply i-is kind of the way I'd put it. this is really about the credibility of monetary policy is secured by the low cost of running a Bitcoin node, and the, way to constrain that cost is with measures like a block size limit. Now Is one megabyte or four million weight units the right magic number? No, of course not. Satoshi Nakamoto didn't develop a mathematical computer science proof showing, \"Hey, this is the correct number.\" he just pulled it out of thin air and, you know, he just put it into the code and, and then disappeared. and left us to figure it out. So now you could frame this either as, \"Oh, it's a good protective measure,\" or as \"This is censor-censorship, right? That is that...\" if there are two megabytes of transactions and you're only including one megabyte of them, you are censoring the other one megabyte of transactions, right? You're preventing them from being published on the time chain, and this is censorship. You can even extend it further of saying, \"Hey, any transaction validity rules. For example, saying, okay, a transaction's outputs should be less than its inputs or equal to.\" Well, if I have a transaction, you know, that is creating Bitcoin out of thin air outside of kind of the Coinbase transaction, that's an invalid transaction. why is it invalid? Well, it's only because of the protocol rules that are censoring it, right? That are preventing it, that are rejecting it as invalid. that- That's a form of censorship. I mean, people wanna limit the term, the use of the term censorship to say, \"Hey, this only applies to, valid transactions.\" It's like, well, the, the validity rules are up for debate as well, and have been since the entire existence of Bitcoin, right? That, which transactions are valid or not can be changed, can be amended based on, subjective value preferences of the participants in the network, and the, the only limiting factor is that we're trying to reach a shelling point equilibrium, right? A, basically a, a game theoretical outcome where we're all adopting a set of validity rules that, without any kind of, properly coordinated, right, coerced, centralized authority, and that we're just trying to figure out what works best for everyone. and there's a lot of path dependency to that. and there's a lot of acrimony and debate. We've seen people fork off because of that, but in any case, that's, you know, going back to transaction fees, the transaction fees are low when the demand for block space is less than the limit. Right? And then when we're over the limit, the transaction fees go ballistic. Now, the challenge here is that there's no way for us to say, \"Um- The data going into the Bitcoin blockchain, should only reflect transactions that are aligned with the peer-to-peer electronic cash system headline that Satoshi Nakamoto put in the white paper, right? because that's kind of a very fuzzy, subjective, value judgment. And now, having said that, a lot of the validity rules are aligned with that, right? and so, you could imagine relaxing the validity rules such that as long as you're paying a transaction fee, you can literally put any data on the time chain. It doesn't even have to be a transaction, right? It could literally just be, It could have, no, no, not have the structure of a transaction, right? Just any kind of data structure, as long as you pay a transaction fee, or pay a fee, sorry, not a transaction fee, a data fee, that you're able to, to add it. And so in, in many ways, when people say that, \"Oh, Bitcoin is, you know, whatever you want it to be,\" That's not quite the case. there are validity rules that orient the use of Bitcoin towards the ends of transactional ledger capabilities, right? that it's not just a arbitrary data layer. now, having said that, people have found very Clever workarounds in order to inject arbitrary data into the transaction structure. and so f-- and specifically, on the inputs that where you would traditionally put a signature that proves that, you know, you are unlocking these Bitcoin, instead you can put a series of, if statements that are going to have embedded in it, data that then can be extracted. through, particular mechanisms and then interpreted, you know, through a third party client, to, to have some, some kind of structure to it. So where the controversy, I think, really, i-i-is, is, tough is, That I do think that there's arguably a misalignment of interests, between, for example, folks who, are upset about the block size limit and want- want to punish the Bitcoin system for having this limit in place by creating circular, you know, literally, you know, let's call it spam, right? Just, transactions whose only purpose is to fill up blocks in order to drive up transaction fees. Now, there's no way to prove it, I think, you know, unless we, we get some kind of real evidence, right? An email showing, \"Oh, look, they sent a million dollars worth of Bitcoin to, you know, spam the blockchain.\" but, the, the other part I think is, is more challenging is what if people are doing this because they are misguided in their understanding of Bitcoin? That they think that this block space has value beyond just its transactional utility. That, oh, block space is scarce and therefore I'm-- and Highly replicated, globally replicated, and has data availability assurances long term, that is, that they think that this is a good way to store data Now, it would be great if we disabused them of that notion. I think that it's really important to do so because they have to realize that this data that is going, n-um, you know, this isn't the case with stamps, but this is the case with ordinals. The data going into the inputs is prunable. You can prune the witness data after it's been verified and you can throw it away, and after a certain depth, you could say, \"Hey, look, the Bitcoin network, don't assume that any of the witnesses beyond, you know, height...\" you know, a thousand, right? A thousand, or ten thousand heights before us, just assume valid, right? And that's what it's called, i-in the Bitcoin node software that if you ha-if you are syncing a Bitcoin node from block height zero it's not going to verify all of the inputs, right, by, running, the script verification, the signature verification. And it's, it's going to assume that all the signatures are valid until a certain height, and then it'll start actually verifying, the signatures. So that really, to me, means that we could discard that data. I, I, I think it would have zero impact on the credibility of Bitcoin's monetary policy. I think it would have zero impact on the utility of Bitcoin as a monetary system, as a ledger. To delete old witness data. The only negative effect it would have would be on schemes like Ordinals that assume some kind of long-term data availability. And That means that the only people running Bitcoin nodes that, you know, are not pruning witness data would be the art enjoyers, who are, you know, running full archival nodes, right? and we're gonna get into some controversy here with, folks, on, you know, def-defining terms, but" }, { "speaker": "stephan_livera", "time": "53:14", "start": 3194.14, "text": "Back to the show in a moment. Mempool dot space is the leading Bitcoin and blockchain visualizer, and they've got some new features rolling out, notably the mempool dot space goggles. This allows you to see what's coming through the mempool. It's like having an X-ray specs that allows you to see what transaction types are coming through. There's 25 categories, and you can even mix and match those categories. So whether you're keeping track of those nasty inscriptions or the, stamps with bare multisig as an example. You can see and narrow down your focus in terms of what you wanna see, and you can of course sign up for the Mempool Accelerator over at mempool.space/slash-accelerator. And now back to the show. No, I think, I think the archival node is, is the correct term. I mean, you can have a full node that once was an archival node and is no longer an archival node, but it now still is a full node. And so, you know, I think that's, that's fair. but I think what I wanna get at as well is we are having some of the same conversations that we had in twenty seventeen. There are all these people saying, \"Oh, no, the fees have gone,\" it's, and it's kind of Maybe because there's a lot of people who are new, they weren't here in twenty seventeen, and they, they sort of didn't see that. so there are people saying, \"Oh no, transaction fees are, you know, fifty dollars for a transaction,\" as an example. Now, that was at the spike, to be clear, it's not even that right now. But they, they are raising this question, and you touched on this earlier, you were joking about it, this kind of question of accessibility, right? That if a person, has a smaller amount of Bitcoin," }, { "speaker": "stephan_livera", "time": "54:51", "start": 3291.46, "text": "to a level where it's, it's not accessible. And, you know, maybe one response would be, \"Look, sorry, like Bitcoin is extremely valuable. It's like luxury Manhattan real estate or it's like, you know, this kind of luxury mansion, this, you know, extreme high value car. Not everybody can have that, and therefore, transacting on layer one, Bitcoin, is going to become an expensive thing. It's not gonna be accessible to everybody.\" but what do you, what are your views on that? Do you see it the, the same way or how are" }, { "speaker": "stephan", "time": "55:22", "start": 3322.36, "text": "Yeah, so I'd say I used to see it that way, and I think that, you know, there's kind of two big schools of thought. one school of thought is that transaction fees are, have, have historically been too low and that they will have to increase, and that they will increase due to adoption. The other school of thought is that transaction fees are too high and will hamper adoption and they have to get lower. I, I would introduce a third school of thought, which is that transaction fees are volatile, that block space Supply is long term elastic, short term inelastic, meaning that in the short term, su-demand for block space can outstrip supply But in the long term, that can't be the case, and then I would say block space is a commodity, it's not a scarcity. There's only twenty-one million Bitcoin, there's an infinite amount of block space in the fullness of time and that really what we're looking at is, okay, in the short term, what does it look like for the Bitcoin ecosystem to have high transaction fees? But then we know they'll, they'll go down in the future, right? This is just a volatility question, and we'll know they'll, they'll go down in the future, one, because on the demand side, we'll be more efficient about our use of block space. On the supply side, and this is highly controversial, on the supply side, we can increase the block space. We did it with SegWit, right? we could do it again with a, another soft fork or even, I'd argue a hard fork, so we'll see, you know, when, when a hard fork is appropriate, There won't be any debate about it, everyone will be clamoring for it. But in any case, so there's no-- I, I'd argue there's no long-term scarcity of blockspace, so ultimately that means that the price The transaction fees long term will trend downwards, but that they will always be volatile, that will have spikiness, and that then if we look at What is the total purchasing power of all of the transaction fees that could increase? Because the price of transaction fees in sats per vbyte can decrease, but if the purchasing power of sats is increasing, it's going" }, { "speaker": "stephan_livera", "time": "57:49", "start": 3468.67, "text": "up, yeah, because" }, { "speaker": "stephan", "time": "57:49", "start": 3469.25, "text": "the Bitcoin price is increasing. then that can more than offset, what's going on, on the, sat per vbyte side of the exchange. So, that means that I think that Bitcoin miners long term will have significant revenue from transaction fees. I think that users will have low transaction fees. and that the network or the, the transaction finality will continue to, ser-- you know, provide the right level of service. So, I think both sides are wrong. I think the, the third, what I described, is just based on reality. it's, you know, anti-dogmatic, anti-ideological, and that We have to start looking at this as a more of a dynamic system than one of like perpetual equilibrium of transaction fees will always be high or transaction fees will always be low, right? We have to look at the past They are volatile. There's no reason to think that will change going forward. None of the fundamentals have changed. Everything's the same, so we have to assume that they'll continue to be volatile going forward. and, you know, I'll, I'll debate anyone on that." }, { "speaker": "stephan_livera", "time": "59:00", "start": 3540.19, "text": "Right. So let's talk about that. So are you saying that we will eventually get block size increases then, in order to sort of release that pressure in terms of, like, as you and Joe pointed out, and I recall from that report you guys did, you were basically saying Saying, look, most people today are using it as store of value, which I agree with, and that if you were to get real numbers of people, like even a small percent, it would be thousands of times, you know, the block space demand in terms of how, even just opening and closing channels or doing lightning splicing transactions, if you had even a small number of the world's population doing that, it would just blow out, you know, at least the current block space, and that's kind of assuming we don't get stuff like, you know, check template verify, any prevout And that you think long term block size in-increases will occur or what are you saying there?" }, { "speaker": "stephan", "time": "59:51", "start": 3591.32, "text": "I think that whether the block size limit gets increased or not is primarily a function of whether we will discover some kind of cryptographic magic that enables on-chain scaling or not in terms of efficiency of the use of block space. So if we really get very, very, very efficient about using on-chain block space Then it might be the case that we'll never need a block size limit increase if we don't have any efficiency improvements going forward, which to me seems very unlikely given the kind of wider protocol research roadmap that, you know, you listed some of the related projects there. Then at some point, adoption will be such that there will be no question that we need to increase the block size limit, right?" }, { "speaker": "stephan", "time": "01:00:42", "start": 3642.55, "text": "it'll be self" }, { "speaker": "stephan_livera", "time": "01:00:43", "start": 3643.41, "text": "evident. So, that's, that's what I would say. Yeah. I know there is research. Jonas, Nick from Blockstream and others are doing work into aggregation. So I think they have-- and I've got an episode, so I can put that up in the show notes, but I think that was relating to half-aggregation. So that wasn't like the full Sizer sort of vision that, you know, our friends Giacomo and others are talking about. so that might be part, part of the way there. Other efficiency gains that will come from, you know, this kind of covenant technology. But, yeah, I guess the other angle people could be concerned about is if they, if, if, if a block size increase were to occur, that could also just mean there's a lot more spam, right? There's just a lot more, you know, ordinal inscription, BRC twenty stamps, stuff happening as well." }, { "speaker": "stephan", "time": "01:01:30", "start": 3690.33, "text": "Yeah. So I think that in terms of the spam, there's two things. One is that on the ordinal side, hopefully as, as we move away from those data availability assurances that I think are, are, are, flawed and, reflect a misunderstanding of, of Bitcoin. as we move away from that, I think the value proposition of ordinals decreases and inscriptions decreases, and that ultimately that, that'll decrease the demand for that. I also think that the lack of value, right? That ordinals and inscriptions, they, they don't have any fundamental value, they're, they're just, you know, it's, it's like graffiti, right? It's, doesn't have any, it's, it just has a negative externality, and it has a cost associated with it. And then eventually, the people doing this, run out of capital because they are paying all these high transaction fees to Bitcoin miners and, You know, they're not really getting anything in return for it, right? They're not, they're, they're-- it's not a positive sum game that they're playing. It doesn't have positive expec-ex-expected value. It's just negative EV. and so- That ultimately, I think, is a kind of a self-limiting thing due to its own internal contradictions. And so, I think that what, w-w-what these systems reflect is, a redistributive mechanism, right, from, people who, don't understand Bitcoin and don't understand how to use it correctly, to people who do. and so, you could see that like as, on one hand, prescriptive and moralistic of like, \"Hey, ordinals and inscriptions are, immoral because, you know, you're using it wrong, you're using the system wrong.\" But you can also just see it as pragmatically, you know, from an economic perspective of, because you are using the system wrong, you're gonna get wrecked. and we've seen it happen, you know, in a number of different contexts in Bitcoin over the years, and this is just no different, right? That You would have been better off not playing Satoshi Dice and stacking sats instead, right? and so it's many such cases, right? so I, I, I think that that's- One, now there might be, for example, on stamps, right, where they're, they're cluttering up the UTXO set, and so we need to figure out ways to prune the UTXO set or add some kind of validity rule to clamp down on that Or, you know, the, maybe there's, there's an angle here that I'm missing that, we need to figure out a way to, tax the stamps. but I, I, I think that the first solution is the, the best, which is just resource exhaustion from misuse of the system. and that, we don't really have to do anything. now, I'm open to changing my mind if in ten years, if these people are still causing problems, then, maybe we do need to change some of the rules. and I know that there's brilliant, software engineers and protocol researchers who might come up with some things. maybe, maybe we need to have a rule that is about, you know, making that more expensive or, we'll see." }, { "speaker": "stephan_livera", "time": "01:05:04", "start": 3904.99, "text": "Yeah, I think, the, the staps component seems to be the most negatively impacting Bitcoin because it's going into the UTXO set and that is ideally best if the nodes can hold that in their RAM. So my understanding there, just rough numbers, I've heard the chain state of Bitcoin nodes has recently, because of this stuff, has gone from, let's say, five gigabytes to like nine gigabytes, and the UTXO set Size has gone from something in the, let's say, mid eighty million, like eighty-five million, I think now it's like one hundred and thirty, one hundred and forty million UTXOs exist, and maybe some of this is just kind of, just due to the way people do this ordinal inscription stuff, because of the way some of the, the wallets act, where maybe they have these kind of one, like, small UTXOs and things like this. So maybe it's a little bit deleterious on that side, but as you said, they'll still eventually run out of money" }, { "speaker": "stephan_livera", "time": "01:05:58", "start": 3958.4, "text": "There was, OmniLayer used to be on Bitcoin and they left. There was Counterparty in, I think, twenty fourteen, fifteen days, and they, they eventually, you know, people don't do Counterparty anymore, at least from what, from what I understand. so, yeah, I guess- Ultimately, it sounds like it's, it's going to subside, but, there's a lot of, d-gents for now who are kind of pumping the price, and as you said, it is volatile. And, from my understanding, I was looking at a report from, Alex Thorne over at, the, the guys over at Galaxy, and they were, I think their report was spelling out that it's actually the BRC twenty out of, out of these components, they're different, right? The BRC twenty minting apparently was what" }, { "speaker": "stephan_livera", "time": "01:06:43", "start": 4003.83, "text": "That was my understanding is because they really wanted to do this, to be a part of this BRC twenty mint. Because of that, they're bid, they're bidding towards the top of the block compared to some of the, you know, the other inscriptions people who are just sort of putting it in there and just ready to let it sit there until it eventually gets confirmed. These BRC twenty people tended to be at the top of the block, and that's what's kind of bid this thing to the moon in terms of, transaction fees. At least, that's my understanding," }, { "speaker": "stephan_livera", "time": "01:07:13", "start": 4033.99, "text": "was sort of the highest in terms of the count, but it's also fair to say that the, the JPEGs take up a big amount in terms of the size of the transaction that they have. So, so yeah, some context for listeners." }, { "speaker": "stephan", "time": "01:07:28", "start": 4048.09, "text": "Yeah, and I, I think that ultimately this, this solves itself in the sense that, BRC twenties don't have any kind of, value. So, they are, you know, you can issue as many as you want, they don't establish any kind of I mean, if you, if you wanna look at, of like, oh, and we hear this about from the token people all the time, right? If, oh, we have to get real world assets to back these tokens, right? Like all of the same criticisms of that kind of nonsense, of tokenizing the world. applies to BRC twenties as well. And so, from my perspective, they are going to dilute themselves down to zero. all these BRC twenties are going to trend down to zero sats in the long term. and so anybody like getting involved in that, it's to their own detriment. Now On the node runner side, I think that what we have to do is understand what's within our control, and it's about get better hardware, okay? Throw away your old Raspberry Pi, replace it with a proper, laptop or desktop or server that has significant amounts of RAM and disk space, so that You really you're, what you're doing is you're making it, more expensive for them, to exhaust your resources. and so now they'd have to sustain their attack on Bitcoin for a much longer period of time. then they would if you're just on your Raspberry Pi and then you give up because you've run out of disk space or whatever it is. but, you know, even on a Raspberry Pi, I think that if you just turn on pruning, you can probably, keep chugging along, for, for quite a while. So I- I, I think that, the, Bitcoin network can, survive this attack, you know, for, for, for many decades, maybe even centuries, and so, that's really-- that's the advantage we have as, as Bitcoiners, is low time preference, right? Our enemies have high time preference, and so that's ultimately their undoing, and, that, that's, that's perfectly fine by me." }, { "speaker": "stephan_livera", "time": "01:09:43", "start": 4183.47, "text": "Right. And, I think what we're seeing is, as you said, it is quite volatile, and, I just checked mempool dot space now, and right now, next block is a hundred and thirty sats per vbyte, or for fiat-minded people, about seven dollars fifty-six. So it has come down a lot. Of course, we'll get the kind of Roger Veirs of the, you $30 or $60, and it's over, and, you know, therefore use some altcoin. But, I think people who are really focused on the-- if you're zooming out and you're thinking about Bitcoin in terms of what does this really mean that society has this incredible tool, this absolute scarcity? And if you think about the sheer magnitude of the transactions that will happen in Bitcoin in decades to come, it'll be a rounding error, right? There'll be people doing like millions of dollar transaction or equivalent, right, in fiat terms, in millions of dollars of transactions, paying fifty dollars, a hundred dollars, maybe even less than that, and it'll be a rounding error. It'll be totally worth it given what Bitcoin gives them." }, { "speaker": "stephan", "time": "01:10:46", "start": 4246.7, "text": "Yeah, I think that's right. And the other thing that's within our control is how we use the chain, right? So, when transaction fees are low and blocks aren't full great time to, you know, set up a Lightning wallet, open some channels, and, maybe even go, go on your, spouse's phone and set up a mobile wallet, you know, Phoenix wallet on, on their phone too. And that way, you're able to onboard yourself at the right time, and when transaction fees on the base layer are high, you can just use Lightning and, and not have to be exposed to those. and then they'll come back down, and then you can, you know, do channel maintenance or whatever you want, during those times. You can also, you know, consolidate UTXOs. I know that there's privacy considerations to that as well, so keep that in mind. but you can do that when transaction fees are low as well. Transaction fees are high, and I think that if, if we all do that, I think that we can onboard hundreds of millions more people, just through kind of timing, when we, use the chain so that, y-you know, historically, we're social animals, so we all try to onboard onto Bitcoin at the same time, right? It's this mass hysteria, it's the bull market Everybody is just trying to do it. When I worked at Target, it's a big, store, for those who aren't Americans who don't understand American culture, you know, Target is like, yeah, it's, it's like Walmart for, for the middle class. and when I worked there, I remember that everybody would try to check out at the same time. It was weird. They come into the store at just random spacing, but then they all try to leave the store at the same time, and it caused waves of people trying to check out. And it's just, it's herd mentality, right? We're social animals. So this is also true, I think, with chain usage, and that's why the, the congestion pricing is beneficial, that is that it disincentivizes people from using Bitcoin at its peaks, and instead it incentivizes them to use it During the bear markets, right? and, and that I think has value as well." }, { "speaker": "stephan_livera", "time": "01:13:00", "start": 4380.77, "text": "Right. Yeah. And even for me, I, I earn and spend Bitcoin, and for me, on an average month, I might do a couple on-chain transactions, but then I'll do dozens off-chain. And so again, even with Phoenix or with my Zeus node setup, that's typically how, how it is for me. So I'm able to use Lightning to batch up and do most of my stuff off-chain and minimize my, my chain usage, obviously. And I think that's something that maybe people seem to miss that, right? They sort of see it like, \"Oh, wow, when the transactions are fifty dollars, I'm not even gonna bother using Lightning.\" It's like, \"Well, even if transactions are fifty dollars in fiat terms, I would rather have Lightning so that I can do some stuff, or most of my stuff, off-chain and only hit the chain, you know, one or two times a month, as an example.\" so that's an example of how, you know, I'm doing it, and I think the And that's one, we have thresholds as well. So I think typically it's either weekly or one million sat threshold. And so I'd say one million sats is probably a good lower bound, but you, you know, if you can go, if you're planning to not spend those coins for a while, maybe take that threshold a bit higher. You might go to like five million sats or even ten million sats as a threshold for withdrawing, and so maybe that's like another thing that people can do, because it's not just about withdrawing, it's also on the other side," }, { "speaker": "stephan_livera", "time": "01:14:25", "start": 4465.73, "text": "You don't wanna have to spend a large fraction of that UTXO. So I think that's probably a few other tips. Those are a few tips that people can, consider. Anything else to add before we close up, Pierre?" }, { "speaker": "stephan", "time": "01:14:37", "start": 4477.32, "text": "When is Coinbase going to join the Lightning Network? I think Kraken has gotten a significant advantage in a high fee environment, 'cause you can withdraw your Bitcoin from Kraken over Lightning with a zero fee instantly. and, I think that, you know, Coinbase made an announcement quite a while ago that they were gonna look into this, but, when? When Coinbase Lightning? You know, I think that we have to- bully these people who are, a lot of them are Ethereum maximalists. and when I say bully, I, I say that jokingly. Obviously we should be polite and respectful. but we have to remind them, you know, that this would be beneficial for their mission of accelerating Bitcoin adoption." }, { "speaker": "stephan_livera", "time": "01:15:22", "start": 4522.42, "text": "Right. And I think even in that case, the Lightning withdrawals, I think it makes a lot more sense for somebody who's Spending Lightning to be withdrawing from the, you know, because if somebody's just like only stacking, it kinda doesn't make as much sense. Like for them, maybe it is more a case of batching up and withdraw on chain and just keep and just hoddle it in your, in your hardware wallet or in your multisig, et cetera. But in the case where you are spending, then yeah, withdrawing and spending and just kind of staying off chain with Lightning is a great thing because that way where you're just, you're saving chain usage, which is obviously saving you fees and, It's a better user experience too. So, I mean, I use Bitrefill and things like this, even my wife uses Bitrefill and stuff like that too, and, you know, she's got Phoenix and she's able to do it, and she's not like a super techie person, so, yeah. But yeah, look, I think we'll, we'll finish it up there. As you said, be wary of Elizabeth Warren and other fiat maximalists, and, you know, for the listeners in America, do consider trying to call your senator, or at" }, { "speaker": "stephan_livera", "time": "01:16:28", "start": 4588.6, "text": "and, I guess the message on ordinals and inscriptions is, look, var- fees are gonna be variable and, you've just gotta have to-- you're just gonna have to learn to deal with that." }, { "speaker": "stephan", "time": "01:16:37", "start": 4597.15, "text": "Yeah, that's right. and, don't get wrecked, you know? just stay humble, stack sats, don't, don't play stupid games, you'll win stupid prizes." }, { "speaker": "stephan_livera", "time": "01:16:47", "start": 4607.38, "text": "Fantastic. Well, thank you for joining me, Pierre." }, { "speaker": "stephan", "time": "01:16:49", "start": 4609.76, "text": "Great, thanks, Stefan. Have a great one. Bye." } ] }