{ "episodeId": "SLP583", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "vijay_boyapati": { "name": "Vijay Boyapati", "role": "guest", "tag": "VIJAY" }, "reardencode": { "name": "Reardencode", "role": "guest", "tag": "REARDENCODE" } }, "segments": [ { "speaker": "stephan", "time": "00:13", "start": 12.82, "text": "Hi everyone, welcome back to Stephan Livera podcast brought to you by Swann dot com. Today we're gonna be having a bit of an ossification or development chat, quasi loosely moderated debate, maybe more like a discussion, between some of my friends who many of you know, Vijay Boyapati, the author of The Bullish Case for Bitcoin, and also working at Swan, and, many of you know, recent guest, regular guest as well, Reardon Code, also working at Swan, taking up more of a pro-development advancement, position. So, guys, welcome back to the show." }, { "speaker": "vijay_boyapati", "time": "00:47", "start": 46.88, "text": "Thanks, Stefan. Thanks. Great to be here. Excited to have this debate with Brandon. He, he trolled me at a conference, which was pretty funny. So, we, we were at, Bitcoin is for everyone, and he asked a question about ossification. So, I'm, I'm ready to go." }, { "speaker": "stephan", "time": "01:05", "start": 64.77, "text": "Okay, so look, let's talk a bit about this. I, I think it might be good to kind of define the key terms. Now, some people talk about ossification, and maybe this is like the straw man argument of like However, maybe the more appropriate still man is something like, okay, if you're an ossifier, or maybe really, maybe the term is more like extreme conservative or extreme conservatism, and really what they mean is maybe more like bug fixes and maintenance only, but no upgrades, and maybe that's, and maybe that's kind of really what is meant by that kind of position. But let's kind of hear from you guys, like if you had to kind of define the terms, what do you mean when we talk about, you know, quote unquote ossification? Is that a fair way to summarize it?" }, { "speaker": "vijay_boyapati", "time": "01:48", "start": 107.66, "text": "Yeah, I mean, I, I, I hope you'll permit me to just step back just a little bit and," }, { "speaker": "stephan", "time": "01:52", "start": 112.12, "text": "and" }, { "speaker": "vijay_boyapati", "time": "01:53", "start": 112.7, "text": "spend a minute or two asking like, w-what is Bitcoin? I think that, that, that is a pretty important question for why ossification is important. So on a technical level, Bitcoin is a protocol for value transfer, where you can keep your savings free from debasement. But on an economic level, it's a foundation for a new monetary system, a new, a monetary standard, and, a monetary standard that mimics the properties that made gold so successful, you know, when the world was on a gold standard, but it dramatically improves on gold in a number of ways. and what I think makes Bitcoin incredibly special and different and something that hasn't been seen in human history is it gives us ultimate scarcity. It gives us a system where you know that there'll never be more than twenty-one million bitcoins. So if you acquire a certain number of bitcoins, your fraction of the total pool of savings held in Bitcoin cannot be debased, and that's really, really special. I, I should say just One thing that's important is that gold, has always been free of political debasement. You couldn't politically debase gold, but gold was not free of technical debasement. and what I mean by that is if you found a way of mining more efficiently, you could debase gold by mining more gold. And for most of human history, that is something that we didn't need to worry about because we just weren't sophisticated enough to, you know, find massive deposits of gold. I think that's a much bigger con- So now, because we, you know, we're much more technologically capable, eventually we're gonna be able to do asteroid mining and deep sea mining and all those kinds of thing, things. So, so Bitcoin is actually, I think, much more important now because we don't have this thing that we can back off to, which is gold. We're ultimately gonna debase gold dramatically because of our technological advancement. So we have this thing that's really special that gives us ultimate scarcity and something that we've never seen before. but why can we trust it? Why can we trust this thing that makes Bitcoin special, the ultimate scarcity? I mean, we say that there are only twenty-one million bitcoins. But that's because we all trust that, that, the inflation schedule is immutable, that it can't be changed, is very, very difficult to change. And that's all based on the fact that it's actually really difficult to change the Bitcoin protocol, and that's a good thing. We want it to be really difficult to change the Bitcoin protocol. If it was easy to change the Bitcoin protocol, then we wouldn't have the trust that we have in this sort of intersubjective reality that's being created that we- We all believe, hey, Bitcoin has twenty-one million Bitcoin. If it were the case that, you know, developers had the power to just willy-nilly change the protocol, then there would be no trust. And I think one of the mistakes that's been made in this debate, and it was happened a lot during the block size wars, was, hey, you know, we don't wanna increase the block size because that would reduce the decentralization of Bitcoin. And then on the other side, you had the big blockers who were saying things like, actually, technology's improving re- really quickly, bandwidth's improving, and, computers are getting faster, and we're getting a lot more space on- Hard drive, so it's not a problem to increase the block size, whereas people on the small block side, a lot of them were saying actually it will make it much more difficult to maintain a, a cheap node. My argument was not that, my argument was that if we change the block size, it completely fundamentally changes our confidence in the fact that we have twenty-one million Bitcoin, and I personally wouldn't be interested in Bitcoin anymore if it were the case that Bitcoin were like Ethereum and you developers had the power to change Change it and add things that they thought would cool, then I, I, I just think it wouldn't be a unique, different system. I have to apologize, my house is being pressure washed, so I, we're getting some of that, that feedback. But, but the, the last point I wanna make here is that you can think about this on a spectrum of control. On one hand, on one side of the spectrum, you have the Federal Reserve, totally centralized, very controlled monetary system, and on the other side, you have gold. Gold is truly immutable. It's a physical element of the universe. You can't change gold. if you want more gold, you can't just magically say, \"Let's get a committee of people together and increase the supply of gold.\" You, you have to actually go out and mine the gold. So gold has this true immutability. And my perspective is we want Bitcoin to be as close to that as possible. It's never gonna be perfectly like gold with, you know, true immutability built into the laws of the universe, because it's a, it's a pro-software protocol that we've created, but that's where we wanna be. And o-closer to the Federal Reserve side, you have Ethereum, which is" }, { "speaker": "stephan", "time": "07:16", "start": 436.26, "text": "Oh, okay. We, I think we'll, we'll just take a break here and come back to it. So, one point, I guess, while we'll just mention, one thing I neglected to mention up at the top was just, to be clear, although all of us work at Swan, these are our individual views. This isn't like an official Swan stance, alright? We'll just make that clear. and, Vijay, is the pressure washing still happening where you're at, or do you wanna just finalize your statement and then we'll" }, { "speaker": "vijay_boyapati", "time": "07:44", "start": 464.18, "text": "The last thing I wanted to say was that Ethereum is also a protocol for value transfer, but it's much closer to what the Federal Reserve is, a sort of centralized system where you have developers with a lot of control, and if they wanna change the, the inflation schedule, they can. And one of the arguments that the Ethereum folks say is that Actually, we have a more deflationary schedule than Bitcoin. We're, what do they call it, ultrasound money? But the fact that they have a more deflationary schedule doesn't matter because there's no confidence in the inflation schedule, because that inflation s-schedule can be changed in the future. So my, my overarching point here is that the ability to change the protocol reduces confidence in the inflation schedule, no, no matter how well-intentioned. No matter, you know, the benefits that developers say that they could produce from this, it, it reduces that confidence, and to me, that is the fundamental thing that makes Bitcoin special, and we shouldn't mess with it." }, { "speaker": "stephan", "time": "08:46", "start": 525.67, "text": "Okay. So, let's, go to Brandon then get your views, like, we'll call this, you know, what makes Bitcoin special from your perspective. Where, where would you disagree with Vijay?" }, { "speaker": "reardencode", "time": "08:59", "start": 538.74, "text": "Yeah, and as you might expect, I agree with almost everything Vijay said. you're, you're-- I mean, you're exactly spot on in terms of Bitcoin needs to be better, better than gold in important ways, and it can't give up at least as close as practicable the properties of gold in terms of not being able to be messed with by humans, right? We like absolute agreement. so start there. We mostly agree, as you might expect, you know, we've both been in Bitcoin for a long time, we kind of know what we Vijay's article, The Bullish Case for Bitcoin, is what drove me to start working full time in Bitcoin, right? So absolutely, we are largely on the same page. I think the, the, the thing that I will just add as an additional necessary property for Bitcoin in order-- I, I said two, i-in order for it to, to serve this function that we all want it to for the future of humanity, frankly, is it, is it must be verifiable, and that's, I think, the property that was retained through the block size war Where because we had this war to keep the Bitcoin growth of the chain slow enough that people could still verify it, we maintained the property of verifiable anybody Who can afford a Raspberry Pi, bickering on Twitter at the moment, but anyone who can afford a Raspberry Pi can verify the Bitcoin blockchain from genesis. You, so the only thing you are, quote, trusting, because it's a trust-minimized system, you're trusting the original code release with the genesis block hash in it and the proof of work algorithm and the proof of work, verification in the software. You can read the code, so you're not even trusting the code, you can read that. and so you can verify Bitcoin, and that's, it's a Property that verifiability, and that's something that gold doesn't have. It is nearly impossible to verify the current supply of gold, and it's one of the challenges we have with trusting gold as a money right now, is that you can't verify how much gold there is above ground. People have ideas about how much, but we, we literally don't know. It's all estimates. Bitcoin, we know exactly how much Bitcoin has ever been mined, and we know exactly how much will ever be mined, and that's an amazing property that we can verify. And then the other thing that, is a critical property, a-and Vijay touched on it, but I think he kind of then put it off to the side, is the decentralization In order for Bitcoin to have the properties we just talked about, all of those properties, transferable, storeable, divisible, verifiable, predictable supply, the only way it has those properties is through the decentralization. And in the block size war, we maintained decentralization of verifiability, but if we don't also maintain decentralization of economic strength, that can also debase any of the other properties. We saw in the block size war, it was won, probably one of the key battles or the key wins that, that swung the block size war towards not changing that critical property of the protocol, which I, I think Vijay is right that a big part of that win was about retaining control, not about whether it's two, two megabytes or one megabyte or four megabytes, it doesn't really matter, the control was critical there. And the, one of the key battles was when Bitcoin holders started dumping their future rights to Bitcoin with twice the block size on markets. If they hadn't done that, the miners were basically ready to activate the larger block size. But when the miner saw that if-- that the coin with the larger blocks was worth less because of the market actions of participants, they got scared, and rightfully so, right? That was the-- that, that's the game theory of Bitcoin playing out live before our eyes. And, and so that action- Action on the markets is critical, and if, and if we have a situation where Bitcoin's holding is centralized among a few actors, among Saylor and, and BlackRock and Coinbase, if they hold all the Bitcoin, then in a future fork, we lose control, we don't have control if people can't hold their own Bitcoin and fight in those wars." }, { "speaker": "stephan", "time": "12:59", "start": 778.52, "text": "okay, so where, where are the main points that you would say you disagree with Vijay, though?" }, { "speaker": "reardencode", "time": "13:03", "start": 783.34, "text": "Right. So, so where I disagree here is that in order to retain that decentralization of ownership, we have to do more with Bitcoin. We, we won the block size war to protect decentralization of verification. But right now, as Bitcoin is today, and we've talked about the four Stefan, but it's important to have it here, Bitcoin can only be held by so many entities. Most people use Bitcoin in custodians because it's hard to use Bitcoin in a non-custodial way, and the custodians then are the ones who would have control in a future block size war, because they're the ones who could dump the coins on a futures market, and that's explicit in the ETF contracts, how they're structured, is that those ETFs have absolute freedom what they do with any fork coin they And so in order for us to have this decentralization, in order for us to have this control, to keep the control, in the, in the, in the people, let's say, we have to be able to hold our own Bitcoin. People have to be able to hold it in a non-custodial way. And right now, at most one percent of the world can hold their own Bitcoin in a non-custodial way. Probably, in my opinion, it's more like zero point one percent. and so we, we have to, we have to do things I kind of got lost 'cause I, I kind of was responding to Vijay. I wanna make a couple of other points before I pass it back that, that relate to, to kind of responding here." }, { "speaker": "reardencode", "time": "14:24", "start": 863.56, "text": "one of them is" }, { "speaker": "reardencode", "time": "14:31", "start": 871.15, "text": "That even if we are having the goal of stopping changing Bitcoin at all" }, { "speaker": "reardencode", "time": "14:42", "start": 881.79, "text": "how would we know when? Should we have stopped changing Bitcoin in 2010? Should we have stopped in 2009? Should we have stopped in 2014, 17, 21? I have no way of assessing as a, as a Bitcoiner or a developer, frankly, when the right time to ossify is. So the best decisions that I can make are to make Bitcoin the absolute best it can be in terms of the properties we've all discussed and kind of agreed about. And we can continue to make it better, and that's a, a critical part of Bitcoin's future success. That's one. And the other one that I want to touch on very briefly is Vijay mentioned that if we, if we had raised the block size, that would have been a knock against Bitcoin's ability to hold the hard cap of twenty-one million, and I absolutely agree with that. for anybody who kind of isn't familiar with this, there's this concept in Bitcoin of hard forks versus soft forks, and it's not always the right way to assess things, but certainly either raising the block size or raising the supply is a hard fork, and Bitcoin will talk a lot about the centralizing effect of hard forks, which is exactly what Vijay was alluding to, if Block size, we're giving up that control by hard forking the protocol, and similarly raising the, the supply would do that. Soft forks, by contrast, are, are changes that don't lead Fundamentally to centralization pressure, because anybody running a current node, you can still run with minor configuration changes a Bitcoin node from twenty ten on the Bitcoin network today. And so we're not centralizing control of nodes or centralizing control of supply when we do soft fork changes. Those are very-- those are fundamentally different things that are often kind of put together in changing the protocol, but they're, they're not the same thing. Changing the block size and changing the twenty-one million hard cap are hard forks that would split the network. And would knock old nodes off the network. Those are very centralizing, but adding an opcode, Taproot, even SegWit, SegWit was about as big a change you can make without it being a hard fork. And so I think we can, that's where there's this nuance, is not, not all soft forks are necessarily not, not centralizing in any way. SegWit was kind of the largest possible change that can be a soft fork, but others are much smaller. And so there's a, there's a gradation, gradation here between what types of properties we're changing, whether we're changing the fundamentals of Bitcoin that we've talked about that are critical to its success, or whether we are adding opcodes that let more people hold their coins on chain or hold their coin, hold their own keys at least. So, alright, there. That was the one I wanted" }, { "speaker": "stephan", "time": "17:06", "start": 1026.03, "text": "to. Yeah. Okay, so as I, as I'm reading it, it's, essentially, I guess one way to frame it is you're saying nobody here is trying to raise the block size. Maybe that's one thing. Like people here, the, the discussion nowadays is more about Scripting and covenant capabilities on Bitcoin that don't relate to block size changes. And so I guess that would probably be the main counterargument, that's, that's what I'm hearing from you, Brandon. so Vijay, any thoughts on this idea? is, let's say, call it, you know, ballpark ten to one hundred million lightning banks, corporates, e-cashmines, high net worth people, like, is that going to be enough? You know, can the partial coiners be the ward of the whole coiners? Like, is that enough to defend the decentralization of the system? What's your view on that?" }, { "speaker": "vijay_boyapati", "time": "17:55", "start": 1075.2, "text": "Yeah, I, I mean, I think it fundamentally comes down to what you think Bitcoin is or should be. And one of the worries I have, this is kind of more high-level comment, is that there's this kind of egalitarian streak that goes through the Bitcoin community and libertarianism in general, and the idea that this has to be for everyone and, and, and everyone has to have a UTXO. and I think this sort of showed up Earlier on as well in the block size wars, because in the early days of Bitcoin, you know, fees for transfer were essentially zero, and, and that gave people, the sense that, hey, Bitcoin can compete with the credit card network. It's just a really low fee way of transferring value across the globe. And, and people really attached themselves to that vision, even though Bitcoin was just in its infancy. If, if you looked at Bitcoin's DNA, it's, which is, I think, its consensus rules, you'd realize eventually the fees would have to go up, and that vision that people clung to, ultimately was not, it didn't match reality, right? And what I worry about a little bit here is that There is this desire, this egalitarian desire to want everyone to control a UTXO and to want Bitcoin to be a tool not just for a new monetary system, but to allow for self-sovereignty as well. And self-sovereignty is a great goal. I mean, I am a libertarian as well, and I think it would be great if everyone could feel completely sovereign over their, themselves, their, the fruits of their labor. But ultimately, if Bitcoin doesn't provide for that, We shouldn't break the, we shouldn't kill the golden goose in a sense, to make it better. That, that's my, my concern here." }, { "speaker": "stephan", "time": "19:46", "start": 1185.54, "text": "So, so let me just frame it this way. Sometimes when you choose something, you also have to choose what you're giving up. And in this case, hypothetically, given current, let's say, constraints and technology with Bitcoin, let's just kind of say one percent is kind of the number, roughly, of people who could self-custody, even including for Lightning. Now, hypothetically Let's say, you know, there's a big bull market and there's a big hive cycle coming, and there's all these people who aren't able to take on-chain, you know, coins or even lightning, and at that point, let's say a node costs Call it three hundred USD to run, but actually on-chain fees are running into the multi-hundred dollars. At that point, would you be comfortable saying, \"Sorry, like the system has to be defended\"? Is that, is that basically the point? Would you say, \"Yeah, stiff\"?" }, { "speaker": "vijay_boyapati", "time": "20:33", "start": 1233.0, "text": "absolutely. And, and I, we actually had a podcast talking about this where I sort of, you know, controversially, clickbait-y said, Bitcoin isn't for everyone, and then I explained why it was for everyone." }, { "speaker": "stephan", "time": "20:45", "start": 1245.41, "text": "Yeah." }, { "speaker": "vijay_boyapati", "time": "20:46", "start": 1245.77, "text": "And this gets back to the question of what Bitcoin is for. And going back to the early days, I think a lot of people, a lot of, you know, the community of Bitcoiners in the early days was very strongly libertarian, and I think a lot of, Bitcoiners at the time said Bitcoin is for being able to buy was their purpose, and they said Bitcoin isn't for anything else. For me, from the very early days, I-- my vision of what Bitcoin is hasn't changed since the early days, is that Bitcoin is a, a new monetary system. It's giving us the ability to create a new monetary system without inflation. And to me, this kind of large scale benefit of having a non-inflationary monetary system, a gold two point oh, something even better than gold, supersedes everything else It's more important than, you know, if you wanna go buy, buy pot, that's, that's great. and the fact that Bitcoin may not be ideal for that, I think you kinda just have to deal with it. It's, it, you have to find another way to get around that. Bitcoin is solving a much bigger problem, and ultimately, we don't wanna give up the ability to solve that bigger problem to solve other problems. So I think you framed it correctly, Stephan. I-if it, if it came, I-as- I think it will come to the point where a, a lot of people won't be able to own Bitcoin, and I, I go back to the, give an analogy of the gold standard, where, people sort of had this view of the gold standard where everyone was walking around with bars of gold. That's not the case. Like, most people didn't have gold. They had maybe a promissory note on gold, but most people didn't have bricks of gold. Maybe a few super rich people had bricks of gold, like, Rockefeller or Carnegie, they had bricks of gold, but usually the gold was used as a means of settlement between financial institutions. So I think the same thing is gonna be true of Bitcoin as well. It's going to be this great backbone amongst financial institutions to transfer value quickly, and maybe there'll be, you know, the people who are involved in Bitcoin now, they will be the Carnegies and the Rockefellers, and they will be privileged enough to have a UTXO that they can- transfer on chain. Most other people will be interacting with Bitcoin through financial institutions. The benefit is that there'll be way more financial institutions. The base chain is already capable of supporting millions of financial institutions, so, so it will be easier to have that level of decentralization. but I think, yeah, you're, you're correct. I will not sort of, hide behind an idea that Bitcoin, I, I, you know, I think eventually everyone will have some Bitcoin. I, I will tell you that I think most people won't have a UTXO that they will control directly." }, { "speaker": "stephan", "time": "23:43", "start": 1423.06, "text": "Yeah. Okay. So then, Brandon, I guess let me put the question back to you. I, I presume Vijay's pathway there is a failure mode for you, in, in a sense that you believe that wouldn't be enough, right? One percent wouldn't be enough. And actually, curious, would you say the threshold should be Ten percent, fifty percent, a hundred percent, what is kind of the success or failure mode for you if you would see that as not good enough?" }, { "speaker": "reardencode", "time": "24:13", "start": 1452.64, "text": "Yeah, I think there's a, the, the, I, I love the question. A-and, and I, I, I'd written down some, some notes for this. And one of the things I, I term I put in there is this idea of sufficiently decentralized. In order for Bitcoin to have the properties of the predictable supply and to retain, remain verifiable, it must be sufficiently decentralized. Now We could-- there's no way I, I can say, I think ten, ten percent or I think fifty percent. Vijay can say one percent or, or zero point one percent. we actually can't know that. That's a literally unknowable thing. We exist in the real world. What I can say is that" }, { "speaker": "reardencode", "time": "24:54", "start": 1493.93, "text": "I am not willing to risk Bitcoin not being sufficiently decentralized if there's anything in my power that I can do to increase its decentralization. And that's because all the other properties, like V-Vijay referenced the, the everything, all those critical properties of a new money system, all of that rests on the pillar of sufficient decentralization So I will never, ever sacrifice decentralization." }, { "speaker": "stephan", "time": "25:22", "start": 1521.6, "text": "So I guess to an- to ask the question in a more direct way, would you, if we only ever get one percent of the population able to self-custody, has Bitcoin failed in your perspective, Brandon?" }, { "speaker": "reardencode", "time": "25:33", "start": 1533.24, "text": "I don't know. I, I think, and this isn't I think, that, that will create a new elite, which will usher in a new gilded age for somewhere between twenty and seventy years, at the end of which we will be back where we are today. A new elite that has degraded and gone to bread and circuses, as all elites do. There's, like many elites, right? Think about the elite founding of this country. this country is an amazing place, in the US of A, if anyone didn't know. it's an amazing- Wonderful place that had a hundred years of, of really amazing growth in human flourishing and freedom on the back of a new elite that had certain ideals about liberty, and certainly Bitcoin would usher in a new elite. many, many of us in the Bitcoin space right now have those ideals as well of liberty And then it would go, I think, the same way as past elites have gone, if Bitcoin's only held by one percent, right? We always talk about the one percent, the, the, the, the upper crust of society, all that kind of thing." }, { "speaker": "stephan", "time": "26:40", "start": 1599.59, "text": "Yeah. Okay. Alright, so let's talk a little bit then about exactly what we mean by ossification, right? So coming back to what I was saying before, I think probably the, the, the real, let's say, steel man of the ossification argument, or let's say, extreme conservative argument, is more like, let's have bug fixes and maintenance only, but no upgrades. I think that would be sort of a summation of that argument, as opposed to, let's say, the straw man of that, which is kind of like, \"Uh, no, don't you It's updates to, you know, so I guess the extreme conservative in this case would probably say, \"No, keep support for, you know, Mac, Windows, Linux, et cetera, but no upgrades in fu-functionality and no consensus changes other than if Bitcoin is about to die, right? Like if it's some kind of, the Linux timestamp bug or the Unix timestamp bug or something like that in the year twenty-one hundred or whatever, something like that. Is that how you're viewing it, Vijay, or do you have a different...\" way that you would frame it." }, { "speaker": "vijay_boyapati", "time": "27:39", "start": 1658.56, "text": "Yeah, I think that's a really good way of saying it. The way I would-- the wording I would use is that we should only change Bitcoin in gravest extreme, at the point at which we are convinced, as, you know, the participants in the network are convinced that if we don't change Bitcoin, the whole project dies. And one of the things I actually take a lot of hope with is the fact that we can individually achieve ossification in a sense by just not upgrading our Bitcoin node and just saying, \"Look, unless-- what the place I wanna get to is that developers, when they make a change, have to make a case. They have to make a case to the, the, the community of people running nodes, this is critically important for you to upgrade.\" And where I wanna be is we have a community of economic participants in the network who are extremely skeptical. And on an individual basis, we can already achieve this. Like if you're running a node, you can be extremely skeptical, right? You can look at the latest version, that's been published by, the core developers and say, look through the changes and say, \"No, this isn't critical. This isn't something that I, I feel comfortable upgrading my node for, especially if it relates to consensus changes.\" changes. A, a, and what I worry about a little bit is that there can be a bundling of things which are technically important, like improving the efficiency and the speed of the node, with potential consensus changes or potential soft forks. And Brandon, Brandon has talked a, a lot about, decentralization and its importance, and I think he's absolutely correct, but I think one piece of, you know, the, the puzzle here in terms of decentralization is developer control. The, the more the developers have control, the more centralized the system is, regardless of how many nodes are out there or how many people own Bitcoin. You could have like every person on the world own Bitcoin if developers, developers at able to easily have people change the software that they're running or the community just, by default, upgrades, you know, constantly without checking what's being changed, then you, then you have a big problem with centralization. And so, you know, on the spectrum of control, you can also look at the history of Bitcoin, where in the beginning, Satoshi was God, right? He could, he could change things really easily, and he, he put in the block size limit Fairly early on. Then it became harder to change, and then you had the block size wars where we, we, we managed to fight off, a hard fork, but it's still possible to do soft forks. Eventually, where you wanna get is that developers have very little or no control, that the control is essentially the economic participants in the network, and they say, \"Look, I'm, I'm just not interested in any more changes from developers. They can go and play with the code as much as they want.\" They can propose soft forks to do, doing all sorts of things, but most of the participants say, \"No, I don't wanna do that.\" and that's, that's where I, I hope we get, and, and I wanna encourage people to think about it that way, that as a participant in the network, I am not gonna accept changes unless the developers make a very strong case that this is critically important." }, { "speaker": "stephan", "time": "30:58", "start": 1858.01, "text": "Back to the show in a moment. The lead sponsor of this show is Swan Dot Com, and Swan has a mission to onboard millions of people into Bitcoin. I also want Work at Swan, helping on some educational content for the team. Now, the team have also put out a new version of the Swan Bitcoin application, which is available on your smartphone, whether it's Apple or Android. Now, this app has a really fast onboarding experience. It's now just a few minutes to go from zero to Bitcoin. So if you are standing there with your family or friends and you might have been having trouble trying to get them on boarded, well, try this now. Recommend Swan Bitcoin, and you can do this while you're standing next to them. They can click through and most of them will be able to set up and do this in just a few minutes. Also, the team at Swan have rolled out a new promotion, there are zero fees on your first ten thousand dollars of Bitcoin buys. So this is a great way to go from zero to Bitcoin and in a guided and managed way. 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Now, if you're starting in a basic way, just start with the device and the USB-C cable, plug it directly to the computer and use it that way, and then later improve your setup. But I believe these devices are great at helping secure your coins, especially as you start to migrate up into multi-signature security. But don't be disheartened or don't be, Scared away? They are accessible, and I think you actually do learn about Bitcoin in the process. So to get yours, go to coinkite dot com, use code livera to get a discount on your cold card. This show also brought to you by mempool dot space, the leading Bitcoin and blockchain visualizer. I use it all the time when I'm checking transaction fees and trying to understand what is the state of Bitcoin's mempool. You can search transactions, historical as well as unconfirmed ones, and also see a great way to visualize things across the Lightning Network, Liquid, mining, and so much more. Also, for those of you with an enterprise, they offer a mempool dot space enterprise program. So for those of you as Part of that enterprise program, you might wanna get increased API limits, and you might wanna have increased access to the team in terms of feature requests. You might wanna have special branding in terms of how your custom instance of mempool.space looks. So to sign up for that, go to mempool.space/enterprise. And now, back to the show. Okay. Yeah. So I'll just quickly point out here that, yes, you know, of course, people should be wary and skeptical about what code they run, but at the same time- At the same time, there's a practical reality where I think I, I start to see sometimes the sentiment of people saying, \"Oh, I'm just not gonna upgrade my Bitcoin Core node.\" But the problem with that, the practical reality is that there are security and bug fixes, and sometimes they're not able to be openly disclosed. They need to be patched, and then only later, after people have kind of updated to, let's say, version twenty-seven, which is the latest release, that, \"Oh, actually, in twenty-six or in twenty-five, we fixed this, you know, show You know, showstopper, but more like your node could have been crashed by a malicious entity. So there's kind of some practical realities there, but I do agree with you that developers, and it seems that they're, they're kind of going this way, that they are maybe a little hesitant to include a controversial change, without letting people know and without sort of having the user have some choice there, because I think developers are going to have to, are, are becoming more sort of aware about, or more conscious about this kind of, the power that they hold in a way that maybe if they are colloquially writing the ballot, they shouldn't also be selecting which choice you make, that they should sort of maybe write the code and give the user that choice, like, do you wanna go with this or do you not, right? Brandon, do you wanna- Can I make a" }, { "speaker": "vijay_boyapati", "time": "35:33", "start": 2133.05, "text": "quick point before Brandon goes on that? I acknowledge that because Bitcoin is a software protocol, bug fixes are actually very, very important, and that it is important that developers are looking out for them and fixing them, and I think Bitcoin's core developers have been an incredibly responsible group for Bitcoin's history, and obviously in-include Brandon in that group as well. So I do have a lot of trust in them. What I wanna change is the, the perception- Yeah, I, I, I wanna, I wanna create this north star of like, what is the ideal? The ideal is ultimately the developers don't have control. I'm not denying that bug fixes are really, actually, very important, and, and, you know, we can talk about the great consensus cleanup as well as, as a part of this. but, but the north star is ultimately we don't want developers to have much or any control, and that will be a big part of actually pro-providing the decentralization that Brandon is talking about" }, { "speaker": "stephan", "time": "36:32", "start": 2191.59, "text": "Yeah, Brandon, go on." }, { "speaker": "reardencode", "time": "36:34", "start": 2193.61, "text": "Yeah, so, so, yeah, yeah. First of all, yeah, yes, the Bitcoin core developers have been an amazingly, thoughtful community. one of my favorite examples of that is, is that Peter Wulla backing away from doing consensus changes. He realized that with all of the Chuck Norris memes, you know, Peter Wulla says, \"So the, the world turns green,\" or whatever, that, that he had too much power and stepped away. And I think, I don't know for sure the mind of Satoshi so I think there's one, a few things I wanna correct in what you were saying. One is Bitcoin developers have never, since Satoshi left, ever pushed a consensus change Directly into the protocol, right? Consensus, consensus changes have always been done via some kind of signaled activation process where users, via the, the economic actions that affect the way miners are going to signal, do an activation. There has never, ever, ever been, and never will be, as long as we're careful with vote Bitcoin, the, an activation of a consensus change without by, by the developers. That, that's not a thing Bitcoin has. That's a thing that shitcoins have, just to put a fine point on it. That's not a thing Bitcoin has. Bitcoin developers do not make that distinction. That's a great clarification." }, { "speaker": "vijay_boyapati", "time": "37:47", "start": 2267.17, "text": "I, I, I agree that the way I framed it was perhaps a little misleading. It's a great, great clarification." }, { "speaker": "reardencode", "time": "37:54", "start": 2273.9, "text": "then the, the thing that I think is really worth bringing up here is, is I, like I agree with you that, that People running Bitcoin software have to be thinking critically about when they upgrade and why they upgrade, as Stefan said, it's very important to upgrade, but it's also very important to be verifying your upgrades, right? Don't trust, verify is like, is the fundamental thing about how Bitcoin survives, is on that verification. People have to be verifying. And the, the-- in order for that to work, in order for that to, to, to maintain Bitcoin's properties, all these, again, the important properties we're talking about, the people doing that verifying-- sorry, people will only do that verifying if they have an economic interest in doing so. And if your Bitcoin is held in a custodian, you aren't gonna verify which Bitcoin node version that custodian is running. Never in the history of mankind has a bank participant verified what version of software that bank is running before they bank with that bank. It won't ever happen, it hasn't ever happened. And so if we are in a world of ten million lightning banks, the only people verifying the software changes to, that control the destination of Bitcoin will be those banks. I don't trust that process to save Bitcoin as hard money for the future. Those ten million lightning banks will change the supply schedule, they will change the block size, they will change the protocol and give themselves control. The only way to retain the properties is that we have people verifying." }, { "speaker": "stephan", "time": "39:24", "start": 2364.39, "text": "One, one point, Brendan, and, I mean, maybe Vijay will kind of talk about this too, but Remember those ten million Lightning banks in this scenario, they don't necessarily trust each other. Like, why would they necessarily collude to create this cartel to sort of-- I mean, if there's ten million of them, it's hard to get, you know, two hundred people to agree on something, let alone ten million, right?" }, { "speaker": "reardencode", "time": "39:47", "start": 2387.05, "text": "Because their interests aren't the same as the interests of the users of money. The, the bank participants have certain economic interests that they will serve, and it's quite possible that their economic interest will be quite different from global money users' economic interests." }, { "speaker": "stephan", "time": "40:04", "start": 2404.02, "text": "So Vijay, any, any, response there or do you wanna-" }, { "speaker": "vijay_boyapati", "time": "40:08", "start": 2407.62, "text": "Yeah, I mean, banks, I think, one thing I agree with Brandon on is banks have this tendency to wanna fractionalize because it's in their economic interest to do so, and, and, and that's kind of against the interest of the people who have deposits at these banks. I will say though that in a Bitcoin world It's much harder to do that because on a gold standard, th-there's a much greater tendency to wanna keep your gold at the particular bank that you had it at in the 19th century, because it's really physically difficult to move it And it's cumbersome to go to the bank, to take your gold, to carry it to another bank, you're probably not gonna go that far anyway. With Bitcoin, you don't have any of those problems. Like, y-y-you'll have bank runs so much faster on a Bitcoin standard from banks acting in a way that is against the interest of the people who are using them, that I think that provides much more of an economic constraint than gold did on the banks of the 19th century. So, I, I, I guess I, I agree with Brandon in a sense that- These financial institutions may not have exactly aligned incent-incentives, but I also think the system as a whole will p-provide a much greater restriction on them to make this much less of a problem" }, { "speaker": "stephan", "time": "41:24", "start": 2483.7, "text": "Yeah, Brandon." }, { "speaker": "reardencode", "time": "41:25", "start": 2484.72, "text": "Yeah, I think there's, there's some truth there. however, let's keep in mind the Bitcoin future that we have right now is that it will be Nearly as expensive to switch banks in that Bitcoin future as it is to switch banks with gold, because Bitcoin's network is so limited in what can be expressed on chain right now. So if I'm banking with Bank A, I'm going to need to have to get out of that bank, and if I'm, if, if, if I want to withdraw I'm probably going, I, I want to draw especially in a kind of, contentious situation 'cause that bank is being a problem. I'm gonna need to be able to take custody of some Bitcoin while I transfer it to another bank, right? They're not gonna just voluntarily, they're not gonna, it's not gonna be like, \"Oh, they, they just, they just sent the lightning payment to the other bank, and now my money's with the other bank.\" You know, that's not, that's not what's gonna happen in this solvency crisis with the" }, { "speaker": "stephan", "time": "42:26", "start": 2546.29, "text": "Rugged and have to learn the hard way, and the system will periodically have these ruggings or fractional reservings, and, you know, people get wrecked. so I think" }, { "speaker": "reardencode", "time": "42:35", "start": 2555.44, "text": "it'll, it'll be a new stable system, much like what we have today, where they'll-- the, the banks will gain control of the money system, as they did with the gold system, and they will then change the money system to serve their interests, and, and they'll be-- the only ones access to the settlement layer will be the banks, like it is today. And since they are the only ones with access to the settlement layer, when we want to le-- take our money out of the bank, they'll just say no, 'cause we don't have access to the settlement layer. It's too costly," }, { "speaker": "stephan", "time": "43:06", "start": 2585.54, "text": "just like" }, { "speaker": "reardencode", "time": "43:06", "start": 2585.9, "text": "with gold." }, { "speaker": "stephan", "time": "43:06", "start": 2586.22, "text": "Yeah. I mean, I'm sort of in the middle here. Like, I think you're kind of assigning a lot of ability to them to be able to go to cartel together, right? When, when we're talking about, in this hypothetical, ten million different entities that don't necessarily trust each other, as opposed to" }, { "speaker": "stephan", "time": "43:26", "start": 2606.45, "text": "You know, something like a minimal covenant in the future that, you know, increases that one percent, maybe it's one percent up to five or ten percent, and maybe that's enough, I don't know. but I just, I'm not totally sold. I want to put one tiny thing in here, real, real" }, { "speaker": "reardencode", "time": "43:39", "start": 2618.83, "text": "quick. We're, we're talking as though the Bitcoin will be equally distributed among ten million entities. The reality is that these things follow, follow power laws. We have one entity right now who controls one percent of all the Bitcoin supply. We have the next four entities that control ten percent or something like that, or the other, like in, in total, like five or ten entities control ten percent of all Bitcoin. It's not gonna be distributed that way. There's gonna be a few people that can, that can act as nearly holding all the Bitcoin because power laws are how the world tends to organize itself." }, { "speaker": "stephan", "time": "44:11", "start": 2650.78, "text": "It's a fair point. Vijay, any, any, response here or do you wanna move on to some other questions I've got?" }, { "speaker": "vijay_boyapati", "time": "44:16", "start": 2656.04, "text": "I, I just, I think there are two sides to the coin Brandon is talking about. One is the, the, the perspective he, he's given that these financial institutions will gain control over Bitcoin. I actually have, I take the other side of that coin and view Bitcoin as kind of this Trojan horse that's gonna take Take over these financial institutions and alter the way they think about money. one of the, one of the big worries I had and one of the, I think big open questions about Bitcoin, was whether it would face a nation state attack. I thought that was the last major risk to, to Bitcoin And I feel like that risk, I, I thought that, that question of whether that risk would, you know, play out has been answered. I thought it would be answered in the next five years, and I think it's already been answered. I think the approval of the Bitcoin ETFs have let the Trojan horse into the walls of Troy, to, to go with that analogy. And the big risk now is that we're inside the walls of Troy and we can take control of the monetary system because they've let us in, but we burn ourselves down inside The Trojan horse because we, you know, we, we make a mistake and, and really destroy the opportunity we have here. So I actually view it as us taking over the, the financial system and transforming it from within a-and providing a non-inflationary money which changes the way that bankers think about banking. And, you know, there will be financial institutions, but I think it's kind of a mistake, my point here is, it's a mistake to believe that they will necessarily act in the way that current financial institutions- Institutions under a fiat standard act, I think they will act differently because Bitcoin will transform them." }, { "speaker": "reardencode", "time": "46:01", "start": 2760.61, "text": "So it'll be a new Gilded Age, and it'll last for a generation or maybe two. I mean, that's, like, I don't, I don't, I don't see how, like, the Gilded Age also transformed finance and transformed the world in an incredibly positive way. Like, I, I think Bitcoin will also do that, even if we leave it alone right now, we'll have a generation or two of transformative time. But there's nothing right now that prevents Bitcoin from doing the exact same thing as Bitcoin because of the, the same basic problem, which is the difficulty of taking self custody of the coin. In, in, in the, you know, in practical real world applications." }, { "speaker": "stephan", "time": "46:36", "start": 2795.66, "text": "Yeah, I'm not quite sold there, but I'm, okay. But let's move on to another question area, because I don't wanna sort of spend all the time on this one question. maybe a question more to you, Brandon, around, safety and assuring the safety of these things, right? So there's been a lot of discussion about, you know, spam inscriptions and so on, all these other, you know, BRC20 stamps, runes, et cetera consequence or an unforeseen result of having Taproot, and, you know, I guess one concern a lot of people have had is MEV or, MEV, as Matt Crowley calls it, or centralizing MEV, as you call it. Now, do you wanna just spell out why, in your view, some of these covenant ideas won't cause this kind of unknown unknown or this kind of centralizing MEV?" }, { "speaker": "reardencode", "time": "47:28", "start": 2847.77, "text": "Yeah, fir-first on the unknown unknown, as I already said, a-and it's, I think, really important for us as Bitcoiners to, to get to verify that, you know, the Segwit, the Segwit change to Bitcoin was about the largest possible category of change you can make as a soft fork. and so in the Segwit change, we ended up changing the effective block size, and, and many are currently arguing that that was a mistake, and I, I'm actually totally open to that point of view, that, that changing the effective block size with- Sagwit was a, a breach, let's say, of, of kind of the fundamentals. I, it was early days for Bitcoin when this was done, things were a bit different than they are now. I'm not saying it was a, a true mistake, but it certainly could be viewed as a breach of the, the fundamentals. so, so people that are, that are feeling that way are, are, I think, right. it-- but other changes that, you know, there's a spectrum of changes being talked about right now in the, the wider upgrading Bitcoin space, and, and they, they range from the Basically impossible to have unknown unknowns. I mean, you can never rule out unknown unknowns because they're unknown unknowns, but the surface area of the change is so incredibly small that it's, that's very difficult for it to have an un-un-known unknown. Now, the, the, the canonical example of this would be CTV. CTV introduces exactly one new hash mode to Bitcoin. It is-- the, the code has been public for literally years. There's been bug bounties out for it for years. the chances of there being an unknown unknown there, are- Approach zero, there's never a true zero. And then by contrast, kind of on the bigger side, there is the talk of the great script restoration, which has more changes to scripting. But no matter how we slice the grip-- the great script restoration, it has less risk of unknown unknowns than Taproot or SegWit. And, and so there's just a spectrum here, and, and how do you mitigate that by extensive code review appropriate to the scope of the change? CTV again has been code complete for years, the content's been out for, I think, five years now, and code complete for about two or three of those, depending on how you slice the exact changes, but, but basically it's been extremely well reviewed. And with bug bounties, and, and so that, that change, I think, has, has met that bar of incredibly unlikely to happen un-un-unknown. and, and like, let's, let's think about this. Both SegWit and Taproot were added to Bitcoin with drastically less review than CTV has, despite being I, I would describe it as two orders of magnitude larger in scope for SegWit, larger in, in blast radius for SegWit than CTV. So, so it's this-- there, there's a balance here, And, and so the best we can do, kind of going back to my point earlier about when do you ossify, is to apply our absolute best engineering techniques, have the changes reviewed by as many people as we possibly can, be as confident as possible about the safety of these things to avoid unknown unknowns, and to put them out to the community and the economic nodes then to decide whether they have reached that bar sufficiently. So, so that's, I think the, the path here, you know, we can't-- as developers, we can never- Give you a guarantee, but we can show, here's the proof of work that we did in validating these changes appropriately for the scope of their change." }, { "speaker": "stephan", "time": "50:47", "start": 3046.56, "text": "Yeah. And then on the, the MEV or centralizing MEV, I believe one of the concerns people are raising is, oh, can it create some kind of AMM automated market maker or some kind of drive chain hash rate escrow, and that could that create some form of MEV that bleeds through to the L1 and centralizes the Bitcoin miners? I know this is something you've been talking about recently and saying. As I understand, you were a bit more, skeptical of it, but now you think that it's not really a big risk?" }, { "speaker": "reardencode", "time": "51:16", "start": 3075.88, "text": "Yeah, an incredibly important topic in, in changing Bitcoin. Just to kind of put it in, in, in perspective, if Bitcoin were to be given, to retain its de-- its general decentralization as it is right now in terms of the code and the developers, but we were to give it twelve-second blocks and, a flexible block size and, let's say, OP_CAT, I think we would probably find ourselves have-- Oh, sorry, one more thing, and some ability to have tokens verified in the protocol as Bitcoin Cash or Ethereum have. If we were to give it those four properties, I think we could be Pretty guaranteed to have trouble with MEV as we see in other coins like Solana, Ethereum, et cetera. So, so how do we, how do we know that we're fairly safe from that kind of centralizing MEV effect? Or, and, and again, there's no knowing for sure. We're, we're, we're developers, we're, we're doing the best we can to be certain." }, { "speaker": "reardencode", "time": "52:17", "start": 3136.54, "text": "we- We can look at what properties all of the coins that have these problems have. They all have faster blocks. They all have some way for scripts to verify the state of other tokens than the native token. They all have, recursive covenant type properties. Now, we're talking in some of the upgrade proposals like OP_CAT right now about adding recursive covenants That's only one of the things all the other tokens have. People, for the longest time, were talking, \"Oh, if Bitcoin had a Turing complete scripting language, it would have all these problems.\" But in fact, that's one of the things that gives rise to these problems, and many of them aren't necessary and recursive confidence alone isn't sufficient because of all the other properties needed. I had a discussion, a, a good example of this was Matt Carallo pointed out, there's this bit matrix thing on Liquid," }, { "speaker": "stephan", "time": "53:17", "start": 3196.64, "text": "Liquid, yeah," }, { "speaker": "reardencode", "time": "53:17", "start": 3197.26, "text": "that could give rise to centralizing MUV. And he just posted it there as though that would also come to Bitcoin if we had the same covenants as Liquid. But I went and looked at the actual protocol, and it, in practice, requires, strictly requires being able to verify the state of other non-Bitcoin assets in a script, which Bitcoin doesn't have. And I think we can agree, at least on this podcast, that Bitcoin will never kind of have first-class tokens where a Bitcoin script can be like, \"What's the balance of this token on that address?\" Like, we'll never- Never do that. We're never gonna have tokens be like a fundamental part of Bitcoin, that's not what Bitcoin is, it never will be. All of us would dump the shit token fork of Bitcoin if it added that functionality, right? So, so we can be very confident about that, and then we can be very confident because of that, that at least that category of centralizing MEV that happens on other chains can't come to Bitcoin because it'll never have that property." }, { "speaker": "stephan", "time": "54:12", "start": 3252.34, "text": "I see, yeah. So it's kind of a more complicated argument around exactly the characteristics of Bitcoin, right? So Bitcoin has ten minute block time, doesn't have this ability to, I guess, I'm not sure the right way to explain it, but like introspect into a token balance that isn't Bitcoin. Now, I know there are kind of protocols that Exist today, like RGB as an example, which you-- I mean, theoretically, not endorsing, but just saying, theoretically, you can create shitcoins on RGB today. It's client-side validation, and they use Taproot, which is kind of, as I understand, it's like a public key tweak, and it's just like a-- Otherwise, it looks like a normal Taproot transaction, so you couldn't even filter it if you wanted to, right? so, but I, as I'm understanding, the kind of introspection you're talking about wouldn't even be able to look into" }, { "speaker": "reardencode", "time": "55:00", "start": 3299.73, "text": "It's client-side validated, was the key thing you said there." }, { "speaker": "stephan", "time": "55:03", "start": 3302.95, "text": "Yeah. There's" }, { "speaker": "reardencode", "time": "55:03", "start": 3303.29, "text": "no way for a script to also validate right, because it's like not" }, { "speaker": "stephan", "time": "55:07", "start": 3306.65, "text": "on the chain per se, yeah." }, { "speaker": "reardencode", "time": "55:08", "start": 3308.21, "text": "Right, it's not there. The data's not even there to verify, it's client-side validated." }, { "speaker": "stephan", "time": "55:12", "start": 3311.93, "text": "Yeah, gotcha. Okay, so essentially the short answer is you think it's not a big risk. Now, okay, yeah, Vijay, do you have any, any response or any point you wanna bring up on this, or do you wanna move on to some other points" }, { "speaker": "vijay_boyapati", "time": "55:27", "start": 3326.64, "text": "Well, I, I just say I, I trust Brandon's perspective, and I said this on Twitter, I think he is, you know, trust but verify. I think he's forgotten more about the Bitcoin protocol than I know. I, I do, I do take heart though that given all that Brandon said about Ockat and, and how it's, you know, been tested and there are bug bounties and this has been around a really long time, I do take heart from the fact that it is really, seems quite difficult to get it into Bitcoin. Have it as a, an upgrade to Bitcoin. I, I, that is kind of suggesting to me we are moving towards what my ideal is. I do have a question for Brandon though, because I would personally be satisfied, you know, modulo, fixing bugs with Bitcoin ossifying today. In fact, I would go further and say I would have been okay with Bitcoin not having, added SegWit. And I, I said this during the block size wars as well. So my question is, do you believe there is a point where modular again bug fixes, which I think we all agree are important, that you would say, \"Yep, this is enough, we should stop, we should ossify here,\" and what would that point be? Would it be we've adopted OP_CAT, or is the difference between our perspectives merely one of a few extra steps where you would think we should go, or is it there's quite a lot more that needs to be done?" }, { "speaker": "reardencode", "time": "56:52", "start": 3411.73, "text": "I love that question. And, and I I think the, I mean, as I said, we want Bitcoin to be sufficiently decentralized and it's-- we don't know what a-- that's not really a destination. I think at some point we'll probably run out of things to do that, that we can make an argument for this, this gives us additional decentralization. so, so I would find it plausible that after we do something like the, the Great Consensus Cleanup and something like the Great Script Restoration, why they both have \"greats\" in the name, I don't know at the moment, I think Rusty's was originally Script Restoration project, and we very quickly started calling it the Great Script Restoration. Whatever. The point is, I, I think if we were to do those two things, we would have a Bitcoin scripting system that is sufficiently-- gives people sufficient freedom in how they- They lock their coins to build decentralized protocols where more people can have their own keys, and it, it's like as of, as of at least right now in the state of Bitcoin research, there's not really anything more we would want to do than those two things. I'm not gonna say I'm definitely it's done at that point, but I can say there's nothing more that I right now would want. Now we could, of course, there's gonna be research happening for the rest of time about, about the future of, of Bitcoin. We could have changes in the world like quantum cryptography, and, and we've, we've of course agreed that there's a quantum break, Bitcoin's gonna hard fork, right? there's, there's not debating that, of course. Yeah. So, so I would say that with those, those two things, which those can either come in several incremental steps each, or they can come in a couple of batches. I don't know the path we're gonna take here. I, I try to stay out of the activation debate and the, and that kind of stuff. But if we had those two things, it would be much harder to argue for future changes." }, { "speaker": "stephan", "time": "58:37", "start": 3517.39, "text": "Yeah. Now, I know there's a bit of excitement, maybe a bit premature, but people are interested in SIZA, you know, cross input signature aggregation, That would be like another kind of, maybe in a similar camp to Great Script Restoration, it's like another whole kind of re-architecture, really kind of super long-term thing, which I don't know if people would be, would be down for that, but that's, again, some of the ideas that people are talking about. But I guess from your perspective, it sounds more like you'd be interested in consensus cleanup and potentially Great script restoration, but maybe great script restoration could come in parts, like maybe it starts with CTV and then maybe something else. Yeah." }, { "speaker": "reardencode", "time": "59:21", "start": 3561.44, "text": "and, and to be clear, when, when developers in Austin, Texas were discussing changes to Bitcoin, we put like, you know, here's, here's CTV, kind of the, the safest change, consensus cleanup over there is like just bug fixes, and then we kind of drew this whole line on a whiteboard, and then we put Simplicity like three rooms down." }, { "speaker": "stephan", "time": "59:39", "start": 3579.37, "text": "Right." }, { "speaker": "reardencode", "time": "59:40", "start": 3579.91, "text": "So, so in, in People are talking about, I have opinions about simplicity. I think it will never be on Bitcoin. It's a very cool language, I love the work that Russell O'Connor did, not panding his work. I don't think it'll ever come to Bitcoin. I think it's, it's too much of a rethinking, and we have so much tooling that we've built for Bitcoin that works with the existing Bitcoin script. And one of the great things about script restoration is that it's a kind of big change, but every wall that we already have would need to change like three variables," }, { "speaker": "reardencode", "time": "01:00:11", "start": 3611.63, "text": "The nice thing that, you know, and it makes it totally different, a different class of change than something like Simplicity." }, { "speaker": "stephan", "time": "01:00:16", "start": 3616.2, "text": "Yeah. Okay. One other point I wanted to touch on, now, you know, there's been a lot of discussion about twenty seventeen, the block size wars, SegWit, and so on, and I think it's brought up- You know, one of my recent chats, I had a podcast with NVK and he made an interesting point, which is, \"Hey, look, it's not your chain, it's not my chain, it's not our chain.\" Like there's this kind of this idea that maybe people see themselves as the, the keepers of the flame or the, you know, it's kind of the, this idea that you need to, you know, stand and defend this network, but at the other level, maybe We have to step back and have a bit of humility and say, \"Look, the economic nodes are what matter.\" Now, yes, we can say twenty seventeen, the quote-unquote plebs beat the big corporate entities, but it doesn't mean the, the so-called plebs will always win, right? It might be that hypothetically- Again, not endorsing, but just saying it's possible that the large economic nodes on the network today, let's say the node of Coinbase, the node of Cash App, is more important than any of our individual nodes, and it's hypothetically possible that the economic nodes opt into some change that the, the quote-unquote plebs don't want. So, what do you guys think? Is it, is it our chain? Whose chain is it anyway?" }, { "speaker": "vijay_boyapati", "time": "01:01:25", "start": 3685.59, "text": "I will, I will say that the people who own Bitcoin are the economic stakeholders in Bitcoin, and this is going back to my worry about egalitarianism is that there are some people who think, \"Well, the-- you know,\" Some poor person in Bangladesh or Africa should have as much right to Bitcoin as everyone else. No, we are like stockholders in a company and we own Bitcoin, and we get to say what Bitcoin is. There is concentration of economic interest in nodes like Coinbase and, and BlackRock, as you say. but I, I would point out though that the fact that people custody with them doesn't necessarily give them as much control as you think, and this sort of goes to Mining pools as well, you can say that mining pools, this sort of very powerful centralizing force, and mining pools could take over Bitcoin, but anyone can switch Mining pools quite easily. So, so it is possible, I think, I, I imagine under a Bitcoin world where we have a lot of financial institutions, people will be willing to switch if they start hearing, \"Hey, Coinbase is pushing for this thing that I really don't think is good for Bitcoin.\" And this is where the plebs come in, where we have a say in explaining to the community of economic holders, \"This is a really bad idea,\" and this is how I think we won the block size war, was we, we did a very good job of explaining all of the dangers of doing a hard fork and what it would mean for Bitcoin." }, { "speaker": "stephan", "time": "01:02:51", "start": 3771.01, "text": "Yeah." }, { "speaker": "vijay_boyapati", "time": "01:02:51", "start": 3771.51, "text": "And ultimately, I think we scared some of the big, concentrated, you know, economic nodes like Coinbase. And I'll give, give a specific example of this. This is the question at the time, and I think this was a critical question for how the block size wars played out, which chain do you label BTC? Like, do you label use the SegWit 2x chain BTC or do you label that 2x or how do you do that? And one of the arguments that people made was, \"Hey, if you go and slap this BTC label on the 2x chain, I'm gonna sue you because you're, you're misleading people that this is the Bitcoin chain, it's not the legacy chain at all, it's this new hard fork chain, and it, it would be fraud essentially to, to label it.\" And I think that argu- Movement from plebs had an impact. so there is a danger, I won't deny it, in economic concentration among big nodes like Coinbase and BlackRock, but also we shouldn't go too far and say they have all of this control which they, they don't necessarily have because the people who custody with them also can say, \"Look, you don't get to do stuff with my money that I don't want you to do. Like if I, you know, custody my gold at a bank, you don't get to go and, you know, hold big parties with the gold and do stuff Stuff that I wouldn't, you know, approve of, so we, we have to, to balance those two sides." }, { "speaker": "stephan", "time": "01:04:17", "start": 3857.87, "text": "Yeah. Brandon, anything to add there or do you disagree with anything there?" }, { "speaker": "reardencode", "time": "01:04:21", "start": 3861.86, "text": "No, I, I, I totally agree, and, and I think that's, that's, that's one of the reasons it's so important to, to bear in mind the difference between hard forks versus soft forks, because absolutely, it, it was, it was a very clear argument to make that if the, the centralized custodians had labeled two X coin, bit It would have been lying, it would have been fraud, and that was very easy to argue to make because it was a hard fork. This was my Bitcoin node that I had when I deposited my Bitcoin would not validate those coins if you were to support the two X coin. And so that's like, yeah, it's not Bitcoin. and it's very different with soft forks. You can't make that same argument with soft forks, because the-- your Bitcoin node would still validate all the coins even if they, if they voted, if they supported the soft fork and they ran the so I think we, I kind of mentioned wanted to talk about this, it's-- we, we have to be, and I think it also matches up with any case point, we have to be very realistic about the difference between hard forks and soft forks and what it takes to resist a hard fork versus a soft fork. Resisting a hard fork, that was kind of the table stakes, that was, that was the starting point for the power of Bitcoin as, as real decentralized money, and we won, and, and that was a very powerful moment in Bitcoin's history. if that, that was to be resisted. I, I, I had this argument with, Francis from Bull Bitcoin. You know, I think that Bitcoiners would be able to rally similarly and fight certain categories of soft fork, of the category, if there were to be another SegWit that also expanded the block size through a soft fork today, I think we would absolutely win that war and we would stop that soft fork. However, if someone's talking about adding opcodes, how do you rally the support of people to take risk with their coins, to sell a few? features against a soft fork and go hard to the mat against OP_CAT. You know, you're not gonna rally the same kind of, of, of ground troops sending letters to Coinbase, sending letters to BlackRock to fight a soft fork for something like OP_CAT. And I think that's part of what Andy K was saying. You know, we don't know who owns, who controls Bitcoin in terms of soft forks right now. It's very clear who owns it and, and controls it in terms of hard forks. I think it's quite clear who owns it and controls it in terms of Major surgery soft forks like SegWit, but it's not clear at all in terms of smaller soft forks." }, { "speaker": "stephan", "time": "01:06:46", "start": 4006.01, "text": "Right. Yeah. And that's a fair, I think that's a fair point to make. I think, you know, if we get another, you know, change, whether it's great consensus cleanup or something else, maybe it would be good to have, you know, three options for people out there, right? Like you could have this kind of, you know, I really agree with this change and I'm willing to go to the mat for it, or the kind of, I'm Get forked off onto the wrong chain, or I'm a neutral, I'm a fence sitter. I, you know, if the network goes with it, I'm okay with that, you know, like, and so there's kind of the neutral normie option, let's say, and, maybe that is how people can be given the choice, of which, you know, hypothetical soft fork option they want to go with, b- But I mean, it can get messy because even in twenty seventeen, there were alternate clients that people were running, right? Like I think, Shaolin Fry, a NIM developer, helped code up, you know, the software for certain people to signal that they wanted SegWit and things like this. And so that's kind of where some of the arguments come about, it was like playing a game of chicken with the network that, you know, there was enough people who wanted-- who said, \"Yeah, we want this, and you miners, you better come along with us," }, { "speaker": "stephan", "time": "01:08:00", "start": 4080.62, "text": "space and all this stuff, and if you, you know, find yourself on the wrong chain, you'll be, you know, you'll be up, you'll be up the creek without a paddle, right? So that was kind of, I guess, the game of chicken that happened in 2017, and, Some people say, you know, some core developers were against that, like some core developers are saying this is a bad, this is a, this is a risk, you know, w- you could fork the network, it could go out of consensus, a-and others were sort of more gung-ho about it, saying, \"No, like, we need to fight back hard.\" So, any reactions on that?" }, { "speaker": "vijay_boyapati", "time": "01:08:31", "start": 4111.64, "text": "my, my reaction is I was against that as well, and I believe it was Luke Dash Junior who proposed that as a way of getting SegWit adopted" }, { "speaker": "vijay_boyapati", "time": "01:08:42", "start": 4122.78, "text": "Rejected that as a strategy for, for adoption. And I think there's this kind of very delicate balance in the consensus system of Bitcoin that we have to be very, very careful with, and when you have one side trying to impose itself on the other, you, you, you lose that balance. And, I, I sort of think of, the miners are kind of the equivalent of miners in gold, and the nodes are like assays for gold. They're the ones who like look at the gold and say, \"Is this actually really gold?\"" }, { "speaker": "stephan", "time": "01:09:15", "start": 4155.47, "text": "Yeah." }, { "speaker": "vijay_boyapati", "time": "01:09:15", "start": 4155.95, "text": "And on the one hand, the miners can't go to the assays and give them copper and say, \"This is gold, you should treat it as gold,\" they'd say, \"No, it's not.\" But on the other hand, the assay-- assays shouldn't go over to the miners and say, \"You need to Like the, the balance is really important here, and this is why it, it, it worries me when we start talking about soft forks that we can kind of impose on the network and just say, like, \"Miners have to come along here, and because we want it, we need to make it so that everyone is on board, otherwise that delicate balance that gives Bitcoin, its power and its immutability is broken, and we-- once it's broken, we're not gonna get it back.\"" }, { "speaker": "stephan", "time": "01:09:58", "start": 4198.31, "text": "Yeah. Brandon?" }, { "speaker": "reardencode", "time": "01:10:00", "start": 4200.05, "text": "Yeah, I, I think the, the problem with that analogy, and, and the problem with analogy in general, is that they're, they're always leaky. And there's no such thing as a gold soft fork. So what you said exactly applies to a hard fork, right? The assayer is saying, \"Oh, mine this different hard,\" that'd be a hard fork, right? Now mine my, my two x coin miners, that's a hard fork. That would be the assayer saying, \"No, you have to change what you're mining.\" But a soft fork is different" }, { "speaker": "reardencode", "time": "01:10:29", "start": 4229.81, "text": "Mining and we can now do additional things with that gold. That's gonna change the demand for that gold. Maybe the chemical process makes using that gold more efficient, which might reduce the demand for gold, let's say, or for at least newly mined gold because we can reuse it. A new recycling process is like a soft fork. So, so we have to kind of refine the analogy and it starts to get hard, 'cause analogies are always leaky. There's no soft forks in gold, but there are in Bitcoin. A-and so of course We have to maintain the delicate balance around hard forks or around these extremely deep surgical soft forks, but it's very different when you're talking about, hey, some people wanna lock their coins in this additional way. It has no effect on people who don't wanna lock their coins in that way. It's a new way for people to lock their coins. How, how can you make the argument that we shouldn't let people lock their coins in additional ways that give them more security for their personal savings when it has-- when it doesn't affect the rest of the network?" }, { "speaker": "stephan", "time": "01:11:24", "start": 4284.32, "text": "Yeah, totally fair point. Go on, go on, Vijay." }, { "speaker": "vijay_boyapati", "time": "01:11:26", "start": 4286.36, "text": "Yeah, we, we don't believe it, has an effect. We, as you say, we-- it's been well tested, but perhaps there is some small likelihood. You, you mentioned, analogies. I wanna use one other analogy. I know that they're prob-problematic, but sockets. you know, you have a, a particular shape to power sockets, and i-i-in the beginning, they only had two prongs that you could put in. And a hard fork on the power socket would be to completely change the shape of the power socket, and that would be economically devastating, right? Every device that used the power socket would need to be thrown away, and you need to buy a new one. That's-- so it's never gonna happen. The soft fork of power socket is to add the ground, which means that people who had devices which only had two prongs can We can use those devices, but then you can make use of a ground if you have a, a connection, so newer devices can use that. The, the worry I think, and we only ever had one soft fork with the power so-socket protocol, at least in the United States, the, the, the worry I have with that is that if you have a lot of soft forks, then again, you have this potential for unintended consequences, and this is, of cat, I'll trust you, that the unintended consequences, the footprint is very, very small, but that there is Some risk," }, { "speaker": "reardencode", "time": "01:12:42", "start": 4362.45, "text": "just let's make sure." }, { "speaker": "vijay_boyapati", "time": "01:12:44", "start": 4364.45, "text": "Okay, CTV. Okay. Very low risk, cat, less clear. Okay, okay, got it. C, CTV, the, the, the risk would be very low of that, having unintended consequences. but there is some risk here, and I think at some point, just like with the power socket protocol, you stop and you don't have any more soft forks because you do con- you, the, the system itself is so valuable, there is such an enormous, like if Bitcoin had, let's say Let's say ten trillion dollars of market value, then the, the stakes are so high for making any kind of mistake. That's, that's another point, part of my point is that the bigger Bitcoin gets, the more important ossification becomes." }, { "speaker": "stephan", "time": "01:13:28", "start": 4408.16, "text": "Yes, just like" }, { "speaker": "vijay_boyapati", "time": "01:13:29", "start": 4409.14, "text": "the Haloclock protocol, if you have an entire economy and all of these devices built on top of that protocol, it is now essentially impossible to change, even a soft fork would be very, very difficult because so much economic value is built on top of that protocol." }, { "speaker": "stephan", "time": "01:13:43", "start": 4423.28, "text": "Yeah, and I guess this is the point that people are making, which is, you know, I think it's, it's fair. I'm not an ossifier personally myself, but I think There's a fair argument there that, yeah, the bar has raised, like the bar is rising over time. So we can't, we can't just say, \"Oh, well, Lightning had CLTV and CSV to get enabled to, to work,\" and SegWit, of course. maybe, yeah, there is a, it, it is a higher bar, but I believe that the bar can still be beaten, let's say, with enough research and work and so on to sort of prove, okay, it's safe and that it's gonna help more people self-custody. Thanks, Brandon, if you have any reaction." }, { "speaker": "reardencode", "time": "01:14:22", "start": 4462.13, "text": "Yeah, I, I like to, I, I like this power socket analogy, so I'm gonna extend it ever so slightly and say that, that the, there was like a big soft fork, which was the ground pin, it was kind of like a Segway or a Taproot type soft fork, but there actually was a second, another smaller soft fork, which was the adding tamper resistance, that changed how the plugs interface and, and it required, it had higher standards for plugs, which almost all plugs met, but some didn't, and it" }, { "speaker": "reardencode", "time": "01:14:48", "start": 4488.26, "text": "The, the, there have been multiple soft forks, and they're for good reasons, and, and that should continue in any protocol. There will be probably future upgrades to power sockets, in, in the US. And, and I think that's good. We don't intentionally ossify, we-- but we do, as, as Stephane just said, we make you ever cognizant of the installed base and the costs to the installed base in how we make changes to these, these protocols. same with TCP, you know, the, the rate of change in TCP has gone down, but even so, the most recent change to the TCP spec was, it was re-codified in twenty twenty-one, like sixty years after it was originally codified or fifty-f-- four years or But yes, changes still should be made. They're gonna have to meet higher and higher bars because of the larger installed bases." }, { "speaker": "vijay_boyapati", "time": "01:15:35", "start": 4535.02, "text": "Yeah, I think that's a" }, { "speaker": "reardencode", "time": "01:15:35", "start": 4535.8, "text": "really" }, { "speaker": "vijay_boyapati", "time": "01:15:36", "start": 4536.06, "text": "good point. My, my, my one counterpoint to that is the difference I think between Bitcoin and something like TCP/IP is that it's this Confidence that we have in the inflation schedule, I think that's less of a point with TCPPIP. If we, if we lose that confidence because we start to believe that developers have enough control to fiddle with the protocol through Softbox, as much as they want, as a community, developers are very, very small fraction of owners, and they shouldn't have outsized control because, again, that is a part of the decentralization of Bitcoin is that no particular group has outside influence. influence on, on the protocol, whether it be miners or economic nodes or developers. And with Bitcoin as a protocol, if we lose confidence in that thing that makes Bitcoin special, the whole thing goes away. so it's not quite Like TCP/IP, because we have this other variable which is kind of market confidence in a particular attribute of Bitcoin. Yeah." }, { "speaker": "stephan", "time": "01:16:39", "start": 4599.73, "text": "Yeah. Alright. Well, look, let's," }, { "speaker": "vijay_boyapati", "time": "01:16:41", "start": 4601.21, "text": "let's," }, { "speaker": "stephan", "time": "01:16:41", "start": 4601.87, "text": "let's, wrap up here 'cause I know you guys have, other meetings and things to get to. So let's, take a few minutes each and we'll kind of summarize our thoughts. I guess, from my perspective, I, I think we talk about being low time preference, so, you know, we should fix our bugs. I think great consensus cleanup and something like after that, I, I personally, I think something like a CTV or an L in hand, something like a minimal covenant step, you know, personally, I think that would be a good way to go forward. but, I, I, yeah, I don't think, but if, you know, if we hypothetically never get any further upgrades to Bitcoin, I still think we'll, we'll probably be okay. that's kind of where I'm at. but, do you guys wanna just, you know" }, { "speaker": "reardencode", "time": "01:17:33", "start": 4653.49, "text": "Sure." }, { "speaker": "reardencode", "time": "01:17:38", "start": 4658.31, "text": "I think the one, the one thing that I, that we didn't cover, I wanted to cover, so I'll use my last couple of minutes here to, to cover it is, we talk a lot about the risks of change, but we also have to be very realistic about the risks of not change." }, { "speaker": "reardencode", "time": "01:17:53", "start": 4673.24, "text": "we, we currently don't know right now if Bitcoin is sufficiently decentralized. Vijay made a compelling argument that it probably is. I argue that it isn't, and the-- so the risk is that Vijay is wrong, that Bitcoin is sufficiently decentralized as it is, and the protocol can stay sufficiently decentralized as it is. And so we have to balance that risk that Vijay might be wrong about that, with the risks of any upgrade. And so certainly there's a, there's a balance there. There and everyone, every individual trusts but, but verify or ver-- or don't trust, verify, whatever you wanna take on that, has to look at a change and see whether the, the risk of that change is greater or smaller than the risk of, of not changing and not being decentralized enough with the protocol as it is. So it's always a balance of risks. And that's why, I think, Stefan, your point of, you know, a smaller change like CTVRL and hence has lower risk and therefore can more easily counterbalance the risk of not changing. and, and that's frankly also similar, other folks in the space have said that they're worried about the risks of doing a small change, because if you do a small change, people could build certain types of complex protocols. I've made this argument against Kat, frankly, where because we didn't make a big enough change, people build complex things on top of Bitcoin, which The centralization pressure we're trying to avoid. So everything is a game of analyzing the risks and seeing how to reduce the risk to the system, whether that's reduce the risk by not changing or reduce the risk by changing to avoid the risk of not changing. the o-others thing I wanted to say that I thought was worth mentioning is just Everyone, please get out there, listen to the content that Stefan puts out about this, about-- he, he has me and, and, and everyone else and, and Vijay on his podcast and Rusty, and does incredible technical content so you can have your own opinions about this. Don't trust me, don't trust Vijay, don't trust Stefan. Listen to people actually talking about these things because you can think for yourself, and that's what Bitcoin's all about." }, { "speaker": "stephan", "time": "01:19:50", "start": 4790.93, "text": "Right, Vijay." }, { "speaker": "vijay_boyapati", "time": "01:19:52", "start": 4792.77, "text": "I" }, { "speaker": "reardencode", "time": "01:19:52", "start": 4792.83, "text": "think" }, { "speaker": "vijay_boyapati", "time": "01:19:52", "start": 4792.99, "text": "it's, firstly, I'd like to say it's a, I think it's been a great debate. I'm glad this discussion is happening. I, I didn't talk about this very much because I didn't think it needed to be talked about much after the, block size wars, and I feel like Bitcoin was saved during block size wars, and, it, it became something that I thought couldn't be, messed with, but I think now this discussion is coming back up again because of, you know, the potential changes that people wanna make to Bitcoin. That's why I, I am, you know, making my, my voice heard a little bit on this issue. Really what I want is to change or shift the culture a little bit more toward ossification. I, I think Brandon and I aren't actually that far apart. Maybe he would want some things that I don't think necessarily needed. but ultimately I think what I want is the culture among economic nodes to be that We don't want to adopt any changes from developers unless they can give us an extremely, compelling justification that this is critically important to Bitcoin's success in the future and its, stability and its security. It needs to be all of those things. What we have here is a foundation for a new monetary system, and I think we have weathered so many challenges and so many risks, and I think we have now weathered the re- risk of a nation state attack, and I would hate to be, you know, to use an American football analogy, to be at the one yard line and to fumble the ball, because we are so close, I think, to being the Trojan horse that gets in the walls of Troy, the financial system, and transforming it from within. that in, in a way that I think is gonna benefit all of humanity. So we need to be extremely careful, and, and we really need to, be very skeptical when developers say something is important or should be adopted on Bitcoin. We should take the stance of, not that we think that they're bad people anyway, I, I have a very high opinion of Bitcoin developers given their history and, their, the prudence that they've shown, but we need to have an extremely- High standard when they propose a change that we are willing to adopt it and to potentially shoot ourselves in the foot and, destroy a system that could transform the world." }, { "speaker": "stephan", "time": "01:22:22", "start": 4942.7, "text": "Great, well, let's leave it there, listeners. I will put all the links in the show notes, so of course, go follow Vijay, check out his book, swan dot com slash bullish, and, Reardencode's got a bunch of content out there. I will link to your social media and stuff, guys. Vijay and Brandon, thanks for joining me." }, { "speaker": "reardencode", "time": "01:22:38", "start": 4958.75, "text": "Thanks so" }, { "speaker": "stephan", "time": "01:22:39", "start": 4959.77, "text": "much. I hope you enjoyed the show. If you did, make sure to give it a thumbs up and share it out there with your family and friends. Check out my website at stephanelivera dot com, and I will see you in the citadels." } ] }