{
  "episodeId": "SLP75",
  "speakers": {
    "stephan": {
      "name": "Stephan Livera",
      "role": "host",
      "tag": "STEPHAN"
    },
    "giacomo_zucco": {
      "name": "Giacomo Zucco",
      "role": "guest",
      "tag": "GIACOMO"
    }
  },
  "segments": [
    {
      "speaker": "stephan",
      "time": "00:09",
      "start": 8.51,
      "text": "Welcome to the Stephan Livera podcast focused on Bitcoin and Austrian economics. This is episode seventy five and my guest is Giacomo Zucco. just fair warning for my intermediate and advanced listeners, this one is a little bit more of a newbie episode. It's targeted towards those newbies who might be a little bit more unclear on why they're There is only one Bitcoin. So if you're, if you're already quite clear on that, maybe just share this episode with a newbie friend, episode seventy-five. Otherwise, if you're a newbie, listen on. Also, one quick note, apologies, I accidentally recorded this, the audio just from my side, is coming out of my webcam microphone as opposed to my normal podcast microphone. So apologies about that, I'll make sure I fix that up for next time. It is just a one-off, but it also won't be a big factor. As I don't, do as much of the speaking in this episode anyway. With that said, let's go on to the interview. Giacomo, it's, not been that long since you weren't, but I'm very happy to welcome you back again for another episode."
    },
    {
      "speaker": "giacomo_zucco",
      "time": "01:14",
      "start": 73.92,
      "text": "I'm very happy to be back again as well. I mean, this show was already great, before, getting some incredible scoops like, a Twitter CEO, and now it's, it's like one of the best shows around."
    },
    {
      "speaker": "stephan",
      "time": "01:28",
      "start": 87.81,
      "text": "Oh, thank you, Giacomo, you're too kind. Thank you. so look, as we were discussing, I think today, I, I've just, again, not an attack about the way other people talk about it, I think it's more just a way of trying to help newbies who get confused, because genuinely, many newbies might come to Coinbase dot com or whatever, or Coinbase, as I like to call them, and they would quote-unquote see multiple bitcoins, and the way it's presented in some of the no-coiner media, they I'd also present it that way and say, \"Oh, but there's multiple bitcoins.\" And I think as more experienced Bitcoiners, we have different ways to answer that, but I think the key one is essentially there is only one Bitcoin. So why, why do-- why is that at a high level?"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "02:12",
      "start": 132.44,
      "text": "So, first of all, I have to, I have to say that, we aren't dismissing while explaining that there is just one Bitcoin, we're not dismissing the fact that the reason there is this kind of opportunity for, misleading, newbies or this kind of confusion is that in Bitcoin terminology is somehow, ambiguous still. So there are some terms that are a little bit, ill-defined. For example, if you think about, technical terms like fork. They have very, very, con-contradictory and inconsistent definitions across different topics. For example, you have a repository fork when you fork a software project and you create another project, and in this sense, Litecoin, for example, is a fork of Bitcoin. then there is, for example, the UTXO fork where you fork the, the, the, the, the, you still in time the, distribution of property Of a coin to another clone of the same coin, and in this sense, Bitcoin Private, Bitcoin Gold, or even some other, I drop al coins like, I don't know, Bytecoin or, or Lumen, they are, a Bitcoin fork. and then there is, I mean, there is the, the technical terminology about hard forks and soft forks in Bitcoin. And the, the nice thing about, the, the crazy thing about, the funny thing about this is that when you have an actual hard fork In Bitcoin, and then that was a soft fork in Bitcoin, it doesn't produce any other chain or any other coin. So a successful hard fork in Bitcoin, as, as, as output, just one Bitcoin. So there is a lot of confusion, and this confusion also includes the words like consensus. There is like, the, the social consensus about which, software is Bitcoin about, and there is the, the, the, chronology consensus about which one, Between several value transactions is the first to spend some output, and also this word gets, and then there is a scam conference in New York, the consensus conference, and so there are a lot of consensuses, and this, this kind of ambiguity also impact the word Bitcoin. So what is Bitcoin? Bitcoin can be, one idea, so the idea of having a purely peer-to-peer system in order to transfer value in a censorship-resistant way, so an idea which is closely related with the- purpose of Bitcoin. So in order to understand what is Bitcoin in this sense, you have to think about, all the cyberpunk history of, people searching for a perfect digital equivalent of gold. So you have to think about, the history of, eGold, how it was censored and then HashCash and, reusable proof of work. And so you have to understand history in order to understand what is Bitcoin as, an idea fulfilling some purpose. And I, I will try to argue that There is, that, this kind of idea is pretty specific, is, is basically, is basically the idea of having a form of, of digital equivalent of gold, some kind of money which is hard money and which is, dark money, meaning that you can use it without, without, a need for an identity. and, if, if Bitcoin is this idea, fulfilling some kind of purpose, then there is only one Bitcoin fulfilling this idea, which is basically the, the Bitcoin we have. We're going to talk about. But then again, you can use the, you can use the word Bitcoin to indicate an idea as a structure. You know, think about cargo cults. So you have people, you have these primitive people living in a jungle. I know that primitive people in a jungle is probably, not very politically correct way to describe them, but let, I mean, let's face it, they are primitive people living in, let's say, they are differently evolved civilization. And, and they look at a, a plane, this plane Rain is, i-is, is flying over the jungle and they see the shape, and they see that this, the thing is powerful and, and strange and mighty. So they build, they build, something with the same shape with, with wood and they start to think that in, in order, reproducing the shape and the structure, they are actually reproducing the power of the same idea, which isn't the case actually, because their cargo cart, is just a cart, it's, i-is not really It can't fly, it can't do anything. So you can have, the Bitcoin idea as a purpose which is just fulfilled by a single implementation, or the Bitcoin idea just as a, as a structure where you copy the structure, thinking that you're also copying the properties of Bitcoin, like decentralization, the immutability, censorship resistant, all this kind of property, you think that if you just copy the, the code, the software, then you copy the property as well. Then you can also imagine Bitcoin as a protocol, so a set of rules that, that if you follow, this set of rules, then you are in, in, in rule consensus with other people and you can basically transfer the same kind of value. And if we, if we think about Bitcoin as a protocol, then there are a lot of, of, software implementation by just one Bitcoin protocol. Then there is Bitcoin as a software, and this is what people misleadingly- Talks about when they talk about Bitcoin Core, Bitcoin Core isn't a different protocol. Bitcoin, Bitcoin Core is one of several implementations, which are all consistent and consistent and compatible with the only one Bitcoin protocol, which is also the only one instance of the Bitcoin idea as a purpose, as a goal. And then there is, so there is this, this protocol, there is a s-a-a set of different softwares, for example, Core Work, not, Libbitcoin, I mean the, the Go, the Go language implementation, the JavaScript implementation, they are all trying to stay, to follow the same rules of the same protocol. And then there is a network. This network is the network of all the soft-- the running software implementing the protocol, and this is called Bitcoin as well. And then there is the asset, so the arbitrary, division of the digital gold, which we, which we call one Bitcoin, which is, I mean, it's a little bit confusing because, I, I think it was Andreas Antonopoulos pointing out first that, the idea of using the same word to describe the idea, the protocol, the software, the network, and the asset is a little bit confusing. For example, in scam coins like, Ethereum, they addressed this problem because there is the Ethereum network and protocol, and there is the Ether, asset, unity token. Okay. I think this is going to solve a little bit because when we- Very lucky circumstance is that, the Bitcoin unit is, super large if Bitcoin is going to succeed. So, nobody, only billionaires will probably, own a whole Bitcoin. So normal, everyday life, and no, nominal values will probably be zero point zero zero zero zero Bitcoin. So people is starting to switch, for example, Lightning Network, people is starting to switch to, using satoshis or SATs, which are the actual, minimum technical unit inside the Bitcoin protocol. So, probably we won't have this kind of, ambiguity anymore between the asset and the software. But still, there, as, as we, as we have seen, in this very long, let, let me say, topology of, of pe- of things that can be called Bitcoin, there is room for confusion, and, and then there is an ethic question if we want to ride the- Confusion in order to promote some kind of, some kind of scam or some kind of, rip-off, some kind of clone, or if we want to cl- to try to clarify a little bit and to reduce the confusion and the entropy."
    },
    {
      "speaker": "stephan",
      "time": "10:25",
      "start": 625.4,
      "text": "Right. Yeah. Excellent point, there, Giacomo. And I think- One way that people can think about it, rather than thinking, \"Oh, there are many bitcoins,\" is to understand how that one bitcoin could change in slight ways, right? So with certain upgrades to the technology that have occurred over Bitcoin's history. And I think one point that, you know, someone like Pierre Rochard might make, and I think you and I would agree on that, is that when people say there, there are more than one bitcoin, that in some sense is a misconception of Bitcoin as this Peer-to-peer into subjective consensus. Can you articulate a little bit around that point?"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "11:05",
      "start": 665.4,
      "text": "Yeah, so, i-in basically, if we think about Bitcoin as the, idea of, a digital equivalent of gold, then there is basically a logical argument for which there cannot be more than, there cannot be an indefinite number of this kind of, of, of a digital, digital gold, instantiation Because if there was, basically, I mean, gold can't be, easily reproduced because there is a, a, a chemical, characteristic of reality that, that is, you can't take an atom and change it in another atom very easily. So gold is hard to reproduce, it's hard to replicate, it's hard to clone, it's, unless you, you believe to alchemist and the philosophical stone, you can't reproduce gold. While software things can be infinitely replicated Produced, they can be cloned, they can be forked, they can be changed, especially open source software like Bitcoin, where you can look at the source, change it, produce a new variant. So if we, if we don't assume that, there is some kind of social consensus or economical consensus around one specific instance of this software or of this protocol, better, then there are infinite potential instances, and we have infinite supply, and we know that value cannot work And money especially cannot work if we have infinite supply, because if something is valuable and there is no cost into producing more of it, then everybody will be incentivized to produce more of it, and you will have infinite inflation, which will destroy the, the value. This is what, for example, in the very good book, Bitcoin Standard, Saifedean Ammous called the money trap. So if there is money, but money is not difficult to produce, everybody will try to produce money, and money will be, will become useless as a store of value. Value because everybody will inflate the supply. So if there are many, if any kind of protocol which, tries to reproduce, the characteristic of the Bitcoin protocol is also called Bitcoin, then we cannot but assume that there is an infinite supply of Bitcoin because everybody can, I mean, literally everybody could create a, a clone of Bitcoin software in their PC. There was, a few years ago, there was even a website where you can go, put your name Put your random variables and create instantly, a Bitcoin clone. So there, there is, I mean, there is thousands, tens of thousands of them, and there isn't a cap of how many, bitcoins can exist in this sense. But there is only one where there is a social consensus, there is what is called in econo-economics and game theory, it's called a shelling point, so a focal point. if we, if we have to go to a city and we agree to go to that city, but we don't- Don't agree about a specific place, then there is, for example, the center of the city is usually the focal point, the, involuntary coordination point where everybody without communicating can basically agree that everybody else will agree. So Bitcoin, the first implementation and the only true decentralized implementation of Bitcoin, of the Bitcoin network and of the Bitcoin protocol, is actually, the only Bitcoin which make any sense, because, any other clone, is, first of all, isn't It's centralized and isn't, it, it can't reach the same level of censorship resistant because, for example, it's created by very centralized, teams and is managed by a very centralized group of people. also, it doesn't have the historical salience, the historical selling point that, that can get everybody else agreeing, to the original Bitcoin. the, the Bitcoin, Bitcoin software stack can exist in infinite, variances. You can create a different Bitcoin node software, you can create, different layers, different wallets, but Bitcoin as a network, as a protocol, and as an asset, must be just, one by, by definition basically."
    },
    {
      "speaker": "stephan",
      "time": "15:13",
      "start": 913.43,
      "text": "Yeah, okay, that's a great articulation, and I think I was going to ask one question, but I think you basically answered that, right? So a newbie, an outsider might looking in, they might say, \"Oh, you Bitcoin people, aren't you just trying to shut down every other Bitcoin? And there's many d- other Bitcoins, why should- why, why is this one special, right?\" And I think you're getting to that with this idea of the showing point, right, that really people are still coalescing to the best one, right? Yeah. Or in their Well, how do you measure that? What are the ways in which-- and can we measure that?"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "15:47",
      "start": 947.07,
      "text": "So I'm skeptical about the fact that you measure that as something that can, that is defined by variables that, that can change over time. So there are ways to measure some kind of supremacy. for example, we can measure, we can measure, hash rate. there was somebody, there was this meme, going around, if, during the, the, the big block, wars. This Meme, was promoted by companies pushing for, the New York Agreement attack, and it was, it, it went something like, Bitcoin is the one where there is more, more hash rate, which is actually, not true because, the, the way the Bitcoin client work, the, the way, Satoshi's Bitcoin client or your Bitcoin client or my Bitcoin client wor- works as a protocol is that it will validate transactions and it, it will al- Only consider valid Bitcoin transaction respecting the, the rules of Bitcoin, and only among valid transactions, it will follow the transaction included in blocks with more, cumulative work. So, the thing is that the Bitcoin software and the Bitcoin protocol, as it's designed today, doesn't follow the hash rate. If I create a transaction which is, which is, which is, invalid, for example, I steal Satoshi's money. And then somehow I get to, to reach fifty-one percent or, or sixty percent or seventy percent of hash rate, that's not, that's not going to, to be accepted by your software, the, the way Satoshi designed it and the way we are using it. So first of all, the transaction must be valid following the rules. And only in order to clarify which valid transaction come first, then we use the hash rate as a purely chronological- Device. So the, the hash rate is a way to, assess the chronological priority among valid transaction. So it's not hash rate defining validity, i-i-it is hash rate defining confirmation inside the pool of already valid transaction. And it is basically people running software that defines validity, not hash rate. So the argument about Bitcoin is the one, protocol with more hash rate is completely, bogus. Also there is the, the, the argument about price of market cap. Of course, market cap is a terrible metric, because for example, I mean, You were quoting before the, the, the Goodhart's Law. once a measure becomes a target, it can be gamed. so if we establish any kind of matrix, people will find ways in order to game the matrix. And, and the typical example of that is actually, market cap. market cap is the supply multiplied by the price. but if I create, a coin, of which I own, ninety-nine point nine nine nine per- percent of the supply. I sell one of these, very, very tiny fraction of a coin, zero point zero zero zero zero one percent of the supply, on a market or at a very high price. For example, I sell to, I don't know, thousand dollars to myself maybe. Then, if an external website is monitoring that price multiplied w-with the nominal supply that the software is telling people there is, but which is actually not the market supply because I'm owning all the supply. Then I can easily game, market cap, and it's-- and indeed, what, ICOs and tokens and scam coins did in the last year were to take the, the, the market, the market cap, metric and to game it in order to become more relevant and to, to challenge each, each other, to, to, to who was better at gaming the, the market cap metric. So, that's not a good metric in general, but even if you find a better metric like, your- You multiply, market cap for, you multiply for volume, so you can find some kind of liquidity buy support. Even there, you don't really define Bitcoin because, I mean, for Bitcoin was created in order to resist censorship of very powerful entities like nation states, the, the same, the, the same adversaries that shut down the early attempt to create digital gold like e-gold. So this kind of adversaries, not only- Only they can easily, if they want to, at one moment in time, reach, a majority of the hash power. They can, but our software will just not accept invalid transaction. So the only thing that they can do if they get a majority of hash power is only double spending valid transaction or reorganize the chain, using valid transaction, not invalid ones. So they cannot change the rules with hash rate, but they should not be able as well to change the rule with- Market cap, I mean, if, if tomorrow the US government or Google or whatever, they put a lot of money into Dairscamcoin, I mean, if it was market-- Let's, let's frame it this way. If market cap defines what Bitcoin is, then US dollar is Bitcoin, because, if you compare US dollar with Bitcoin, US dollar has a, a higher market cap. So if Bitcoin is the one coin with more market cap, then Bitcoin is the US dollar. Which, is clearly paradoxical. Bitcoin is Bitcoin, and even if some kind of big powerful entity push, can put a lot of money into an alternative thing, that alternative thing is still not Bitcoin. Also, you can measure, I mean, Bitcoin has a lot of, matrix where it has a clear dominance, like infrastructure, you have software infrastructure, tools, libraries, open source software, you have, you have hardware infrastructure, so ASICs created The only two mine Bitcoin satellites in space, beaming down Bitcoin blocks, mesh networks, transmitting Bitcoin transactions. So you have a strong software infrastructure, a so- a very strong hardware infrastructure, and also a very strong financial infrastructure because you have futures, you will soon have, ETF and, and so on. But none of these, is a specific metric which defines what Bitcoin is. I mean, once we know What Bitcoin is, we can actually, we can actually, observe that Bitcoin has and is probably going to maintain, the, the strongest network effect of all these kind of metrics because of the way, dominance works in, in protocols and especially in money. But it's not these kind of metrics defining, what Bitcoin is. Bitcoin is what fulfill the idea of Bitcoin, which is basically right now by definition Only the specific Bitcoin implementation and, and network."
    },
    {
      "speaker": "stephan",
      "time": "22:59",
      "start": 1378.74,
      "text": "right, yeah. And I think the other thing that can confuse newbies, on this is some of the lies that they get told, right? So there are different, misconceptions that get sold. So, for example, they'll say things like, \"Oh, Bitcoin was the one that forked away from the real true vision.\" Or they'll play semantic games with language and framing. They might call it SegWit coin or Core coin. What do you, what do you say, about those kinds of things?"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "23:26",
      "start": 1405.5,
      "text": "Yeah. So, first of all, as we said before, the, there is a, this whole discussion is about words basically. So words are just, placeholders. You can use words in Very different way. there is no reason to get mad at people using some words in a different, in a different definition. but in some cases, there is people which is, which is basically, using some kind of strategy in order to, to, spread some lies or to take advantage of people, misusing definitions and, and words in a way which is can be easily detected. For example, they can try to redefine- Some words arbitrarily in a way that, also carry along some kind of, unconscious or, or im- implicit meaning or the, the, or they can use some, choice of words which are obj- objectively inconsistent, logically inconsistent. for example, if somebody says that Bitcoin Cash is one Bitcoin because it's a fork of Bitcoin code, then, I mean, we can accept that kind of, eventually, we can accept in- In the, in the, in the context of the argument, we can accept that definition, but then we have to say the Litecoin is also Bitcoin and that Dogecoin is also Bitcoin. And, and again, if you define Bitcoin as, anything which has the same UTXO of Bitcoin and at some point in time, then if I created the coin and, and I, and I give away for free the coin to anyone, or in Bitcoin, then my coin, which maybe is completely, different, has a purpose As implementation is also Bitcoin. So the point is that many of these, word choices are logically inconsistent, and also, for, it's a very big red flag when people uses this kind of word choices in a way which is inconsistent, inside the debate itself. So they change the meaning of the words during the debate. Notable, notable example of this kind of, of behavior are, for example, where people start to, to call Bitcoin Bitcoin Core. Or if somebody is calling Bitcoin Bitcoin Core, so if somebody is using the name of one implementation of Bitcoin, in order to, refer to, the general, protocol or the general asset, that's a very, very big red flag. Or if, there, there are more obvious, attempt to manipulate the meaning, for example, calling it SegWit, Bitcoin SegWit or stuff like that. Basically the, one of the strongest narrative, Among people lying about Bitcoin is, is about, Bitcoin changing, it's, so, some people basically, developed an idea of Bitcoin very, very early on, in which Bitcoin was something super cheap to use, like, free, you can have your cake and eat it, free lunches for everybody, there are no technical limitations, there are no technical trade-offs, Bitcoin is something miraculous Where everything is free for everybody and there is never a choice, a sacrifice to make, to make, which is something that is never true for, for reality in general and for software in particular. So these people, they, they built reputations, around this idea of Bitcoin and they also built some businesses, around this idea of Bitcoin. For example, assuming that validation costs weren't in trade-off with transaction cost or assuming that, that, block- Space can be infinite without actually, becoming a threat of, fee pressure to sustain the security. So they were ignoring some trade-offs and, and they built a reputation and business around this ignorance. When this ignorance actually faced with, reality, they had to ch- they had either to, to admit it, giving, giving up their, their broken business model or, or, apologizing for their re- reputation. Mutations built on top of, of, mistakes, or they could just try to change the protocol in order to adjust to their broken conception and to subsidize their broken business model. And some people, notably the people participating to the New York Agreement attack and other kind of attacks, on Bitcoin, they actually choose the second road. Instead of, adapting, to the reality of Bitcoin, they try to change Bitcoin in order to adapt to their, Really misconception. But one rhetorical trick that they pulled at the beginning, they were just, \"We have to chain Bitcoin, otherwise Bitcoin is doomed.\" I remember, some of these people, saying Bitcoin is going to die in two weeks if we don't, change the block size. Bitcoin's, I mean, Gavin Andresen was tweeting in two thousand and fifteen, I think, \"Bitcoin will basically die if we don't change, the, the block size in few months,\" and it was false of course. So the first, rhetoric, the first narrative was, Bitcoin has to change in order to adapt to our initial misconception of Bitcoin. But then they, they started to use a very, a, a, a quite smarter narrative. Instead of Bitcoin has to change because otherwise we are doomed, they started to say, no wait, we don't want to change Bitcoin. people who, who is adjusting to the actual realities of Bitcoin trade-offs, they- We want to change Bitcoin, and we want to change the code in order to get back to the original vision or to the original, economical, economical protocol. So there was this rhetorical trick in which basically, accepting Bitcoin trade-off is changing Bitcoin, while changing Bitcoin in order to subsidize broken business model is getting back to the original vision of Bitcoin. This is done, Also using some kind of, I think very, very inconsistent, very, very easy to, to debunk, misuse of the word cash. If you think about that, a lot of people, promoting, altcoins as the real Bitcoin, they're using the, the word peer-to-peer cash, as, somehow supporting their idea of increasing validation and centralization in order to reduce, on-chain transaction costs. This is a- Very, I mean, I think there is nothing to support this kind of use, of the word cash, because if you think about that, cash in the normal world, in an everyday world, if we, if we say that some transaction is cash, that means that it's, final, that is settled, that is not based on debt, that is, basically, may-- sometimes we use cash in order to indicate, to indicate privacy. So, for example, you are a fugitive, you are on the run, so you cannot Cards because that will be traceable, so you want to use cash, and this was the, the main meaning, in which the Cyberpunk people were using the word cash. Digital cash meant some kind of di-digital means of payment which is not as traceable as credit cards or, or PayPal. but there is no actual reason to associate the word cash to something which is very cheap or very fast to move at across, long distances over the world. If you think about that, if you're going to say And if you're going to send a, a PayPal transaction to somebody from Asia to California, then that's very cheap and that's very fast, because that's not cash, that's just a debt, with the counterparty, which is PayPal. But if you try to send actual cash, physical cash from, from China to California, that's the opposite of cheap and fast cash, since it is, I mean, more private, more fungible, more final, As a settlement, cash is, as, as some advantages over scriptural money, for example, a, a bank transfer, but it also have some disadvantages, and these disadvantages are usually that cash is, more expensive and more slow to move across, big distances. So it's crazy that people started to use the, the, the word cash, used by Satoshi Nakamoto and other cypherpunk pioneers in order to, to make people believe that the original- Original conception of these guys were that, there are no trade-offs, no technical trade-offs, and we can have a system which is both, censorship resistant and a-able to resist to state censorship, but also super cheap and super fast to move across bi-distances. Ironically, the, the real Bitcoin, the, the actual Bitcoin, the only Bitcoin, serious people is working on, is also going there, is also going to be very, very cheap and very, very fast Fast to move across distances, for example, with, Layer 2 and the Lightning Network and other, and other kind of, layerized technologies, and stack. So we are getting there. Bitcoin is cash, and Bitcoin is kind of easy to and cheap and fast to transfer, but that's not the point about, the cash word at all. So this narrative was basically a, a, a, a, a collection of, terminology, abusers basically."
    },
    {
      "speaker": "stephan",
      "time": "33:09",
      "start": 1988.75,
      "text": "Yeah, and fantastic. And I think one more point that might be really good to hit as well is that some of the people promoting this whole B-Cash idea, they throw confusion, they throw this sort of doubt there and say, \"Oh, well, you don't need to run a node, there will be enough other big nodes, and you just run a non-validating wallet.\" What are your thoughts on that, and why is that inadequate?"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "33:34",
      "start": 2014.14,
      "text": "Yeah, this is again, consequence of another lack of terminology clarity in Bitcoin. So for example, the word, we, we discussed the words, Bitcoin consensus fork, cash, but also the word node is very, very ambiguous in, inside Bitcoin. Yet, I mean, I think eventually it will clarify a little bit, it will basically, ossify around some kind of definition, but so far it's still very ambiguous. So when Satoshi Nakamoto started with the idea, everybody was basically running the same s- the same kind of, software. There was not any kind of differentiation, there was not any kind of, basically, you know, division of labor across the network. So everybody was running the Bitcoin software, and the Bitcoin software was doing a lot of things. It was, running as a wallet, so allowing you to sign transactions, it was, running a-and to keep your private keys. It was running as a validating node, so allowing you to validate if transactions, in Bitcoin are valid and are, so if they are valid as signature and as rules, and if they are confirmed. So if they- They are valid as, let's say, inflation control and, anti-double spending. a-and also, the, the same software were u-were used also to produce new blocks, so to also, increase the blockchain and, build the blockchain and, generate new blocks, including transaction and also distributing the supply of Bitcoin, via the, the Coinbase of the blocks. So there were, and- And this last function of a node, back then, was also itself, a collection of two very different functions. One function is to, set the relative chronology of transactions in order to prevent double spending, and the other function is to, generate and, and spread around the new, monetary supply. for example, these aren't the same things. They, they are, they have been down, they have been done together, and it was very smart. idea by Satoshi to do, to, to unify this, function in, in the mining process, but eventually, for example, when, the, when the, new supply, will stop growing when the coin base will go, when the, when the block subsidy will go to zero and the coin base will only consist of, block fees, then the, the function of distributing coin will disappear and only the function of, building the blockchain, avoiding double spending will remain. So there are very different functions, and the word node at the beginning was indicating a collection of all the function. Then the system evolved and the first my- Miners stopped using the same Bitcoin software of the others and gener- and what Satoshi were calling generating nodes, this kind of specialized users started to, to, basically, to be moved to mining farms and mining pools and, and ASICs and stuff like that, while everybody continue to run, to run a validating node in order to be sure that, that, that you have been paid. The only way in Bitcoin where you can be sure you have been paid is to run a Bitcoin validating node. And right now in the technical consensus of basically all the, the, the knowledgeable developers, when they say node, they don't mean Generating nodes, so somebody running, the mining software with the mining ASICs in order to, build up the blockchain and pro- and, and to distribute new coins. But, they, they mean people, basically validating incoming transaction in order to understand if these trans- these transactions are valid or they are double spend or they are fake or they are maybe, producing inflation, against the rules of, Bitcoin monetary policy. So, right now there is, Reportedly, no way to validate an incoming transaction unless you run a node which includes downloading all the blockchain, everything, and validating all the blockchain. That's the only way in which you can be sure your payment is valid from a technical point of view. Otherwise, you have to trust somebody. So you can just, I mean, if you use a mobile wallet, except for a very few exception like AB Core, which is a Bitcoin Core implementation for Android, but- E-exccept with very few exception, when you run a, a Bitcoin wallet on your cell phone, you are, you are using the wallet function, so you are storing the keys and you are, signing with your keys, but you're not using the node function, so you aren't validating what you receive. sometimes you are trusting some companies to tell you that you received some money. For example, if you use a ledger wallet software, Ledger Live, the ledger company will tell you that you received Money. If you use Mycelium, the Mycelium company will tell you that, you will receive money, which means that you are trusting them, which means that if a government wants to subpoena them to tell you a lie, they can, if they get compromised by an internal, I mean, with an employee go, with a rogue employee, they can lie to you, or the company can do an exit scam, of course. This big company I just named will probably not, exit scam on you because there is, there are reputational and check imbalances, but technically they can. or, even worse, some wallet, they, they followed something that, basically there is yet another terminology, misunderstand, misunderstanding, which is, about SPV. So, in the white paper, Satoshi was, designing the Bitcoin structure, very incomplete back then. I mean, the white paper is incomplete, it doesn't talk about supply cap, it doesn't talk about implementing, implementing- details, it doesn't talk about a lot of stuff. But, it also, imagine a new features called simple payment verification or SPV, in which basically, you, you, you only, download and, and check the headers of the block and not the blocks themselves. And then you check if a transaction that you want to validate is inside, is committed to inside the Merkle root Inside the header of a block. If that's true, it means the majority of hashing power accepted that transaction as valid, and if that's true, it means that, probably the transaction was valid. So this is a smart trick in order to use game theory. I mean, you assume that the majority of, you, you assume that the majority of hashing power is, honest, about valid transaction, and then you can just ask them, you basically ask miner to validate, your transaction, so you trust miners, which is, I mean, Satoshi Nakamoto, i-in the white paper itself, he was recognizing that this is potentially very bad because, if you use this kind of, of trust ma- trust, trust model, then the majority of hashing power- Can not only double spend or org, now they can also, include the invalid, invalid, invalid transaction, for example, inflation, they can steal, money from people, they can, I mean, you can have a, a hashin majority, stealing all the money from the wallet of WikiLeaks because the government said so, or, or creating, two hundred percent inflation because the government said so. so it's very bad as a model. Instead of having the hashim, the hashim majority only capable of reorgs, which is already, I mean, reorgs are, are, are a threat, but they aren't a total threat. They, they can't do anything. They can only double spend money. instead, if we, if we switch to this, SPV model, they can do basically everything. hash power majority becomes all powerful and they can change all the rules of Bitcoin, inflating or stealing. In order to counteract this, Satoshi Nakamoto were, imagining, this kind of, solution in which we use, cryptographic fraud proofs. In which, if I, if, somebody with a full node is detecting a fake transaction, they can, spread around, some kind of alert which is cryptographically provable by any, anybody, and everybody will, will be alerted that the, the miners are trying to scam them, and they will, exclude the node Accept this, this, fake, invalid transaction. The problem is that, Satoshi Nakamoto never implemented this fraud proof, model, and there are strong theoretical arguments that this, theoretical fraud proof model can't even be implemented because there are a lot of, I mean, false positive, si-"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "42:57",
      "start": 2576.58,
      "text": "Let's say, CBI attacks, you can basically have, an attack of denial of services in which everybody tries to create fake, fraud proof. So this model never worked, and some wallets started to promote a function that they called SPV. I think it was Mike Hearn, the guy that declared Bitcoin dead in 2015 and moved on to work for bank blockchains. Mike Hearn, he created the, the, the first- The, model in which basically you stop validating, you just trust the random miner, mining majorities, and, instead of validating the transaction, you, you, you trust that the, the mining, the hash rate majority is not honest, only about chronology, but is also honest about majority, which is, I mean, with the, the current centralization of, ASIC production under Bitmain, for example we have seen is completely not, something to take for granted. So, yeah, notes is also a word that we should be very careful about."
    },
    {
      "speaker": "stephan",
      "time": "44:06",
      "start": 2645.89,
      "text": "Excellent stuff. I think one more area that can drive confusion for newbies is just around the way journalists present this con-- this question of, are there multiple bitcoins? And they might also present it in a different way, so they might sort of present it from like a nuance and balance kind of doctrine or that- They might try and think of it like, \"Oh, I need to present the other side as though it's equal weight, \" but in reality, we know that, right? You know, Bitcoin's value and B-Cash value, B-Cash is like three percent or less of Bitcoin, so they're not even equal. Or another example might be on-chain scaling versus off-chain scaling, right? Presented as though they're equal. Do you have any thoughts on that? Or ways for a newbie to, you know, protect themselves or be wary?"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "44:52",
      "start": 2692.26,
      "text": "Yeah, so it's, it's You're a newbie because, eventually, you will have-- I mean, right now when you enter this kind of, debate, you're not just hearing two people disagreeing about one technical things. They are, they-- you basically have two people, or, or two groups disagreeing about the honesty of the other group. So, what is usually called, the, the Bitcoin core side of the debate, which is a, a misrepresentation, as we said, because Bitcoin po-core is just one implementation of the Bitcoin protocol. these people is not just telling the newbie that, other people are wrong about, for example, scalability. So, let's open a parenthesis here. Scalability, scalability is a term which doesn't mean that, we, for example, we double the number of- Transaction scalability is a specific technical term, and there is basically no, technically speaking, if you speak with an engineer which knows what scale-scalability means, there is no way that, that a global consensus system where every transaction must be recorded by everybody forever. So in Bitcoin, layer one in the Bitcoin blockchain, the Bitcoin blockchain is great to bootstrap Bitcoin, it was a great technical achievement, but it is a global- Global, consensus structure. That means that when you buy, a coffee with your Bitcoin, your coffee purchase will have to be recorded, downloaded, and validated even in year two, two, two thousand one hundred thirty by everybody. So every peer of the network will have to download that state change forever and to validate it in order to be sure and not to trust somebody else, which is very bad for scalability, which basically prevents scalability in In a, in a, in a technical term. Of course, we, we have-- we can reach a better scale of transactions, on chain, but scale isn't the same of scalability. scalability means something that can scale in a certain way, and the global consensus system can't technically scale at a certain way. So when we have this kind of debate, one side of the, the-- perceive the debate isn't just telling you that the other side is technically wrong. Instead- Telling you that the other side is actually, misrepresenting terminology is basically lying to you. So they're saying, look, everybody which has any knowledge about this, this technology knows that the global consensus system can't achieve scalability without layerization, and everybody who's telling you the otherwise is not just wrong, if you, is basically lying to you about some, fundamental- Trade-offs in technology. And, and if you switch to the other perceived side of the debate, they're, they're not just telling you, I don't know, this Bitcoin developer is wrong, I don't know, Adam Beck is wrong, Luke Dashier is wrong, Peter Wiler is wrong, or, or Greg Maxwell is wrong. No, they are telling you that these guys are lying and that there is a conspiracy. this is a typical like populist conspiracy theory. So when there is some kind of- Kind of scarcity in life, some, some kind of, of, trade-off, some kind of sacrifice, sacrifice to make. For example, you can't have your cake and, and eat it too. Then there is this, this tendency, this social tendency, this social dynamics in which, people tend to create a conspiracy theory. So it's not that food is scarce or life is scarce or health is scarce because that's how reality works. These things are scarce because Somebody, some elite of evil reptilians is creating a conspiracy in order to artificially, take it away from us. So, you know, the typical populist approach is there is money for everybody, free money for everybody, work for everybody, girlfriends and boyfriends for everybody. The only reason you suffer in life is because some conspiracy is, artificially taking it away from you. you can see that in movies as well. For example, if you, if you look at science- speaks of movies like, In Time or Elysium, you find this typical conspiracy theory. Everything is free for everybody forever, there is no suffering in life, there is no sacrifice, there is no trade-off, but the only reason it appears to be a trade-off is because some, some, some, cabal of, of, conspiracy reptilians are taking it away from you. So the, the two sides of the, let's, quote-unquote debate here are not just people disagreeing About technical stuff. Once, one side is telling you that the others are actually technically incompetent and liars and basically frauds, and the other guys are telling you that the other sides are, part of a secret conspiracy in order to, to, to create a trade-off, a technical trade-off that doesn't exist for some kind of very obscure reasons and conflicts of interest. So when you as a new newbie, which can be like a reader of news or a journalist itself, because many journalists aren't able, since the beginning to address this very complex topic. So you have just one choice, you have to understand that somebody is lying to you. And when you know, because logically, I mean, I, maybe they're both lying, maybe one is lying A, or maybe the other one is lying B, but it's logically not possible that they are all in good faith. So when you're not just witnessing To a, a technical disagreement, but you're wi-witnessing to actually a mutual accusation or being dishonest. You can't just pretend that, I mean, you're just exposing two sides of a technical truth. the same thing is going on, for example, think about the flat Earth hypothesis. So some people think that the Earth is flat. So, they're, they're not just disagreeing about a technical detail. there are the, the, the, the ex- Experts in geology, they are telling you that there is over, overwhelming evidence that the, the Earth is, round shaped, is like a kind of a sphere, and, and they're telling you that the other guys aren't just disagreeing, they are telling you that the other guys are basically, fraudsters trying to sell something which is absolutely impossible or discredited, and so that they are either incredibly incompetent or liars. And the flat earthers Will not tell you that they just disagrees, about, about the Earth being flat. They will tell you that there is a giant conspiracy in order to fake, space photographs, to fake, flight, flight routes, to fake, textbooks of geology. So there, there is a strong, let's say total, accusation of mutual dishonesty here. So if you're a newbie, I'm sorry, but you can't- Not pretend to stay, equidistant. You have to, the only way you can settle this stuff is to stop being a newbie and to start to verify the arguments that each side is, promoting, and then you have to enter into details and you have to verify yourself, who is lying and who isn't. And, I'm sorry, there's no other way around. I know that division of labor is the, is the pillar of society, so a journalist may think, you know, I'm not technical, so I'm not Supposed to understand, the trade-off between validation and, and, and transaction, and not supposed to, to understand, what is a propagation delay, what is a orphan rate, I mean, I'm not supposed to do, to know this stuff. But if you want to clarify things, I'm sorry, but you are supposed to. Either you choose to just, refrain from any judgment and stop, arguing about this stuff and, and, and, and shut up basically. So you- You have two choice. Either you shut up and then you can not enter into details and you shut up and you let other people to figure out, or if you want, especially if you want to help people to clarify, to study, to talk about something, then you have to, let's say, become a little bit more technical in order to be, able to understand which, quote unquote side is lying. My take, but you don't have to trust me, if you are a newbie, you should verify. My take is that, there is no actual debate here. There is a one group of, technically and economically, educated people who understand Bitcoin, and this group of people, they aren't agreeing about everything. They are disagreeing strongly about a lot of stuff. For example, they disagree about stuff outside Bitcoin. Right now, everybody in Bitcoin Twitter is insulting each other about, about the inclusion and, and, all this kind of, I mean, so social justice, theories and stuff like that. But they also disagree about things inside Bitcoin. For example, Luke Dashier and Nicolas Zorzi and Peter Todd think that new Trino validation, new Trino validation less wallet for Lightning are a dangerous thing, while, great developers, very Competent developers are wor-working on the Lightning Network, they think that it's a great thing, it's a, it's a very positive thing that can help the network. So there is a strong disagreement there. There is also disagreement about, Rusty Russell is scared that the, the long term security of Bitcoin is, is, somehow, somehow not, not great because of, some kind of, of, dynamics, and other people completely disagree with him. So, there, there is one side which is not about people, agreeing about everything. They disagree a lot, but they, s-some, some of them will be right at the end, and some of them will be wrong, but they aren't actually- Really being dishonest and they aren't lying about factual things. While there is another group of people that aren't disagreeing about technical things, they are lying. For example, these people, they were s- telling people that Seg- SegWit Witness had some kind of tragic vulnerability, this was a lie, probably so, because nobody would, was ever able to exploit this, this fake, this fake, vulnerability. They were saying people that SegWit SegWit Witness was Was patented by Blockstream, secret, secret, secret, society, which was a lie. their same, I mean, the, the, the typical example of, of, of a liar, which is a professional con artist, is Craig Steven Wright, the, the pamper of the, BSV, version of Bitcoin Cash, is the archi-archetypal example of a liar. He lies about everything. Constantly, continuously, because that's its job. I mean, his job is to be a con artist. So that, that's actually how he makes a living. but there are other people which are just a-as, as dishonest as him, Roger Ver. I mean, you don't have to take my word for it, but if you check, facts, about what Roger Ver is saying, you will say that he's lying. same goes for, Brian Armstrong or other people in the space. sure, Famous, powerful, rich, but that doesn't mean that they are honest. you can actually verify the lies."
    },
    {
      "speaker": "stephan",
      "time": "56:56",
      "start": 3415.5,
      "text": "Yeah, exactly. great points, Giacomo, very well articulated. I think, perhaps we could just leave for the newbie listeners, just tell them what are some, you know, resources or things in your mind that you think they should be wary of, that, that might lead them the wrong way. For example, Bitcoin dot com."
    },
    {
      "speaker": "giacomo_zucco",
      "time": "57:13",
      "start": 3432.59,
      "text": "yeah, Bitcoin dot com is a typical example of something which is called cybersquatting. So you You know that, for example, the, back then there was a, a website called WhiteHouse dot com. then unlike WhiteIs-WhiteHouse dot gov, which was, bringing you to the website of the White House, they were bringing you to a, a porn website. But then they understood that it was even funnier to pur- to bring you, to a, a political website that was, basically, insulting the current, president in the White House. So, the, or the- There is, for example, somebody,"
    },
    {
      "speaker": "giacomo_zucco",
      "time": "57:52",
      "start": 3472.31,
      "text": "basically registered the martinlutherking dot com website, sorry, martinlutherking dot com, creating a fake website, now, now it was taken down, but back then there was, the content of this website was a, a, a fake official martin luther king website, which some kind of fake quotes and fake sentences attributed, misattributed to martin luther king in order to make him look bad, and it was- Created by anti-Martin Luther King people. So this is not news, in the internet, you can, register a website and, you can use that website, either to support something or to fight that something spreading misconception and lies about that. There are a lot of other example, including like peris dot org about Peris Hilton and Jennifer Lopez. You can find a lot of example of cyber squatting. So, bitcoin dot com is actually such a thing. It's a website where you go, you think you're, you're learning about Bitcoin, but these guys are actually selling you, Bitcoin Cash and a lot of lies about how Bitcoin works and, and about what Bitcoin is. And, and you should be very wary, wary of that. Also, the Coinbase, exchange, has a very long history of, being anti-Bitcoin in his, ethos and ethics and, and business behavior, and they are also spreading lies, I mean, you were calling it, Coinbase instead of Coinbase, which is, I think, is a very appropriate, it's a very appropriate, joke. it's, it's very interesting to think that, with some exception, e-every company that use a technical term inside Bitcoin as the name of the company, and that's a very, that's a, that's a typical red flag, you know. Coinbase is a technical term created, invented by Satoshi Nakamoto to indicate the first transaction of a block, the one creating the new block subsidy and collecting the fees. So the Coinbase company, is, registering and using commercially a technical term. The same goes for Bitcoin dot com, a company using the Bitcoin word, as the brand of the company. Let's imagine somebody using e- Internet dot com as a name for a company spreading lies about the internet. That's crazy, right? But also blockchain dot com, it's another example of that, which is basically invested by the same people. It was a great wallet back then in two thousand and thirteen, and then it degenerated into being one of the worst technical wallet ever. it's, it's terrible from a technical point of view and also participating into, campaigns to discredit Bitcoin and to promote, shitcoins. And, I mean, this, rule of the thumb, like, if you use a terminal, a termi- a technical term in order to, indicate your company, doesn't always apply. For example, when I, when I talk, when I talked about this rule, of the thumb, people from Ledger, criticized me like, \"Wait, Ledger is also a critical term, but we aren't scamming.\" okay. also there is a- there is a BitPay. BitPay is a typical company w-which was promoting, spreading lies. I mean, BitPay people, and Coinbase people, they sent an email to all the user saying that there was a require-required upgrade of the Bitcoin protocol in order to push for the BTC1 implementation by Jeff Garzik, which was the same implementation that was completely broken, and if adopted, it would have killed the network overnight. So, the, the enactment- Well, a broken implementation that could have destroyed Bitcoin if adopted was sold by BitPay and Coinbase as a mandatory upgrade of the network. So these companies, I mean, they never-- the, the, the CEOs of these companies, they never apologized, they never rectified, they never did a postmortem. So this is not just about, digging in the past and being resentful for past attacks. Sure, I mean, we don't forget, and we may forgive If at least people was apologizing for what they did and explaining their behavior, but since they didn't explain, we have to assume that people behind Coinbase and behind, behind BitPay are still, highly adversarial people trying to hurt the Bitcoin project. of course, there are also other kind of, of entities like, CoinDesk, it was, I mean, Digital Asset Holdings was participating to the New York agreement attack, so CoinDesk is right now not really is not at all a trust, trustable, trusted source of news about, Bitcoin stuff. First of all, they mostly talk about shitcoins and private blockchain, snake oil, but also when they talk about Bitcoin, they have a past of spreading lies about Bitcoin, like the, the lies we were telling before. And also you have a lot of, I mean, I will be very wary and I will be very, very, very, very cautious to listen Listen to people that, use ambiguity and misconception in order to get visibility and attention. For example, Andrew Desantis, Chris De Rose. These are, these are smart people, these aren't stupid. They know that, what is going on, but they know that if they, they play with misconceptions and they play with ambiguities and they try to create confusion, they can profit visibility from this kind of confusion. And I'm sorry to say, I mean, and- I'm not naming names now because, I don't want to, to, to, to put more fuel on, on, on the fire, but there are some major podcasts that, are kind of, scarily going into that direction right now about Bitcoin. so if you see, some kind of confusion, the ethical thing to do is to try to study and to clarify the confusion, not to, boost the confusion, not to spread the confusion in order to profit visibility from that."
    },
    {
      "speaker": "stephan",
      "time": "01:04:01",
      "start": 3841.97,
      "text": "Fantastic Giacomo, excellent explanation. I think that'll really help, the newbies to Bitcoin. look, I think, so if you're a newbie listening, make sure you follow Giacomo. He's a really good guy to follow. He's very funny and he also puts out a lot of good info as well. So Giacomo, just give the listeners a quick, you know, update on yourself and where they can follow you, what you're doing, that kind of thing."
    },
    {
      "speaker": "giacomo_zucco",
      "time": "01:04:23",
      "start": 3863.86,
      "text": "So, what I do, what I do is, Tina got involved in Bitcoin and started to participate to some startups. For example, I work for Lawrence Naum for the Green Wallet and other small startups, many of them has failed, rightfully so, because they were bad ideas, but some of them were, made pretty, pretty, pretty, pretty good. And then I started to, do two things, consultancy to, institutional, and, and incum, financial incumbents, and, support for open source development. We created the Blockchain Lab in Milan. There was a place for developers, Bitcoin developers, to stay for free and to work together, and we, helped, we helped the, the launch of some common standards like, Bolt for Lightning, OpenStamps, RGB for assets, and so and so. So what I mostly did in my life was to support, Bitcoin open standards and to, use the knowledge I was gathering from, from, from that activity in order to sell consultancy. Right now, I'm switching from consulting Tendency to education full time because consulting is getting boring and education is more, is, is, is, is better for me, is more satisfying. So, I joined a company called B Academy, and, with my network, with my previous network, BHB network, I'm basically, joining this education effort, together with other friends in the Bitcoin sector in order to provide courses and, and stuff like that. And, and I'm- Trying to unify my, my nonprofit, open source, support effort with other people with something called the B, which is like a foundation in order to reach, to gather donation and to grant, bounties to Bitcoin developers is, is proving-- I mean, we started this effort almost one year ago and it's proving super difficult, so I, I still don't know what this second kind of effort will, where it will lead me. But if you want to follow me, yeah, as, as Stephan said, you can follow me on Twitter. I can be, triggering, an offensive on Twitter, so, I mean, warnings and, and parental advisory, I can be triggering, but I try to also be, honest and informative. right now I don't, unfortunately I don't, I'm not really curating my online presence, so I don't have an updated website or stuff like that. so- So Twitter is right now mostly my, the epicenter of my online presence. But from there, I mean, you can find me on Telegram in different chats, so you can find me, Yeah, some, GitHub or Slack and, and stuff, but mostly Twitter is the center of my presence right now."
    },
    {
      "speaker": "stephan",
      "time": "01:07:18",
      "start": 4038.52,
      "text": "Fantastic. Well, look, I think that's pretty much gonna do it for this episode. So, once again, thank you for coming on the show, Giacomo."
    },
    {
      "speaker": "giacomo_zucco",
      "time": "01:07:25",
      "start": 4045.21,
      "text": "Thank you for having me, and, congratulation for the, for the show."
    },
    {
      "speaker": "stephan",
      "time": "01:07:28",
      "start": 4048.65,
      "text": "I hope you guys enjoyed those explanations by Giacomo. I think he's really good at explaining some of these things. He's definitely a must-follow on Twitter as well, so make sure you go find"
    },
    {
      "speaker": "stephan",
      "time": "01:07:41",
      "start": 4061.14,
      "text": "Make sure you also listen to my earlier episode seventy one, the intro to Bitcoin Austrian Thought. I think that's a really good one for anyone new to Bitcoin or who hasn't necessarily heard it from that perspective. And you can find my podcast on all the major podcast platforms, Apple, Spotify, Breaker, etcetera. And also, you can find me on Twitter, my handle is at Stephan Livera. My DMs are open, so you can ask me questions there as well. Happy to help. That's it from me for this one."
    }
  ]
}