Transcript 0:00 [upbeat music] We are back with a spicy episode today. This is Bitcoin Season 2, Writers Room. 0:17 What's up, Colin? Mmm, what's up, Charlie? Might get us canceled. Might be the last Writers Room. Oh, man. We are going- Might get us canceled. 0:24 We're gonna get dragged for this one, and it, and the only reason we're gonna get dragged is 'cause we're two armchair goofballs- [laughs]... talking about the spiciest subject in Bitcoin. 0:34 It's been the thing that everybody's lost friends over, over the past, like, five to seven years, and that is Bitcoin scaling. But Bitcoin scaling, because it sounds like, Colin, God forbid, that the cashies are back. 0:49 I've been seeing- The cashies- I've been seeing that-... are back... the cashies are back. Like, we managed to get Craig Wright sentenced to, like, one or two years or something. I think it was one year. Great. Yeah. 0:59 Yeah. Yeah. Get his ass out of here. It's- Screw that dude. This topic is the, it's like what Mark said about communism. It's the shadow that's haunting, not all of Europe, but all of the Bitcoin ecosystem. Ooh, yeah. 1:12 And that is that the block says war was fought, but did it ever end? Or was that just one battle? 1:18 Uh, are, are we saying it's like the, uh, the Korean War, where it's like technically there's just an armistice, and it's, it's kind of just [laughs] at a ceasefire indefinitely? [laughs] That's actually a good analogy. 1:29 And the thing, the thing is that, um, everybody's like, I've, I've... We've seen this past week or two, it seems like the whole block size discussion has kind of crept back into discourse or, or has it? 1:41 Like, did it ever leave? Um, the thing is there are accusations flying, and there are some Bitcoin developers who are starting to sound a little bit like big blockers, but, but 1:52 the reality is that it's probably a very nuanced conversation. We'll get into that. Um, we will attempt to try to dissect this conversation a little bit more than your average 256-character Twitter post. 2:09 So, but before that, a word from our sponsor. [upbeat music] Bitcoin Season 2 is brought to you by Botanix. 2:15 Botanix Labs is pioneering a new direction for DeFi with the first EVM L2 running on Bitcoin that's built to be forward secure, decentralized, and share gas fees generated by the network with users. 2:29 See the future of DeFi at Botanix, botanixlabs.xyz. Yeah, I just noticed that I'm wearing the same shirt as that- Yep... uh, [laughs] that reads from- Same, same hoodie. Same hoodie. Same. It's 'cause it's a good one. 2:44 Um, I think before we get into trying to address the nuance of, uh, the whole, like, big block, you know, Bitcoin developer conversation, maybe we touch on, like, the thing that is sucking all the air out of the room this week, which is the strategic Bitcoin reserve, Colin. 3:01 Yeah. How do you wanna approach this topic? [laughs] I think that there are kind of two ways to approach it in terms of what's actually going to happen or what's most, most feasible. 3:14 So we had Pierre Rochard on the mining pod. We recorded that this week, and we're gonna h- put that out over the holiday week next week. 3:22 And he basically made the point that Trump doesn't even have to do anything to establish it, and this was kind of what he said in his Bitcoin 2024 keynote, was that 3:32 he never said they were gonna, he was gonna buy Bitcoin. 3:34 He never said he wanted to accumulate it in the same way that Cynthia Lummis has proposed a bill where we'll buy up to, like, a million Bitcoin or something like that over the course of however many years. 3:46 He just said that we're not gonna sell what the US government currently custodies. So the US government has like, what, 220,000 Bitcoin that it's seized from dark web markets mostly over the years. Mm-hmm. 3:58 So from day one, this could be established, and kind of already is established, if you wanna make that argument, by just saying that we're not gonna sell that, right? 4:08 I think that's a very different thing than the second notion of what Lummis is proposing, where the United States actively accumulates Bitcoin. Yeah. 4:18 I think that is the one that maybe gets some of the people who are against this a little more, eh, you know, makes them a little more uneasy. 4:27 And with good reason, because I do think that there are legitimate arguments for or against this. 4:34 I think that just to break it down for anyone who is not paying attention to these things like us, who, like, like, are your, your, your hosts who are chronically online- Yep... 4:43 and having their faces, you know, decayed from blue light- [laughs]... all day. Exactly. Um, 4:48 the idea is that the United States would establish a strategic Bitcoin reserve in the same way that they have a strategic gold reserve, and the game theory f- from the standpoint is as a way to hedge the dollar's decline. 5:00 And if Bitcoin eventually goes to where we hope it goes, then they are going to have a huge war chest, which they can then use for any number of domestic foreign policy, uh, pulling economic levers, things like that. 5:14 [sniffs] Now, the pro here is obvious. Bitcoin goes to- To the moon... whatever price point. 5:21 To the moon, the United States has potentially trillions of dollars at its disposal, um, that it can use to assert its dominance [laughs] and continue the empire's, uh, reign, you know? Yeah, it solves the national debt. 5:36 We, uh- Yeah... we just front run the nation- That's-... state game theory... a better way to put it. And, yeah. Yeah. 5:41 It's like this could eventually be something used to dissolve the US's debt rather than defaulting on that debt or inflating it away, which is the latter is what we're currently doing. 5:50 Um, the negative here or the, the con, which is, I think, lesser appreciated or maybe I would say hotly debated. 5:57 Because the first one with the pro in terms of, like, this is what could happen is, like, pretty cut and dry. 6:02 But the con is that if the US startsHoarding Bitcoin, we might get ossification of the protocol layer quicker than we otherwise would, because now you have one of- like, the world's superpower holding an outsized stake, maybe as much as 5% of the entire Bitcoin supply, and at that point, you know, will they actually be okay with developers proposing things that maybe aren't in its, their best interest and proposing things that might be of a detriment to their monop- control over, monopoly over the currency supply, over the US dollar? 6:41 Now, the common retort here... Sorry, I'm just laying the groundwork. I'll be done soon. Yeah, yeah. 6:45 Like, the common retort here is, "Well, I have my node, one node, one vote, therefore any code that I run is going to be the Bitcoin, and they can't force me to do anything." 6:54 This was the kind of the lesson from the block size wars a lot of Bitcoiners took. 6:57 And like, while that's all fine and good, and theoretically, yes, like, you decide the code that's running on your node, ultimately, economic nodes and the, the institutions and individuals that hold the most Bitcoin can sway market forces to the point of where they can dump coins for a contentious fork or buy coins of a contentious fork and sway not just the market, but the hash economics of that chain. 7:22 And then it's great that you run your own code, but if the US government and BlackRock dump your Bitcoin for their Bitcoin, it doesn't really matter in terms of your economics buying power. Um, so was that- Yeah. 7:35 So, uh- I- That's the thing. 7:36 Like- It's like the, the particip- participants of the network, um, the network's gonna reflect, like, who the participants in it are, and if, if the participants are your nation states, the interests and future development of the network, if there's any, will look like that of the interests of the nation states. 7:53 And some people think that's a great thing. Um, I f- again, I have a qual- you know, nuanced opinion about what I think we should and shouldn't do. 8:07 This is the thing is, like, you know, if you're a Jason Lowry fanboy, and you s- you sit up all da- all night thinking of new ways to, like, armor the United States against a hash offender- [laughs]... 8:18 then like, yeah, this is, like, great. 8:20 The US should totally buy a bunch of Bitcoin and, like, just convert that and turn the entire country into a giant data center that mines Bitcoin and shoots hashes at your enemies, or the hell, whatever he's talking about. 8:34 Uh, this is not probably the best, uh, it's probably not totally aligned with freedom money if you're that type of person. You're more like nat- national money, and, um, yeah, probably get dragged for having that, 8:50 being that reductionist, but, you know, you got that kind of thing going on. The thing is, like, uh, we will take a step back and sit. 8:57 Let's, let's, like, all pat ourselves on the back because we finally got to the point- [laughs]... where we're actually talking about this as a concern. I, I think that's a really important point. Um, like, what? 9:13 Not two years ago, the entire- We thought it was over [laughs]... industry was blowing up. Bitcoin was nuking. People were fleeing the US. Was- Coinbase was like, "Well, we might just leave." 9:25 Every, every creditor in, in the business, like, e- every, every crypto lender, Bitcoin lender, multiple exchanges were getting butt-fucked. Like [laughs]... [laughs]... 9:35 the FTX fallout really, if for anyone who wasn't around, like, it cannot be overstated. It was c- catastrophic. It was terrible. 9:43 It, it, there was a domino effect of insolvencies, and it was yet another time where people were like, "See? I was right about that Bitcoin thing. It's dead." 9:52 Bitcoin fell to its 2017 high basically, and, and was below, was at, like, 15, 16K for a few months. It was awful. It was awful. 10:01 And it's incredible that not, not, not two years later, or basically two years later, because that was in November. I remember very vividly watching everything go down o- on the final days of my honeymoon [laughs] so. 10:12 But now, now the president is literally saying, "Yeah, I'd like to see, uh- Yeah... Bitcoin at $150,000, or else, uh, I think that's kind of my, like, watermark for success." I'm like [laughs] Wow. Like we're- Wow... 10:23 50% increase, and then we're there? Yeah. Like, got- you got it, Donald. Like- Yeah... we can get you there, bud. I do think that. Yeah, so I think it is a testament. We went from 10:32 ETF to strategic reserve, you know, within the, the span of a year. But this is part of the problem, right? Because these are not metrics that I think the original... And I don't wanna... 10:45 That, that's such a, a weird thing to invoke, like the OGs. Yeah. 10:48 But if you look at old Bitcoin talk forums, and you look at why Satoshi, like, his own writings about why he launched the project and early adopters, th- that would not be a metric for success to them, right? 11:00 Like, the metric for success is- That would be, that would be, uh, an inevitability along this path- Yes... to global adoption- Yes... but not a metric for is this network successful. 11:09 This, like, distinction is probably- Yeah... really important, like- Yeah... to hammer home. Yeah, 100%. I, I think that that's a really good way to put it, like the inevitable versus the ideal. Yeah. 11:21 And as we were saying before we started recording, that's been my, like, mental model update for a lot of things geopolitically, and, and econom- and financially, and without Bitcoin re- uh, within and without Bitcoin recently, is, is where pragmatism and idealism butt heads. 11:35 Um, and yeah, a- and I think that a lot of people, when you, when anyone has kind of said anything negative about the strategic Bitcoin reserve, or when I tweeted about MicroStrategy owning 2% of the Bitcoin supply not being, like, the best thing for the network- Like, bro, that's always gonna happen. 11:50 Do you want Bitcoin- Yeah... to not succeed? I'm like, w- well, no. Right. I've, I've- Yeah. If you think Bitcoin goes to 10 million, this is inevitable, but it's- Yeah... not... 12:01 It's weird to, it's, uh, it's like, um, it's like the Ben Asserin quote from, uh-The, the, the movie, um, about the 2008 financial crisis, The Big Short. Yeah. 12:13 Uh, he's like, "Just, just don't, just don't clap, or just don't dance." Yeah, yeah. That, with, uh, when Brad Pitt and the two other dudes, they're in the casino- Yeah... 12:19 and like they're like super stoked, and he's like, "People are gonna lose their homes over this." I feel like that's a, that's a really good corollary to this- Yeah... 12:24 'cause that's what a lot of the con- detractors are saying. It's like [laughs] he, like, "We're not gonna get covenants because of this." Yeah. Like, "People are not gonna be able to self-custody because of this." Yeah. 12:34 Like, you're gonna be happy that you got rich, but don't clap about it, um- Yeah, yeah. So, a lot of analogies there. Any, like, last thoughts before we transition to the even spicier, uh, more cancelable topic? 12:50 Uh, final thoughts about the strategic Bitcoin Reserve. Um, yeah, I don't think so. I, I think... Oh, no, actually this is my one final thought. 12:59 It, it really is one of those things where I'm torn as a Bitcoiner, because on the one hand, I don't think it's good for Bitcoin. On the other hand, if we do take the game theory seriously, 13:12 it would be probably better for the future of my, like, children and my children's children if the United States did do this. 13:21 Like, if Bitcoin really does just like giga moon over the next few decades, then us not having Bitcoin when the dollar gets demonetized is a really bad thing for the United States as a nation. So- Yeah... anyway. 13:37 Not to blow people. So yeah. Um, yeah. S- I, I mean, the, this is what the writers' room is for. We, uh, we, we, we, we get in the arena, the intellectual arena, and spar. 13:52 Um, and we are now going into the coliseum itself, and, uh, hopefully you are entertained. We who are about to die salute you. [laughs] Um, [laughs] the topic of the day, topic du jour is, 14:09 um, are the big blockers back? We, we, this, this is kind of, we're gonna originate from James O'Burns. I hope that's his name. James, please, James, come on the podcast. 14:22 [laughs] Uh, James O'Burns, um- Send us a DM please. Let us know- Yeah... that we're butchering that or not. 14:27 James O'Burns, James O'Burn has been, uh, on a heater lately, and, um, he's been having some long-form tweets which spur 14:35 a bunch of arguing in the develop- developer world, and sniping a lot of comments from people across the aisle. Um, and he's talking... So he's notably an independent, uh, active, uh, developer close to the Bitcoin core 14:52 world, and, um, there's not a lot of those truly independent ones. Um- I think he's one of the, one of the only really prominent ones at this point. Yeah. Most of them are- Well, I, I think maybe OpenSats. Or am I... 15:06 I think he's got some- I don't think he has funding currently. But maybe- Okay... 'cause like if, if, when we did the one on the CTV and Opcat activation matrix, like he was just a question mark. [laughs] Yeah. Yeah. 15:20 So, uh, so he's been, uh, critical of, of Core. Gonna hand wave here. And we, we will not be able to cover everything here. 15:30 But, uh, the tweet of the week is this one, and I will share it here, which is, um, oft-forgotten Bitcoin scaling limits. 15:40 This is from yesterday, and he says, "Many aren't aware of how limited current on-chain capacity is. Um, forget peer-to-peer commerce or checking account volume. 15:51 Even forget," I think this would shock a lot of people, "savings account volume. Um, even L2 use is out of reach, but, for all but two pers- 2.7% of the United States or.1% of the world." Some numbers. 16:08 And he goes into a long thread about basically saying, uh, how many transactions can we fit into a block? What if, um, X percent of the United States alone wants to self-custody? What happens if, um, 16:24 say, one-tenth of the United States, 20 to 30 million people, want to make a, a single transaction on-chain every month? 16:33 And basically, um, Bitcoin very quickly, it's not just, doesn't just get expensive, but literally becomes prohibitive, um, because we, there is not enough space for more people than 20 to 30 million people a month to make a single transaction. 16:53 And I think a lot of people would be surprised, 'cause, uh, uh, not many people really, I think, do the math or try to like take a crack at looking at, at what a real actively used Bitcoin network looks like. Mm-hmm. 17:07 And, um, he says, well, let's, well, let's say we, we, we do, uh, get these coins off exchanges and people are practicing self-custody. The solution is layer twos. Well, um, 17:18 he would, he does the math on like how much chain block space the, uh, layer twos would need to, to do similar types of activity. And the short version is, given our current understanding, it's like still prohibitive. 17:33 Very, very prohibitive. 17:34 And, um, this gets into like whenever we talk about scaling and we talk about Bitcoin does have a limited block space, um, like amount of transactions that can do a block space, um, like this inevitably turns into a block size 17:50 discussion. While James does not seem to explicitly be endorsing a block size increase, there is the implicit, uh, conversation about 18:01 like something's gotta give, and we either like do lock out most of the world from being able to use Bitcoin in a truly sovereign way given the current block size. 18:12 So like-His, I think his main point really is, and I'll just preface this as saying, we have to talk about... If we want Bitcoin to be accessible to more people in a sovereign way, we have to change something about it. 18:26 And if we're not going to change things, like adding new opcodes or covenants or other scaling proposals, the other proposal is to increase block size. 18:37 And I intuit what he's saying as, uh, he does not want to in- increase block size, and that's why he wants to push the conversation towards these other soft forks. Mm. 18:48 But a lot of people are interpreting this as the same type of criticism about Bitcoin itself and the, um, hegemony that Bitcoin Core has in the ecosystem. 19:01 Um, these are similar criticisms that what became the Bitcoin Cash, uh, hard fork in 2017. Similar criticisms that, that those people have, or had at then, uh, had at the time, and still have. So that 19:19 kind of context set, I'll toss it to you, Colin. That's good, good context. Yeah. And people might be confused as to maybe why we opened with the Bitcoin strategic reserve. But like, I think the reason... 19:29 Or strategic Bitcoin reserve. I keep flipping them, but you know what I mean. Yeah. The reason being James has been very vocal recently about some of the covenant proposals and other things, um, because 19:43 he's signaling along with others that we really only have so much time probably to get through meaningful changes to Bitcoin that don't do things like fix catastrophic things like quant- you know, like, uh, making it quantum resistant, uh, or fixing the, um, whatever the- I think- What is it? 19:58 The- The weird edge cases- Time, time-... the rounding errors and some of the great consensus cleanup The, the, the timestamp bug or whatever, what... You know what I'm talking about. I can't- Yeah... I'm, I'm blanking. 20:07 But we only have so much time probably to push through optional, if, if that's a good word for it, upgrades to Bitcoin that increase functionality. 20:18 Um, the other thing just to highlight the difference I think between this conversation potentially for people who are advocating may- for bigger blocks or like just saying even tangentially that, "Hey, we have a scaling issue here," what I think is funny is for the big blockers a la Roger Ver with BCash, their primary argument for bigger blocks was for Bitcoin as a transaction medium still. 20:40 It was like if we want the entire world to be spending this and to be using it as a means of exchange, they're not gonna be able to do that without an increased block size. 20:50 And I think that what I like, what I like about James is, is that this is grounded in a much more realistic discussion about Bitcoin use cases across the board for locking them in L2s, for, you know, cleaning up maybe your UTXOs, for sending to exchanges, ex- withdrawing from exchanges, all of these other things. 21:07 And I think it's another unfortunate reminder generally speaking that w- whether we like it or not, the way that Bitcoin truly scales is through centralized, you know, c- centralized, uh, 21:25 points, right? Or, or, or institutions- Well, yeah. I mean, yeah-... companies, all of like that... I'll, I'll help you get to this. It's like, um, the thing is like, uh, sovereignty is very difficult to achieve. 21:35 And, uh, convenience and, uh- Hey, Charlie... sovereignty is... What? Sorry, one second. Okay. I'll be right back. Keep, keep, keep talking. Yeah. To the, to the audience- Peace... I'll, I'll just, I'll keep riffing. 21:47 Convenience and sovereignty is often, uh, a trade-off. I'll highlight a comment we have in the, from the audience on YouTube from Amin. Believe it's Amin from Arch. Shout out, Amin. 21:58 Um, he asked, "Are you a big blocker, Charlie?" And I'll just say, uh, point-blank, no, I'm not. Um, I do not, uh, consider myself a big blocker, uh, at all similar to the cashies. Um, 22:13 uh, I would say, though, Amin, that while I'm not a big blocker, uh, I do find the conversation around things which are sacrosanct to talk about in the Bitcoin ecosystem very fascinating. 22:25 And I think the fallout from the block size war is that it made a lot of the, um, a lot of this, uh, convers- a lot of these topics, uh, uh, top- toxic to talk about. Yeah. Um, 22:42 and, uh, yeah, I'll, I'll, I'll, I'll throw it back to you, Colin. Well, this was my spicy take that'll probably get people pissed off. And I'll- Yeah. Again, again, again, this is Colin and I. Yeah. 22:51 This is a, a editorialized show. Like, we want- Every-... to talk about these things because right now there's like, there's very little nuanced actual, like, long form discourse on this. Yeah. 23:02 And everything we say here you should take as not just fact, but- Not fact... No, no, no. As fact. Oh, as. And like a r- religious conviction as in like- Yeah... 23:12 I will defend myself, and I will kill if necessary to defend these positions. Um, uh, that, uh, you know, you should, you should take everything I say here as zealotry- [laughs]... 23:24 and as, as you know, kind of like, uh, the same way that, that Luke Dash Jr. defends Roman Catholicism. Um, but anyway, um- [laughs] That, that aside, uh, you know, jokes aside, 23:37 for those who are unaware of my, uh, my little sarcastic rant there, but- The sarcasm, yeah... my, um, my spicy take that I made before the show is I don't think that the big block 23:49 line of discussion would be so verboten if it weren't for the fact that the last time we talked about it, we got two hostile forks against Bitcoin in Bitcoin Cash and Bitcoin SV, which is kind of funny. 24:01 There's this kind of, you know, regressive turtles all the way down 24:06 effect from this where it's like the four, the eight megabytes wasn't enough, so BSV had to do like 32 megabytes I think 'cause- And now they've just like snapshotted a block height, and they're just like, "Oh." Yeah. 24:17 Exactly. "We no longer can run the chain anymore. We talked about this previously." Y- y- yeah. Honestly, it's, it's so funny. 24:22 But, um, I-I think that, look, the fact of the matter is Bitcoin already had a block size increase. That, that segment was a block size increase. 24:29 If anyone's saying that it wasn't at this point, you need to go back and look at it 'cause it functionally was. 24:34 Um, we even had to play games with the semantics about block weight to make it seem like it was even less of a block size [chuckles] increase than it actually was, which is... 24:44 I, I still have trouble wrapping my mind around that. I'm, I'm a little too regarded. But- Yeah... um, 24:50 at the end of the day, I don't think that anyone bringing up the idea of a block size increase should be excommunicated, right? Th- this is you talking about something that may be unpopular. 25:01 I think it's unpopular for a very specific reason, right? Perhaps the same reason why, you know, any sort of socialism or communism in the US is such a scary topic to a lot of people because of the Cold War. 25:14 That doesn't mean that I'm advocating for communism. But what it does mean is that these things in and themselves aren't necessarily dire, right? Or existential. They're, they're discussions. 25:25 There are legitimate reasons to say why we should not increase the block size- Mm... like, uh, initial block download, latency when relaying transactions. 25:35 All of those things are valid, just in the same way that I think though we should be able to say that there are legitimate reasons for saying that we should increase the block size limit. You know, I'm- Yeah. 25:44 That'll get you canceled. It will. And I'm not, like, advocating one way or the other. 25:50 I do think that James raises some good points about the fact that at the end of the day, there are limits to what this system can do, and we are going to c- like, it's a gradually then suddenly thing. 26:01 It's not gonna be a problem- And people for- people do not appreciate how quickly those limits can and probably will happen whenever all the shit does take off. Yeah. 26:08 And- I mean, look at 2023 with, with the ordering- And, and the longer-... description stuff. Exactly. And the longer, and, like, the more we, um... And, and this is like, well, do we, do we, do we scale proactively? 26:21 Do we scale responsibly? Um, this is the question. The, the thing is, like, the l- the, the less prepared we are to, like, actually address these issues, the stronger the block size increase camp becomes. 26:39 And, um, I think four megabytes is a, is a perfectly fine block size. 26:47 But the reason we decided on this is because we simultaneous- sim-simultaneously said when we, like, defined Bitcoin's block size as it is, that we would pursue other ways of increasing economic density of transactions. 27:04 Things like UTXO sharing and covenants would, were, in- again, implicit, I think actually sometimes explicitly stated we want to pursue that type of thing- Right... instead of increasing the block size. 27:16 And so here we are, and these proposals have been well discussed and are on the table, and that's, that is what we're... That's, like, what we're pointing to to say, "So let's, these are the things. 27:28 Let's, let's go do that." And, um- It's almost like a Trojan horse argument. Yeah. 27:33 It's like if you offer big blocks, like, get people so pissed off and nauseated by what you're saying that they think covenants are actually fine. [laughs] Yeah. 27:44 Well, that's, I mean, that's kind of what, like, Jeremy Rubin said. Again- Yeah... I referenced he had a talk in Hong Kong of May this past year, which is like, 27:53 um, once fees gets us to a certain high, like, level, even the hardcore ossificationists are gonna be begging for covenants. 28:01 And I think this is a thing I keep going back to, which is, um, most people are just not ready for how expensive Bitcoin can and will get if it is to succeed. 28:11 And if it doesn't s- and if it doesn't get expensive, then I think we have a much bigger [chuckles] problem. Right. Um, and, uh... 28:20 But, but the thing is, like, I mean, let, well, let me pull up some other people's comments on here. Um- Yeah. Get, get Mark up. Yeah. So we've got Mark, uh, Mark- Get, get, get Mark Goodwin on deck. Yeah. 28:28 So we got Mark Goodwin up here. Mark Goodwin- Friend of the show. Mark, if you're listening, come on anytime. Well, love to have you come and talk about this. We're not gonna talk about stable coins. 28:37 We're gonna talk about [both laughs] covenants and scaling and freedom money. 28:43 Which is, uh, he says, quote, this is sarcasm by the way, "That thing you are working on to increase throughput or UTXO ownership could be p- could put our stabilization asset at risk. Sorry. 28:54 Also, thanks for the coins we seized. Who needs privacy? It is a store of value asset. Who needs scaling? Stop that stuff. It is a national security issue." 29:03 This is him taking on the hypothetical future response from the state, who in a S, strategic Bitcoin reserve scenario, pushes back against the freedom money advocates. 29:17 I would say freedom money advocates are much more scaling focused than number go up advocates. And these things do not necessarily have to compete directly, but they often do, uh, 29:30 they often do, uh, ar- uh, promote and argue for different things, so. 100%. Yeah. One thing to add here, I get where he's coming from because I've made the same argument about ossification. 29:44 I don't think the idea though, at least for me, is like Bitcoin puts y- stable coins or a digital dollar at risk of adoption. 29:53 Because I don't necessarily think that making Bitcoin easier to spend, UTXO sharing, scaling solutions, solves for the volatility problem. Like, that's why people use stable coins. 30:07 People aren't not transacting in Bitcoin in Latin America because it's too expensive to do so on chain or because lightning sucks. 30:14 They're doing it because they don't like storing their wealth in something that fluctuates by as much as 50% over a few months when they're living on, like, $10 a day. 30:26 You know, like, these people do not have-You know, thou- thousands, tens of thousands, hundreds of thousands of dollars to store in this digital currency what they are using they are using to literally survive. 30:39 It's, it's their spending money to get by day to day. 30:42 So in terms of adoption for something like that, and maybe I'm thinking too much within that specific local context, and so Mark's point is I think more broad for the entire world, digitizing the dollar and then using something like a stable coin in the future that's just, you know, basically an extension of the dollar hegemony. 31:00 And that makes sense to me. 31:02 But I, I, I don't necessarily even think that at th- this point just to, to drive the point home, uh, scaling doesn't necessarily change the reasons why people would rather use a stable coin than Bitcoin. 31:14 I, I do think that intuitively, and we've seen this in practice, pe- people don't wanna spend an asset that they think is gonna be worth more in a year, right? The- th- you just fundamentally don't wanna do it. 31:25 Um, maybe we get to a point where Bitcoin's value plateaus and that becomes more popular, but the majority of people won't do that. So, um, then we have a bunch of the kind of O'Byrne-inspired spinoffs of, 31:41 um, pointing out that there's kind of been a vibe shift in Bitcoin. Maybe it was always there, but it certainly seems like it to me, where Bitcoiners are saying, um, 31:52 we don't really want-- we don't care about trustlessness. We care about number go up. And, um, James of these screenshots, this interaction between David Sirois of Alpen and Mr. 32:02 Hoddle, famous, uh- Bitcoin Twitter's most prolific reply guy, I think. [laughs] Yeah. I think that's probably- Again, Mr. Hoddle says a bunch of stuff across the board, and he's more entertaining, and he's fun. He is. 32:15 Uh, but- And he knows his shit. Like- Knows his shit... he argues with people. He's been around for a while, and he usually has decent arguments. Granted- And sometimes he has really dumb arguments. 32:24 Sometimes he has really dumb arguments. Yeah. Sometimes- And sometimes you can screenshot them because he's more of like, he's more of like a tabula rasa. 32:30 He can-- he will say a thing, which is an argument, which you can use to, like, as we're going to do, pull out and use as a, like, a storyboarding, uh, like, exercise here. And here's an interaction with him and Mr. 32:43 Hoddle and David Sirois, where David says, "With Catwe, can have trustless perfect privacy, scaling payments. I'm saddened we let this derangement around everything is a scam or spam block us." Mr. 32:54 Hoddle says, "This is exactly how shitcoiners speak." David Sirois links, um, uh, arguments about building bridges and scaling and arcs and vaults and channel factories and saying, "This is cool." 33:08 And Hoddle says, "You might find that tech interesting. I don't particularly care for it." David says, "Are you interested in anything aside from number go up?" Mr. 33:16 Hoddle says some, like, more great consensus cleanup things, initial block download, time warp. David wri-- David replies, "I agree those would be cool, but that's it? Seriously? 33:26 That's literally all you want for Bitcoin?" Mr. Hoddle wraps it up by saying, "I'm a simple person. As long as I can sync to chain tip, hold, receive, and spend Bitcoin, I'm happy. I don't need much." And 33:39 this is kind of a common type of perspective and argument that a lot of Bitcoiners have, which is, "I got Bitcoin. I can send a couple transactions on chain." Yeah. "Why does it need to do anything else?" Yeah. 33:50 This is the I got mine argument. Yeah. 33:52 These are the people who are gonna be able to afford point one Bitcoin transaction fees in a apocalyptic future where the chain is so choked with transactions that only large-scale custodians can move coins around. 34:03 Like, th- this is early adopter syndrome. And to me, this is also the limits of kind of crypto anarchy thinking, you know, or just general anarcho-libertarianism. 34:15 You know, I, I, I tend to lean towards some of the more libertarian arguments about a lot of things, but I do think that there is a point where 34:24 if there is a general purpose good or an effort that can be made that is a general-- that, that is generally good for the population, and it is neg-- and it, and it is not a, like, a positive right, it's a negative right in the sense that it literally costs you as a holder of this asset nothing 34:42 to affect, why are you against it? It's just, "Oh, I don't find that interesting, therefore we shouldn't do that." That to me is not a good argument. Yeah. 34:51 It's- Like, like- I, I appreciate, like, "Oh, I'm not interested in that." That's fine. That's actually- Yeah... a reasonable perspective. 34:57 But to, like, argue against it bec- simply because you're not interested in it is, is weird. Uh, it's like- Yeah... it, it's a, it's a known, it's a pro-ignorance, a pro know nothing standpoint. 35:09 And I also just think a lot of Bitcoiners are making big assumptions about their, um, actual wealth in Bitcoin terms. Mm. A lot of Bitcoiners, 35:20 I think, are gonna realize that they are not actually as wealthy as they, as they think. 35:26 You c-- a lot of these big, very deep-pocketed nine-figure wealth individuals, families, and institutions, even if they buy Bitcoin much later than you, um, you're gonna find that unless you ascend, um, to, you know, a couple orders of magnitude in, uh, wealth amount, you're actually gonna find even if you've been stacking for years, you are probably gonna find the chain way more expensive than you thought you would. 35:54 Um, are you in the top oh point one percent most wealthy, uh, people in the world? 36:00 Because that's actually what we're talking about because it's gonna be a wealth effect of the most wealthy people in the world being able to use Bitcoin, and their-- it's-- the price is gonna reflect that on chain. 36:13 So, like, you better hope that you leapfrog, um, in, you know, all of your friends and family into that top, absolute top-tier wealth bracket. 36:23 Um, even if you think you got, like, three or four whole Bitcoin, like, you're set, like, you're, you're locked in, you got half a million dollars in BTC and your bank account's at zero, like-Great job. 36:33 You, you managed to stack, but that actually doesn't put you in a high enough wealth bracket to be in the top 0.1%. 36:42 Creates like- And people do not appreciate this, like, the real amount of wealth that is out there in the world. And this is like totally we're in the realm of speculation here. Right. 36:51 But it would be interesting in this scenario because you have a, I don't know, you couldn't call it a black market, but a gray market maybe or just like a sketchy market where people are liquidating their coins by passing on their private key. 37:05 Like, where basically it's like your only option to actually sell if you need to have that liquidity or even move the funds is like to go to someone who is willing to take the risk to buy your private key from you and then move those funds themselves, um, 37:22 you know- Yeah... like, 'cause they're willing to- That's actually, that's actually kind of what a state chain is, if you [laughs] I don't know, it's like what Mercurial or a state chain is. 37:27 [laughs] Um, but it would just be the black market state chain for, uh... 37:34 Yeah, I mean, like, even like you might be able to like you'd certainly be able to move your Bitcoin, but like you might realize- Yeah, you can move it for sure, but maybe it's more economic, uh, for you to actually sell it that way and have someone who has more liquidity than you to pay for the transactions through some of their other wallets, right, to do that. 37:51 It probably wouldn't play out, but- And, and a state chain is another like multi-party computation schemes still require counter like trusted counterparty at some level. 38:00 So like you're back to like you're not technically sovereign, you've just trust minimized your us- your ownership of Bitcoin. Again, I'm a huge proponent of trust minimization. Yeah. 38:12 Um, but like is that actually like the dream of Bitcoiners? Like, where did your uncompromising attitude towards sovereignty come, like, go? 38:22 Because to me, it sounds like it's you've, you've bought, you've DCA'd for like four or five years, and you got like a few Bitcoin 'cause you managed to not buy a car or sell your tires and chair for a while, and you're great, man. 38:36 Like, that's great, but like, uh, like you're gonna find out how few Bitcoin that is, uh, and- I, I would actually take... I'm gonna take the ste- I'm gonna steelman against this- Okay. Steelman. 38:50 I, I, I've been, I've been strawmanning this. Like, I don't think that you're gonna have a future where like necessarily you have to use a Bitcoin to transact on-chain. 38:59 Like, maybe that's true, but, um, w- I do think that the way that Bitcoin will continue to scale as it's done already is like the vast majority, the vast overwhelming majority of people are going to use custodians. 39:15 But these custodians, assuming that we get things like Covenants and other scaling, um, upgrades for things like UTXO sharing, something like ARK becomes used more broadly if we get CTV. 39:30 They're going to become more sophisticated with the way that they move funds behind the scenes as well. 39:36 And so, like, even those custodians will not be transacting every Bitcoin on-chain, and the va- ma- vast majority of people will be using Bitcoin through third layers like a custodian. Yeah. 39:49 And- But again, that's, that's... When I talk about like on-chain use, I'm talking about that being the pristine, truly sovereign way- Yeah... to use Bitcoin. And my... 39:58 but my point being, I think that it'll scale in such a way through those third layers and through the custodians using their own scaling solutions on the back end, that actually on-chain activity, while it will be significantly increased from where we are today, will not necessarily be to the point where it's like you're having to pay the US dollar equivalent of like $100,000 to transact. 40:20 Um- Yeah. That's, that's certainly a, that's certainly a, a, a, an argument and a view. Um, this, again, it gets into this like fuzzy projection of what the aggregate, uh, fee amount 40:37 to produce a Bitcoin block should be- Mm-hmm... 40:40 in a hypothetical 20-year future, where like how much does, how much revenue does the Bitcoin mining network need to produce to produce sufficient economic security, uh, for miners? 40:51 Because in 20 years, the subsidy is gonna be de minimis negligible- Mm-hmm... in Bitcoin terms. Yeah. So the en- basically, the entirety of revenue has to come from, 41:02 uh, not subsidies, probably fees or fee-related type activity to mine. And that's another, another topic for a writer's room where like Peter Todd's like, "We need to get... 41:12 We need to put like an inflation schedule back," or, you know- Oh, yeah... in the Bitcoin. Which I think is- We're not opposed, we're not opposed to taking on like s- sacrosanct topics like- Yeah... tail emission. 41:23 I mean, but I think- I think that, though, that to me is, and maybe this betrays like a certain, uh, th- uh, thread in my own head or my own position here, but I, I, I would rather not have... 41:37 I would rather have bigger blocks over that, personally. Like, I would rather have capped Bitcoin. Well, 'cause a tai- a tail emission would be a supply increase, right? Yeah. And I think that that- Yeah... 41:48 to me, that, that breaks... That's not Bitcoin anymore. Like, that's a different thing. I would agree. Yeah. Um- So that, that is like 21 million Bitcoin is core to what Bitcoin is. Um- Yep... 42:01 four-megabyte blocks is not. It's current- Yeah... that's not what the chain is, but, uh, this was left open by Satoshi. 42:10 If we want to go take an origination argument and if we want to consider like, uh, what we think Bitcoin is. Um, so th- those are all interesting perspectives. We welcome these discussions. 42:22 The thing is like, okay, if you're listening to this, you've made it this far, it's 45 minutes, and we will be wrapping up soon. Like, 42:28 uh, I, you know, I think it's time that we have conversations like this where we just shoot the shit. Um-Too many Bitcoin podcasts do not dive into nuance here. 42:40 Um, they hand wave away with little to no historical or technical understanding or appreciation, and they often rely on, um, very, like reductionist, I think, dumb and weak arguments that if x- if a shitcoiner 42:57 with his broad definition of shitcoiner believes something, that argument too is a shitcoin perspective. Yeah. Cat is a great example. Um, Cat is- Cat's a perfect example. Yeah. 43:11 And it's this unfortunate reflection of where we are at in our current cultural moment. 43:15 Like, [clears throat] the Bitcoin industry has been infected by woke politics and like woke- But it's in, yeah, it's back-backwards woke. 43:22 Yeah, and you know, wokeism started obviously on the left, but [clears throat] there's a strain of the same kind of intolerance for other arguments on the right. 43:30 Um, maybe it's less pronounced because the, the culture is, is largely defined, I think, by a lot of left-leaning thought or has been over the last ten years. 43:38 [sniffs] But Bitcoiners are extremely woke and intolerant, [clears throat] um, a certain contingent of them, I should say, to other additional viewpoints. 43:49 And, um, I-I think that we're, we're finally starting to see that kind of a [clears throat] shift a little bit though. Yeah. 43:57 Um, uh, we could probably talk forever about this, but I, I don't wanna like belabor this point too much. 44:02 I just wanna like kick this off, and hopefully if you're watching this, feel free to, uh, clip anything out of context and, uh- Yes, please do... 44:10 and write your angry, inflammatory replies so that Colin and I can defend ourselves or- Get people to take the pitchforks out. We want something from this to go viral. Yeah. Please. Yeah. [chuckles] Even if it's bad. 44:23 Please, nail me to the wall- We can just ignore [laughs]... so that we can have better content, 'cause the thing is, is that, um, 44:29 there's, there's just like not good discussion about this and it's all way too reductionist. And, um, if you f- f- uh, yeah, we're, we're open to bring on somebody like James Woodburn. 44:42 I think I invited John Carvalho to come talk about, uh, Bitcoin sats. Um, but I, 'cause I, I think these are interesting conversations. Um, we want to have, uh, polite discussions. So- Yeah... on that note, 44:59 uh, Bitcoin, uh, this is recorded on a Friday, the twentieth of September. Holiday season's coming. Bitcoin is down below 100K. We're all poor again. 45:07 Dude, it, it tanked to 92 this morning, and then I just lo- looked at my block clock, it's already back up to 97, and I was like, "Damn, I thought that was like, like we out here." 45:16 I thought we were gonna be a little lower than that for a little while. A little holidays. Bro, we're back up to 97. Who said Bitcoin wasn't fun? It's still volatile, and, um, uh, so Bitcoin discourse is also volatile. 45:31 Um, yeah. 45:33 Anyway, uh, make sure that going into Christmas that you don't [upbeat music] [laughs] 45:52 That was great.
