Bankless - DEBATE: BTC vs ETH; Which is more Sound Money?

Episode Date: October 28, 2021

BTC vs. ETH. It's the crypto title fight. Crypto is a non-zero sum game, but there can only be one #1 blockchain. Which of the two giants has the better monetary policy? What about roadmap? Community? Culture? Tune in as the two communities square off to find out which protocol is the more sound. ***** POOLTOGETHER | DEFI LOTTERY https://bankless.cc/PoolTogether  ***** SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  MATCHA | DECENTRALIZED EXCHANGE AGGREGATOR https://bankless.cc/Matcha  LEDGER | SECURE YOUR ASSETS https://bankless.cc/Ledger  ALCHEMIX | SELF-PAYING LOANS http://bankless.cc/Alchemix  ------ Topics Covered: 0:00 Intro 4:00 Dennis, Muneeb, and Justin 7:09 What is Money? 11:18 Soundness 14:32 Properties of Bitcoin 19:45 Bitcoin's Security 25:33 Stacks vs Rollups 31:55 Blockspace Value 35:25 Fee Markets & Security 41:05 Properties of Ethereum 45:08 Weak Subjectivity 53:07 Proof-of-Stake 1:01:55 Money vs Smart Contract Platform 1:08:17 Stacks 1:13:24 Money & Execution Layers 1:17:25 Attacking the Network 1:25:27 Slashing & Hard Forks 1:30:37 Soundness & Monetary Policy 1:39:02 Ossifying and Innovation 1:43:29 Closing & Disclaimers Resources: Justin on Twitter: https://twitter.com/drakefjustin?s=20  Dennis on Twitter: https://twitter.com/Dennis_Porter_?s=20  Muneeb on Twitter: https://twitter.com/muneeb?s=20  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey, Bankless Nation. Today we are having a special episode, a debate about Bitcoin and Ether, the infamous debate, which one is money, what is sound money, which one is more sound money. And joined me. Co-moderating this debate is Dennis Porter, who I've actually done one of these debates with before. So this is actually round two of an Ether's Bitcoin ultra sound money debate. Dennis, are you ready to get started with this? Yeah, I'm ready. Thank you for having me on. David. I really appreciate it. had a really great time last debate that we went back and forth. It was mostly civil for the most part. So it was a good back and forth. We were able to discuss our points. It was more of a

general Bitcoin versus Ethereum type of conversation. But this one looks like we're going to be focusing a lot on sound money aspect of Bitcoin versus Ethereum. So I'm looking forward to having it. We'll be joined by a couple of great ones as well. Absolutely. Yeah. And so where as last debate, it was just me versus Dennis. And then eventually we tapped in some people from the audience. we are bringing in some technical people as well. So I'm tapping in Justin Drake. And then Dennis, do you want to intro who you have brought along for your teammate? Yeah, I brought along at Manib Ali.

He's the founder of Stacks. He's building on Bitcoin is what they're working on, trying to bring smart contracts, NFTs, you name it. All the fun stuff that you Ethereum folks say can only be done on Ethereum. He's trying to bridge that gap with Stacks. So really interested to have him on. But also the reason why I bought him on is mostly for his. technical skills, technical savvy, similar to Drake, really understands the framework of how these

technologies work. All right. Well, without further ado, I think we should go ahead and get right into the conversation about Bitcoin versus Ether, which is more money. And so we'll get right there after a moment to talk about some of these fantastic sponsors that make the show possible. Arbitrum is an Ethereum scaling solution that is going to completely change how we use Defi. If you've been using Ethereum for the past 12 months, you've probably noticed the high gas fees and the slow confirmation times that have been plaguing defy. Too many people want to use Ethereum, and it doesn't have enough capacity for all of us.

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Go to Ledger.com, grab a ledger, download Ledger Live, and get all of your Defy apps all in one space. All right, guys, and we are back to get into this conversation about Bitcoin and Ether, what is more money? So we have two new guests on the show today. You guys just met Dennis, but we are also joined by Munib Ali and Justin Drake. Munib, you want to tell us a little bit about yourself

and your background and who you are? Of course. Thanks for having me. My background is mostly distributed systems. I did a PhD in computer science at Princeton and then got into Bitcoin in around 2013. And many of you might know me mostly from the Bitcoin community, but a little known fact that I was actually part of the genesis sale of Ethereum,

and I have been involved in the Ethereum community, for example, was part of the sea drown of open sea and a bunch of other things like that. Fantastic. Thanks for that color, Munib. If you are a frequent bankless listener, you probably know who Justin Drake is, but if you are new to bankless, Justin, tell us a little bit about yourself who you are, where you came from and what you do in the world of crypto. Sure. So I'm Justin Drake from the Affirm Foundation. work on a set of upgrades to Ethereum, which we used to call Ethereum 2.0, and that includes

proof of stake and sharding. I guess my background is technology. I studied mathematics. I was a FPGA programmer in the past life, pyrm space. So I know a thing or two about Bitcoin as well. And Dennis, I know we talked a little bit about you in the intro, but also want to tell us a little bit about yourself and your background and how you came to be in the world of Bitcoin? Yeah, I jumped into the world of Bitcoin in 2017, tried to go all in on mining. But that was a lost endeavor. Eventually, I decided to kind of hunker down for a couple years, do my due diligence, study this asset, study this market. I'm a Bitcoin only kind of guy. Some would call me a maximalist. I prefer to go buy Bitcoin only. But now I've jumped fully all in on the world of content

creation. So I started a podcast called Smart People Shit. And I also do another show called The Update where I regularly update my listeners on what's going on in on the space. Also a very avid and consistent contributor to Twitter spaces where I do some of the better rooms. also involve politically as well. So helping candidates like Erica Rhodes in California's 30th district try to take down the most anti-Bitcoin congressman in office right now. Fantastic. Thank you for that, Dennis. And for anyone tuning in to Bankless for the first time, I'm David Hoffman, co-host of Bankless, where we are big proponents as ether as money, decentralized finance, and overall living a bankless life and promoting tools that helps one live

a bankless life. And with that, out of the way, gentlemen, I think, we need to start this conversation by setting some foundations. And the whole point of this conversation is figuring out which one of these assets is more money. But first we need to figure out what money is. And importantly, what is sound money? So Dennis, in your opinion, what do you think sound money is? I'll keep it real brief and short and simple here. Let's start with what money is. money is a tool. We discovered it 10,000 years ago. It's what helped us form societies. We use it for storing value, transferring value, and measuring value. For me, sound money is money that is not prone to sudden changes, appreciation or depreciation and purchasing power over the long term. So pretty short and sweet.

It has three uses, storing, transferring, and measuring value. And then as sound money, It maintains its value, doesn't go up or down appreciation or depreciation rapidly in the short term or long term. Obviously, we'll get a little bit more into that as we continue, but just keep it simple for now. Justin, how about your definition of money and sound money? What is sound money to you? Right. So for me, money is basically an asset which has monetary premium. monetary premium being this magic meme energy, economic energy that provides this asset more value than the base utility. And the classic example in my mind is gold, right? Gold has this industrial utility.

It's used in every single iPhone. But if we were to try and value gold purely on utilitarian terms, it would be worth maybe a trillion dollars. But it turns out that it's worth more like $10 trillion. dollars. And so this extra value is monetary premium, partly because it's used as money, and so it gains this premium. In terms of what is sound money, for me, it's kind of the ability to simply to accrue and maintain this monetary premium. And so basically there's a space component and the time component. The space component is how much monetary premium can it accrue, how big can it become?

And the time component is how well can it retain this monetary premium over time? I love that answer as well. Muneb, tell us about your opinions of money and sound money. What properties are required to produce sound money? Yeah, I think in my mind, money differed from sound money quite drastically, like in the sense that money would focus more on the medium of exchange part, like anything that you can use on a day-to-day basis. Like, for example, if you're traveling, you land in a new country, you pick up the local

currency there and then you spend it. But you don't think about that currency as like a long-term store of value. The minute you were to think about that currency as a long-term store of value, you would actually evaluate it very differently. So I think in terms of as soon as you start talking about sound money, I think you start looking more into the long-term store of value and potentially the unit of a count, right? So if I'm holding sound money for over, let's say, a very long time, like a decade or something, then I want to make sure that, you know, how will other things get priced

against this asset? So that's kind of like the difference in my mind. So one concept that I use internally to not have this confusion around money and sound money is I use the term currency instead of money, right? Because what is currency comes from the word current is basically money that flows. And so really I think it's important to distinguish maybe for this conversation, currency, and you even said the word currency, Moni, and money, which I guess for this conversation will be sound money. So I don't think either of us, either two parties, the Bitcoin or the Eith party, is interested in their money being currency. I think we both are okay with it being currency, but really what we're going after here is the sound money property. And ultimately, this is

basically like which assets number is going to go up the most, more or less over time? If you kind of really bake down the thing, it's like which one holds its value and accrues and captures its value over time the most. Does anyone have any problems with that differentiation? I mean, just to be clear there, though, sound money when you are looking at the definition of it, it doesn't necessarily have to go up in value over time. It can also go down in value over time as long as it's very slow and incremental over time. So if you're looking at the actual definition, Yes, we would all want our sound money to go up over time, obviously, but the true definition is a stable money, not necessarily a money that always goes up in value.

Okay. All right. So I think that's a very historical definition. And I think the notion of money is all around shelling points, and these shelling points change as technology progresses over time. And so what might be in, you know, a reasonable definition of sound money in the past, you know, you can list a bunch of properties. if you know you are able to innovate and come up with properties that transcend these old

properties now then suddenly you've redefined the notion of money and part of the reason is because there's this comparative dynamic or even competitive dynamic and you know you can look at it for example with with with gold and bitcoin right it's possible that bitcoin will defrow in gold and gold will no longer be considered sound money you know maybe because it doesn't have properties such as being digital. And so really it's important to look at these selling points and properties in the context of time and innovation. I think said differently, there's a Gresham's law in economics where it called bad money drives out good. And I think that's what Justin Drake is saying, where, well, Bitcoin and gold, they have really similar

properties, but like what one do you think is going to drive out the other? And I think maybe Gresham's law is basically saying, well, money collapses, converges down to sound money over time. I think it's important to know this there, too, that it doesn't make it not sound money any longer. I think just that in over history, humans coalesce around the soundest money. So gold didn't stop being sound money. It's just that Bitcoin is much sounder than gold. Just like how gold stole monetary premium away from silver, Bitcoin will still monetary. premium away from gold. So just a little bit of nuance there. I don't think we just necessarily

disagree. Yeah, I'll share my mental model here, like, in terms of when you mentioned the numbers going up far, like, I think interestingly, like currency is a solved problem, right? So, like, there's nothing kind of like new there. We already have currencies and we use them on a daily basis. But sound money, interestingly, is not a solved problem in today's world. And whichever solution you look at, you know, look at Bitcoin or Eith, I think both are in their discovery phase right then. And in the discovery phase, you're likely going to go up in value because their market size are potentially much larger than the market size today. And once you actually reach a stable point, then it will be interesting to see that the sound money aspect, does it retain value,

go up in value, or actually slowly lose value over time. Okay. I feel like that is now adequately defined. So unless anyone wants any final statement, about the definition of sound money. I think we can go ahead and get into the differences of monetary properties of Bitcoin and Ether. Sound good? All right.

So since Bitcoin came first in history, I think Bitcoiners get to go first on this one. Dennis, Muneeb, what about the properties of Bitcoin make it the most sound money? Meadib, you want to go or me? I think you can go first. Okay.

Yeah, for me, the attributes that make Bitcoin sound money that protect its ability to be sound money are the fact that its issuance is extremely stable and highly predictable. Bitcoin has a hard supply cap. So that cap is set in stone at 21 million, can never go up, can never go down.

Obviously, people could burn their Bitcoin, make it even more scarce. It's also very extremely difficult to create. It requires a large amount of energy. Labor theory of value kind of kicks in here. in this place. But most important to me, the reason why I believe that Bitcoin is the most sound money is not just because it is extremely stable, very difficult or nearly impossible theoretically to corrupt or manipulate by governments or those in power, but because these

components themselves cannot be changed. So it's very stable, highly predictable, can't be changed. Bitcoin has a hard supply cap. Can't be changed. It's very difficult to create. And that actually goes up in difficulty over time, which increases its value and makes it more sound. So the biggest part for me, when you're looking at sound money, is does it have the attributes that you and I will probably agree on? But the one thing that I think is the most important is removing human control or the human ability to manipulate the issuance or the supply cap of that money at any. at any given time. Muni, before I bring in Justin here, do you want to add anything onto that?

Yeah. I think my lens is a little bit more technical, like in the sense that for me, the fact that there is proof of work, I'm like involved here, actually adds to the fact that it is, it is sound like in the sense that, you know, back in the day, people would actually do some work to dig up gold, and that actually adds an element of scarcity here. Right. And I think that is a fundamental component of the proof of work. And I would say, secondly, when it's easy to define, you know, some sort of new

cryptocurrency and basically say that it has a hard cap. I think that's relatively simple. I think what's like much more interesting here is the community that has emerged over the last decade around Bitcoin and how they have. basically inherited this value. And they're kind of like the defendants of the 21 million cap. And I think it's the value add by the users of the network and the community of the network.

And the last part there would be that Bitcoin as a notebook was really designed from day one to be a global network, where meaning that anyone around the world with a normal laptop computer could actually open up their laptop and independently verify that this is the correct state and I have the right number balances. So I think it's a combination of these things like overwork with global access along with a community that is going to basically die on the hill of like you would never be able to change the supply. I think that's interesting, you're adding in the community behind one of Bitcoin's defense layers because I've frequently got into bait about whether or not Bitcoin has a social contract or not.

And many, many Bitcoiners will say that Bitcoin doesn't rely on humans at all. It actually relies on math and math alone. That's one of the properties about Bitcoin. But are you saying that there's actually a community human involvement that also puts up a shield around Bitcoin and makes it immutable? I think basically what I've noticed is Bitcoin makes it extremely hard to make changes at the consensus level. So the threshold to making any changes to the consensus level is extremely high, like the number of miners required, the number of scrutiny required for any even small changes. And that sometimes gets criticized as well, that Bitcoin doesn't evolve, doesn't

change that rapidly. And I think the community, where they play a role, and I think this was very apparent in the, kind of like the block-sized wars, where the community was basically, at one point, even the big companies and exchanges were on one side, but it was the average users who basically said, we're not going to let this change pass through. We just outcry to reject it. So I don't think that they have the property of coming together to define a change, but they're just very, very good at rejecting changes. And basically saying that we will always fall back to the base case to make no change here. Justin, has anything that Dennis or Meneb said raise a flag in your mind about the soundness of money? Yes. So I think the

the main red flag is basically the security aspect of Bitcoin. I just don't see the long-term security aspect of Bitcoin. I think it's a broken design, to be completely honest. I think part of the reason I think it's a completely broken design from a security standpoint is because its security Lindy resets every four years. So every four years, you know, we're asking the question, can Bitcoin be secured on smaller issuance. And in that sense, you can kind of think of Satoshi

as kind of this Dgen blockchain designer, kind of trying to see how far he can push down the security of Bitcoin until eventually it kind of breaks. And so it's kind of like slowly boiling the frog over several decades and kind of seeing if and when it breaks. I guess the answer that Bitcoiners would put forward here is that Bitcoin will be secured by transaction fees. I mean, we were to discuss that, you know, transaction fees is kind of grade B fuel for a number of reasons.

One of them is that it's very volatile. It's also can be stolen. But even if we remove kind of these issues, if we just look at the quantitative aspect of transaction fees, today transaction fees on Bitcoin are about 2% of the issue. And so like 50 times less. And if you compare it to other systems like Ethereum, it's also 50 times less. And basically, you can ask yourself, why is that? And I think the answer is basically that Bitcoin provides very little transactional utility.

The utility of Bitcoin is in the hoddling, is in the not moving. You buy Bitcoin, you put in the cold wallets, you hold it for two decades, and then, you know, you sell it. And so that's two transactions over two decades. And so basically Bitcoin has in a way cannibalized its security plan by not adopting, you know, a virtual machine that allows for programmability. And but then, you know, a Bitcoiner, such as many of my come in and say, hey, I have stacks and I will provide programmability and I will provide, you know, scalability, you know, through this side chain. But the problem with sidechains is that they leach transaction fees. So if you have a transaction on stacks, that transactional utility is going to be captured by the Stax network.

It's not going to be captured by Bitcoin. But then you might say, hey, hold on, in order to have transactions on stacks, we need to have deposits and withdrawals to and from stacks. And, you know, those would go through Bitcoin. And so you'd be paying fees on Bitcoin. But that's also not the case in the long term. If you have a very successful side chain, all the deposits and withdrawals and all the bridging will happen natively with that blockchain. Like one very easy example is an exchange, right?

An exchange can just hold a lot of wrapped Bitcoin on stacks. And basically when someone buys Bitcoin stacks, it just goes directly to that user internally to the stacks. And so really the model of scalability and programmability for Bitcoin is inconsistent with its security. And then once you don't have security, you've lost everything. And one of the things that you've lost in particular, most likely, is your scarcity. Like the whole meme and narrative of having this 21 million cap is an illusion, right? It might hold true in the short term. But really what Bitcoiners are doing is that they're trading off short term predictability.

Sorry, they're trading off long term predictively for short term predictability. So in the short term, we can understand. understand this monetary schedule very, very well. But at some point, it becomes unsustainable and something must change in the long time. I want to get Mnib to jump in on the stack stuff, but there was one thing at the very beginning that you had said that I thought was interesting that I'd like to address. But Menebel, I think, addressed the majority of what you just said. But in the very beginning, you were talking about issuance and supply issuance. Well, the difference between, I think, really Ethereum and Bitcoin, which is a very important distinction here, is issuance versus a supply

schedule. There's no issuance rate on Bitcoin. It's purely just a supply schedule. And in 2140, when it is finished, there will be no more supply issued. With Ethereum, the problem I see when you decide to say, well, we need to have an issuance rate that we can manipulate or change, that's when you introduce the question of how much is enough. How much issuance is enough for minimum security. And unfortunately, when you start asking that question, the only person who can answer it is a human being. And thus being a human being coming into the situation, it requires human control and human manipulation over the monetary supply, over the monetary schedule. And so that's why I prefer a supply schedule. When you say that it's only dependent on fees, yeah, that is the

future that Bitcoin or see. I'm so bullish on the price of Bitcoin that I do believe that fees. And they have over time. If you look at it, there's charts out there, you can look up. I can't post any here like I normally do on Twitter spaces. I can post some charts up top. If you send me a link, I can share. Yeah, there are charts that show the fees are over time predicted to become the dominant reward when mining. But I would love for obviously Justin, I'm sure you probably had something to say back to

that, but I think Meneb should address the stacks. Yeah, I think that's a very well-known type of criticism for Bitcoin's supply. And like how would how would the incentives work once the Bitcoin is run out? Right. And I think the way to think about this is that first of all, let's separate out proof of work from the incentives for. So proof of work will keep functioning, right? Like that thing is there. As long as there are incentives for miners to mine, they will keep doing the work and at some difficulty level and they will still secure that. Interestingly, I think you can look at the phase during which the point-based rewards are coming out as almost, like a bootstrapping phase for Bitcoin. And I think the biggest difference between, you know, my mental view and Justin's mental model here is that I actually don't look at Bitcoin as a

transaction network at all. So it doesn't matter to me how many transactions Bitcoin is doing. I look at Bitcoin as a settlement layer, right? And that's literally how Stax is defined as well. So it's actually not a side chain. Like we call it a layer 1.5. And it has cross-layer consensus between Bitcoin and stacks. meaning that the consensus transactions are literally happening with Bitcoin. So the Stax miners are heavily incentivized to pay very high transaction fees because they want to mine a block. So if the incentives on Stacks go up, incentives on the Bitcoin site also go up.

And those incentives are not coin-based rewards. They are actually transaction fees. So these people, like if Stacks is valuable, Stax has a $3.5 billion market gap right now, very small in the grand scheme of things. But if stacks are successful, and there are more incentives there that actually directly results in more transaction fees, very high transaction fees, because these people are heavily competing with each other. And that's the settlement use case. And I see Bitcoin as mostly as a settlement there. And I think that given the limited block space on Bitcoin, people will be willing to pay insanely high transaction fees to put any data on the chain.

And so I'm actually not worried about the incentive mechanism. for the work in the long term. Justin, do you have anything you want to say to that? Yeah, I mean, I think the most interesting point is on the settlement layer, but I'm happy to also reply to Dennis. But, I mean, I'm very curious to know, basically, how much is stacks paying? Like, the way that in the firm land, we have shed security

is basically through roll-ups, where basically these roll-ups pay for putting data on on the charts on the Ethereum and this is exactly the words you use pay for putting data on the blockchain. Now, my understanding is that Bitcoin is not roller-friendly. So you can't have

this model. Instead, you might have a different model. And my question to you is basically if you have twice as many transactions on stacks, does it mean that you're putting twice as much data

on the Bitcoin blockchain? My guess that you're going to say the answer is no. Like there's going to be every single block, there's at most a constant amount of block space that's going to be consumed. And that's going to be orthogonal to the transactional utility that stack is providing. Yeah, so that's not how it works.

And basically, let me clarify that roll-up point a little bit. So I think the only difference between roll-ups on the Ethereum side and roll-up type systems on the Bitcoin side is the computational power. So Bitcoin does not have a full-tier-uncomplete programming language, but it does have Bitcoin script. And you could do limited type of competitions there. We don't even do that, right?

So we mostly are automatically publishing hashes on the Bitcoin site, but this is actually cross-consensus, meaning that part of your application is literally running on the Bitcoin site. I'll give you an example of a Bitcoin lending application. So the Bitcoin lending application has, your Bitcoin on the Bitcoin main chain. If you're lending your Bitcoin, you're actually paying a Bitcoin transaction fee

to send out your Bitcoin. Your collateral in a stable coin could be in a smart contract on the stack site. I think the fundamental disagreement, again, between the Bitcoin and tiering camps is this idea that you need a full tiering complete language at the base layer. In our world, we're like,

you don't need the full tiering complete language at the base layer. You can still build applications without having the full tiering complete language to the base layer. I mean, the key word that you said here was hash, right, and not data. And there's a very different distinction between a hash of the data and the data, right? Hash is constant size.

Yes, but it depends on the, it's depend on the, it's an order of applications, not order of something else. So it's order of usage. How many users, how many applications are, but let's even forget about hash. At the end of the day, we're talking about a very scarce resource, which is the block space. I think you and I would agree that a block space can grow infinitely. So the block space on Ethereum is scarce, blocks space on Bitcoin is scarce. And at some point, the transaction fees is really,

how much are people willing to pay to write anything? Doesn't matter if it's a hash, doesn't matter if it's something else, if they're willing to pay to write to a scarce resource. And that's where the value of the transaction fee is coming from. It does matter because if you're making one single checkpoint every single block, for example, then you're putting, you just need one transaction per block, and that's a constant amount. And so there won't be necessarily a competitive dynamic there. Is your argument that Bitcoin block space will not be scarce?

The people won't be able to pay a high transaction. No, no. It's that the demand for the block space won't be that large because it's only one hash or one transaction per block. So I will disagree on two points. A, it's not one hash per block, but that's not how stacks works. it's a big O of miners, the number of miners, plus the application. Okay. So the big O of miners plus the big O of applications that are doing the cross-chain consensus,

meaning part of their data is literally on the Bitcoin side. And secondly, I would say that I am willing to take the bet that the block space in Bitcoin is going to be insanely valuable by the time the CoinBids reward is actually run out. So let's go back to that point because I can't get my head around how Bitcoin's block space becomes insanely valuable. While also, Muneb, you said that Bitcoin is a settlement network, not a transactional network, right?

It's not a visa. It's not a mastercard. It's just where Bitcoin's come to settle. Which seems to be in alignment with what Justin was saying, where the main use case for BTC is hodeling. It's for saving your wealth. You can use Bitcoin without actually ever making a transaction on the network for years, if not decades.

In theory, Satoshi has used Bitcoin. without actually making a transaction on it ever since 2009. And so where do you think all of this demand for Bitcoin block space, which is the way that the blocks chain sustains its own security? Where do you think this demand comes from? Yeah, I think I have a great example that actually answers your question and Justin's critique as well. So recently, Bitcoin NFTs started taking off.

So every single NFD has its data, the hash, stored on Bitcoin. and every single transfer also results in information. So if you just look at an NFD market, so again, it's a Big O of NFTs here, not a Big O of the... We're going to need you guys to define Big O because that goes off my head.

So Big O is basically, it's a... Let me try to simplify it. So when you're looking at a function, what is the input that is going to grow, that is the main vector that is going to help. grow something. So if something is dependent on the number of miners, then let's say if miners go from 10 to 100, the resulting function is going to grow based on that. So let's say if something

is dependent on the block, the number of blocks, but not the transactions. So it doesn't matter if you do 10 transactions or 1,000 transactions. It's only going to do like one hash per block because it's is based on the blocks, not on the transaction. So in this example, in NFTs example, I think is a perfect one, Because then the data on Bitcoin is growing based on the number of NFTs, not based on the stacks blocks. Right. Okay. And so in that sense, I think that that example basically clarifies it, that why would

Bitcoin's blocks be valuable? Because if Bitcoin NFTs are taking off, then people are paying for them. But also just real quickly, too. I think, you know, we're looking far into the future here when you're talking about the the supply schedule being complete and there being the final 21 million Bitcoin. The world in our eyes is fully on a Bitcoin standard. Everybody is using it. I think a lot of us see the block space on Bitcoin.

It probably won't be used by the average person or the average user. It'll be used by very large institutions, banks for trade, global trade, where they will want to see finality on very large transactions. And so far into the future when, you know, all of us are dead because that's how far away it is when the reward runs out. Not a single person on the planet today will probably be alive unless they live for, I mean, I guess I could live for 120 years. But that space will be used by the very, very large institutions, global trade, and they will most definitely be able to keep the value of that block space up. Okay. So I want to return to one of the original question,

which is, we started talking about Ethan Bitcoin as sound money based on the sustainability of the chain. And so Dennis and many of you guys just gave some cases as to why there will be blocks-based demand, which will generate the fee market required to sustain Bitcoin. But I would contend that the growing fee market of Bitcoin actually needs to increase at a rate that's commensurate to the actual growing and value of BTC. because it's one thing to have dollar denominated transaction fees be sustainable, but I don't think we want to secure our chains based on the value of the dollar,

because the value of the dollar is fleeting. So in a Bitcoin denominated world, the value of the Bitcoin blockchain, the security budget needs to be sufficiently large in Bitcoin terms. And I think even with the decreasing fee budget in Bitcoin terms, the growing dollar value doesn't grow at a rate fast enough for, to maintain security when the value of a Bitcoin is growing way faster than the value of a dollar. Does that all make sense? I think it makes sense like what you're trying to say.

I think my answer is pretty simple there. Like I look at Bitcoin's security budget to be something where it needs to be so high that even a state actor would find it very hard to attack them. So when people talk about difficulty, the Bitcoin difficulty is going down. Like recently, for example, Bitcoin difficulty went down when miners moved out. China. I wasn't worried about it at all at all because on an absolute scale, the difficulty level is so high that the Bitcoin network is secure. Right. So what we're talking about is really, I think we can put aside like proof of work. We can just look at the incentives available

for the miners. And are the incentives resulting in a high enough difficulty level that a state actor would find it very hard to actually come in and attack the people work network? Right. So I think that value, that number, given like how early we are in property right now and that difficulty level is already so high. I think 20 years from now, 30 years from now, maintaining that level of difficulty wouldn't be an issue in my view. Another thing here, too, I really like, Justin, did you want to give final comments there? Because since we're co-moderating, I think it would be good to also kind of flip this now and try to move the other direction. But I think, Justin, you should get the final comments here,

but to start to move towards is, why is Ethereum sound money? You know, what's your argument about that? You know, because obviously we could go back and forth all day on Bitcoin here, but we'd like to kind of hear what your guys' points are for why Ethereum is sound money and then obviously get the back and forth. But Justin, final comments on what Manib just said. Yeah, so Monib just talked about, you know, resistance to state-level actors. I think that's an illusion.

Basically, you can try and quantify the security. and you can talk about basically economic security, like how much economic resources are securing a particular blockchain. And when you look at Bitcoin, it's relatively straightforward. What you do is you take the hash rate, which is about 150 million terrahashes per second, and then you ask yourself, how much does it cost to manufacture and deploy one terahash per second?

Now, my rough guess is that it's roughly $50, but some Bitcoiners will say, you know, maybe it's like $100, but I don't think any reasonable Bitcoiner will tell you that it's above $100. And so basically we're looking at roughly $15 billion of economic security. And in the grand scheme of things, that's peanuts, right? Like if you look at the security budget, for example, of the U.S., it's, you know, like $750 billion per year, you know, for its army. And now, you know, maybe that's a good segue into why Ethereum is sound money, is you can start looking at, you know, the economic security of Ethereum. And it turns out it's several times larger than Bitcoin.

And for Ethereum, it's even easier to see what the economic security is, is you just take the number of EVE tokens, which are currently staked, multiplied by the price of each token. and you get roughly $32 billion. So even today, it's two to four times larger economic security versus Bitcoin. And I still believe that $32 billion is too small, right? We need to have a trillion dollars of economic security. And I see a roadmap with Ethereum to achieve that, partly because we have this guaranteed issuance. But I just don't see it for Bitcoin. in the context of this exponentially decreasing issuance.

And just to ground the listeners so far, the reason why we've been talking about transaction fees and transaction volume inside of blockchains and security is that all of these things relate to the soundness of the money because it relates to its ability to hold value over time. So when blockchains can be secure over time, the money of the blockchain can also hold its value over time. just wanted to make sure that we had the listeners grounded on that.

Yeah, that's a fair point to make just so that people kind of understand where we're coming from. I moved away from the aspects of money to being just purely security focused. So I'm sure we won't need to cover security too much when it comes to the conversation around why Ethereum is sound money. So let's go ahead and do that with you, David and Justin. Why do you believe that ether is the most sound money? David, you're the first? Yeah, to elaborate on what, what, said, I think the proof of state consensus mechanism is the most efficient consensus mechanism

possible. Proof of state collapses down the cost of providing security down to the absolute minimum. A computer connected internet, internet connected computer, which most everyone already has. And then after that, what's left is capital. And really when you think about it, all consensus mechanisms, all security mechanisms, are just a bit of computing power, an internet connection, and then something for that individual to lose if they do something wrong. And capital is the most efficient form of that, right? If they have a bunch of capital at stake, they have a significant incentive to not lie to the blockchain, which is what makes the blockchain secure. Proof of work has the same dynamic. There is computers with computational resources. The Bitcoin

computers are really, really big computers with a lot of computational resources. And then they also represent capital as well. Roughly one-third of proof of work staking or validation comes from the fact that the cost of operating a mining farm is one-third computer hardware, which kind of is your stake. It's kind of like proof of stake with extra steps. But the collapsing of security down to proof of stake allows for really, really efficient security. And what this means is when you have efficient security is that it actually costs very little to secure your blockchain. And when it costs very little to secure your blockchain, you don't have to issue as much money to pay for security. And so because the cost of security

really, really efficient. So you have very, very little issuance to secure a very large market cap of economic activity, which goes and lends itself to the property of sound money. If you have a global cryptoeconomic system that is secured by the most efficient consensus mechanism possible, which I believe is proof of stake, then you have the least amount of issuance possible, which retains the value of the supply of the currency by issuing the least while being able to secure the system. So proof of stake is one of the properties that makes ether very, very sound money. Yeah, let me ask a couple of questions there. So I think there are two aspects of Google's stake that I probably generally have concerns about. And by the way, just to just to clarify,

I think PufuStake can work for certain types of applications where the stakes aren't that high. But we're talking about building a global reserve currency and, you know, people's livelihoods are dependent on this. And this is the kind of like the base layer system upon which everything else is dependent on. So the stakes are very, very high over it. So I think the issue in my mind with POOC stake is kind of like two poles. The first one is, if you go back to the beginning of this podcast, I was talking about that can a normal person, a normal, normal user of the internet,

just on their laptop, independently verify that is this the correct version of the blockchain or not? So that you can't do with Pupiske, because of the bootstrapping problem. And we can debate that, but I think this is almost like a proven theorem in computer science that you have a bootchraping problem and put a mistake, you have to trust certain nodes to be able to boot up. You can't boot up on your own. I think Justin wants to say something over here, so let him talk.

No, go ahead. I mean, are you talking about the activity? Yeah, so I can define the problem very concretely, right? So let's say I'm a user, I'm setting somewhere in Japan, and somebody gives me like five different copies of the Bitcoin blockchain. I don't have to talk to anyone to independently verify which version should I go for. If I'm the same user sitting in Japan, someone gives me five copies of a proof of stake

blockchain, I don't know what to do. Like I have no idea how to verify which copy is the correct one. Yeah, so this is something that's been talked about at noxium. And basically, you can argue that Bitcoin as well has weak subjectivity in pretty much the exact same way. Basically, the problem is that, you know, if you, if for some reason you're a caveman and you've been disconnected from the internet for a very long amount of time, you know, years, and you, and you come out of your cave and you, you, you run your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, you'll be able to sink to, to, to, to the head.

I mean, that's, that's just not true in practice. You know, one reason, for example, is that, um, um, um, um, you know, um, um, you need to be downloading the latest version of the software, you know, to have all the security patches to be able to run the latest consensus rules and verify them. And so in the process of downloading this latest client, you, unless you're going to be verifying, you know, if your caveman is very sophisticated and he's going to verify every single line of code, which no one does, they're going to be trusting basically this source of where you've downloaded the software. Another aspect of weak subjectivity, which exists in Bitcoin, is, you're basically the peer-to-peer networking bootstrap nodes.

So when you connect to the network, basically, there's a set of IP addresses, which you're going to query the very first time you run your software. And if, for some reason or another, these IP addresses are compromised, then they can just give you a version of the world, which is just not the true version. And so they can fool you into believing

that some chain is the longest chain, when actually it's not. And so weak subjectivity is just a fact of life for both Bitcoin and Ethereum. I absolutely disagree here because I think the core invention behind blockchains is that you can trust the state of the blockchain

independently. If you take away that core property, the rest of the problem that you're describing, those are all known computer science problems with really good solutions. Like how do you verify software downloads? How do you verify that you're connecting to the right peers and can verify that you're downloading the data chance accordingly?

Like these things have existed even before blockchains, right? These things have been there for like 20 years or something like that. The only new thing that blockchain you're adding is that you can independently verify that this is the correct version of the blockchain. If you are throwing away that property, then you start entering the land of like, why are you using a blockchain? Just like start trusting other people for running some sort of a consensus system. To be clear, you don't have to trust people if you stay offline a small enough period of time. And you know, you talk about verifying like the, you know, where you download the software from.

I'm imagining you're talking about signatures. So basically, if you're going to download Bitcoin Core, you're going to be verifying, I don't know, Peter Wallace's signature or whatever. But here you're trusting Peter Werler, and it's the exact same thing with weak subjectivity. The way that you bootstrap from weak subjectivity is that you have whatever trust assumption you want to make and then they will give you some sort of state of a checkpoint of the state and then you can take it from there.

But again, this this checkpointing mechanism is only required if you're cavemen, which most people are not. And if you are cavemen, then the same problem applies. to Bitcoin. I think this problem is much deeper than that, right? Because it's, first of all, it's not about Kerman. But in the ethos of decentralization, a normal user should be able to self-verify that is this the correct copy or not. So you're basically breaking the number one ethos of decentralization that a normal user cannot self-verify. You always have to trust somebody else to be able to then verify that, okay, I can only verify if I trust the initial state,

and then I can verify the state from there. Let me know. No, it's not just the initial state. It's the software as well. Are you as a normal user going to read every single line of code and compile from source and run the executable? We can get into how to verify that you have the right software. There are many ways of actually doing that. Like people have been solving that problem for ages. That's not a unique thing to Bitcoin. Like you're conflating how do you verify that you got the correct copy of the software with verifying a blockchain? Can you all agree that it's important to verify that the blockchain state is correct or not or be able to independently verify that blockchain state is correct? Then why do you even use a blockchain?

Then you just trust whatever is running on the other side of your computer. When you have a state machine, you have the state, but you also have the state transition function and that is going to be your code. And you can't just desosate the two. It just verify the state without, you know, verifying the state transition function. need the two verified. So let me pose the same problem and a different way. Because of Bitcoin's proof of work, let's say there's an attacker that wants to fool you and is trying to create multiple invalid versions of the history. Every single fork actually requires an insane amount

of work to be done. So the attacker is limited in how many blockchain histories the attacker can actually produce to even present to you. Whereas in proof of stake, I can, I can. give you a million different copies of a blockchain and you wouldn't be able to tell which one is the current one. Because it requires me just signatures to create a million different copies and a million different histories of a proven state of blockchain. No, because in the context of Bitcoin, you can have, you know, if you're attacking the networking layer with these bootstrap nodes, you can have an eclipse attack and basically you can censor every single, you know, chain that has done a lot of work. And so even just a small amount of work is enough to fool.

And same thing for the code. You can have consensus rules which just fork off because they consider invalid legitimate change which have done a lot of work. And then therefore you're falling back to these insecure chains, which have done almost no work. Sorry, sorry. Let's say, let me make it more concrete. Let's say I want to make a change that goes 30 days back.

I would need to do 30 days of work to be able to create that separate version of the chain. Real quick, though, can Meneeb, could you do one, this last comment here and then Justin, and we should probably get back to Proof-Stake just like directly. We should move on, yeah, sure, sure, sure. Yeah, but like Manib and then Justin one more. Sure. So I think what I'm saying is, let's make an attack very concrete. Let's say I'm an attacker.

I want to change the history of the blockchain 30 days back. So in proof of work, I'll have to do 30 days of work to be able to even try to fool somebody that this is not the correct version of blockchain. That's the core thing. In a proof of stake system, I can give you 10 million different copies that each have a different version 30 days back without doing any work. That's the part of the argument. The work argument doesn't hold because you can have rules which disqualify chains, which have done a lot of work. And so you could have a chain, for example, where the difficulty kind of decreases in such a way that, or, you know, a chain with very few blocks, for example.

once you mess around with the state transition function, you can't validate state. That's like a fundamental premise. Some of the things that I'd like to go back to, because just in regards to some of the points that David was bringing up, some of my core issues around proof of stake, which really, to be honest, my biggest issue is moving from proof of work to proof of stake. I think it's been pretty well shown that Ethereum has had a very difficult time doing that, I've heard, you know, I keep hearing over and over again that's going to happen. I think that's kind of a separate argument that a lot of Bitcoiners try to make. The one that I really would like to attack is this idea that proof of stake is a better model

because it will incentivize saving. Okay, yeah, you know, I could, I can see that. But my problem, I'll actually pitch why purchase stake is a better model in a different way. Yeah. Let me finish this one. And then you can, you can pitch it in another way as well. But some of the biggest issues that I see with proof of stake is, It does kind of incentivize, I would say it incentivizes hoarding in a similar way that Bitcoin does.

But the problem is that it incentivizes hoarding with the people that are minting the ETH. So those that are creating the ETH are incentivized to hold on to it. The difference between proof of stake and proof of work is the miners have an economic cost, and they are incentivized to distribute the Bitcoin that they are creating. But what ends up happening is it's harder to disperse, and you have this large consolidation of supply in the hands of the wealthiest people potentially on the network, which really inevitably, when you look past in the past, in the history of money, the incentive to debase, manipulate, or corrupt a monetary supply or issuance always happens when there is a heavy amount of people

holding on to a large amount of that supply because there is an incentive to manipulate or debase the currency. So this is the real big problem that comes down to is there will be a time when the human control over the Ethereum issuance will lead to debasement and manipulation, in my opinion. The other part is, again, just this transferring from proof of work to proof of stake. I'm not sure it's possible. It feels like it's like open heart surgery while flying a rocket ship hasn't been done yet. It seems like a lot of other protocols don't have too much of a problem with being on proof of stake.

But I think from the very beginning, you can go all the way back and see that this has been a very big issue for Ethereum. And when you were talking about this minimum viable security, minimum viable issuance, you know, it's great in theory. But, you know, it's kind of a problem also in a sense that you have been taking from the miners over time. You went from 5eath to 4th to 3eath. And then now also again with EIP 1559, you are taking away the fees from these miners. These are your, you know, paid security guards that you guys have been having on your team.

And they've kind of been getting screwed over by you. when you decide to move from proof of work to proof of stake, I see a real issue here because these people that you have essentially been screwing over for the last several years are not going to be incentivized to protect the chain for two reasons. One, you've been screwing them over, but two, the other one is that you're going to be dropping the difficulty bomb and that is going to ruin the chain that they are protecting. Well, I don't know about you, but if you've ever been a, have ever had employees, I don't ever warn my employees that I'm going to fire them three or six months in advance tends to lead to instances of them colluding to steal from me, you know,

right? Usually what you do is you fire someone, you walk them out the door. That's not going to be the case from proof of work to proof of stake. I really do see, you know, the mev getting kind of out of control. I think you'll get a, you'll have time banded attacks that kind of get out of control, and it could be a very turbulent time ahead for Ethereum as it moves to proof of stake. Justin, I have the things I want to say, but do you want to take this one first? Sure, so many things have been said. I mean, one of them is, you know, execution risk. And, you know, part of it is just, you know, having software without bugs that works.

But there's also the risk that miners will somehow revolt and attack the system. And, you know, if we zoom out on the topic at hand, which is money and monetary premium, you know, you can start looking at a whole list of shelling points, right? And really, like, in my mind, there's two types of shunning points. There's kind of these short-term competitive shilling points. And then there's the really important long-term competitive shilling points, which are based on network effects. Now, the two really important ones, in my opinion, in terms of the long-term ones, is one security of the blockchain and two, scarcity of the asset of the token. Now, it is true that Bitcoin, and in that, and in that, and, and, and, and, and, and, and, and, and, and, and, and, and, and, in these long-term categories, I truly believe that Ethereum is kind of orders of magnitude

ahead of Bitcoin. And as such, Bitcoin has lost the long-term game. But if we look at these short-term ones, you know, there's a whole list of them. So you can look, for example, at financialization, right? So the notion that Bitcoin, you know, has an ETF now, you know, that makes it more money than Bitcoin than Ethereum. Yes, yes, I would agree. But, you know, these are very, very short-term things that basically have a lifetime associated with it. It's a shutting point which will, which will disappear. And actually, if you take a historical perspective in financialization specifically, like the timescales just keeps on decreasing.

So, you know, Bitcoin came six years ahead of Ethereum in terms of the Genesis. And then you can ask, for example, when, you know, how much advantage did Bitcoin have for gray scale? It turns out there was three years kind of gray scale. of Grayscale had the Bitcoin product three years before Ethereum. And then you can ask yourself, what about futures? Well, it turns out that's half of that again. You know, Bitcoin had futures one year and a half before, before Ethereum.

And you can ask the same thing for, for, for, for, for, for, for ETS. And it wouldn't be surprised if it was also half of the of the, of the previous thing. And execution risk is the exact same mindset. It's kind of this short-term myopic mindset of short-term shedding points. And the reason is that execution risk, well, guess what? It disappears once we've executed. And the same thing for attack risk, you know, it just disappears once there's no more minors, once proof of work has been removed.

So maybe you're right. You know, maybe there will be issues, but it's very short-term thinking, in my opinion. Another thing that was point that was brought up is on distribution. And this is a misconception that somehow a theorem proof of stake is not distributive. And the reason is very simple. simple is because when you you stake if and you receive the rewards, that counts as income in all jurisdictions pretty much. And income has income tax associated with it. And that's, let's say, roughly 50%. And so you have this natural kind of forcing function to sell your ether. You need to sell

50% of it. And so that is a very similar distribution mechanism to Bitcoin. Bitcoin, you need to sell your Bitcoin because you need to pay for electricity bills and hardware bills. Well, it turns out that in the case of a firm, you need to pay your income tax bills. Depending on governments for your issuance. That's an interesting take. I haven't heard. For the record, I actually, I think there's a better argument than the income tax being a forced distribution, although it is worth noting that that is actually blanketed

across the world. The distribution aspect of proof of stake comes from the nature that proof of state. has made it trivial to become a validator to the chain, which meaning, and so, Dennis, we talked about this last time we debated. The Bitcoin and Ethereum have both the same problem of, we have this money, and when you have money, you have a money printer somewhere. The Bitcoin protocol can print money if it wanted to. The way the Bitcoiners and Bitcoin has solved this is that it's just capped, like just, just, just kept it, just killed it. Just like, no, kill the money printer, destroy it. Take a hammer to it. It's gone.

And that's what Bitcoin is. So like, no, no issuance for anyone. No one gets anything. Ethereum does something different. It says issuance for everyone. And all you need to do is bring your computer and capital, because everything is involved with capital. And so by collapsing the cost of validating the chain, Ethereum solves the senior issue problem

of like, all right, we have this money printer. What do we do with it? By spreading it out to the maximum number of people. And by doing that, you also receive maximum decentralization and mass. maximum security. So whereas Bitcoin just eliminates seniorage, Ethereum tries and finds a way to spread it out to the maximum number of people by reducing the cost of providing security to the absolute minimum.

My question for ETH's money is... I was actually a bit surprised when I started even seeing the mean because for the longest time, I kept hearing that ETH has gas for small contracts, which actually made a ton of sense to me. Like, ETH deserves a lot of credit for basically, inventing and smart contracts and then getting some of the early applications there. And so in my mind, it was always a smart contract platform.

And then it has competition there. And three years ago, you know, everybody would laugh at when somebody would say, no, these other platforms are going to build better, faster smart contract systems, and then they're going to get traction. But I think fast forward to like 2021, and that's happening. So the salinas of the world, the avalanches of the world, I would even argue to some extent stacks of the world, they are getting all these applications. And Ethereum is kind of like losing at home ground. Like this is the main thing that Ethereum is supposed to do.

And I just don't understand why is Ethereum even trying to pick a fight with a blockchain that has just one use case? It is a single purpose use case. The only thing it is trying to do is to be the best money layer for the planet. Right. So I like help explain to me how does those two use cases differ from each other? Like what type of technology do you need to build to be a really good smart contract platform and what type of technologies do you need to build for being a really good money layer and which fight are you are you trying to pick? So one of the realizations I guess for me is that it's impossible to be, you know, an outstanding smart contract platform without. the monetary premium, the premium is necessary for two reasons. The first one is that it's necessary for security, right? And the whole product of the blockchain, the block space that we're selling is all about settlement guarantees, aka security. And in order to achieve this, you know,

resistance against state actors, we just need tons and tons of monetary premium. Like right now we have 32 billion dollars of economy. It's too small. By, it's too small. By, you know, a couple of orders of magnitude. So we must grow that if we're going to build a platform which is resistant to World War III. Another reason why it's required is because we need trustless economic bandwidth, right? The defy is, sorry, the small contracts, many, many cases are interesting because they manipulate value.

And, you know, you enter the world of finance. And in the world of finance, you need collateral. And when you want to build these trust lists and decentralized applications, you want to minimize the number of assumptions that you're making. So at the minimum, you're taking on the assumption that the firm is secure, right?

That's the kind of like the basic assumption. But you don't want to be making additional assumptions. So like the most natural way forward to not take on assumptions is to just reuse the native money, which is if as your collateral, as your economic bandwidth. If you try and do something else, for example, you try and use wrapped Bitcoin,

then now suddenly you're trusting BitGo. And now your weakest link is Bitcoin, which is not satisfactory. But it turns out that kind of security and scarcity are mutually beneficial. The more security that we're, we have, the more transactional utility that we have, the more fee burn that we have, the more monetary premium that we have, which gives us more economic security, which gives us more

utility. And so it's really a foolish game to try and detangle and disassociate the notion of security and utility and monetary premium and money. So it said differently, Munib, I think the way that you presented this is that like, you know, Ethereum pick a lane like, are you money or are you a smart contract platform? And I would actually turn that around on you and just kind of, which is going to be reframing exactly what Justin Drake just said, where he says, you need economic activity to drive scarcity. Actually, I think Bitcoin needs to do some more defy stuff. And also the whole ETH killer phenomenon needs to do some more Bitcoin things. It's not Ethereum that needs to pick a lane. It's Bitcoin that needs to generate

internal native finance. And then also the ETH killers need to actually become decent. so they can have the monetary premium. So it's actually the opposite ends of the spectrum that need to come and do both, because it's both that gives you both the decentralization and security that allows you to be money, while also generating the internal native financial economy that drives demand for block space, which generates scarcity into the L1 asset. Yeah, so I can give you the Bitcoin model. So the Bitcoin model is that Bitcoin is the decentralized money layer.

then you have a smart contract layer like Stax. Stax is purely a gas asset, never trying to be money, they'll never be money because it literally depends on Bitcoin for its existence. It can't exist without Bitcoin. And there's a separation between what is money, what is the store of value, and what is the gas asset. And then they can interact with each other and you can use this system that way. But then extending that argument,

do you guys then also believe that every other smart contract platform or forget about smart contract platforms like Solana, look at Polygon. So Polygon recently had more daily active addresses than Ethereum. So with that type of network activity happening, does Matik becomes money and would start kind of competing with Ethereum? Solana will become money and Avalanche will become money. Are we all in that game? Because my model of the world was very simplistic.

Like Bitcoin is money. Let's just bring smart contracts to it. There are a bunch of other smart contract platforms as well. but this argument seems to say that everything is trying to be money. In my opinion, everything that is an L1 token is trying to be a global sovereign, non-sora value asset. Yeah, I agree. And I think this is actually part of the reason why I believe that Stax is kind of, you know, a little dubious in the sense that one of the things that Stax is is claiming is that it has, is inheriting the security of Bitcoin. But I don't know how to do such a thing.

Like my guess is that if, you know, more than 50% or more than some threshold of the STX tokens are controlled by an attacker, then that attacker can just, you know, do all sorts of bad things like censorship and maybe even break. That's not how Stax works. It's not a proof of state system. There are separate miners that use. We don't need to get into it, but that's not our tax works. Right. But you do have an honesty assumption in addition to the honesty assumption that Bitcoin has.

So parts of the applications basically think of them as cross-chain, right? So part of your application is literally just running on Bitcoin. As the lending application, you're just doing Bitcoin transactions to lend your Bitcoin. And part of the application is running on the stack side. So your collateral, for example, is a smart contract on stacks. And then that is settling, that data is settling on Bitcoin. and there are miners involved that are running on the Bitcoin side. It's not proof of stake.

I know that's the world you guys come from, but we can get into it separately. Right. But let's remove the programmability aspect for now. And just think of Stax as just like a site chain that provides a bit more throughput. Are you claiming that Stax has solved Bitcoin scalability in a trustless fashion and it has exactly the same security model? it helps like how lightning helps, right?

So lightning can scale payments and then you're doing settlements on Bitcoin. So Stax is the programming layer. It has smart contracts. So you can do it a lot more smart contract activity that is eventually settling on the Bitcoin chain. And then you have the cross-chain connections between them. So you can build applications that basically are running on both.

Okay. Now, my understanding is that there's this proof of transaction aspect where basically I haven't looked into, too much because I didn't completely understand the documentation, but basically what I understand is happening is that there's money, Bitcoin specifically, which is being sent to various STX holders, presumably. And as an attacker, if I'm willing to, I have a lot of Bitcoin and I'm just willing to spend and give a lot of Bitcoin to these STX holders, then presumably I have some amount of control. And if I'm willing to spend more than what the others are,

doing, then I can start doing bad things like censorship or, you know, reverting bad chains or stuff like that. Yeah. So the way to think about that is a Stax follows the proof of work type of security model. But instead of burning electricity, you're actually consuming Bitcoin. So you're, so that's where the security budget is coming from. But that's, that's like specific to how kind of like Stax functions. My main argument is that separating the money there and letting the money.

layer be the money layer and building basically contracts around it is one model. And I actually disagree that I don't think, like if you talk to people at Solana or Avalanche and other places, like I don't think they would say that they're trying to do money. Like they would argue that they're not trying to do money. They're trying to build, you know, decentralized computing platforms that are valuable for different reasons than decentralized money is valuable. I think if they don't think that they're trying to be money, they're making a mistake. Like maybe they don't know that, but again, if you commit to being an L1, you commit to trying to fight for monetary premium.

Right. And Muneb, you're saying that Stax is secured in a very similar way to proof of work, except that the work is spending this Bitcoin. And so basically, that probably means that that Stax has, you know, orders of magnitude, maybe 10x or 100x less security than Bitcoin, simply because, you know, the expenditure of electricity on Bitcoin is just so much. larger than the expenditure of Bitcoin for Stax. And as such, if Stax doesn't compete for monetary premium, it just won't have a security,

and then it just will be irrelevant. Yeah. So I think Stax does have less security budget right now than Bitcoin, but the design is very, very interesting where all of the four histories of Stacks are secured by Bitcoin, literally. So you benefit from the security of Bitcoin because Bitcoin is securing all fork histories on Stacks. But here's the interesting thing. Even if I take your argument that Stax is less secure than Bitcoin,

let's say somebody attacks stacks, the core argument of keeping your money there separate is that nothing happens with Bitcoin. And securing the money layer, in my view, is the most important thing. Once the world gets decentralized money, there can be many smart contract platforms. There can be many type of different applications that are built.

See, that's actually something that I think a lot of Ethereum might agree with. We just separate our stacks, differently. And so you called Solana and all these other eth killers as like computing environments or, you know, smart contract platforms. And the way that I would phrase that is that these are execution optimized blockchains, as in they are optimized blockchains that have sacrificed decentralization in order to increase scale. In the Ethereum world, and really, this is just a neutral technology, roll-ups are the same thing. They are execution-optimized networks, and that they have sacrificed decentralization

to be layer twos on Ethereum, preserving the money layer, which is the asset transfer layer of Ethereum, which is contrary to a lot of what Bitcoiners say, actually a very simple L1. Like it's generally pretty simple as far as it goes. Maybe proof of sake is a little bit complex. But in the grand scheme of things,

you have all these compartmentalized financial application layers, these roll-ups where it's very, very performant. And then you can tap into the very, very secure L-1. L1 of Ethereum. And this goes back to what I was saying earlier, where Ethereum's trying to do it all. It's trying to have a decentralized layer one, which has a very significant monetary premium that is highly secure. And then it's designed to have highly executable layer twos that can conduct all the financial activity. And so it literally gets the best of both worlds, and it captures all of the money, all the value of decentralized finance using the roll-ups, and then it

injects it into the security layer of the layer one. Yeah. So can I, can I give the Ethereum people some unsolicited design advice? Like I think I've tried doing that back in like 2016, 2017, when I effectively said, you know, don't try to do sharding. You won't be able to do it. Try to work on L2s. And I'm pretty sure Justin has spent like years and years.

I don't want to discouraging for doing that, but sharding turned out to be a pretty, pretty hard problem. I would say that if I was involved with Ethereum today, I would actually not try to move to Pufus stake. You actually have a fairly secure network with Pufo Work right now. You actually have like a bunch of traction and usage. And L2s are working. Like Arbitrum is coming online.

That's actually a pretty solid solution. If I was designing Ethereum today, I would stick with proof of work. I would actually try to limit even further the types of activity, that can happen on the L1. Maybe you just wanna do roll-ops. Maybe you just wanna do fraud proofs at the L1, but discourage applications to be built at, basically try to minimize your L1 layer

instead of keeping it very complex. So any types of applications are being built. And don't try to do sharding, don't try to move to Puevoste. And then you have a serious shot at becoming a money layer because you inherited all of the properties that the arguments that I was making, like why a proof of work system,

is actually better because it actually has security defined outside of the system. We didn't get into this that much because what's happening with proof of stake is you're trying to define security within the system. Everything is pointing to each other. Right. You need a referee that is actually sitting outside of the system that when things go south, someone can actually step in and be like, here is how you define security. Because one of the first things that's going to happen, if something goes south within the system,

is how would you then recover from? Like, I can give you an example. All these blockchain systems are BFT systems. Let's say for some reason, a bunch of exchanges get compromised and close to 33% of your staking power is now not cooperating with the consensus system. You will stop making forward progress.

This wouldn't happen in other types of design. So I think defining the security of the system outside of the system itself is actually the critical difference here. There are also some other problems as well. I would like to kind of get your, you and David and Justin's answers on here. But a lot of times the argument from the Ethereum community is that it's economically infeasible to attack the proof of stake network. But when you take it to consideration, this aspect of,

slashing, which could be one way to help make it more economically feasible. You could also target large holders of Ethereum. You could buy wallets off of network, so there's no transaction. People are unaware of the movement of those coins to other holders. But you also have this issue with these derivative companies that have been formulating. So like the Lido protocol, I think they've captured like a very large majority of the staking in a very short amount of time. because they give Ethereum holders this token in exchange for staking on their, on their protocol. And so it leads to this really kind of perilous situation where the supply is becoming and the staking is becoming very, very centralized in a very small amount of hands combined with,

you know, the idea that if someone has a large majority of the staking power or control, they could intentionally get into a situation where they try to slash themselves and also slash their competitors leading to a situation where they, again, have a larger control or percentage of the network. So I'd like to kind of hear what you guys have to say about the ability to kind of supply, hijack the network and the staking protocols. First off, Lido is a decentralized staking as a service protocol. It's a Dow. Half of Lido, I would say, is distributed rather than centralized, but relatively centralized. And the other half is completely decentralized. The people that are, the aspect that's decentralized is that people come in and submit their ether to the validator network.

It gets bonded to the beacon chain. And it also gets spread out amongst, I think, like 11 validators. Meanwhile, they're also working on this thing called shared secret validation, which is basically like splitting up the keys to a validator, allowing the actual validating network to also become decentralized. And so it's not a corporation in the same way that Coinbase is. And so when I see ether going into Lido, I'm actually seeing. becoming part of the decentralized like staking network that Lido is offering. And this is actually a model that a lot of Ethereum teams, applications are actually expanding upon. Rocket Pool also comes to mind

where yes, the ether is actually being owned by a central contract address, but that contract address is represented by a very large number of people, both validators and eth suppliers. So it's actually not accurate to say all this ether and this one address is centralized. Sure, but a lot of, of the governance tokens are being controlled by, you know, a very small amount of people,

which does have an impact on the centralization of that supply. I mean, and it also leads to this issue with the costliness of money, which is a very important aspect going back to sound money. And when you are able to essentially give your Ethereum to them and you get a one-for-one token back, it completely eliminates the costliness of production because you can be a part of the staking and you can be a part of the issuance without any cost to your stock. whatsoever. Do you have anything you want to say? Yeah.

So one of the things you said, Dennis, is that we're claiming it's impossible to attack the network with proof of stake. You know, that's not the claim, right? The claim is the exact opposite is that with proof of stake, just like with proof of work, you can attack the network, but there is a cost and that cost is measured in terms of economic security. And right now is on the order of $32 billion. Well, that's my point, though, is that it's cheaper than that because of the fact

that you can get away with slashing at your competitors. You can buy... No, no, no. You can target top holders. It's not how slashing work. It's the exact opposite with slashing. You can target top holders. You can target very top holders, wallet holders.

You can collude with people. You can collude with exchanges in order to gain larger controls of the supply. You don't actually have to buy $32 billion worth of Eath. Sure. But slashing is kind of the opposite of the way you portray. It's like you're talking about slashing like other people. but that's not how it works. The way that slashing works is that it slashes bad actors. If you make a provably bad action on the network, you know, you make a double vote, for example.

You're voting for two inconsistent things at the same point in time. It's a cryptographic event. And slashing is a recovery process. It's when an attack happens, if and when it happens, and it is possible that it happens. All the bad actors who are provably bad to just get removed. And so you're left with the good actors. And so slashing is precisely what makes it difficult to attack the network in a repeated fashion. And this is a key differentiator with Bitcoin. When you look at an attack, you can look at it as a one-shot game or you can look at it as a repeated game.

In the case of Bitcoin, if somehow you manage to accrue 51% of the hash power, then you can attack Bitcoin over and over and over again. So for example, you can just continuously send. sensor it and not produce any blocks. And so there isn't this recovery mechanism. In the context of proof of stake, if an attack happens, sure, it can happen one time, but then we're going to slash you. Okay, maybe it happens the second time, but then we'll slash you again.

And guess what? Every time there's a slashing event, it becomes harder and harder to pull off the attack because it's just less and left if in circulation. And also this is what Munib was talking about, about external security versus internal security, where Justin Drake is saying that Ethereum actually derives its security by removing this, what Vital calls this bond camping attack, a proof of work, which has external security. Bitcoin can't delete A6 because they're external,

but Ethereum can delete its own ether because it is internal. And so it gives it an extra layer of defense when it comes to attack. I would push back on that, right? So think of this way. let's say that someone is able to get to up to 51% on Bitcoin. At that point, it's open warfare, right? Like, anyone can go, try to get more hash power, and you're not fighting, you're not fighting publicly to gain more hash power.

And the way Bitcoin and not come out of consensus works is, everything is probabilistic finality. You can actually go back in time, fork from another place, and the system has self-recovery baked it, right? Whereas in proof of stake, you have actually removed one of the actors, which is the external minor. Now everything is internal. And once someone actually gains access to, let's say a massive hack happens, like Cricken gets taken down, Coinbase gets taken down, or something like that. Once someone has more than 33% of eat, you're told you can never be able to make forward progress.

No, it's the opposite. If Cracken or Coinbase gets compromised, they will get slashed. and so they will get removed. I mean, if they abuse their power and and and and and and and and the system. So so you're saying that in terms of your in terms of this you start slashing like the like 33% of economic power on the notebook and they will start losing their eat and then what if the attack is bigger? What if what if what if now if you're talking about a 51% attack on Bitcoin? What what if somebody has 51% of economic majority power that can they do anything on? an network now because they're the majority. Well, if they start abusing the power, they'll get slashed.

That's kind of the TLDR. Who's going to slash them? They're the majority of that one. Built into the network. Well, it depends. There's, okay, we're getting technical here, but there's kind of two types of slashing. Like, one type of slashing is like the cryptographically provable slashing. Like, you made a double vote.

You tried, for example, to finalize two inconsistent checkpoints. this is automatic slashing and happens you know by the network there's another more subtle type of staching where as a majority actor you can for example do censorship and here basically the

resolution is social social slashing so the affirmed community can see okay well there's this one actor it's clearly compromised it's clearly attacking the network because it's censoring all these blocks the good news is that we can identify this actor we can see that you know

the owners of Pubkeys X, X, Y, and Z are not producing blocks, for example. They're censoring the network. We're going to go ahead and socially slash them, which is a hard fork, but it's a very similar process where at the end of the day, the attacker loses the... I think this really highlights the difference in the two school of thoughts. Like in the Bitcoin camp, there's no concept of a social hard fork, right? that I'm going to remove the economic, I'm going to remove Bitcoin from somebody's wallets,

or I'm going to roll back the state of the blockchain. User activated folks? Right. When have, when have they happen? They can happen is the point. The point is that they can happen. I think that's, I'm pointing to the difference, right? People can pick which camp speaks to them more.

I think on the Ethereum side, it is acceptable. like with a Dow fork to rollback history or to take away tokens from one wallet address and give it to some other address. And the Bitcoin world that's completely unacceptable cannot be tolerated by another community. Wait, you know, that you have Bitcoiners wearing, you, you know, user-activated soft fork, UASF hats and, you know, like saying that it's completely unacceptable, I think is a mischaracterization. And also it hasn't happened on Ethereum. and the two networks are on power here.

Like, it can happen in both cases. And let me give you one example. I want to compare. Sorry, sorry. I think people will get confused here. I want to compare a user-activated soft fork to the Dow pack, right? There is a huge, this like night and day type of a difference here. The user-activated soft fork is not changing the balances of anybody.

It is not rolling back any transactions. It could. But there's no way, it would. It wouldn't be a soft fork at that. It would be a hard fork of that. No, it would be a soft fork. You can freeze funds. So let's assume, for example, that a quantum attacker comes in and steals 10% of the supply.

This is the exact same situation as the Dow. The Dow is basically one attacker being in control of an outstanding number of coins, let's say 10% or 15%. Would, you know, would the Bitcoin community say, okay, yeah, that's fine. We're going to have just one attacker control. They would literally say that in what. never rolled back. Okay.

But at the minimum, they would have the option to do a user-activated fork to freeze those funds and effectively destroy them. It will not fly into the Bitcoin community. It will literally not fly into the country. That's a subjective argument on a technical one. Let's just make it a historical argument. Has never happened in the Bitcoin history, has happened in Ethereum history. So that's just a historical fact.

Yeah, to me, it's such a very weak argument because the Dow hack happened in 2016, which which is five years ago, out of six Ethereum's lifetime of six years. And there's also been a very significant number of proposed hard forks and proposed EIPs that did something like this for like fund recovery, famously I think EIP 999 to get their parity funds back. And many, many other EIPs, which never really make it to the surface of the conversation just because they get denied. And so like, yeah, Ethereum had it's like Mulligan, but also at the same time, And there's a lot of things that Ethereum has denied from proposals from the community that, like, Bitcoiners just don't hear about and kind of really illustrate the new level of immutability

that Ethereum has achieved. Right. So I think let's take, for example, EIP-159, right? So here's the paradox of that. As a economic policy, I actually think it's a much better economic policy than the previous one. Right. So I think I agree with you that it's an upgrade. as a Bitcoiner, I also know that that would not have happened on Bitcoin.

And I think this is where the fork on the road is. And we don't know what is going to win in the future, but I think it's important to differentiate the two paths. The path on the Ethereum side is that you're willing to have social consensus around monetary policy and then change the monetary policy. Bitcoin is saying that there's no concept of social consensus around these things. this is all proof of work and that's it. That is a social consensus, by the way.

Mike, that gets back to like this, like I think it was the ultimate point and our last debate between me and David, which was that in order for something to truly be sound money, it needs to not be able to be messed with or tinkered with by human beings. Because throughout history, we've had 10,000 years of history to prove that any time you leave the door open for human beings to come in and change the monetary supply or the issuance, they will and have always done that. And so I think that it's very much the difference between the Ethereum camp and the Bitcoin camp is that you guys kind of think like, okay, well, as long as we as a community are okay with these changes, that's okay. But there will

come a time, in my opinion, eventually it could be 10 years down the road, 20 years down the road, who knows, could be beyond our lifetimes. But the fact that you leave that door open for human tinkerability to the monetary supply and issuance is ultimately leaving the door open to corruption of the monetary supply itself. Like I asked you the question, I said, you know, if the dollar became deflationary today, right? Like they just, they finally raise rates, they stop printing money, they go full-blown, deflationary with the currency, they start burning it. Does that make the dollar sound money. And I think your answer was no because the door is open to tinkerability. And

I said that the door is still open for tinkerability with Ethereum. And that was kind of my whole argument. I'm curious if you kind of had a something to say to the effect of that since our last debate. Yeah. And I think the video aspect of this will actually help out here. So like Bitcoin, it has maximized for immutability more than anything else. And I think bitconers don't really appreciate the fact that Ethereum is actually, the door is more open than it is with Bitcoins. Although I will say there is no such thing as perfect immutability. It's always a spectrum of how open the door is.

The Bitcoin door isn't completely shut. It's open just a smidge. And the Ethereum door is open a decently more amount than Bitcoin. And then we have the dollar, which like the door is like all the way open, right? And so it's actually really hard to get changes into Ethereum. Like, we don't implement that many changes, and the changes that we do implement have, like, hundreds and hundreds of, like, highly technical eyes on them. And those people that are putting the eyes on the changes have thousands and thousands of eyes on those people. And so in stark contrast to this whole, like, 12 old white dudes behind a closed door, Ethereum is, like, done on open forums in open, in the court of public opinion and never actually really can do anything that's against the community.

And so while there is a door that is a door that is open, it's done in a very transparent way with the social commitment of eventually we are pushing that door more and more closed every step we can while we work on integrating all the technological upgrades that we can while we have this time of flexibly updating blockchains. Two things you said real quick there, money one sec. I just want to say two things. You said that Ethereum closing the door, it doesn't change very often, but you guys hard fork. every three weeks, four weeks it feels like at this point, maybe even less than that. It's roughly once every two years. And the things going into those hard forks are just very, very small. And the court of a public opinion, you know, again, this is the court of public opinion. It's human control. And you may have made the human control aspect of your money more decentralized than a dollar. We can 100% agree on that. I think the dollar is the ultimate shit coin.

But when it comes down to it, you've left that door open. And there will come a time, in my opinion, in the future for a majority of people to get into a position where they can make changes to their benefit that don't benefit all the users. I think most of the changes that you, and you said this last time, every change that we've made so far has benefited the users of Ethereum. But that doesn't mean that that will always hold true. Also, I would say that the community as a whole is, I think it's interesting that you don't include the miners in there because as I said earlier, you've went from five to four to three and now you're burning the fees. And so you have hurt people in your It's just interesting that you don't see the miners as part of your community.

I want to add some things that I think this is also a very fundamental point that when you're talking about making changes or even the need to make a lot of changes, whether it's not making changes. That's where conflating the smart contract platform with money actually hurts Ethereum in my view because there will be more changes required to upgrade a smart contract platform. Like maybe you could even argue that a proof of stake system is a good upgrade for a smart contract platform. Or maybe at least in my view, it is not a good upgrade if you want to be money. So I think because those two things are conflated at the Ethereum base there, something like Solana, which in my view is just trying to be a smart contract platform can actually hard for or upgrade. Their stakes are very different from a money layer. And in the case of Bitcoin, where Bitcoin's money layer is separate, and stacks, the smart contract platform layer is separate, stacks can actually hard work more and just optimize for

whatever functionality the developers are looking for without ever changing the money there. This is also true with roll-ups. This is the same pattern there. Exactly, which goes back to my recommendation that you can even right now try to stick with approval work, try to actually minimize the Ethereum-based layer instead of making it more complex, and just do most of the computation and drawlups and L2s. I know Justin

is itching to say something, but Dennis, you said in Muni just said something that I think aligns here is like, you guys are kicking out the proof of work miners, just stick with proof of work. Under proof of stake, the users and the transactors and the security values

of Ethereum are all the same people. And so it's fundamentally more about aligning incentives where proof of work miners are really mercenaries. They have to be profit-driven. They have to sell the asset. And they represent a two-tiered society that wraps around a chain. So the people that have the ability to mine the chain

and the people that can only buy the asset from the miners, right? It's the same thing as like the money printer. It's a paradigm that we exist. There's two classes of citizens. There's people that can access the newly, freshly issued coin. And then there's the rest of the world, right? with proof of stake, we actually collapse all parts of Ethereum into, are you an NFT trader? Are you a defy speculator? Are you just interested in the protocol? Well, all three of those people

can all be Ethereum validators under proof of stake. And it's not that we're like kicking miners out the door, Dennis. Actually, miners have been, we've been noticing the accumulation of ether by miners leading up to the suspected timing of the merge. And so miners are actually going to very elegantly morph from proof of work minors to proof of stake validators preserving their business model. Justin, do you want to say anything? I know you were issuing to ask something. Yeah, I just have a few thoughts. I guess on the whole, you know, changing the rules aspect. I think one of them is on time scales. I very much disagree that it's easy to change Ethereum and it's changing regularly. And just to give a few examples, you know, proof of stake has been part of

the plan since before Genesis. And so it will basically take seven years to deploy proof of state, you know, another year from today plus the six that Ephraim has had. EIP 1559, these have been ideas that have existed or have originated from five years ago. It took five years to get EIP 1559. And one topic which, you know, I joined the Firm Foundation four years ago. And the one thing I was working on was sharding. And sharding is going to take 10 years from start to finish.

And when you compare that to changes with Bitcoin is actually, you know, we're more conservative than Bitcoin in a sense. If you look at, you know, Segwit and Taproots, these don't take 10 years, you know, to go and deploy. They take, you know, significantly less. Another thing that was, you know, brought up is kind of the good ideas versus bad ideas. Like, you know, it's not about making a change in of itself. It's about what changes are being made. And I think Ephraim has an excellent film. mechanism at play. And it's kind of the honest minority assumption kind of thing. If there is a

bad idea, it just takes one single actor to blow the whistle and show that this is a bad idea and basically convince the eave holders who are incentivized to bring in only good incentives, only good changes to come in. And so because of this honest minority aspect of changes, I think, you know, Bitcoin has fundamentally kind of handicapped itself because it's given away the innovation, innovation which is very safe because of this honest minority aspect. Another thing that I want to bring forward is that eventual ossification for Ethereum is inevitable. It will happen. It will be fully ossified just like Bitcoin.

And this goes back to, you know, my short-term thinking versus long-term selling points. the fact that we are changing right now is like all myopic, it's all noise, it's all short-term noise. And the reason why we eventually need to ossify is because as the total value locked on if there increases, as there's more and more activity, it just becomes harder and harder to change. And the reason is that we have to make these backwards compatible changes and our level of paranoia and conservatism kind of scales with the amount at stake. And so at some point, we're kind of trapped in our success where we can no longer move and will be fully fully ossified in a very similar fashion to Bitcoin, unless there's some sort of like external looming threat, which is some sort of forcing function for us to take emergency action. And one of these forcing functions could be quantum computing, for example, which forces us to upgrade our cryptography.

And then the final point that I want to bring forward, and this is something that Bitcoiners always sweep under the rug, is that. the fact that the monetary supply is fully programmatic is an illusion, right? The door, every single four years, kind of grows and grows and grows and grows. And eventually, because Bitcoin will be unsustainable from a security perspective, something has to change. And it turns out that the easiest thing to change is just to remove the 21 million cap and just have this continuous kind of tail issuance to secure the, the blockchain.

Meneb, do you want to jump in there? No, I would just say the same thing, but that's a very big assumption to say that Bitcoin would be not secure, given their discussions we've had about Bitcoin being a settlement layer, and miners don't care if their incentives are coming from transactions or from point issuress. And that's anything to add? Yeah, you know, it's interesting too because you do say that Ethereum or Bitcoin gave up innovation, but there's some other ways that Bitcoin is innovating, and that's in the

world outside of Bitcoin itself. I think that it's pretty well understood at this point that the mining hardware that's being used, the chip production that's occurring is all innovations that are occurring because of the desire to find more efficient ways to mine Bitcoin because of the having that is programmatic miners are forced to upgrade their hardware. It's also incentivizing renewable energy throughout the planet. And I personally believe that you'll have a very big period of time where the mining and the renewable energy production in this country and across the world will grow dramatically because of the impact of proof of work and because of the impact of the impact of mining itself. And I think that also when you look at what's going on in the

community, there's tons of work being played into things like stacks, things like liquid to enable Bitcoin to do all the different things that Ethereum claims it can do. And something was said earlier too as far as smart contracts. And All of these things were created on Bitcoin. They were first invented on Bitcoin itself. But we haven't found a reason or a need to change the protocol in order to enable those functions to occur. Happy to let them occur over on Ethereum until all of it eventually comes back to Bitcoin.

I think the closing statements that I will say is that there is a gap between Bitcoiners and Ethereum is much larger than what is perceived to be much larger than what's actually true. I actually, I joke with Eric Connor a lot that, you know, Ethereum and Bitcoiners, they actually have the same values. They just believe in fundamentally different executions. We believe in the immutability of money. We believe in decentralized, the world of decentralizing finance away from the powers that be

into the hands of the people. And it's really more about the execution, about how we actually get that done. And so while there appears to be many, many differences between these two camps, I think we all have to be reminded that we're all in the same industry, we're fighting for very similar things, and at least we're not a centralized blockchain. Yeah.

I mean, that's ultimately driving, man. Screw the Fed. I can plus one bad. Actually, sometimes a joke that the difference between the Bitcoin model and the Ethereum model is actually one layer of indirection. All we are saying is that keep the base layer simple, build the complexity in a different layer, which is kind of like happening with the L2s anyway, right? And that's really the only technical difference that I'm talking.

This is literally what stacks is on top of the question. Justin, any closing statements from you? No, no, really. I mean, I do want to kind of echo this. You know, we're all going to make it in the sense that the industry as a whole is obviously going to make it. And I, you know, I think that we, you know, we're all going to make it in a sense that it's very, very likely that, you know, we're all going to be able to accrue money to a premium and be successful. I think it's just a matter of orders of magnitude. And I think, you know, Ethereum is in the position, you know, to just win in terms of these orders of magnitude aspect of.

Well, Dennis Meneb, Justin, thank you for coming on and hatching out one of my favorite subjects, ETH versus Bitcoin as money, which inevitably these debates always go and find their own paths forward. And I think this one was no exception. So thank you guys for joining us on this bankless live stream. Thanks, David. Thanks a much. Thanks. Thank you.

Dennis, do you want to give a quick shout out where people can find out more about your content that you do and where you live in the Twitter sphere? Yeah, find me Dennis Porter on Twitter. If you search that, you'll find me easily. But if you want the handle, it's Dennis underscore Porter underscore. I spend a lot of time there. I do a ton of spaces in and out of there pretty frequently. I also have my podcast.

So I do smart people shit. That's where you're going to find my channel. And then also I have another show under that channel called The Update, where I regularly update listeners on just kind of what's going on in the Bitcoin space broadly, but also I try to bring on experts like on chain or technical analysis mining. I also have a, as I've said before the very beginning, I do have some experience in politics and I kind of try to make that a framework for what I do. As we all know, the crypto tax reporting amendment was a big problem.

And so, you know, even though we fight on a lot of things, there are some things that we all fight, you know, mutual enemy. And that is the, you know, the governments around the world that are trying to, you know, to screw us over and trying to suppress. So I look forward to continuing to fight politically here in the United States. And yeah, if you want to DM me, my DMs are always open on Twitter. Thanks, Dennis. Munib. Where can people find you in the world outside of this live stream? Yeah, so I'm simply at Munib on Twitter. That's my first name, MUNE-B. And I spend all my time working on stacks, which is a smart contract for Bitcoin. So if you're interested in locking up

capital and earning a pure Bitcoin yield on the main Bitcoin chain. You can try out some of the smart contracts there. Or recently, I think there's Bitcoin culture being represented in Bitcoin NFTs through Stacks as well. So if you want to collect some Bitcoin native NFTs that describe the culture aspect of Bitcoin, you can check out some of the new marketplaces that are coming up on stacks. Fantastic.

And Justin, where can people find more about what you're up to and where you live in the the Twitter world. Sure, yeah. I'm Drake F. Justin on Twitter, but you can also DM me on Telegram. I'm Justin Drake there. Or you can send me an email, Justin at Affirm.org. And then also you can check out his website, ultrasound.money. All right, thanks everyone for coming here and powhouring about one of my favorite subjects.

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