BTC Sessions - Bitcoin Core Crisis: Why Risk a New Bitcoin War? | Tomer Strolight

Starting point is 00:00:00 We find ourselves in the midst of one of these heightened tension periods in Bitcoin within Bitcoin. We have this incredible controversy, and digging one's heels in over what one claims is a very trivial point seems very suspicious. Now you have a lot of people questioning Core's intelligence, wisdom, integrity, honesty. That's really harmful to Core. We may be past a point of no return. That's Tomor Strolite, former tech executive and prolific

Starting point is 00:00:29 Bitcoin author. In this episode, we unravel the polarizing debate surrounding Bitcoin Core's recent decisions. People got up in arms about that, and this is the debate now, discuss what the ideal role of developers should be, maintaining laser focus on the primary principle and only legitimate use case of Bitcoin and explore whether Bitcoin did or still does have a central ethos. Well, it all, it absolutely does. Whether that survives is the question. Tomer also shares the silver lining to all of this that most people miss and how you can contribute to Bitcoin. We're seeing more people not trust Bitcoin Core. And that's actually a good thing.

Starting point is 00:01:12 For Bitcoin Core, for Bitcoin. Good morning, Tomor. Well, thank you so much for joining us today. To dive right into it, you've been dropping a lot of spicy takes regarding Core version 30, calling it reckless and saying that they should be in full damage control right now. So just to kick things off, I wanted to, first of all, get a sense of what they're doing. doing that's reckless and why they should be in damage control mode. And also to give the audience who might not be familiar with with core and the maintainers, what in your view should they be doing?

Starting point is 00:01:42 What is the purpose? What is their role in this Bitcoin ecosystem? Okay. This is a serious question. And we find ourselves in the midst of one of these heightened tension periods in Bitcoin within Bitcoin. We basically have a setting, which is not a consensus. setting. So there's no fork risk related to it that's been in Bitcoin for a decade, maybe longer, which is the data carrier size, which is how big of an op return nodes will relay. And relaying is passing on unconcerned information to one another. So a transaction comes in. Your node looks at it. It says, does this meet the consensus rules? Okay. Does it meet my policy rules. Okay. So I'm going to hold on to it and I'm going to pass it on to the other nodes that are

Starting point is 00:02:36 listening to me to say, have you heard about this transaction? So that's what relay is. It's the peer to peer gossip protocol that they say, have you heard about this? That's why it's called the gossip protocol. And they pass things around. And for the longest time, we've relied on policy as well as consensus to pass messages along. And policy was generally well enforced. And then, Then a controversy kind of came up, and people will debate the exact order or how big each of these things were. So what I'm about to say is not even verifiable fact, you know, but a controversy came up a couple of years ago with the inscriptions, which was someone discovered that policy did

Starting point is 00:03:23 not prevent people from relaying and getting confirmed into their nodes. JPEGs and other BRC 20 tokens and things because they could be tucked away in the script portion of tap root transactions. If this is already too technical, don't worry. They found a way to do something that people didn't expect they could do when we approved the tap root and the Segwit soft forks and all participated in it. And that led to spike in fees and here's where my take is going to start to come into it. a lot of shit coining on Bitcoin, right? Like new tokens were created. Tocons had crashed to zero.

Starting point is 00:04:04 Tocons that spammed the blockchain that created bloated, bloated on the, of the size of the blockchain and bloated in the size of the unspent transaction databases size. So it was aggravating. And initially it was like, oh, is this something to be scared about? And then on sober considerations, like, well,

Starting point is 00:04:24 this is shit coining. It's going to wear itself out. They have to pay fees to do this. So they're going to go broke doing this. And that essentially is what happened. The amount of big JPEGs and companies making money selling JPEGs went down a lot. I haven't followed. There's millions of different JPEGs and JPEG collections and shitcoins on Bitcoin.

Starting point is 00:04:50 So it's hard to keep track of how badly they've all fallen. But I think to say 75% or more is reasonably accurate. there may be an exception here or an exception there, but they're well down, even the most significant of them. But a controversy was struck up at that time to say, should we, should Core have patched things so that some restriction could be put on that utilization? And that led to a big debate saying, with one side saying, yes, core should have patched it. And another side saying, well, if you know, if you patch this, then someone can find some other

Starting point is 00:05:25 way. There's just too many ways to let arbitrary data into the system. And we kind of had nothing happen about it. And everything was quiet. You know, it was like the dust had settled. It was quiet. And then in preparation for this next version of Bitcoin core coming out, V30, some changes were made and the change initially was proposed to change the data carrier size of this op return field for arbitrary data from 83 bytes to, I think, 160 bytes. And there was some contention about that. And so they said, well, we're removing the filter altogether, which means operative can be up to 100,000 bytes because that's the maximum size,

Starting point is 00:06:07 the consensus permits for a transaction to be. So people got up in arms about that. And this is the debate now. And it's led to somewhere in the neighborhood of 20% of existing nodes running in different implementation now, not, which explicitly sets the data carrier size to 83 by default, and you can set it to zero. And it's got actually a graphical user interface. You don't have to edit for modifying these fields rather than you have to edit a config file

Starting point is 00:06:38 and save it properly and make sure that it works. So there's a lot of people who are upset. Core 30 hasn't been released yet. So the network is almost exclusively running some data carrier filter. And there's all sorts of concerns that people have, but I think the philosophical one, the one that got me kind of worried about this is the explanation to remove it is weak at best. It says it does nothing. So we have to remove it. And the counter to that for me is if it does nothing, then you can leave it in.

Starting point is 00:07:19 Yeah. Right. So after months and months and months, the argument God refined too well, there's these other protocols that are launching and they need this information to be relayed really quickly before it's confirmed because it's for justice transactions on layer twos. And we don't want, and it's very rare that they're going to use it anyways, like a couple of times a year. And so my concern, my mind come back to that again as well, if we're worried about making a wholesale change to Bitcoin, that some unlaunched layer two can make a couple of transactions a year, we don't really have anything to be concerned about. We're not concerned about a couple of transactions. We're concerned

Starting point is 00:07:58 about lots and lots and lots of big transactions. And that, I don't think has been responded too well other than to say, well, it does nothing anyways, so it's overhead and we need to get rid of overhead. But you can see 20% of the network has already actually made a switch or started running a node which they hadn't run before that rejects this idea. So we have this incredible controversy, and digging one's heels in over what one claims is a very trivial point seems very suspicious, right? I just don't know any other way to put it. It's like if you're saying this is irrelevant, don't worry about it, and you must absolutely run it,

Starting point is 00:08:37 you know, and in addition, the core software is deprecating the feature, which says, we're going to remove your ability to filter on these terms at some point in the future anyways. But don't worry, it means nothing. It does nothing. It's kind of like, you know, it's like if as your doctor, I said, we've got to remove your tonsils, don't worry, they do nothing. Yeah. Or we've got to remove your spleen or your baby toe or your foreskin or, you know, like all these, these things don't matter that like, and we've got to remove them. It's like, well, how about I just keep it? You know, how about we leave it? And I think that that's really this debate. It's, And it's become very zealous, right?

Starting point is 00:09:14 There's a lot of zealotry. It's like, we need this because you might do something very evil with it's not being present there on the not side, if you will, at the extreme of it. And we need to remove this because having one line of irrelevant code and the Bitcoin core database is inefficient and too hard to maintain. And now the two sides are at loggerheads. So, I mean, that's, that's, I'm clear about which side I'm on, but I'm trying to present it as clearly.

Starting point is 00:09:42 as I can without attempting to vilify one side or make another side seem stupid. And I do think this has actually been the back and forth. We've had the core side saying everybody on the knot side is stupid, in the less polite terms than calling them stupid. And on the knot's side saying there's something sinister going on, they're not being clear about it. So this is why you have a class. You have people who think they're smarter than other people versus people who think they're

Starting point is 00:10:12 better, they're more good than other people fighting it out. And that's, and that's the debate right now. I don't think people on either side would disagree with that last part of the assessment. No, I very much, I would agree. It seems like a technical versus a philosophical debate. And this is a scrabbing value, and I'm not trying to, but it very much kind of almost seems to me like you have one side that is incredibly smart and intelligent and very technical. And then you have another side that maybe has a little more wisdom. And it's just a little bit of a faster pace and a slower pace coming to heads, but it kind of gets to the root of,

Starting point is 00:10:42 again, the kind of part of the initial question is, what should be the guiding principles or focus of the maintainers? What should they be looking to do? Because right now, again, it feels like they're trying to look to future possibilities and then go after that, but it is coming at a cost.

Starting point is 00:10:58 So even specifically, the idea of being reckless, what are they being reckless with right now? Or how are they being reckless? Yeah, no, I mean, I think when you make, when you make a wholesale change that can't be studied, and it's because you can't test it in the real world. Like I remember, I used to be a CTO of a company, and we would make changes to the website,

Starting point is 00:11:17 and we would try to run load tests on them. And the tests would pass low testing. And we'd be playing back real world interactions on the database to say, okay, well, this is as real world as you can get, and it passed. So now we're going to move it into production, and then the cycle would crash. And it's like we can't really model what the real world does in a new real world situation. And this is a big change. This is removing, you know, this is allowing op returns of up to 100,000 and allowing up to,

Starting point is 00:11:44 I can't remember if it was 10 or 80 or something, different operatives in single transaction. These are big differences. And people who say, well, it doesn't matter. It's like, why not take, you know, the wise and, you know, previously abused camp on, on this, people who've made their share of mistakes before say, go one step at a time. You don't have to dive head first, headlong into this thing. This is a long-term project. There isn't even a use case that's big, like, the, one of the justifications for removing the

Starting point is 00:12:14 limit altogether is nobody will use it, right? But you don't know nobody will use it. You're saying that there's not a good economic incentive for people to use it until there is one, right? There just isn't one in the history because there's been other things to do and what, whatnot. So, like, I think that this is where it feels reckless to those of us who are older. Some who have technical experience as well. Like Jimmy Sons, a programmer, and he's on the view that he's not upgrading

Starting point is 00:12:42 and discouraging people from upgrading on the grounds that this is a reckless move. I don't know that he's used that exact word, but if you listen to his most recent vlogs, you can see he's not upgrading because there's no good justification to do this all at once, and we don't know what circumstances or what outcomes it will have. So I think this is, you know, when I was thinking about this as small, It's not that my view of the other side is that they're necessarily malicious. It's that they're young and less experienced. And one of my favorite sayings, because it resonates so strongly with me, especially

Starting point is 00:13:19 now as I'm older, but I kind of thought it was cute when I was younger is good judgment comes from experience. And experience comes from bad judgment. And I've made my share of mistakes, like the example I just gave when I was CTO of a website. we had lots and lots of issues and everything that we tried to do in hindsight. It was like, well, we could have taken things slower. We were in this rush, move fast, you know, stay, be agile, all of these terms that were really caught up.

Starting point is 00:13:49 And our agility was the downfall of that company. So maybe I'm scarred by my experiences there. But I've seen it in a lot of instances. And so I'm just saying, like, if nobody's going to use this anyways, let's let's drip, let's drip it in at best and note and look carefully at what each incremental change is having before making the big leap to remove it altogether and deprecate it and remove people's ability to use it. I think that's also part of where people think there's some hypocrisy on the core side,

Starting point is 00:14:25 which is they say run whatever you want, but we're removing and deprecating this feature that you might want. So it's challenging, it's challenging to have a discussion about a hypothetical. And then when the hypothetical is like, well, what will happen if we remove this? It's like, and say, well, we know, we know people won't use it. And we're saying, well, we don't know that people won't use it. And saying, well, we know they won't once we remove the option to use it. But it goes back and forth, right.

Starting point is 00:14:55 And I think, well, you know what I think, right? I think it's reckless to try to move too quickly. And the consequence, this last part of the question that you asked, where I've recently said, Bitcoin needs to be doing damage control is, Core used to have 100% market share. Core used to have a reputation that was revered by the user base of Bitcoin. And now you have a lot of people questioning Corps' intelligence,

Starting point is 00:15:23 wisdom, integrity, honesty. And so that's really hard. harmful to core. Maybe they no longer value being seen that way, but this issue of stewardship, like Bitcoiners want there to be some kind of stewardship of Bitcoin that caters to it as money. And I think we've also got a camp, you know, the pro-core side is also filled with individuals who are pro-spam, right? So you've got people who say they're anti-spam, but there's nothing they can do about it. You've got people who say they love spam, but they love their JPEGs. And so it's this conglomeration.

Starting point is 00:16:01 It's like a political group of many people. And that taints any kind of purity of message over there. So you end up having to have five different arguments with five different classes of people who are doing these things for different reasons, ideological reasons, technical reasons. I can make money spamming Bitcoin reasons. And they all find themselves in the same camp together. And even if they distance themselves from one another, they're making the same recommendation.

Starting point is 00:16:31 So they become tainted by one another's position. No, I agree. It's funny. There's a few things that I want to tease out. Then Gary, I promise I'll stop hooking. No, of course. Is I feel like part of the underlying is hitting on some intangibles,

Starting point is 00:16:43 and we're almost arguing about how to value or what kind of weight they should be given. In the sense that too, like with Jimmy's song was saying, I know he made the reference point is that there's also the unseen unseen, like you, you have to account for the unknown unknowns. What are you, we don't, there's some things that we cannot predict. Well, they know that inscriptions would, come from Segwit and Tapper, right? That was an unknown unknown until it popped up. So how much weight in our decision making are we going to give that possibility?

Starting point is 00:17:06 As well as there's like the, what would you call it, almost like the negation in the sense that how many transactions or activities in Bitcoin didn't happen because of the existing filters? You'd have no way of measuring that, right? You'd have no way of interpreting that information. Right. And one of the things I really want to tease that with you here, especially because your experience being a CTO and being an entrepreneur and I believe in private equity at some point, as well too, is I am not trying to throw shape, but it's going to sound like I am. I tried to look and see

Starting point is 00:17:35 if I could find if any of the existing five maintainers had experience in business or entrepreneurship. And the reason I was looking at is that's not necessarily being a good maintainer, but I almost get the sense from the current climate and communications that they're not giving, in my opinion, enough weight to goodwill. What is the value of goodwill? And just for context, like you can look, businesses have this on their, they're, on their balance sheet. They will have goodwill valuations, right?

Starting point is 00:18:02 Microsoft, I think was like $87 billion I looked up. There's $3.6 trillion in goodwill in the S&P 500. Your reputation, customer preferences, your branding is so, so important. And so one, I wanted to get your thoughts on if,

Starting point is 00:18:17 because again, it's not a company. It's something different. We can discuss that further as well, too. Is there importance in core having goodwill? And the first obvious one that comes to me is that there's still some consensus cleanup and things need to happen.

Starting point is 00:18:29 We might need to deal with quantum at some point. And for the fact that it's not important and it doesn't do anything, but it is hurting your goodwill, we might actually need that goodwill at some point in the future here shortly. Well, you know, I'm going to give you a bit of a controversial answer here. The first thing is goodwill on companies' balance sheets is not what you think it is. It's when they overpay for it, when they pay for a company that they acquire and they're paying more than the balance sheet values.

Starting point is 00:18:59 They're buying, they're buying $100 million with their cash, but they're paying $200 million. They account for the extra $100 million as Goodwill. It's not that they've done a market survey and the market said, oh, and the market said, this is worth $100 million and it change in. They write it. But goodwill and the brand and the trust is absolutely something that's of value. You buy the latest Apple product on the basis of, well, it's got a nice new features, but you expect it'll work and not be malicious towards you.

Starting point is 00:19:29 Bitcoin is a very different kind of entity, as you rightly pointed out. And one of the slogans that's been widely adopted and not refuted is don't trust, verify. And so you're asking, what are we facing when we're facing a lack of trust in Bitcoin core? And so we're seeing more people not trust Bitcoin core. And that's actually a good thing. For Bitcoin Core, for Bitcoin, for the people who don't trust Bitcoin Core, we've got a lot more people very involved in trying to understand what's going on with Bitcoin.

Starting point is 00:20:02 We've got a lot more people running nodes of different implementations that act as a check and balance against one another. It's going to be harder to make consensus changes in the future, including ones that fix known issues and known problems. That's all good. Why is it good that it's hard? because we don't want it to be easy to make consensus changes to Bitcoin. We don't want it to be this trusted. Well, these people have always done a great job. And so we're just going to trust them on the basis of their track record of having done a great job.

Starting point is 00:20:32 The truth of the matter is, right, not the current maintainers, but all of us who, especially those of us who've been around longer, we approved Segwit, we approved Taproot. We learned from experience that we had bad judgment into some. degree on those things for not foreseeing the exploit that came in and the trouble that it caused and the trouble that it's led to now with a loss of trust in court, right? We were all moving in this direction together, so we all own it. And what the lesson many of us have learned is, don't trust, verify, do extra scrutiny. Bitcoin is not an imminent danger of blowing up because there's a filter that might do nothing, right? Like there's, you know, if there's a fence, it does nothing, you can remove it, but maybe it doesn't do nothing, right? Maybe, maybe not having a very

Starting point is 00:21:27 descriptive scripting language that allowed people to conceal JPEGs in it in large single transactions. Maybe that was preventing a lot of these other use cases or restricting them or making them harder, making them less viable, less commercial, less discoverable. So I just think that this is part of Bitcoin's growth. And we may be past a point of no return where we're going to have a couple of implementations and very high degrees of scrutiny, like paranoid levels of scrutiny of one and others moves for a very long period of time. And I'm saying that's possibly not a bad thing for Bitcoin.

Starting point is 00:22:06 It's a curious thing for Bitcoin Core, and maybe this is the learning moment of learning judgment from experience of having bad judgment. I think that digging their heels in on this created a movement of people saying, I no longer trust Bitcoin Core in the way that I used to trust them. I'm questioning motives. I'm suspicious about explanations. I'm unsatisfied by the explanations. and so I'm actually doing something about it and making the switch.

Starting point is 00:22:38 And how that plays out in the long term is not exactly obvious. There's a new reality that everybody has to live with, which is there's a sizable number of bitcoinsers who are highly dubious about, who have a high degree of doubt about the motivations and reasoning behind KOR's most recent moves, which is going to infect pretty much every one of KOR's attempted moves. in the future. So there may be some non-controversial fixes or there may be some non-controversial bugs that need to be addressed with controversial fixes to be discussed. It's all up in the air.

Starting point is 00:23:15 But the nature of this consensus system is it's exceedingly hard to make changes to the consensus code. And the policy is this new issue. It's like we didn't use to route around policy aggressively now because we didn't make changes to policy and didn't test to see whether they could and people are routing around and there's been this Libre relay thing that's been launched, which is a filter-free node. And, you know, like, it's causing a lot of people to have a rethink, well, you know, do we need more rules? Do we need tighter rules? How do we enforce them? Should we enforce them through consensus? Is there a way we can reinstate the impact of policy? Do we need to move quickly? Do we need to move slowly? Like, all of those things are out in the open. And there's a big

Starting point is 00:23:57 debate about all of them. And there isn't a, Bitcoin's not a democracy. It's not like there's going to be a vote on one day and one party is going to get in power and then we'll see if they keep their promises or break them, which we know in democracy, they won't keep the promises. So it's a different kind of system. It's a system in which the power shifts every 10 minutes as to who gets to write the blockchain and it's based off of proof of work. It's a system that's, you know, you need to change the consensus code to change the rules. Everyone executes the code. So in terms of rule makers, you know, the rules have been written in stone. And if you want to change them, You need everybody to agree in terms of changes of power.

Starting point is 00:24:37 There's someone different in charge of right. And you never know who's going to be. And it's not a democracy. It's proof of work, which is a bit of a lottery based off of how much energy you're putting into things. So it's a different kind of political system than anything we're familiar with. And that complicates things too because we're so unfamiliar with it that there's people who are misinformed about it. And there's nobody who's got a ton of experience with it. Like, the most experience anyone has with it is 16 years.

Starting point is 00:25:02 And there's very few people who have that much experience with it. And because it keeps changing, like what was true in 2011 about how mining pools and mining works is no longer true about the current mining environment that's ASIC and industrial and has whatever controversies it has in it. So it's a lot. It's a lot. You know, it's fun, frustrating, terrifying, rewarding, rewarding, rewarding, all of those things all at once. Are you sick at the Fiat-funded fast fashion that falls apart quicker than the dollar? You know, the cheap stuff made to drain your wallet one inferior product at a time. Stop it.

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Starting point is 00:26:38 No tech skills required. You get white glove support and education, a rig performance guarantee. Plus, it's powered by 100% carbon-free energy prioritizing renewables. Ready to take control of your Bitcoin future? Visit SaaSmining.com by scanning the QR code or clicking the link in the description down below to book a free consult and start mining today. No, I agree. It's funny. Just quickly, the idea, I'm kind of with you in the sense that like I would like more implementations, more people working on different kinds of versions of the Bitcoin client. And I'm reminded of the argument for why hash centralization was always kind of, you could kind of hand that a wave in the sense that if there was a pool that was a bad actor, we could just move to a different pool. You could just point somewhere else. And it would be nice to have that same sort of thing with regard to the Bitcoin client. Like if there's an issue with the ones maintaining it, we can just go somewhere else. Gary, your thoughts, my friend.

Starting point is 00:27:27 No, Nathan, what you're saying on face value makes total sense to me. You'd want options. Ideally, you don't want just one central committee deciding everything. But that's coming for me, somebody who teaches Bitcoin self-custody, and I still don't grasp so much of what's going on here. And, Tomor, to your point, I go to a Bitcoin meetup once a month. And a lot of people are very passionate about Bitcoin and very technically knowledgeable people. And 95% of the people there could not explain.

Starting point is 00:27:55 to you exactly what is going on with this core knots debate. Now, there's one guy in there who really good guy, really technically proficient, he'll tell me that this is all much to do about nothing. It's not a big deal. It's a lot of fud. Just go on doing the thing. And maybe he's right. I don't know. Would you, for people who this is alarming, do you have any advice on how they can learn more or what should they be doing? Should they be shifting to knots? Any tips. Yeah, I think it depends on how much you're prepared to learn technically. So that's the first thing. Like, are you ready to go? Like, how much effort are you prepared to put into understanding how the network of Bitcoin forms and passes messages along and doesn't pass messages along? If you're

Starting point is 00:28:46 really interested in looking into that, then you can better understand the debate on both sides. And I tried in my earlier comments to talk about what this gossip protocol was and what the relay protocol was. But then you also not just only need to have it explained to you and to understand it, then you need to reason about it. You need to think about it. And I think why a highly technical person might say to you, don't worry about it. This doesn't matter. It's like it's not a risk to Bitcoin because Bitcoin will continue to operate, whether people put in big up returns or not. Things might get relayed.

Starting point is 00:29:21 They might not get relayed. Only experience will tell us. There's people with strong opinions one way or the other as to what will happen. If there is relays, if there isn't relays. But you won't know. But it's not a threat to the operation of the network because the networks will continue to relay only consensus valid transactions and potentially also make it hard for policy invalid transactions to get mined or maybe not.

Starting point is 00:29:48 Like that's what, this is. much more a debate around pace, wisdom, philosophy, you know, taking choices, giving choices. And there's arguments to be made on both sides. But the reason I don't give you a straight answer is because you have to be prepared, if you really want to understand what's happening technically, you have to be prepared to understand what's happening technically. If, you know, there's a problem with metaphors, people try to keep giving metaphors like, I, did with having your spleen removed. But someone on the other side would say, well, it's not exactly like having your spleen removed. It's not an invasive surgery. There aren't necessarily side effects.

Starting point is 00:30:31 I'd say, well, maybe there are side effects. And then we get lost in talking about spleens and surgeries and hospitals and stop talking about Bitcoin. So like if you understand what it is for what it is, you can reason about what it is without needing a metaphor. If you don't, then you need metaphors, but metaphors are ultimately only go so far. So I don't. I don't know if that's terribly helpful for you. No, no, it is. I guess I don't know if you have an answer to this or not, but for somebody who not necessarily like a layman on the street and there's nothing about Bitcoin, but somebody who's been into Bitcoin for, say, minimum five years and is somewhat passionate about it, someone who at minimum can self-custody, how many hours

Starting point is 00:31:07 of study would they need to put in to sort of get what this debate is about? Probably not more than five, to be honest. Okay. I think if you want to actually understand what's going on here, we're talking about how Bitcoin nodes communicate with one another to the, and if we envision the network as being all these peer to peer nodes, but we take the ones that are mining nodes and put them at the border. So it's like everyone's inside the circle and the mining nodes are at. When a miner receives a, so somebody creates a transaction and it bounces around and relays around and eventually gets to a miner and then eventually gets mined.

Starting point is 00:31:41 And then it's in the blockchain. And then it's written forever, unchangeable, immalienable. there. And so if you understand that, like if somebody kicks around a ball, a transaction starts to send one through, if it's consensus valid and policy valid, it'll just go through every node that relays it and get out to the edge of the network where a miner will pick it up. And if it's as long as there's a good fee, it'll get mined eventually, right? If policy is stopping it, then some nodes will relay it who aren't enforcing that policy. And they have to find a different path to the edge of the network where the miners sit.

Starting point is 00:32:21 And now there are nodes that called Libre Relay that really are very permissive. They've removed all the filters. So if you end up connecting to one of those and they're connected directly to a mining node or to many mining nodes, then what they're going to try to do is bypass all the rest of the network and send your consensus valid transaction to the miners where the miners will mine them. Now, the miners also run Bitcoin Core or Bitcoin Notts or their own customized versions, and they also have their policy. So they don't put in certain things that are consensus valid as well.

Starting point is 00:32:55 Or if they, you know, so as long as all the miners, let's say, for example, all the miners right now are saying, I'm not taking op returns greater than 83 bytes. Well, you can ReLibre relay them all you want around and everyone else could have whatever policy, but the miners aren't going to mine it if they're all running this policy that says, I'm not accepting into my mempool, my block template these things. And now some miners also have workaround solutions like Mara's Slipstream, where you can go straight to them and send them something. But that requires some measure of KYC.

Starting point is 00:33:27 And I'm sure that they look at what's going in if you're sending a big image and it's a big picture of someone doing something grotes. then they're probably not going to mine it for a small fee because it's them who took money to put it in the Bitcoin blockchain. So now you're starting to get to the edge cases. But I hope that that explanation of how the Bitcoin network moves transactions around before they're confirmed in the blockchain was useful enough that you can now reason enough about the difference between consensus valid and policy valid transactions.

Starting point is 00:34:00 Yeah, go ahead. No, no, I was going to say, I like the image that where you're talking about having it bounce around, it put an image in my mind of the way, sorry, this is going to be really technical nerdy, like nuclear fusion works in the sun and how some photons get out, but most of them bounce back in. I don't know. It's a silly thing, but it got me thinking of how you were into Bitcoin art and producing different movies, videos, ideas. Exactly. Because not all of us learn the same way. I'm currently dealing with a client, a protege with our company, Bitcoin mentor who's like, she's still not quite grasped what we're talking about. She's like, can you

Starting point is 00:34:36 draw this out for me? I'm a visual learner. And I don't know, we might get into that later, maybe we're still focusing on, you know, core versus knots to that. But at some point in this discussion, I'd love to talk about that with you about, you know, how much of a benefit it is to teach people and present things in different ways. Because what you just did right there did help me consider it in a different way. And I thank you for that. Okay, great. Well, I'm happy, yeah, so if you draw a picture of a big oval or a big circle and draw, and draw, a bunch of nodes on there and call those the mining nodes and then put a bunch of random dots in the middle and draw like five or six lines between each of these random dots. That'll show you,

Starting point is 00:35:13 then you'll be able to look at a picture and say, oh, that's the topology of smaller Bitcoin network. You don't have to draw 20,000 dots because that's how many nodes there are, but it'll give you a smaller version of it. And you can see, like if this guy creates a transaction, here's a path as to how it gets to a miner. But if these guys, If these guys aren't relaying it, then it never gets to a minor. And that's been the idea behind filters, right? That you have to go directly to a minor, which is inconvenient. And then you have to have a relationship with them and they have responsibility for what

Starting point is 00:35:46 they've done if you're bypassing these rules. But now it's become easier to bypass these rules or there's been exploits that rules haven't been written into filter. And that's what's got people upset about. Cool. I do want to talk about kind of art and the ethos of Bitcoin, but there's something that you said there, I want to tease apart a little bit because I'm playing around this idea, and I don't know if it's necessarily accurate, but the idea of responsibility.

Starting point is 00:36:09 So you were mentioning that perhaps if you're going directly to a minor and they're putting something into the block, they might be responsible for what they choose to include. So they have their own filters and stuff on it too, by the way. Do the core maintainers have any responsibility for what's included in the Bitcoin Core client and what may result from that? Now, the reason I'm bringing up from philosophical standpoint, if I can try and make this case, because I've been thinking about who owns Bitcoin Corp. If we're coming from the Austrian perspective,

Starting point is 00:36:34 there's no such thing as a public good or like a public ownership. You can have a collective, we have a bunch of individuals owning things, but there is no public ownership. And in trying to do that, you end up with a tragedy kind of of with the common. So going directly from Bitcoin,

Starting point is 00:36:48 ownership in Bitcoin is synonymous with control. Not your keys, not your coins. So when you own Bitcoin, what you really do is you have control over the private key, Bitcoin's at that address, and you have the ability to spend from there. under that same logic, would it not mean that the five maintainers who can sign for, what is it, pull requests for updates, do the five maintainers who control the keys essentially own core?

Starting point is 00:37:10 It is their property because they're the ones who control it. And does that mean, even just philosophically, not necessarily legally, they implicitly are responsible for the outcomes. And also, how does that change our frameworks? When I started kind of playing around this idea, it really pushed me to the idea of like, I want more implementations. essentially I'm relying on one product as a Bitcoin user as a customer from one team and they own it. Well, this is a really interesting question that you have.

Starting point is 00:37:35 And I haven't had a long time to think about it. And so I'm cautious about the answer that I give on the immediate thing. I think in the sense that you own Bitcoin because you own keys, that doesn't mean that you're accountable for what's, Oh, right. I'm trying to, like, what I'm trying to get at is I think because it's because the Bitcoin source code is open source. Yep. And it's delivered on an as is basis. I think this is the important thing. The maintainers wash their hands of legal liability.

Starting point is 00:38:16 If I sell you a used car on an as is basis, you understand that it may have risks and challenges and I accept no legal risk. And Bitcoin is given away for free on an as-is basis. And it always has been. So I don't think that there's a legal liability on behalf of the maintainers of Bitcoin Core for what they put in there. There is, of course, a social responsibility because they're not saying, here, we just whip this thing up, watch out. We haven't tested it.

Starting point is 00:38:49 There's a different claim being made that says we have over 100 reviewers. It's very thorough. we know what we're doing. You know, so there's, there is a trust us element in terms of the quality of what's being argued is being presented to you. Again, I don't think it creates legal liability for what they do, but it's social reputation that's included and involved here. And so I think that there's a big distinction between having the keys and having legal liability.

Starting point is 00:39:22 And that's why this whole thing is going to be. coming down to social reputation around how you're doing it as opposed to just what you're doing. There's a question of why you're doing it since the claims as to why seem to have some level of contradiction or back and forth in them. This is not a strong case. Like the thing's about to crash and we need to fix a bug. It's like there's this thing that's been going on for a long time and we want to remove it because we don't think it's doing anything.

Starting point is 00:39:52 And, you know, and so other people say, well, you know, I think it might be doing. something, you don't know that it isn't. And that's the debate. So I would really shudder to say that there's any kind of legal liability for how people use the software, right? Like, you know, Adobe puts out Photoshop. They're not liable for what people do with Photoshop, right? And Photoshop isn't even sold on the same as-is basis as Bitcoin is given away. So I, you know, I may not agree with the maintainers, but I certainly don't think that they are, legally responsible for what other people do with the software that they wrote. I wish that they didn't make it easier for other people to do things that aren't money

Starting point is 00:40:35 with Bitcoin. And I think that's a stewardship issue. It's like there's those of us who believe Bitcoin is money only, right? And we understand that you can do some other things with it. Like I can take a dollar bill and fold it into a paper airplane. And there's nothing you can do about that. But it's not that it was designed with special. better flying paper at the expense of its monetary use case or fungibility or something like that

Starting point is 00:41:01 for it. So I think that this is where like maintaining laser focus on the primary principle and only legitimate use case of Bitcoin, which is its monetary characteristics, needs to play the higher role and needs to be the priority always. And I think that's what the focus and blurriness is causing people to say, what are the priorities and who's involved? this is where the suspicion comes in. It's like if there's people who are making money off of shit coining on Bitcoin and they're saying, we think this is terrific, in part because it acknowledges that shit coining on Bitcoin is okay, there's a lot of people who say, well, that's not okay. Attention on freedom-loving Alberta Bitcoiners. Tired of the Big Six Banks freezing funds,

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Starting point is 00:42:22 it's perfect for adding Bitcoin to your corporate balance sheet. If you or your business is in Alberta, switch to your Bitcoin refuge at bow valleyCU.com. Scan the QR code or click the link below. No, I agree. And I do want to also point out just quickly too. When I was saying that like owning Bitcoin, no one can own Bitcoin the idea and the consensus mechanism

Starting point is 00:42:43 in the sense that like no one can own language or math, but somebody can own the design for the calculator that uses math. So I kind of just drawing that same parallel there. I want to touch on this also goes into the art world then too. Does Bitcoin actually have a spirit or a central ethos to it? Or is that just a byproduct of the early adopters that came in? Two kind of different veins. One in the sense, like, email doesn't have an ethos.

Starting point is 00:43:06 There's no culture around email. It's just a tool. And then secondly, as well, because it speaks directly to removing the filter, removing the operative, that even if it does nothing, it is a message and it is a communication. like the action does have a communicative effect regarding it, signaling like, okay, look, it doesn't actually help with the monetary use case, but at least signals that were here for a monetary use case, right?

Starting point is 00:43:30 So it does have some value of thinking of that messaging component. So, broadly speaking, goes into art and all this fun stuff as well, too. Does Bitcoin have a spirit and ethos, or is that just a reflection of the early users? Well, it all, it absolutely does. Whether that survives is the question, or how it changes and how it gets diluted. Like, does America have an ethos, right? Well, at the time of the revolution, right, there was a very clear ethos, right? And you can read the essays of the founding fathers, and you can read the Constitution,

Starting point is 00:44:00 and it starts with big three words, we the people, right? Like this is, and it has a bill of rights. And so this was the idea of a nation where individuals had rights above that of the state. The state existed only to protect their rights. That was the idea of America. I wish that was still the idea of America. And for many Americans, it is. And it spread throughout the world.

Starting point is 00:44:25 And we thought, you know, when I was in high school and my first years of university, that idea was actually spreading throughout the world. And Canada adopted its own Bill of Rights in, I think, 1982. I was 12 years old at the time. I was learning about it at school. And it had maybe some clauses that weren't as strong that weakened it. So it wasn't as strong as the American Constitution. But there was still a bill of individual rights, a charter of rights,

Starting point is 00:44:49 and freedoms and many other nations in the world were copying the same idea. But we now live in a world where that isn't the culture anymore. People are prepared to trade off their individual rights and those of their neighbors for security, money, all sorts of things. And so the idea isn't as well enforced. But the idea is the spirit's still there, right? The American spirit, why so many people want to live in America and why some people who've never set foot in America. I'll say I am an American in spirit because they believe in individual rights. That is very much what we're going through in an accelerated manner in Bitcoin. There are people who say money should be undebassable, unseasable, finite, measurable, divisible, transmissible,

Starting point is 00:45:36 permissible, permissionless, censorship resistant, all of these terms that we use, which are the idea and ethos behind the creation of Bitcoin and its manifestation. Satoshi could have made all sorts of other considerations that would have made those features diluted, different, you know, altogether, not existent, but he did. And so people were attracted to Bitcoin because its technology produced these effects, right? The emergence of sound money was predestined in the choices that Satoshi made in creating it. So Bitcoin absolutely has a spirit. The spirit of Bitcoin was the spirit that Satoshi figured out a way to put into it.

Starting point is 00:46:22 The ideas weren't all his in terms of what money should do, but he found a way to engineer a decentralized digital money that did do that. And that's the great invention and that's the great spark. So any attempts to dilute Bitcoin's ability to be money is controversial. And this again, going back to this controversy, right? It's like there's two traits, right? Like, is money meant to just be exchanged? That's the not side. Or is more important to money is permissionless.

Starting point is 00:46:51 So you can make paper airplanes out of it too. Right? That's the debate. Like, that's what it's coming down to. And which is more important because it seems that these two things come up. If they could both exist harmoniously, then there wouldn't be a debate. But there appears to be a tradeoff between these things. The more paper airplanes you make with money, the less people see this thing as money

Starting point is 00:47:13 especially during its adoption period, and the more you restrict people from doing anything other than money with it, the more you risk preventing people from doing money things with it, too, would be the core side of the extreme core side of the debate. It almost seems like it's a pushing, conflicting forces between permissionlessness and fungibility. It's not so much fungibility. I think it is just, it's purity. You know, like it's it's the permissionlessness versus focus, you know, and I think that that, you know, because the tape, because software is so malleable and can do so many things, you know, the argument that has come from the core side, some proponents of the core side is Bitcoin is just a database. Well, you know, everything is just a database, right? So, so if you say that Bitcoin is just a database, you're saying Bitcoin's no different than anything else, and you're not saying,

Starting point is 00:48:13 it's the greatest money that's ever existed, and that's the purity element of it. So this, I think, is where people are really caught in the issue of focus, right? Part of why Bitcoin has succeeded so well against all the other shitcoins that have come out is it's not a platform for shitcoins. It's not making promises of things in the digital world that aren't true. It's not, it's just trying to serve and be money. And so maintaining that laser focus. And it's a big prize and it's an important service to humanity.

Starting point is 00:48:51 And that's why so many people care so much about restricting its use cases to the monetary ones and not into JPEGs and other tokens and all sorts of other things that have nothing to do with money in and of itself. No, fair enough. I think perhaps that fungibility was the wrong word there because it's almost the idea that alternative uses for money make things worse money. The fact that gold has alternative uses makes it actually a worse money. The fact that your house should never be a monetary asset, but we're treated like one, especially in Canada.

Starting point is 00:49:26 We'll talk a little bit about Canada a second here. But non-monetary uses for a monetary medium detracts from its ability to be a monetary medium. Go for it. That's really well put. I think that that's the key. And one of the beauty, like if I take your gold example, like because, Gold has other uses, jewelry, tooth fillings, other things. There's a trade-off in the utility.

Starting point is 00:49:51 We could use gold for its industrial uses, but we don't because it becomes monetary. We could use all the houses that are being unoccupied and not lived in for housing. For shelter? Yeah, for shelter. Go figure, using a house for shelter, if it weren't for their monetary use cases. Bitcoin until JPEGs had no other utility other than money. And so it allows all the other things that could be monetized to be used instead for the utilitarian applications, right?

Starting point is 00:50:25 And now we're finding things that make Bitcoin more expensive and inconvenient to use for stupid applications like JPEGs, which don't need to be stored on Bitcoin. Right. And so, you know, and whose ownership is, is a whole other discussion because everyone who runs the Bitcoin blockchain actually has all these JPEGs. So the owners don't really have any special access to them at all whatsoever. So it's like, this is why people care so much about making good money. And it solves, it solves the housing problem. It solves the utility of gold problem. It solves the permissionlessness problem. And so we've got now two debates around, well, who's who's after permissionless money? the people who want to put JPEGs on Bitcoin or the people who don't. And you can have a real, you know, a real fist fight, like virtual battle over, over who's right in this thing. So great, Gary. You totally could have a virtual fist fight over it, like you said.

Starting point is 00:51:27 And I can't speak to the motivations of the people running core. I mean, it could, I could speculate and just say, hey, at this point, maybe it's just an ego thing. Maybe there is no alter your motive. It's like, hey, I made my point. I don't want to look like a fool. I'm going to stand by. I mean, people are people.

Starting point is 00:51:40 I mean, that could be the case. I don't know. Maybe it's something more. But I do think, at least for the supporters, I'm not at the side of the debate, you could very easily argue that they're both coming at it from very sincere belief in what they believe that this should be. And, you know, this is either a pure money, which should be used as money.

Starting point is 00:51:58 And this is the future. We're finally, we have this pure money. And there are people like, you know, the guy in my meetup group who would say, comes out from a very ANCAP perspective. It's like, no, the easy. those of Bitcoin has always been freedom. And if somebody wants to make a stupid picture on there, for whatever reason, that's his business. And it's not going to change fundamentally. We have nothing to worry about and so on and so forth. And again, I don't have the technical expertise to

Starting point is 00:52:22 know if we have anything to worry about or not. I guess I do have a little small question on there how small it is. Would you be able to steal man like the worst case scenario for either one of these teams winning? Either, you know. I'll do a, I'll do my. I don't hold either of these views, right? So the worst case scenario from the core side is you force use cases on people, and then the government can come in and force use cases on people too, right? So it's like you say you can't put pornographic images on the Bitcoin blockchain, and they say, well, you also can't put anti-liberal party messages on the Bitcoin blockchain

Starting point is 00:53:08 because that's a bigger danger to society, right? So that's kind of, you allow censorship into the system because you don't put JPEGs on, and now you allow free speech censorship. So that's the one side. The other side is, as Bitcoin is being adopted, you put things on there that deter people from coming to Bitcoin. You put pornographic images all over the Bitcoin blockchain, particularly ones that we all agree shouldn't be on there.

Starting point is 00:53:33 And if you do that, then people won't want to run nodes in the network. loses its decentralization and people are held liable, legally liable for running nodes because they're now housing illegal content as it is. And you end up with Bitcoin losing its independence from the state because the state ends up meddling in a whole lot more. I don't think either those cases are plausible, frankly. So I think that those, but those are the extremists views on sides. What's the worst case scenario to, and I guess maybe I misunderstood what you were saying, the worst case scenario to leaving the filter on? I mean, is there a cost of this, this 83 byte filter? Is there a... No. I mean, I think this is why I'm, this is why I am where I'm, like, there's,

Starting point is 00:54:26 it's, the 83 byte filter is there. Nothing is, nothing, it's not, if it's not preventing people from doing anything in the first place anyways, leaving it there isn't going to do anything. If it doesn't do anything, leaving it there isn't going to make things worse, right? It's like, but there's a very thin argument to be made for removing it, which is these Citria type protocols, although not Citria itself, needs for the justice transactions to be widely relayed before they're confirmed. And so that's the use case that it allows. And at the same time, it says, you know, anything beyond, anything above, anything above 160 bytes won't be used at all. So don't worry about it. We can allow it and don't worry about it.

Starting point is 00:55:08 So I don't think that there's a steel man case for that. Like the strongest case it comes on that one is it's useless code. Having useless code has a maintenance cost. And we don't want to incur that maintenance cost. That's not a very strong argument as far as I'm concerned. It's like we can get around to it. It's obviously not very expected. It's not like people are looking at that line of code all day.

Starting point is 00:55:28 Oh, God, what are we going to do? It's so hard to maintain. It's so costly. It's so expensive. So I think that's an exaggeration out of steel. man. It's like, you know, if you leave that line of code in there, it's, it's not the end of the world. So there's no end of the world scenario for doing nothing because this has been done for the last 16 years or 10 or 11 years since Op Return and its filter has been in there, which is why,

Starting point is 00:55:53 I think a very conservative point is just, why mess? Like, why mess with this? This is, this isn't something that's broken. Why try to fix it, especially when it's as controversial as it is? And I, I think there's been a few tweets made in the last few days around saying, like, nobody asked for this, right? It wasn't that, even Citria didn't come in and say, we need you to blow this out. They said, they said, here, you know, we're doing this and we're doing it in a fake pub key, but, you know, it's only going to be a few transactions a year. So it's not like Citri said, I'm warning you in advance. I'm about to spam the shit out of the Bitcoin blockchain.

Starting point is 00:56:26 They said, I'm going to do a few transactions a year that are just as transaction. And Core's reaction was, we're going to eliminate this filter. And we know it's not going to change your behavior, Citria, but it might change the behavior of others who we don't know who exist yet. So it's very hard to steal man the case against status quo. And if someone can do a good job, by all means, let them. I haven't heard that argument at all. I've heard the argument around, you know, the more limits and filters you put in, the more

Starting point is 00:56:55 you invite censorship. And that is, and that has its arguments for and against as well. but the argument against the status quo, when you say the filters can be routed around and they're doing nothing, it's very hard to then say, so leave them. Yeah.

Starting point is 00:57:13 I'll say the one that I've heard, which I don't think is a strong one, but I may have it wrong as well too, so don't take this as necessarily accurate or correct, is that if you have things like Libre Relay and preferential peering, and we have things like slipstream going directly to the miners, that there is a slight risk of minor centralization

Starting point is 00:57:28 in the fact that if they are the only ones that see that transaction and then it gets included into a block, it takes longer to propagate throughout the network because that transaction hasn't been seen before, it has to be validated before it gets passed along before it's necessarily included, which means the miner that is using those services, using those services or using those systems,

Starting point is 00:57:50 gets to start mining on the next block a little bit ahead of everybody else. Now, the reason that I don't think that this necessarily a concern is because on the same, the flip side of that, is that their risk of being orphaned is also larger as well too. So for me, it's like, yeah, risk or war. Take your point. Yeah, take your pick.

Starting point is 00:58:06 This is why some people have said it's like picking up pennies in front of a steamroller. It's like for the fee for the extra fee of one transaction that nobody else has, you're relaying and you're doing, you're finding a block that takes longer for everybody else to validate and someone may discover another block sooner. So it's six of one, half dozen of another. And it's not really, and this isn't, I would say it's not even in the top 10 or it doesn't contribute 1% to mining centralization. Or it's not one of the top 10 reasons for why mining has become centralized, right? It's not like people were, well, that pool takes JPEGs more than this pool.

Starting point is 00:58:48 So I'm going to mine with that pool. And in fact, you know, I think what we saw was on the margin, even when JPEGs were in high utilization, if you were mining blocks without the JPEGs, you had like a minimously smaller fee that you captured because the economic transactions were bidding up to be. It wasn't like you got JPEG's paying this much and regular transactions paying this much. Regular transactions wanted to be in the blockchain. So they were maybe paying this much and that was the difference in revenue. So all of these arguments around minor centralization, I think there's much bigger things to do

Starting point is 00:59:21 to decentralize mining, which, you know, and I'm not the expert on all those different things, but slightly faster, slightly more higher fees are not what's driven people into centralized mining. It's been the availability of equipment, the power, where power is cheaper and where it isn't, the inability to form your own block templates and have a likelihood of success, which is now being addressed through datum. So, like, those are the things that will allow miners to be more decentralized, you know, But some of these centralizing forces are kind of natural forces, where, like where there's cheap power and available only to a single party or so, then you're going to get centralization

Starting point is 01:00:06 around that power source. Agreed. Gary, do you want to hop in with anything or I have a ton of questions to keep piling up? Well, no. I mean, I don't want to get in the way. Do you have something more on Knott's core? If you finish. Specifically, actually, I want to do a slight little shift there, nice little segue based on what

Starting point is 01:00:21 what term was saying. And I do want to get actually, because I know you're coming, I'm going to see what Canadian Bitcoin conference coming up here soon on October 16th through 18th, I believe if I'm not mistaken. So I do want to ask you about the state of Canada, but that was just the perfect that made me think about mining just in general. I'm curious how, if you have any thoughts on how mining as a, we'll say, profession, business might evolve in the future. Because I, looking out, I don't think mining's going to look like it looks like today. And I'm curious if you've given this any thought. Yeah, I have. And this is a long-term view. And it's certainly not an investment

Starting point is 01:00:54 recommendation or anything like this. It's like mining is a really hard business, arguably a bad business. It is, there are times when wild margins are being generated because the Bitcoin price has gone up and the network can't respond quickly enough by increasing their expenses to put themselves into a no-profit situation. But the inclination of the industry is always to increase their expenses until they have no profit. It's like someone's making $20,000 a coin. well, if we had only 10% more hash rate, we could make more coins, and that ends up costing them money, and it costs everybody money. Bitcoin mining is the only commodity that no matter how much energy you put into it, how much investment you put into it, you only get the same amount out of it,

Starting point is 01:01:41 right? It's like, imagine if you had an oil well and it's producing 100 barrels of oil a day, and then somebody else built an oil barrel that produced 50 barrels of oil a day, and that somehow made your mining drill produce only. 50 barrels of oil a day. That doesn't make sense. It's like, but I've got oil here. But in Bitcoin, we're all mining from the same well, which is the same block reward. And so the industry has this through competition, these economic incentives to invest until they're unprofitable. And that's why in the history of mining, we've seen all these turnovers. We saw individual miners get replaced you know, with miners that had more efficient technology, first GPUs, then FPGAs, then A6.

Starting point is 01:02:26 And then we saw the rise of, and we saw a lot of businesses go. We saw a lot of manufacturers go out of business. We saw a lot of miners go out of business. And then we saw the industrial miners start to happen. And we saw a lot of them have really bad stock returns. And some of them have to declare Chapter 11 bankruptcy. And, you know, and so I think it's a very, very tough business because of the nature of perfect competition. There's this thing in Bitcoin, which everyone says, this is Satoshi's greatest contribution to Bitcoin, the difficulty adjustment.

Starting point is 01:02:54 That's a punishment 99% of the time to Bitcoin miners, right? It's like, oh, you were making this amount of money by mining blocks a little bit faster. I'm slamming the brakes on your reward. So Bitcoin miners have often been lifted by the rising price of Bitcoin, not by the challenge. And so it's a very tough business. And I kind of forget the nature of your question initially now, but it's like, it's, It's for people who are really prepared to, you know, you have to be very parsimonious, run incredibly efficiently, be prepared that the mistakes of your competitors are going to cost you money to.

Starting point is 01:03:29 And we don't have this, you know, I think it disproves one of the microeconomics theories that in oligopolis you get what are called kinked supply curves, you tend not to in Bitcoin, right? the supply curve, the demand curve for Bitcoin mining energy and equipment continues to move towards perfect competition. And in perfect competition, according to economics 101, everyone earns only their marginal cost of production and they lose their fixed costs. And that's certainly been core consistent with on a zoomed out basis of the history of

Starting point is 01:04:11 the mining industry. It's a very hard business to be profitable. and people who do mine. So my long-term prognosis is it will be integrated into people who have other businesses that produce surpluses of energy, and it'll be integrated into people who have ideological connections to Bitcoin's decentralization rather than it'll be a good standalone business on its own. But how long that takes and what we have to go through to get there, I can't foresee

Starting point is 01:04:38 with accuracy. Yeah, I'm in complete agreement. That's very much where I see things progressing to as well, too. that this commercial mining industry won't exist. That mining won't actually be profitable. It'll be like a cost reduction for energy producers for people who already had that stranded natural gas, that waste to begin with.

Starting point is 01:04:54 And it'll be a way for them to soften their costs, but it actually won't be at a profit. It'll be almost like a side activity to whatever their existing business is. And it'll only make sense if you're already producing energy. And there may be specialized like consulting companies that do the mining portion of your work for you, but they won't be the miners keeping the reward.

Starting point is 01:05:13 they'll be charging a fee for administering the mining efforts of the power producers. And they may help on equity joint. So, you know, like the nature of all the financial engineering that the market does to structure these types of activities is different from what we're both in agreement on, which is as a standalone operation, it's very, very hard to buy power and buy equipment and produce a profit long term. Agreed. Gary? Yeah. If you want, we got to transition. Yeah, Bitcoin art a bit. I mean, you have it right behind you. It's beautiful. And I do want to touch on Bitcoin art.

Starting point is 01:05:53 Aside from just, there you go, aside from just the aesthetics of it and how beautiful it can be. I was listening to an interview you did, I guess about three years ago about Rand and the fountainhead and Alice shrugged. And I'm a fan myself. I don't know if you noticed my mug, if you can read that. Yes. There you go. Lagnar, Donishold. Is that how you, have I been pronouncing it wrong the whole time? I've been saying, you know, I've heard Ayn Rand pronounce it differently from her student Leonard Peacoff from everybody else. So none of us are, is it Ragnar or is it Ronyer?

Starting point is 01:06:27 Dona Schold or Donishield. I don't know. I'm doing it the English way. Ragnar. That's what I say. There you go. But in one point in the interview, you guys talked about how marketing is, is, I know, if you were saying this or the person interviewing you were saying this, but marketing in a sense

Starting point is 01:06:44 is lying. You're highlighting the benefits of something and you're kind of downplaying the negatives. And ideally with Bitcoin, you don't need marketing. Bitcoin is what it is. It's going to do what it does and it gets adopted as it will. And I definitely think there's a lot to that. But there is another point where I do you think, and maybe I'm mistaken about this, marketing is useful if only to try to get as many people on board as quickly as possible before the state can really jump in. And and start trying to do things that hurt it. I don't think the state can destroy it, but just kind of slow down adoption.

Starting point is 01:07:17 And the more constituents can be on board, the harder it is for politicians to go against a broader and broader base of people who adopt Bitcoin. So I guess in that respect, it comes to the question of, I do think there is a use for art in Bitcoin beyond just the aesthetically pleasing nature of it

Starting point is 01:07:36 to help spread Bitcoin and help present it in a way that other people may not have previously considered. I watched some of the movies you made. I even read something. You may have even seen this called the Time Chain Codex. Have you seen that? I've seen it.

Starting point is 01:07:49 I didn't even. Oh, there you go. Oh, my goodness. See? Shows you the research I did because I love it. I'm the editor. It's authored by it's based off of a series of essay by Drew Bonsal that Fragal and Crypt created artwork for. And then I added it.

Starting point is 01:08:10 I loved it. Well, that's fantastic because that alone had me thinking of Bitcoin in a way that I would never have thought of even if I read all the technical papers about it because we're visual learners and it put it in a way, oh, my God, I could understand better. So I guess my question is, if you go back to Atlas Shrugged, you know how there were people who said, well, listen, I'm not as smart as Hank Rieger. I'm not as capable of John Gault. What could I possibly do to contribute? And I think there's ways for everybody to contribute. You don't need to start a Bitcoin mining company. You don't need to start a- And I have to start a-

Starting point is 01:08:40 solve the Byzantine General's problem. You don't have to solve the Byzantine General's problem. But what would be ways that you might suggest people who maybe don't have those skills could contribute to spreading the message of Bitcoin? Yeah. Listen, I think this is a really good point. And it doesn't quite get on art because it gets on whatever you're gifted at. If you're a gifted artist, then you may choose to apply art. If you're a gifted developer, you may choose to analyze the code or develop code or write, you know, create wallets, some, you know, create some application that incorporates Bitcoin and so on and so forth. So I think if you're passionate about Bitcoin and you want to help it, well, the first thing

Starting point is 01:09:18 is buy some and hold it, right, and do so in self-custody and do it the right way. Like become Bitcoin, become a part of the Bitcoin network and talk about it to the best of your ability or refer people. And the best of your ability may be go and read so-and-so's book, right? And that sometimes is a hell of a lot better than trying to explain it yourself if you're not expert at it and can't make the case for it. So be an advocate, be an advocate for it. But to the extent that you actually have original ideas about Bitcoin that you want to communicate, I think that's where this creative element really starts to manifest itself within an individual. And in that case, I would encourage you to explore

Starting point is 01:10:02 what it is that you're saying, whether that's in the form of writing or drawing or sculpting or making music because the artistic expression, like when you surrender to the creative process and you will let it come out inside of you, you have no idea what you're capable of, right? Like you're vastly underestimate your creative ability, your artistic ability, because you're not exercising it often. But when you have a muse, when you have an inspiration and a spirit, like what Bitcoin stirs in so many people, and you surrender to it and you let yourself start creating. The first thing you do may not be great, but it may. But you start to explore within you what your creative ability is and then you hone it and make it more precise. And so like I think of

Starting point is 01:10:48 when I started writing up a Bitcoin, I was starting to write largely about how it works technically or its libertarian benefit. And the more I wrote, the more suddenly something was becoming awakened in me that was emotional and spiritual and artistic. And, and it's, led to me getting involved in projects like the Time Chain Codex or the movies that I made or some of the more spiritual essays that I wrote about Bitcoin. And I had no idea I had that inside of me until my practice ended out. Yeah. I'm kind of sorry. I just want to pause and that for a second. I'm kind of shocked with that because my entire experience of you in spaces and on Twitter and YouTube and these things too has been very spiritual. So what were you like beforehand?

Starting point is 01:11:31 I'm very surprised to hear that. I was an objectivist. I was a militant, atheist. Like, and like there's, there's a scientific method and all else is BS. Yes, we have emotions, but they're not valid means of cognition. So I had a, you know, and if you've seen my movie, the legendary treasure of Satoshi Nakamoto or read the essay, it begins with saying Bitcoin is a spiritual awakening. And my whole motivation for writing that was I had a spiritual awakening and I wanted to understand why. And I saw so many other people have a spiritual awakening instead.

Starting point is 01:12:06 in Bitcoin. And so I took my highly analytical history and applied it to all the people who I saw and the story of Bitcoin, I realized I think I have a good hypothesis as to why Bitcoin causes spiritual awakenings and people. And so originally when I was writing that essay, it was just called Bitcoin as spiritual awakening. And it wasn't, and it wasn't meant to go past the section four of it, which, of which Section 5 is the legendary treasure of Satoshi Nakamoto. But when I had written it all, I heard in my my head, all these integrations coming into place. It was almost like a voice from outside, a disembodied voice from outside of me saying,

Starting point is 01:12:43 now that you've written all of this, you can understand what the legendary treasure of Satoshi Nakamoto really is. And it's not this pile of coins, but it's the ability to discover your true self, which is a greater treasure than any other you'll ever experience. It's wonderful. I think it's great. I think there's something to that beyond even just promoting Bitcoin and spreading the word and helping keep it safe from the politicians, just the idea of finding something to,

Starting point is 01:13:11 maybe to live for beyond just understanding basic ideas of logic. Like, what is this extra beautiful thing that we are trying to live for as human beings? Because we're human. And again, it does come around full circle to me to the philosophy of Ayn Rand, you know, like all of her characters in her books, especially like characters like Ragnar are very unique individuals, right? They've found their true selves. He's a pirate and a philosopher at the same time who sinks the government ships filled with gold. I love that so much. To bring back the justice because I had gold is taxed and therefore stolen. That kind of personality

Starting point is 01:13:53 is the hero that she envisions and the ability to be a hero yourself means to be who you are and to live fully within that, especially in a philosophically consistent manner, not to just be a wild brute, but to have both mind and body aligned with your values and reality at the same time. That's her ideal of a hero. And we see many people like that in Bitcoin. But again, just to your earlier point, when you're saying, what do you do? You don't have to solve the Byzantine generals problem.

Starting point is 01:14:30 Satoshi solved it. Nobody has to solve it ever again. And you can't re-solve it either. You can't be the first person to solve it again. Like that's done. Check. Humanity has that achievement. But it enables so many more achievements.

Starting point is 01:14:44 And so you don't have to be John Galt. You don't have to be Satoshi Nakamoto. You can be you. And you shouldn't be anybody else but you. Right. But you have to figure out who you is. Word. Yeah.

Starting point is 01:14:58 You know. All right. I'll leave it at that. I think of a point. No, it's great. I love it. Thank you. It's funny. This is not well thought out. It just kind of struck me as we were talking. So I had to play around with the idea a bit more to see if there's any validity to it. But we were talking, I asked earlier about the ethos and spirit of Bitcoin. But from the way that you're describing what happened to you, it's, I'm almost wondering to myself, does Bitcoin have an underlying spirit or ethos?

Starting point is 01:15:21 Or does Bitcoin unlock an underlying spirit of ethos of humanity? It's already there. A return to desire for beauty, for meaning. Because you're right. So many people go through this, myself included. go through the same transformation. So is it Bitcoin introducing something or is it Bitcoin exposing something that's been just basically beaten down and pulled out of us by the existing system? Now, I think it's the latter for sure, right? Bitcoin doesn't create the human desire for freedom.

Starting point is 01:15:46 That human desire for freedom existed before Bitcoin, right? Bitcoin doesn't create, like Bitcoin maybe helps us see more clearly that vision within the world and within ourselves. but it's not the creator of that. Bitcoin is the creation of someone who held those values and enough genius to engineer those into computer code and a decentralized computer system that runs. But we were talking about America before, I had one tweet that I really liked,

Starting point is 01:16:15 which I said, Bitcoin is the most American idea since the idea of America. And it was like, that's the idea, that culture, that spirit exists. And it existed before America existed, but it never existed in a nation before America existed, right? So America was the nation that invented a Bill of Rights that was supreme above the state, and that's been worn down since, regrettably, and Bitcoin's the software, hardware, physical, digital system that manifested in the realm of money that spirit in the 21st century.

Starting point is 01:16:55 I'd be remiss if I ask too then. So we're talking about America and the American ethos. You and I are unfortunately both north of the ice wall. I'm curious. I'm curious what's your kind of view of the state of Canada right now? And one of the reasons I asked as well, too, is Gary and I were just speaking with Jeff Booth. And he's left. He went to the U.S.

Starting point is 01:17:15 Or did he? Or did he? Yeah. Who knows? But I very much am starting to feel a little bit apprehensive about being here and I'm somewhat concerned. And I'm in Alberta. you're in the heart of darkness there in Ontario. Yeah, let's not.

Starting point is 01:17:30 First of all, is Canada anything, right? Like, America is something, and it's having a battle over what it is, whether it remains that thing purely. What is Canada? And the best, you know, I've lived here 50 years now. I was an immigrant, but I was only in kindergarten when we came here.

Starting point is 01:17:47 And to me, what Canada represented was a very, first of all, a very civil society, one that does respect it. individual rights that was a reasonably low density population that brought the best of high density populations to a handful of cities, but managed to manage vast resources with hardy individuals. You know, like we have the biggest freshwater lakes. We have these giant nickel deposits. We have the biggest forests in the world.

Starting point is 01:18:21 We have the biggest planes. And we have, you know, less than one-tenth of population. the United States to manage those big things. And so we had these big engineering projects, giant highways, giant railways, giant dams, giant hydroelectric facilities, nuclear power plants. We really had an industrial engineering competency that was world-class and unique in the world. And maybe we can still have that and maybe that's still what we represent. Right. Like, it's not a nation, you know, all the population lives right on the border, essentially, with the United States. The rest of it is resources to be ignored or exploited. And I think, you know, the whole environmental movement has made us question whether or not we should, we ought to, we can. And so we've, that's where, like, whereas America has turned its, if it turns its back on individual liberties and rights, it loses what's American about America. If we turn our back to our resources and our great engineering capabilities,

Starting point is 01:19:20 the oil sands, you know, like the second largest deposit of oil in the world, we, we turn our back on what Canada is. And Canada is a physical thing, right? It's as opposed to America, which is an ideological thing. And that's, listen, that's a hypothesis that may or may not be fully true or may or may not be a strength. But that, I think that that's a big part of Canada. So we'll either find ourselves becoming owned by highly industrialized economic companies or we'll manage to run a nation that holds true to those principles. And that doesn't mean that everybody becomes an oil rig worker, right? Like there's there was a lot more. But the strength of the country comes from exploiting its natural resources.

Starting point is 01:20:09 I never considered that before, that Canada is basically the access of the natural reasons. We're so somewhat defined. If you ask Chad GPT, like, you know, rank Canada in terms of, in terms of the top hundred natural resources and where it stands. So it'll do all this computation. It may make a few errors. But you'll see for every natural resource that exists, it's kind of like in the top five.

Starting point is 01:20:33 Maybe there's like some obscure metal or something that it doesn't have. But nickel, gold, diamonds, oil, water. Adamantium. And Tim, all of these things. Like they exist in large abundance in Canada, and it takes significant effort and heartiness, right? Like you've got to go combat the climate to extract these things. But that's what we did, right? That we had an really impressive.

Starting point is 01:21:04 And it wasn't necessarily bad for the environment. It wasn't like we extincted the beavers or the moose or the elk. and so doing. So, like, we can find ways to do what it is that we can provide and participate with the world and that's unique about us and we have competitive advantage in, but we have to be prepared to do it. And it calls for Hardy, not soft people. And I think that's why Canadians are still so based because, like, we know, right? Like, even if you're not living that, the winter comes and it comes every year and it's hard. And so you can't ignore the hard. And, and so you can't ignore the hardiness of Canadians and because they can't ignore the hardness of nature.

Starting point is 01:21:47 No, that's wonderful. And even speaking of Rand earlier, too, there's something very beautiful and wonderful about being a producer. So being a nation that even just has his identity wrapped in being a producer for the rest of the world, I think is fantastic. Gary, do you have anything you want to add or ask? Now, this has been wonderful. I mean, Nathan, you?

Starting point is 01:22:02 No, I'm golden. Tomer, where can everybody go to check out your work? Where can they find you? And also a reminder that yourself and me will both be at the Canadian Bitcoin Conference, October 6th. 16th to 18th. So come hang out. Come chat with us. Yeah. So I'll definitely be at that Bitcoin conference, the Canadian Bitcoin Conference. You can find me on X if you want to hear all the latest fights over the Block Space War, as we might call it.

Starting point is 01:22:26 A lot of my writing is on Medium. So Tomrstrolight.medium.com. I've made a few movies. That's really what I recommend people see first. Bitcoin is generational wealth. Bitcoin is beautiful. And the legendary treasure of Satoshi Nakamoto. Those are all still reside on YouTube in Swan's Bitcoin channel. But if you search those titles in my name and YouTube in the search bar, you'll find them. Or you guys can provide links to them. But Bitcoin is generational wealth, a legendary treasure of Satoshi Nakamoto. Bitcoin is beautiful.

Starting point is 01:22:56 That's what I recommend people get started with if you want to familiarize yourself with my work. And on my profile page, you can find a link to my book, Why Bitcoin, where you can order a hard copy. There's also a free version of it still on the Swan website at Swan. com slash why Bitcoin, W-H-Y-B-I-T-C-O-I-N. That's 27, two-minute essays or four-minute essays, like each on a two-page spread, taking you through why Bitcoin exists, why it's so different from anything else you've seen, why you should choose it, addressing all sorts of questions, and even starting to get them to the spiritual side of things.

Starting point is 01:23:32 So that's a good starting point. Hey, you. Yes, you watching the Bitcoin price movements and the latest exciting news. It's awesome to stay informed, but the real power of Bitcoin comes from taking control. Don't just watch, take action. Head over to btcsessions.ca slash learn for free step-by-step tutorials that guide you through every major skill you need to know, plus full video playlist for deeper dives on any topic you like.

Starting point is 01:24:03 And if you're ready for the ultimate fast track, scroll to the bottom and check out Bitcoin Mentor.com. for premium one-on-one experience with my team of Bitcoin experts to ensure you get it right the first time. Don't wait, secure your Bitcoin future today. Hit the link in the show notes or scan the QR code on the screen. If you enjoy this episode with Tomor, please do like and subscribe and check out the previous episode with Jeff Booth on AI Bitcoin in the fall of the Fiat system.

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