Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Sergio Lerner: How RSK Will Bring Smart Contracts to Bitcoin

Episode Date: July 4, 2016

Security researcher and RSK co-founder Sergio Lerner joined us to discuss RSK (also Rootstock), the project to launch a turing-complete smart contract sidechain to Bitcoin. We talked about how he got into the industry, spending countless days analyzing Bitcoin for vulnerabilities and finding a few along the way. And, of course, RSK, the ambitious project to strenghten the Bitcoin ecosystem through adding smart contract capabilities. Topics covered in this episode: How Sergio initially got involved in the Bitcoin space His early work on turing-complete cryptocurrencies going back to 2012 Why financial inclusion is the most important problem to solve Merged mining and RSK’s security model How RSK compares to Ethereum RSK’s business model Episode links: Rootstock (RSK) website Drivechain BIP Proposal This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/138

This is Epicenter Bitcoin, episode 137 with guest, Sergio Lerner. This episode of Epicenter Bitcoin is brought you by hi.combe. Protect yourself against hackers and safeguard your identity online with a first class VPN. Go to hi.combe slash epicenter and sign up for a free account today. And by Jax. Jacks is the user-friendly wallet that works across all your devices and handles both Bitcoin and ether. Go to J-A-A-DoubleX.io and embrace the future of cryptocurrency wallets. Hi, welcome to Epicenter Bitcoin.

The show it talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution. My name is Sebastanku with you. And my name is Brian Fabian Crane. We're here today with Sergio Lerner. He is a Bitcoin developer. Some people may know him from some of his blog post. He wrote this blog post about the original coins of Satoshi that got a lot of attention.

He was also one of the people hired by the Bitcoin Foundation to do some of the business. security audits of the code, so once he was working there. And today, he is one of the founders of rootstock, which I'm sure many have heard of, which is essentially bringing a smart contract functionality, similar to Ethereum, to the Bitcoin network. So I'm super excited to have your own say here. Thank you, Brian and Sebastian to host this show. Yeah, no. And thanks for York. Now, we talked briefly before the show about sort of how you got involved in Bitcoin. Can you tell us that story? Like, what was the original sort of your way into this space and community? Well, first of all, my background is on computer security. So when I, when I

learned about Bitcoin, I was completely surprised by this. This was fantastic for me. And I started doing what I do. I started reading the code, trying to find any kind of vulnerability. And I remember having spent a lot of time researching and trying to understand the system, because it seemed to me that was perfect. And I dedicated so much time that actually I started, I found a couple of vulnerabilities. And one of them was very, very fun and very interesting that, allowed the attacker to shoot down the whole Bitcoin network.

And this was 2012, I think. And I sent an email to the Bitcoin development team at that time. And they were really, really heard what I had to say, and they fixed it. And that's why I get involved. And I started to become a kind of auditor of the Bitcoin code. and going after each of the changes of the code every month, I took some time to audit, and from time to time I found something interesting.

But I spent a year working for Bitcoin without even having a single Bitcoin myself. I was helping the community, I was helping, but I did not have Bitcoin. So it was 2013 that I wanted to invest. But I knew that there was a missing part of a history of Bitcoin that was the first year. So what was happening in the first year? Where were all those coins that had been mine? And that was important for me to feel sure that I could invest. So I started researching about that, and I found out that there was a pattern that later I called the Satoshi pattern,

which linked most of these coin bases, the generation of new coins. And it seems that all those comments belong to a single entity. So I had a lot of arguments in the forums about this. A lot of people told me I was completely wrong, but when I presented the evidence in my blog, it was so clear that I had like 35,000 visits in a single day. And my blog had no more than 10 visits in a day. So for me, that was astonishing.

And that week I got a very interesting call from the key people on the Bitcoin community. And one of the calls was from Wences Casares, he was the CEO of Zappel Wallet. And he told me, come to my office. I want to talk with you. And I went to talk with him. It was very interesting talk. But after 15 minutes, he said, OK, you have to come with me to San Jose to the Disp Bitcoin Conference. you have to be part of this, you have to tell everyone,

you have to tell what you know. And I said, he told me, I pay for everything. I paid for the, he gave me his own hotel room and plane tickets. And I invite you everything. And because I knew him for very, very few times, very short time, I said, no. And the other day, he called me again and said, are you coming? And I say, okay, I'm going. This is it.

So I went to the conference and it was amazing. And also it was funny because I was sitting in tables there with other people and then people started talking about me, about the researcher did. No one knew how I looked. So I said, hey, it's me, it's me. So it was funny. And we danced on the stage with Peter Shrem that we were all so excited at those times. And for the first time in my life, I felt I was.

was part of founting. I'm completely agnostic to everything. So this was the first time I say, OK, this is a place where I can develop myself and I can feel to be part of a movement. So it was a very interesting time for me. Cool. That's fascinating.

And do you still do that to look at all the Bitcoin changes and the PIPs to see if there's any kind of new vulnerabilities or security holds? Yes, not as often as I used to. The last vulnerability that I found was a couple of months ago. And it was not critical, but it was interesting. So I do it, not as often as I would like to. But RSK had me completely focused on this platform 25 hours a day.

I sleep thinking about RSK, and I get up thinking about RSK. And that's my current project now. Cool. So then let's get into that. So tell us how did you get the idea for RSK for Rootstock? Well, the idea of creating a smart contact platform was actually before Rustok. It was in 2012, 2013. And because of my university thesis was on peer-to-peer poker.

I wanted to create this system where one could create applications, distributed applications, to play peer-to-peer poker in a completely fair way. So I created a prototype which was called QuidCoin, which was a Turing Complete platform, but the only applications that I built was applications for playing poker. So that was, and I tried to convince everyone that that was the future, But, you know, it was so focused on playing so that I didn't see the financial implications, the enormous financial possibilities of having a smart-contra-platform. And so then Ethereum came up and with all these interesting new ideas of use cases,

and I decided that I wanted to be a part of this endeavor. I wanted to create smart-contraulted platforms. So last year, I had this opportunity to meet the right people in the right time. And one of them was Diego Uttair Salibar, which is one of the founding members of the Latin American Bitcoin movement. So another great people here in Buenos Aires. So we decided that this was the right moment to create a smart contact platform specifically for Bitcoin, to add value to Bitcoin. and also to bring balance to the force. We were seeing that in the ecosystem,

there was a lot of arguments between industries, miners, core developers, and we wanted to create something that we could make everyone to be part of and still to be a Bitcoin project, essentially a Bitcoin project, because we believe in Bitcoins. So that was my next question. With all of the, I guess, well, what we've seen lately, lack of governance, the ability for the Bitcoin community to sort of come together around certain very important decisions. Why did you feel it would be, how did you think you would achieve such a thing in such a divided community? Because in RSC, we are trying to have every participant have a stake in the platform,

every participant to be part of in the governance model. So we are adding proof of stake for people who have actual Bitcoins in our platform to be able to vote. Minors are able to vote. And we also have a federation of renowned industry companies that will vote. on protocol changes and full notes also will vote using a new protocol to allow them to prove that they owned a copy of the blockchain so we are trying to change that we are trying to show that this is this can be done so obviously there this is something that we are we are very excited about

but I hope we can we can make this goal reality. So that's very interesting. Do you think in the future maybe do you have an expectation that if this works out with rootstock that maybe Bitcoin would start using some of the same ways to decide on protocol changes and upgrades? I'm not sure if Bitcoin is going to change Issetos, it's essence. And that's correct. I mean, Bitcoin has been built to be It's been built to be very hard to change and that's okay.

That's the Bitcoin we want it to be. We want Bitcoin to be strong, the strongest as possible, and the decentralized as possible. But by giving an example of how we can get all the parties in agreement, I think we will lower the fights in Bitcoin community. We will make the Bitcoin community more fond of each other because of seeing the example in Roostock. in RUstock in Earth's K.

So it's more by showing an example. It's not that something that we want Bitcoin to change. I think that we can show a different way of doing the things. So you talked before that when you first got interested in smart contract and during complete cryptocurrency, you had the use case of gaming and gambling in mind. Yeah. What is today, what are the use of

cases and areas that excited you today that you think rootstock is going to address? Well, the thing that put us together, the whole group of founders here in ERSK, it's that we think that the smart contact platform essentially provides financial inclusion. The possibility to transact at a lower fees and really to allow people to be their own bank using smart wallets. So essentially, because we live in the underdeveloped country, and we've seen that there are billions of people that do not have access to bank accounts

or they don't even trust banks anymore because of different defaults we have here in Argentina. So we see this platform essentially as a mean to bring financial inclusion to people. And that's our main goal, and we are working with integrators, in Latin America that are bringing financial institutions to create micro lending platforms to create smart wallets and I think this will be the main use case.

Of course, I'm very excited about anything, the future, the great thinkers of new applications or distributed autonomous organizations, but we think that there is essentially a use case for financial inclusion that it's greater than any other future idea. Yeah, that's fantastic. And I think it's really interesting that a project such as Rustok is coming from Buenos Aires rather than some European country or the United States. And that gives it definitely a different viewpoint from where the technology is being developed. So yeah, these sort of use cases are definitely not the same as, you know, what perhaps the

Ethereum team are thinking of or some other platform being developed here in the developed world. So let's get into some of the technical aspects of Rootstock. Can you give us a high level overview? And then we'll come down into the different layers of the stack, but give us a high level overview of what Roostock looks like technically. Okay. So Roostock is basically a smart contract platforms that relies on three pillars. One of the pillars is that we are doing merge mining. So we are using Bitcoin hashing power, the Bitcoin mining network, to secure our own blockchain. And at the same time, we are providing the Bitcoin miners a new revenue stream so they can withstand the Bitcoin halving and they can get more rewards from the work they do.

And you know that merge mining is a technique where the Bitcoin miners use the same hardware they are using for mining Bitcoins and with the same cost to mine a different cryptocurrency. In this case, the RSK platform. The second pillar is that we are doing, we are using Bitcoin as the native currency. So we are not creating a new speculative currency. And that's very important for us because we don't want to compete with Bitcoin. We think the stronger the Bitcoin is, the stronger the RSK platform will be. So to create, to use Bitcoin in our platform, we need a way to exchange Bitcoins between the Bitcoin platform, the Bitcoin blockchain and the RSC blockchain. And that system is called two-way peg.

There are several ways actually to implement a two-way peg. One is the side chain concept that was developed by a block stream, and the other is the drive-chain concept that was developed by Post-Torke. And the third one is basically having a set of notaries that have custody of the funds that are transferred to the Rostock platform. And what we have actually created is an hybrid system that combines all these three parts. So in the Rostock side, we have a side chain. In the Bitcoin side, we have a mixture of a federation and a drive chain, which allows miners and a set of. of renowned parties to have this compound custody

of the Bitcoins that are transferred to the Rostok platform. But this foundation has no authority, nor no way of making you an out-arive use of the Bitcoins that are transferred to the Bitcoin platform, to the, sorry, to the ErisK platform. Because this works, in the Air Escape Platform, there is a contract, it's a smart contract which we call the Bridgemaster, which orchestrates the creation of Bitcoin transactions and the Bitcoin, the Federation only has to take these

transactions, sign them and put them in the Bitcoin network. So they have no authority to create their own transactions. But at the same time, we are working with some of the most important Bitcoin companies such as e-wallets and exchanges. So we are pretty sure that we will get a very, very high level of security for the custody of the Bitcoins that are transferred to the RSC platform. In a very few weeks, we'll have a press release where we will announce which are the parties, which are the companies that are taking part of this, of this. federation. Oh, and the third pillar of the RUstock platform that I didn't mention is that we are

creating a high volume, very scalable blockchain. So we will be able to rise the transaction per second to probably 300 transactions per second. And we allow this by trading off a little bit of decentralization for scalability. So Bitcoin is essentially fully decentralized. And we are maybe in the middle between super-scalable blockchain and a complete decentralized blockchain. Let's take a short break to talk about hi.com.

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So RSK essentially is, is it the first real project, right, that's pursuing this original sidechains vision at this point? Is that correct? Yeah, yeah, that's correct. I think Paul Stork is also working on a project that will be implementing as a drive chain, but I think we will be the first to use this technology. And can you talk a little bit? Because with Bitcoin, I remember with the side chain sphinx, there was a lot of talk that a hard fork is needed in order to have a proper two-way

peg, but then there is this kind of intermediary solution or intermediate solution where you have a federation, a federated peg. How do you use that? view that so would rootstock use a federated peg first and how important would it be to make those protocol changes down the line? I think it's very important for the for the project to be able to move from the federated peg to the fully autonomous peg and we've created a new Bitcoin improvement proposal which is open and online and we've we are working on the implementation of the proposal and this proposal creates a new opt code to be able to create a drive chain on the Bitcoin side. So we are using an idea that we call progressive decentralization,

which is basically the node system, no consensus system, no blockchain can go from completely centralized control to fully decentralized control. There should be intermediate steps to go from one point to the other to get assurance that the network is performing as desire. So basically this new op code allows to move from a federated peg into a system where the miners boat, this is not a boat, sorry, this is an algorithmic boat. It's actually an knowledge system where the miners are allowed to algorithm algorithmically vote to release Bitcoin funds obeyed by the smart contract breach in the RSC blockchain. So basically we start with a full federation and we move into a system where the number of

algorithm votes by the federation is reduced and the number of algorithm votes by the miners is increased. And this is a dynamic balance. So if if any time the number of miners engaged in merge mining, the R.SK network goes down, automatically the number of algorithmic votes, the Federation has to assign its increases. So at the end of this period, we hope that we have full engagement of the Bitcoin miners in merch mining.

So before we get into mining and scalability, to refresh everyone's memory and including mine, can you sort of explain the difference between a federated peg and a fully decentralized peg and how both of those work in reality, again, in a real use case? So a federated peg, it's a system where basically there is a set of notaries. We have a multi-signature. and so to send Bitcoins to the RSC blockchain, you basically send them to what we call an exit address. The exit address is at one of the address of the federators.

So automatically, when you send funds to this address, you can create an SPP proof on the RSK side that allows you to convert those... those Bitcoins that were locked in the Federator address into Bitcoins living in the RU stock in the RSC blockchain. So basically moving funds from Bitcoin to RSK is automatically. The other way around, moving funds from RSK into Bitcoin requires the collaboration of the federators. And how it is perform is that basically the whole system works on-Chairns. So there is a smart contract that is the bridge master which holds a Bitcoin wallet and

controls all the unspent transaction outputs that were part of the transfers to the exit addresses. So basically this contract creates a transaction. This transaction is broadcast to the federators by using a log message on the smart contract platform. smart contract platform. The federators received this transaction, they send signatures as on-chain messages to the bridge master. The bridge master combines all these messages, all these signatures into a fully signed transaction, and then this transaction is also broadcast using a log op code in the RSC blockchain, and any user, including, of course, the federations, take this transaction and put this transaction on the Bitcoin blockchain.

So essentially, this set of notaries, the Federation, they cannot choose which output to spend, they cannot choose which the destination address where the funds have to be transferred. It's all being orchestrated by a smart contract. If they wish to cheat, they will have to create a fully off-chain chain automated system to create transactions out of the system. But this, of course, is not going to be

possible because these are, the federator have a reputation that they protect. They are part of the Bitcoin industry. And how will these federators be picked? So let's maybe talk about the governance model a little bit. How will you choose these federators and how will they get, be renewed, I guess, on some sort of annual basis or something like that. Okay. So we are choosing the federators to be the most important companies in the Bitcoin ecosystem. And again, this will be in a press release very soon. But we aim to have at least several federators from each continent, from each geography.

So this is not something local to any country. So this has to be a federator of very, very important companies all over the world. So we already have companies in the US, in Europe, in Africa, in South America, in Asia. And these are some of the most well-known exchanges. So these federators, they already have security policies. They already have auditors, security auditors. So it's not that anyone can become a federator. To become a federation, you have to meet certain.

policies, procedural policies and security policies. So these companies already have these policies on place to protect the private keys that allow them to control the multisignature. Today's magic word is roots, R-O-O-T-S. Head over at less stock bitcoin.com to sign in, enter the magic word, and claim your part of the listener award. You mentioned scalability before and that root stock was more scalable. Can you talk a little bit about like how does that work and you know what's the limiting factor that's keeping it to 300 transactions at this time?

Okay, there are two limiting factors in scalability. One is storage. Essentially, the main, the most important factor is storage. The question is how many notes, how many notes, how do you know, How many full nodes do you wish to have? How many full nodes it's enough to have a decentralized network? So some people would say that 5,000 notes is enough. Some people would say that 100 notes if it's enough, if they are distributed all over the world

and there is no single party controlling them. So Bitcoin has approximately 5,000 full notes. And if we get to the point where we have 1,000 notes, full notes, then we are okay. We don't want to be as decentralized as Bitcoin, but we want to be pretty decentralized. So essentially, we are asking full notes to have more powerful computers

and more storage as a Bitcoin. From the technical point of view, there are several things you have to change from the transaction processing to be able to create to a scale. Basically, what we are doing now, not for the first release, but for the second release,

is that we are partitioning the transactions in a block into non-overlapping sets. So basically, we can process the transaction in parallel. If you compare this to Ethereum, for example, Ethereum serialize all the transactions, so if two transactions actually interact with the same contract, basically those transactions cannot be separated. And so we have a system for separating transactions as if they don't interact with each other, so we are able to parallelize the processing and the execution.

At the same time, we are creating a new VM, which is, it has a adjusting time compiler. So essentially, we can process more instructions per second, and that's another step towards scalability. And probably the last step that helps scalability is having probabilistic verification and fraud proofs. And that's still another important step that we are working on. And also, this is something that all our blockchains also do, is that another thing that prevents you from scaling is that when you create a new full node

and you want to enter the network, you want to, download the full history. And our blockchain and other blockchains too allow to download only the state, the current state of a network, and you can ask the federators for a sign a checkpoint so that you can make sure that that state is a state that you can trust until you start getting

the information, the historic information. So you can basically start from one point and at the same time, download historic information. And this is very similar to what Bitcoin is doing with the pruning system. Cool, very interesting. Now, I presume, would there ever be a scenario

where one would want several different root stock root stocks tied to Bitcoin or should, will there always be sort of, you know, Bitcoin and then there's one root stock chain? This is something I've thought many times of what would be the main blockchain that will survive on the long run? Which are the basic needs for blockchains? And I think that, of course, the storage value and Bitcoin is essentially the main important, the most important. A smart contract, it's becoming of greater importance as time passes.

But also anonymous transactions and private transactions, private contracts, it's something that will rise a lot. I'm very, very interested in seeing what happens with said cash, Sukus project. So I think that that can be one of the second sidechings to Bitcoin, a completely anonymous cryptocurrency. That can be also a completely anonymous system for, Bitcoin to become anonymous, sorry. And I see that these two side chains,

anonymous transactions and smart contracts are the main ones. But I also see some others competing, and that's fine. I mean, the Bitcoin improvement proposal we are proposing is allows any number of side chains or drive chains to be, to be, develop it. So we want to see collaboration. We want to see more of these projects. And we also are very, very open to collaboration with Ethereum and with Dash and some, any project. There is a lot to learn. There is, I really think there is no competition at this stage of the ecosystem. Basically, we all want the blockchain to be as secure as possible. We don't want

security incidents as the Dowel or anything. We want to, people to believe this is a technology that is going to change the world. Let's talk about Ethereum in a second. You mentioned the term drive chains a few times, if I understood correctly. Can you explain what's the difference between a drive chain and a side chain? Well, a side chain is a system where essentially one blockchain evaluates the consensus system of another blockchain. Basically, one blockchain has to understand SPB proofs of another blockchain in order to accept

an SPB proof, which basically contains a transaction and a set of confirmation heaters, as proof of that some transaction has happened in another blockchain. But when you implement a side chain combined with a merged mining system, basically you don't get more security as basically letting the miners acknowledge that this transaction has happened on the other blockchain. So basically if you are going to implement a side chain where you are going to do merge mining, then essentially basically what you can do is allow miners to vote, but this is an algorithmic, boat is not a human boat on the state of the other blockchain. So miners basically pass information

between one blockchain and the other blockchain. So this is essential. Essentially miners vote on the Coinbase addresses and if there is a majority of these tags in the Coinbase, Coin-based fields, they unlock Bitcoins. I don't know if I was precise enough, but you can take a look at the Bitcoin improvement proposal

in our GitHub repository. Okay, great, yeah. Just what number is that? Well, we have not presented yet to the Bitcoin community because we are working on the implementation. So it has a, I will send the, the link so you can publish that. Great, yeah. So we'll put that in the share notes. So you mentioned Ethereum before, and of course that's the first thing that will come to the mind of many people

when they hear about Rootstock, when they hear about smart contracts. In particular, I'm curious about the virtual machine. So Rootstock also has a virtual machine. Ethereum has the Ethereum version, the EVM. Like, how are those two different or similar? Well, at the first release, we are fully compatible with the Ethereum VM. We actually have taken part of the Ethereum VM in a very, very interesting project, which is called Ethereum J. So we basically took the VM so we can be fully compatible with you. So in the first release, by the end of the year,

you will be able to basically take an Ethereum application and run it on the RUstock on the RISK blockchain. And this is important for us because we want to give Ethereum developers another platform so they can test their applications and they can develop their solutions. And from that point and on, we are creating our own improvements to the EVM.

Basically, we are creating a new VM and doing a dynamic retargeting of AVM opcodes into our new VM. So basically, you will be able to run Ethereum applications and also we will provide our own tool chain for developing application on the native VM. But at this point, compatibility is very important for us. Okay.

And so why would, let's say an Ethereum developer who's building smart contracts and solidity, why would he choose root stock as opposed to Ethereum? Is there an advantage in your opinion and using rootstock long term over Ethereum? Yeah, as I see, there are several advantages in different areas. From the technical perspective, we are working very, very hard on scalability. And we know that Vitalik is also working on sharding and on other different techniques. We believe that our approach is better for scalability, but we will see it.

This is a scalty competition. From another perspective, we have a very, very different security model. And I think having this federation that also create checkpoints is a stronger security warranty. And because we are selling this platform to financial institutions and banks, we have to give them certain guarantees that essentially Ethereum cannot. We have to give them, for example, the Federation guarantees that the Federation is going to do this checkpointing of periodic blocks. So from the point of view of the use cases that we want to see implemented, we need a stronger security model as we are trying to provide. Okay. And also I want to, I want to

wanted to ask, so what is the currency that powers rootstocks? Like with Ethereum, we have ether. Is there an equivalent in rootstock? Well, it's Bitcoin. Essentially, when you transfer Satoshi to a platform, you get more decimal digits, but essentially, it's Bitcoin. So essentially, you pay for fees in Bitcoin, and miners take their fees on Bitcoin also. Okay. And so then in that case, I guess my next question is, so with Ethereum, a lot of the network effect, I think, around Ethereum, came from the crowd sale and the prospect that, you know, this would become a huge thing and that those who bought Ether may be able to sell Ether down the line at a profit, capitalizing on those gains.

with something like rootstock where you don't have that initial hype, I guess, around that currency, what makes you think, what makes you confident that people would use root stock as opposed to Ethereum or would sort of onboard massively on this platform? First of all, most of the people that are going to use the smart contract platform are not the people who bought Ethereum on the first place. So the people who are really going to benefit from the SK platform are people who have probably never heard about cryptocurrency. So I see that when it comes to real world use cases, we will have a certain advantage there to really see people using our platform for real use cases that can benefit. real people in our countries.

Of course, if you have invested in the cross sale of Ethereum, you will be completely pro-Ethium. But we have seen many companies that have invested in Ether, and they see us not as a competition, but as a second possibility. If something happens to Ethereum, something goes wrong, and we know that that can happen, because every cryptocurrency at this point is just,

a massive experiment, so they can have a second opportunity to develop their business. So most of the people have welcomed the existence of a fully compatible platform for development of their Ethereum solutions. So we recently did a podcast with Arthur Breitman, and we talked a bit about Dow Hack and about EVM and solidity, and he made some very interesting points, essentially, sort of blaming, at least to some extent, what happened there on the solidity language itself and on the kind of security, you know, the security provided by EVM and solidity. What's your view on that? Okay, there are several things that went wrong. You cannot.

to put the blame on just one thing. For example, the solid language hides the fact that when you are transferring, you are actually making a call. And so that's one thing that solidity could improve. But also, a EVM layer, essentially, there is no recommended way that you can send. either without making a call. So I think there should be a send call that essentially sends either making sure

there is no side effect. And that's a flaw of the EVM that we have corrected. But essentially, I think that the hype was made investors to be a little blind. I mean, when we are developing a distributed Adonness organization, the first massive doubt, that you are working with a new language, with a new kind of attack surface, like game theoretic attacks. And also with a new platform, you cannot rely on a single security audit. And that was something that people should know.

There should be several security audits for these kind of projects. a lot of people has to be involved. And if you think about what Ethereum did when they did the first release, they hired three companies to do the security ID. They hired List Authority. They hired Coinspec, and I think they also hired Djibou. And the three companies were given the same tasks to audit the codebates and to all the design. So I think that that is the right approach that the DAO creators should have.

And I also blame the investors because you cannot just blindly invest in a piece of code and resign to all your legal recalls. I don't know any English word for that. Your own legal defenses just because for the hype. Yeah, I think I tend to agree with what you said then. And I also touching on what Brian said earlier and Arthur's remarks, do you think that using a very basic language, basically essentially derived from JavaScript like solidity rather than some more higher level languages like Cook or some of these other ones, domain specific languages, do you think that that would be something that should be implemented in these smart contract platforms? are languages like CILIT suitable at this stage? The base layer of the EVM allows you to implement any kind of compiler for domain-specific languages.

And it's up to researchers, it's up to people to implement them. So what we have now is a general purpose language, which is solidity, which it's still very immature, but it's the best we have. So what I think is that having a general purpose language that's not mean that anyone is able to create a smart contract. And we have to trust people with a security background to write these smart contracts. It's not just that anyone can write smart contracts. It's a different security model.

It's a different platform. It's completely different what has been developed until today. So even if this looks like Habescript, but it's not because it's typed. So if it looks like Habescript, that doesn't mean that anyone should jump and start writing contracts that handled millions of dollars. Let's take a short break to talk about Jax. Jax is a cryptocurrency wallet designed by the people at DeCentral. Maybe you've been thinking of buying Ether, but having gotten around to it because he didn't know what wallet to use, which one is easy, which one is secure, etc. Well, there's an easy way now, and that way it's Jax.

Jax easily and securely stores both Bitcoin and Ether. not only does it store those currencies, you can convert them right in the app. So with built-in shape-shift integration, you can, for instance, transfer Bitcoin into the wallet and directly convert it into ether or vice versa. And since there's only one seed, it's easy to backup and it's easy to sync. Jax has wallets for literally every platform, every device for Mac, Windows, Linux, iOS, Android, or extension wallace for Chrome and Firefox. Jax is made by the people of DeCentral, and they have a proven track record,

of awesomeness. In 2013 they created CryptoKid. That was the very first browser extension Bitcoin wallet at the time. And the way to think about Jacks is that it's CryptoKid on steroids. If there was doping controls for cryptocurrency wallets, Jacks would be illegal, highly illegal. Fortunately, they're not. And the great thing too about the DeCentral team is just they keep putting out new features and new features for Jack and it just keeps getting better and better. at a disturbing pace I would like to add. So go to jacks.io, that's j a xx.i.o to download your wallet and you'll understand what it's like to use a next generation

cryptocurrency wallet. We would like to thank jacks for their support of epicenter. So where's roostock out at the moment? Like when is it going to launch how far is the development? The development is running very uh fast here we have a i don't know if you see that but we have the group of programmers just behind me working here in buenos ayres and the the roadmap is that in september we will have the first public test net but the launch of the platform will be on december so we will have from september to

december to do security audits external security audits to improve several areas to test to to to to to do whatever is needed to make sure that the platform is ready for lunchtime. And if we detect anything that doesn't give us enough confidence, then we will postpone the launch date. So we want to make sure that RUstock is lunch when it's fully secured. So talking about Roodstock, the company, what's the business model here? RISK, which is the company, developing the blockchain, earns 20% of the fees that users pay.

So this is a pay per use model. And we have to use this model because there is no prime mine. So this is just, so we will win, we will earn, we will fulfill our project if the platform is used by people. So that's what we're aim. We want to see a huge volume of transactions, huge volume of people benefiting from our platform. And that's how we will earn our salaries.

Okay, great. So presumably RSK, you know, it's gonna be open source, of course, right? So your idea would then be a little bit like with Ethereum, right? They put all this money into developing open source court and then deployed it and people had the same sort of thinking, but what if just somebody else comes along, you know, forks it, deploys it separately? So you have the kind of same expectation that because you're the ones developing it, you're setting up all the merge mining setup, et cetera, that that's the one that will be used,

not some other RSC type. So I don't believe that that will happen because what's the incentive for that? I mean, essentially we are relying on the Bitcoin miners for doing merge mining. So why would merge the Bitcoin miners which are part of the root stock, which are part of this platform and can take part of a decision making of this platform, start merge mining a completely clone of our platform for no reason? I mean, we are giving them 80% of the revenue. So how to, we are only keeping enough for us to fulfill. feel our view and to keep on improving, to keep on working for the platform to be, to have

more value. So I don't see that happening. And at the same time, it was very hard and it's very important for us to have this federation. I don't think other companies can be in a position to bring together the main companies of the Bitcoin ecosystem in the same table. and as we have done. So moving on then, in the white paper,

you mentioned the upcoming happening, which is the block reward having and the impacts that that could have on Bitcoin. Can you talk to us about some, what are your opinions on what we should see happen in a couple of days now? Oh, I'm very, very positive that with the current price of Bitcoin, there won't be any miners,

dropping the mining business. I see Bitcoin very strong now. So I don't think that any anything is going to, any bad is going to happen with the hubbing. On the contrary, I think that the Bitcoin price will go up. But one of the aims of our project was to give more value to Bitcoin. So in the future hubbings, there will be more use cases. there will be more because of Bitcoin is it's limited at the current state in the number of

transactions per second that can be handled we want this to the Bitcoin unit of account to be able to handle hundred payments per second thousand payments per second and and this will bring a lot of value to Bitcoin and a lot of income to the miners so we are confident that in the future halvings RSC we have a important role to maintain their their possibility to keep on mining. Yeah, I agree. It's been quite fortunate, no, for the Bitcoin price. It's just sort of like pick up shortly before the happening.

I think if I've gone the other way around, it might, it could have looked quite differently. And I know we did a podcast before, which was quite a while ago, where we were sort of running through the scenarios, you know, what happens now the price drops, especially you know, lots of mind to become unprofit, drop off, how could one attack it? But I also think that actually doesn't look too likely at the moment. At least that's my feeling. So to end briefly on one topic, you're based in Buenos Aires, all of rootstock is based in Buenos Aires.

Can you talk a little bit about what's going on with Bitcoin, cryptocurrency, blockchain in South America? in general and in Argentina in particular? Well, I'm going to talk about my view because I've participated in the different conference in South America, but one of the co-founders of R.S.K., which is Diego, he's actually one of the founders of Bitcoin in many of these countries. He's one of the main promoters. So I think Diego is a great person to talk more about that. But what I see, especially in Argentina, is that we have no trust in banks.

We have a history of capital controls that do not allow people to move their own money, have numerous stories of people trying to move their own money from their own accounts, having trouble doing that. So I think that Bitcoin has shown a lot of people here that there is a way to escape that that, that controls that basically restrict the freedom of people. So I see that that has given a lot of adoption.

But now that I think of Harris K, I think that there is a lot more space to go. And Diego is working with the poor people here in Argentina in pilot programs to allow cryptocurrency of small communities to be used. And I think that's a great place to start, to start seeing what people requirements, people necessities, and see how cryptocurrency can help them. Yeah, I wanted to ask about the transaction volume. Do we see a lot of Bitcoin payments, for example,

in Argentina, I know there was once in New York Times article that said that lots of people in Argentina are using it to, you know, freelancers working abroad and they're getting paid like that. Is that something that's picking up, or where do you see that? It's very difficult from an individual perspective if you are not in the, in top of an organization to measure the number of transactions. I'm moving in a circle of people where everyone uses Bitcoin for everyday things like paying lunch to or anything. So for me, using Bitcoin is a day-to-day experience. But it's very hard to me for talking about the whole country.

Probably there is no use of Bitcoin outside Buenos Aires. So my experience with Bitcoin does not represent the use of Bitcoin in the full country. But in Buenos Aires, is there like a whole range in Palermo where you are a range of places that are accepted? There are, yes. Yes. Hotels also use bitcoins to allow you to pay. Okay, excellent. Well, Sergio, thanks so much for coming on.

It was a great pleasure talking with you. And it was fascinating learning about RSK. I think this is an extremely exciting project. And I can't wait to see how it turns out and to see. what kind of impact it will have. Thank you, Brian. Thank you, Sebastian. It was a pleasure to talk to you.

And just call me whenever you want to keep on these exciting conversations. Sure. We'll have you back on perhaps in a few months when the platform's out and ready and we start seeing use cases coming up. Where can people find you read up? Of course, we have links to all this in the show description. Where can people find root stock, information about root stock, the white paper, all that stuff? All the information is on RSK.co, which is our new website.

There's a couple of white papers there, and we will be presenting new white papers about different technologies of the platform as soon as we do the public test net, the first public test net. We are preparing for that point. So stay tonne to the RSK.com. CEO website, please. Excellent. Yeah, and we have links to that in the right paper and of course in the show notes.

So thanks so much. Episode Bitcoin is part of the LTV Network, Let's Sop Bitcoin Network, so you can find this show and other shows at Let's SoftBitcoin.com. Yeah, we put out new episodes every Monday. You can get it on iOS, Android, and of course videos on YouTube.com

slash Epicenter Bitcoin. And if you would like, you can also leave us an iTunes review and send us an email at Show at Epsilon. episode of bicknon.com and then we'll send you one of those t-shirts. So thanks so much and we look forward to being back next week.