TFTC: A Bitcoin Podcast - Tales from the Crypt #100: @arbedout

Episode Date: September 19, 2019

Join Marty as he sits down with Matt Odell and a very special guest, arbedout. Arbedout is a Twitter anon who has some incredible views on Bitcoin. Particularly how the nascent "cryptocurrency boom" shares a lot of eerie parallels with market booms throughout history. The trio polishes off 3/4 of a bottle of Knob Creek while reminiscing on their experiences within the "cryptocurrency boom". Follow arbedout on Twitter: https://twitter.com/arbedout Shoutout to this week's sponsor, Cash App. Cash App. Head over to the App Store or Google Play Store, download cash.app and start #stackingsats today. Use the promo code: "stackingsats" to receive $5 and contribute $5 to OWLS Lacrosse you download the app. Subscribe to our YouTube channel: https://www.youtube.com/channel/UCtdbWsnfA08KhSUO4amVLaQ?view_as=subscriber Contribute to the show: https://tftc.io/contribute/

This episode of Tales from the Crypt is brought to you by the Cash App. You freaks already know all about them. And if you don't, let me tell you about them. The Cash App is allowing you to stack sats. So you can buy and sell Bitcoin on the Cash App. You can send Bitcoin from the Cash App to a personal wallet, from a personal wallet to the Cash App. And then on top of that, you get the ability to use the Cash App

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If you're going to get $5, then $5 is going to go to Alves La Crosse, a charity very near and dear to our heart. Again, if you haven't downloaded it yet and you're in the U.S. and you're looking to buy Bitcoin, what the hell are you waiting for? Use the code STACKINGSATS. Download the Cash App from your local app store today. what happens we picked our guest for today very particularly for the 100th episode it's very special guest i'm sitting down with matt across from me matt's with us we just uh i'm not the special guest we just recorded rhr and now we're ripping into this this is somebody who i've been

following on twitter matt as well for many years i'm sure many of you freaks are going to recognize him i'm thoroughly excited for this conversation and that we were able to get him to come on the podcast i'd like to introduce you freaks to arped out hey everyone oh wait i did it wrong let me try again sup freaks there you go not too much dude you are uh a man of infamy in my life or to me at least uh your prowess on twitter in particular that is what uh you are well known for in my eyes you have a very innate ability to draw parallels to mania the past and what's going on in bitcoin in the overarching cryptocurrency landscape here in the world that's happening right now in 2019 and the years five years past i believe that's uh when i started noticing it was like 2015 2016

on bitcoin twitter wow has it been that long i think so make sure you're holding that mic close um so let's just jump into it how before we get into all these parallels and all the good stuff how did you find your way to bitcoin sure okay uh well i guess like oh right i have to hold the microphone up to my lips so that people can actually hear me yes you don't have that issue on twitter uh see this is why twitter is so much easier i have the chance to like delete and redo it when i screw up you guys are going to have a nightmare in the editing studio apologies in advance for that uh so when i first heard about bitcoin it was probably the infamous slash dot article if you remember that and then the that was what 2011 yeah and in fact i know it was 2011

because there's an email in my inbox that I save that's haunting me to this day where I mock the idea of Bitcoin thoroughly. So for background, I don't want to give my LinkedIn resume, but I've been working for a few decades now as what I'll say is a distributed systems engineer. My title right now is lead architect,

but I consult, so that sort of floats around a bit. I'm basically, when you need an old gray beard who has a lot of ISP experience, I'm the guy with the gray hairs. So with that background, when I first encountered the idea of money as a protocol in 2011, that triggered some deep and basic fears in someone who has a background like that. Because all you're thinking of is like all the outages that you've had to deal with in the past, all the systems that you've seen break in weird and complex ways.

Your instinctual belief is that this idea can never work. It's almost a reflex action. So there's an email I have in like April 2011 and me like, I haven't bothered reading the white paper or writing code or anything. I'm just you know absolutely not having it like a moron and for again for background at the time I hope I don't dox myself too hard with this but I was working with a payment startup that we were working on things like PCI DSS compliance and make sure stripe data was able to make it securely from retailers

to payment processor gateways and that type of thing so when you have that sort of perspective and you hear like a peer-to-peer money that no one's in control of your start thinking about things like chargebacks and subscription payments and how that would all work and your again your immediate reaction is oh these people are idiots you know this is going to fail completely what was the impetus to open your mind to it well i kept waiting for it to fail in 2011 and 2012 and 2013 and eventually at the end of 2013 gox started having these rumblings like where you sort of knew things were about to go south mount gox is completely solvent yeah exactly uh that's one of those things you shouldn't have to

say you know much less record a hostage clip of a video announcing it to the rest of the internet yes for you freaks who are not aware of the uh the inside joke we're making right now roger vera came out in the uh the fall or winter of 2013 early 2014 uh in a really creepy video where like like you just mentioned he looks like he's being held hostage and reassures everybody that mount cox is solvent he's seen the papers well then then the new narrative is he never used the word solvent so mount cox goes down right mount cox uh goes down and then was i don't know if silk road was after right after so there was that two month interregnum where it was like okay well the world's largest exchange has gone down oh no and then our best use case goes down with it yeah and

at this point I'm doing the no corner victory dance you know like haha I knew it this validates all my priors and the thing just doesn't die and this goes on for a couple weeks and finally I'm like all right what that's not how markets work let's I finally forced myself on one Friday afternoon to have a moment of humility and say okay maybe re-examine this thing that you knee jerk just dismissed out of hand and i jumped into the white paper on a friday night and by i think sunday afternoon i had religion it's like oh i get it now what started clicking for you uh the realization that it's really not about payments at all it's about money um there are plenty of amazing payment instruments that are based on credit that people use happily

uh trying to compete with a credit instrument right from the get-go is pretty difficult unless you're offering better rates or better terms than that credit instrument and there are all sorts of different you know what credit instrument might even be too broad let's say fiduciary media one of those things could be credit cards another thing could be fiat currency you know they're both those have one thing in common a counterparty obligation the credit card you have your counterparty is chase or whoever is underwriting the credit line the fiat currency it's the state and we sort of weigh away that counterpart obligation because the state is as good as gold that the one who's you know backing up uh the rule of law with their police force they have the judges

and the courts so a note obligation to the state is sort of you've already put your whole life in their hands what's one more thing yeah exactly and so you didn't fall for the peer-to-peer digital cash uh need to be able to buy coffee yeah at no point in time was at the entire time that i was reading it and no point did i say gee this is a slightly less convenient way to pay for coffee all in you know were you uh so you noticed the money aspect of it right away which a lot of people get confused a lot of people do get confused with the payments network part of it i don't is money right that's the problem that everyone has no one knows what money is right and if i if i'd gotten through that i still for the record i don't know what money is

we just that word and what it's applied to in the English language just blows my mind at times we've been fighting over what money means for hundreds if not thousands of years we will keep fighting about it long after I'm dead I'm sure luckily I didn't ask myself that question because I might still be tied up in knots what I asked myself was what is this good for and because I'd already dismissed it from the payments point of view I think that gave me the the little kernel of like enlightenment that managed to save me which was oh this doesn't compete with anything in payments this competes with my savings account it's not my checking account right right it's the money that just sort of sits there and i can trust but it has this extra aspect i don't even have to

trust the bank i like how pierre phrases that it's a savings technology not a payments technology that's a great line yeah and so were you you're coming from like a software engineer distributed systems background did the like fact that bitcoin is like were you driven to the economics of it as well or a combination of the two the economics of it i have to be careful with that uh i think the most important economic aspect of it is that any one of us can explain and understand the emission schedule and the way the money supply is created in inside of two minutes talking to each other and we all agree on what that means that base broad consensus that's the most important aspect of it i think honestly satoshi picked a lot of constants very lucky

out of thin air magic numbers yeah exactly um who am i to say that four years is better than one year or six months for example but the fact that we can all instantly agree on it whether you have my background or whether you have my mom's background who i recently had to explain bitcoin to because it's been in cmuc so now she has to take it seriously she's obviously nothing to do with uh computers or engineering anything like that but she got it right away i think did you have to do have you been like trying to convince her for years or no my whole thing is and i'm pretty clear on this if you need someone to tell you to buy bitcoin you should not be doing anything you're gonna end up buying bitconnect by accident one of the best ways to get people to buy bitcoin

is to just tell them that they wouldn't understand it uh that probably for the record we're uh we're recording this in brooklyn right off of bedford ave that is the ultimate hipster line right there we are we're in hipster hipster mecca right now bitcoin's on vinyl you probably wouldn't get it i'm sorry there was just a little sound in my my ear there my mic was getting a little clicky but we fixed it that's good that's important no but it's so what and then so what'd you do from there so you i know you started a quote unquote this is terrible to say a blockchain consulting company you're doing that for a little bit and so you're working at this this uh payments startup and right so okay let me try to time this this is 2014 the blockchain startup wasn't until

a couple years later so there's a brief interregnum where i'm just trying to read more and more and learn more and more and what i ran into right away was that the only really sources of information that were out there was bitcoin talk and reddit this is before crypto twitter was even a thing and i think this is a large part of how crypto twitter became a thing all of us were desperate to talk to each other but didn't know where to meet so we just started ranting about bitcoin and then searching for each other's hashtags it was it was beautiful in the uh winter of 2013 into the spring of 2014 summer 2014 and really if we're gonna give credit where credit is due i think that the mania around bitcoin twitter what has turned into started as crypto twitter

is people trading shit coins yeah and that was a lot of the cash tags a lot of the cash tags were started for shit coins i remember there was a big deal when uh it moved from hashtags to cash tags on crypto twitter for god for your shit coins but that's what you were we were uh talking about before we hit record is that we've all survived like that that phase and then the 2017 mania and now we're now we're here in 2019 but let's try to break down what it was like uh in 2013 2014 for the freaks out there oh wow he wasn't really a believer yet right yeah this was actually i can't speak to corner yeah so i can't speak to what it was like well actually it was a pre-coiner yeah three months after gox let's say that sounds about the right time i'd have to look

may 2014 sounds about right if i yeah if i look at my coinbase but silk had silk road gotten taken down yet uh i think i think so i think i felt like silk road was the fall i've got a laptop up here let me check i want to see summer or fall marty's day checking for us yeah pull that up marty november 2014 there you go fall wow because i remember i was on the toilet when i found out about it you know the good old silver bitcoin news on your toilet right sultra 2.0 uh so when when was silk road 1.0 yeah 2.0 was the first one it's like the rest of ross albert yeah when was october 2nd 2013 actually wow oh so pre-gox pre-gox it was pre-gox with bitcoin history we tried to do the usaf or usaf history we messed up our timelines as well okay so that still makes

sense so so silk road goes down gox goes down four months later it's like may 2014 and at this point despair has set in and i feel like i've missed the boat on noah's ark and it doesn't matter that noah's ark is like capsized you know on fire it's like oh i wanted to be on that boat yeah if you saw it in 2011 i didn't see it back then like that must have been a little bit painful yeah you know i wasn't on board i wasn't really watching at the time there wasn't really i mean 2011 price discovery was like you know alpaca sucks didn't exist yeah yeah uh one of the things is that that is important i think to touch on right here since we're at this point in your discovery uh every single person who gets into bitcoin thinks they're late right yeah would you

say that oh yeah absolutely i thought it was so late right i mean once it hits you once you get religion like well this is obvious everyone i this is not a secret i can keep myself yeah exactly yeah i remember i don't want to dox myself here too but i remember getting my first bonus check and be like all right i'm in it was bad timing for me but uh it was it was good timing though it turned out timing in retrospect now looking back but uh it is crazy that like it you get to to jump in and uh i think going back to like 2014 2015 that summer 2014 in particular is when uh the first shit coin storm started like in earnest you had like people like bryce wiener spinning up like uh blake coin or whatever it was like the king of shit coins

zeta coin shit coins we're gonna black coin all right let's confess our shit coin sins did anyone have you been pure maximalist all the entire time haven't bought a single shit coin once god no no when i first got in i repent i was i was a whore when i first got in i'm repenting now no yeah i mean i lost all my bitcoin gambling on shit coins i have none now that's i'm completely completely clean of bitcoin yeah well that'll happen sometimes my condolences man did you know but i think we've all been there i had a tragic is it boating accident is that used a tragic shit coin accident sure no i just got fucked by cripsy yeah yeah big burn big burns living off my saffron coin he's ever in hong kong or thailand so if you freaks aren't aware big burn big burn was the

ceo cripsy he was like the first cz first cz huge ego huge ego he just exit scanned everybody right just ran away i think he just stopped it was like based out of like boca raton florida or something too and he just like fucking bolted to china people are still looking for big burn If you see Big Vern out there, let us know. We'd love to talk to him. Big Vern, if you're listening, you may be. Cripsy was like the Binance of the first. I don't know if that wasn't really the first Alt-Run,

but like the Alt-Run of that era. Yeah. Well, I guess this is how we're going to start framing and organizing this conversation. So like what I think you're very, what Arbedout is very good at in sort of pointing out on Twitter with his threads with very good detail is sort of the mania that we're in.

And so like the different types of snake oil salesmen that we see throughout the years and how it's evolved and where we are now in that cycle. So in your point of view, how has that changed from where it was back then? Oh, wow. Give me a timer to focus on because we could talk about snake oil salesmen

during the railroad bubble. or yeah so let's yeah let's start with the railroad and then so we'll start with the railroad and just like snake oil salesman in general if anybody's trying to sell like whatever proof of stake coin merge mind multi-script coins and then we can transition into the protocol wars and really focus on bitcoin or something like ethereum going from there wow okay so focusing on snake oil salesmen specifically there seems to be as part of any new technological revolution new techno paradigm let's if we have to use that word there seem to be two sort of main currents they're the people who are building things that they're going to be used in the long term and

then there are people who sense the opportunity around it and try to cash in and some of those people are necessary that's a lot of venture capital is basically based on the idea of you know taking a long shot bet on someone that pays off with 10 to 1 odds on a 10 to 30 year time frame that's not that indistinguishable from gambling the difference is i guess a snake oil salesman versus a vc or an investor with big dreams is the snake oil salesman sort of knows that he's not on the level he's he has inside information that he's not actually going to be joining you on this journey that he's selling you on uh and there's ways you can suss them out a great way to suss out the snake oil salesman during the shit coin bubble was watching them

pump their shit coins and then trade out into dollars immediately like why don't you want to hang on to the asset that you're pumping can you give an example of this uh not without getting sued man jeez i'm sorry um uh i don't want to name names it's one doesn't fix that yeah exactly it feels i mean we're recording this now in the summer of 2019 it feels a bit like you know doing an end zone victory dance at this point most of the shit coin or salesmen have uh so how about charlie lee right he's the classic example he's my favorite he's the classic he's my favorite to hate because and he gets away with it man he's gone away i mean we've talked about this a lot on this podcast at least he told people he sold like i'm everyone

knows how i feel about charlie but at least he told people he sold and he did he did kind of regardless about it like my the crux of my issue with charlie isn't so much with charlie it's that the fact that he was cto of coinbase and the moral hazard of him being the lead dev of like coin and oh wow and and those coinbase tweets in the beginning were like crazy he was like oh like what price will like coin be when it hits coinbase you know and he would like list a poll just like all huge numbers right you really can't do that yeah this is very questionable he's a very rich man now though yeah he's got you know he sold it for both real money and fiat yeah well let's pull this back to like the the railroad craze like what were some of the things

off the top of your head that happened then oh well i feel like i've tweeted a lot about the roads maybe too much um well well before we get into the railroads like what is your fascination with like history and reading you're one of the most well-read people i've come across oh god i i always read a lot of boring stuff yeah i do i always blanch when people say this because it's sort of privileging the media that i prefer like if i were pasting screenshots of all the netflix stuff that i binged i don't do that i'm not a netflix binger but if i were you'd be like oh man you couch potato but i pasted all the screenshots from the books i like ah what a learned scholar so erudite like okay sure um my fascination with the

railroads so humble uh stay humble so my whole thing is that railroads are the first real uh globally available networks uh before that i guess you could say that trade routes were you know the way that uh goods were shipped across the world using boats and whatnot but around the time when we started getting the ability to design railroads and lay down railroad tracks we immediately started to need the ability to manage networks to design we didn't have the words like hubs and spokes and whatnot but that's what we needed to be able to use railroads as a civilization so a lot of the initial weird things that you saw later in the internet bubble and maybe even the shitcoin bubble uh i see reflections of that during the initial railroad boom in the 1800s

what in particular happened back then like what were some of the the scams that were going on oh man would you believe they had protocol wars no they totally had protocol wars how do you think a protocol war works out on a railroad the width of the track bingo i've been i've been reading your tweets oh shit look at this guy yeah gauge width and there were tremendous fights over gauge with spanning decades because someone had made the decision to throw in their money first and then worry about the integration later so they're pot committed and they don't actually let technical due diligence get in the way of their wants and desires they've already got money pulling them in a different direction sound familiar yeah and what did they wind up consolidating on sorry what did

they wind up consolidating on well initially there were attempts to try to bridge the two different kind of widths like with extenders and sort of jerry rig devices devices that can uh connect two different kinds of rails interoperability exactly chain link oh man we're going there the knob's creek is flowing wow there you go that's our that's our secret to success yeah shout out to our dad for bringing a bottle of creek with him the least i could do thank you uh yeah but eventually what happened is network effects kicked in which is a different way of saying that more people preferred just incidentally one particular railroad line for whatever reason there were multiple different reasons that we don't have to go into because

they're local to the railroad bubble i think they're boring i mean if you give me three hours i might go into it but for the sake of brevity we have plenty of time there is no time limit we have 75 hours of recording space on this sd card so oh no that's the limit um eventually the dominant network took over and the operators of the dominant network said you know what this interoperability stuff is way too much of a hassle sorry we're going to disconnect you the interoperability was in play just long enough for them to pull in customers to their new network and buy time to lay down rails to alleviate the fucked up non-operable yeah interoperability tracks the other big thing with the railroads was uh information asymmetry right

like people the investors didn't really know what they were buying yeah exactly this is a great example of there's i forget the silicon valley thought leader who says it but it's actually a good one that i'm going to steal from he says people don't buy products they buy better versions of themselves the people who are investing in the railroad bubble some of them were investing in like dreams of a better tomorrow being able to be able to instantly transport to somewhere lush and green in the suburbs or they wouldn't call it the suburbs and you know the backwoods the backwards yeah wherever um and some people were really piggybacking off of the first railroad bubble in the very first boom years and seeing the people who got rich and said well i don't

really care about railroads but i want to be like that guy right i've seen i've seen this guy made his bones on railroads i'm just going to build a bigger railroad and thus make more everlasting riches and big titty bitches i like that shout out to american hobble that's what the the railroad movement was based off of well there's one guy that i've tweeted about recently uh by the name of his name is ruskin he was a vociferous railroad critic he had every single possible criticism of railroads you could possibly imagine he criticized like the way they smelled the way they sounded the company of the people you were in all this stuff and it turns out at the end of the criticism that by the way he just built a carriage car that was required that didn't work

on the railroads that needed like paved roads and he saw the railroads as a threat to him but that part is like left out of the end until the very end of his 39 different volumes of railroad criticism 39 volumes yep dude went all in did you read all 39 good lord no i read the synopsis come on i'm not that much of a masochist he was a no trainer yeah exactly no trainer god damn it matt you're always you're always thinking there you go and it's crazy how similar it all is you know and someone else i think uh i think it was nick carter who mentioned the the bowling alley boom of the 80s or the 70s that's a good one where everyone was like there's going to be a bowling alley in every town they had one in the white house and it just bought it

was like the biggest pump and dump ever and there's just so many similarities just when you go throughout history it's pretty fucking crazy well yeah let's jump into the similarities that you like that we're seeing with the protocol wars in cryptocurrency right so wow what are your what are your thoughts are you do you think protocol wars wow do you think there's room for multiple What protocols do you think it's a winner-take-all, winner-take-most? How do you see this playing out? I got to figure out a way to say this without sounding like a fortune cookie. What's our lucky numbers?

21 million. Okay, so let's talk about the protocol wars. When you say that to me, the first thing that just blazes in front of my mind is, shit, protocols are war. protocols or contracts between, especially on peer-to-peer networks, between different actors with different incentives, different goals, the only thing

they really agree on is that they're all showing up to the same party, you know? When we talk about the protocol wars, typically what we're talking about is the TCPIP suite versus OSI and the choice for which protocol

suite to adopt to help grow the internet. But in fact, there have been plenty of different, if that's the protocol war, they've been playing between protocol skirmishes. There's the fight between HTTP and Gopher. There's the perennial, I wouldn't say war, but guerrilla conflict between IPv4 and migrating to IPv6 versus just using NAT.

Basically, a protocol is a means for a bunch of different people with different hopes and dreams to all get on the same page. But just because they're all on the same page doesn't mean they're all singing the same song. The things that CloudClear wants out of the internet are very much different than the things

that I want out of the internet, and we're both speaking the same protocol. The things that Google want out of the internet versus what you and I want out of the internet, very different. They want to monetize our personalized information. I would not like to do that. I just want to shitpost.

But the protocol makes all of this possible, right? Yeah, it's the protocol that allows us to all negotiate and at least speak on the same terms. It's like a language. Yeah, exactly. A language is a protocol. We could all disagree in English. Yeah.

All right. and so so the specific protocol wars okay so here's what I here's my brief synopsis of the OSI versus TCP protocol wars TCP was sort of just

a weird science project that Vint Cerf came up with on a weekend and the internet as it was was small enough back in the day to just fling it up against the wall and see if it stuck the flag day to cut over to it was if I remember correctly we're gonna have to look this up online in my tweets January 1st 1983 I want to say

and there were like 400 nodes on the network at the time that had to like upgrade to this new protocol how many nodes were there? 400 yeah this is a small internet back in the day we're talking you know universities mostly on that map we always see I'm looking through your many tweet threads right now to see if I can find the date

I've got your well and this is like the pressure thread that I want to hit on with these protocol wars in particular is this what was this the it's like a like a flash card thing oh right the flash the first one is like if as we should we let a thousand flowers bloom we'll let 10 000 weeds bloom as well it must be our great task then to distinguish the weeds from the flowers so that is a quote from michael padlipski who was a protocol engineer at the time this was all going on and he was very much what we would call a tcpip

maximalist so let me set the scene here tcpip is basically this weird ass science project vint surf didn't think to call himself satoshi nakamoto or anything cool like that but same spirit just some guy's side project that managed to become wildly popular and work the osi suite was very much the protocol designed by committee and everyone got to put their own two cents in there was a hierarchical top-down design meetings and focus groups and all that sort of thing so two very sort of different cultures entirely there's the two guys in a garage hacking things out versus a top-down hierarchical organization and like very much corporate driven right yeah so does this even dive into like waterfall versus

agile development what the like waterfall like top down i mean there's nothing there's nothing that says it has to but yeah organizations like that tend to adopt a waterfall methodology of software development just de facto just because you know you get your marching orders from above and those get filtered down to your middle managers and eventually the devs have to do something to make some some uh middle manager in a meeting two weeks from now be able to check off something on a box okay yeah so how did tcp eventually well so there were skirmishes through all throughout the 80s over whether whether osi would be adopted and by who and what context uh and i think i've tweeted about them for at length so i don't want to bore

people too much on the podcast with it but i can tell you where it all came to a head and where it got interested in sounds good to me sure there was a meeting in 1992 with the iab and the basic premise was okay uh the protocol as we know it is not going to scale uh this is before ipv6 had been even designed or anything like that so we're running into it turns out in retrospect an imagined scaling bottleneck. How are we going to deal with this? An email was sent out to a public mailing list, basically presenting the

adoption of the OSI suite as a fait accompli, something that already happened and just the details need to be hammered out. And the community of internet protocol engineers and network operators that were on the mailing list that received that letter erupted

in response. And the meeting in Boston in 1992, I believe, was extremely contentious. and it basically was the protocol suite equivalent of the UASF. Just a bunch of engineers saying, nope, we're not doing this. We appreciate the email, but we reject your proposal. We reject King's.

We believe in running code and rough consensus. That was the line. If you've ever heard that repeated in Bitcoin, that's where it came from. False. Never heard that line at all, ever. and so this was would you consider this like the first modern day digital age protocol war yeah it was the first massive conflict between two different competing protocol visions mostly

because we're still feeling figuring telecommunications protocols out in the 70s and late 80s and we were still trying to decide where they were relevant and whether they were even worth arguing about it's you weren't really at like the scale to get into debate right exactly the scale at that point would have been you know not too different from the three of us in this room right now you can sort of hash out any arguments that we would have on a particular protocol suite pretty quickly once you start pulling in people from different universities and corporations and uh defense research agencies and all that each of them sort of pushing against each other and jockeying for position things gets very difficult bureaucracy exactly well even though

it was like still like a small world back then and the small protocols that they were fighting over it's crazy how prescient it was in context to what we're doing here and what we've seen in bitcoin and the overarching shitcoin space like yeah so beware the panacea peddlers just because you wind up naked doesn't make you an emperor perhaps they really do strive for uh incomprehensibility in their specs after all when the liturgy was in latin uh the lady knew their place a sure course in law is descriptive f minus m times a prescriptive you shall not bear false witness do you want protocols that look nice or protocols that work nice that one really resonates with me i'm deep in the middle of managing a layer 7 protocol load balancer right now

and i think about that every day when i see data coming into the lba like oh this looks nice great so can you break that down a little further for us like oh god we edit that part out from the prank call prank call we're not editing shit out yeah we don't this is the director's guy this is knob creek at its finest we're just gonna shoot the shit nice yeah well well so i guess let's start transitioning this like what are people doing wrong when they're approaching uh shit coins in particular oh wow let's pick on ethereum we like to pick on ethereum let's do it oh man this is this is for contact i mean these are protocols bitcoin is a protocol it's a set of rules a set of consensus rules that we all agree upon and can meet and and agree and

if money if this is to become money and money is truly uh follows thier's law not gresham's law which is uh commonly mistaken for thier's law and good money drives out bad in the digital age maybe this dominant money protocol will win out bitcoin but it seems like there's many people any panacea peddlers if you will who are out there that think they can do better and and will do better so i guess what we should jump into is bitcoins what people perceive are its limitations and why it may not be a scalable protocol or the protocol the dominant protocol at the end of the day how something like Ethereum thinks they're fixing it and why they might be misguided.

Okay. I can definitely give you a piece of my mind on that, but I feel like I should preface it with this is just one loudmouth's opinion. I mean, we have been trying to yell at each other about this for years, and it seems we're not going to be reaching consensus anytime soon. But I'll try to back it up with some examples, at least.

The chief failing in my mind that all these cargo cult copies of Bitcoin that are trying to build a better, better, dappier Bitcoin are failing to understand is that it's a protocol, not an application layer. You want to build your apps on top of a protocol, not into the protocol. There's just no way to accommodate

all those different goals and hopes and dreams of tens of thousands of developers who want to build applications into a base protocol layer. Eventually, you're going to have to give them an off-ramp to do some whatever weird, crazy stuff they want to do off-chain. An analogy would be, well, HTTP is a great example of a layer protocol that hosts the application layer. Imagine that we had to put in every HTTP protocol layer tweak into TCP instead of HTTP.

The problem with doing that is that if you want to take advantage of new features of the HTTP protocol, you download a new browser. If you want to take advantage of new features in the TCP protocol, you have to hard upgrade anything running the TCP protocol, which is not just your operating system, but it's also all the routers in between you and the web server that is running the other side of the HTTP transaction. It's just an order of magnitude change in the amount of effort required. It's basically, I mean, it's people ignoring trade-offs for their own benefit, right?

Exactly. exist when there's trade-offs yeah in nature there's always trade-offs i've always wondered are they ignoring are they pretending it doesn't exist or they do they not appreciate it i think it's a combination yeah well yes i think it is a combination there's definitely some who are openly ignoring it and probably understand and are like the snake oil salesman that you were describing earlier who are just here to make a quick buck but i do believe there's altruists and people think this is really going to scale or not even scale but they think they're solving the world's problems but they're too naive to realize the limitations that they're running up

against that was just yeah i was just changing here no i mean i agree yeah i think a lot of people are naive in this industry specifically right and uh and they don't realize and those are the people that we can convert and then there's the people that are dead to us and those are the snake oil salesmen who absolutely know that the trade-offs exist but they want to increase their bitcoin stack as as much as possible before that happens yeah absolutely do they even want to increase their bitcoin stack or they just like well the smart ones want to increase their bitcoin stack and then you have the stupid uh snake oil salesman who want to increase their fiat stack but either way they're they're trying to increase the stack

that's true um which brings us like to a good segue and something that that Harbdout reached out to me that he wanted to touch on while we're having this conversation is sort of like what motivates shit coiners and no coiners and how it differs from what motivates Bitcoiners. I still don't know. I have a few ideas about what motivates some of my Bitcoiner friends and myself,

but I don't know if I feel comfortable speaking for them. I feel like... Speak for yourself. I'll try. What motivates you? What motivates me? we exited you know i no longer when i see things about say the federal reserve on television it's entertainment for me it's nothing that has anything to do with my life hope right exactly

i'm there's something deep and profound about that about how our generation seems to prefer anonymous peer-to-peer software over the people who are ostensibly in charge of our monetary system just there's a generation gap there but it's more than that there's a culture gap between those of us who see bitcoin as an exit versus those of us who see it as a waste of energy i mean some people look at it looking at us seeing bitcoin as like an exit a vehicle through which we are exiting they think we're crazy like to the point where they're trying to label us as terrorists why would you want to exit white supremacists yeah exactly why would you want to exit and i think that's the biggest obstacle we have to overcome when we're trying to you never

appreciate the need to exit until you've had your exit blocked i found i didn't really appreciate it until i had a one-two punch of using venmo and you can't mention words like persian or iran or farsi on venmo without getting your payments blocked which is a bit of a kick in the teeth if you're trying to buy a book of persian poetry for your dad for his birthday you know like what now i'm on ofax shit list are you kidding me yeah so let's jump into that you where where's your family from in the world you know i don't want to get into too much detail on it because i don't want to fall that uh into sort of victim mentality where i start blaming all my problems on the banking system and on venmo or anything they have to over comply with those rules and i appreciate

that i don't have to be a part of their system satoshi gave me the right to exit and as a result i no longer have to bitch and moan so i'm sorry you built a product that doesn't interest me that's your problem but more specifically i mean is your family had like firsthand examples of of living through like political turmoil that led to economic turmoil that led to you know loss of savings loss of wealth yeah you can probably guess that from my age i'm the right age for an iranian family to have been hit by the one-two punch of the revolution in the war uh everyone dealt with it in their own way i guess one of the strange things that i still can't quite believe even to this day is how comfortable people were storing they're using

uh things like silverware or jewelry or silk rugs as a store of value that's something uh you wrote a thread about that yeah because i tweet about everything apparently um yeah intermediate monetary assets are the people are using silver silverware particularly right like silver forks and silverware there are different things the big play is real estate but the problem is it's not divisible so you end up with like odd chunked size lots and there's not much liquidity depending on where you go so you have to search for some what nick zaba calls mangarian commodity that you know there's enough demand for you that is generic enough that you can pawn off so silverware sure but for its silver content it can't be any silverware that's actually

a problem they found several hundred years ago people were stockpiling silverware because it was shiny and then they realized oh wait the silver content is not that great it's tungsten yeah at the end of the day one step away i mean that's the thing people don't realize about real estate i mean we're in new york we're in the most one of the strongest real estate markets in the world um highly liquid by real estate standards and it's not liquid at all if you compare it to bitcoin yeah like it takes it'll take you like nine months to close a deal 10 months to close a deal who knows how much slippage you have in between there um and just big numbers right you're not talking you can't you can't there's no divisibility there at all is there a difference

between how long it takes to unload a single apartment let's say versus a single building i imagine there would be i guess but still not that much because because look at the end of the day you want the highest price possible right so it you know it's liquid in the fact that if you just want to like market dump your real estate you can market dump it you know at like a horrible price but if you like want a good price like it takes you time right and then you have the other factor where like people who are holding some of the most expensive real estate in the world in like hong kong and you have political turmoil come in and just upends the whole fucking system all of sudden uh because because real estate is anchored in your geographical location right so so it does

very much rely on faith in the the political um landscape yeah no that's why i think connor brown's uh his post on basically bitcoin providing a store of value where people will not have to store their value in real estate and equities or whatever is is very bullish for bitcoin because again like you do not want to be stuck in hong kong where they have all these protests going out and china ruins their autonomy and their real estate prices go dick up overnight and ass up tits up that's what it is um and then you have things like what's going on in argentina this week where now if they wanted to get ten thousand dollars out per month they can't and again it's too late for them now like they wanted to funnel that into bitcoin they can only do it in small

well if they had to convert to us dollars first but they can only get two ten thousand dollars worth of us dollars per month now um no it just highlights the fickleness of the jurisdiction with which you live in and going back to to your story in iran in particular i don't know this is getting too heavy but like what like as an iranian with somebody with an iranian family it was pushed to america like what do you what do you like what are your thoughts on the the the relationship between us and Iran pass pass. Yeah. Yeah.

To women. Let's, let's limit the list of people I'm going to piss off on this podcast. Okay. Uh, I don't, it's not that I, uh,

don't have opinions on that sort of thing. It's just, I worry that I, my opinions end up speaking for other people who can't speak. And I know mine are a little bit out there. I don't want to give anyone the wrong impression. Yeah. No,

I mean, and I'll just say just as an American looking at, and some, you're not the first, iranian friend i like to call you he's also american yeah you are american as well but like grew up in the states yeah yeah i mean i i know but it's important for the freak what i'm sure no what i'm trying to get is like as an american like in our relationship with iran's always perplexed me it's like why because i've met individual iranians i'm like these are great

people like you're we were we were almost propagandized growing up to hate to hate iran it's a relationship of power you know it's what it all comes down to greed and power that's the beauty of bitcoin the beauty of bitcoin is that it channels greed for good right is is because so many people want to ignore that greed exists but with bitcoin we acknowledge greed exists and we make the system in a way that that it allows greed to actually make it stronger and to help people flourish yeah i'm not sorry for trying to take it there i was just uh i'm curious i'm not i'm like infinitely curious to the point where like it's like ah why is it like yeah i'm not gonna get into it back to uh what we came here for but like so what how do you see

like bitcoin being successful from here like do you think bitcoin 10 years in september 2019 uh would you consider it excess success at this point do you think it's vulnerable are you are you happy with where it's at you know it's the weirdest thing i don't think we should ever be happy or content i think it's always evolving if you said in 1999 that the web was amazing and awesome and a life-changing revelation i would agree with you but if you said it was success at that point i would have said does that mean there's nowhere else for us to go i think this is just the beginning i think we've avoided crib death you know we

there was that awkward period where it was like wow gee I don't know maybe maybe people are right maybe one of the million different things that have been pointed out fear uncertainty and doubt talking points might actually come true well that was like we were talking

about 2014 2015 early like 2015 it went summer fall of 2015 like there was legitimate despair despair like I have i it's well january was low right it was like 150 was january i thought it hit like 180 in july when do i think that but 150 was january was the low possibly yeah but then that whole year was just despair i think i remember pumping like the november 2015 into 2016 i was just like holding

my bags at that point and like crying in a corner and i was just like my dad was right there was legit despair like i was like oh shit this like might not work out when was the bear whale that was right around there but when do you remember no i think the bear whale was december 2014 wow that's my guess i'm probably wrong as we've seen with bitcoin history so far marty's looking it up those posters are great like the bear whale posters and stuff that was a great moment i was not helping to kill the bear whale i was as i said i was crying in the corner yeah this happened uh in october of 2014 there you go i got that one right at least yeah because then after the bear well we actually dropped to the low which was january 2015

of like 150 or like 160 timeline is so off yeah it's weird how we edit everything in retrospect at hyper synchronization sort of the 2017 scam brain explosion has just scrambled all of our understandings of time there was before and after and before is just some weird mess it's all jumbled together what was the most uh astonishing thing to you of the ico boom in particular of the ico boom how many people jumped in with both feet who sincerely believed that they had performed technical due diligence and had only done so much as scan the white paper and had a brief chit chat conversation with someone who had some believable pitter patter to sell them the the bastardization of the term white paper is and i feel like the scientific community should

be coming after uh people were reading like 10 white papers a week i was just like i was sitting there i was legit sitting there during that pump where i was i i was like oh my god there's we have like yale grads like princeton grads like all these people telling me i'm wrong and they're right and that i'm supposed to be reading all these white papers and i was like i i am i wrong i was actually like i it was it was a similar questioning myself as 2015 but in a different way you know i was sitting there i was like well if i'm wrong like i'm way fucking off like there's like i'm not even close right how horrifying is that in retrospect realizing that oh no it's actually option b everyone else just temporarily lost their minds and now they're not going to talk

about it just well i didn't think the whitewashing was going to happen as much as it did i am not in that slide i took screenshots i have receipts well the whitewashing is pretty egregious i mean the whitewashing uh that we had to defend a couple weeks ago ourselves we're not going to name the particular uh aggressor uh towards us but a lot of people in the ethereum community trying to say that consensus and the lead devs and vitalik and the company consensus the company consensus yes horrible name and the lead devs were weren't advisors to icos that raised hundreds millions of dollars i mean the dow the first ico on ethereum not the first ico the first ico was many years before ethereum but i have a question if that were true and we know it's not

but if that were true when the dow went down and that famous announcement came across okay guys can you stop trading if you're not coordinating with people who are trading then who are you talking to with that sentence you have to ask someone to stop trading right is so let's describe this more for the freaks who aren't aware of what happened what what are you talking about who said stop trading so when the initial dow kerfuffle went down there was an internal i want to say skype room it was an irc oh and i think it was skype yeah pretty sure it was skype several different participants were trying to sort through what had happened and the initial reports and actually viewing activity on chain and then a um blanking on the guy's name a lead ethereum

developer some guy uh gave out the call no it's vitalik oh vitalik straight up said okay guys can you stop trading sorry who right vitalik buterin have you heard of him boy wonder kid not ringing any bells sorry guys here's uh here he's got some quantum computing coming out too oh that guy quantum dude yeah quantum computing guy um gave out the call okay can you guys stop trading and And the only way that makes sense is if there's someone else who can actually execute your order, someone at an exchange who is in charge of liquidity. Why are you talking to those people? Why are you in a chat room with them 24-7?

This was not an incident room that was set up. This is just people hanging out. What's going on? Yeah. It's fine to do those sort of things. Just don't whitewash it after the fact. That's the thing that makes you a scammer. You can own up to just about anything.

Throw a postmortem on it and say, hey, lessons learned. I'm sorry. Building the future of money. Something, something omelet, something, something eggs. that's fine when you lie back after the fact first that stopped working in 2009 when twitter became a thing we have records of everything sorry well then then the the egregiousness of it all yeah it's like we were all here we watched all this happen and that's what sort of pissed me off i was like this is not what happened like here's proof like here's screenshots that these

people were advisors on these icos people lost a shit ton of money and and again it comes back to and that's the beauty of that dichotomy of bitcoin versus other projects is that bitcoin bitcoiners in general at least in my experience like to uh pontificate about extreme ownership like you have extreme ownership of your keys you have extreme ownership of your wealth once you have that and you should be taking extreme ownership of your decisions and and your actions at the end of the day and just culturally i think uh that first principle and that mindset will set bitcoin up for success in the long run but it is severely lacking in other projects yeah absolutely and i understand the tension because there's sort of the conflict between

managing something and then being able to say that it's decentralized you want to be able to make sure that your project can grow as an engineer i get that you don't you know as a lead engineer in charge of that project if I were in in someone else's shoes I might have made that call but you're a centralized administrator at that point just own up to it say hey this science project that I'm working on we had to uh quit trading on it things broke we found a bug software happens it is what it is it's the whitewashing after the fact that just is deeply unsettling I don't know what to make of it but to like to play a little bit of devil's advocate here like there was there was some regulatory arbitrage going on right like they had to they couldn't

be completely honest because like a lot of people give like for instance tezos they give shit about um like they're saying it was a tote bag right like you're making a donation you're not actually buying anything like ethereum pioneered that and they had to do that because of regulations right like they were doing this sale and they had to say like ethereum's not money it's gas it's all these things but they knew it was a competing money the whole time right yeah and i get that but here's my whole thing and this is not judgment so much as pity i wouldn't have made that decision i would have uh made the play that they made but if i'm in their shoes and i have to play this game of regulatory arbitrage i would use that window of time between when you

make those statements before when the regulators come knocking which they always do and they already have right to you know build some actual decentralized technology that would protect me from regulators where's your mixer where's your tour relay where's your instead you're sending lawyers and PR firms. That's not going to work here. And centralizing all the nodes and not giving a shit at all about long-term. Exactly. Everyone talks about Vitalik being

a central point of failure for Ethereum. I don't care about Vitalik. What happens when the guy who's in charge of accounts receivable for Inferi gets on vacation when the bill is due? What happens when Jeff Bezos decides that you can't have Ethereum nodes on AWS? So let's dive into this for people who might not be abreast of the situation.

I mean, it's very clear that well, it's actually not very clear at all what the fuck is an ethereum full node number one and then number two nobody knows who's running them and then number three how much how what percentage of those full nodes are being run in centralized services like infura so for you freaks that don't know infura is a consensus back company i believe yes it basically lets you will host ethereum nodes on your behalf in amazon web servers basically most importantly for like businesses and stuff right like if you're running a ethereum application and you you need a node in the background you you you task that out

to infura yeah well that's but that's if we're going to give the ethereum community credit i think that's one thing they've done beautifully is sort of uh confuse what a full node is in ethereum world like what would you consider i'm not going to get into that i've seen the twitter wars about whether an arcade node is an actual full node from my point of view if you have to depend on anyone else to find the full history of the transaction chain then you're something else besides a full node you need to be able to i know it's been referred to as the mountain scenario but you need to be able to bootstrap a node up from scratch to be a functioning part of the peer-to-peer network it's just that's just able to verify everything yes exactly

without any trusting uh another counterparty what is the mountain man sorry what is the mountain man theory oh uh let me see if i quote this right it's the idea that needing to run a full peer-to-peer node is some weird mountain man uh fantasy is how i've heard it described like you know some weird uh what are those guys called preppers the people who yeah like some insanely uh like a crazy paranoid person yeah yeah mountain man yeah which i don't get i mean it's pretty i i can't even describe the argument because i don't understand it on a peer-to-peer network there is one type of node a peer pretty much those peers can do different things but they all better be running the same software doing the same thing we're all mountain men yeah exactly

yes that's like what i feel like the most effective attacks against bitcoin have been or at least sort of social attacks like just framing like that and painting bitcoin as mountain men and fascists nazis yeah and it's like it's infuriating because it's like if you're working from first principles and you're trying to build a truly distributed decentralized system like this is the mountain men need to be able to run the nodes right right like and how do we get that across to people i guess that's the crux of the question like well what do you need infuriate have their cords cut yes yeah you need the nightmare scenario and i don't want to believe that but the reference that i have for this is what it took for us and we're still not fully

migrated but what it took for us to migrate from plain http to https was edward snowden telling us that hey every single government in the world knows what point you're looking at that's what got us to finally start taking anti-encryption on the web seriously in 2013 before that it was totally fine to have just plain text going across the web that's so crazy yeah we'd known it for decades it seems crazy yeah because we were young still that me and marty were young at that point you know yeah that happened and that that was a big game changer for me was was snowden yeah i i think i mean look if if the us government let's be clear here i mean it comes down to really the us government right because if the us government's fine with it they'll provide sanctuary so you'll

be good for most situations if the us government is fine with ethereum and is fine with them being very centralized and doesn't actually take action then there's no reason for bitcoin to exist like Like the whole reason Bitcoin exists is because we need to be immune from the strongest government in the world. If you're not sovereign resistant and you don't have to be sovereign resistant, like there's really no reason for Bitcoin to exist. So eventually we will get to the point. And I think it'll be more of a creeping type of situation where it'll just be you just need KYC for everything. Like you want to like leverage up your ETH on DAI or whatever, on Maker. like you have to do kyc for that and that'll probably be the people will realize they'll

slowly realize especially people who live in iran and other places where they can't actually access it where they try and leverage up their eath and they're like i'm forbidden from doing this there's actually value in a permissionless protocol yeah it's going to take a while to get there i think but unless they see the the need for it firsthand i don't know how we get there I hope it's close to your scenario where it's a creeping realization as opposed to an abrupt, like, you know, hey, you should have actually taken care of this

before this event happened. I just think, like, the Fred Wilsons of this world will not let it be an abrupt... It'll be more of a... You know, because there's so much money in ETH. There's so much US-American wealthy money in ETH that it can't be abrupt. Like, they won't let it be abrupt.

Fred's been seeming pretty down on Ethereum these days. Yeah, he's all in on Kin now. I feel bad. I feel bad for dogpiling on these people. They've just suffered a very public sort of... Humiliation? Yeah. Capitulation is not fun.

The reason I don't feel bad for Fred and the reason I called him out on this podcast is because he said that Kin is one of the most used cryptocurrencies in the world. Again. Oh, right. I already called him out for it once. You had a Kin stand in your Menchies yesterday. I have the director of comms is probably a listener to this pod.

Shout out, dude. i know i know you're listening he definitely follows me on twitter and he's constantly in my fucking mentions and it is absolutely ridiculous there's no logical person on this fucking planet that's in this industry thinks that kin is one of the most they think it's more used than both of bitcoin and ethereum which is like the most ridiculous claim that you can make like i like i don't i don't care don't give me numbers and bullshit it's all gameable and and and you're full of fucking shit and you know it i like to think we have a big enough sample cell uh sample set of listeners out there freaks if you've ever used kick uh please let us know i've never met

anybody that's used the app likewise yeah i mean messenger apps are all about uh network effects right because like i have like six installed on my phone um and and kick is not one of them no i honestly like if they did an ico i would not know who they were likewise i actually had it installed like six years ago well that's so i would i didn't know who they were that's the other fucked up thing about kick like they acknowledge that too like it wasn't that like their last ditch effort in investors meeting was like we're running out of runway right we have this new funding mechanism we're gonna launch an ico like semi semi i acknowledge it yeah it's uh but again it's snake oil salesman man they're they're among us

do do do you think we have a a cycle another cycle whether it be an ico a shit coin ieo whatever it may be going forward do you think the market is learning do you think it's wisening up do you think these quote-unquote protocol wars are close to being over i want to believe that they're over but i know deep down that they're not we're just going to keep iterating on the idea of what money is and there are so many different permutations of something that could be stupid enough to be some sort of money that you could put on the blockchain that i don't think we're done exploring anytime soon i would never have seen for example any of the do i have to use the word stable coins sure let's call them that i would never have seen that coming why are you afraid to call them stable

coins there i mean okay because there's no such thing there's no such animal i mean it's an over collateralized currency board with peer-to-peer participants who again have differing incentives and are maybe taking bets outside of the currency board it's just a way to push fiat risk onto the margins of a lending contract as far as i can tell if you want to call that a stable coin sure it'll be stable right until it's not yeah that's my favorite line is stable coins are inherently unstable yeah because they're susceptible to black swans yeah the people are looking at die right now maker in particular like if ethereum falls below like 150 it was crazy look die is particularly ridiculous because they're like the the issue with bitcoin is that it's too volatile

so instead you should take an extremely volatile cryptocurrency asset and leverage it up. What the fuck is that about? That doesn't make any sense to me. Well, and as somebody, and when I say I come from a finance background, I am not tenured finance. You're not Jamie Dimon.

I'm not Jamie Dimon. I worked at a very niche type of fund and only for a few years. But again, even as somebody who was only a junior analyst, and is not as intimately uh knowledgeable about the interworkings of of all the financial instruments that exist in the world as more tenured fund managers or analysts may be even like the cursory knowledge that i developed over the course of that three four years you just look at these like products like maker and all these synthetic products they're just layering risk and systemic risk and levered risk and it's like this is exactly what we're trying

to run away from yeah and it like and that's why i try to not be as mean as i used to be towards ethereans and particularly defy proponents because i just honestly don't think they understand systemic risk well you should be more mean in bull markets that's my theory when they're getting wrecked like the numbers speak for themselves like they're just they're feeling it when they wake up in the morning they feel it you don't have to remind them is there a future in which defy works wow sure but only because we're just going to keep changing what defy means bitcoin is defy bitcoin is actually defy you can't have defy without the d part yeah you know that's the fucking issue here is they're pretending the d part exists when it

doesn't fucking exist what are your so what are your thoughts on this whole synthetic i think you can never ever ever get rid of risk you can only move it around so if you ever find yourself dealing with an instrument where the people who's selling it are actually convinced that they've gotten the risk out of the equation run as far as fast you can i think the two because i have to relate everything to some previous event apparently the two things that come to mind uh right gut feeling are George Soros breaking the Bank of England and breaking their currency peg. The lesson there was a motivated speculator

against the most determined currency board in the world, the speculator always wins. Shout out to George Soros for initiating a speculative attack. And the other thing I think of is long-term capital management where all of their equations, all these Nobel Prize winners

were absolutely convinced that they could essentially get rid of the risk and print money out of error. and that works right up until it doesn't i think i think the timing between when uh shoals won the nobel and was awarded the nobel and when ltcm collapsed within like weeks of each other right yeah they were uh and it was an epic collapse like the yeah and that's the the other thing too it's ltcm was built on credentials we have we have the smartest engineers the smartest economic academics in the world working on this.

Give us your money. We're going to trade it well. This all happened again in 2008, the Gaussian Coppola, the... Yes, the equation that basically made sure that CDOs were always profitable or something like that, right? Yeah, these models all work great, right,

up until they don't. Once you get on the very tail ends of human behavior, nobody can model that. Yeah, and it's... Well, that's why you should read your Taleb freaks. understand that you can be fooled by randomness that systemic risk exists

and that this shit can happen out of the blue the black swans can fucking happen does bitcoin suffer from systemic risk I worry about things like what effect an ETF would have or why would an ETF be bad

good question I have a gut feeling I don't know my if i can explore that gut feeling and i have this might be bullshit i have this gut feeling too we actually talked about this on our chart today like the people who just see bitcoin as another ticker symbol and don't actually take possession of their coins and just take a bet on it might in the event might accidentally end up creating some form of autocorrelation where they're invested in let's say spy and also bitcoin because they're weird and then so it becomes part of my whole portfolio and it becomes part of it comes part of like a managed future strategy

exactly just the edge risk and then at some point they flip the risk off switch and say nope i'm all the cash i don't know i don't know if that feeling is silly or stupid because i've had a lot of silly stupid feelings about bitcoin but that's my first thought people making long leveraged bets in the existing financial system somehow that impacts the price of it but the key is is that the bitcoin supply is unchanged if you run your own node everything is exactly the same as whether or not that etf existed right and then the last thing is i mean they're inevitable so they're going to happen so if if that's if that is a is that if that's going to kill bitcoin then we're fucked oh i don't think i'd worry more about that not an etf situation because the etf has

a certain prospectus where it says hey this vehicle is meant to invest in this asset and I don't think they reallocate much like if it's just a pure bitcoin etf yeah what he's saying is people will dump it regardless okay right they dump it with all their other assets yeah but then to your point yeah what does that really do what's going to be a massive price drop I feel like we've seen a couple of those do your worst you know that's it's almost better for like the long-term actual bitcoiners right then we just get to get in yeah lower price it's the thing about bitcoin you know I can laugh at the bear well in retrospect but I'm not looking forward to the next bear well you know i know we can get through it but oh man dude he was an idiot he market sold at fucking

three oh he didn't market sell he limit ordered at three hundred dollars craig's about to dump half a million bitcoin on the market all right we're gonna eat the bear whale was nothing compared to this yeah he's gonna dump half a million and then kleinman's gonna dump the other half a million right the thing that sticks with me about the bear whale is i had enough time to notice it go to crypt dog grab a hot dog come back and that line on the graph was still going with 300 just straight across like wow this guy is going at it was it on bitstamp yeah i'm definitely gonna forget to do this but there's a youtube video like uh with some music that was so good the slaying of the bear well yeah i'm telling you i was not i was in it on in spirit i was upvoting

things on reddit i was responding i was on irc and stuff but i was in my in my heart of hearts i was like fuck i'm an idiot and i was not buying i was not buying the bear well in hindsight like i should have just unloaded everything into into that guy yeah right like three hundred dollars of bitcoin that's insane what was the price per set the price per set was ridiculous because didn't he announce it on some forum whether it be bitcoin talk no he announced it by like putting 30 000 bitcoin for sale at 300 on bitstamp oh it was the worst way to unload too like if you Yeah, because it ripped right up to like $3.50. So it was like that wall was done, didn't it?

But then we went down after that. Because everyone spent their money on the bear well. I guess what I tell myself after the bear well is that the reason that all went down was to teach us to take advantage of other bear well opportunities. Like the big one, the next thing that came after the bear well to me was the number of that weekend where BCH was like half a Bitcoin.

Yeah, we were talking about this. the other day when coinbase ninja launched yep i was getting so many texts were you getting a lot of texts oh yeah dms everything i imagine working at barstool sports when all this is going down and bitcoin marty bitcoin marty bitcoin cash marty are you gonna have to no well i love barstool i love everybody i work with but like that was the they were that office the employees in that office were the perfect sample of retail money in that run-up like and it was crazy because i started working there fuck i believe it was like the beginning of november like right when it passed 6 000 and went ripped from like november 2017 yes yeah and i showed up

like oh i'm the bitcoin guy like whatever like i wrote the newsletter in the mornings before i went to work and was like if anybody had bitcoin questions they're like oh so do you think they partially hired you because you were smart oh 100 bitcoin 100 yes yeah um it was a good resume item in november 2017 great resume item but it was crazy just being an observer like seeing my co-workers who had just been exposed to this and how degenerate they were i mean barcelo sports is also known for being a company filled with degenerate gamblers as well so it was very uh part of the ethos yeah part of the ethos that they were just but like people were buying like wan chain iota i spent everything five years i showed bitcoin to a buddy of mine from college

and at my birthday oh no i don't want to dox myself my birthday was around that time period and he shielded me wan chain wan chain wan chain yes yeah wan i was like what is this if you look at the website too it was like pure h it looked like fucking craigslist are you kidding me i've shielded you bitcoin for five years and you told me it was all bullshit and then you come and you dare shield me one chain on my birthday are you fucking kidding the audacity but that's perfect we're still friends though because i'm a bigger person than that you know when people get wrecked people get wrecked well you can never let you can never let the i can let one chain the coin economies get in between friendships yeah you can't do that but and that's like what

or harping back to what we were talking about earlier, it is thinking back to that time period and how enthralled the Barstool office in particular got. It is easy to see that this shit could happen again, like another mania. Yeah. It is definitely going to happen again. I will say that right now.

Everyone is super excited about it not happening again. It's kind of bottom-ish signals. I'm not saying, I'm not calling it bottom because you're a fucking idiot for calling it bottom. is a pretty big bottom yeah i but but it's important i think as like public facing bitcoin figures to not cement our cement our line public facing bitcoin figures what the fuck is that i'm trying i'm trying you know i fucking despise the term influencer there's no influencers in bitcoin there shouldn't be any influencers in bitcoin

um but we are like public facing bitcoin figures like that's fucking what we are you know it has happened for better or worse cheerleaders as eric bosco would i don't like cheerleaders you called us cheerleaders he didn't call us cheerleaders i didn't like that he did that bag leaders what i'm not a cheerleader i'm i i think we're we're rational bitcoiners like i don't i think we're very we acknowledge we know what it is we found our bitcoins in yeah we acknowledge the issues bitcoin faces but we understand that that is our hope right like we need we need bitcoin to succeed if bitcoin doesn't succeed we have the penopticon we have um complete control over money we have you know servitude on a global scale bitcoin is hope

and hope is uh one of the best things i love that we can have this frame of conversation at 10 000 you can't talk about this shit at 100 because you sound insane 10 000 like yeah fuck you we're taking on the bis we're taking all the banks your entire money supply you didn't believe me well you didn't believe me at 100 either we're 100x later eat a dick yeah now we're talking about like global reserve currency status yep you know uh that's a beautiful i just gave a bitcoin shill the other day uh to my buddy who he i've been chilling it for like five years but he finally acquiesced and i was talking to him i was like look like we don't even have to become the global reserve currency we could just become the gold market and we're still we're still

10x we're still 20x you know like that that was my argument my argument was but like under the global reserve currency and it was completely a reasonable argument i mean it very much is but it's like again and so going back to the the conversation will this happen again how will it happen again but in your mind like what could we do to prevent something is there anything we could do to prevent it to prevent yeah like is there an onboarding of education or is there any way in which people could learn the hard lessons that we learned in 2014 to 2016 without i don't go through it i don't think so and i'll give the two reasons why uh the first is we like to believe that we are in a position to teach we're still admit to

yourselves i will admit to myself we're still in the process of learning 100 oh absolutely we're learning together when did you guys start running your own full nodes out of curiosity my first one was the 21 computer um that was such a fucking waste of money but there was a there was a big gap between that and my next full node i'm not even gonna give a year i think 2014 2014 when i started running my own full node but i wasn't using it to receive transactions you know you have to you learn likewise i did the whole like it's what you would learn if you were like if your model was napster a bit touring like oh i got the software running and then i'm using electrum to contact to contact their own public servers and that's sort of the same thing right

that's how that works for like a long time before i learned that whole public server thing yeah we're still in the process of learning so expecting that other people won't go through that learning process and greed yeah right they'll always be green and people and bitcoin is great that we we acknowledge greed exists and that we thrive on greed but the greed will also lead them into shit coins first and then it will bring them into i agree with all this but i but what i'm Is there any way, any particular pain point or area that we could sort of, this is what I'm looking for, like sand down and smooth out and make it easier

so it's like less confusing? So it's less confusing. Maybe like the framing of, hey, these are protocol wars and protocols historically consolidate on the one. The only thing I can think of would be if we could acquire the bitcoin.com and blockchain.com domains as well as the Bitcoin Twitter account and just point them to the white paper or something innocuous.

Because right now, the biggest problem that people have that I encounter is they'll Google it, either they'll turn Bitcoin or blockchain, and they'll land on Roger Ver's site or the blockchain wallet. They're both Roger Ver's site. Because he's a major investor. Do you think it's that big of a hindrance? Sorry?

Do you think those domains are that big of a hindrance? I think those are the biggest single actions you can take. There's a bunch of little small things. I mean, look, I just left the house and I read the news that there's been yet another gold-backed cryptocurrency launched. Yeah, Paxos did it this time. Super.

We're just going to have to keep iterating over and over through everyone realizing this is a bad idea. Sometimes I forget when I just give them the most basic response, like it requires a trusted third party so it doesn't compete with Bitcoin. That's an important response to give them

because people don't realize still. Yeah. They have to connect the dots. It's still very, very fucking early. Well, this actually just stoked a line of thought in my mind pertaining to you, Arvda. So you consider yourself a gray bear distributed systems engineer. Digi-gold was maybe the first. Was Digi-gold the attempt to tie gold to a digital currency?

No, Digi-gold had nothing to do with gold. Liberty Reserve also had nothing to do with gold. It was based on the dollar. What was the one that had to do with gold? Wasn't there like a gold back one in the 90s? CHOM. E-cash. E-cash.

Was that gold-backed? You know, I don't remember because this was early enough in the Internet days that we were disconnected enough from each other and Google was in such a state that you would happen upon someone else's pet crypto projects. You didn't have Google yet, right? When was Google? No, Google was...

Oh, God, we were using Dogpile in the 90s. Mr. Old Man is arbed out over here. This is the crux of the question I was trying to get. Were you following cypherpunk monies in the 90s? In the 90s, I was a punk little kid was showing up at all the hacker conferences like defcon and pumpcon and hope um and that's not the stuff we talked about we were talking about hacking the phone system man yeah yeah that was the big deal free internet right yeah freaks all right this is going to be far ranging conversation but

let's take any like step backward like another step backward like how did you get into engineering and hacking in particular like what drew you towards that oh wow uh you know it's sort of I guess it ties together the whole you're about to find the book thing as well to why I read so much um my parents worked odd hours between the hospital and the university oh man I doxed my parents oh no my mom's a nurse giveaway um all right everybody start filtering yeah start googling um and they would drop me off at the local library and there was a computer that had Oregon Trail and a lot of books and I fucking loved Oregon Trail okay continue I did too but I kept dying of dysentery yeah me too that's what always happened yeah you gotta understand the trade-offs

yeah that's a terrible way to go yeah i i thought the game was all about like loading up on beef like i had like the most meat in my wagon but everyone kept dying realize that's what bitcoin is about i didn't exactly i didn't know at the time but i was i was a fucking degenerate gambler and i would always ford the river because whenever whenever there was a chance for like a high risk a high risk for the river i would always take it because fuck it um and one day i just got so frustrated with how bad i was at it that i busted out the hex editor and tried to see if i could like hack my way through and that one thing led to another i got a job at my first isp in like 1995 when the job was like literally holding a fan in front of the modem bank because the modems

were overheating what that was a job that i mean it shouldn't have been a job but we just didn't have enough money this was back before we were talking i was hearing like things in the news about dsl and cable modems but that seemed like a distant dream it was the days of like 28.8 and 14.4 k bits per second yeah dial-up modems because we were at 50 like we were born into 56 wow was what was AOL yeah that was AOL yeah yeah oh and I guess one thing led to another um it's strange thinking about it in the same way we had the promise of an open internet back then but we had to go through the entire AOL experience and then the internet experience on top of that before everyone sort of settled on and said okay just raw internet access for everyone that seems

to be the just getting everyone this commodity is probably the most sane business model yeah for any of you younger freaks out there i don't know if anybody remembers aol kids but like the aol kit like you could not type something into a url bar right like you just you were just given you were given topics that you could click on send us the floppy disks in the mail and the regular disks and the floppy disks you could actually format i downloaded aol for our family uh we got a free disc in the millennium backstreet boys cd aol was like the shit coin of our times right that's a great example of a shit coin i mean if someone brought us in right it got me it actually that was the first i ever used the internet was through aol yeah me too that's kind of sad

aol on our gateway computer or family desktop wow old school yeah dude you didn't get it though we did not get it though that dude was pissed at us but like this is a good topic to go into like aol was popular like i remember chat rooms oh yeah all that's huge they fucked that they They fumbled the ball there, you know? I mean, AIM survived. It was the first social network, right? Way ahead of time. But why did it fail, in your mind?

Well, this should be no surprise. Centralization. The problem with AOL was that it was America Online actually building out an infrastructure to serve all of America, if you're not a telecoms company already. I mean, there's a reason that the DSL companies and the cable companies are the ones

that really won the ISP revolution. It's because they already had the existing infrastructure. All the cables were already laid and everything. If you're AOL, you're building on top of someone else's infrastructure. You have to rely on people dialing into your phone banks, and your user experience depends on your ability to interoperate with the public plain old telephone system.

The problem is you can't airdrop the same experience onto the entire United States, so you have to start picking and choosing. And then once you start picking and choosing, now you have to start picking who you make happy, and it gets a game of trade-offs very quickly. You start choosing markets that you want to make happy

and market segments and ooh, AOL is better for moms than it is for kids and where's the money coming from? So is that something we observed? Like was AOL picking sections of the country or their demographics? No, they tried to do everything

but the thing is you try to do everything as a centralized organization you are bound to do something's well and something's not great and eventually you're going to overextend yourself. You're going to look for a merger which they did with Time Warner.

That was like the worst merger ever. yeah and then it all goes down another media company i they uh you know they also didn't even try to like brace interoperability right like like the whole like they there was commercials that would just show like the aol keyword right and you would just type in the keyword no website needed or whatever but but that was just completely closed silo right like that's just aol they didn't they didn't want an open internet oh that was the vision it was aol and and CompuServe and Prodigy and all these different walled gardens. The idea was

essentially, I think I heard it described as imagine if you could leverage a tax on vacuum tubes. That's what this is going to be like. Everyone wanted to have their own toll road onto the information super highway. Trying to understand this structurally, what was happening when I was signing into AOL?

Was AOL running a bunch of shit on quasi-AWS servers giving me access to information? Yeah, there was no AWS. Obviously not. So you're booting up your gateway and you're starting up your modem software and you're dialing into AOL's phone bank. And on the other end, there is another modem that picks up the call and starts chatting

back and forth. It's passing your data along to AOL's private servers. There are no other academic institutions or retailers or anyone else like the public internet that are all connected to each other. It's all owned by AOL. Now, there are different AOL content providers, let's call them. Some people are moderators, some is user-generated content, but it's all under AOL's auspices.

It's a lot like Twitter, actually. But imagine you had to dial into Twitter, and while you were dialing into Twitter, by definition, you couldn't dial into anyone else because you only got one phone line. Actually, that subtle point sort of dictated a lot of the structure of it. It was their note. Yeah. Well, then you found AOL sort of manipulating the ways,

like family would get multiple phone lines, so they could be on the internet and talk on the phone at the same time. My favorite was when you would jump on AOL and someone was already on the phone line because it would just jump into their conversation, the noise. Ma, get off the phone. I think that's what really killed AOL was the rise of broadband, partly because it was faster and partly because suddenly multiple people could be on the computer without having to interrupt your ability to communicate to the outside world in your house.

You didn't need them. i remember my first time using non-aol internet was when i was traveling and i had to i i went into the internet on a like a hotel computer and it was through internet explorer and it was just it was separate and we just i it was connected you know through i think it was like dsl or whatever it was at the time and i was just like what the fuck like this is this is something completely different than i then i i didn't know you could like do internet my without aol like i was used to the close garden very simple uh similar experience my uncle was a techie like very big in the hardware uh still in the hardware but like he had altavista and like that was my first

browser experience outside of aol was altavista i was like what the fuck like you can wow just like type stuff and search it like altavista was google before google correct yeah i think google was around but not big i remember using altavista and dogpile before i used google but i don't know whether that's uh you remember yeah did you never use sg's they taught us that in in in elementary school i was i was taught to ask jeeves questions jeez and then you had yeah but it was all about marketing right yeah there was a lot of it was all marketing but what went out at the end of the day didn't really have any marketing did it no i mean at the end all the dumb money dried up i guess there we had to go again through this collective understanding of like what we want out of the

internet it was weird everyone in 1995 wanted to be on the internet but in retrospect we were all talking about hypertext and virtual reality hypertext is you know clickable links basically but we had a completely different it was supposed to be like an internet connected card catalog which i guess is a way to talk about how we surf the web quote unquote but it yeah like the concept What does XANA do and all that stuff is floating around as well. It's this weird thing happens when you build network technology. Everyone starts using it, and then you realize that, okay, you might have wanted to build it for hypertext, but out of the 10,000 people that are actually using your hypertext protocol, 9,999 of them are loading up Pornhub.

The internet is for porn. Well, then, like, that was a great musical. Yeah, that was in 2003, that song. With Avenue Q? Yeah, Avenue Q. And it was real talk. like the internet was for porn mostly yeah i watched it when i was a child i i think it it helped shape me as an individual what is this avenue q musical uh uh it's pg-13 muppets let's

say okay yeah on broadway yes singing important part it makes it more reputable yeah it doesn't like meet the feebles it's not never made its way down to uh the chestnut theater in philly no no that's one thing as new york maximalists have going for us get all the great uh all the great plays it definitely did shape me as as a as a youth in what way uh they said a lot of things that everyone knew but no one said you know like the internet is for porn like the porn hub was one of the main um proponents for https and then now they run their own vpn they have a vpn they're actually getting into climate change now did you see yes did you see that they recorded a porno on one of the dirtiest beaches

in the world and every time you view it they're gonna donate like a nickel or something they plow the streets of Boston every time there's a storm genius well then you have dominoes fixing potholes as well it's very smart not the dominoes in the porn business but it's a private business a private

entity pizza and porn there's a lot of overlap yeah there is these are all totally cool but when Tim Berners-Lee was coming up with the idea of the web he never dreamt of any of this stuff you know what was he dreaming of just pure like information exactly it was going to be math problems being sent a global scale university there's like it or not pornhub is where all the profit goes and wikipedia gets ignored we have

the opportunity for global knowledge base and we don't really want to fund it too much well wikipedia can go fuck itself oh shit here we go he's got very strong political right yeah it got political it's not about open knowledge anymore it's just about our boy david gerard is a big wikipedia david gerard is one of the moderators for crypto on on wikipedia so he he stunts us everywhere we go hi david we know you're listening but like i hope i hope david gerard's listening taking sup freaks to a new meaning him and vitalik i don't know who that guy is i forgot um yeah but i i just it's it's it's pretty crazy when when you look back and you you try and decipher what everyone was envisioning everyone was off right no one really knew and you just

try and build like as sound a protocol as possible and then just like let humans figure it out yeah going forward i couldn't agree more what have we figured out about these new monetary protocol that exists protocol the plural protocol it's protocols protocols protocols protocols yeah i can say protocols what have i figured out about them what have we just in general oh man we're still figuring it out bring this here's here's the one big thing here's my big takeaway for you yeah um the ability to join and leave arbitrarily a global network that everyone else is attached to and to transparently behave in however way you want to is extremely freeing we have the ability You can describe HTTP as a protocol that allows you to transfer text back and forth to people across the world.

That is one way to describe it. Requests and responses at a basic protocol level, it's pretty straightforward that you can just pass blobs of ASCII text back and forth to each other. It turns out what we do with that ASCII text is phenomenally important. Well, you've heard already, but you're going to be hearing a lot more in the future. stories about people who are using Bitcoin for terrorism and people who are using Bitcoin for drugs and people who are using Bitcoin for porn. What you're going to

find out is that that's nothing to do with Bitcoin. Most people are actually really horrible people most of the time. I'm sorry. It is what it is. We're all like masturbating monkeys. There's a reason Pornhub is so popular. Silk Road popped up for a reason. When will Pornhub

become a sponsor of this podcast? We've just been chilling them this whole episode. Pornhub, if you're listening. I know you are a protocol that connects people all around the world should allow them to express their hopes and dreams and deepest desires and Unfortunately for most people most of the time that's gonna be gambling when it comes to money people tend to gamble They tend to spend it on drugs. They tend to make really poor financial decisions Bitcoin's job is to not get in your way of doing that It's not necessarily to enable you to give you a helping hand or throw a conference where we show you how to like, you know

buy Ripple at the top no that's uh it's designated for the airwaves on cnbc 4 p.m fast money brian kelly shout out lotto's coin shout out d-rack i think eventually we're gonna gain an understanding at least that it's nothing to do with the web it's a particular website that you should be focusing your ire on you shouldn't be annoyed at bitcoin if you want to hate drugs fine but hate silk road 2.0 there's nothing about the underlying protocol that mandates that you use it to buy drugs you can certainly if you'd like buy some bitcoin give it to the red cross congratulations good for you you put a little bit more money in their pocket than would have gone to stripe or whoever the

payment processor would be if you don't want to do that that's fine too if you want to judge people who are engaging in a different sort of behavior okay go ahead feel free to make sure you understand that the protocol only enables their behavior it's the humans underneath that are actually in charge why do you think we not we but a lot of people are so driven to attach these use cases to the underlying protocol do you think it's a misunderstanding or do you think it's nefarious i think we dodged this earlier we're going to talk about bitcoiners and shit coiners yeah yeah we did okay so there's two schools of thought there's the no coiners and the shit coiners pre-coiners are people who just maybe have like heard about it on tv but still haven't gotten

their toes wet we love our pre-quarters yeah i like to think of my mom as a pre-coiner in 2017 she hated bitcoin in 2018 she forgot about it in 2019 she's asking me about it it was just on the news for two weeks you know that crazy time in 2017 and so she watches the news after she gets home from work so they're super important those two yeah exactly psychologically it was super important yeah dad's like full-blown big corner now just because those two weeks shut up mr odell and mr odell he checks he checks the bitcoin price more than me nice he he reached out the other day he's like i can't believe it's seventeen thousand dollars and then we realized that he was talking about the volume nice he's learning he's working on it so the pre-coiners aside the no

coiners i see as the monetary version of neo-ledism which is i guess in turn the ledites back in like the late 1700s early 1800s these are people who were confronted with the initial pangs of the Industrial Revolution and realized they were on the wrong side of it and freaked out. People who realized they were going to be replaced by machines. That feeling is terrifying. They were the first ones to feel it, the Luddites, and take action on it, I guess. I mean, I suppose the first time, you know, we invented the lever and the wheel, someone said, oops, I'm out of a job. But the Luddites were the real first. I'm not going to pull you back rides anymore. Yeah, I mean, the wheel was a shit coin, right? That's what they thought.

nice so ever since then we've been sort of teasing out how machines make us feel and there's a certain school of thought and this is tied into like oh man wordsworth and shelly and romantism you think goes back to like you know the matrix man versus machine oh no it goes earlier it goes way earlier i mean frankenstein yeah that early hundreds of years ago we've begun we're still working through the process of figuring out how we interact with machines and how we feel about them how they uh affect our lives as human beings we want there's a certain core group of people who want to believe in some nostalgia for a past that never was that was pre-machine where everything is lush and green and verdant and we're back to nature and there's no emissions and no

electricity usage you know no need for the electricity police even yeah people don't realize that there were like 10 foot high piles like oysters on the side of the road and stuff like inefficiencies but i i interrupted go on these people at their core realize that they have something to lose uh there was a lot of this during the internet bubble you should have seen how the travel agents held when we just said that they wouldn't exist what's a travel agent exactly actually travel agents are coming back in vogue i know but the rich people love them now yeah see that's how they just book it on travelocity or whatever expedia that's how this technology works 90 of it gets commoditized and the other 10 turns full luxury like because

there's still some people who don't even want to log into kayak you know like oh i got a kayak guy they can do it for me exactly um but bringing this back to like bitcoin and the the light aids in the bitcoin or the traditional monetary world like what is their their fear traditional monetary so there's two sorts of uh no coiners that you see in the traditional monetary world there are people who are too dyed in the wool to even appraise it on its face value and i was one of those people we talked about that at the beginning of this chat uh and then there are people who are realizing not necessarily that bitcoin is a threat but that bitcoin could make them obsolete they don't realize it on those terms it's more like oh this technology that i don't

understand completely could make me irrelevant i guess it's the same the travel agents even have that humility to recognize that yeah sorry do you think a lot of them have that humility to recognize that yet or i think there's a deep sort of fear the kind of fear that you that hits your belly when you smell smoke but you don't see fire like you can sense an existential threat to your career part of that comes especially to people who realize that their career is partly you know yeah if your career is centered around say working in the financial press and telling people who make poor financial decisions what they want to hear every day in the daily paper bitcoin is going to be a real downer for you because number goes up is just not something you write an article for

uh five days a week very repetitive yeah exactly i can orange coin good number goes up today i'll tell you from experience imagine imagine if you were in the job of like reading the tea leaves of every Federal Reserve meeting and every FOMC operation and showing up and now instead you've got this two stanza line of code

that dictates the monetary emission schedule in perpetuity how are you going to come to terms with that? I mean you've spent decades maybe of your life

trying to figure out Fed speak and now you're going to switch to this it's not going to happen but do you think that okay I mean I think that

a lot of the no corners actually own Bitcoin so should we have like a delineation I don't think so is there a delineation do you have do you have particular ones peter schiff definitely owns

bitcoin obviously yeah rubini probably owns bitcoin noriel he probably owns bitcoin i'm more worried about the the krugman's of the world krugman probably doesn't own bitcoin because he didn't even see the he just so that so the krugman type the type that is the dyed in the wool career academic economist who has built the models that are supposed to represent what our economy runs on, they are the Luddites

that you're speaking to. Right. That's a deep sort of core belief for those people that there needs to be a leader for this sort of thing, a central person in charge, a missionary,

whether it's the Federal Reserve, so-called the Lennard of Last Resort, whether it's the Secretary of Treasury, there needs to be someone who has their finger on the pulse who knows something more about how money should work than anyone else does. Who knows something about irrational exuberance. Yeah, exactly.

Taking that belief away from people is almost impossible. When they've anointed themselves as the emperor of money, how are you going to take someone's personality disorder from them? Right? But also, how does the whole world become beholden to these academics and their models for the way the world should work the only way it works is if you stop worrying about money at all and just accept the base case like your wages and what they come in and treat money as an abstraction because once you get on the rabbit

hole i mean you'll be thinking about it for years and starting a podcast and whatnot it will obsess you and take over your life once once you go down what is money yeah like it's pretty hard not to become a bitcoiner i think and i think that's the key is like you bring them down what is money and then well the point i'm trying to get at here when i'm like clawing at here is like to us obviously they're clinging on to reputation more than they yeah ego it's ego what would it take and might not again they might be neo-ledites where there's nothing that we could do to convince them and oh they'll whitewash they'll hit it i it's reeducation right like they just learn by getting re-education

re-education oh re-education they'll get rekt and they'll eventually learn right they'll watch their dollars become worth once people start valuing their net worth in bitcoin they will

watch it go down the fucking tubes until they jump in but our good friend Joe Wiesenthal says nobody's going to do that I love Joe, Joe lives six blocks from me just to dock myself further so getting into the internet shit with him is sort of weird because i know like it's sort of like uh jerry lawler andy kaufman like it's a fun thing but i can't do that dude i know we're gonna get breakfast in a couple weeks come on you guys

have met right yeah yeah let me be clear too i consider joe a friend too is joe been on the pod joe has been on the pod about a year ago probably exactly like this week i think i listened to that pod before rhr existed right so yeah yeah it was last summer yeah that was a great episode joe like actually one time i found myself at a dinner with you and joe it was like the three of us sitting next to each other and that was joe like for as uh for as much as he likes to instigate on twitter i think he's more of like a heel like just trying to instigate people but i think he has as a journalist and as an economist to uh an academic i'm trying to think of uh words that could be a complimentary academic and economist in the bitcoin uh world or derogatory as somebody

who an intellectual if you want honest yeah exactly somebody who's trying to approach the subject of money in an honest uh an honest fashion like i think he is a good critic if you yeah he's he's definitely got his shitpost game down paddle given that he's on another shitpost level he triggered everybody with the negative interest rates he knows he knows how to twitter you know He's very good at Twitter. I mean, he's been around the block. He was an original FinTwit guy. Yeah, exactly.

So I'm going to say, because I've been waiting to spit this out, I'm going to say no to the original question, whether they're going to, not Joe necessarily, but Krugman and everyone else, whether they're going to come to their senses. And I'll give you some examples real quick. Okay. Just to spin them off the dome.

You remember Cliff Stahl talking about how the internet would be no more important than a fax machine? Yeah. He's the canonical example of someone who said- That was Krugman, wasn't it? No, Krugman was the fax machine. You're right. Cliff Stahl said it was going to be pointless.

He had a different article. sorry you're right i'm mixing up my my no netters uh kristall is very famous for saying yep i got that really wrong oops i goofed and everyone sort of pat him on the back for it because you know sometimes you get things wrong it is what it is at least he admits it yeah he read it right up front and basically it was very healthy saying like you know i haven't really staked my self worth on the idea that i'm gonna write on everything everything every single time this seemed goofy at the start now i'm on the net what do you want to break my balls right that's one way But most people don't have that sense of humility and self-esteem.

There are two other routes that I can think of. One is there's a famous, and you can pull it up on YouTube. Not now, but I'm saying you can. There's a famous segment from the Today Show in 1995 where they're talking about what is the internet? And they're just so. I saw this shit. It was great. The A with the, the A with the at?

Yeah. Is it called at? Yeah. And they're basically like, what is going on here? What is this nonsense? and there's very there's a lot of incredulity and mocking but mostly it's treated as sort of a gimmick and a joke they'll eventually come the people that were on that show eventually came to terms with the internet on their own time there was no grand reckoning and they just sort of adopted it

i can confidently say i'm pretty sure katie kerrick sent an email right and that's that's the third route the people who were actually like hardcore they're were hardcore internet skeptics in the late 90s and early 2000, they just pivoted from being skeptics about the internet to skeptics about technology. Instead of saying, oh, the internet and all the work, now they're talking about the 737 Max and automated software failing.

At no point in time were they going to have that higher level of like, oh, wait, maybe I should rethink my priors. They just don't have that in them. Once you dig that far in, I think we've talked about other people like that in the podcast earlier. At a certain point, it stops making sense to try to rehabilitate yourself,

and you start saying, okay, well, I'm in the bunker. maybe I can angle for a nicer room in the bunker maybe I can get a night with Ava Braun who knows make it part of your brand just make it part of your brand exactly I think the key here is

when I was growing up on the internet I never questioned how the internet worked or anything I had no knowledge of whether or not this internet was the proper game theory or the proper this or the proper that like i just it was magic i just signed on to the internet and

i was i was there to go and i think like that's what's going to happen with bitcoin is just the generational shift yeah like when you have young people they'll just come in they'll be like well bitcoin is like that's just it right like just to quote russell uh shout out russell coon like and shout out beauty on as well beauty on yeah bitcoin is beauty and he is the biggest proponent and probably like beauty on i know you're probably not listening oh that would be so amazing but like he is he first so the way beauty on views bitcoin is bitcoin is code it is a protocol it is speech at the end of the day like he gets pissed off when people try to equate bitcoin to money yeah let alone something like you guilty that you give that like very guilty but like the the he is

somebody that i think has been through the the ringer of protocol rule wars and the internet and is very keen on describing bitcoin in a very specific way and it will become obvious to to future generations it's not obvious to us now that it works in this way but it is a protocol it allows you to exchange messages as a gossip network that you can send transactions through and yes we imbue value on those transactions but at the end of the day the protocol is just dumb and it works and it has rules that you have to abide by yeah i don't know what i was trying to say but i feel like part of beauty on stick is that he's actually he's like fighting the regulatory arbitrage battle and he just refuses to ever acknowledge that he's not fighting the

regulatory arbitrage battle like if i was in court bitcoin is speech like absolutely right but if i'm like on the shill stage bitcoin is better money like that's what it is right so so it's like we can't admit because of our regulatory overlords we can't admit that bitcoin is money we have to we have to pretend that it's only code and it's only speech and it's only this and it's only that well here's where i was trying to go with it at this point like so that even even that conversation a code of speech like it was just settled in the early 90s which yes seems far away to us but in the whole like not even the bitcoin scheme of things like the internet scheme of things we're still pretty early on right like yeah we were only well we've had our first internet

native generation we're 10 years in now into the mobile scene 5g isn't even here yet 5g yeah my dad shielded me 5g the other day but like it's the future man it's the future how how much more is this going to change not only in our lifetimes like over the next set like obviously we can't predict this or know how it will change but like how drastically is our life going to change when i say i don't know what i mean is 20 years ago i was content to like download midi ripoffs of the music that i listened to like music versions and now everyone has the tricorders from star trek carrying around with 24-7 access to satellites.

I don't know where that happens in another 20-year scale. But God, I'm actually going to use the word network effects. The consequences of everyone, every smart person in the world suddenly being drawn to this communication medium so they can interact with every other smart person in the world to build cool shit. Weird shit that I can't even

imagine, man. I will be annoyed if we don't have a holodeck before I die. That better happen. We better be able to beam me to the Great Wall of China. well that's another quick like another line of thinking that just happened i'm drunk by the way we're nice way through this knob yeah halfway hang on let's do a quick check of the this is the knob creek bottle that i we brought as a present halfway through almost halfway through a handle the supply is the supply has been decreased but it's i forget what i just lost my train of thought but i apologize we were we were transporting around the world through holodecks

yes through holodecks but like fuck i forgot what i was gonna get we'll come back to it we'll come back to it but like i want to like keep on this future thinking thread here like are we just a stepping stone for so like you said we have one generation yeah the internet like one generation has gone through the internet age and now we're stepping into another generation for 10 years into the mobile phone sort of proliferation happening like how weird does this shit get because it's gotten pretty weird in my lifetime it'll get super weird i mean how weird do you want to how deep do you want to uh interpret

the internet put it this way let's get as deep as possible okay 1973 nsfnet people talking about packet switching sure that could be seen as like the genesis of the internet but go deeper in order to build an internet, you need to build a telephone network. You need to have a way to connect people end-to-end and transmit data across wires. That's like 1850s. Go back before then. You need to have a way to represent text. So we're talking about the printing press, the invention of writing. All of that has just been an endless march from when we first started

being able to understand how to mass-produce text, all the way to transmitting it end-to-end, all the way to where we are now. Where is it going to stop? I don't know. The limits of human appetite. I don't know where that is. All the energy in the known universe? Yeah.

Is that what our appetite has? Maybe. I mean, that's... Look, the heat death of the universe is going to come one way or the other. Do you want to be really cool or do you just want it to wash over you? Consume you.

Matt Green of Zcash fame tweeted out today. he was like how much bitcoin pow energy is enough like how much is needed and i just wanted to respond like 63 so i don't know i just felt like that was like a good number that sounds like the amount of energy that that we consume they were too busy they're too busy fighting over whether or not who gets control of the zcash trademark to uh they might as well fud bitcoin while they're at it right like just go with a little bit of fun i love the energy trolls that's a big part of the whole back to nature neoludism thing like this idea that energy usage is bad i might be able to

buy that emissions are bad in certain locations or at least talk about it but just the idea that you know if you and i decide to set up an offshore wind farm and slap a bunch of bases around it and say oh it's taken up however many megawatts why is that bad by itself exactly you're killing the environment tell me like what your problem is with this so i can at least begin to think about fixing it by just saying electricity bad okay all right let's jump into this like the world today like i love you marty it just does not have first principle mindset thinking like people just take oh you're consuming so many megawatts of energy therefore you are wasting energy that's the first assumption that people make and then they don't even take into consideration the source of the

energy the efficiencies that are made and it's just this culture of and maybe the culture that we have grown up in bitcoin twitter is a part of that but like just like seeing a tweet and being like this is the way the world works yeah large numbers have a great way of focusing people's attention that's one thing that the scammering explosion taught me when you say like i don't even have any sense of scale what one megawatt is versus 10 versus 100 in terms of how many homes that is i mean i i have a general but when you say 100 megawatts like wow that's a lot that's something i should have a feeling about an emotion an opinion something i should weigh in on i mean really most people should just ignore that sort of tweet and move on with their lives but we

have this deep innate desire to like focus around these metrics and then chime in with our own two cents i don't know why i every metric i come up with for trying to measure the bitcoin network good or bad a week goes by i'm like well that's a bullshit number i can't imagine what it's like being nick carter having to come up with like actual like viable metrics god bless him he's doing the lord's work yeah we love nick have you met nick yeah i met nick once in person nick is great yeah nick is one of our boys he's an actual boy go sign up for the coin metrics uh newsletter if you haven't already yeah we actually shilled it last rhr but we didn't record so then when we re-recorded we did not show so we're shilling it now yeah subscribe it's very good you know there's

a lot of people that and that have paid newsletters that have paid subscriptions and stuff but one of the beauties of the space is that there's so much free knowledge available and you know i think marty's bent is fantastic i mean it is part of the tftc brand so like i'm kind of shilling that and but it is fantastic and literally the only two newsletters i subscribe to are are marty's bent and coin metrics uh and optech oh and optech and optech yeah absolutely i forgot about optech that was not uh intentional god bless you david harkin i hate to be a cheesy host right now but want to go take a pee but they're all free and the key is they're all free and if you pay three hundred dollars a year for whatever shitty newsletter you have like you're getting ripped

off yeah that's how i feel so we have no marty we have no marty oh man marty's out of the room what are we going to talk about uh hmm shit there's nothing i would say with marty not in the room that i wouldn't say with marty in the room so do you think um i was kind of judging from your earlier statements the fixed supply isn't as as important as as the known supply right would you say like if satoshi had created a situation where it was one percent inflation forever but we knew it was one percent inflation ever and it was and was fixed that wouldn't be an issue not necessarily if it were clearly understandable and actually you know what It's still dirty.

It's still too dirty. Here's the thing. I'd have to know. I don't think it feels dirty. I'd have to know who that 1% inflation was benefiting. It would be the miners. It would be the miners as per Bitcoin's. So instead of a decreasing supply every four years,

we're talking about slightly. It would be like a fixed tail admission for Bitcoin. Oof, that's a good question. Okay. Qualified, yes. It wouldn't be a deal breaker, but it kills a lot of the value but it doesn't really matter now because it's too late now now we have 21 million that's our yeah that's our fixed amount as long as it's set in stone everyone

understands it that's the big right the important part is actually knowing what it's going to be what that supplies right you all agree what it is you all agree it can't be changed there's no fucking with it i'm still not i don't know that's an interesting question because i don't know if you had even a little bit of inflation where they would have attracted the hardcore holes i think it still would have because they would have known like okay it decreases up into a point and then it's one percent forever so it still would have because it's still basically fixed right right essentially back from my p are we talking inflation schedules right now yeah you left the second you left i was like we're gonna attack the 21 million fixable i didn't know what

i'm talking about so i was just like i'm gonna put our dad on the spot and we're gonna fucking do it thankfully it was just a number one man if it were number two we would change the proof of work by now yeah yeah good thing you came back dude that was a quick can i put my two cents in here did you stack sats while you ripped the piss that's the question that's the question i should have i'll stack sats now and repentance but are you worried about any missions still or the lack of that's not what i asked him but that is another good follow-up question not particularly worried now i think what we saw during the moments of the worst congestion was that fees are more than enough income for miners to live off of i'm sure that will be the reality when the reward supply

drops and who who said it this week was it mr hodl no he said he's actually bullish on fees being bigger in the u.s dollar but how about vasco's comment let's talk about vasco so they Yeah, so we had Eric Voskuhl in for a conversation last week, and he's worried about dust. The dust limit. Yes. So the dust limit goes up as fees. If the fee is higher than the amount of Bitcoin you own in the UTXO,

then you can't spend that UTXO without losing the whole UTXO, right? Right. So is that something we should be concerned about? What is your answer? When I think of things like that, and I realize this is going to sound a little bit like a deus ex machina, but give me some rope. Are you familiar with Jeremy Rubin's OP Secure the Bag proposal?

It's a new op code. I am not, no. Basically, it allows a mechanism for you to... Sorry, did you want to... No, continue. He's proposing a new op code that will allow you to leverage Taproot and MAST to commit different UTXOs to different branches in a Taproot script in a big O of one operation.

It's not the same thing as distributing a bunch of different UTXOs to different addresses. but it's you're able to consolidate your steroids right and the idea yeah and the idea is to use it as a congestion control mechanism so that you could have this one transaction that everyone says okay well we all agree that these utxos are committed to these different branches but they're not spendable you actually have to expand the transaction later when there's ideally when their fees are low enough for you to do so so you wait yeah i think of things like that at a high level i think our understanding what the mempool is going to be is going to change but like why

why is this a problem for example in a world where everyone is using open dimes in a hypothetical world where that exists is it a problem well that's a safe well that that's actually funny we bring the subject up because i uh had james a burn over last night we uh we just chill just we had a thanks for the invite bro oh sorry bro no we had a uh i owed him a steak and i classic bitcoin yeah i made good on that bet last night but i brought this i brought up our eric eric bosco conversation this point in particular and he seems to think so again the crux of the problem is bitcoin will get to a point if fees rise that uh a lot of the bitcoin in people's personal wallets will be considered dust where it's not spendable fees are ten thousand dollars

The fees are greater than what you would spend or prohibitively expensive to what you would be trying to move in, which is obviously something we should be worried about. And it is a limitation of the system. Like there will be like dust exists right now. There are some UTXOs that are unspendable. Actually, that's probably not right. It's like under 200 sass or something. In December 2017, there was more dust than there is right now. but uh james seems to think that yeah like if we are to assume that everybody in bitcoin is

economically rational people they say aren't though which i would agree with to a point i'm not i'm not making this case but uh economically rational actors would see uh dust limits coming and consolidate utxs but they weren't ready like coinbase wasn't ready like there was a situation there where the fee crisis continued Coinbase was going to like lose a shit ton of money. It could be possibly insolvent. And they got saved there because

the fees came back down. How ridiculous is that? I cannot believe that we went through that entire fiasco years of arguing back and forth with everyone and then after the fact they were like alright well now it's time to start batching transactions. Seriously?

No we just want to brute force double the size of the block size But we could always raise the block size. I mean, that's one thing we didn't talk about with Eric. That's true. The block size could raise if it needed to be raised and it wasn't going to destroy our censorship resistance. That's a last resort, but I'd like to think there's other,

again, economically driven solutions to the dust problem. Okay, you're not going to like my answer, but you brought me on here to have the old Greybeard Network guy tell you old Greybeard Network stories. Yeah, we need old man arbed out. So here's old man arbed out. This is a true thing. back in the day

if you wanted to get IP address space you need to get blocks of IP addresses to be on the internet you need to get a block of IP addresses allocated to you and they're sort of like phone number banks let's say and you assign them to your computers that's how you get on the public internet by having these addresses and being able to route

them to other people and announce them to other people using a routing protocol called BGP that's already too much detail I'll try to zoom it out back in the day it used to be just this one guy who you asked for IP addresses and everyone trusted him because he was so fucking cool john postle rest in peace what a good dude um what was the what was interacting with john postle uh you know i

only emailed him once and he passed away three months later so he was a really cool guy um he was beloved he was known as he's was the iana the internet assigned numbers authority that was his title now it's an organization um yeah i know about iana yeah he he was the guy who basically kept track of all the port numbers for different protocols and different IP addresses. Anyway, the process eventually shifted and the people who were originally used to just asking for IP addresses and getting them were a little bit cranky about it. And the network evolved and the network evolved. Eventually you get to the point where the existing network infrastructure doesn't work. So many people are joining that you need to have layers. But nobody really

agrees on what those layers should be or look like other than that, you know, we know what with the core, what we call the default free zone, with the core, I don't want to use the word mempool, it's not the same thing, but BGP route table should look like. And we all agree that everyone's networks outside of the core internet should be their own business. We built all these sorts of different hackarounds

to get around the fact that we didn't have enough address space to go around. We built network address translation gateways, NATs. Everything runs in NAT. Yeah, everything is behind layers and layers of NATs. Now there's carrier-grade NAT and port NAT Static NAT, just NATs on NATs, which are a nightmare to debug, which is why I have this pained look on my face.

We built Cloudflare, which is an entire organization that is dedicated to man-in-the-middling half of the Internet's traffic, I guess. There's no other word for it. Cloudflare? Yeah, they're a CDN, and the idea is you put their proxy servers in front of your origin all around the world to speed up your website. It makes sense, but also you're man-in-the-middling. That is what it is.

They're in charge of the HTTPS SSL termination. How many websites does CloudFlare service now? A significant portion. Percentage-wise, what do you think, like 60% or something crazy? I think it's up there. It's high. More than 30, I want to say. How easy is it to DDoS a site?

That's the thing. That's the reason that they've attracted so much usage. They're really good at standing up to DDoSes versus basically... And they have a free model, which is key, the freemium thing. Yeah, you can just point and click and be up on Cloudflare. Outside of Cloudflare, trying to stand up to a 100 gig DDoS attack is impossible. You'd have to provision so much extra capacity. But because they're running a global network with so much capacity, they can...

But all these sites being DDoS, or are they just hedging potential DDoS? Hedging. I mean, you might be DDoSed. Well, a lot of the reason you use a CDN is not hedging DDoS. Does tftc.io need to be worried about a DDoS? No. You're probably using Cloudflare for speed. it's faster to be on all these different cash servers all around the world that'd be dope

that'd be such good publicity they're trying to censor us that'd be awesome you should go full tour actually I don't think you'll why don't we have an onion address we're going to be tour compatible by the end of the week it's a shame

someone stole your nodal box man that could have been on tour now it's on tour the thief was good enough to put it on tour which is well at least they have that going for him thanks for the recommendation by the way i'm loving my nodal box the noddle is fucking noddle shit yeah noddle noddle we we pronounce it both ways you're you're welcome to pronounce i'm a noddle guy yeah i i only started pronouncing hodl after parabolic trap was he was the one who pronounced it hodl i was always a hodl guy

before that i'm still a hodl guy and now everything is hodl and noddle i just you know it doesn't matter that he disappeared on us during the bear market it's just how my pronunciation if you want to talk about a comeback tweak with gif parabolic trav had the best one robert de niro robert de niro like no it was no it wasn't robert de niro it was um it was robert de niro no it was uh um gosh why is the name escaping me right now you can't anger management can't dunk on me if you The Departed. Drawing a blank, man. Not De Niro.

Oh, the freaks are yelling at us right now. Oh, my God. They're so angry at us. Please do not unsubscribe. Just write a review, five stars, about how we were wrong. Why can't I think of his name right now? You have a laptop in front of you. Look at it.

I'm pretty sure it's Robert De Niro. No, it's not Robert De Niro. I'm telling you. This is going to be edited out. It's Jack Nicholson. Jack Nicholson. Oh, my God. I'm so sorry, guys.

I'm so sorry, freaks. Please don't unsubscribe. Marty had nothing to do with this. Oh, wow. I was right. It's his baby. Don't get angry. That was the best comeback tweet.

Like, Parabolic Trav went dark. Fuck, I can't believe they called him Robert De Niro. He had a lot of people trolling him, though. There was, like, Antibiotic Trav. There was Parabolic Shad. There was a bunch of forks. Yeah. Logarithmic Trad.

Larry C. Mack. A bunch of people coming at Parabolic Trav. if you try to drop draw parabolas uh you're gonna get yelled at sometimes you know yeah the problem was that he was good we love you bro but like you were selling courses on like the parabola and then you like disappeared in the bear market like you like that's a little bit fucked up you know you got a shit post all the way through it is what it is it's yeah we were here we were here we stayed through the bear market you know and we all stay humble stack sets like we exactly we we told people the right way you're from just outside of philly right yeah all right so you've seen rocky once or

twice a couple times it's not about winning it's about you just want to show i'm not a bum you got to hang out all 15 rounds man you gotta it's about the montage it's about the pride you got to be there for the montage the the integrity of the human the person that you are at your core it's about being true to yourself and that's what bitcoin is for the record anyone who's not here right now watching this he's got the biggest shitting grin on his face adam back was i tweeted this to adam back yesterday he was asking like why are the memes so dank with bitcoin versus everyone else i don't get it and i was like because of what we all went through like how can you not laugh through that you know it was just so ridiculous watching it go from like we

all got wrecked are we about to be kind right now like what should we tell our shitcoin brethren if we even are to status them as brethren. It's never too late to renounce yourself and just stay humble and stack stats. All right, this is one thing, the pressing topic that I've been wanting to get with. Oh boy, there's something you had on your chest that you're... Is ETH 2.0 ever going to happen?

Is it a second system syndrome victim? That's what it feels like. So can you describe the second system syndrome? Second system syndrome is what happens when you're convinced you've learned all of the lessons from the first system that you broke, and you try to make sure all of them are baked into your second iteration. And the problem is the first system is a constant learning process. The things you learn about it when your first 10 users show up versus your first 100 versus your first 1,000 versus when your first 500 turn off and you're back down to 500 back and forth, they're all different lessons. so the classical second system syndrome fallacy is thinking that the learning process is done not actually appreciating that it isn't and so what you end up on your hands with is a constant

science experiment that never quite gets out the door because you're always learning you're always trying to incorporate the things you're learning over and over one of two things is going to happen eventually someone's going to put a hard cutoff release date and since you're not actually being done learning before the cutoff release date happens you're going to learn those lessons on the fly or they're not and it's going to be a perpetual science research project project if you want to know what that looks like in practice for existing protocols let's see ethereum well i was going to say networking protocols there's there's the itp project which is actually a great research project uh what's going on with itp uh you know it's in this weird space in between

not tor and not cjdns it's not that it's bad it's just you have to be like if you're look if you're an academic working in like uconn or ucla or someplace that has a decent networking department that'll fund you for years itp is what you're fooling on no one's using it right not really that's the issue yeah i mean the the key with tours that you have the foundation like actually making shit happen right exactly and it's sort of a one of the tricky things about protocol development it you can't either they sort of spring out of the either satoshi style vince surf style just weird sign project that everyone says it good enough i'm using this now or it's just this endless thing the thing about the tour foundation pushing things toward is how long does

that work how long does that last eventually either the protocol has to ossify and everyone has their hands off or just in particular yeah which i think yeah i think tour is great by the way yeah but like i i remember when i first started bitcoin or like so like i the snowed in revelations was a big deal for me right i was like i i came to the conclusion that we were like serfs right like that we had to like take back our own sovereignty and it was in a lot of ways it was pre-bitcoin but it was at the same time as bitcoin um and all the people in my circle that i was communicating with i didn't know who they were and whatnot but it was all online they were all like i2p is the future we're going to go to i2p here i am five years later six years

later no one uses i2p right uh we all use tor it's pretty secure right it's like secure enough uh the key there is is usage right it's like actual people using it and tor has made it the foundation specifically has made it very easy for someone to install the tor browser at this point you don't even need a separate client you're just installing the browser and you're running it or if you're using tails which is dope as fuck that's the key tails yeah you're using that it all goes through goes through tor and you don't even have to think about it that doesn't exist for itp there's no way to easily stick a usb into my computer and and switch over exactly you hit the nail on the head right there this is a core part it's funny how everyone talks about like network effects and

what they really want to talk about is like well they say metcalfe's law but they really want to talk about number go up you know uh this is actually a core network effect that you just identified switching costs what are the switching costs for adopting a new protocol for itp they're too high because there's no like you said people don't really even think about tor so much they think about tails and anonymity and it just so happens to be tor is the best way to enable that it's the easiest way to get there since there's no easy way to get a bunch of people onto itp really quick that's the first problem the second is the incentives for using it your favorite dark net site probably has an onion uh hidden service do you know how to get to whatever dark net market

using the itp do they even have those no i like i'm the one who's supposed to be educating people on how to do that i don't even know how to fucking do that yeah so i think that's where tor beats out alternatives like itp and cjdns um but all these as cool as tor is it's still like a geeky nerdy science research product the tor is not going to see mainstream adoption now or probably anytime soon unfortunately most people these days right now most people seem to force prefer centralized vpn providers i'm not saying that's good i would actually prefer more people using tor and the tor browser vpns are good too they are for what they are yeah too much yeah i both man both you gotta what's what's also promising too is again using more bitcoin products now

and downloading more software that's related to bitcoin a lot of like pierre's no launcher wasabi they're just made sats app pierre's no launcher doesn't have tour yet does it yeah it does did they enable it yeah i'm pretty sure like so your lightning node is just tour now i'm pretty sure it was pretty sweet that my noddle just had like a click isn't that great just click it one click yep you're on well exactly i was like you should disable that too yeah that was yeah i clicked it reflexively and then i was like yeah that's gonna take years we're sick of the start through tour but but even so like after it's it's uh after you're fully synced and all that and you have the ability to go to tour i feel like bitcoin products are making that easier than ever yeah i

mean i have three i have three nodes that are just serving blocks through tour so like if you do want to do that initial sync through tor it will be easier now than it was six months ago or a year ago nice yeah but like back to like the second system syndrome problem like sorry that was a diversion my bad no it's not your bad this is the podcast of tangents yeah so half a knob the problem with second system syndrome here is sorry the problem with eth2 let's just call it let's just give it a name yeah it's second system syndrome but with the added bit of the minor incentives since there's proof of stake and what is it now shasper or were you casper it's shasper sharding plus casper congrats enough shasper don't even get me started on sharding again um should we

let's just shard all the chains why don't we just shard everything congratulations you've solved one problem now you have n minus one times number of shards problems good for you super all right before we jump into that let's stick on the second system part second system syndrome problem the thing is in this case because there's an economic incentive not to cooperate you know there's going to be a fork coin there are going to be miners who say yeah we're not on board it it remains to be seen how many there are and how that plays out you're already seeing this like we've talked about this on our hr for like last few weeks bitcoin hit an all-time high in hash rate today yeah over 100x a hash per second ethereum and i i think this

is a product of pro p prog pow programmable pow and their overall uh roadmap to transition to proof of stake like their hash rate is the last i checked 40 below its all-time high and bitcoin even though it's 50 below its all-time high in price is at its all-time high in hash rate what's especially concerning to me about that is that it's not as if those gpus have up and disappeared no so there's still you know that's effectively ammunition that's out there who knows where this ends i honestly don't i think there's a lot of different disincentives all piling up and a lot of feelings being piled on top of those malincentives this is not a something that i would be anywhere near you're i feel like we're sort of inching towards how is ethereum 2.0 going to

turn out i don't want to know is it going to turn out that's my big question because i my one of my favorite threads one of the threads i'm most proud of yeah is ethereum like in a lot of ethereum proponents would like to think that ethereum has a quasi lindy effect right now but i think it is exhibiting a reverse lindy effect because you cannot start building a lindy effect until you have a protocol that is backwards compatible yeah and upgradable and their ethereum in particular their vision to transition to eth 2.0 you cannot start on your lindy effect until you have the protocol that's set in stone that will be backward compatible in new versions going forward so we know for a fact that that does not exist right now like we know that ethereum plans to transition to

a whole new chain with a whole new set of protocol rules the whole new set of consensus rules that will basically start a lindy effect if they stick with that like in history has shown that they will not stick with their implementations at least up to this point and there's just like bunch of whitewashing and and this this is great because disingenuous definition of terms and in network effects that's what it is there's disingenuous definitions what their network effects actually are and what they mean for the long term why don't we define what network defects are because everyone misuses it network effects are the direct or indirect benefits that are

are acquired by users just by joining the same network. They're not necessarily all good or bad. A great example of a network is traffic, like driving to and from places. A negative network effect is congestion. When too many people are on the roads and the roads are clogged up, that's a network effect.

A benefit might be that people going along a specific road might find that it's more beneficial for each of them to pay a little bit of a toll I know who pays for the roads pay for a toll and then have each of their individual tolls dedicated to maintaining the upkeep of the road

network effects in this case you just nailed it right on the head they haven't had time to set in because no one's really gaining a direct or indirect benefit from being on the same application layer when everyone's saying hey we need to jump to a new chain because this isn't solving our needs

there's no there are direct benefits that are requiring to the people who are say selling conference tickets and selling thought leadership but not necessarily people who are actually trying to conduct business on chain what's the benefit that they're acquiring from all this i don't see it what i do see from the description you just gave was the and it's nobody's fault we had the best of intentions i clean myself because i'm a network engineer all the people who thought that the migration from ipv4 to ipv6 was going to be smooth and quick and instantaneous i didn't realize the problems of like having a completely

different wiring compatible protocol we just thought everyone would just slot in and things would just start working and we i've been hearing about ipv6 since 1998 i think we're at 50 adoption still not there no no because it's the thing about uh network effects like that we mentioned earlier is switching costs the switching costs just aren't high enough to get people to move to ipv6 at the edge so it's usually isps that have run out of ipv4 space they're like well we can't build this with ipv4 so we have to go ipv6 they're the ones driving adoption um yeah because we still have ipv4 access like that's no problem yeah like my router like gives it as an option yeah and they're ipv4 ipv6 gateways all over the network to make sure that there's interoperability between

both networks who's my question for this is for your 2.0 is okay you launched it who's compelled to use it i guess you can get the exchanges on board since you're on a skype chat room with them and they'll change the ticker to your new thing and then well and that the most confusing thing for me right now i'm generally confused is like their attempt to bridge the value of eth 1.0 and the Ether tokens on ETH 1.0 into ETH 2.0. Yeah, I don't... In my mind, just from an outside observer and somebody, I'd like to believe I have a better understanding

about what ETH is trying to do from their transition to ETH 1.0 to ETH 2.0 than your layman, though I do not have as good an understanding of the transition of ETH 1.0 to ETH 2.0 as somebody who's working on the protocol. But still, before I'm going to invest all my time to understand the intricacies of what happens during the transition from one to the other,

the whole point that a transition exists is you are giving up. You're giving up on it, right? Am I wrong? You fucked up, right? See, how does it not feel like that? I think their answer to that would be when we're evolving, this shows our flexibility and how we have the ability to demonstrate value.

And this is the benefit of not having a leaderless organization. We're pushing innovation and so on and so forth. But really, yeah, this is giving up on the whole decentralized application dream. Well, to me, it all comes back to thinking about the man in the coma, thinking about backwards compatibility. Like, is the man in the coma running an ETH node right now?

Who is securing their ETH through their own full node, through their own devices but has fallen into a coma and in the next six months if Ethereum starts their transition to ETH 2.0 and they eventually make that bridge and start on ETH 2.0 and let's say our man in the coma

wakes up from his coma this time next year and ETH 2.0 is a thing. Is his node going to be backward compatible? Is he going to be able to claim his Ether on that chain? I'm not positive. And even if he is... No, my question is if eth was supposed to be bitcoin 2.0 and now it has its own 2.0 is that bitcoin 3.0

what is going on i'm confused galaxy brain.jpg holy shit it's confusing it's confusing the beauty of bitcoin is that it's fucking simple it's complicated but it's simple yeah right it's like crazy that that's the argument but it's true it's it's fucking simple as fuck we know exactly what it's giving us it you can run a node you can be running the most original node it still syncs to the same exact chain right that's pretty crazy no it's fucking beautiful it's not even crazy it's crazy and beautiful it's both but it's how do these principles get so bastardized in this journey that we found our sides on i think it's because so i think the crux of the argument are ethereum snake oil salesmen

or are they just misguided altruists? Most of them are naive. I think most of them are naive. I think, okay, it's condescending for me to say naive because I know a few smart people who are working on it. So I think there's, I'm going to try to throw them a lifeline. Naive is the lifeline. If they're not naive, they're fucking snake oil salesmen.

Fair. Fair. Fair. Different, I think there's different perspective. Like I said, I'm a protocol guy. If you're used to the app layer, I think you think app development first and then consequences later.

I think if you're shilling anyone on your token, yeah, you're a fucking snake oil salesman. But if you say you want to build cool things with the EVM because it's like JavaScript, I get it. At some point in the distant past, I thought sidechains were a good idea. You got to work through it. It's cool.

What about federated sidechains? What about Liquid? I think federated sidechains are great because they own up front what they are. It's like, listen, it's a federation. It is what it is. It's just Ripple on Bitcoin. Yeah.

You have to trust this N of M multi-sig. are you okay with that at the start great there's no the the key is admitting the trade-offs exactly and for example i don't think anything is wrong with eth 2.0 in theory in practice okay one guy is backstopping the bills for infera and holds like 20 of the stake that's higher than i've gone with and i've been very radical with it are we talking about mr lubin yes we are and that's the number that everyone says in private and i'm the first one who just said in public it is what it is you say that number i think i said 12 and it was like oh what was this radical over here no there's no you say 20 in front of a couple of consensus lawyers and they start blanching

and catching the vapors oh my stars it's fucking hilarious but it's it's impossible to deny like it is fucking out in the open like fucking i'm not you know what i don't give a fuck there's there's the shit people say in telegram rooms and in conferences and there's the shit people say like on Twitter where like they gloss over this let's not gloss over it yeah that's the number

everyone sort of doesn't deny yeah so what is that I mean honestly if you want to be a Jeff Bezos

of the blockchain go ahead and build AWS I ain't gonna hate but like talking about that setup as if it's decentralized come on it's

disingenuous isn't even the word that's a scam I think I have hi Joe I know you I think I'm drunk enough to give my barstool

consensus story now let's hear it summer 2017 before before i even started working for barstool barstool was lucky to have lewis roberts who's not with them anymore he's their head of sales at the time and uh a startup within consensus virtue poker in particular which had no idea whether or not it was going to be legal or within the laws of new jersey let alone the laws of international law they were trying like we went into consensus's office and this is when i i was very skeptical of ethereum up to this point i'd

written my thread about uh going to the consensus meetup and seeing how they pitched ethereum and i'd lamented about that already but i'd never been in the belly of the beast and seeing the pitch from an ico company to a a company that would have offered advertising services for them luckily not even luckily like the the biggest insight i got from that meeting was i went to consensus and this company virtue poker they ran an ico raised millions of dollars to create a uh a poker app on the blockchain with clubs it was it was cryptographically proven that it was a fair house whatever blah blah blah whatever i didn't even need to be there like my boss lewis who i've talked about on this podcast he's been on these first two episodes if you listen to the first

two episodes the podcast louis is with me but and he's not as into bitcoin as i am he's into bitcoin but does not understand like the intricacies of it as i do and i didn't even have to say anything to him like we went into consensus we sat there for an hour had virtue poker pitch him on why they should be allowed to market a barstool not literally we got into my car and i was like being silent on purpose just waiting to see if lou would make the first word he's like was it me or was that just like fucking stupid like is this all a scam like he like innately knew that like this doesn't make any fucking sense like they don't know speaking particularly to virtue poker they did not know whether or not like poker was going to be legal in the

jurisdictions they were operating they didn't know whether or not and that's actually this was still back when i was on like my my ardent like what do you think about ethereum transition to proof work to proof of stake like that was the one that was my biggest worry at that point like i wasn't even worried about like the ico was like you're changing your consensus algorithm like how are you gonna move all these ico daps from a proof of work consensus to a proof of stake consensus basically seamlessly without a hitch and that was like the one question and like the dude building on ethereum didn't even know about the switch from proof of work to proof of stake and i was like what the fuck luckily i didn't even have to be like what the fuck lou looked at me was like this

is fucking bullshit like i'm not even gonna get into this but like that's how insane it is and that is consensus c-o-n-s-e-n-y-s the the vc arm of ethereum is pumping these videos these companies excuse me and they can't even explain to a layman like how it would in any way make sense like i didn't thank god like i felt like immense amount of pressure come off my shoulders the fact that i didn't have to say anything lou looked at me it was like yeah that's fucking stupid i envy you why the venture capital scene in new york because of fred wilson and that damn blog post uh just fell in love with the ico concept for the same reason around the same time because of a million reasons but honestly because of easy money there's so much money to be made dude it got to the point

where there was a it got to the point where there was ico advisory funds you know if we weren't even ico funds they were ico advisories basically made up of lawyers who would advise you on how to launch a quote-unquote clean ico and one of them approached barstool and tried to make barstool do it and luckily i got into the email chain but i didn't have to like the the conversation got to actually i don't know how much like i should uh i should disclose this but like long story short an ico advisory fund was in barstool's ear like you should launch an ico and i was like there's no you can barely run a word per press site here you should not be we had an ico advisory fund we wouldn't be doing this podcast like we could have just retired you know we could have this podcast

in the middle of this podcast life cycle we were recording in uh the same we work of one of the biggest ico shit funds in the fucking world what was that coin fund.io dude coin fund oh wow r.i.p i would walk past that jeremy fucker and be like what the who are you hey that reminds me how's coinless doing they're they're hitting me up once a week to interview their ceo um not getting not getting answers to those emails if you can't tell by now uncle marty's very drunk and disclosing some we do not we do not allow shit coiners onto the podcast it's a very important rule that we we we make here at tftc no this is this is something it's not worth it in the long run it is ephemeral like the the better conversations are here speaking with you somebody who's worked

on protocols for fucking decades and actually understands the problem where you could oh yeah you could speak to some ico shitcoiner who's launching some quote-unquote innovational business plan but it's like it's ephemeral this gets to you we mentioned the blockchain consulting thing i did in 2017 this now i can actually lay it out on the line i didn't accept a single dollar of money i think i lost five thousand dollars or so on the venture basically it was an excuse to go out with people and grab coffee and talk about what they were working on what i was really trying to figure out like are is everyone else insane because if everyone else is insane i'm gonna go short what did you find like what were the conversations you were having

no one believes this shit one-to-one there was no people pump their bags like you wouldn't believe on twitter and meetups but one-to-one they always have the same cynicism they're always the big tell is they're talking about how they're going to cash out in dollars there's never any concern about adoption or how you're going to catch your first 100 users if you start to have that conversation people start getting nervous and touchy eventually around may 2018 i saw all i needed to see and was like all right well definitely there hasn't i mean you have to understand i'm gonna dox myself even further fred wilson actually funded a couple of companies that i worked at back in like the 2007 2008 era you can probably figure them out if he's listening

hey fred um i hope fred's a big he fred's a big freak he's a big fred episode he's a big uh name in the new york venture capital community you if he says something is the next big thing then you listen you know uh and going against what i i've worked a lot of startups which is how i know so many different bcs you know you they find your last company you work at the next one you build another cool thing hakuna matata the cycle repeats paint with all the colors and the wind and all that uh and just mix two disney movies there very flawlessly and it was just the strangest thing all of them just abandoning their collective knowledge that they had for years and just chasing the easy money there were so many different things about the icm mania that should have set off red flags

for anyone with a traditional investing background like why the rush to liquidity why aren't we focusing on the easier experience who are the early adopters actually like no show me your actual early adopters meet them in person talk through what they're getting out of the product all that due diligence was just put behind in the desperate rush to be part of the next big thing well that's what blows my mind coming from a traditional finance background and particularly fund of funds so i i worked for a company and we had what's called 40 act fund of funds and 40 act fund of funds basically a mutual fund but you're indexing other funds into a quasi mutual fund but the amount of due diligence that we had to do on the funds that were in our index was

absurd to the point where i was like i get why like people are mad at regulations but now looking back in the lack of due diligence that was exhibited between 2015 and 2019 in icos in particular it's like oh i understand why this these due diligence checks are in place like you need to make sure like due diligence to the point, like if you're working in a traditional fund, the due diligence is the point where you have to physically show up to somebody's office and prove that the server is there and is running the data that it's running.

And that does not exist in this world at all. And that's one thing I want to make clear to you freaks out there, maybe listening to this and financially illiterate or not illiterate, but unaware of the, the due diligence that goes on in the fund space. Like it is thorough. like there are regulations for like not calling for regulations but to play fair in the real world you have to check off a bunch of boxes and the the boxes that either didn't exist or were never

checked off were egregious in the ico boom you status motherfucker well that's like that's a weird thing like makes me like that is one thing where it's like all right the state here maybe it does have a point like okay so i'm not a statist motherfucker you fucker but let's throw them in let's throw them in the throw them in the swamp um belongs but yeah it's the same sort of thing if the thing what we're talking about here and again it's regulatory arbitrage these people were basically trying to either intentionally or unintentionally create a level of distance between them and the regulators and sort of everyone even in 2017 was talking about like oh the sec is going to be coming after you the sec is coming after you the sec well now the sec is

here in the interim between the mania and now no one's actually put any effort into like trying to make sure that the regulators wouldn't be able to catch them except the people who like exit scam to move to puerto rico those dudes are free and clear shout out verne defend crypto.org yeah exactly it's ridiculous it's absolutely ridiculous yeah and I have

if you're gonna go that route personally do what you like take your chances you're the one who suffers the consequences who am I to judge

it's the disingenuous attempt to be like half a scammer you can't be half a scammer just be a scammer yeah exactly if you're gonna do it just be a scammer

I will respect the fucking hustle if you do Catch Me If You Can is one of my favorite movies okay Frank Abingdale I saw he's still giving out advice on CNBC

like you see nbc tweet about frank abigail a couple weeks ago right love that shit but don't tell me like you're decentralized and open and free and then you know set up backdoor deals with like the saudi arabia sovereign wealth fund the way the way i look at it is like i'm fine with free mark i like i love free markets i think all of it should be free and i think the result of free markets is that you will have rectification right like we go back here it's like you will get wrecked the rectification is a new word like people will get wrecked and and it sucks like it really sucks for them but like they will get wrecked and they will learn from it you know and and then we proceed and and that's the ultimate result of a pure free market and i'm fine with

that because that is what i want and i think it's a net benefit for for the world um but like that sucks for the individuals and that's why i shout from the rooftops what i feel because i want those individuals to possibly not have to deal with rectification but i understand that in a free market that is exactly what's going to happen you will have scams you will have bullshit that has that they do not disclose the trade-offs which is actually the definition of a scam but that that that's what's going to happen and you just you just deal with it and hopefully the majority of people you know skate by and don't have to fingers crossed man can we motion to i may be pushing my luck here can we start calling it rectified rectified i like i like rectified i think we

can uh this is i think this is the first time the vernacular is uh motion passes yeah motion passes motion passes we've achieved consensus i'm not sure if i agree with this governance system I might have to fork off. All right. Someone call Dan Larimer. Let's turn to more optimistic Bitcoin-focused conversation. Again, going back to what I was trying to harp on, where are we now?

Are we robust enough? Is the possibility of creating the true open financial system that we envision coming to fruition, does that exist right now? What are the areas that worry you that we need to focus on, maybe that we aren't focusing on as much as a graybeard? As a graybeard, the one thing I appreciate is my complete inability to see the future, so I can tell you what the past feels like.

There was, let's see, I think in 1996, 97? That has to be the timing. I started downloading mp3s from different random FTP sites all over the web. This is before BitTorrent even became a big thing. And ripping my own mp3 CDs from going to a local record store and getting the software to encode WAV files into mp3 format. This is way before Napster.

Yeah, way, way before. And at that time, nobody took mp3 seriously, and the idea that we were going to redefine how music was distributed or anything like that was just not on anyone's radar. and about 2000 2001 things just start to flip my first two mp3 players were in order literally i want to get the name right the um it was a no-name taiwanese outfit the jukebox rj100 it was basically a three and a half inch laptop hard drive with like 12 double a batteries and a logic board all taped together and just barely fit in your pocket 20 gigs of mp3s

and i forget the other the name brand these were all like things you had to look up on the equivalent of like alibaba you know like they weren't being sold in stores or anything but it was a cd player that played cds that had mp3 data on them that could hold like an hour and 15 minutes worth of lithium battery charge because the usual cd player didn't play mp3 data exactly so somebody basically hacked the dac boy to like decode mp3s but nobody figured out like oh wait this means the cpu is doing 100 times more work than it was doing before so we're gonna burn out batteries in an hour two things one these were amazing life-changing technologies for me they gave me like hope in a way that you cannot like i was the coolest kid in school when i had my 20 gig mp3 player you kidding

me what music were you downloading uh skinny puppy a lot of old punk and industrial that was Yo, Marty had a Zune, right? Marty, were you a Zune guy? Oh, wow. You seemed like a Zune guy. A Zune? No, I was not. I was never a Zune guy.

I was a Walkman. I got the... Did you ever have the mini discs? The Sony mini discs? Do you remember the mini discs? Hell yeah, I had mini discs. I had a CD binder. I went from a CD binder to an iPod.

I can't even remember. It's not an iPhone anymore. What was it? iPod. iPod. Holy shit. I forgot what an iPod is. car you used to have the the cd binder where you were like okay let me pull out what up what cd i

was gonna play yeah now my cd player in my car literally acts as a mount for my phone like i just stick the fucking silicone into the nice to the hole of the cd mount to hold my phone yeah i went straight from uh binders of cds to the ipod wow or in napster and kazam and lime wire in between kazam yeah i remember kazam and napster and my mar so we had to go from those initial devices that first initial glimpse of what it meant to be using mb3s instead of like the cds that you got from sam goodie or vinyl records even oh yeah you remember record stores having to be a thing because you need to stockpile music yeah my favorite movies ever airheads Airheads is one of my favorite movies ever

Oh nice One of mine is Empire Records Just because I was young enough There aren't big record stores like that anymore There's no need for them When I think of This last summer for me and Bitcoin I set up my square card

Now I have deposits and withdrawals of Bitcoin working I have my coin kite cold card I have my noddle I think of that hard drive mp3 player It's clunky and it's weird and it's definitely a technology in transition but also in a very real way there's a Bitcoin balance that I can drop

onto my debit card and turn into fiat when I need to it's it's the definition of a technology in transition it's awkward and clunky but also totally works it gets the thing done that I need done what I would really like to do is just have Square move the fiat part away

entirely and have the endpoints that I'm sending money to just have Bitcoin addresses but it's not on them to do that there's an entire ecosystem that needs to grow it's going to take a decade or two for that to happen but we're at the start of it and i think no and that's exactly one of the points that i like to harp on is everybody wants everything out of the box right now like bitcoin needs to be the perfect payments network the perfect money the perfect store of value the perfect unit of account out of the box and how do people not

realize that this is going to take time like you can't have everything if you want to wait for that to happen you can but by that time number will have finished going up if you want all the value all at once fine but you're gonna have to sacrifice the price discovery that number has gone up yeah number been going up will it ever stop going up no bitcoin is gonna pump forever i did admit this to eric don't tell eric i did admit this to eric while we were interviewing him but but i do believe that the number goes up forever because even though it goes up on a less slope like the slope will decrease it will just continue like if you have a deflationary currency and it becomes a currency of the world like it's going to go up forever like by design

it's i believe that i it scares the hell out of me that i kind of believe that but in broad strokes i do it makes sense right yeah i'm not crazy but here's what worries me it's I love Parabellum, Trav, but it's not going to be a smooth, straight parabola all the time. Oh, no, no, it will not be a smooth. It's not going to be smooth at all. Like from here to 1 million, 10 million, 100 million, I don't know where it ends,

but I know my hair is going to be gray by the end of it. It's going to be dirty, and I'm just going to recycle the same fucking tweets over and over again. You've been warned. It's just going to happen. We go to 100K, we drop down to 25K, there's going to be the same exact tweets I sent to you at $3,000. like that is it's gonna be the same tweets and i'm gonna recycle them and it's gonna be

fucking beautiful it's what's gonna happen all right we all know i don't disagree yeah if bitcoin fails we're fucked that's how i feel i don't even think we're fucked we are fucked no i don't think so but because i think it's very hard to deny that this is not an enticing technology at the least and if not a very hopeful and technology filled with potential at the very most right like no i mean can you knock people for trying to make the world better i agree but are we honestly making the world but i guess that's the question we are making the world better like do you think we're this is on it like is this a completely greedy play by us or focus on making your world better because once you start trying to make other people's worlds

better then that way lies madness you're gonna start controlling them and trying to get them to dance to your tune start going like hitler things make sure that you're taken care of and make sure that you're not actively hurting anyone else and then the rest will just sort of sort itself out well it is that's what i believe but that is also the beauty of beckway in my mind is like again like going back to our conversation of exit and voice the beginning of the conversation like you do not have to participate in this if you don't want to but you should this is this is the thing that i think a lot of no corners don't get they think their opinion is important or necessary or part of the conversation no we exited you we left you can write about us all you want

we're outside of you are we gonna win in the long run do you think are you hopeful uh it's gonna be the network that everyone wants to be a part of so sure that's it's ironic like i i was mentioning earlier internet skeptics how do you think internet skeptics communicate do they not use email carrier pigeons yeah they're still faxing it's like it's like a harry potter thing it's like owls these owls yeah i was down with owls by the way i would have been an owl maximalist if that was real like if i could transfer value and messages through owls i would probably do it we're in brooklyn the king of pigeon mess i know but if i had owls like if i could actually like send an owl out my window i'm just saying i like not realistic owls aren't very good at sending

messages that were value until that's world war ii generals yeah it was pigeons i'm pretty sure they didn't do that i gotta ask they did oh no they use pigeons are we three drink matt six drink matt where are we we're we're three quarters down the knob creek wow you know and do we have a paddle we have a paddle we're paddling it's like the the current's questionable you know we're like dealing with it we're in the knob creek and this is my favorite free-flowing tftc conversation i've had in a while i think this is the longest one that's ever existed we're at two hours we're five minutes away we're well we have to continue we have to break the record five minutes away from breaking my deepest apologies to everyone

who has had to hear my nasal voice for the past two hours and change shut up fuck you man this is No, this is episode 100 at TFTC. We're going to blow it out. We're going to go for another hour. It's the centennial. It's the centennial. We have 75 hours on Marty's SD card, supposedly. I don't know how your SD card might run out before this.

Yeah, I mean, we could do it. We could go 36, you know? Yeah, we'll do it. We'll do a day and a half. We'll do a day and a half podcast. I'm glad I explicitly asked for 100 because it was coming up. It was like, hey. dude we've been trying to get you since before i met you and before i met marty

yeah we've been trying to get you since oh oh you can go back in the dm archives i think i dm'd you like two years ago i was like let's do this yeah i've been reticent about it i don't know why i guess there's i don't know the old bitcoin habits die hard it's not a good idea to be sharing real names right but then again everyone knows each other in real life so yeah that's how i felt He seduced me for a while. I don't want to get too cheesy here, but you've been very formative, your ideas at least, on Twitter. That's the crazy thing about Twitter is this one small medium of messages imbued to the world and 280 characters or less over time since the change.

I've learned so much from you on Twitter. and you've been the the impetus for a lot of the subjects that have been written and marty's been in particular and and again i just what a big thing of this podcast over the last two years has been i do not think people think long term enough i think people are caught into their current condition and are caught into the currents of their modern time and just get caught up and bullshit and are not able to step back and look at the bigger context of things and that is why i have been a big fan of yours and trying to get you on this podcast for so long it's because i think you have a very unique ability to take not just a step back but a

fucking thousand foot step back and to look at the world and how we're interacting with it now and comparing it to other times in history and it is crazy i mean we've been warned history does not repeat itself but it rhymes and what you bring to light is that we are part of that writing history i'm glad i'm at least useful for that one of the hardest things that it's that i've had to come to terms with in uh understanding bitcoin is that a lot of people with my traditional skill scott are really good for telling stories you don't want a guy like me like good lord god forbid writing his own blockchain software can you imagine what that would look like in a different world i'm the guy behind like hedera hashgraph if you ico'd i might buy the person i would have

taken you for an avalanche guy oh man i should have fucking ico'd i would have totally been kingsley coin i would have totally well no let's get into it like you you touched on it earlier like you were quote-unquote blockchain advising but you're basically yeah advising the brain drain and tell people they shouldn't be doing that like what is you could have made a lot of money well so i there's two things that you want the old stuff here's a couple things you can make or lose a fortune in an instant you can only lose your reputation you can never get it back uh all of the people who went in for scams during the dot-com bubble they're the people who i know plenty of people who made poor decisions i'm not

gonna get into them because i don't want to dox anyone but classic there's two sorts of people there's people who like immediately had to fess up and say oh shit i fucked up with that last call that last job that last play that last thing and they got to be part of the mobile revolution in the app store and got welcomed back into the cool kids club and then there's the people who were like nope adobe flash was a great decision and those guys are off in the cayman islands right now banging their trophy wives god bless them but we don't hang out with them anymore you only get a one chance you know no that's like what life do you want to live yeah at the end of the day the money is not going to be it's it's not

going to hold you close at night it's not going to come to your birthday party it's not going to respect you wait wait wait wait just for devil's advocate i completely intend to get fucking rich as fuck off of bitcoin fair yeah fair okay i just wanted to make that clear disclosure so disclosure with that being said right where where are our blind spots like are we wrong how could we be wrong we could we could be wrong right about bitcoin absolutely we could be wrong answer me huh okay you want to steal me on our yeah let's deal man let's deal man how how is bitcoin wrong huh he's thinking he's he's got that's the thing all i can think of are like no corner arguments that i've debunked like a million times already on twitter

like oh too much electricity go fuck yourself um you need a central authority to pick the interest right i think we could be wrong like 10x later we sell and then it crashes or something like i think we have a 10x in us regardless if we're wrong what is being wrong what is being wrong that is the question we're being wrong is like bitcoin doesn't become the global money something else does i think what would that something else be though would it be the u.s i think it would be like a corporation i think that's very important like a libra style bullshit well well shit if that's the case and libra does succeed over no not libra it would be like libra style it wouldn't be libra something libra style even if that is the case where that

succeeds over bitcoin i would not have felt bad uh championing bitcoin because i believe we would have lost in the long run if a libra style coin becomes the status quo i think oh we've definitely lost in that situation yes but i think but we would have still made bank yes but it in whatever the currency is could have still made bank but it would not have been like a scammer-esque like bank make uh where i do truly believe that at least i know i'll speak for myself like i know that i think bitcoin is one of our only shots at achieving a free sovereign money in the digital age and a libra coin is not that but that's what we're losing out to in the long run yeah it sucks but it doesn't denigrate what the ethos and the the goals that bitcoin are striving for

oh you guys looking at me for to chime in now yeah i mean i i don't think like yeah i agree that you know but i actually disagree i think we would have failed in that situation i i i definitely would have failed but like our intentions would still be pure my goal is for bitcoin to be the global money that is my goal and i think i can help educate and meme that into existence and i will do that um if i get rich and people who buy bitcoin lose a ton of money like i have failed that's that's how i that's how i would feel um i i promise to you guys that that i will absolutely tweet about it if i ever fucking sold my bitcoin which is never gonna fucking happen um but i would tweet about it

if it happened and i would i would fucking talk about it on the pod but i yeah i i i think that we all get rich together that's my plan we all get rich together but i do want to get rich and i will never fucking pull off of that pedestal of of wanting to get rich because i think that is important i think i think the key motivation to investing in bitcoin is that the schmuck next store who's been an asshole to you who who's completely enamored with the fiat system is going to get fucked you know and and it's the human greed that brings you into it and wants you to to do better than that dude and that's why you get into bitcoin in the first place as well as all the independence and everything else but it comes at its core it comes from you wanting to do better

than your neighbor right and i think that's the humanity like that's how human humans work is that we want to do better than our neighbor oh you want me to chime in how do you feel about that i have feelings um i don't disagree i think the incentives are important i think anyone who says that they're not interested in how I'm in it for the tech yeah exactly sure you are like everyone else everyone's got everyone's had a boating accident too you know as we talk about it I find it hard to think about failure scenarios what worries me is the idea of catastrophic success uh I think the price is almost a foregone conclusion it's going to be some number that

i can't even wrap my head around just because we're at 10 000 right now that is insane but right now it's just zero it's just normal yeah you know it's just like like that's what someone asked me the other day like what do you think the price will be in five years so i was like i can't fathom that price because i thought ten thousand dollars was moon math right when i first got in i was like that was the big meme in like 2015 2014 it was like we're gonna get ten thousand i was like i was like yeah i was like ten thousand dollars is like okay let me multiply ten thousand times how many bitcoin i own oh my god okay i'm good you know and now we're at ten thousand i'm just like uh the huddle knot's gonna say we're never gonna go under ten thousand again it's

gonna be like the normal it's just you know where we are at so let me flip the question around let's say it's 10 15 years from now 2035 2034 holy shit what's going on the price is let's i don't know 1 million 10 million some insane number let's say we're at 10 we're a million dollars it would be one cent per set okay so we've hit set send parity so let's say we're there and no one's happy half of us think we failed why like work backwards from that scenario don't try the blog size is too small probably no i'm going to be the block size is small is that it's it's hard to move bitcoin and yes you may have the dust limit's too high yes that is interesting to me the okay let me try to articulate this failure scenario do you guys know what pik notes are payment in kind

no okay you don't really need to i mean imagine instead of trading utxos you started trading obligations for utxos so the utxos themselves don't move but the obligations essentially we recreate fiat it's a rise sounds risky yeah i know where you're going i think i know where you're going oh yeah continue so that's my concern that we somehow succeed in a way where everyone is happy because number go up and number went up lots number keeps going up yeah but we in a million different insidious ways introduce centralized control and gatekeepers in ways that are just subtle enough that there isn't the equivalent of a UASF movement where everyone throws on hats

and goes to war, but enough to compromise what we have now. That is something that concerns me. I don't know how that would work, because I never would have imagined anything about Segway 2X. I never would have imagined the backdoor agreements. I never would have imagined the hats.

I never would have imagined BIP 148. Schallenfrei coming out of nowhere being like, we're going to fucking do this, motherfuckers. man i do remember that like august 2nd of that year like the day after the bch before he had was like fuck it bitches ain't shit we're doing this nobody that does wear me too but it also when you like think about the game theory of bitcoin too

like when it gets to that point who are they rationally who are the economical actors at that point and are they rational that's the question you have to ask and are they willing to what's what's the right phrasing like it all bitcoin at the end of the day all comes down to economic rationality you are mining because you are going to make a return on your capital that you invest in the mining infrastructure you are buying bitcoin because you believe that a network effect is going to grow behind it after you buy it and it's going to increase your purchasing power over time and then when we get into this this post-honeymoon scenario which we're pontificating about as a future scenario that we don't exist in yet like you just have to think

like up to this point at least in my mind uh economic rationality has won out and i'd like to think that the the system is such that it will continue to win out in the long run whether that forces people to consolidate utxos and do dust holidays whatever it may be i just think those holidays are ever going to happen they're never going to happen but so because that's not economically it's not economically rational right but i do think the economics will work out to where you have to assume it you have to assume economic rationality you have to assume that people will be greedy with their own stack right yes exactly i hope that's true and i think that's true the majority yeah just assume that the majority are greedy

with their stack well am i am i right in assuming that it's worked up to this point do you think people have been economically rational up to this point i think so but i think incentives can only serve to incentivize behavior uh it's not going to be we don't get to all sit back on our laurels and say oh the incentives will work themselves out we have to appreciate the incentives and understand i'm sorry no uh and actually be an active part of defending bitcoin like if you remember the uasf we could have all just sat back and said oh the incentives actually you know they dictate that they tell us that this is all going to work out for the best but that doesn't mean you don't have to run your own full node you don't have to be on twitter

yelling at jeff garza for his off by one error and you just have to like sit back and let someone else do the work who's that dude sorry uh he's the guy behind the metronome that ico guy what was it Fuck that dude United Bitcoin Let's take all of Satoshi's coins And then we're going to KYC you And this is the future of Bitcoin That's a great example

Of when I said the people who were part of scams Just fucked up the Cayman Islands And are off spending their money from the dot com bills Nah Jeff fucked it up He's fucking poor man Uncle Marty over here is more of A conspiracy What's the word I'm looking for

Not apologist Not apologist What's the word I'm looking for Enthusiast Not enthusiast either I'm sympathetic To some of their views You're a sympathizer

People like Jeff Garzik and Mike Hearn Looking back Mike Hearn was a spook Those guys were obviously spooks Garzik too He went to KYC everybody and moved everybody to Metronome. Steals Satoshi's coins.

Freaks, if you're listening out there, factor this into your threat models. There are spooks, government actors, people that are trying to disrupt Bitcoin. Is that conspiracy? You know what? No. If I were coming at this ex nihilo, I would have said yes,

but we've seen too many issues in the past with developers attaching themselves to open source projects and then suddenly introducing bugs that just miraculously break encryption. That's happened in Debian. That's happened in Apple's SSL implementation. It's a common tactic. You get like a researcher and academic.

Such a good tactic. Yeah, I agree completely. I just wanted to hear you say it. Do I want to hear it? Do I think those guys are doing it? I have no proof. Do I think it's rare? No, not at all. Well, I'm very happy that Garzik and Hearn have been thrown out of the system. Hey man, there's always Ethereum. Do you remember

Hearn's R3 tell all new york times bitcoin's dead r3 is the future i'm gone i love the chutzpah like universally unilaterally declaring like i've that the bitcoin experiment has failed like satoshi is that you i like three hundred dollars yeah it's over it's done people wonder why we are like aggressive you know like that's what happens like you attack us we get we get aggressive that's like i don't want to get too far into number one the whole concept of conspiracy has been bastardized like conspiracy is the the meeting of minds to conspire against another mind like go back to cato go back to the cataline experience there excuse me the cataline conspiracy

which is the literally the prototype prototypical example of rhetoric in the world is about a conspiracy against catiline or against cicero catiline conspired against cicero to kill him and like if you like if you translate that latin it was a oration by was it catiline or cicero got conspired it was cicero who got uh conspired against by catiline but the catiline conspiracy oration is literally one of the the cornerstones of logic like in in the academic world like conspiracy is a real thing like people have the connotation of conspiracy theories like oh you're a loon if you believe in a conspiracy theory what a conspiracy theory is at the end of the day is that you had one or more persons

conspiring against one or more entities on the other side so my my favorite conspiracy theory is that alex jones is a government agent designed to make all conspiracy theorists look crazy and i think that is the ultimate conspiracy theory and i think it's true i i actually wholeheartedly believe that one because i it basically when americans hear conspiracy theory now they think alex jones they shut off right shut off and and he has fucking horrible arguments and he has the he operates from a horrible basis to begin with and it it disingenuizes all of us and i don't even know if that's a word but it makes us all look like we're fucking crazy and so that's my favorite conspiracy yes it's back to like orwellian naaman and shit like that like just

the fact conspiracy theory when you break down the etymology of the words in that there's nothing nefarious about it like a conspiracy again there's two people conspiring against another party whether it be one or multiple people this is a fact this is just like the way the english this is the way the words work this is how they work and like to think that there aren't people like we are conspiring we conspire to give information to people there's no conspiracy there's no conspiracy no oh shit i thought we were here to manipulate the spot price of bitcoin am i at the wrong podcast good number go up we're uh we're trying to push it to 11k right now yeah what uh i heard china just accepted bitcoin as a global currency i literally we had a i don't

know did you listen to our live episode in san francisco yes i did i i am familiar with so i literally told everyone in the beginning of the episode i was like market by bitcoin so the price is higher when we when we quote when we quote the price and that was like at the local top we were booking it like 13k and then just it's just like it just pummeled on everybody i felt that a little bit about that this is officially the longest episode of tales from a crypt ever okay we've had three hours i don't think do any of our rival podcasts ever hit three hours joe rogan said three hours a couple times i'd like to yeah i agree he is a rival podcast nice i'd like to thank our sponsors knob creek without them i don't think we'd have made it all

three hours we're not done yet we're not oh wow can we get a shout out can can the freaks who are listening up until this point congratulations by the way for listening three hours can you like reach out to knob creek and be like they drink a lot of whiskey you should sponsor them and i don't know like channel bitstein like there's some kind of connection between whiskey and bitcoin that we can hit here um both very low time preference yeah yeah exactly what margie said just just do something like that as long as anyone doesn't find out that my real name is that's all that matters keep quiet on that guys i hope you keep that in how can we classic tur how can we how can we end this on a good note our doubt what are what are you thinking

like right now what is the the overarching landscape of the space and the space okay uh it's it's 2019 now and right now it's 2020 yeah almost 2020 we're just now at the point where people are interested in the space but starting to lose interest in shit coins like i can have conversations and say i'm bitcoin only and have people take me seriously there was up until 2016 nobody wanted to talk about it at all and then they didn't want to talk about it because they wanted to talk about their shit coins like matt just uh was saying earlier and now we're at the point where we can say okay bitcoin only you had your ico fund this is what we want to talk about what excites me for the future snore and taproot and you know one of

the things that can you know what since we have time why don't we fill a little bit here i'm really do it i'm really annoyed how much hate lightning gets even if you don't get so much hate what the fuck even if you hate lightning and you don't believe in lighting you think lightning's gonna fail you should thank your lucky stars that you are not competing with the likes of me for space on the next available block and instead i'm on the lighting network you have to understand that's how it benefits you if even if you're not using it you would have been competing with people for fees who are using it now get that through your heads It's fucking optional.

Right. It's optional. That's the beauty. The whole beauty of it is that it's fucking optional. So that's my first rant. The second rant is because people have tied together Segwit and Scaling and Lightning all together in one. They've missed out on one of the cool benefits that I think Segwit has provided from day

one that no one's really focused on, which is script versioning. Right. Which is freaking amazing. I'm really looking forward to the combination of Taproot and script versioning being available in main net. That might take a couple years to get live. I think Peter has a BIP that's currently in the Request for Common phase that he pushed a few months ago.

Does script versioning have to do with BEC32 in particular? Because there's, what, 16 versions of BEC32 that we can go through, or 17? Yeah. I don't know that they're strictly related, but script versioning is related to SegWit. SegWit v0 is the current version of script, And the idea is you can have multiple different script versions. Yes.

And the BEC32 address structure allows for 17 iterations of the script versions. But even within one script version, you have something like 256 versions as well. I believe that's true. I haven't looked at the BIP in a couple months, but yeah. Yeah, it's like 256 to the 17th power in the amount of script versions that you fit. But that's something that's crazy. it's like bitcoin's evolving and we're having to adapt to these these new realities but we're finding that they're they're making bitcoin more useful at the end yeah right

and it's i think we haven't even begun to see what bitcoin is capable of until those capabilities are in the field until we have uh script versioning in the hands of actual developers live on mainnet i'm really excited to see what people build on top of that so when matt and i our gray beards do you think we're going to look back on bitcoin and be like wow this looks nothing like it did dude i'm already a gray beard i'm too young too young oh man it happens bitcoin will do that to you yeah okay i wrestle with two things on the one hand i this might have been the most important project the internet i'm talking about right now not bitcoin the internet might have been the most important global project that mankind has

collectively built at least in my lifetime but also it is easily the world's most efficient most demanding most gigantic mechanism for distributing hardcore pornography and our core pornography is good though oh we're at that point in the podcast it's okay it is good it's a net positive in the world it's bad for your mind it lets young men who have no way to get out their rage or whatever, get it out on hardcore pornography. They're not. I'm no one to judge, so I'm not gonna.

We're not a porn podcast. But just keep in mind that you might end up dedicating a quarter century of life to what is simultaneously the greatest achievement ever and also a massive jerk-off machine. And 99% of people might prefer the jerk-off option than the global enlightenment

option. Is it worth it for the global enlightenment global enlightenment option in the long run? Sorry? Is it worth it to stick through it? Yes, absolutely. If a thousand people

are using the internet for porn and one person is reading up on information they otherwise wouldn't have access to because of lack of ability to get to a library or lack of ability to retrieve that information

from some state-censored archive or whatever, if we've given one person a benefit and a thousand people are touching themselves, I'm fine with that. I'm not going to hang out with those thousand other people.

you have to be able to have you need a censorship resistant digital currency to pay your VR prostitute like how are you supposed to pay your virtual reality prostitute if you don't have a censorship resistant digital currency like that is the greatest use case

of Bitcoin you can't put cash into a vending machine for a VR prostitute no because cash will be banned by that time like they're about to ban cash because they need to go negative on interest rates right we all agree on this it will happen

we're holding out here in the states they will get rid of cash and when they do get rid of cash the number one way to pay for your VR prostitute will be bitcoin and that will be our use case besides huddling which is the number one use case

and we're going to end it on VR prostitutes that's really how we do it ok great bye mom I think that will be a getter we are ripping into hour three and half hour

seven at this point. Do you have any parting notes for the freaks out there? I have nothing to shill. I have nothing to prove. You want to show your blockchain consultancy? I have nothing. I've shit posted a thousand times already. Show your Twitter. What's your Twitter? Arbedow. Yeah, Arbedow. That's

Alpha, Romeo, Bravo, Echo, Delta, Octagon, Ulysses, tango yeah and a r b d a r b e d o u t a r b e d o u t uh seriously for you freaks out there who are unaware of arbed out criminally underfollowed one of the most uh again well read and somebody who i have learned a lot from over the years you know i am so appreciative that you broke your podcast cherry

with Tales from the Crypt. The feeling was mutual. I love you guys. I've known you before the podcast. It's great to be here. I'm really excited to see what this turns into in the months and years ahead.

It's going to be fun watching you guys turn into gray beards. Well, we're lucky to have a gray beard like you to lead the way for us. I feel so old. Let's end it on that.

Well, let's not end it on that. Let's end it on for as old as you feel and maybe you look fucking younger than i do cheers he looks super young i mean i actually the first time i met him i heckled him on his age and then i recently realized that i'm turning 30 so i am i got a fucking gray beard i'm still 22 i hope you guys like this episode great i was like great i was like you fucking old motherfucker anything cheers stay humble stack

Peace and love, freaks. I like that one.