TFTC: A Bitcoin Podcast - Tales from the Crypt #112: Dhruv Bansal

Episode Date: November 1, 2019

Join Marty as he sits down with Dhruv Bansal, Co-Founder and CSO of Unchained Capital, to discuss: - Multisig - Hardware wallets - SLIP 0039 - Center of Hash - Bitcoin in space - Balancing adaptation and conviction - much more Shoutout to our sponsor: Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse you download the app.

Well, hey there freaks, it's your boy Marty Bent here to introduce this week's episode with Drew Bonsall, co-founder and chief security officer of Unchained Capital and a repeat guest here at TFTC. We talked about a little bit over a year ago, I think. I think it was over a year ago, yes, because we recorded from the dig office. so drew and i caught up what's been going on uh at unchained in his life and a bunch of other things talking about multi-sig hardware wallets uh got a little cosmic talking about bitcoin mining center of hash and then sending bitcoin transactions from space and what that may look like in the future and did it with a little bit of kanye talk typical um and yeah it was a lot of fun i think you guys are going to enjoy this uh this episode is brought to you by the cash app as you know cash app is the simplest way to send and save money and now it's the simplest

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him we had some pre-noon beers uh on a saturday morning and uh um disclaimer unchained is a uh unchained capital is a sponsor of rabbit hole recap and marty's bent um but whatever i love talking to drew we had a great conversation enjoy what is up freaks welcome back to tales of the crypt smarty bent sitting down with drew hey everybody chief security officer co-founder of unchain capital uh back again ah you freaks just heard that that little disturbance there i figured out what it is it's my phone near the zoom i can't have my phone near the zoom oh interesting creates a little audio disturbance uh drew recently married in town visiting the folks i am congrats man welcome to married life

thank you it's great how was that experience what'd you guys do um for the wedding yeah oh my god it was like a ridiculous bollywood indian wedding that i guess i'm on the air now i'll say it wasn't necessarily what i wanted but it made everybody in my happy really really or everybody in my family really really happy so i'm i'm glad it happened it was awesome where uh where'd you guys do it right outside of texas at a little resort it's really hard to move hundreds of indian people around from location to location like so that was the one ask i made that i did get in this whole process is we got everybody out to one resort they just had to get to that one place and they could like take golf carts around and not really have to coordinate after

that point and any winnings are big events right like three days yeah we love weddings it's like a huge deal yeah like uh yeah how uh three days of celebration correct it was like at least three days celebrating boss well when was the last time we talked it was like i was we recorded that in the dig office had to be last summer right so over a year ago at this point we we talked about space a little bit then only a bit yeah only a bit you have uh since expanded on that topic definitely want to jump into that but uh just generally like how things been going at unchained like how's your year been oh it's been an incredible year i mean compared to the prior year where like prices were just tanking and uh where you know our lending model is getting

stressed out the market is like freaking out people are capitulating towards the end of the year this has been a way way better year i mean bitcoin one is up like it's more stable there's so many more interesting companies, and I think so much more awareness of the value of stuff that Unchained does, so multi-sig, financial services, that's been a great year. Yeah, no, it's crazy to see how, like, the explosion of, again, like, fundamental companies, everything's been going on a lightning, the developments of multi-sig, the open source contributions you guys are making, like, Slip39, you guys just announced recently. So where do we want to start?

let's uh let's start with something i guess let's start with uh the multi-sig stuff like how are you building that product there was um there was uh uh the casa team gave a presentation in riga about the web browser setup so um what's going on with the multi-sig product how you guys approaching it specifically with the web browser thing uh if you if you use a incognito or private window you're probably good but there are things you have to worry about right especially with signature verification oh yeah oh totally um maybe we can separate and talk about uh the things you need to worry about when you use hardware wallets period and then how multi-sig makes that harder or easier and safer or less safe so i think you know i got to give it credit to the to the casa

team and to jeremy in particular like it's important to surface issues with security not everybody realizes that browser extensions are just just this horrific playground of of potential exploits. And it's funny, like sometimes the most programmery amongst us are like the least willing to use other people's software, right? So I think it's easy for me as a programmer to take it for granted that people understand what browser security, but they don't. And so it's important to be reminded of that. I think Jeremy made a really good point that browser extensions can wreak havoc on your expectations of security of some site that you're looking at. So that's the good part.

I think the part I didn't appreciate as much is the pretend that somehow Unchained Capital's website is uniquely susceptible to browser extension hacks or something. When I think, ironically, we're probably one of the few websites on the planet that actually gives you tools to get around issues of trust with your web browser and your computing environment. What are those tools like? They're hardware wallets at the end of the day. I think that's what's so compelling to us about using hardware wallets as a rails for our customers to hold their keys I mean the people that make hardware wallets Satoshi labs the ledger team cold card They're thinking a lot about the problems with browsers the security problems with computers in general And they're trying to instead of giving you band-aids or like really hard to follow rules or whitelists and constantly updating threat vectors

They're just saying skip the whole thing like move to this Dedicated device that's gonna protect you in all these stronger ways so yeah no that's why i'm happy to see the the trend of probably being set by companies like cold card where you can where you can check your old x pub key on the device oh yeah just do it on the device and do you think we are moving towards that being the standard and so that's really the rub here right so multi-sig makes using hardware wallets in general makes storing bitcoin in general more safe you have more keys that uh you know you have to manage and the Logistics can get a bit more complex, but you're fundamentally better protected.

You have redundancy, you have the ability to separate keys out geographically. Those are the positives. The negatives are it's inherently a more complicated kind of protocol. A kind of unique idea to multisig is this concept that the key, one key alone, is insufficient for you to determine all the addresses and the balances and the general transaction activity of a multisig account, if you'd like. And that's really where the rub, especially with browsers, kind of comes back. The Trezor team, just to highlight them,

because they're actually one of the better examples of a hardware wall out there these days, they do a great job in a single SIG environment, making it so that you, the Trezor device owner, have a lot of direct ways to confirm things like addresses and public keys and derivation paths and all that right on the Trezor device. You'll see that information on the screen. You can confirm it. You can have a strong guarantee, for example, that when the Trezor website, which is a website and is ultimately subject to the same kinds of

browser extensions, hacks, you can have really strong confidence that whatever you're seeing in your browser is the real deal because you're seeing it on your Trezor as well. That's a very powerful primitive for users to utilize in verifying the security of some site they're dealing with as well as their own computing environment. The challenge when that same idea is applied to multi-sig is it's just simply not as easy to make the same kind of confirmations. You can't merely plug in one of your keys and then check that the multi-sig address that you're being displayed on your computer and in a web browser or wherever is actually correct. You need some information about the other keys in that quorum. And now Unchained

Capital, for example, gives you that information. You're able to download it directly from the page of your vault or loan. So it's definitely available to you. But getting your hardware wallet to understand that extra information isn't as easy as it should be. And Trezor, just again, to highlight them as frankly a good example of this actually fall short on this last point. That they don't have, for example, in many of their ways that you talk to the device, they don't have the multi-sig equivalent

for show me this address. Now they for sure have it on the device. The Trezor is capable of answering that question very directly, but you have to talk to it outside of the browser. That's our current understanding of what this looks like. Are there deep reasons for that? I'm not sure.

We could ask the Sushi Labs team. In my view, it would be really awesome if they surface some of that multi-sig functionality up a little bit so it could be called from the browser directly, which would really help in security for applications that run in that context. And I'm sure they'll get there. It is ultimately, as you mentioned, a matter of standardization. With single-sig, there's a very clear path to, like,

oh, I have a private key, here's how I turn it into a long sequence of addresses for my balances. In multi-sig, it's more complicated. there aren't as clear standards though there are some emerging so maybe that's part of the reason and and just because i've been singling out trezor let me just pause and say uh ledger doesn't do any of this ledger is a much poorer platform for multi-sig just in general because they're much further behind something like cold card which is much newer is actually further ahead of trezor in this regard do you think this is because uh some teams prioritize a focus on bitcoin

other than others or yes absolutely that's one of the major reasons for it uh there is no built-in ethereum multi-sig there's no built-in multi-sig in a lot of coins and if your wallet is focused on supporting all these all these coins it just makes sense from a product roadmap perspective that they're going to focus on concerns which are cross-coin as compared to more advanced functionality especially around multi-sig for particular coins so i think that's definitely an advantage that let's say the cold card team has is that they're bitcoin only they get to really push the envelope and support cutting-edge bitcoin features not just multi-sig but things like partially signed bitcoin transactions qr codes and cameras so totally air-gapped experiences

these are really valuable innovations in the hardware wallet industry and i've enjoyed just them showing up as a major third player if you'd like at least for bitcoin owners because they're putting pressure on satoshi labs and other hardware wallet manufacturers to catch up to them in terms of feature set that's a net good for everybody no i agree and then you see people like justin moon taking it running with it and creating things like junction which would totally for this right yeah um so we just had a huge conversation a couple weeks ago about all this stuff and it is crazy how intricate it is like just the concept of derivation paths and keeping uh especially in a multi-sig setup keeping the derivation path and remembering it storing how

it was created and so there's so many intricate details or avoiding lock-in so for example i know a lot of people use electrum for their multi-sig and what do you mean by this perfectly reasonable choice to use Electrum. It's open source, it's well-tested, it's very old, and therefore mature. But at the same time, because it's oftentimes the first platform to implement a given functionality, it has often made its own kind of idiosyncratic and retrospect decisions. Things like wallet words having their own unique Electrum way of doing it for a little while is an example of that. But multi-sig as well. The derivation paths, to go back to it, that Electrum uses are a little bit, I think, off the emerging standard.

And so you can quite happily use Electrum to build multi-sig with Trezors and Ledgers and all sorts of stuff. But you may be required, essentially, to use Electrum forever more if you want to continue to work inside that quorum. If you want to get out of Electrum somehow, you might need to sweep your funds

to a more standardized multi-sig kind of setup. Or you just got to be a programmer and know how to get into your keys manually and such. Is this a product of BIP39 and their decision to go the way they do their seed phrase? I honestly just think it's another reflection of Electrum moves very quickly. Just as another example,

it's one of the first major wallets to actually include Lightning support. Yeah, the first OG wallet. Yeah, so much about Lightning is going to change in the coming years, but Electrum's going to support it from now, and I suspect that will mean, unless Spez and the rest of the developers there

really focus on standardization in a way that they really haven't before, they've really been focused on supporting their users and giving them a good experience, which is also really important um it it arguably what's the point of supporting an emerging standard in a you know couple year old technology when it might also change a few years from now yeah and like maybe there will be many standards yeah correct yeah these little pockets let's come up with our own standard to standardize the standards all right we're already getting

cosmic here multiverse of standards if you will no it's um that's one thing like again we're almost 11 years in now like this it's still uh so raw right now so um and everything's slowly building up and that's why i think uh you see in the hardware space a lot like people attacking people and stuff like that i'm like all right like let's give it time for everything to flesh out and and to figure out the best practices because honestly like we don't we don't know uh the best practices yet oh yeah i mean i think it's in some cases we can know them in other cases that we're writing them and figuring them out as we kind of go along.

I totally agree with you. The attacks are a little bit, I think, unnecessary. I think merely pushing out good features is disruptive enough right now that people and companies who are pushing the envelope in terms of privacy, functionality, utility, these are all, this is the best way to shake up the competition in my view.

Put out some good code that does something new and interesting and valuable. Well, let's talk about the new code you guys just released and slip 0039 so it's uh you did this in conjunction with satoshi's labs um creators of trezor and it's basically a special shamir secret share uh encryption that you can use uh for single sig but more ideally for multi-sig correct yeah i mean there's a little bit of history there too i think shamir sharding basically it's an algorithm that prior to bitcoin prior to a lot of the stuff that's in our universe has existed. It's existed for decades now. And it's just a way

to take something arbitrary, like song lyrics if you want it, just arbitrary data, and split it up amongst multiple parties in a way that you get this nice M of N functionality, where if there's N shards, you're going to need M of those shards co-located in one place in order to be able to decrypt and access the original information. The remarkable thing about Shamir sharding as compared to other ways of splitting something up, especially digitally, is that if you have less than M of those shards, so if you have one shard or two shards,

and let's say that's less than M, it's not enough to unlock the root secret, you actually have zero information about what the original data was. It's not like you incrementally increase your knowledge of that data with each shard you're able to exfiltrate or steal or acquire. You need all of them.

That's a very powerful feature. It's binary. Yeah, exactly. so that's that's Shamir sharding has been around for a long while it's one of those algorithms I think that occupies this interesting middle ground between being it's it's it's so easy to if you're if you know a little bit about mathematics and cryptography and computers it's fairly easy to understand how the algorithm works and so you think I could just write this myself but at the same time it's there's lots of ways to do it poorly and there's a long history of

fuck-ups in people Shamir algorithms there's some famous cases even in the crypto industry recently I I'm not gonna I'm not gonna name the wallet because I think I don't remember the details but there's been already examples of walls that have implemented Shamir on their own and just screwed it up somehow and what they thought were all these nice protections were actually illusory if you had one of the shares you may have had all the secrets and so it just goes to show that like as old as this algorithm is there hasn't emerged really a nice standard, like a standard library in Python or C that everybody uses. I mean,

there are some, but it's not like, for example, making an HTTPS connection to a website. No programmer will write that code. They will use the library and it will work and have the same bugs as everybody else. So I think what Slip39 represents is a few things, but first and foremost, it's a standard for this stuff. So the Satoshi Labs team did a great job setting up or creating some original momentum around this. I'd also like to just add it's not just the Satoshi Labs team. There's a lot of other folks

from Blockchain Commons and other places, Christopher Allen, Mark Friedenbach, and several other names that have really contributed to this. So it's very much like a, it's very much a group of people working on the standardization. So one, it's a standard.

Two, it's an implementation. There's a Python component that Satoshi Labs wrote, and there's a C component that a few other folks as well, some Unchained Capital engineers contributed. And it's important to have both Python is really nice for developers to work with but imagine you're gonna put this on like a really hardcore Security device like a hardware wallet you want it to be in C

You want it to be resistant to things like timing attacks and you want it, you know? There's just the kind of things you want to do in a lower leveling which is important to have multiple inventate implementations in code that target the same sort of theoretical algorithm and it's also important to have that stuff be reviewed by real cryptographers and computer engineers, security experts. So that's kind of one of the big things that Satoshi Labs and Unchained and Blockchain Commons and a few other teams, HTC as well, have all been kind of collaborating to push out to the standard and some implementations for it. The reason it's even more interesting, though, is that Slip39 represents, I think, a new generation of Shamir sharding technology. In the original algorithm, I described it as, you know, M of N shards. The important

thing to realize is each of those shards are fundamentally the same in terms of the weight of information that they contain. It doesn't matter which of the M shards you put together. And if you have one of the shards, you have exactly one Mth, if you'd like, of the ability to decrypt this information. So they're fungible. Yes, they're fungible and they're also equal, right? Now that seems like that's a very simple scenario that makes sense, but it turns out in a lot of situations, you don't want equality. You want the ability to weight shards with different amounts of information ultimately. Influence. Influence. And the reason for that is because it's very rare. I mean, think about why are shards really useful? They're useful in a couple

different contexts. One, for individuals to be able to take their key or their secret and split it up in different places. But in contexts like Bitcoin, you have multi-sig. I think multi-sig, like multiple keys, is fundamentally superior to sharding up one key for the simple reason that when you shard one key, you have to bring all your M shards in one location geographically and concurrently at the exact same time and place. That's an opportunity now where your key is reconstituted in one location. An attacker who knows that you're about to do that can wait for you and can attack you at that moment.

With multi-sig, your M keys are fundamentally parallel and separate. You can create M parallel signatures at the same time, at different times, and then you can recombine the signatures later. You're never forced to be in a position where you're out there in one location with all the relevant key data unencrypted and ready to be taken, right? So in general, multi-sig is better, especially for individuals. But consider a situation like Unchained Capital, where we are holding one key in a multi-sig quorum, and we really need to protect that one key. We can't really split it up into its own multiple keys. That technology isn't really available, and Bitcoin

doesn't have some features that we'd like, like MAST and Schnorr and Tapper, which I can get into in a minute, but it winds up being that we need as an organization to protect that one key. And coming back to the idea of shares in Shamir being fundamentally equal and fungible, that's a weird tension for an organization because fundamentally organizations trust individuals more or less. There are more trusted executives, less trusted middle managers, and even less trusted junior employees. And if you imagine a company like ours trying to set up, let's say a signing schedule where we have an on-call rotation of trusted employees and people associated with the company that are responsible for our daily signing activity there we would

like the ability to create high and low or medium security groups and that is really the cool thing that shamir that slip 39 delivers it takes the traditional shamir sharding algorithm and makes it hierarchical so i can create groups of m of n's and i can define how many groups need to be unlocked at the same time and each group can have a different configuration of m and n so this is really interesting i can have just as an example this is not how we do it but i could have you know the c levels be in their own group and i could have the middle managers be in a group and i could require both groups sign but i might arrange it so that only one of the you know c levels is required but three of the middle managers is required and you can kind of fungibly

change it around the point is i'm able to encode that i trust c levels more than i trust middle managers and so how does this work out logistically like in in meat space does every person within this quorum have a hardware device do they have something like a ub key so i think that that starts to be uh you know where you take the slip 39 as an abstract algorithm and you start to implement it in real devices and that is really going to be a function of who you're trying to solve this problem for so trezor for example the new trezor model t supports slip 39 natively which just super cool. But Trezors are really designed, I think, for individuals to use. And so as much as there's this hierarchy and this complexity, you can really think of it as

it's just basically vanilla Shamir sharding on the Trezor designed for individuals. This is really cool because it solves the problem of if you were using a Trezor previously, you've got your Trezor, the key is in there, it's protected with a pin, maybe a passphrase. But what about the wallet words? There's 24 unencrypted English words that if someone were to recover them, they've got your key. They don't need your Trezor. How do you protect those? In the past, Unchained has advocated for our customers, take simple precautions, maybe cut them in half. The Trezor comes with a nice little foldable thing with two halves, cut them in half, take one half, put it in one location, take another half, put it in a different location. That's a really simple, if you want, way to

achieve Shamir sharding, two of two, if you'd like. But it's not a very defensible solution because partly if someone gets one half, they now know half your wallet words. And with half of your wall awards they can probably crack the other half actually force that exactly right now and you can always make them more you can split into four parts but it's an imperfect solution a much better solution is to just have shimmy or sharding that wasn't really technically feasible in a trezor before because the whole point of a trezor is your key material is never on a computer if you were able to put your key material on a computer yeah you could run you know a standard sumir sharding thing on it and then now you have your shards and you could save those but you've

now imported your keys into a general purpose computer in order to run that algorithm so what's cool about Slip39 running on the Model T is you don't need to do that step. You can just have the Model T do all that work. So it can take your key and split it up into all your shares. Each share, by the way, looks like a set of wallet words. It's just English words. So it's a familiar form factor. And then you just go protect, you go put those three of five shards or those 10 of 20, whatever you'd like in various places. And you now get all the benefits of Shamir sharding, which is super nice. Even better when you want to recover your treasure. Let's say you can now travel to shard location after shard location and incrementally recover one shard, two shards,

three shards. Once you have enough shards, your treasure kind of turns on and now you've got the key and it's working as normal. It's a really cool ability, but that's really for individuals, right? For a group setting, the treasure is still an awkward form factor because it's a device. It's literally held in the hand of one person. It's got a couple buttons there. It's not designed for groups of people to use simultaneously. That's part of where Unchained's contribution in Hermit kind of shows up. So Hermit is our implementation of an offline command line only wallet designed for high security organizations like ours that also leverages Slip39. So the core sharding stuff is the same as you're going to see in a Trezor Model T, which is really exciting because it

means they're interoperable. But the difference is that Hermit is a, frankly, difficult to use esoteric piece of software designed for organizations like mine, where we are forced to protect a single key. And we are an organization that has to do it and deal with things like employee turnover, signing schedules, et cetera, et cetera. So what's cool about Hermit is unlike a Trezor, the shards that are co-located on a Hermit machine, think of this as a laptop that you've done some surgery to. You've removed Wi-Fi cards. You removed Bluetooth. You've essentially created, if you want, your own home-rolled HSM, high security module here, right? It's a machine in which you know all the parts you know where everything is there's no way in or out other than

let's say a camera and a screen that's how hermit works it uses qr codes so you've kind of got this custom computing environment and then what hermit does is it assumes it understands that multiple people are probably going to be using this concurrently so you can set up a quorum of let's say three signers five signers whatever you'd like are required at all times to show up concurrently unlock the hermit installation it's got a bunch of really cool features like deadman switches and like all this interesting stuff but it's fundamentally just a different form factor designed for groups of people to be signing concurrently which is just fundamentally different than an individual using a hardware wallet wow that's crazy how intricate these

things are going to get so i also want to describe something really cool that we've been working and playing with uh maybe some go ahead before you get into that i'm going to fix your mic because it's like sinking on you oh my god was that just me no no it's not here okay all right all right mic fix is that better yeah very cool um this is just a cool little idea that we've been playing with at the office. I only bring it up just because I'm hoping some listeners here will want to work on something like this. So the way Hermit communicates with the external world is it uses QR codes. So you have to pass in all the information about the transaction you'd like

to sign, what the UTXOs were, the balances, the amounts, and then Hermit has the keys and it'll sign for you. This is a pattern that's emerging of taking signing technology and splitting it up into various parts. So you might have like a transaction planner. That's the thing that's online and it's capable of talking to the internet, talking to human beings via mobile device or whatever. It's the thing that's connected. And then you might have consensus. That might be your Bitcoin node. Maybe you use a block explorer, whatever. That's the thing that understands the state of Bitcoin. And then you have something which manages keys. Now something like Electrum does all of that in one place. Like Electrum has consensus code to like run Electrum server and

figure out what the state of the blockchain is. It obviously writes transactions and it can actually even manage a key for you in software if you'd like. Now that makes sense because Electrum has been around for a long time. Let's just bundle everything together. But I think the second generation of technology here

is about unbundling. So dedicated like consensus solutions, like, you know, in the Ethereum world, things like Infura and the Bitcoin world, the chortle. In the Bitcoin world, that's just running a node, right? Can we even call it Infura anymore?

Consensus Botland. You're right. It's probably a new thing. I don't know. I don't use Infura. And and then hermit really represents it doesn't know consensus because it's not connected to a node because it can't be it's offline And it can't really plan transactions because it's just a command line Well, it's really just about protecting the keys and I'll talk about caravan

Which is another project that we're coming out with soon. That's more of a transaction planner, but coming back to hermit The reason we chose that name is because it feels like this really, you know cut off from society, you know thing It lives in a really secure physical location There's sort of a challenge process you have to get through and putting passwords and all this to unlock it. So there's this like challenge and then the Hermit will like converse with you, right? So how do you talk to it?

You talk to it with QR codes. But one of the cool things we've been working on is this idea that we kind of want to set up a Diffie-Hellman key exchange to set up a HTTPS connection, if you'd like, a secure channel between, let's say your phone or some computing device you've brought into the secure location and the Hermit machine.

So today, you bring in paper or you bring in a computing device that can display a QR code. A procurement reads that via its camera. It'll sign. It'll display you a QR code. You capture that. Now you have a signed transaction, which you can go and broadcast later. The thing we're working on now is instead of using QR codes, the problem being that QR codes are packets of data. They're limited in size.

You can only fit so much UTXOs, if you'd like, into a single QR code. We want to turn it into an audio signal. So like old school 90s modems. You know what I mean? like where exactly exactly and um and literally do diffy helman key exchange so even if people are overhearing the noises that are being made by hermit and the other device you've brought in because of basically the same mechanism that can only be decrypted at the end spot if you have you need a secret that lives on each machine so the idea would be you'd roll

onto the hermit installation unlock it boot it up your machine and you say go and they would connect to each other and they do this diffy helman key exchange like squeaking and squawking if you'd like taking it to the audio realm is something i have never even thought of it well it's because audio is fundamentally streaming right so instead of having to build some kind of animated qr code craziness we just get to stream all the bytes we'd like as many utxos need to be transmitted can be transmitted as many signatures need to be signature sign can be transmitted back it's all over this encrypted channel so even if you mic and like record everything that happens you won't unless you literally have the same devices be able to

decrypt any of it i thought radio waves was uh was the peak of of the waves yeah the best part about this though is we started looking like who has written code like this before and it turns out there's this entire community of like cb radio programmers who are basically um using headphone jacks and stuff to transmit radio signals and they've written all these great libraries to like get you off the ground in this audio signal processing space which is really cool i think beauty on used to be into this type of shit actually um that wouldn't surprise me and this is a this is a good scheme and i love the old school just like squawk and squeak like yeah you know picture of it that uh i never knew that was even possible let alone being worked on that would

be crazy like so anybody could hear these sounds but not receive the message unless they had the secret on their head right which is a little bit distinct than the qr codes the qr codes are in plain text and so you have to flash them and they'll be read and there's nothing secret in them they just contain transaction requests and then signatures which will wind up on the blockchain but nonetheless they can be exfiltrated and worse they're packets of data so they have a limited size yeah so is this similar what this is like exactly what justin did with the bit boy right that was pure qr codes it's really it's really similar justin who lives in austin we hang out quite a bit uh he and unchained have clearly been working on a lot of parallel projects so we're

trying to sort out ways that we could work together a little bit and maybe duplicate a little bit less effort. But no, Justin has been awesome in terms of thinking about all the same things we're thinking about, like offline air-gapped hardware wallets, Slip39, working directly in multi-sig with hardware wallets and BitcoinD. These are all really valuable interstitial areas to write new code in. What do we got? We got some bad disturbances. Is your phone ringing in your five questions it is over here though i can move it over that's what it was yeah put it in airplane mode um sorry for that disturbance freaks uh minute 31 30 we'll see if i remember that nice 31 30 that's not hard 31 30 start the countdown from 31 marty and you'll find

the disturbance in the force um but transitioning uh talking about justin moon and austin like how's the austin bitcoin scene been seems like the meetups have been incredible it's amazing i i feel like austin has benefited greatly from its i don't know think about it like why would what kind of person is into bitcoin right what else are they into they're into technology freedom guns libertarian politics barbecue uh i'm generalizing and stereotyping here there's a lot of non-conformist bitcoiners which i love but put those shout out to our bitcoin vegans uh yeah matt corallo i know There are a few others out there. Chanel-y, I think, is another one.

Some on my team. Some of the best folks in the space are actually vegans, which is great. But if you put all those stereotypes together, I feel like Austin really has it, man. Like, we're in the middle of Texas. We've always had a don't tread on me kind of spirit. But yet, at the same time, Austin, I think, in distinction to the rest of Texas, has been oftentimes really progressive in terms of politics, technology, transformative changes. um it's just a really good breeding grounds i think for the kinds of um ideas that lead you to become a bitcoiner so we've always had that and i think piling on top of that is people fleeing

california people leaving more expensive cities to find like better weather more chill people a flip-flop and t-shirt kind of lifestyle um so all of that just put together man it's a great place for bitcoiners and more and more are coming there i think every month and you got some some great mindshare down there like when uh i mean it's not austin but we met in dallas uh earlier this summer in that event you guys threw was filled with some hitters brian bishop was there and you guys have andrew polstra in the city as well oh yeah we've got jimmy we've got tour demister lives down there um the unchained office i think is one of the more bitcoin like oriented companies in austin uh it's definitely turned into like where a lot of

meetups are happening and that's just great for me because i live across the street it's a good life everything's just yeah what's that like working across the street oh my god dude it's amazing uh joe my co-founder joe and i we kind of live across the street from each other and uh when we started the company like the responsible thing to do is to get like a cheap office like somewhere and like the business park you know up north in the city and instead we took the expensive office downtown next to our houses and it's made all the difference quality life is huge you don't have to commute like the added commute to each day is uh it adds up there's hours in traffic there's hours commute i will say there's a perverse aspect though when your commute has been minimized to

be like three minutes you're like why not two why can't this elevator move a bit faster oh i've cut it down to that i go from my bed to 10 feet away to my desk and that's where that's where my work station is i mean it is actually i've been working from home for a year and a half now and the quality of life is exponentially better just being able to feel like you can fucking leave the cube whatever and the cube is in your apartment poop at your own house yes poop at your own house uh you can work in your boxer sometimes not that i would advise it but i would advise it be free be free it's true um actually uh too much information but i'm not a big underwear guy um so i don't even know why i said work my boxers i usually don't even wear them be free

be free here freaks we're two pilsners in on these pre-noon beers actually we're taking post-noon sips now um but i want to circle back to that event you threw in dallas uh for those of you freaks who are not abreast of this event it was the day before the bit block boom conference in dallas earlier this summer and i just thought it was a great event like back to back parker did a great job of lining up speakers and then more importantly uh in my opinion the the uh the audience was very engaged and filled with a lot of big texas oil oil men and money managers i've really enjoyed because i'm not native texan i don't know much about the energy industry But I've really enjoyed watching some of the more progressive and technology minded energy investors like really taking to Bitcoin and getting it.

You know, there's a there's a sort of like Texas wildcat or commodity understanding investor type that gets that like volatility is an opportunity and not something to run from. I think one of my favorite people in that space is a gentleman named Gideon Powell, who's shout out to Gideon, my man Gideon, who's just super forward thinking. about this um turned me on to and he's very passionate always passionate always always passionate and always like it's like this image of of i think what i wish you know as as a non-native texan it's what i wish more texans would be like it's like this amazing combination of independence libertarian politics like moral compass and being technologically forward thinking like i think just talking to get in in casual conversations he's sort of been like well you know my family's always been in the energy industry and oil like when my grandkids do that probably not just having

like the courage to to see the world changing is a big deal and then to ask well what should we be doing instead and then actually following through and making huge investments and working your butt off to build like massive installations for bitcoin mining that's a really that's an incredible transition right am i allowed to say like he had a helping hand the layer one stuff am i allowed to say that's this is my understanding yeah i don't know i don't know how much we should say about it But like, yeah, they're being tremendously successful and they're laying a lot of ground, I think, for other people who are coming in and just appreciating their expertise and hard work. And there's just something really cool about harvesting free energy from the plains of West Texas, bringing jobs and money to like an area which needs it and just making Bitcoin with it, man. That's a really interesting and cool vision.

Yeah, and it's crazy. it's it's always been um this is something i've been fascinated about mining and uh the efficiencies that bitcoin mining can create for these oil and gas producers in particular and it's crazy to me that it's taken the the oil and gas producers to have this aha moment but it feels like we're almost near a tipping point where they're realizing the efficiencies that could be gained like the new york times read an article a couple weeks ago at this point where they were lambasting BP and Exxon for for flaring less than 25%

of their excess supply and that means 75% is just being expended just wasted so there's obviously efficiencies to be gained it's fun watching these oil companies have aha moments and I know I don't know what the situation in Texas

is but I remember my last Q job I actually worked at a valuations firm where we did a lot of portfolio valuation for private equity and venture capitalist funds invested in mid-market companies that weren't public yet and a lot of these companies were oil companies and you get a peek into their books and the way they take out loans and a lot of these oil producers especially in middle america took out a lot of pretty big loans with crazy interest rates and the contingent what was contingent on

them getting those loans was basically predicting that the price of a barrel of oil would be at a certain point usually it was between 80 and 100 from when i was looking at so you have a lot of these oil companies that took out a shit ton of money uh like five six years ago thinking that peak oil was here and we were gonna we were gonna go to like above a hundred dollars uh a barrel and now that has not come to fruition oil prices are cratering and so is natural gas prices and there there is a mad dash for these efficiencies and more revenue and bitcoin just makes sense I mean it does but I think you need to be someone like a Gideon to see it right like it's because I mean to be fair it's also in tiny market we're talking about 150 billion or 200 billion dollar

market cap or something like this how much revenue is really made daily by miners on the order of millions tens of millions of dollars that's very small for like the energy industry to to to use as like a sink for wasted energy like but that's just today and I think the ones that learn how to do it first are going to have some serious advantages um what i just like is i think a lot of people have been saying it i've been saying it i've heard it on your show but like bitcoin and the energy industry are going to get closer and closer together that what we think of as energy production and bitcoin mining are two separate industries today i don't think that's the case 20 or 30 years from now and i think the layer one investment is like a huge signal in that direction

yeah it's i mean it's again it just creates these efficiencies and the concept of leveling out the grid just having a sort of steady demand bitcoin can make that happen or or increase or just or not even setting demand increasing the demand function right like places where energy was not steady production yeah it wasn't valuable to capture that energy because the people in west texas weren't going to use it for anything and it would cost a lot to ship it to a place with people but you can just make the bitcoin there and that that that fact that bitcoin helps us go harvest energy that we weren't going to harvest otherwise is like this it's a revolutionary like change for the energy sector i think yeah because what's their biggest problem is transportation you cut

the they don't they can't transport the excess supply if they were to they would have to build pipes like we hear all about these pipelines going hundreds of miles you cut the potential travel distance down from hundreds of miles to feet and it just makes sense right and it's happening i think i mean layer one's an example it's happening gideon is hard at work in texas creating more layer ones and texas is not the only state in the union that's that's that's thinking about this as well there's there's uh uh west texas the permian basin right bracken's more up north right don't know yeah somewhere in texas yeah texas is a permian base i think brack the bracken base and i think people are thinking about it as well um where's bracken

Oh, Alaska. I could be wrong. I'm not well-versed on my basins right now. But it is crazy. We're trying to create these crazy energy efficiencies on Earth so that we can go to space. Oh, yeah. Pre-transition into the space article. That was the transition, yeah.

We're just hungry for energy, man. So we become a type 1 civilization first, and then we can go into space. Yeah, absolutely. Let's talk about your space article, man. It was fascinating. Yeah. We'll pull up the title right here.

Bitcoin Astrology. Astronomy. excuse me, Bitcoin is definitely not astrology, but my favorite part about this. So it's a, it's a sci-fi futuristic piece that you assume that we are in a big society that has Bitcoinized and mining is proliferated.

Like we just described. And the energy industry has been conjoined with it. Yes. And what do we do from there? And I, my favorite part about this article, I just want to drop this before you dive into it, was I think it did a really good job of describing the concept of center of hash. And that's always something I've been like, I've heard it, the phrase center of hash on and off throughout the years.

I don't know what that even means, but I think you really drove home the concept and really helped me understand the physics that come into Bitcoin mining and the physics that come into this messaging protocol. So let's dive into it. Yeah, I mean, I think I've been thinking about these ideas for a long time. The last time we got drunk and recorded, there was some space talk, and it's been brewing for a while. On some level, it's fundamentally silly for me to be working on this or thinking about these issues or writing hash war simulation code or anything like this.

But at the same time, man, I got into this industry because it's fun, and this is fun to think about. It helps me sometimes when I'm solving a stupid bug with the website or dealing with some mundane issue of just running a business to get into the underpants mode at the house, dig in for a weekend, and really think about a speculative version of the future. It's just been really fun.

And I think the core themes that I try to follow through this article are like we were just talking about. Let's just project forward. If we're this hungry for energy, and Bitcoin makes us hungry for energy, how will that affect our society as we grow? And I sort of purposefully framed this article about Mars and MuskCoin

just because I think that's a little bit in the news today with Elon and all his crazy plans. I don't know if people are Elon fans or foes here. I just find him to be a compelling person. I don't invest in his businesses. I'm on the fence about Elon, but I have more of a Bayzonian. Is that what you say?

I agree more with Jeff Bezos. so we should do a moon camp first and then explore planets from there because the way I understand it, you would know this better than I, it's easier to launch rockets off the moon than it would be Earth. Absolutely.

I don't know if anybody plays Kerbal Space Program, but I feel like a lot of my understanding about orbital mechanics comes from Kerbal Space Program. But I will say there's a great guy to follow online. If you don't, his name is Robert Zubrin. He's just an amazing thinker about humanity in space and uh i'll just make the point that he's not a big fan of uh moon bases as a route to the outer planets because he kind of views them as like it's kind of like uh you know going in the wrong

direction on the highway for a bit to just pick up some starbucks and then get on the road trip where it's like it actually delays you just conceptually it made sense makes sense to me it does and the sense of the moon is closer to us and therefore seems on the way but there's a certain just like if you could perceive like the gravitational potential energy of the solar system like just directly and you could see all the hills and valleys of where you're going you'd realize you've got to climb up this big hill to get to the moon so to speak and then you've got to climb back out and it might be easier while you're on the planes just head down the valley and go to Mars directly that doesn't mean logistically it's not I'm speaking more in terms of like the efficiencies

of orbital mechanics it doesn't necessarily mean that logistically it's not a smart idea to establish moon bases and get good at space travel when we're two light seconds away as compared to 20 minutes away right um but there are some questions around it hey maybe both will happen i think they both should yeah yeah and so let's describe how this affects bitcoin like if we do move into the solar system beyond earth i think to me the the fundamental thing i i it started out as a debate internally at unchained which was basically because we have these debates it turns out on slack quite a bit um like how big is the reach of bitcoin was basically the argument the question right like because there's articles that i refer to um in my own article on bitcoin

astronomy um there were people have discussed uh you know what is it like i mean i'm not the first person to to drink and speculate about bitcoin in space right um uh there's a a great article that talks about how bitcoin mining will probably never happen outside of the earth just because of the finite travel time or finite speed of light ultimately and that's something i confirm in this article but having read that article um a little bit that became that started the debate on unchained is because like unchained has a lot of bitcoin maximalist types and it's got you know other people that aren't so much bitcoin maximalist so it's a great discussion because it's a little bit of a proxy for the battle on earth if you'd like right where if uh if what what you think

happens 200 years from now and your speculations about humans in space i think is partly dictated sometimes by your crypto politics today on earth a little bit um that's certainly what i learned with the reception to this article which a shit coiner i'm a shit coin the musk coin i'm okay with it i'm okay with the label um and it really just boils down to i think uh you're pre-selling this a few hundred years yeah no i see in front of it yeah well that was my secret hope is that elon musk would read this article and then uh somehow you know enact this plan if it wasn't already his plan well for the freaks out there who haven't read it let's describe why a musk coin would be needed right in your uh in your uh not idea in your opinion so let me just to summarize clark's

article which i think he put it really cleanly is it boils down to when you're far away from earth let's say all most of the mining is happening on earth for whatever reason and you know you're elon musk or you're whatever space calling you're you're on mars you just got set up there you got some nice buildings and stuff. And you want to participate economically with the rest of the hyper Bitcoinized humanity, right? Which means you're sending Bitcoin transactions and stuff back and forth between Earth and Mars. That's like a 20 minute to 45 minute journey, depending on how far away Mars is in its orbit and whether it's a single trip or a round trip for a signal to go there and back. With that kind of a delay, what winds up happening is it's really simple.

Let's say everyone is even and we've sort of got the same number of blocks on both sides and the miners on both sides are like in sync um let's even argue that mars finds a block first they're unlikely to find the block first because almost certainly they have less hash rate right just and everything's kind of linear in hash rate so if earth has 100 times the hash rate they're going to find roughly 100 times as many blocks as mars does let's just argue that mars finds a block they transmit it to earth because they've got to get it to earth if it's to count right it's got to get into the rest of the blockchain it takes 45 minutes to get to earth in those 45 minutes how many more blocks have has earth found like a lot more because they have way more hash rate so by

the time the the new martian block shows up all these earth miners are like that was 45 minutes ago dude there's six more blocks on the chain right now and it just gets rejected and mars then takes another you know 20 minutes for that signal of the rejection to get back to mars and meanwhile all these blocks earth has been mining are still on their way there and so it's just they're too far away and they have too little hash rate to really make a difference and so that was the interesting fact to me it's like that's an easy thing to say and it's intuitive but i really wanted to measure it and so i wrote some code to kind of simulate earth and mars having hash battles and i confirmed like that basic supposition right which is that yes indeed as mars as you get

further and further away that's kind of the main plot of the article as you get further and further away from quote unquote the center of hash where most of the hash rate is located it become your ability to participate as a miner in the network becomes more and more suppressed so let's magnify in on the center of hash like because the center of hash is uh affords minor certain advantages on earth too right correct yeah it's basically like a defensive mechanism right the closer you are to the center of hash the more the easier it is for you to get consensus with everybody else and the center of hash is not one static place right it's dynamic it's kind of like the center of mass or the center of inertia or the center of gravity it's a mathematically defined point which is a

function of all the things that are happening in the system right so the the center of mass of the earth is near the center of the earth the center of mass of a barbell is going to be in the middle of the bar the center of mass of something asymmetric is going to be closer to the fat end same thing with the center of hash except we're not adding up kilograms we're adding up you know hashes per second here and depending on where miners are located today the center of hash is almost certainly near the center of the earth because it's like halfway between america china europe wherever you'd like the question is as humanity expands to like the moon to mars the asteroid belt where is that center of hash and what we're forced to conclude based on you know

the simulations that i've run and the intuitive reasoning is it's really hard for the center of mass excuse me hash to move much further away than where it is already it's sort of like it's got some inertia it's kind of stuck there gravity a little bit like hat like economic gravity it's really hard to get miners to move in concert somewhere else like indian wedding guests kind of a thing um and so they're just going to stay where they're at because that's the most locally economically best decision for them is continue to stay close to where all the action is a little bit it's a little bit like how certain cities become like the top tier for an industry like if you're doing hft like you need to be in new york or london it doesn't make sense to be in

denver that's what uh well hopefully not anymore because uh that's what flash boy is michael one of michael lewis's books but yeah so like the way high frequency trading works you literally have people buying property as close to the new york stock exchange as possible because the fiber optic cables that uh feed the data to the servers in the new york stock exchange use lasers and speed of light is finite and shockingly slow it turns out like it's a big number but that comes to electronics that is being fixed in a stock market though or at least bats is trying to fix it where they sort of have like a something that levels the playing field from from a distance perspective like if you're closer you may have to like wait a little bit they have like longer

wires or something literally i want to come back to that theme because i think bitcoin could really benefit from geographic awareness like that in various ways um but it's really it's hard to engineer that but you know i want to come back to that idea but at least at least in bitcoin astronomy and mars and the struggle for bitcoin what i was forced to conclude is like look so i agree with prior commentators in this space that mars is never going to be able to develop a mining industry. But then the real question becomes, is that a problem? And I think the way we've been discussing Gideon's projects, the merging of the energy infrastructure with the Bitcoin mining infrastructure, I see a lot of net positives to that. I see a lot of structurally

positive elements to aligning economic incentives directly with energy production. And I think in the article, I speculate about some of the future benefits of that on Earth and how good it will be for us globally to unite these ideas. Should Martians in the future speculatively accept not having that advantage? And that's kind of like the jumping off point for the middle part of the article. Yeah, so it's basically Martians can only

add transactions to the blockchain. They can't mine them. They can be Bitcoiners. They can use it, but they can never mine. Yes, which is an interesting perspective. and the lust for sovereignty, right? And you get a situation, your peace, you get a situation where the Martians are like,

we're not being represented. You have like a quasi-taxation without representation situation for the Martians. Or like, why are all our settlement activities like accumulating with rich bastard earth miners who oppress us kind of thing, right? I don't know if you follow the expanse, But it's fun to contemplate political tension between these environments.

And I think it's emerging today, this idea that Bitcoin is a political technology. But I think in 200 years, if the initial givens and speculations of this article are correct, Bitcoin is fundamentally a political technology. It's well understood to be that. And to claim that your entire society has no role to play in the consensus building of that political technology might be a very scary outcome for Martians. So the justification for the creation of other blockchains is the fact that they're too far away from the center of hash

and not because they have different functionalities. They might even be the same. They might be exactly the same. And I think that's the part that I really love. That's the conclusion I most enjoyed reaching in this article because I view myself, I don't really like to label Bitcoin maximalist because I don't like joining things, but I believe in Bitcoin as the solution right now.

you know, fuck it, if Bitcoin changes its plans, I won't like Bitcoin anymore. But I like where it is right now. I like the conservatism, the fixed supply, like the focus on security, proof of work, these are all big parts of what I value in Bitcoin. So it's very, and I don't value altcoins greatly, personally. So it's very interesting for me to reach the conclusion that like, inevitably, as we expand, we will have to build new blockchains. And that may be the only good reason to build a new blockchain is the simple statement that i'm literally light hours away from that other one and it's not working well for me and it's so fucking meta we're getting so cosmic here too because it's literally like a chain to another chain right like you're like

you can hook up and maybe or like atomic swaps between chains like if we are we are assuming that we're traveling between planets and stuff like that but i certainly if we're let's say this happens and mars is able to like build their own chain yes we would have cross-chain atomic swap like would there be a thing on the universal uh or the galactic uh layer where so like our big beef here on earth is that we have like basically a quasi barter system of currencies will that exist in the in the galactic layer too like well is there a a sound and i'll be all currency in the galaxy that we don't know of yet maybe i don't know so i mean i think that's the interesting part here is like like if you analyze why is the situation occurring why can't martians mine like

where did this problem arise from it arises in the selection of 10 minutes by satoshi as the convergence time for the blockchain now you can argue satoshi's a fool and should have made it an hour or five hours or whatever you'd like so it could encompass the whole solar system and indeed if it were like many hours long the block time then martians would be able to mine because it wouldn't matter that they're like 20 30 minutes out of sync in the same way that it doesn't matter that one connection in China is 15 seconds delayed from a connection in New York. That delay is not meaningful on the scale of the block time. But the problem would have just arisen at a different planet. It would have arisen at Pluto. And if you don't believe that, if you

believe that you could have somehow arranged it to work for the whole solar system, that's fine, but just go forward another 10,000 years. What happens when we're not in the solar system, when we're out at Alpha Centauri and it's four years to get a signal one way, eight years to get a round trips packet. At that point, it starts to become less and less believable that Bitcoin at 10 minutes or whatever block time you want is going to span that entire spatial volume. And I think that's really the insight here is that Bitcoin and any blockchain at all, in fact, that relies upon communication and no centralized point and proof of work and all these core ideas about Bitcoin is fundamentally an object that has a certain spatial size. And I think that's

underappreciated perhaps and it doesn't matter today because the spatial size that we care about is less than like two light seconds in diameter earth is a tiny place and we all live here but in the future as we expand we will cross that horizon we will be further out than bitcoin's utility to us yeah it's like again it's like a meta gravitational pull right almost and it's it's crazy to think about and uh like this is another big topic in the news this week i'm actually happy to have you here to pick your brain about it like how does quantum computing fuck with other shit is bitcoin doomed is bitcoin doomed um bitcoin will certainly be doomed later than everything else i would say um my own like quick answer the quantum thing is just like

It's important to remember that Bitcoin has multiple layers of, if you'd like, encryption or protection. The first layer is this idea that addresses represent hashes of redeem scripts. And a hash is a very particular kind of mathematical construct. It's a one-way function, it's asymmetric, you kind of lose information, sort of random, it mixes up its inputs and randomly sprays them out over the space of outputs. a particular kind of mathematical object and then within the redeem script so it's not enough obviously if you have an address to be able to get to its redeem script you also need the private

keys that can sign for the uh the code that the redeem script represents that is you know ecdsa signatures that's fundamentally public private key cryptography that second part that's the part that quantum computers are theoretically able to suborn and what's interesting about bitcoin as compared to HTTPS or your credit cards or various other cryptographic things in your life is that it has these two layers. And so fundamentally, quantum computing, as we understand it today, is really only capable of attacking that second kind of encryption, public-private key cryptography. And so many other things will fail before Bitcoin kind of fails because Bitcoin has this additional layer of protection. I'm not enough of a historian to know how much that additional layer of

protection was designed purposefully to protect against quantum computing, but the point is that it does. Quantum computers do not know how to hash or reverse hashes faster than traditional computers, at least as far as we understand algorithms today. So the important part is, if you've not spent from your Bitcoin address, it's unlikely to be attackable by a quantum computer. Also, Bitcoin mining is unlikely to be subverted by quantum computers, which come in and have vastly greater ability to mine blocks. But it is true that as quantum computers become more sophisticated the public private key cryptography that bitcoin relies upon to guard balances you know once you know the redeem script that is up for cracking and hacking and i think

that is scary is there a way to become quantum resistant yes there are known algorithms which more or less replicate the parts of the properties of public private key cryptography that are known to be quantum resistant today, they have trade-offs. They're not as fast, as easy to compute, as space efficient as the existing algorithms that we currently use, but they're quantum resistant.

So there's a little bit of a trade-off there. I imagine it's one of those things where, you know, how much energy has been spent on designing quantum resistant encryption algorithms? Probably not as much as will be spent when quantum computers are realistic threats. now how far are we away from that that era i think i think shorter than people want to believe but still a while away how long is that i don't know like realistically i don't think anybody uses

like ecdsa type signatures or public private key cryptography the way we do it today i think realistically within five to ten years we stop doing it that way really we start we start having to deal with this situation um yeah absolutely so have you been following uh like i mean the reason this conversation came up most recently because of google's exactly claim yep is that uh pr like apparently they've been running one specific function just to prove something and it may be uh catering to a certain conclusion but um what are your thoughts on on the google news i'm i'm repeating thoughts that i have read elsewhere i'll be honest i think the best person to follow in this space is a gentleman named Scott Aronson actually also in Austin he's

a longtime quantum computing researcher that like frankly you know I've been following for a very very long time and and he's just consistently well one he's an amazing researcher and then two consistently writes some of the best popular and accessible content about quantum computing computing classes and increasingly like these kind of intersections with cryptography um and it's interesting like his he has a great art he has a great blog post which talks about his reaction to the quantum supremacy news out of google and it's interesting because he i think like me is worried he's basically saying this is a big deal we need to be thinking about ways to start focusing on how to get past this threat because the fact that google has has demonstrated

whatever they've demonstrated which we can get into in a second is it's kind of like the clarion call it's like this is this shit is happening like why is it such a threat though if it's something that humans would leverage right it was like quantum computing would be a tool that we use or would it be something that turns into uh ai and starts it's more that it breaks a bunch of assumptions that we have around how information can be securely exchanged on the internet then why are we trying to discover it uh because we believe it will be extremely useful for all sorts of other things that we want to do like the goal of quantum computing is not to be able to break existing credit card payment services the goal is to have vastly more powerful computers and if you

believe scott aronson well then go ahead shouldn't the goal be to break all that stuff i mean on some level like it's healthy it's good right like we our universe is quantum and we're so restricted from that like we don't typically there's very few moments or times in our macroscopic giant lives that we're forced to confront the fact that the universe is quantum mechanical in in its fundamental nature this is really cool because these are if you really think about the way the quantum computers work is insane it doesn't make any sense from do we become gods when that happens we become we put our fingers into the electrical socket i feel like we don't know what we're going to find in there but it's going to mess us up a little bit and that's okay

we'll engineer around it human beings are are fundamentally clever creatures that's actually funny my wife and i walked to uh our old coffee shop in our old neighborhood this morning we're walking back and just having this conversation we were saying like humans for being the most adaptable species that's ever existed on this planet for being the most adaptable to change we hate change so much some of us some yeah well i think most of like i feel like as we get older yeah more and more of us i agree it's always the right kind of change though right change that we want and that we're prepared for is easy to to accept and changes that we didn't anticipate are very difficult and the easiest response is to deny that they're happening you know and i think

bitcoin really reveals that it reveals like how open a person is how open-minded they are to understanding a new way of of things being um to a certain extent quantum computing is a little bit like that like where the easiest response is like i've been hearing this shit for fucking decades man like what's new right now nothing's gonna change like it's all the same um your vote doesn't matter it you know like all this stuff it's easy to have that that that dismissive reaction but i think scott aronson and myself personally like this is an interesting development now i think just just to be clear like we're still super early like this this supremacy that that google um displayed is supremacy the ability for quantum computer to calculate something a classical

computer could not but the thing that was calculated is a useless thing it's not a thing anybody wants to calculate it's a problem designed to give the most advantages to quantum computers and that's cool because they're they're doing it but one thing i think is super interesting is what is their motivation like we asked a little bit about why are we writing quantum computing like there's a certain dick measuring contest of like we're smart enough to have figured this out this thing that we've been theorizing over for 30 years we actually built it like that's cool but what are you going to use it for right i think scott aronson would argue that the the chief use of quantum computing is to simulate quantum systems that indeed we speak of quantum computers

as these tools that can help us break cryptography and like solve the traveling salesman problem or all sorts of great things but realistically his belief is that where they'll be most useful is things like for example predicting how proteins fold or predicting how actual quantum particles and molecules react in certain situations because, one, that's fundamentally quantum. Classical computers, when they try to simulate that, do it very weirdly and inefficiently. A quantum computer could simulate that very, very directly.

Is that an attempt to describe or create? A little bit of both. Imagine drug discovery. On some level, in theory, we know Schrodinger's equations, we know Newton's laws, we know all these detailed microchemical rules. Why can't we just predict what every possible drug would do? And the answer is, it gets complicated very quickly.

We don't have the technology to simulate or predict as well as we'd like. Maybe quantum computing is that technology. So that's one of the incentives to go out and build a quantum computer. But recently, I've been thinking more and more, coming back to hyper-Bitcoinization, there was an interesting poll on Twitter, which I think is forward-thinking, like, what do we do if and when quantum computing becomes really real, and we have to consider Satoshi's hoard, or all the lost P2PKH coins? yeah we talk about this a lot on tales from the crypt uh satoshi is just his horde is a huge

quantum alarm system basically a big incentive to define quantum computing so that's the interesting question is it alarm system or is it an incentive or is it both yeah like what's it worth today five seven percent of bitcoin no uh yeah yeah something like that yeah that's billions of dollars now i think billions of dollars is too small of a target frankly i already billions have been invested into quantum computing i'm sure but probably not tens or hundreds of billions yet and if any of you freaks are new to the podcast the reason that satoshi's coins are quantum alarm system is the way that they are the the private public key was set up it's a pay to pub key and since it lacks that first layer of hashing protection yes and then uh since satoshi has left

the product did they implement this before he left i don't think it was implemented before 2010 it certainly wasn't common yes and so now we do pay to pub key hash and that h makes all the difference right and so that affords uh so if you have your uh coins and a even a legacy address a three address or a b1 you're gonna you're gonna be paid to pub key hash correct i think almost everybody who's actively using bitcoin today is safe from this and that's the challenge is that satoshi left so early yeah and yeah so his coins are more susceptible to they would be quantum breakable before most people's coins and that is a fascinating thing so most people not most people but john newberry was the first person to describe this to me uh about a year ago

actually i think yeah exactly a year ago like uh maybe satoshi is just like some quantum alarm system created by the nsa or something like that because that would be like imagine if bitcoin price keeps rising like it like it did yesterday at some point that incentive will be strong enough right and i think that's so interesting my favorite conspiracy theory is that satoshi is a time traveler who came back in time to help prevent the rise of quantum computing or something like this well let's get like is it going to help us or like hurt us quantum computing overall yeah i don't know it's like any technology it'll help us but there'll be a lot of growing pains it like just even the the cursory example of drug discovery imagine we were actually

good at predicting what molecules did in our bodies like how amazingly better medicine and our technology overall would be so like net good like do you evolve to a whole different species and type of entity after that like is this the singularity no not quite yet i don't think so this is just a really powerful thing that we have monkeyed our way into that we don't know what it is yet um what's your opinion marty what do you i don't know what do you think i'm too dumb like should we fork his coins out should we let it happen should we let them be stolen i think you gotta let it happen let it happen yeah i'm currently leaning on the forking side like like something like uh you know a soft or hard fork i don't know how sure i'm not sure how it would

have to be implemented but that says like if your coins are older than n years and they are in p2pk or other quantum you know hackable sort of addresses we're just going to pretend they don't exist now they're really that do you add that on that's the real question right is that they not exist anymore and they're lost forever which is kind of my leaning or do we recycle them back into the supply i would lean towards that as well no i mean people have been that's the got to think of the man in the coma too like is this uh system uh as pure as we want it to be if we don't think of the man in the coma and satoshi may just be a man in the coma you know we don't know or in jail or whatever yeah unable to access their coins it's an interesting question though

right i mean five to seven percent of bitcoin is uh is a lot of scratch today well that's another question too like what if satoshi is in jail or in a coma or something and he does wake up and want to spend his coins is that the end all be all a bitcoin i've i've actually said this before like i don't think so i think if i'm not talking about quantum computing or anything now but if we do get to a truly uh sci-fi cypherpunk future where bitcoin has certain assurances from a privacy point i could see satoshi uh basically contracting out work uh to people around the world and that was like a big theory that i liked a couple years ago is that once bitcoin hits like a few trillion uh dollar market cap and satoshi has more money than the chinese government he

can start like uh contracting out chinese citizens to do certain change the world basically just like hey i'll pay you you don't need the communist government i mean like the crazy wolf side of that is that okay say that that's possible if someone hacks his coins because they got to the go on and computing number of qubits first and then they decide to spend their coins on whatever they'd like exactly um what an interesting problem i have no idea what will happen the unknown the unknown it's the beauty of life right we search uh through the abyss of the unknown and like are we born in the weirdest time in history is that like a true curse man i always felt growing up that like you know there's that saying like too late to discover the world too early discover

the stars kind of thing and i definitely felt that way to a certain extent like the best minds of my generation are fucking selling ads that's what we're doing um bitcoin has changed a lot of that for me it feels like obviously i'm speculating about space travel and all sorts of crazy things but i really do uh view this as a fundamentally new technology for humankind um maybe in the way quantum computing may also be something like that uh but it does feel like one of the more interesting times to be alive maybe i'm just paying attention and life was always interesting but now i'm just part of the interesting groove in it i don't know i don't know man i think it's undeniable um like we've got trump as president we're about to have jesus as king as the number

one album on the charts which is uh that's something all right and three beers in that a little buzzed uh our six packs crushed we have no more beers so we're gonna and it's not even one but um with the kanye album in particular it's like jesus is king very controversial to say these days but it does feel especially the last decade so going from like to 2008 2009 the financial crisis the depths of the financial crisis and we're going to bring this back to kanye of course so you have uh my beautiful dark twisted fantasy uh from that you have jesus the life of pablo now jesus is king and i wanted to tweet this out earlier but i tried it and wasn't articulate enough but i think it could be more articulate in the audio form i think that discography

in particular those four albums are a perfect uh emagulation of the decade that was the 2010s right like we came from the depths of the financial crisis my beautiful dark twisted fantasy was a fucking dark album about like eating ass and porn and like being a hedonist and then slowly came out with yeezus or is like backing off that more and then saint the life of pablo like you can see him rejecting uh sort of the mainstream view of pop culture and then now jesus is king has gone full like polar polar opposite of what he was in 2010 with my beautiful dark twist of fantasy and i do think that is a um it's a parallel to what we've seen over the last decade right again from the depths of the financial crisis to donald trump becoming our president

to false hope maybe that some people would say in obama um not not making everything not making the world uh better after the financial crisis then we go to trump and now it feels like as we had in the 2020s bitcoin being a part of it but everybody's just questioning everything and And it just feels like, for Kanye's discography in particular, to end with Jesus is King, to go from the death of the financial crisis to what I would argue is the precipice of a great awakening where people are questioning everything.

And let's not lie, being religious is counterculture right now. He just came out with one of the most countercultural albums that he could at this particular time. That was my rant. I have so little Kanye expertise to reflect back at you, but I would say that, I don't know, how can you not have your politics personally be changing over the last 10 years?

Like, if you believe the same shit you believed in 19-fucking, or 2004 or whatever, like, I don't know if you've been paying attention. And it's not like a right versus left, it's just, the world is changing. Now, again, sometimes I'm just like, how much of that is I'm just becoming more aware as, like, a person in my 30s,

like, with a house and, like, stuff to worry about, and maybe I'm just finally realizing the world has always been interesting and always, you know, been worth paying attention to. But it does feel like particularly this is a time of transition and change. And my own politics have changed tremendously in the last 10, 15 years. And Bitcoin has been a huge part of that. Like it's been, and personally, just an opportunity to interact

with all sorts of political views that I didn't previously hold. Like I would say quite openly that like I do care a lot about the environment and I feel like we're fucking it up and conservatism is really important. conserving our environment is really, really important. And yet I believe in Bitcoin and quote-unquote wasting energy constantly in order to build this really esoteric thing. That's not wasting energy, though, I would argue.

Totally agree, totally agree. But me from 10 years ago would not have thought that. Me from four or five years ago would not have thought that. And it's interesting to just watch my own attitude change. And I think it's important, as Bitcoin continues to appreciate value, as I have a company around it, I keep asking myself,

How much is this a convenient attitude that you're taking based upon where you sit in life today versus something that you've come to from a first principle or something that is worth believing? It's really hard to know the answer. Everyone, I guess, has to decide for themselves. But I will say, if you're not changing your mind a lot, kind of coming back to your questions about Kanye and his own, like, changes internally and publicly and privately during this discography, like, I don't think you're a very interesting or aware person if you're not changing a lot

right now. Yeah. no i don't agree and actually i had this a very similar conversation earlier this week um focusing on and how do you balance so i honed in on the the mark anderson uh quote strong opinions weekly held but how do you balance that like sometimes people use that quote as a cop-out for i fucking hate that quote for not having conviction yeah exactly yeah who is a strong opinion weekly hell what kind of person are you you believe a bunch of shit like really deeply and you're willing to discard it in two seconds like i understand that it's a quote

about uh being data driven i guess yeah but so how so how do you temper that changing when things are changing but also having conviction that's the conversation i got into earlier this week but i agree like the world has changed and if your views haven't changed uh you are uh you're not something's wrong with you but you're not paying attention but also i do think there is a strong need for conviction too like so how do you balance that like what is the conviction what are the things maybe you could be a bayesian about it what are the things that you anchor in as the these change are going these changes are going on i think just being a bayesian you anchor yourself in the things that you are most certain of right so like this conspiracy is happening and you're

like well what are the likelihood of that like so i'll entertain the possibility of that outcome i won't say no that's impossible but I'll have to square that with what I know about humans and governments and incentives and all these things and Occam's razor and I'll have to conclude that that conspiracy is ridiculous like it doesn't mean I'm not I'm close-minded to it but the odds of it being true are so low whereas other things are like we live in a conspiratorial era like this Epstein ridiculousness and stuff I I'm not a big conspiracy person but like and I don't even say conspiracy person the whole conspiracy theorist uh misnomer not misnomer the the uh that's the word i'm looking for that means like a the negative connotation of conspiracy theorist

is orwellian what is a conspiracy conspiracy too pukeable we can spot like when you're on a phone like when you go to meet somebody at a bar you conspire like hey we're gonna meet up like the whole word conspiracy has been completely painted with this negative connotation and conspiracies at the end of the day are just the admission that multiple parties conspire to do a certain thing and i guess maybe there's a question of likely versus unlikely conspiracies and i suppose to to the point of the world we live in today so many unlikely things have occurred now or i i feel like my priors my bayesian priors on what the world is or what it can do or what can become have changed tremendously and i feel like that's the only way i can square this is

it's it's really hard to entrench oneself and say like these are the truths of the world and these are the lies and and here are the good people and the bad i feel like that's a real that's a real route towards bad behavior but um at the same time to your point about conviction like you need to be able to believe things strongly to act like i believe i'm very convicted in bitcoin right now like i think it's it's worth spending all my time energy and resources on i've been doing that for years and I don't see why I should stop. Uh, yet I want to believe that I can never be a BSV person or something like this. Like I would recognize when the shit got fucked up and I need to get out of this. Will I actually, I don't know. Um, maybe it's hilarious and I've already crossed

the Rubicon and I haven't realized it and I'm just talking shit right now. And a decade from now, it'll be obvious to me how lost I am. But, um, the best I can say is, is it's just about likelihoods right what do you believe is true and possible and what probabilities do you assign to it and when the probabilities are high enough you should display conviction but recognize that there are always probabilities and that your priors for the way the world works should change even things like quantum computing are like this right like what's the what are the odds that the entire infrastructure of the internet in terms of secure communication will collapse in the next five years it should be low but then when you see google saying hey we just did this thing

like you gotta reconsult your odds and be like well shit if they're saying that and how much more money is going to come into this it's going to be more than has come into it previously how fast are they going to move what are the things they could achieve with this and suddenly my prior start to change and all of a sudden i'm concerned and now i'm like oh we should be talking about satoshi's horde and for me that was like a 20 minute journey you know like when i was reading about the article i was like oh shit we should be thinking about satoshi's horde a lot more a lot more carefully right now um yeah so what's the worst case scenario with satoshi sword somebody just cracks in market dumps or it's not even satoshi sword if they're able to steal satoshi

sword they able to fuck with all our coins in a lot of ways well things like for example a transaction like when you have a bunch of coins and they're safe quote unquote from quantum attack and then you want to move them in moving them you have to display the redeem script and the signatures in that five to ten minute period while they're confirming if a quantum computer is fast enough it can go take your coins and sign a different transaction because now you've displayed the public keys is bitcoin going to be the first thing that's attacking no no absolutely not absolutely not like amazon will have solved this problem for bitcoin potentially by then and i would say if i thought the horizon of this problem were 40 years out and not 5 to 10

i might say it the other way that bitcoiners will have solved this problem i actually do believe that bitcoiners will be part of the solution here because who who today like like me like you read quantum supremacy article and you're immediately thinking about bitcoin security so like who's most motivated to build better quantum resistant security or cryptography algorithms it's bitcoiners we have the most to lose at the moment some of the smartest minds to figure it out as well indeed no longer writing ads well it's actually yeah no and i can i know from personal experience too that some of the ad men that have uh made their riches in the ad world are looking into bitcoin and it is good to see it like just as a um a signal if you will like and that's been

the knock for the last decade again talking about the 2010s i do think we're gonna have a roaring 20s i think we're gonna have another roaring 20s but the 2010s they were marked by uh basically ad tech fintech and quants writing algorithms consolidation of people's data yes and uh maybe people are are breaking out of that that mindset and it was very lucrative i don't think it's that lucrative anymore though i think people are getting sick of ads i think uh the arm opportunities for these quants is is being depreciated as well as fed policy is pretty uh consolidated across the world federal central banking policy excuse me is consolidated against the world these fucks up these quants and stuff like that um and bitcoin's just more exciting right it's such

so much rawer it's more raw roller or more raw more raw more raw raw list the most raw it's more raw than than ad tech or anything like that so it's just naturally got to be interesting for these type of people right i totally agree marty yeah well we're approaching a hard stop here we are i wish we could go on we're out of beer we are out of beer this is true Um, is there anything you want to end it on anything, any words of wisdom, any, anything on the horizon, unchained, any events, any, um, any tidbits? Um, I guess I might, I might add, uh, you know, come down to Austin for those Bitcoiners haven't taken a visit yet.

You're always welcome to come visit the Unchained Capital offices, uh, check out some meetups. There's incredible stuff happening. Um, I think from Unchained's perspective, what we're most excited about in the coming months is just open sourcing more and more of our core code. There's a transparency win to that for customers, but we're really hoping that as one of the leaders of multi-sig technology over the last few years, we're getting sick of writing all this code. We'd like to pass it out to everybody else. And my best hope would be that they start to use it in the same way that we have been using it. that just makes our business a lot safer it gives us a lot of ability to band

with other developers like Justin moon and others and put pressure on hardware wallet providers and other key makers to like just make their products even better so the thing I'm most excited about probably in the coming year is let's say Bitcoin keeps having days like today and yesterday and it keeps growing we got to get to a place where we're protecting ourselves better I think for me personally, and maybe for a lot of folks, 2017 was just a wake up moment. Like I can't take this stuff casually. I need to really protect this and make it a priority in my life. I think over the next few years, if we have greater price appreciation, it's going to become an existential

problem for a lot of people. Like it will be the majority of my wealth and other people's wealth. And in that situation, protecting it and finding good financial services around it and trust relationship becomes an imperative so we're really excited about that kind of growth um it's gonna get crazy freaks oh man and uh drew i gotta thank you and team for supporting this podcast in particular it's been greatly appreciated throughout the year and uh big fans what you guys are doing it's always incredible getting together drew talking about space one of my favorite people to get heady with getting cosmic man gotta get cosmic you were we literally get cosmic we talk about the cosmos that's what we got this week freaks peace and love