TFTC: A Bitcoin Podcast - Tales from the Crypt #36: John Newbery

Episode Date: August 1, 2018

Join Marty as he sits down with John Newbery to discuss Bitcoin Optech, a new initiative to help large economic players within Bitcoin ensure they are following best practices when it comes to using the Bitcoin blockchain efficiently. The two also dive into Schnorr signatures, Taproot, Lightning Network, and get cosmic over some heady Bitcoin theories. Follow John on Twitter: @jfnewbery Follow Marty on Twitter: @MartyBent Check out Bitcoin Optech: www.bitcoinops.org

what is up freaks welcome back to tales from the crypt it's your boy marty bent on a hot humid wednesday night in williamsburg brooklyn key new york city in the summer it's uh it's one of those sticky stinky nights the trash is everywhere i'm sick of the trash john i'm sick of it you got to get out of the city man i do on the weekends i i jet straight for the beach uh as you freaks can hear him in the background i have john newberry with me from chain code labs john welcome back to the podcast thanks money good to be here chain code first two repeat guests you and matt corralo matt oh matt beat me prodigious matt corralo just barely um and i feel i feel spoiled having you two as the only two repeat guests up to this point and jw weatherman he's

been on again okay i had to post his second episode though well it's an honor honor to be invited back the honor is all mine we are sipping on some rosé on this humid night a crisp crisp very nice cheers cheers and the zadi la rosa very crisp right now very refreshing john uh requested that we only do one bottle tonight so i obliged um so we're going to be tame we'll get cosmic a little bit a little bit cosmic we'll definitely get cosmic um yeah reason i brought you back in here is last week you announced a pretty amazing initiative in my opinion uh to help the economic players in bitcoin become more efficient and use block space more efficiently uh the bitcoin operations technology group or bitcoin optech why don't you fill us in on what's going on there

sort of why you guys decided to get together and what you guys have done up to this point yeah so us guys is me and james o'burn at jane code and steve lee out on the west coast shout out steve shout out steve post google right x googler yes that's right product director at google um we want to help bitcoin companies adopt better scaling technology and maybe encourage them a little bit to adopt better scanning technology so the history the history here is as you freaks all know back at the end of last year we had the price was mooning we had a lot of activity on chain mempool filled up fees went through the roof and that hurt a lot of people and at the same time as that a lot of the transactions on the network were not constructed efficiently so

So there was room for batching, a lot of transactions weren't using Segwit, lots of small wins like that. And people got a little bit frustrated in places. There was definitely some friction between some of the companies in Bitcoin and some of the members of the community. And we wanted to help somehow or explore how we could help. so the impetus came from adam back he posted a blog post and sent an email to the mailing list which which i'm a member of suggesting that we have a grand scaling challenge to coordinate industry players to adopt scaling tech and that was really that really resonated with me it's something that i i'd already kind of been thinking about and so i i got back to adam

I talked to a few people and probably around March or April this year, started talking to companies about whether there was actually a need for this and what their pain points were and whether they thought something like this would be useful. James O'Byrne was also very interested in helping, as was Steve Lee. And so after about two months of talking to companies and figuring out exactly what we would do, we've launched Optech and we're hoping we can do something useful in the industry. yeah i mean you touched on the uh i won't say strife but the the contention towards the end of last year when fees got got to an all-time high i think at one point average fees on a u.s

dollar basis was like 50 at some point in december when they got high yeah i don't know the exact numbers but um that's unfortunate because it hurts it hurts individuals it hurts businesses and it prices some people out and some use cases out yeah and that's actually i was talking about with somebody i think it was last week uh i did like a youtube show with that adam meister guy we were talking about it like we were talking about bitcoin opt i think it was the day you guys announced um last friday or friday yeah yeah and uh saying like what what would have last december been like had had this initiative been started like a year ago so like a big problem one of the big problems over december in particular was uh that became known to the greater community

because of uh laurent from oxt uh he was able to identify the coinbase one of their wallets in particular had a utxo set of about three million dollars at the time uh that was unspendable because it was all dust so you have one of the biggest economic players in the industry sort of not using uh they weren't uh consolidating uxos utxos excuse me uh efficiently and it was actually like eye-opening to me it's like how is coinbase one of the biggest players in this space been around since 2011 2012 how how are they not able to to efficiently use block space at this point like how is that not like number one of their number one priorities and it seems like it wasn't a priority for a while and maybe maybe that was the kick in the ass we needed was was the high

fees to get this going yeah yeah and it's not a problem until it is a problem and then it's a big problem um so not just coinbase a lot of companies did have very large wallets with lots of utxos and that wasn't a problem for them when fees were once totally a bite but then when fees spike up to 20 or 50 or 100 then suddenly it's too late to do anything about it and at the same time they're fighting fires trying to onboard all the millions of customers who suddenly want to buy bitcoin that's their priority they need to make sure their back ends are still working and scaling so yeah it's a good thing we're kind of in this quiet bear market right now because those companies can maybe take this time to look at their implementations and see where they can

make efficiency gains now in preparation for whenever mempool fills up again and we see more transactions going through the system okay you uh teased it in this week's newsletter that uh zappa is gonna explain how they consolidate was a four million utxos or four million dollars worth of utxos four million utxos holy crap zappa had a lot of utxos yeah oh my god and how like today is consolidate that into one UTXO or like a... It's ongoing. So yeah, we teased it in this week's newsletter. We have a short piece written by AJ Towns,

who works at Zappo, just giving a bit of detail about what they did to consolidate. And in the end, actually, it may turn out to be a good strategy to not consolidate until, you know, not consolidate previously because fees were very high.

And now that fees are low, it's a good time to consolidate. So it's great now that fees are low. We're seeing quite a lot of large companies consolidate and the UTXO set has gone down massively this year. And consolidating UTXOs is only one way that you can gain efficiencies, correct? Yeah, so consolidating UTXOs is great for the network

because the UTXO set is the critical data that four nodes are storing. Four nodes are processing the entire blockchain but they can prune away old data what's what they need to keep and what they need to keep in in fast access memory if they want to keep up with the tip is the UTXO set so whenever that goes down that's great for the health of the network but in terms of more efficient use in general a big win would be batching so for these large economic players that are using maybe percent units of percent or tens of percent of the the transaction throughput of the network

if they were batching then we'd see a huge win in terms of the amount of economic activity and payments we could get through the system so what does it mean when you're when you say batching for for the freaks out there for the freaks out there um and for me so if we think um okay let's imagine I'm a service and I want to send out 100 payments to 100 individuals. If I had a very naive implementation of that, I would construct a transaction that sent out to recipient number one and return some change to me. So Bitcoin is a UTXO model. Every time you send out a transaction, if your UTXOs that you use to input the transaction overshoot what you're trying to pay, you create a change UTXO going back to yourself.

So you'd create one transaction going to recipient number one with change coming back to you. You'd then create a second transaction, maybe using that change and sending it to recipient two with its own change coming back to you and so on. And you'd have this series of 100 transactions which might have one or two inputs, but they'd all have two outputs

because you're chaining along that change. Each time you create that change output, But you add one UTXO, and then each time you spend it, you remove that UTXO and add a signature. And that signature needs to be validated by every full node on the network. So you're creating this very big set of data. If instead of doing that, you match your transactions, so you just create one large transaction with 100 outputs going to your recipients, and then maybe one change output to yourself, that's a lot smaller on the chain, a lot smaller in terms of the data that's going over the network

and is being stored on the blockchain. And it's cheaper to validate because you're checking a lot fewer signatures. So it's good for you, it's good for the network, and you save a lot of space and you save fees. And that's one thing. I mean, that's been going on. The debate has been going on since Satoshi Dice. like obviously there's no such thing as spam some people would say but we should try as hard to uh

to incentive i don't want to say incentivize but entice these big economic players to be as efficient as possible and yeah well bitcoin must be incentive compatible right that it it fails if it's not so in the long run yes these large actors should be naturally incentivized to do these things um but maybe there are obstacles between where they are now and actually implementing them and if optech can help remove some of those obstacles and so those players just need to step forward and do it then that can only be a good thing i think yeah how do you guys plan about going uh evangelizing this message um well we we talk to companies um we've we've reached out to 20 plus companies now and had initial conversations with with all of those companies

just to try and understand how they're actually using bitcoin and how they're using the blockchain and that's eye-opening we want to understand what their pain points are and and why they haven't implemented segwit for example if they haven't or why they're not doing batching and understand those problems um think about you know the trade-offs that they're they're thinking about and maybe give them information around why it might be a good idea to do batching or segwit. In terms of concrete activities, we have our weekly newsletter. So we're trying to spread knowledge about what's going on right now in Bitcoin in terms of technology you can use today and implement today. We had our first workshop in San Francisco last week on Tuesday,

and we had a bunch of Bay Area companies come and talk about RBF and CPFP and coin selection and general communication with the open source community. So we're hoping to do more of those workshops. And we're hoping to produce documentation around things like batching or RBF, CPFP, or if Lightning continues to mature and it seems like it's ready for these large economic players to adopt Lightning, maybe documentation about integrating Lightning into their existing systems, maybe documentation about Schnorr signatures, if those come along. So that kind of thing.

Documentation, face-to-face meetings, we've got an online forum for engineers to kind of exchange ideas. A bunch of things. Is the documentation on GitHub, just open source? I can check it out, whatever. Yeah. So everything we produce will be in the public domain. haven't produced it yet but that is what we will be doing um this is going to come off as you freaks

are probably going to think i'm lying but believe it or not uh earlier this year probably like february march i was meeting up with this guy eric spano he's actually um he's responsible for starting bills.com which francis collette now runs oh yes uh francis just left oh no he left catalaxy and isn't it yes to go to go flat i don't know if it's bills or it might be bills i'm not sure what it is yeah regardless not important to this story the original founder eric who handed it off to francis i don't know what francis is doing with it now but we would meet up and we had similar conversations like hey there's got to be uh a way for like there's got to be like what you're doing right now with the github

uh uh instructions or scaling cookbook we're calling it exactly scaling cookbook like that that needs to like get in the hands of like block explorers uh exchanges economic economic uh actors in the space and we we actually were focusing on block explorers like if you're a block explorer like here's what you should show and explain to users like what they're looking at because if you go to blockchain.info or now blockchain.com uh it's not it's not as easy to read their their block explorer as uh as it should be yeah and and ux is a big part of this so one possible argument against batching is our customers are used to seeing a transaction with one output for them and so if they start seeing transactions with hundreds of outputs they'll be

confused um so you know part of what we do or part of what we hope to do is understand best practices around ux as well as around the technology and you know help spread those now it's uh funny seeing the ux uh because i've got a little bit of a ux background myself um the ux community and the development community within cryptocurrency sort of coming together more more intently now i can tell that a designer did not make the bitcoinops.org site um nope nope it's it's functional and it presents the information required and uh our priorities are not to make a pretty website but but prs are welcome so any of you ux guys out there who want to contribute to our website please open a pr no but that's um that's actually i had an

interesting uh conversation with uh with richard burton from balance.io he's working on uh well design wallets for the ethereum community and to hold their tokens well i i don't agree with uh that project and or not balance but ethereum in general i do think uh what richard is doing from ux perspective is very uh very needed and and we are i think we're getting to the point where uh there might be more consumer facing apps and ux is going to be a very important part of that one app that just got teased a couple days ago was uh jack mauler's uh zap app did you did you check that out at all i haven't looked at it yet but i i saw it's always been tweeting about it apparently like you're gonna be able to just run lightning on an ios app uh i think there's some

degree of uh trust involved where you have to trust uh there's going to be lightning nodes that you sort of have to trust while you're using it on your phone but um very interesting that you'll be able to go pay for coffee pay for coffee with bitcoin uh using the lightning network great because he's also got a merchant app. And what's very interesting is that he's testing it with marijuana companies in legal states, Denver, California, Oregon, Washington State, I believe, that obviously they have problems getting bank accounts,

so they hold all their marijuana profits in cash in vaults, and they have to have Brinks guards come move their money around. So he's actually helping them avoid that, where they can they can accept bitcoin it's done it's a glorious thing right god bless you so lightning now we're gonna dive in while we're on the topic like what do you think it's been it's been growing exponentially over the last last couple months i think i think beginning of june it was at like 21 bitcoin and now i think i saw today somebody was saying we're about to hit over a million dollars of cumulative money

within the network. Reckless. What? It's reckless. These reckless kids with their channels. It's great. It's great. I'm very excited.

The thing I was most excited about in the last couple of months was Satoshi's Place, obviously, because it's amazing. That was, we pulled that up at the last BitDevs meeting and there was a couple of inappropriate images on there john i did not want to see that in public uncensorable inappropriate images uh

i think uh i think ethereum just copied that too you can do it on ethereum now too very unoriginal though really yeah there's a you can do it with a gui or whatever they're they're satoshi level uh denomination is on a in a channel in a in a state channel i'm not positive okay i'm not positive um but never never really original on that i'm always copying copying i don't think that's fair marty i think uh ethereum has done a great job at recruiting application developers and they've done a great job at supporting those application developers and there have been a lot of applications i would like to see that replicated in bitcoin i think we can have really cool applications on bitcoin as well how so how do we get there

lightning of course we we have more things like satoshi's place and lightning is is a far better model for that kind of application in my mind than ethereum which i don't think scales um the things you can compare there are crypto kitties and satoshi's place and crypto kitties is a fun game on top of a on top of a blockchain and it basically brought ethereum to a halt because all of that data was going onto the public blockchain so toasty's place had had far more activity i believe in terms of transactions but they were all off chain and the bitcoin blockchain didn't care no one no one even needed to know and for me that's a that's a really kind of concrete

proof point that this is the way you build applications on top of a blockchain and what do you think needs to happen before like we uh like the the dam is broken and like uh developers are able to flood in mass the lightning do you think uh more sort of developer kits need to be developed libraries different languages different implementations what are what are you looking for um yeah all of those things just more widespread and diffuse knowledge about building applications on top of lightning so people like alex bosworth who is doing just an incredible job has he been a guest yet not yet i need to get him on you need to get him on whenever he comes alex whenever you come through new york hit me up yeah he's he's doing wonderful

work and he's just uh a fount of ideas and cool projects of things to do on top of lightning so you know him spreading those ideas people picking them up lightning becoming more mature because it's still beta and there are still issues it'll happen i think yeah it's like the other thing so Alex played part in an experiment to sort of derive a lightning network interest rate. I don't know if you've seen that, Nick. Yeah. Batia doing a time value of BTC on Twitter. He's been writing some pretty interesting pieces about deriving interest rates from lightning network activity,

basically seeing how many fees people accrue over a certain amount of time. um and he's basically saying that depending on how good of a router you are you can you can earn like better interest rates depending on how how much uh economic activity you facilitate and stuff like that which has been amazing to see and uh the one thing that he will even say is that these are very early day conversations but i'm happy to see that these conversations are even happening like we're thinking about talking about how we would build build capital market structures on top of bitcoin actually at the end of the day yep and that's i mean that's what let's get a little bit cosmic that's what this is all about like we are literally uh building the tools that

allow us to push off the dock and and sail away from the traditional finance system i don't think it's going to happen anytime in the next five or six years but maybe a decade two yeah so how long did that take for us to get cosmic uh we are 22 minutes and 40 seconds and great i love it i love it when we get cosmic um yeah with if if this all works the way we hope it will work we're building a new economy and it's it's fascinating to see it in its nascent stage and people thinking about these things and wondering where it will go yeah i uh i mean just thinking back to our last conversation in november like how much has changed since then like i feel like i feel like we've gone through like five years of earth time in seven eight months um i don't want to benchmark but

then but like up to this point like how is the network or the activity and the development on the network progressed versus your expectations up to this point bitcoin in general or lightning both um i i don't keep that close an eye on day-to-day changes in lightning but um you know i know the the three clients are all maturing and we're all we're through alpha into beta for all of those clients and we're seeing more channels and bigger channels and more cool experiments like satoshi's place so that's that's great it's going you know it's going ahead as planned but it still sucks a bit you know it's sometimes i think sea lightning stops talking to lnd stops talking to asong so yeah we still have a ways to go bitcoin continues bitcoin abides and

is is doing exactly what it's supposed to do um bitcoin core is continuing and in my opinion continuing to write great software and um release great software so that's that's all really cool um in terms of future direction i think probably when we spoke taproot and graft root hadn't even been proposed or talked about no so that's all very exciting um peter wooler released his bit proposal 10 days or two weeks ago about schnorr signatures so that's progressing so let's let's jump into schnorr signatures so this is i brought up this chart on bitcoin visuals you freaks can't see it but john can see it in here so like if you can see I'm looking at we're looking at chain size so like the the growth of chain size like

Bitcoin obviously you want it to be decentralized so you want the chain growing at a slower rate it looks like there's a noticeable I don't know if it's segway adoption whatever it is but around February late February early March there's a considerable sort of trajectory change in a good way of the the chain size growth so it looks like the growth rate is slowing down you can see that the blue line here growth rate uh beginning in july 2013 so five years ago is around like 85 growth a year uh which at that state is not that much or is i mean the chain wasn't that big then so it didn't take much to grow 85 but right now it's growing at like an annual rate of like 25 to 30 a year so the amount of data getting out to the bitcoin blockchain in particular

it seems like it's trending toward you can tell it's becoming more efficient which is which is a huge sign and good for decentralization and so i would assume that this is this sort of like change in trajectory was due to segwit and i'm interested to get your thoughts on how snore would affect something like this because it creates a huge efficiency gain when you're sending multiple you're sending from multiple wallets to one wallet correct or um you're set you're condensing multiple transactions into one wallet excuse me so the initial um the first step is simply to add schnor and by itself schnor does some cool things it reduces the size of the signature from 72 or 73 bytes down to 64 that's not actually Schnorr

that's just the encoding that Peter has proposed in his BIP because the encoding we use for ECDSA is needlessly inefficient so that's that's good it reduces its signature size down a little bit the other thing that you immediately get from Schnorr is multi-sig becomes the size of a single signature so that's that's great um what you're talking about i think is aggregating signatures across inputs for a transaction yes okay so that wouldn't come with the initial out roll out of schnor that's something that is possible but is probably too much to bite off at this point okay and if you really want to go into the details you should watch the san francisco bitcoin meetup talk by peter wooler yeah that's what i was referencing because i watched that i read about that in the

newsletter on monday that's like where i got that question from yeah so that's something that could happen in future but um first of all we need to know and i think um from my listening of of peter's talk a sensible initial soft fork would be just snore plus taproot maybe so we wouldn't get that transaction signature aggregation but it's something that you could use snore for in future and so let's jump into taproot then so what is what is the addition of taproot there okay um so taproot is a scheme where you create a transaction output that can either be spent with a signature in the best case and that signature could be a multi-sig where everyone signs or it's spent with a script and that script is revealed through um an adapter signature on

the initial commitment it's quite difficult for me to explain at this point john literally had close his eyes and visualize what he was thinking to explain this yeah uh so the really okay i'll try and explain it like a black box that the the nice thing about taproot is in the general case and the general case would be like 99 at the time um whatever the encumbrance is on your output so whatever the conditions of spend are you can just get everyone to agree that that condition has been fulfilled and they sign a multi-sig and it just looks like a single signature on the blockchain so that's really good for scalability because just validating a single signature is great it's really good for privacy because you never need to reveal your script

and well those are those are the good things if you have a condition where not everyone agrees and not everyone signs this multi-sig, you then reveal a script which is just an adaptation, is revealed by an adaptation of the signature. And so before it gets spent, everything looks the same. In the majority of cases,

everything looks the same. But in that small case where not everyone signs the multi-sig, you just reveal this kind of tweet signature plus the script, plus the conditions on that script. So it's really good for privacy and scalability basically and that was maybe not very clear but i got it okay i got what you're

saying okay good and i mean this is huge because in my opinion others others would uh debate this but i think uh some of the biggest competitors to bitcoin are the anon coins that are they're basically fighting bitcoin on its fungibility characteristics and i think things like snore and tap taproot like if they become a thing will sort of blow that uh sort of weaken that that competitive the competitiveness of coins like monero and zcash and stuff like that maybe i mean those those coins have different privacy characteristics but anything that improves fungibility in bitcoin is is really really important because if you don't have fungibility you don't have a money you you know you have something which isn't money you have an orwellian

system basically um and that's one thing everybody has to be aware of like hey bitcoin is not as fungible as it can be or nor should be at this point but things like schnor and taproot are on the way and then lightning network also adds another layer of privacy as well yep privacy i'm gonna say privacy privacy uh do you think getting schnor and taproot implemented will be as hard as getting segwit implemented no no i'm gonna i'm gonna say no um i can't tell the future but i think not um i think a lot of the people who might oppose it are now using an altcoin called bch so um thank you for using the politically correct term uh bch yeah neutral I hope not.

I think there's such clear wins that it's difficult to see a reason why one would oppose adding Schnorr and Taproot, but you don't know. Do you think it'll start out like a BIP9 activation type vote? I don't know. I wouldn't use the word vote. uh bit nine is a a coordination mechanism for miners to signal that they are ready for for a protocol change um maybe i don't know i'm not i'm not in charge but i think uh like what you and james and steve and crew are doing at bitcoin optech is actually huge

for making this happen because you're basically extending an olive branch to a lot of the companies that were pro segway 2x last year and and so there was a lot of like you guys are helping mend wounds from the civil war of 2017 may peace prevail i do i enjoyed that in uh in your newsletter may peace prevail i hope so i mean i that's i think that's a better approach that we try and work together and improve the system um we'll see if it if it's fruitful but i hope it will be i think it will be i'm i'm confident uh because it's such a no-brainer and again this is all this is all network effect and a feedback loop and if everybody's on the same page it just makes the feedback loop that much stronger and the network's effects that much stronger and the

confidence in the network that much stronger which makes bitcoin more likely to succeed yeah and and what's good for bitcoin is good for everyone using bitcoin so exactly hopefully hopefully we'll get schnor and taproot in maybe next year if we hurry and then companies can start using it and we we all can start using it that would be a a wonderful thing all right let's get cosmic okay let's get heavy let's go uh bank of canada this week uh released a paper that says they think bitcoin has passed a threshold at which it is not susceptible to a 51 attack and is unlikely to be attacked by a nation state who said that bank of canada bank of canada the bank of canada francis paulette posted a lot about this okay um

it seems as though people aren't talking enough about this but if that is true like and bitcoin is a self-sustaining network with i mean the hash rate on the network alone is where is it like 40 40 exahash a second right now 42 yeah it's a 42 exahash a second it that's guys listeners at home if you don't already realize 42 is a lot of exahashes can we can you explain that can you explain the gravity of how how secure the network is yeah 40 is not quite enough but 42 is just spot on but what does that mean like so what where was it this time last year all right it's fine july 24 2017 it was at 6x pathetic 6x 6 we've gone 7x in 12 months yeah so what took what took eight and a half years or eight eight almost nine years

eight and a half years to get go from zero to six it took one year to go from six to 42 that's some crazy growth that's yeah it's parabolic are you confident enough to say that like the bitcoin bitcoin from a hash power perspective is uh sort of protected from outside outside attacks i'm gonna say no no no why is this um i think we still have a long way to go on minor decentralization and combating those centralization pressures well that's why i got lunch with matt yesterday and we talked this is all we talked about it's better hash and how to make it a thing because i really want to make it a thing but it's you need a lot of hash power out of the gate to yep to get it working so matt was saying like if you want a viable pool to make this

app and you probably need 5 of hashing power out of the gate okay that's and that's like on par with f2 pool which has like 6.2 which is one of the bigger pools um in the world so this is i'm going to use this as as a so that and i did the math on that it's probably like 200 i didn't do the math somebody else did the math for me it's probably like around 270 megawatts of energy that's a lot of energy okay guys at home 270 megawatts that's a lot of energy a lot of energy but uh matt and i we basically came to the conclusion that you're we're going to need a coalition of mining farms to sort of like drop guard and say hey let's just get together who cares who the pool operator is let's let's create a joint venture or something

and just get this off the ground do you think something like that is needed to get better hash off the ground do you think better hash is needed to decentralize mining or do you think it could be decentralized in another way no i think better hash is definitely the way forward or a one thing that we need to do um i have not spent any time looking at minor economics um unlike matt who thinks about it a lot so i i don't know five percent seems like a lot of the network um you're saying that anything less than five percent is unviable as a pool uh i don't want to say unviable maybe unprofitable um because i think you said the variance of payouts is a problem up until that point okay um yeah i don't know um five

seems like a lot but maybe maybe next time you have matt on for for the third time here the first three pete will be the first three pete guest yeah um i don't know it's a thorny problem like introducing a new mining protocol because you have a chicken and egg problem that exactly the incumbents don't want to do it because it's a they have a huge sunk cost in the protocol they're already using and then again to make it viable for for newcomers you need to sort of mass a certain amount of hash power it's like yeah yeah how do we make that happen but did you see what bitmain did today i did not bitmain said they're going to start open sourcing the algorithms that run on their miners that they're using in particular okay john doesn't trust him

he's gonna be like i i didn't i don't i don't know what that means i'm afraid so what why do you think mining centralized right now you don't think it's sufficiently um i don't you know i don't think it's sufficiently decentralized and I worry that there are more pressures towards centralization than pressures towards decentralization what do you mean what are what are the pressures towards centralization economies of scale economies of scale yeah yeah and especially around manufacturing that bitmain is dominant and I don't see them well all right let's get cosmic here imagine when you can 3d print your chips what do you think

do you think that'll ever happen imagine if you can you can imagine if you have a fab in your backyard fabricator some people see the bleep we'll be able to 3d print up on there but who prints the printers that's true let's get cosmic that's another chicken

I don't know who knows it's an experiment and we are about nine and a half years into the experiment so let's let's see what happens are you more confident than you were in November before or after 2x stopped that was after that was after that was after we need to X stop I mean August 1st was the user activated soft fork and then it might have

been early mid-December actually because they had like a three month period where they thought

they were going to fork did we talk about the one-off problem I think we

might have talked about the one-off problem on the first I don't think so the one-off

problem the 2x the 2x they they they didn't fork because because of the

one-off problem they were one block away they were they were so close

um did we talk about that wow it's ancient history now right um seems like years ago i i am more confident i was more confident after 2x was abandoned um because i think that was a very strong signal for bitcoin decentralization and the market responded appropriately and went up but now it's gone down so maybe we can't read too much into that well send it back up this week but i'm not gonna get my hopes up could be a bull trap who knows uh but there is it's hard to say it's hard to say there's a lot of etf approval rumors going out there i'm not so confident that an etf is going to get approved this go around but it would be ultra bullish if it did yeah but again like that's not really that's not really what i'm looking at what i'm more worried about is

the hash rate and the hash rate is growing exponentially 42 guys 42 extra hashes like who who would have thought this time last year right seven times where it was and actually let's get into this i don't think i've talked about this with anybody on this podcast yet but did you see there was a mining facility you can see this drop in hash rate here uh oh yeah that was a good one last month yeah uh it actually it caused a difficulty uh a downward difficulty adjustment but apparently like a huge mining farm in china got like blown out by a flood yeah and it it there was like a considerable amount of i mean a noticeable amount of a material amount of hash rate left the network because of this um yeah it went down maybe 10

percent yeah over the short run and then recovered in in fairly short order yeah but if it was a flood and it's kind of difficult to pause out cause for things like this if it was the flood that that flood is now immutably stamped in the blockchain for the rest of history well that sort of drives your point home that we need to further geographically decentralize this stuff because imagine if let's say even 50 of the miners are in china who knows could be that high could be higher uh chinese government one day just shows up to all their doors and unplugs their their machines like it's not i if if it's 50 that's not really a problem we have 20 minute blocks for a period of up to four weeks and then difficulty adjusts down and we we go on yeah and

yeah and then well and then miners and other parts of the world say oh my god difficulty is about to drop down uh let's plug some miners in let's plug those s7s in it's a living work is bitcoin a living organism and are we are we sustaining it do we control bitcoin do we or does it control us good good okay how far how far are we in now because we're 44 minutes every 22 minutes we get it off a cosmic notch yeah good that's one of my i mean ralph c merkle he's he's said that bitcoin is basically a living organism that replicates itself every 10 minutes and spreads itself out across the world geographically it would survive a nuclear attack with the cockroaches per se yeah that's cute

no i i love i love bitcoin cosmic cosmology have you ever heard the phrase that joe rogan uses a lot on his podcast and actually it's more in the stand-up he says we are the sex organs of machines like we just proliferate them and make them like make sure that they persist into the future and keep expanding and growing and it seems that way with bitcoin uh it's it acts a lot like dna and like rna and like replicating itself it replicates itself yeah spreads around the world are we in the matrix maybe is it about like are we in a simulation about to create another simulation with bitcoin being being the catalyst for that it's blockchains all the way down we are in blockchain

it's funny to jump into those topics every once in a while what's like the most cosmic theory that you've heard about Bitcoin like Satoshi is a time traveler we talked about this when we met up let's talk about this because I've been explaining this terribly

that one time we met at the Smith a few months ago and you told me that Bitcoin might be a quantum computer alert system marty come on that was i think three old fashions into it yeah it has to do with the the way satoshi's coins are stored right in in the wallet wallet uh set up yes because it's not paid as sick key hash oh yeah yeah that was fun um because yeah so satoshi's coins us are all stored in pay-to-pubkey and not pay-to-pubkey hash

so if you can solve the discrete log problem of the secp256k1 curve or dlp in general which you could do with a quantum computer then all the satoshi's coins are yours so how did we get it's an ai that wants to incentivize humans to create quantum computers is that it's incentivized to create it or it is an alarm system so we'll know exactly when quantum computing is here okay that's probably it so once Satoshi's coins move

it's like alright quantum computing's here is he the only person with that or entity with that type of wallet on the blockchain right now I don't know but the standard now is pay-to-public-key hash where your outputs are protected

by a hash as well as DLP, which is not as susceptible to quantum computing. There was some... Noparo was talking about or somebody

hopped into my mentions today asking about quantum computing and Schnorr signatures and whether it's quantum resistant, which it isn't, but... It's not, no. Are you worried about quantum computing at all? Nope. Why not?

Because I think there are alternatives. I'm not an expert, so I don't know too much about these things. But there is an interesting thread on BitcoinDev from Tim Ruffing about how you could spend a paid-to-pubkey hash in the event that there's a quantum computer in the event that quantum computers are breaking DLP without revealing your public key before spending so the problem with what happens when quantum computers suddenly come along and start breaking people's public keys into private keys

is as soon as you spend your pay to pubkey hash you reveal your public key so then there's then a race to get into the block so if you're fighting against a quantum computer they they take your spend they know your public key they derive your private key and they double spend you but tim roughing has a scheme where you can spend without revealing your public key and then later reveal your public key it's on bitcoin dev how's that possible uh you should read david harding's gist about how it's possible okay because david harding is huge fan of david harding oh very articulate writer he's he's writing a newsletter for bitcoin optex so it's very well if i'm going to recommend one newsletter outside of my own

bitcoin optex newsletter it's it's it's a pretty strong newsletter i would say uh very succinct too david's doing a very good job david harding what a guy now you'll get it you'll get an update on uh some of the prs that are there recent prs that are out there like uh uh some of the more some of the more popular prs and stuff like that and then a little tidbit on how to become more efficient on the blockchain it's uh it's a beautiful newsletter much needed let me sell it right now to your listeners okay hey guys are you a bitcoin engineer who doesn't have time to keep up with irc and bitcoin dev and the bitcoin repo every week yes okay spend five minutes not even five minutes reading the optech weekly newsletter

and you'll know exactly what's going on in bitcoin whether it's pull requests posts to the mailing list tips for using the blockchain more efficiently

we got it all it's much more succinct than going to bit devs and going through 80 tabs of PRs and

white papers but John how do I subscribe to Bitcoin Optic where do you subscribe thanks Marty you subscribe at bitcoinops.org

go to bitcoinops.org and sign up for our newsletter that's bitcoinops.org newsletter second tab bitcoinops.org slash en slash newsletters slash and it's right there

they've got five out so far there was a lot of people mad at you guys for not making this public before the first four were published people really want this information it's yeah it's hot information it's David Harding's hot take and we we had a few trial runs first with our with the companies we'd spoken to and then we

launched on friday last week so that's when it was all announced yeah and i don't know if i spoke out of place last week i spoke for you guys and said you were a non-profit is that correct uh okay legal disclaimer disclosure disclosure disclaimer disclosure disclosure we are not a not-for-profit legally we are an llc because that was easier for us to set up but we do not exist to make a profit and we expect to end the year with zero in our balance sheet so any any money we get it goes towards our costs and expenses i think you guys should do a bitcoin core devs uh calendar bitcoin core devs to raise some money yeah yeah i'm kidding who'll be december that that would that would be the fodder of so much uh b cash fud uh december it had to be james

o'byrne he sort of looks like a svelte old saint neck if you ask me with the beard he looks like chris kringle and the uh the young uh in the uh what is that i mean the timeless um uh doll movie i think it's like i don't know i forget what it is timeless doll movie it's one where you put one foot in front of the other and soon you'll be walking through the door you don't know that one no and that's marty's singing voice there but james o'brien will be december uh looks the most like chris kringle at a young age let's make him grow the beard out a little bit uh big crossfit guy he's a he's a beefy bitcoin boy he is part of the beefy bitcoin boys club uh i believe it's just me him and mike in space right now from uh bitcoin car talk

When are you going to do a calendar? That's a great question. We're going to talk about it. That'll be brought up at our next meeting, which is in a couple of weeks. We have a Jiggle-O meetup. I kid. We're getting too cosmic here.

We're almost an hour in. Again, I'm selfish when I have you and other core developers in the room. What else? I have a question for you. Hit me. The question that becomes the question. How are you getting on with The Glass Bead Game by Herman Hesse?

Slowly but surely. Yeah? A chapter a month. Okay, that's the right speed. Yeah. You've got to digest it. But it is a fascinating book, just like, because Hesse wrote that in what, the 30s, 40s? Yeah.

And him thinking 200 years into the future and how it's a very cosmic book because you literally you're you're synthesizing data with music and it's uh it's fascinating hermanet like if for you freaks that don't know uh john and i bonded over love for herman hesse my my annual reread is sit hartha by uh herman hesse it's uh if it if you have one annual reread i would recommend it that because it always it always seems to balance you out if you're ever stressed out that's a good book to read it's a good book it's a slim term so you can you can you can write read it in three to four hours yeah but the glass bead game that is not a slim toe it's a magnum opus what is your favorite part about why is that your favorite house you go uh it's his masterpiece

it's well you told me like if you can't get through the intro like the intro people can't the intro is yeah i really liked it though you like the intro yeah it really sets the scene it filters out a lot of readers who probably wouldn't appreciate it and it really it really makes you think about because they talk about music in particular and how it is uh an extension of the mental health of a society would you say maybe it went through like the terrible i mean at the time like he thought the music of the 30s and 40s was bad like imagine if he was hearing the the top 40 charts rap that's out there right now he was he was big into cultural history was tessa he he was uh very interested in looking at society through its culture and music right

a lot of his books incorporate music he's and and education those are his big themes well we're gonna tie this all back to bitcoin because this is like what safedine says a lot is is fiat money has led to fiat food has led to like the fiat culture where you're just like fickle fast let's get money let's get money i mean that's what rap is basically about get money get money get money and we don't have buildings we don't have art we don't have music like we used to there's no more beethoven's there's no more mozarts there's no more michelangelo's there's i would argue there's no more stanley kubrick's and there's no more good movies out there if i see another goddamn good godzilla or iron man movie i think i'm gonna pull my hair out uh and

he honestly believes that like a reversion to sound money would incentivize people to have lower time preference and build better buildings and make better music and focus on making a better culture at the end of the day and he truly believes and i'm starting to come around very much convinced that uh bitcoin as a sound currency could enable a better culture thoughts on that john bunk total bunk bunk why why do you say that i think we live in a golden age of culture and you're applying your survival bias to things that have survived for many hundreds of years because they're good and there were terrible things 500 years ago which didn't survive because they were rubbish and we have good things and we have rubbish things right now and we have more

good things than we ever had before hmm interesting it's bunk it's rubbish sorry safe i don't know though like if you go down so if you go down to i think about architecture in particular okay because it's all cookie cutter is it all most of it is a lot of it is but like is that not if you go down more true now than it was before excuse me is that more true today than it was 50 or 100 years ago i don't know i can't say i wasn't around me neither it doesn't it doesn't uh no it doesn't seem like it seems like everybody like you have this factory mentality applied to like home building in particular so i when i'm envisioning this like i'm envisioning the shore town i grew up in south jersey cape may county and when i was there

when i was born there was like a bunch of shore houses like ranchers like one floor like nothing beautiful nothing extensive and it was like a smaller community 27 years ago uh but since then uh there's been like a huge housing boom on the on the island just like complete shitty houses like shitty plastic siding shitty plastic fences like everyone looks the same you go into one house that you've never been in before you know exactly where the bathroom and all the bedrooms are because it's the same layout everywhere it's not really authentic or or personalized at all i would so yeah that's that's a small data point why do you think we're in a golden age of culture um because tv's really good now oh my gosh say it ain't so the wire

what a show the wire sunday still going strong the wire sunday well we had a little intermission and this sunday will be the end of season one so it's going to be a big you're not we've done season one we're not even we know we we had a few weeks which we missed but do you ever get sick about talking about bitcoin no you know no do you uh no never i'm getting sick of crypto and bitcoin twitter in general it's getting exhausting yeah it's uh it's unhealthy i think it is no twitter's unhealthy yes yeah i have an addiction my name's uh marty bett and i'm addicted to twitter i think we did this skit last time did we yeah but it really is like it's it's a problem like i'm sitting there on the couch with my wife at night i'm just like fucking phone in

my face like scrolling down like it's bad like i need i need somebody to uh i'm gonna pull a miles suitor here somebody to uh take my account change my password for me and not tell me for a couple months miles suda he's uh he's a cash app wahoo wah on uh yeah he's a has he been a guest is he he will be a guest eventually uh by the way cash app uh this is a free ad the best app i've i've seen to date for buying bitcoin and getting it getting it into a wallet as quickly as possible if you're going to use a centralized exchange i think the ux they've set up is is incredible and miles has been a huge part uh on that initiative i believe he's the the product manager of their of their crypto team there at cash and square um and they're doing huge things

for bitcoin too i believe they were they hosted the uh they hosted our first optic workshop so thank you square appreciate it yeah jack jack seems like a a chad maximalist he seems bought into the to the vision he's a maximalist i think i think and it's going to be crazy to see how they integrate uh bitcoin going forward i think uh i think they have some exciting things planned and uh i bet they'll be experimenting with lightning at some point in the future as well i hope so yeah okay i'm not privy to any any of that but neither am i neither am i i would hope so should we should we polish off this rioja let's let's finish this rioja what do we want to what do we want to finish this podcast on john i don't know buddy it's it's always a pleasure

to be to be on tales from the crypt but i don't have any wisdom i just i like i come here for the wine it's getting hot in this room too um you can find out more about john at john f newberry jf newberry excuse me one r jf newberry one r on twitter uh go to bitcoinops.org figure out what they're all about subscribe to their newsletter subscribe to my newsletter and then if you have bitcoin developer friends that are working at companies like gemini oh yeah no that's that's good yeah i should have ended with that thank you muddy um if you work at a bitcoin company and are interested in bitcoin op tech and want to make your on-chain bitcoin operations more efficient go to bitcoinops.org if you're an open source developer and would like to

talk to engineers at bitcoin companies and learn what's going on in the field in real life go to bitcoinops.org is chanko doing any residency residency programs uh in the future we got something cooking but not announced yet not yet you'll be first you'll be the first to know be on the lookout sign up for the newsletter will probably be in there um that's all we got for this week peace and love freaks bye