TFTC: A Bitcoin Podcast - Tales from the Crypt #71: James O'Beirne

Episode Date: May 14, 2019

Join Marty as he sits down with James O'Beirne, Bitcoin Core contributor, to discuss his assumeutxo proposal, debt, short-term v. long-term thinking, and what it's like being a permabear. Checkout the assumeutxo proposal: https://github.com/bitcoin/bitcoin/issues/15605 Follow James on Twitter: https://twitter.com/jamesob Follow Marty on Twitter: https://twitter.com/martybent Shoutout to our sponsor, Cash App. Head over to the App Store or Google Play Store, download cash.app and start #stackingsats today.

This episode of Tales from the Crypt is sponsored by the Cash App. You freaks already know all about them. They're helping us stack stats. They've also been the number one finance app in the App Store for the last two years. They're the first peer-to-peer payments app to allow you freaks to buy Bitcoin. It's the easiest way in the U.S., in my opinion. No more having to wait five days for your ACH transfer to come through. With Cash App, you can buy Bitcoin instantly, and then when you're ready to take full ownership, When you are comfortable taking possession of your UTXOs and custodying your own private keys, just use the Cash App to scan an external wallet's QR code and send your Bitcoin off where you can copy and paste the address into the Cash App and take custody of your own Bitcoin.

Cash App also comes with standard banking features like direct deposits, other things that your bank doesn't offer like the Boost program, the Cash Card, which is customizable and comes with the Boost program. It helps you instantly save any time you use it at Lyft, Whole Foods, Chipotle, Chick-fil-A, Starbucks, Dunkin' Donuts, local coffee shops, which is my favorite. I used it two hours ago down the street and saved a dollar. Download the cash app today from the App Store, Google Play Store, freaks, and keep stacking sats. Tales from the Crypt. What is up, freaks? Welcome back to Tales from the Crypt. It's your boy, Marty Ben here.

On a cold, dreary Friday morning in early May, sitting down with a fellow beefy Bitcoin boy. Very excited for this conversation. Finally have him one-on-one in the studio. I had his brother with him the first time he was in the studio. I want to introduce you freaks again to James O'Byrne. James, welcome back to the pod. What it do, freaks? It's good to be back, Marty.

It's a long time coming. Definitely, definitely. I got to say, it's a little disorienting to be sober on Tales from the Crypt. But it's a pleasure to be back. Yeah, this pod holds a special place in my heart because I guess it's the first Bitcoin-related podcast I ever went on. But I distinctly remember listening to the first episode on the way to work and just being completely floored by your montage. I know I owe you freaks another montage. We need to do a catch-up.

The people demand it, Marty. I know. The thing about the montage is you have to write them out. They're like scripts, so I have to write a script for it. Totally. Did you do any editing of that after the fact? Yeah, I tried to do it in one foul swoop, and you really run out of breath quickly.

So what I found, it took me like 50 takes. What I found is that you have to do it one sentence at a time and then cut it up. Yeah, I was amazed. I was like, yeah, it's a great work of podcasting. Thank you, sir. It's flattering coming from you, a man of your stature. Okay, come on.

uh i promise uh this episode i'm not gonna leave for a pee break in the middle and just leave you on the mic to to riff well we'll see we'll see all right we shall see so sure i'm into it it's been almost like a year since we last talk what the hell's been going on what have you been working we've had for you freaks that don't know james and i've actually been talking for like an hour already we probably should have been recording those conversations but we'll touch on them again but let's just get uh let's just get a check up on james o'byrne how have you been what's been going on yeah so when we last talked um i had just moved to new york i just started at chain code and um for my first few months of chain code i was kind of doing a variety of things

um a lot of it revolved around the bitcoin optech initiative and um uh basically it was uh sort of a process of going around and talking to a bunch of different bitcoin companies and you know seeing um where they were encountering uh scaling problems especially with fees and stuff like that um and that was fun and and um it was definitely instructive in terms of how people are are uh using bitcoin and thinking about scaling um and uh ended up uh organizing a few conferences and um doing a lot of traveling but honestly i'm kind of a hermit by nature and i'm uh i i consider myself much more of an engineer uh than sort of a developer evangelist. And so I was kind of eager to just get back in the woodshed and

start writing code. So right around December, I think I kind of decided to step back from the OpTec stuff for a little while and get back to just writing a lot of Bitcoin core code. And so since then, I've been working on a few different things. But I guess we're going to talk about one of them today, which is, uh, assume UTXO, but, um, yeah, so in general, just doing a lot of programming, trying to survive New York city, um, drinking too much coffee. Um, you know, the usual stuff. Well, um, before we jump into assume UTXO, I just want to thank you and the other people in the Bitcoin Optech team for, for putting that initiative together. It's, uh, it's been incredible. Uh, the, the weekly newsletter, David Harding, shout out to David

doing an incredible job putting that together i'm loving the uh the stack overflow highlights that have been in in recent weeks and uh the beck 32 series that's going on now as well um he's a total gem i mean harding harding is is irreplaceable he's one of those people who um is just a thrill to watch and is is a really kind of unique skill set um you know like being in in the kind of software industry it's it's incredibly rare to meet somebody who is able to articulate the ideas as well as david is as well as um having you know as deep a technical understanding as he does and so he is a complete gem you know the presence of guys like him and uh guys like brian bishop i don't do you know do you know kanger the fastest typer in the world yeah yeah and so not

only is he the fastest typer in the world um perhaps only matched by uh laulu's um speaking speech yeah um he's not only the fastest typer in the world but he has a single markdown file or maybe a just a single flat text file where he records every conversation that he has with everybody what yeah so yeah yeah every single conversation he has goes into this text file um and i i got to imagine he's like paraphrasing and stuff but um yeah he's got a really interesting spiel on it if you ever talk to him what uh what's the gist of the spiel i'm very fascinated about this like i feel like writing uh like basically a journal entry day is hard enough i can't imagine transcribing the conversations i have after the fact yeah i know well i mean

and your your your persistence and dedication with the newsletter constantly amazes me for for equivalent reasons but um i guess his idea is that he wants to basically cross-reference all of the the stuff that he's talked about with other people and and maybe find patterns or um just be able to to go back and reference uh you know things he was thinking about i don't want to speak for him you know you should you should definitely maybe have him on the pod sometime but definitely brian next time you're in new york we need to sit down i need to hear about this uh this practice of transcribing your your conversations after the fact it's incredible like somebody who has six concussions that's another reason why i write like this has to

be great for your memory as well are all those lacrosse related no only one was lacrosse related believe it or not i was skateboarding snowboarding fell off a top bunk uh basketball a litany of of causes man really it really threw my body around my younger and my youth making good use of it yeah i didn't know you skateboarded i used to skateboard a lot yeah i was a big skater for a while especially when we lived in charleston um actually getting back into it more recently we should go out and skateboard because i would like to and when i was in california actually i picked it back up but the problem is that you would go to the skateboard park and you'd be surrounded by um these like you know 12 year olds all of whom are better than you at skateboarding

yeah we don't go to skate parks anymore we we just we ride we hop up curbs we do uh we do street stuff cool we'll find like a quarter pipe in a driveway that'd be that'd be ideal as well but yes going i went to a skate park here in brooklyn i believe last time i was like a year ago and there's like a lot of pro skaters here in brooklyn so you go i haven't skied i'm like pushing 30 almost having skated in like a decade and not even a decade i'm skating like seven years trying to get on get back into the skateboard i was like nope man this isn't gonna work and i was like i'm gonna go try to do uh 180 ollies on the basketball that is exactly what happened to me is i was i was i was trying to learn to bowl skate and i'd showed up early in

the morning to avoid you know the uh the utter disgrace brought upon me by the 12 year olds uh and i and i completely ate shit in the bowl and it was the first time in a long time i felt like sheer blunt pain uh feels good though sometimes it does you know there's something cathartic about it for sure but i was like i'm kind of an old guy now i can't i can't be doing this yeah i've got um i get a nephew who's getting into it i've shown thrasher videos on instagram and he like loves them we call us skateboarder savages and that's probably what'll push me to get back into skateboarding at some point let's do it buddy let's do it let's have a skate date i'd be in i'd be down i gotta get a deck um no it's i mean skateboarding is bring it back to uh

bring it back to bitcoin in some way skateboarding is like uh something like very ingrained with trial and error like fail try a trick as many times you can fail seems a lot like the bitcoin core process as well um yeah yeah i i've never yeah i've never kind of thought about it that way but definitely um trying to get a pr merged is a lot like trying to grind down the handrail and like you know just wrecking your body in the process we can always bring it back to bitcoin on this podcast absolutely yeah i think there's some some intellectual equivalence there but um yeah i i mean i bring up brian and and uh and david because i think the the presence of those two guys in bitcoin it just tells me that something really special is going on because

um you just you you you can't find these sort of people in any uh large supply all right that's something uh as you meet more bitcoiners and this is we had uh ruben waterman who started this app called bitter based out of europe it's basically a really cool service non-custodial exchange it allows you to buy bitcoin basically you set up a banking um a banking connection with bitter with ruben and you basically send them money a set amount of money and you send them an address to send bitcoin to uh and you basically send money to his exchange he sends you bitcoin within the hour and it's never held on the exchange or held in ruben's custody he's just buying facilitating the trade which is really cool app but this is somebody i didn't even know about bitter until

two weeks ago didn't even know about ruben until two weeks ago he reached out i was like i'm gonna in the states would love to come talk about bitter and met him last night for the first time and it was just easy to like there was already like a bootstrapped understanding of of that we're both in the bitcoin and we're sort of into this world and have this mutual uh sort of mission that we're on it was just like really easy to not sound cheesy but like to vibe with him it was like and he's somebody who's built like an incredible service and just doing it purely out of this is going to make the world better and that's a lot of the bitcoiners that you meet don't want to get cheesy again but it's the feeling you get like you're just describing it about david and and

brian who are who've done incredible things and i've had the pleasure of meeting actually i haven't had the pleasure i've had the pleasure of watching brian type at bitcoin paul to connie badger did not want to uh did not want to uh interrupt him but that type of dedication to just transcribing presentations so that people on the internet can can get better information is is why are people doing this why are people just dedicated to bitcoin is something i i often ask yeah and i mean that that kind of activity that transcription really lends this like historical weight to what's going on it makes it feel like oh man maybe people are later going to kind of read back on this stuff and aside from it being just a huge resource if you want to google you

you know, uh, you tree XO or, you know, whatever your, your, your topic is that you want to find more, more out about. So it's a huge service Brian does, but yeah, in terms of the OpTec stuff, the other unsung hero there is, uh, Steve Lee. Oh yeah. Moneyball baby. Moneyball. Yeah. He's, um, he is just a gem of a man. He's the salt of the earth. Um, and he's, I mean, uh, he, he was, uh, sort of the backbone operationally of OpTec for a long time. Um, really just like, uh, I've never seen people use a spreadsheet like steve can and um he he he did a ton of work there um but yeah the the whole team uh was great i i really didn't do that much i mean i was on hand for uh i don't know some engineering uh spieling and uh did some minor organization but i was really

eager to just get back to coding so let's talk about the coding let's talk about assume utxo um i'm not going to try and describe it because you're here and you know how to describe this much better than me i guess let's start what uh what made you want to attack this problem how are you attacking it and what is the feedback up to this point because you you sent a message to the mailing list what march 15th so it's been out there for a month and a half now yep yep yeah that sounds right um yeah like so many things in bitcoin it's really not a new idea um people have been talking about it for a while and in fact uh i think i had first heard about it um in the winter of um 2017 um no maybe 2018 in any case um uh yeah it's kind of

funny bitcoin whenever you think you have a new idea um just basically search through the mailing list and you'll find you know like peter todd was talking about it three years ago or something like that but but in any case um uh i had sort of heard about this idea of um well let me back up let me let me start talking about for a few months um i was kind of doing some performance benchmarking on bitcoin to try and figure out how we could get some efficiency gains um during initial block download which as the uh freaks out there may know is is probably the most onerous part of uh operating a bitcoin node in terms of just getting synced with the network um and validating all the historical blocks and um getting brought up to speed you know that can take um i think basically

the floor is like that can take uh four hours um but uh the ceiling is is pretty much unbounded based on your hardware your bandwidth um and typically it takes you know a few days maybe on consumer hardware and a moderate internet connection so um so that's that's not great and that's a a pretty big impediment to um actually running a full node so for a while i was i was kind of like well maybe you know there you know we could we could flush the caches differently or you know we could change some data structure around so that ibd i don't know you know we cut it down by by 10 20 percent um so i spent a lot of time doing some benchmarking and um had a few ideas but i really thought to myself like these are just marginal improvements you know 10 20

percent speed up would be nice but it's it's not really going to fundamentally um change participation in uh in running a full node so um you know we should go back to the drawing board and really figure out some kind of fundamental improvement that we can make so um yeah one of the Bitcoin Core meetings, the one we had in New York, I think in early 2018, this idea of assume UTXO had been mentioned. And the basic idea is that in Bitcoin, when you do the initial block download, you're downloading these raw block files in the blockchain, and you're kind of replaying them um block by block to generate a view of the um coins that have not yet been spent and this is this is basically how you know um this it's like a quick reference um for whether

or not a coin is spendable um and um so the idea of assume utxo is well if if we know at a certain height what that set looks like um then maybe we can just forward that to a node that's trying to bootstrap um and then kind of um uh assume that it's correct you know um with with uh some degree of certainty and then back validate it after a while um and that would allow someone to get a full node up and running um a heck of a lot more quickly than than doing a full initial block download so the obvious objection to this i i mean i guess i should pause and then let you do the obvious objection but it's like yeah like you know uh checkpoint right right like you you i mean it's not intuitive that you can get something for nothing so uh so what's the the trade that

we're making here um and i guess to to articulate that trade um we should talk about an existing feature of uh bitcoin which is called assume valid um and so uh with assume valid i think that the thought process was pretty similar here like we need a a substantial speed up to initial block download um and so uh what the developers did i think this um this came around in oh i won't even try and cite a release number i think it was 0.15 but i'm not sure um so the idea of assume valid is that um we specify a certain block hash at a certain height in the code that's um that indicates uh that we can assume that for any block that we're validating before that block in the chain that signatures are correct and so we just don't check the signatures and um the idea

here is you know when i when i first heard about this i was kind of unnerved i was like you know that sounds really fishy. That sounds like something you'd see in Ethereum. But actually, if you stop and think about it for a second, it kind of makes sense because Bitcoin Core is a really complicated piece of software and almost nobody understands the full set of implications of the consensus rule set

and how it's implemented in C++. So it's actually a really difficult piece of software to review in its entirety. And what something like assume valid allows you to do is it allows you to introduce an optimization like, you know, that drastically affects the performance of an initial block download process. and it and it does so in a way that makes it really easy for for a pseudo-technical user to kind of review that it's it's correct because what you can do is you can take uh you know an existing um bitcoin d instance before there was assumed valid and you can say okay you're claiming that basically the software has validated this block well i'm gonna i'm gonna double check that

and so i'm gonna run some rpc commands um and check that the hashes match what you're claiming is the block that my software previously validated. And so almost anybody can do that. And as a result, that security model ends up being a lot easier for a non-developer or a non-core developer even to verify. Does that make any sense? Yeah, it makes sense to me. I can't speak for the freaks out there.

but yeah yeah try and try and channel the freak energy and you know uh definitely interject because i feel like i just went on a huge monologue so how how do you come to agree on what hash gets assumed valid and stuff like that i guess that's probably where the contention comes in is who is uh deciding where to uh and where to place these assumed valid hashes how are they determined who's determining them is it done in a redundant way is it done in a decentralized way is how much trust is involved is probably the main crux of the issue yeah no that is the crux um and i think it's really really important to understand because almost everybody can actually participate in that process um and uh obviously the more people who do the better um so assume valid uh and assume

UTXO whenever it comes around, if it comes around, are established through the pull request process on the Bitcoin Core GitHub repository. And this is the way that any other software change to Bitcoin Core is made. But Assume Valid is just, you know, it's another piece of code, albeit it's a lot simpler. And it's typically updated, you know, a few weeks or months before release. But the idea is that somebody, you know, really anybody can propose an assumed valid update. And then the way that that pull request is reviewed is people come online and they say, yes, according to my instance of Bitcoin, the block hash at this height is the hash that you gave or it isn't the hash that you gave. What's going on here? and so because anybody kind of running a node at that point can just issue a few rpc commands they

can verify that that that assumed valid values um uh actually the right one and how far back in the chain are you looking to go with these typically um i mean you you want them to be buried um pretty significantly to avoid any um you know reorg that would happen in the wild but to be honest with you um that doesn't have to be very deep i think you know typically you might expect a few weeks worth of blocks um i think the thinking being that if you have a reorg's worth of a few weeks then i mean confidence in the system is is probably shot anyway so what's the point but i think by release time it it like i think in this case we had the last assumed valid update at least a month before this most recent release was cut.

This is something that's already implemented and it's already in the wild. Yeah, yeah, yeah. Everybody's node uses assume valid by default. So this security model is already there. But I think it's really worth emphasizing. It's a really kind of profound point in my mind that this way of doing optimizations is good

because if, you know, another route that we could go is like, well, I shouldn't say another route, but this is a change to the code that's easy for anybody to review. Whereas if you're making a really sophisticated change to Bitcoin, there are only a few people who can legitimately review that. And it would be really easy to, you know, or relatively easy compared to something like a constant value to sneak a kind of backdoor into Bitcoin.

And so the more of these changes that you can make kind of simpler and reviewer by a larger set of people, the better. So assume valid and ultimately assume UTXO, I think, are kind of good in that sense. yeah you touched on um comparing comparing this to ethereum earlier i guess uh a lot of people like to compare this to get fast sync or something how is this different to something like that yeah so i'm not very familiar with get fast sync but i think get fast sync does um an analogous thing where they basically uh retrieve um like a snapshot of the state tree or you know whatever it is in ethereum um but crucially they they don't back validate that snapshot and i'm actually um unfamiliar with with who they retrieve it from and how they retrieve it from and we can get into

um how we're how we're planning to do that in assume utxo because it's kind of interesting and i think has some pretty good security properties um but uh fundamentally they they never actually go go through and replay all of the blocks to to validate that the snapshot that they received um is legitimate and we actually do that in the assume utxo proposal so the way that works is that um you load one of these utxo snapshots and um then you'll have a little bit of thinking to do just to get to the network tip because there might be you know a few uh weeks or months um since uh the snapshot was actually cut um so you have a little bit of syncing to do but hopefully that shouldn't take you know more than an hour um but then after that syncing

completes you know you you have an operational wallet um and for for many purposes it's it's just sort of a regular bitcoin node that's fully synced and fully validating but then in the background um we're simultaneously doing the initial block download um for the purposes of getting to the base of where the snapshot started um just to check that that everything is good and so in some ways this is actually an improvement on assume valid because we could disable assume valid while we're doing this initial block download in the background um and actually verify all the signatures if if you wanted to i don't i'm not really sure if there's a strong argument for doing that um but you could and so i guess with adversarial thinking here

where in this assume utxo model in my mind like is it most vulnerable like right after the utxo set or snapshot is cut and then so basically the the attack vector here is assumed attack vector vector is if you're using these these uh assume utxo and you get the ibd uh done quickly and you wait for the chain to validate in the background is that is before the chain gets validated transactions that you make based off those snapshots have the potential to be fed bad block headers or something correct yep yep so the the the practical attack here is if you were to download a bitcoin version that was say compiled by someone else or you know from um from some source that isn't bitcoin.org and someone had hard-coded in um a specially constructed assume

utxo hash that pointed to um a utxo snapshot that they had specifically crafted to say contain you know, a coin that wasn't theirs. Um, so, uh, that would, uh, that would be the only way that you could really attack this. Um, and recall that, you know, if, if you, if you download an untrusted version of Bitcoin that you either haven't compiled yourself or, um, you know, that doesn't have a Gideon signatures on it, then really any kind of change could be made. So, um, so basically the the threat model there is is pretty much equivalent to what we have today and so there's no trade-off seems to be some added benefits in sped up IBD like what how long do you think do you do you think as the person who has uh has proposed this proposal that it has any chance of

getting merged in and if so what will the process look like yeah I think um I think of the long-time contributors that i've talked to there's uh there's been pretty good reception so far and i think the way we're going to approach this is is to do it in slow phases um so to start off with there's there's a good deal of refactoring work that needs to be done for this um in order to support the the background validation stuff and it's refactoring work that honestly we should probably do anyway because it makes the code more testable a little bit more you know modularized Um, so, um, I've already done a good deal of that. And, um, I think we're going to start to, I'm going to start to propose that stuff for merge, um, which again are kind of good changes

in themselves. Um, and so, um, the first phase of assume UTXO, if, if it's kind of adopted is we're going to introduce use of the UTXO snapshots into the RPC interface. So we're not going to transmit snapshots over the network we're not going to do anything different by default but if you're a sort of sophisticated user and you want to try out the snapshot stuff then you have the rpc interface to do so and we're going to hard code the assume etxo valid in the code and unlike assume valid we're not going to allow you to to specify that via command line argument because for the reason I just kind of described earlier in terms of the attack vector,

we really don't want people to sort of play around with this assumed ETXO value. Yeah. So I guess another contention that Bitcoiners will have too is that they probably don't want this by default because I believe, I'm not going to name names, but some people have said that this may lead to some complacency in people just depending on this IBD.

in mass but i think if you're downloading a chain validating the chain in the background does that make that that argument sort of void yeah it does i to to a large extent um but i think so that's like so the rpc thing is is phase one um and that's going to allow us to really think about this stuff and and and give it a lot of time um not only to to sort of uh be used to some extent in the wild but you know for the development community to really stew on it um and then uh afterwards uh the the next phase of this thing would be actually having every node um well maybe not every node maybe it would be optional but having nodes generate snapshots and then transmit them over the peer-to-peer network so that if you're a node and you want

to come online you would connect to the peer-to-peer network you would get your chain of of headers. And then you would request the most recent snapshot from your peers. And we've come up with a way that we could do this, which is kind of neat, where basically we would split these snapshots into very fine chunks. And we would use something called erasure coding to expand out the snapshots into a slightly larger piece of data that could split into chunks but that would allow us to basically um retrieve the snapshots from all of your different peers um kind of in in a sort of like bit torrent-esque way where you're reconstructing a single snapshot from a bunch of different pieces of data that you get from all

your all your peers um and so that that you know should should not only kind of take some burden off of the network but you know give you assurance that um you're not relying on a single peer or you can't be dosed by a single peer trying to get a snapshot it's possible to sybil this process sure but only so far as like you know you could sybil a regular bitcoin node you know um you you could easily if you wanted to to sybil a a node coming online um today uh you could as long as you feed it a headers chain that contains all the existing checkpoints, which are relatively low height.

So there's really no change from that standpoint. I'm just trying to think through adversarially here. Why do you think this is scary for a lot of people? It probably feels like something for nothing. It probably feels like, why haven't we done this before? Ethereum's doing this. um i just i'm just having flashbacks to andres brecken freaking out the bitcoin cash team when

they well this isn't a checkpoint but like i think this is what people think of as like bitcoin cash implementing their checkpoint like near the chain tip and yeah being like we should not be doing anything like that or something yeah and that is truly crazy because that let's explain why that's crazy and how this is different then yeah so if if if you wanted to create a hard fork in a chain that was doing checkpointing near the tip um then basically you could just do a reorg that's longer than the checkpointing and and uh and really wreak some havoc there um so like we're not you know i think that's that's very drastic i think it's worth noting that something like assume etxo and assume valid they are not restricting other chains from being valid they

They're just saying, hey, you know, in this software project, we previously validated this chain. If you want to come up with another, like, high work chain that, you know, that at least includes the checkpoints, we're not going to preclude that on the basis of assume valid or assume UTXO. We're just saying kind of like as a software project, this is the chain that we've previously validated. um so it's it's unlike checkpointing near the tip which really dictates like okay there is a single chain that that we all trust um and this is it and anything else is invalid which is nuts no so i think it's important to draw distinctions between that that way of uh that way of i don't want to say checkpointing like that way of doing things versus

in assume utxo model um that's what frees it because there's a lot of nuances stuff right and that's uh yeah and as you were describing earlier bitcoin core repository is a code base that no one man can probably fully understand and um it's exceedingly complex it's it is it's it's kind of funny because like the if you think about it from a software perspective like the actual interface of what a bitcoin node does is is pretty simple you know it kind of like takes in these blocks and and maybe emit some transactions and access relay for transactions like conceptually the interface is pretty simple and one of the first like bitcoin related things that i did was kind of replicate the bitcoin interface in in python in a project called

tiny chain just kind of for my own education so it's a pretty simple thing but uh the defense mechanisms that bitcoin has evolved over the years and like sort of the optimizations that have been necessarily adopted make it like a toweringly complex piece of software. And like the I'm going to just interject here. Do you think it's

the social layer making it more complex or is it the technical interoperability of the code base as well? It's a combination of a lot of things. It's unlike other software projects in that typically when you join a software project

one great way to learn the code base is to make a bunch of refactoring changes and make make everything um you know make a bunch of sort of sort of cosmetic trivial changes um that that are you know good improvements um but they're not like totally critical um in bitcoin that just doesn't happen because every single change is is needs to be extremely scrutinized and changing wide swaths of code for um reasons of you know style or cosmetics just isn't defensible and so as a result you know the the um changes that are made to bitcoin are extremely conservative and satoshi uh you know genius that he was uh you know probably didn't realize like the magnitude of what he was writing at the time and so you know i mean didn't structure the software in the

best way so it's you know bit by bit we're kind of making um these uh architectural improvements to bitcoin but there are still a lot of them to be made and they're kind of hard to make because the the review process is so onerous it was uh i believe francis paulette uh shared the original source code of bitcoin uh on twitter i believe a few months ago and he found it on bitcoin talk a bitcoin talk thread from like 2013 but somebody had access and reviewed like the bitcoin source court well that source code before the genesis block was launched and shared it on bitcoin talk.org and you go through and you see like satoshi trying to describe everything you could tell he was just like i think this will work i think this will work and it seems like

we're uh we're uh we're sort of i mean obviously it does work it's 10 years in production at this point but still making it as streamlined and and like you said re-architecting it uh is a big is a big task that we've been burdened with yeah yeah yeah and it's i mean it's it's it's a piece of software that's totally the product of like very adversarial evolution it is a battle-hardened piece of software like it's it's it is a big bitcoin core is very reliable but it's very ugly you know it's like it's like uh a sort of like frankenstein raised by wolves um and i frankenstein raised by wolves i love that yeah i have uh a huge amount of respect for it um because it it humbles you you know when you when you start to work on it um

because your like petty stylistic changes uh just are not what it needs you know um so it's a approaching it as a software engineer is is a really interesting experience because it does tend to violate a lot of your intuition about how software projects work have you ever been close to rage quitting um like micro rage quits i've definitely micro rage quit on some prs before um i actually won one change that was just merged um was adding uh thread names to deadlock uh debugging tools and um logging and when i initially proposed that like i don't know i spent like two three months in review just kind of like addressing feedback and i was like you know what screw it i this this is an essential like i've got other stuff to do but but i kept

needing it for some of this benchmarking stuff and and some some parallels or some concurrency debugging stuff so I finally brought it back but it's yeah it's it I guess the whole thing requires patience but it's kind of easy when you realize how important it is that that the process be done right you know yeah we were uh we met at the coffee shop earlier this morning or chit-chat about um russianosky and uh his uh his stoicness and and the refactor hell that he got stuck in for a couple years or is still stuck in right russ is a personal hero of mine i i love russ like he he's just one of the best guys ever i mean talk about you know um gems of bitcoin uh russ is one of them um this is this is a guy who um

you know worked on google search he um implemented our values in c++ which is a huge deal um and yet he like he he has no qualms he happily does grunt work a bunch of tedious like grindy near janitorial like maintenance of his of his pull requests um for years on end with with no light at the end of the tunnel and he just sits there and grinds and and he is like he's he's just a champion i i i uh walking into work every day and getting to see a guy like russ is just like a delight so we've talked about it before on this podcast with carl don when he was here a couple months ago but i think it's uh advantageous for us to sort of re-describe what roy is doing not roy russ is doing um and russ is trying to basically separate the the wall of

gooey from the node correct yeah yeah yeah so like i was saying you know um satoshi's design of the code was extremely monolithic it's like kind of a big ball of mud every everything's kind of mixed together uh and and we've made some pretty big strides even since then like um blue mat separating out main.cpp into validation and that processing was a big step in the right direction russ is is doing a kind of um fundamental change in that spirit um and he's trying to actually separate bitcoin out into separate processes so that you have sort of a consensus layer um you know which is bitcoin as we know it and that runs in one process and then you have things like the wallet and the user interface running in separate processes so if we get there um that's really

going to be great for the project because not only will it allow the user interface and the wallet to to iterate faster than uh the the consensus layer but it'll it'll give us confidence that you know when we're changing something in one part of the code it's not going to spill over and affect the really important stuff that the node's doing. So that's critical work. And I think he filed the first PR for that in late 2016 or early 2017. And he's just been carving off pieces of it

and getting it merged since then. And he does so without ever complaining and reviewing everybody else's code all the while. So Russ is really the guy that you want leading a change like that um and he's really proven himself i think to the bitcoin community and um and i i couldn't be happier that uh he's involved in the project and and uh working on that in particular the epitome of a servant leader if you will russ is a philosopher king yeah he's he's he's great man uh uh he's totally gonna hate that i'm blowing him up on this podcast

but uh that's okay russ can blow yourself up on this podcast official invite sent over the airwaves um and i'll reach out in person of course but uh that's fascinating what's it like working at shanko labs there's a there's a bunch of personalities in there there are a bunch of personalities in there uh everybody's a personality there um it's great i love it it it really um it it's the only reason i tolerate new york city which i sort of love hate uh we all love hate the city yeah it's very it's very uh schizophrenic um it was a really hard transition for me because um before i worked on bitcoin um i worked uh for a time at uh nist the national institute of standards and technology um coming out of school

when I kind of thought I was going to go into applied math or, you know, maybe academia. Ew. Ew. Yeah, dude, go back and tell, like, 2008 James, ew, because, I mean, I guess I didn't get too deep into it, but I quickly found out that was not where I wanted to be. And so I had this job at NIST working with some material scientists

on a partial differential equation solver package, which sounds really complex, but really it's a lot of matrix algebra. So I was working on this thing, and it was a great project. I really love the people that I work with. John Geyer, the guy who runs this thing, Phi Pi, is a personal hero of mine.

So that was really cool, but it was a very research-based environment. It was very freeform, and it was kind of hard for me to just sort of work in a vacuum without i really missed having like demands from customers because that provides a sort of clarity when you're working you're like oh these people need this thing um i'll do it and then you know get a pat on the back or whatever make some people happy when you're doing research it's it's way less structured um and so coming out of that i was

like all right i'm never i'm never going to do a phd i'm never gonna gonna gonna sort of be in a research position um but uh little did i know that you know someday i'd end up at chain code and and chain code's very researchy and it's very self-directed and um for me that was that was a pretty jarring adjustment because i was kind of used to acting um oftentimes very tactically and then and then maybe once in a while coming up with something very strategic to do um so i had i had to adjust to that and it was really uh it was hard especially when you're surrounded by incredibly brilliant people you know um uh but uh but it's awesome i i mean i don't know i really love bitcoin and um and i really want the project to succeed and so it's kind of easy to come up with

stuff to do um no yeah it's incredible it's incredible what alex and suhas are doing by just basically bankrolling all this too so i guess on the subject of chain code and let's quote unquote dev incentives um what do you think of the state of bitcoin if we need people like alex and suhas to sort of bankroll you guys to write code that's a really hard question um i i guess though i'm kind of uh encouraged by the fact that it seems um to be pretty finely dispersed across a lot of companies and patrons at this point um square crypto jumping into the fray yeah yeah square crypto um you know places like fidelity hiring up a lot of good engineers almost every company that we talked to um uh during the bitcoin ops uh stuff uh would say like yeah if if you know

of a core developer just throw them over to us like we want to hire somebody um so i think there's a ton of interest and there's a ton of recognition in bitcoin that without the open source the open source component is everything and bitcoin doesn't exist without a robust community of you know serious engineers working on this stuff so i think because that's that's really widely acknowledged um uh i'm pretty hopeful and i think you know if it wasn't an out if it wasn't alex and suhas i mean i'm sure glad it's them but um if it wasn't them you know there there would be other people why glad it's them i mean i i don't want to gush too much on my uh on my um you know my bitcoin cohort on this podcast i feel like this is me just dispense especially you know when it's

like when it's my bosses but um i really i love those guys they're they they just have their heads on so straight and um it's really kind of rare that you find somebody in life or at least it's rare for me um where i find someone who's like kind of at the next stage of life you know these guys like um they're they have kids and stuff and um actually i don't know i don't want to dox them too hard but the point is that i really i really look up to them and and they're just um they're doing really really cool things and they have done really cool things and uh they're inspiring to work with because they they're they're kind of intelligence that um that uh uh you know a lot of the chain code guys are just the level of smart where it's almost um

it's almost unbelievable and i i think i get by a lot on kind of hard work and persistence and i mean i'm a decently smart guy but like these guys are just a completely another don't undersell yourself james anyway they're great um i really like working for them because i i look up to them in a lot of ways No, yeah, it's for the pleasure of meeting Alex and having lunch at Chaincode, I believe, last summer. It was an incredible experience getting to see his fuck-the-man mentality.

It was incredible to come out of this now. That is our unofficial tagline. We can't circulate it too widely. I want to make some shirts that sort of embed that somehow in a subtle way, but yeah, that's our tagline. No, but that's a topic conversation that comes out like Blockstream, Build-A-Borg, Chaincode, trying to hire these people to implement code

to overtake Bitcoin or whatever. There's those conspiracy theories out there where it's like, come on, people. And I think Square Crypto entering the fray, like you were describing, like Fidelity asking for developers going around Bitcoin Optech, other companies asking for developers.

I think, again, there's more companies joining the fray and it took companies like Blockstream and Chaincode to sort of hold the torch and prove the way for others to get comfortable with this type of model. so like there's obviously skepticism is inherent in the bitcoin community and some people have skepticism towards these companies it's like this is what you want like and i think i've been saying this a lot more recently i think bitcoin hitting a decade of production 10 years is psychologically big for like the squares of the world the incumbents of the world to be like all right

this is worth us investing in developers and stuff so i'm happy that chain could exist to sort of prove the way totally yeah and i mean as as the system represents more value more and more people are going to want engineering stakeholders involved you know um and so uh is this pure is this pure enough i mean yeah so people are going to want technical people to show up on their behalf and it's going to happen and the money's going to come in and i mean this thing this thing yeah will be um uh irrevocably kind of decentralized i hate that word but no but it's every pr no matter if it's coming from chain code or blockchain or square crypto has to go through a review process it's not like yeah they just get the push shit through

yeah yeah definitely definitely but to so to bring it back to assume utxo a little bit a little bit And talking about kind of centralization a little bit, a little bit, I think one of the really cool use cases for Assume UTXO is for a sort of point of sale commercial type thing where, so one road that we're kind of going down here is the sort of CASA or BTC pay server fast sync approach, where basically somebody is just like preloading a node with their data dir. Yeah, I forgot to bring that up earlier. That's what Nicholas Drorier hopped in the comments of your email chain highlighting BTC Pay Server solution. Yeah, yeah. And I think that's a really dangerous road to go down.

Why is this? Well, if you buy your Kasa node or you download your BTC Pay Server instance and you accept from them a data directory and code that you're taking for granted, you're placing complete trust in them. And we don't want that, right? Obviously, you have to trust the Bitcoin Core repository because that's the code that you're running.

But you really want to try and avoid trusting anybody else. And by trust Bitcoin Core, I mean you can verify the signatures or the code or whatever. But as soon as you start to have these different points, especially if they're not public companies, in the case of Casa, and you're just kind of taking a data dir from them and a Bitcoin D executable,

that's really dangerous. Why is it more dangerous the fact that they're not a public company? Oh, just if you can't see the code. With BTC Pay server, you might be able to see the scripts that they're using to generate the data or you might be able to kind of validate signatures

on the on the data directory but oh i tell you meant like publicly traded companies need to need to share more data or something oh no no no no um talk about like open source projects yeah yeah yeah just being able to look at the code and and you know verifying for yourself what's going on if you want to but so the the issue with the btc pay server fast sync stuff is that basically it's like a zip file signed by Nicholas Dorier and co that you just kind of trust. And even to trust them,

you then have to validate signatures on that data, which users are notorious for not doing. I don't think I've ever validated a signature. It's honestly hard. Like, every time I have to do it, I'm like, oh, God. because you got to import the gpg key and then you might have to like manually adjust the trust i mean it's it's laughably hard to do i don't i don't know why it has to be that i mean i don't know but but the point is that that we we really want to avoid a situation like that so we we want

to build something in to bitcoin that that is safe um and i think assume utxo can do that and so i think it becomes a really compelling option going forward do you think companies like btc pay server and casa would be more open to this than the solutions that they've had to create absolutely absolutely because it's easier for them i mean they don't have to then maintain some hacky script that goes through and sanitizes the data der and you know make sure if if it's just configuration options they pass into bitcoin that's a heck of a lot easier on their end for sure imagine a lot less stress as well but yeah you can imagine like a small business owner saying okay you know i want to accept bitcoin payments or oh i gotta set up my bitcoin node so you know they buy a piece of

hardware and you know it does the utxo snapshot initialization and then over the course of the next week or whatever they do a full validation right they can then fully validate that they they they have a block and and then you you know you have um another full node on the network that's serving historical blocks and um i think that could be a really good thing do you think people who idb with assume utxo become targets the period between validation uh again it's that's contingent i mean it's a good question because you know we gotta think adversarially about the stuff but it's it's really contingent on getting the user to accept

a bad assume UTXO value, which you just can't do unless you recompile Bitcoin. You apply someone else's change to your Bitcoin source code, then you recompile, then you run that. As soon as someone's asking you

to change source code, that should be a big red flag because they could be asking you to do anything. So I don't see any reason why assume UTXO users would be targeted any more than anybody else.

I'm just trying to think of how you could prove how hard this is. Could you prove how hard this is by trying to attack it? I think in many ways it's like trying to attack assume valid right now. In fact, assume valid is potentially easier to attack because there's that command line flag there where you can say, oh, just start up your Bitcoin D node with these flags and you sneak an assume valid value in there. um but then even then you know you need to basically sybil the node so that it doesn't

retrieve the most work headers chain from the network and then feed it a chain of blocks that includes the checkpoints and your bad block which you know requires a lot of work so um yeah it's really there's really not uh an attack when i started this i mean i almost started this as an investigation um it was half an excuse for me to make a really substantial change to bitcoin because that's really the only way i learned the innards of something i i think some people can just like stare at a piece of software for a long time and understand i have to make changes and so um i started this as a way to do that as well as a way to investigate this idea that other people had you know other other sort of gray beards in the project had had uh talked favorably about

checking out and so gray beards the gray beards of bitcoin they're real man um that's i again like i don't want to i don't need to shill bitcoin to um or shill bitcoin development culture to listeners of tales from the crypt i'm sure but maybe it helps to hear that um i've had a few jobs in the software industry and and a few jobs at some some places i'm really proud to have worked at. Um, but nowhere else do you find guys like Greg Maxwell who are in there, you know, who had decades of experience doing this stuff, um, with just a sort of intrinsic, um, uh, aptitude for designing security critical systems. I've never, I've never encountered a group of engineers more capable and competent in my life um and it's that's that's i mean that's a lot of what

drew me to bitcoin initially is i saw the quality of people working on it and i was just like this is completely unparalleled um as far as i'm aware yeah that's what makes me again going back to skepticism very skeptical of any uh bitcoin usurper coming out of the blue and uh and thinking as adversarially as the bitcoin core team has up to this point and and sort of replicating the carefulness with which the project is approached. Totally. You know, I know that Bitcoin allegedly has, like,

the seven magic network effects or whatever that Trace Mayer talks about, which, you know, I like hearing, but, you know, I don't know anything about markets. I don't know anything about... Oh, we're going to get into your market thoughts in a second here. God, I hope for the listeners' sake that we don't.

but I do know about software engineering and that is really the network effect in Bitcoin that I watch and it would be evident to me if there was another project that came along that really had some kind of critical mass that kind of made me think, okay, well, there's a real kind of challenge here

but there really, in my mind, just is not. what's uh what's a repository looking like these days how many people are joining in the uh the review um is there a lot more contributors i saw the contributor list that went out with the version 0.18 release seemed like there was more than 100 names on it yeah it's it's it's sizable i think there are some really promising new people coming on board um there's there's a french guy named Antoine Riau who had been contributing to Bitcoin Rust for a while

and he's kind of getting into the mix but again I mean there's always a scarcity of really really qualified people who can do very effective review the most that we can hope for at this point is that we're starting to seed those kind of people and so like I'm

kind of on my journey getting to that place with certain parts of the code but I think you know there's there's increasing interest there are even more people coming along you do you do find people who come along and

start you know everybody starts with sort of maybe superficial observations or changes or reviews to Bitcoin and that's okay you just got you got to get familiar somehow so I think we've definitely seen an uptick in that regard but gray beards are slow to emerge

and I think it would be remiss of us if we did not mention the fact that John Norbury for the next couple of weeks is running a PR review club, I believe Wednesdays for the next few weeks. Oh yeah. An IRC. That's right. Yeah.

Yeah. You freaks out there who want to get involved in the review process, go check that out. I kind of hope he starts to do like a, a video call style thing. Cause I just intuitively to me, that seems a little bit more high bandwidth than, than doing IRC,

but it seems like it's turning. It's like the Ethereum calls, which, which are, I guess that's a good point. yeah they never seem like organized to me but review is review is just very nuanced and very hard and i i imagine he's going to be doing a lot of typing so yeah i was gonna say how do you do like a review club in irc like typing all that out it sounds terrible it's yeah it's i think it's

gonna be terrible it's it's a significant significant act of charity on john's part so i i hope it's successful but damn man i would i would fire up a maybe like an audio stream or something you need to get brian bishop up here or something get cyborg conjure to do the transcription you know he another thing about him he's really into genetics and gene hacking and stuff uh he's an interesting follow check check out conjure if you don't already now i really yeah he's actually got talks from before bitcoin talking about gene stuff genetic stuff correct yeah he really knows of stuff i i worked in biotechnology briefly uh for uh about two years in um uh doing doing gene gene diagnostics basically at a lab in california and so i have like a little bit of i have enough

background to know that he seems to know what he's talking about yeah man a well-rounded renaissance man brian bisham truly truly um speaking of renaissance what's going on in the world right now are we are we in the midst of a renaissance are we in the midst of a of the world crumbling around us this is something that james and i when we meet up outside the podcast we talk a lot about his macro themes geopolitics what the hell is going on in the world what's going on with the central banks how much money is being printed will it ever stop uh we had an update to that conversation ongoing conversation this morning at the coffee shop and i think uh i think your perspective is interesting i think it's a good one to put out there for the freaks too like what

you're worried about what you're looking at your theories the binariness of bitcoin's potential so let's jump into that yeah um binariness a word it should be it can be for us um binary nature yeah i i'm kind of a perma bear i think i've always been a perma bear i i remember in in high school coming home um really drunk and sitting down at the kitchen table with my dad and and I started weeping, I think, about the fall of capitalism or something. As we all have. Yeah, yeah.

So it's hard for me sometimes to disentangle my own maybe economically pessimistic bias nature. Yeah, it's weird. I kind of fight with myself a lot because in many ways I'm a very optimistic person and I'm very enthusiastic about the possibilities of life and so forth. But I've really been pretty bearish on things for a few years here.

But recently, I think I've grown even more bearish and I've grown alarmed. Oh, God. I mean, there's, I guess, no shortage of alarm on the Internet. And I'm now adding to it because ever since the Fed basically reversed their sort of hawkish approach. Beginning of this year? Beginning of this year. Went from two hikes this year to zero. To zero, yeah.

it's and almost implied you know rate cuts uh at some point um or or additional you know um uh quantitative easing measures but anyway i guess like before we get into this uh i'm just if bitcoin didn't exist i don't know if i'd be able to get up in the morning you know it's like i think things are i hear that a lot man why why do you think that is is bitcoin that like are we crazy to think that bitcoin is can solve some of these problems i think it certainly can i think it's an open question of whether it will um actually i'm not in question about that i think it will it's just kind of a matter of on what time scale you know it might take i don't know could take a hundred years or more i i think

that people who benefit from the system as it exists now, namely people who are well-connected to the banking system, people entrenched in various parts of government, definitely have an interest in keeping this party rolling for as long as they possibly can. But I think that there is a certain gravity to a sound money system, and this really wasn't something that I had thought a ton about.

before um getting into bitcoin but um i it kind of blows my mind that that we've really only been um in a fiat money experiment you know since the 70s um and and most people don't realize that i didn't realize that for sure um generation and a half yeah and you know in that span of time we've seen some insane uh economic uh exuberance um and subsequent bust and i don't think that we've seen i don't think that we've really that that all the chickens have yet come home to roost um certainly not so uh so yeah i think the fiat money experiment is um is really wild just basically the idea that the government has um the discretion to just kind of expand the money supply and and and as a result of doing so devalue the savings of anyone who has bothered you know to

have a low time preference and set aside some savings um i think that's criminal but it's not well understood by most people which is is really kind of the fundamentally scary thing to me is is that there's a total divergence between there's a collective ignorance yeah yeah yeah yeah and it's i mean it kind of mirrors the wealth inequality in the sense that there are a few people who who know what's going on you know who are kind of tuned into what the function of the fed is and indeed like what even the m2 or you know or m1 money supply like means and represents and how that affects businesses and savings and people's lives. And then there's, you know, so that's maybe like, I don't know,

say 5% of the population, if that. And then there's the other 95% who are just kind of like subject to all this and going along and not really thinking about it. And they're drastically affected by this stuff. You know, all you have to do is look at some statistics. uh suicide attempts opiate addiction uh bankruptcy like things are i mean we've been saying this for a while like i said our permable permable excuse me perma bear i have very similar uh thoughts as well and have had very similar thoughts for for the better part

of a decade now almost um but you're but like when i wrote about in the bent last week i think you actually responded and we had like a little email conversation about it was like this debt fueled society basically sows the seeds of its own destruction over time because again we i tied that to like birthright like birthright across the world's going down like kids aren't having kids anymore you're seeing a japanification of the world play out in real time and what this does we can tie this into a bunch of things and we will but the one thing i talked about in the bend in particular is like again the the debt fueled society sows the seeds of its own destruction because it forces people to to basically weigh opportunity costs and it's gotten to a point where

the opportunity cost is breeding and having kids because people are going into so much debt and they can't buy houses they have to pay back their their student loans so they're forced to choose like can i even afford to have a kid right now a lot of people are saying no i can't we used to have a society before we went off the gold standard where you could have one a single single parent provide for the whole family now you you have most of america where both parents have been forced into the workplace many times in two or three jobs and uh not even many parents many people like many many singles many individuals and it's literally becoming to a point where this this debt-fueled system which relies on more people pumping more consumption and more money into it is sort of

destroying itself because it's not allowing itself to create a base to sort of keep that going at a certain point so maybe that's when the ultimate uh doom that we've been feeling inherently for the last decade comes to comes to fruition is when that generational shift happens and you literally don't have somebody to foot the bill yeah you absolutely tied together uh a bunch of different elements there that i've been thinking about a lot um yeah yeah bathroom break one yeah 110 25 i think exactly in the way that you're saying there's this short-termism induced by um the the behavior of the fed in terms of expanding the monetary base um people focus on consumption

because why wouldn't you if your value is quickly eroding and as a result of the increasing price of the really important stuff that we all need to live like real estate for example or health care education education you know everybody has to work all the time and we have to work at these jobs that kind of indicate, like, malinvestment. I mean, look at Uber and Lyft's financials. Just go to any WeWork and walk around. Right. Check out what people are working on.

Sorry, if you're in a WeWork right now, I'm sorry. There's a lot of... Yeah, it's not you. There's a ton of malinvestment going on out there. Right. I mean, we should be thinking about how to build more affordable housing and not, like, I don't know,

how to create yet another, like, e-commerce fashion platform. Not that there's anything per se wrong with that, But I just think there's a lot of frothy stuff going on. So, yeah, I think it creates a sort of short-termism, and that debases people's sense of purpose, really, because you just kind of lapse into this hedonism where you're all about food or trying the newest restaurant.

Cloud chasing. Yeah, yeah, exactly, exactly. And so I think when I say the reason I get up in the morning is Bitcoin, it's it's it's because um well primarily i see bitcoin as an antidote to this but at a kind of like straussian level um bitcoin is something that has long-term value and purpose you know and it's it's kind of the antithesis of uh oh i'm just waiting until the next like uh delicious meal at the latest trendy restaurant you know um peter i watched uh recently this week jeremy welch breakfast with him recently he recommended this peter teal video he went to

some college with cornell west and basically had a q a with the students and touched on what you just did like we're turning into like a economy built on like new e-commerce platforms and new websites basically it's like built on basically just creating visual and ux flows it's nothing like nothing crazy is being produced we're not going to mars we're not mining asteroids yeah a lot of it's window dressing yeah exactly it's all window dressing and it's scary it's like what are we stuck in this sort of state of treading water and mediocrity and and just trying to again it's what we would i would are what i would argue is that we're stuck in this the system that's forced us to create these shitty jobs and i think that's what we're

getting into in this this part of discussion right now but like how do we get out of it like that's that's how do you unwind this this malinvestment to unwind it i think you have to have a renewed list of priorities about what's worth focusing on as an individual um and um i i've actually been listening to a lot of jordan peterson lately uh who's i i think a wonderful thinker um and he's particularly fascinating because before i actually started listening to him i had always heard these kind of like shadowy nefarious like the like that he had some reputation i was like okay this guy's like a secret racist or he's you know something he's like in the alt right or something like that and i actually started listening to him and i was like this

guy just makes a ton of sense and he has no you know i wake up and make my bed every morning yeah well you've you've set your house in order marty um marty has a beautiful apartment by the way um thank you james but um i really like his take on basically load yourself up with as much responsibility as you possibly can because pursuing happiness in life um is is not a good aim he argues and i mean there's a semantic game you can play there where you know depending on how you define happiness maybe it is a worthwhile end but i think the point is is to basically put responsibility on yourself and start thinking about things that are very long term to get back to like the macro end of of our discussion um my prediction is that central banks um will continue

with quantitative easing they'll continue buying assets they'll continue their open market operations they'll continue expanding the money supply in effect um because as soon as they stop that then the level of corporate debt the amount that that businesses in in america and around the world are leveraged is just going to explode um if it's not first the entitlement programs that are already you know predicted to be insolvent and contingent on population growth that we just don't have anymore because because people aren't having kids because we're not thinking about the long term you know all right we need to get back to the seven generations mentality of the iroquois nation um it's but like again you said we're stuck again and this is the big team on this

podcast that we're stuck in this inflection point this anomaly in history and like and like we've been touching on like nobody really realizes that you're just born into the system you start running you start going like oh this is just the way it fucking works and then so how do we get people to question that so that's the most important thing i think we have to get people to is just the point to even fucking question the system they're living in i think it's going to become increasingly evident you know if you think back to say the 40s and 50s i mean those were not ideal times for a variety of reasons but you could get a house guys our age like would have a house and there wasn't really a question about that you lived next to a variety of people like you know

if you're a garbage man or a janitor like you could have a house you could probably live in the same neighborhood that i could there was there was a lot more equality but because we've now segmented the population into those with financial assets and those who benefit from you know inflationary um monetary expansion and those who do not now it's it's increasingly rare that these things that we once were able to afford as as a civilization we can't so i think that'll continue to become more pronounced and cause people to ask how did this happen like how do we get here what's going on yeah the down oh okay go ahead go ahead well i was going to say the downside and this is a whole nother sort of um segment of the conversation is that i don't think people

are going to realize why or how we got into the the position that we're in and until it's too late huh until it's too late until it's too late yeah because the the political expedience of something like modern monetary theory yeah i i saw that look on your face and i mean that's exactly how i dahlia just came out said it's inevitable and it is it is cynically modern monetary theory is inevitable because the the political pally uh palatability of it is so high for politicians it's fantastic because they no longer have to raise taxes to be able to breadwin for their constituents and people who don't pay very much attention to politics love it or don't pay very much attention to economics love it because basically you know that's free stuff for

everybody and there's a sort of overwhelming socialist rhetoric now because you know capitalism has failed um oh my god we have not lived in a truly capitalistic system uh in a while oh yeah for sure there's definitely capitalistic aspects of capitalism in america no doubt entrepreneurship's heavy and stuff like that but the bailout of the banks prove bar none like if you have you it's basically a two trillion dollar socialist program oh totally yeah yeah i mean it's ironic because we we've only government intervention has only increased you know in the 20th century and 21st century and that's that's when capitalism starts to fail as when it becomes crony capitalism and then all of a sudden you're awarding 400 billion dollars

to completely dysfunctional banks because they made a huge mistake um and uh but but yeah i mean like going back to even like fdr's introduction of social security um you know uh nixon's uh medicare changes i mean like all this all this stuff is is an increased element of socialism that is is creating huge dysfunction and and people are just like calling for more of it calling for more of it and at a time like again going back to stats like look at the state of our society we'll talk about america in particular since we are americans this is where we live but like it's been an apparent like the opioid crisis is turning into an epidemic especially here in the northeast in certain parts of the country uh depression at an all-time high suicide suicide

rates at all-time high in the youth it's it's rising as well if you look at the younger ages The effect that social media is having on them and the clout chasing sort of environment that they've been brought up in is leading them astray. And it's being proven in the stats of mental health because mental health wise, we're we're going in the wrong direction in this country. And I think tying it all back together to the the separation of the haves and have nots that this monetary policy is basically set into play. and like you said like the people with financial assets with paper wealth are allowed to inflate that paper wealth via the money printing uh the people who do not have access to those types of investments are getting left behind and getting their personal power destroyed via inflation slowly but surely over time and again it's you're starting and then at the same time you have the

goddamn fucking government in this country is so ass backwards the framing of the conversation at the political level doesn't even make sense in my opinion it's all just a bunch of shouting against each other or excuse me past each other and we're getting to a point where like politics is so polarized that people are starting to physically lash out like if you wear a MAGA hat walking around it's a good chance in some places you'll get punched in the face somebody will take your hat and like the the rhetoric around global warming now too like you can see definitely there's about three like social justice warriors coming at you if you don't agree with with all their their views on climate and stuff it seems like there's tensions building up between different

sex uh of the uh of the underprivileged in this in this two-tiered society that again it feels like the fabric of our the continuity of our society is sort of slowly somebody's somebody's pulling the thread of the sweater yep yep and i think the possibility of meaningful reform in the existing political infrastructure that we have here to me is just kind of out of the question i i think that ship has sailed on it really unfortunately and i i don't say that with with lightly no this is something like again going back to the mechanics of our government like why do we have 100 senators 535 representatives nine judges and a president like the way it's set up like the mechanics of our government was set up in a time where people had to fucking ride horses to

get to the fucking state building to speak on behalf of their constituencies we live in a time in an era where we do not need these politicians they basically represent our voice we allocate our voice to them to speak on our behalf i'm not calling for direct democracy or anything but there is a way they are uh they are a very constricting it's a very constricting system at this point considering the technology and the the open communication channels that we have as a society yeah you know the fix is not so clear to me it's not clear to me either there's a really great book um called amusing ourselves to death which is a very short book it's maybe 100 pages and it's about the way that television as a medium affected politics and um what the author talks about is is

back you know in the early days of this country the political process um as you can imagine was very low tech and if you were a politician you would get up and make a two three hour long speech that had been memorized in front of a group of people and then you would take questions and if you wanted to participate in political discourse you know you had to write you had to read um you had to go out and listen you talk to people face to face whereas when television came around um education and political participation got mixed in with entertainment and all of a sudden you know you could sort of feel like you were being informed or you could feel like you were participating when really you were consuming something that was crafted blue verse red yeah

exactly exactly um blue man yelling at red man and and you know it's it's a sort of another case of a vested interest manipulating people who don't have time or interest to really figure economics and politics out and so democracy doesn't work and i know you weren't advocating for for democracy because you know in in a short summary it's it's uh two wolves and a lamb voting on what's for dinner right um what i what i love about bitcoin is that it's a sort of modular advancement to it's it's removing a function of government that could be manipulated and indeed is being manipulated in a very big way by 19 people um on the fomc um 19 or 17 whatever the number is i think it's 12 voting governors and then you have like six or seven yeah the seven

at the federal level um so you have 19 people controlling the money supply you know and allegedly they're not they're not political because they're not elected they're not you know that they don't have explicit party affiliations or whatever but we all know that's that's garbage these are human beings this is a human system we've all seen the wire we know what happens we know how this goes we know how this movie ends like they get they get they get politically invested somehow because they're human beings and they have interests um and so money like again you know most people don't realize this it affects everything else it is upstream of everything else that's why like and there's been tropes throughout history like money

is the core of all evil money is the root of all evil like money drives everything money makes the world go around like stack money fuck bitches get money like like there's it feels like there's been like warnings throughout history like pay attention to the money pay attention to the money yes please pay attention to the money that's what makes the world go around and we have completely not been paying attention to the money for a few decades now because it's it's the crystallization of people's time and time obviously is the scarcest resource and so as soon as as soon as you affect money it's hard to tell you know uh what isn't affected so my point being that bitcoin in particular takes money out of the control of of any given human being and i i think that the effects

of that and the benefit of that cannot be understated but um i don't know how long it's going to take man it it it could be a really long time because there um is a huge i i doubt that um everybody's just going to sort of make this smooth migration and decide you know that oh yeah like this this computer program that supplies our money is good and furthermore we want to completely upset the existing power structures and um uh uproot the system we were born into yeah yeah i I think what's way more likely is that something like MMT is going to come to the fore and that the printing presses are going to heat up and they aren't going to stop. I'm just waiting for my Yang Gang freedom dividend.

But that's like, yeah, I completely agree. I think QE Infinity is going to keep going. I mean, it's going to go until it can't anymore. And that's, I mean, like you said, we can't force people to question this stuff. it's it's like what matt and i say on rabbit hole recap like you want bitcoin before you need it um people aren't going to realize they need it until it's too late yeah totally totally for a large chunk of people um what was i about to go into uh what i mentioned before that well i okay so one of the things that that um you had mentioned earlier was my sort of like binary valuation

thesis that's what i want to go into about bitcoin um which i think is kind of a it's kind of encouraging and i have a follow-up question okay cool cool cool so i've been thinking a little bit recently that basically in the mid to long term bitcoin has a binary outcome it's either a success and people use it or it's a complete failure for some reason that we discover later on um which i don't think will amount to like like it becoming illegal or something i think that's kind of a short-run um condition but um so i'm i'm thinking that yeah basically bitcoin's either worth an incredible amount or it's worth nothing and so as a result like the sort of expected value for you right now i you only have to own a little a little bit of bitcoin like a you know if you own a little

bit then um you stand to gain a huge amount if it appreciates and you stand to lose not not that much um right now so i guess this is like when people refer to bitcoin as being a call option on like a future system of value that that makes a lot of sense to me intuitively and so i guess a lot of the reason i've been paying attention to macroeconomics is like well maybe i should rebalance a little bit and and you know figure out like what's another place to put my money but in the course of doing that it's it's become apparent to me just how grim you know kind of any other means of value store is right and so speaking of bitcoin specifically in your medium to long-term view like what needs to happen like at the protocol and infrastructure level for it

to be ready for this because that's like what I wrote about in the pen today like 2017 during the euphoria during the run-up uh december that year like the exchange infrastructure wasn't ready fees went through the roof which isn't necessarily a bad thing um segwit wasn't adopted yet like where are we from like a protocol level efficiency standpoint and like an overall infrastructure standpoint to to making this possible for not even mass adoption but adoption at a material level And the faster that Bitcoin ossifies, the better, in my mind. We could freeze it today and it wouldn't be ideal, but it would be workable. I think the malleability fix, you know, even if Segwit had made it in, I mean, it would be a total pain to do Lightning, but you could do it.

You could work it out. There are second layer schemes, you know, that can compensate for that. So my position is one of kind of extreme conservatism. um i want to make bitcoin as resilient as possible as quickly as possible so that we can basically just solidify it um and cement it um because my real concern would be a sort of populist perversion of bitcoin where we're making changes and we keep making changes at a pretty rapid clip and all of a sudden there's kind of popular sentiment for some kind of you know inflation schedule that's different than the one that we have now ew yeah ew ew freaks if that

ever gets proposed um get your pitchforks out we'll just be right not your pitchforks just get ready to fork and not not implement that code your figurative pitchfork um um no i agree completely and so you do you think okay it's not perfect right now but it'd be workable yes Yeah, absolutely. If you cemented Bitcoin. I mean, I think in terms of the consensus layer, yes. Obviously, we're going to keep needing to make peer-to-peer upgrades just in terms of making sure that everything's resilient. But I think generally speaking with consensus, it's workable right now. That being said, the improvements that are slated for a proposal, I think Peter just just dropped his his his software proposal recently yesterday. I don't know if you saw that. I did not see that. It's floating around.

Finally dropped? It's floating around and it's pretty exciting. um graft root which is basically a technique for making um any one sort of bitcoin script type resemble any other um is is really nice that's a really great improvement snore obviously for its aggregation potential and simplicity huge improvement um oh i'm sorry did i say graft root i'm in tap tap yeah so so graft root then is really exciting because it sort of allows you to dynamically append spend conditions to a coin which would allow you to sort of you know amend smart contract yeah it's it's it's it's smart

contract d um but it's a good protocol and again it still just resembles like a small bitcoin transaction in the way that that taproot does so those things are really really exciting and they're really cool and i and i think you know there's a good chance that they will have them Um, and they're great, but they're not necessary. Um, what is necessary is that the properties that Bitcoin exhibits right now stay intact. Um, and I think there's a really good chance that that will be the case, but I think, you know, there's an interesting debate about like the privacy technology on chain. Um, I'm kind of skeptical of that because I think that Bitcoin's auditability is, is, is more critical than on chain privacy. And I think that there are second layer approaches

to doing privacy i agree and don't tell eric boskel that i would oh god yeah don't want to get that that guy mad don't want to meet that kind of back alley bitcoin's not audible auditable seriously that's what he's saying uh i don't want to speak for him okay um and i'm too stupid to to present his idea with i know i know he's got some very uh nuanced uh and i think yes he has uh He has some thoughts on Nick Carter's proof of solvency theory that you can force exchanges to sort of prove that they're solvent to a certain extent. Okay, all right.

Okay, well, Nick Carter's another gem. Another gem. Another past TFTC guest. I wonder if he's a beefy Bitcoin boy. He's not a beefy Bitcoin boy. No? There's very few of us. How do we induct beefy Bitcoin boys?

I don't know. I think we have to Greco-Roman wrestle. How much do you have to be able to squat to become a beefy? I'm not a big squatter, more of a free weight guy. Okay, that's fine. I don't know. That's fine. It's deadlift.

We're a deadlifting community. Okay, all right. You've got to be able to deadlift at least your body weight, one and a half times your body weight. There we go. Yeah. I like that. That's a good metric.

I'm pretty sure I can do that right now. I'm sure you can do that. Yeah. You're a strong guy, Marty. Hey, you're looking extra beefy these days. In a good way, not in a doughy way. Thanks, man. Lean beef.

it's been a rough few weeks with the moving but i'm i want to get back into the the crossfit classes as soon as i can yeah uh one thing i wanted to loop back to that uh we were talking about at coffee that i wanted to bring up in our macro chat is like we were talking about the monetary policies affecting the inequality and stuff like that and then like and the social programs are affecting stuff like that and then we talked about minimum wage too and this is another important factor that i think is there's another important variable that i think is factoring into the sort of degradation degradation of our society to a certain extent is like and i this thought came to be after watching a thomas soul uh conversation that was published

in december by uh i believe the hoover institute or the hoover university or something like that and he basically explained how like and it makes sense like minimum wage all it does is is the most important demographic that it affects probably is teenagers looking to get their first jobs and develop work ethic and if you take away the ability for teenagers to develop a work ethic they're not going to develop a work ethic and or they're going to have a harder time doing it later in life the argument i'm trying to make is like i started working when i was 12 and i think that work ethic of starting that and being able to have jobs that were paying cash under the table and stuff like that was really formative to what i have become as a person and learning learning

hard lessons as a teenager because i was able to be paid under under the table was was huge right yeah no absolutely um and just even you know it's amazing like um even having the possibility to to go out and get a job as a young or unexperienced or or you know someone who's been marginalized by society um that that process of being able to bootstrap yourself into the labor market to accumulate experience you know on the job um is is so incredibly important and it's the epitomization of one of these policies where it's sort of naively touted by people who you know probably genuinely want to do the right thing and help people but it ends up hurting the most marginalized people and and reinforcing a sort of like um virtualization or intellectualization of

our of our world and our economy i mean you need to go out and work a shitty job as a as a as a child like it's a formative experience you learn how to deal with the crazy general public how to deal with like uh you know maybe sometimes oppressive managerial structures like like you you learn how to adapt to all these conditions and and furthermore you have all these wonderful experiences that you just you wouldn't otherwise if you just jumped right into a white collar kind of kind of workforce if you're fortunate enough to be able to do so yeah and then again the opportunity cost if you're not able to get a job what are you going to be doing you're gonna be hanging out doing you'd be selling drugs maybe yeah yeah i mean if if all right so if you're a

kid in the inner city in a shitty part of town um you're already getting screwed by your education system because it's doing nothing for you you're probably screwed you know let's let's assume traditionally you're in a food desert most likely you're in a food desert like there might be racism affecting you you know basically the odds are stacked against you and your only hope is in some cases going out and getting a job and like bootstrapping yourself into society um and often like the the best way to do that is a is a low-wage job and i mean there are some great statistics out there about the fact that people often readily advance beyond the minimum wage uh there are very few people who actually sit at the minimum wage. And, um, I'd refer people to a recent episode of,

uh, uh, Russ Roberts, excellent podcast called the econ talk where he talks to a guy in, um, at the university of Washington who did a very comprehensive study on minimum wage. And he found that basically, you know, there are people who benefit from minimum wage, but they're really not people who need the benefit the most. The people who are hurt most by a minimum wage are people who lack experience who you know are teenagers um who are maybe you know systematically discriminated against because remember if you're charging a minimum wage that's an excuse for someone to indulge in their biases not to hire you so if you can out compete somebody on price that allows you to overcome bias in society but if everybody's stuck at this floor of like say

15 an hour then you know like the pretty blonde girl who applies to be a cashier is 10 out of 10 time is going to get that job uh before you do whereas if you can actually compete on price and negotiate then you you can get into a workplace and and accumulate experience for yourself so i think i think your point's a really good one that it just kind of epitomizes um this increased sort of like uh restriction on freedom that's that's that's leading people to live these sort of detached short-term lives where there aren't many prospects for accumulating wealth over the long term yeah again like detached or a society detached from reality to a certain extent like we were talking about a call like are we crazy like are we the ones like are we the crazy ones

is everything okay yeah is everything okay we're just crazy i i mean you know if you look back there were some crazy things going on in the 20th century you know i mean uh we were putting japanese people in internment camps there is incredible stagflation in the 70s oil shortages people waiting hours in line for gas inflation was crazy i mean some part of me thinks like wow we're doing a lot better than we were back then um and at least now we have technology but i i am constantly amazed at the rate of change especially in our lives i mean if you think about it we're the last generation that was born really before the mass deployment of the internet before we were sitting on computers all day you know you and i were probably like running outside in the

woods as kids for entertainment i was in north philly playing double dutch they're not playing double dutch double dutching double dutch oh man you knew how to double dutch yeah yeah there was uh there were some girls on the block that liked to double dutch nice marty would hop in every once in a while nice that's it dude that's a great image doing double dutch i don't know if i could do it today double dutch you really got to time your your entrance yeah that that that struck me I mean, I'd be scared for my physical well-being trying to do double dutch. It took me a while to get rope skills, you know. No, like, yeah, like, we are that bridge generation.

Things are changing at a rapid pace, but I think we are succeeding in spite of the system, at least the political and monetary system that we find ourselves under. Yeah, yeah. And is it success, like, is this quote-unquote progress success? Is there such thing as, what's the word I'm looking for? admirable uh progress versus uh sort of uh frowned upon progress like do we want rappers rapping about lean and so people clout chasing about doing xanax and right fucking bitches and twerking and all that stuff right right or do we want uh sort of a

society with mission-driven society again going back to like seven generations like that's again we're not mission-driven we're clout driven um yeah yeah yeah and and i think one interesting thing that crosses my mind a lot you know again um worrying about being a being a sort of perma bear pessimist is is that sometimes i think that material success and wealth almost sows the seeds of its own downfall because in getting really comfortable and you know and having all these these wonderful innovations of the 20th century we've gotten really comfortable especially you know being in america and having a reserve currency and all the privileges that come with that like maybe because things are so comfortable we've we've become soft and we've forgotten

where prosperity actually comes from because it was already here when we showed up yeah so this is like the hard times create strong men strong men create good times good times create weak men wow yeah that that hits the nail on the head and i really worry that we're in the later part of that cycle where um all right here it is hard times create strong men strong men create good times good times create weak men and weak men create hard times yeah so there's a really kind of poetic symmetry to that that that rings true and it's really concerning because it tells me that i don't think things are going to get better until they get a lot worse and we really undergo some kind of catastrophe which i am not looking forward to well this goes into

another thing we were talking about pre-record is maybe this is something that you can only recognize back in retrospect and maybe we're living through rock bottom right now um obviously not uh not represented by like a crash in the stock market or anything like that but um just in again like overall mental health of society and the health of the the family balance sheet and stuff like that maybe we'll look back in retrospect and be like ah this was either the beginning middle or end of that and that sort of uh calamity yeah yeah it's really hard to tell where we're at because i think over the past decade we we we've gotten this influx of new technology new communication patterns i mean think about the amount that we use twitter on a daily

basis like it scares me the the amount that i want to use twitter um i'm bad bro huh i'm real bad you see me in my corner here you see this is this is me all day just in this corner it's it's it's really really hard not to be because it's such fierce stimulation and the content is genuinely so interesting and like we're going out and we're you know reading everything these other bitcoiners are doing and it genuinely is uh uh meaningful and stimulating but it's it's this mode of consumption too and you can just sit there and scroll and scroll and scroll and a lot of people do this and i've even noticed in myself that production becomes much harder because it used to be when i was when i was a kid um you know i'd sit down and write something i'd write

a journal entry i'd write a program and i'd get a big dopamine hit out of that because creation is fun and it feels good but when you're reading twitter you can kind of get some of those similar feelings you can feel like you're doing something feel like you're being productive uh without producing anything at all and um so it's it's a little bit scary and i and i kind of wonder about how that balance breaks down you know maybe let me get a little pushback here but maybe the participation of that is helping create a hive mind right i think that's like that's one of been one of my biggest uh lines about twitter it's like a huge empathy creation tool yes part that empathy creation is or empathy creation is probably part uh part parcel on the way to becoming

like a hive mind like society yes yeah yeah and i i mean hive mind to me sounds a little bit scary but i think i know what you're getting at yeah which is a sort of more fluid and liquid consciousness yes that people share um and i think that's great and and i don't want to sound like a luddite i i don't want to go back to a time before twitter because i think we can't it's here it's you know in the same way that bitcoin has been discovered it's pandora's box has been open and we just have to adapt to the new world yeah and and twitter too like i would argue it's better right it's provided me and i wouldn't i would not be here right now without twitter like this podcast would not yes totally my newsletter would not exist without twitter like this podcast literally would

not exist if i did not dm somebody on twitter i was like you should not be shilling ethereum to barstool audience yeah that's how this started and like but it is you have it is trying to think of an analogy but it's it's like such a powerful tool that you have to learn how to like tame your your interaction with it it is sort of like like bitcoin for communication you know i mean it completely it's like a hayekian distribution network of of ideas and thoughts and and and your merit has allowed you to basically start with nothing and become you know marty from tftc and so i i think that's a beautiful thing and and yeah i think you're right that there's there's a whole lot good that's going on i think in general the way that i would characterize our times is

that we live in very interesting times as the chinese proverb goes and and some crazy things are happening with the monetary system but the saving grace is that we have these technological tools now that are being discovered and created actively that allow us to take back some of the individual's autonomy and to really um try and try and make a good future for ourselves so i'm excited about that i'm as well i'm happy to be on the front lines uh trying to make bitcoin become a thing or it already is a thing trying to make it become successful it already is successful trying to make other people realize that they need it there we go um we're almost two hours in here it's been incredible been incredible time as always um i guess let's end

it here uh what what any parting notes parting thoughts parting ponderings do you have for the freaks out there uh i hope this wasn't too uh sporadic of a journey for you freaks yeah they love this sporadicness cool yeah at least i do how do you are you okay with being the joe rogan of the bitcoin podcast game i don't i don't i don't think i deserve that title but um i think you do if if anything i think you surpass joe like the joe rogan equivalent because joe's cool but he's very hit or miss and he's very marketingy and i think you're you're none of those so um i appreciate the kind of words james i'm a big fan i'm really i'm really just um saying all these nice things to marty so that he'll give me one of his cool hats that he's just made uh if if you don't know

what cool hat i'm talking about go to the recently released uh tales from the crypt website uh by the time this episode's posted yes this will this will be true statement yeah cool okay well i'm yeah i think they might be sold out by the time that's a good point that's a good point but check anyway actually i'm thinking about launching this today but well you know take your time this might be make it right yeah i should make it right um got a lot yeah free freaks out there weren't aware i got a lot of inventory in the docket so you might be getting three episodes a week for the next couple months so um james it's always a pleasure sitting down with a fellow beefy bitcoin boy pondering about bitcoin in the world i'm overall optimistic if this came off as

a pessimistic conversation just gloss over that we're overall optimistic i would argue and i think it's because we finally have a common mission which is bitcoin uh which provides an optimistic view of the future couldn't have said it better myself marty always good to be on the pod well can't wait to do it again soon peace and love freaks