The Wolf Of All Streets - The Great Debate: Solana vs Ethereum vs Bitcoin | Crypto Town Hall

Episode Date: December 7, 2023

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Hey, Alex, I just saw your message. I know. Isn't that just like an amazing, amazing tweet right there? Pretty amazing. If any of you guys are wondering what Alex messaged me, he sent me Max Kaiser's tweet, which says it's illegal to trade ordinals, unregistered securities in El Salvador. Same for NFTs. And I said, can we discuss this on space? Because apparently Bitcoin maxis are now pushing governments to censor Bitcoin transactions. It's just kind of remarkable to me.

I don't know, man. It's a permissionless free system to do whatever you want, except for the things that the grand wizards tell you they don't want. I mean, these are the ceos of bitcoin they're such they're such a cancer in the bitcoin ecosystem i think um scott i need to invite we'll say though matt's is really fun to interview i want to i want to invite austin how do i do i

need to send him a link or how does this actually work i've invited him a couple times i'm not sure if he's there yeah we have to carry on the great debate because I need to once and for all I need someone to tell me I want Yago up here as well can we get Yago up here hello

let me message him I know the team did but let me message him right now you have to talk first ok we've got Austin here very happy to have Austin here Let me message him right now. One second. You have to talk first. Okay, we've got Austin here. Very happy to have Austin here. Austin, are you here? Can you hear us?

I can, yes. Ah, fantastic. I needed you yesterday, actually, because I was trying to tell these people that I'd... Let me tell you how the discussion started. And I don't mean this to bash any other protocol because i think we're not in the in the game of bashing protocols but i have a i really really really have a fundamental question that i need answered and i'm not asking this in a in a bad facetious way and i'm not hating on ether i've got a lot of eats in my portfolio i mean i've got a lot less

than i used to have because i i moved a lot of them into Sol. But I have two questions. The first question is, if ETH and Sol were both launched today, would anyone actually use ETH? So that's my first question. question is what other than the fact that ETH exists and has a whole lot of applications that are already built on it is there actually any reason for ETH to exist and I think the two questions are pretty similar but like is there any reason for an ETH to exist in a world where there is a soul now I guess for your first, are we assuming that ETH launches like the way it launched in 2016 or the Ethereum of today? Ethereum of today.

So if the Ethereum of today, the proof of stake version of Ethereum, that the one that is alive today, if this, if, if it launched today and Solana launched today and none of them had any history so when i said none of them had any history you can't dunk on solana for previously having had downtime just like you can't dunk on east for previously all the previous things that he's had my big question is if the two were launched today is there any reason to actually use it and i'm not asking this so that you bash and say well solana Solana is the best, but I'm actually really, I really want to understand technologically. And I want to encourage anybody else to actually jump in from a development point of view to tell me what the reason is for ETH to exist in a world where a blockchain like Sol actually exists.

So I think they're doing slightly different things in this sort of, excuse me, I'm getting over being a little sick here, but they're doing slightly different things in the end state of both networks. So Solana's main focus has always been as an execution layer network. This is why it's in one global state. This is why there's an aggressive development effort to make the network faster and faster every year. It's why fees are so low

in the network. The model there is basically to scale out as big and as fast as possible with as low transaction fees as possible, and basically to make it up on the volume, right? This is sort of the difference between the way Oracle does a software contract and the way that Salesforce or Slack does a software contract, right? SaaS can't compete with, you know, $20 million contracts until you have 50,000 paying subscribers to your product. And then, you know, Amazon Web Services blows Oracle out of the water, right? But they're doing slightly different things. I think, you know, the Ethereum of today has a lot of features that folks actually might choose and might like, right?

I think that you can see a future where the security tooling that Ethereum is built out is quite good. It has six validator client implementations. That's quite good, right? There's only one for Solana right now that's live. The FireDancer, which is a totally new rewrite, is in Testnet, and that's probably going to go live in the next 12 months. But there are some real technological differences in terms of the robustness of some of the tooling that's been built out on Ethereum, because the network is, quite frankly, so much older. And so if you're comparing the state of where they are today, I think there are still a lot of reasons why someone would say, I like the design decisions

Ethereum has made. And this is going to sound like an would say, I like the design decisions Ethereum has made. And this is going to sound like an insulting analogy. I don't mean it this way, but there's a reason people still use wire transfers, right? There's a reason the Swift network still exists, even in a world where you can move USDC instantly around the world for basically $0 in basically zero seconds. And that's because these things are sometimes built to do slightly different things. Now, the extension from there is I think Solana is incredibly well positioned to actually be an execution layer chain that normal people actually use. And this idea that we're going

to have 47 layers deep of applications in the Ethereum world sort of sounds like we're, it sounds like the worst of Cosmos in sort of my view without a lot of the good parts of cosmos about self-sovereignty um but that's not to say that like the core ethereum layer one or sort of this idea of roll-ups or sort of what arbitrum and optimism are trying to do with consolidated roll-ups and you know shared sequencers is necessarily a bad idea it's just trying to do something very different than what the Slana network is trying to do. Did we lose Ran? I think we lost him.

Yeah. That's such a good answer. He left. You literally vaporized him with the hot fire, I guess. Tends to happen when we're on spaces. I guess- I feel like the bigger question here, though, is why do we

still have the Ethereum virtual machine in the way it exists today? I think that is kind of the meta question here. There's a lot of really great reasons why you would want to trust the Ethereum toolkit today, and why that toolkit is built out in such a way that there are things you might want to build on it.

I think the real question though, is if you fast forward three or four years, parallelization within the same layer is a necessity for any blockchain that really wants to scale out to hundreds of thousands of concurrent users. And that is something that, you know, there's a few people working on this for the Ethereum ecosystem. Monad is probably the, or Monad,'s a few people working on this for the Ethereum ecosystem.

Monad is probably the, or Monad, no one actually can agree on how you pronounce anything in blockchain, let alone what the technology is. But, you know, Monad is doing something very interesting with trying to make the EVM parallel. But, you know, Solana from the ground up was built to be parallel. Because when a transaction executes on Solana, it has to specify, here's the accounts and state I want to talk to, because when a transaction executes on Tawana, it has to specify, here's the accounts and state I want to talk to. And here's the instruction set. That's not the case in EVM. So transactions are deterministic in the sense of you always know what a transaction will do before it executes. In the EVM, it's one global write lock. So it's inherently sequential and you can create forms of quasi parallelization by having

multiple layers. And this was the original idea behind sharding, right, if we go back to like 2019 and 2020. In the roadmap there, but I think one of the main advantages that Solana will have in terms of an execution layer usability chain for consumer facing applications and uses like deep end is it can do more than one thing at a time. So Austin, I don't know why, but for some reason, Twitter space has kicked me, kicked me out of the, out of the space. I heard the last part that I heard was that, you know, that fire dancers coming on and fire dancer makes, makes Sudan,

I think a little bit more, you could say decentralized, and a little bit more fail proof if you wantproof, if you want to call it that. I'm still struggling a little bit. If I'm an app developer and I've got an idea for a blockchain app, when would I use ETH? When would I use Sol? Ren, perhaps, I know we have Austin, but Iago kind of gave a pretty long description or answer to that yesterday. And as a refresh, maybe we should set the table there with Iago and then let Austin respond. Because that's kind of what sparked this debate happening today in the first place.

Iago, you have thoughts on that? Again, you can sort of reiterate what we discussed yesterday. Sure. I will just caveat that I just joined and haven't been able to hear what Austin said, so I won't be able to really respond directly. He said you're the best. He said you're the best and that you only say kind words. Thank you, Austin. Yeah, so there were a few points I think I made yesterday. One is that overall, there has been a move away from monolithic designs in engineering generally. The move away from monolithic designs tends to happen, you know, say 10 years into any particular development paradigm. So there was a move away

from monolithic designs with mainframes. There was a move away from monolithic designs with cloud. And there's a move away from monolithic designs with blockchain. And the reason is that monolithic designs effectively represent one single pipe. You can do various things to make that pipe faster. You can shove more stuff down the pipe if you optimize the pipe. But any bottleneck that occurs on a single pipe is going to block everything up. And that is the problem with scanning any monolithic system. And so what we're seeing now is this new paradigm, which I'm convinced is the paradigm that we're going to see for blockchains because what's happened in every single software engineering problem that we've seen in the past is we're going to go and move to a modular

parallel parallelized design and what allows us to do this now which wasn't available even two years ago is new cryptographic techniques and in particular I'm talking about validity proofs the most common of which are zero knowledge proofs. What that allows you to do is it allows users and validators to opt into a particular set of transactions, prove that they've properly validated those transactions to the main chain. And in so doing, the main chain and the main chain validators, the main chain nodes, don't need to be engaged in every single transaction. That's the difference between a monolithic design, right? Where the nodes have to see everything

and process and execute everything, which is impossible to scale. And a system where you have different parts of the system seeing different things. I get the technicals. I get the technicals. I'm trying to work from a practical point of view. Yeah.

But I think the technicals matter here, too, because I don't think this is actually an accurate description of what's happened in the last 10 years of software engineering. I think we have seen, you know, modular was all the rage in the early and mid 2000s. This was the microservices boom, this was Heroku, this was this sort of idea that we were going to have lots of independent services that all co interact with one another. And largely, that has not actually been how software has developed over the last 10 years a lot of that stuff's been rolled back a lot of companies that migrated to the cloud have actually

migrated out of the cloud because when you build things in a like a semi-modular system in the cloud it's actually incredibly slow and so the overhead of using a cloud is 20 to 30 percent higher than actually running stuff on bare metal. You know, all high-performance computing systems in the world do not work on distributed modular systems in that sense. I mean, if you talk to high-frequency engineers who work for, like, large trading firms, they describe the process of programming on a modern CPU as a distributed system, because they have to think about the speed of light in how they're interacting with this stuff. I would also say that, like that Solana, by that definition, has been modular since day one.

It has parallelization. It has support for multiple languages natively through LLVM. It has system calls to support zero-knowledge proofs now. I totally get why modular is interesting, but the narrative of modular has run way ahead of where the actual technology is nowadays in terms of what's possible or describing disadvantages.

I mean, if you're saying that a bunch of modular systems, like a bunch of Layer 2s that settle to the same DA layer is modular, I don't know if that's entirely honest because at the end of the day, that DA layer is still your bottleneck. There's always a bottleneck in every system design.

That's what I said. I think you'll remember that. That's what I said yesterday. My problem is that you said to me, ETH is now the central bottleneck, as opposed to you said SOL becomes the bottleneck. In this case, ETH becomes the bottleneck. Yeah, and you can have multiple DA layers,

right? This is the whole idea behind Celestia. This is the whole, the high idea behind eigen layer, which I, uh, I think people should be very, very cautious about restaking.

It's a giant financial house of cards that has the potential to take down pretty much all the blockchain economically. so, you know, just do your diligence on that stuff. Um, but you know just do your diligence on that stuff um but you know this is one of those things where every time we sort of set up a false dichotomy that there's only one true answer in crypto we end up with technologically dishonest solutions right solana is not the only architecture that makes sense modular is also not the only architecture

that makes sense and ethereum is not the only architecture that makes sense. And Ethereum is not the only architecture that makes sense. These all have different trade-offs for different applications. So that's my question. And my question is, if I'm an app developer, and I want to develop something really cool on a blockchain, I want to try out which blockchain should I go into, when as a developer would I go on to ETH?

And when as a developer would I go on to SolTH and when as a developer would I go on to SOL? I mean, I think there's probably better people to represent what are the best reasons to be building something on Ethereum. I mean, in general today, we see applications built in Ethereum where fees are not important and instead the robustness of tooling is important. So if you're building a platform and the average transaction volume is going to be $10,000 for something, right? Ethereum fees are no barrier to you there. And you may want to say, oh, we have this like really robust system of multiple

validator clients. And like, that's worth it to you. I think what we see on Solana is people building stuff that they literally cannot build on any other blockchain, right? This is sling, this is helium, this is the whole rise of deep in this is Jupiter aggregator, right, which is hits up multiple liquidity pools and multiple order books for even a $10 trade, because the transaction fees are so low there. And I think also like, L2 is might get there in the future. But right now they're still very centralized. And so you have centralization risk if you're working with an L2. So these are all just things to keep in mind

as you kind of think about where to build stuff. But I think it's on a single global state machine and composability is a really strong draw for developers that are trying to build integrated applications? So I think that, you know, the description of transaction fees as cheap is very problematic. If the transaction fees remain cheap, then the security of the system is compromised. And indeed, if you look at Solana today, you see relatively few, the actual security budget is very low.

And if you say, we're going to have a huge amount of transactions and that's going to allow us to collect fees, then you're inherently making your block space scarce and transactions will no longer be cheap. And so this idea of cheap, right, cheap things are cheap because there isn't enough market demand to make them expensive. That's not the case. That's not the case. That's not the case. Things are cheap because the Ethereum pipe can't handle the transactions. The Sivana pipe can handle the transactions.

And to me... Yes, but there's vastly more transactions occurring on Ethereum. No, there's not. No, there's not. No, stop. There's not. There's vastly more transactions happening on Sivana today. The fact is... Go to Artemis.xyz, go look at the dashboard.

There are more transactions happening on Solana today than there are on Ethereum. And getting the same transactions. Now, you could argue maybe Solana is not as decentralized yet. You know, you could argue that there's only one uh um that the five answer hasn't launched you don't have you don't you you only have one one client and one point you could argue that today but i'm saying in a year's time two years time when all of these things happened then i don't as a developer but what is what is the path what is the path towards this kind of decentralization when you have nodes and validators who need to be able to process

all of the transactions, right? That creates an extremely exclusive club of those who are able to process that amount of bandwidth and CPU. That's not correct, Austin. Yeah, so there's a lot to get into here. First, I want to really push back on the idea that transaction fees are somehow related to security. That is not an accurate concept, right?

Proof-of-stake security is based on stake. It's not based on how much someone pays to submit a transaction. Yes, but who's paying people to stake? You're talking about the economics of inflation? Inflation? So you're redistributing, but what are you redistributing? If the system is not positive sum in terms of its revenue, right, then all the inflation in the world will only decrease the value of the token.

Right. So you need the system to be positive sum. And that can only come from transaction revenue, effectively fee revenue. So there, I mean, I'm not sure it's necessarily true. So the argument here is basically that if you magically scaled Ethereum up to 100x transaction capacity, Ethereum would be less secure. Right? That's kind of the argument. I don't think that's that's an accurate statement. It's 100% an accurate statement. And that is why it's not being done and it's always a special fast lane with cheap gas for l2s sorry why is there a special fast lane with cheap gas for l2s being proposed because what l2s do and this is incredibly distinct that this distinction is is the crux of the matter what l2s do is the aggregation and compression of a large number of transactions, right? So that they don't need to be processed in full by the nodes. They don't need to be processed in full by the validators. And it is through the act of aggregation and compression that you are able to squeeze more out of the rock.

In other words, you're able to provide the end user with cheap transactions because they're effectively buying in bulk with all of the other end users on their system. But those fees in aggregate then are paid to a node who doesn't need to process the full complexity. And that is the asymmetry, which you get with compression and aggregation that you cannot get in a monolithic design. There's nothing monolithic about what you're talking about. You could do this with, so Solana has state compression, right? That does exist today on the L1, and that's not necessarily processed by every node until it's bundled back. But I think one of the really important things to dig in here on is Ethereum has about two and a half times more validators than Solana does. And Solana has several orders of magnitude cheaper fees on the network here.

So I don't think these dynamics at scale play out the way that you're talking about. But I really do think that if we're if we're being honest with ourselves, the ability for someone to run a node on Solana exists today, right? It is actually much harder to track all of the transactions on all these L2s. You usually cannot even run a node on most of these L2s to track it. And you can make a trade off that says, look, users willing to trade on an L2 don't need the security of Ethereum. They don't need the security of a globally decentralized and distributed blockchain. Okay, that's an argument that you can make. I don't think that's a trade-off we need to make. And I think that what Solana and other networks are showing is this.

Here, you and I completely agree. I don't think there's a single example of a truly trustless L2 on Ethereum today. And I think that the Ethereum community has, and I think the technology is available to make them trustless. But the Ethereum community, by and large, doesn't demand it. And so the economic or market incentives for them to provide that are simply not significant for it to actually happen. I think it will eventually happen

because the technology is there. But as is the case frequently with Ethereum, the hype is far ahead of the reality. Although, to be fair, i think that's true of practically everything including solana i'm so confused as a i mean my like for me as a developer i don't a reason to build on each i mean i just i just don't get i need someone to say to me if you're building this kind of application, also,

and you mentioned if you're trying, your average transaction is $10,000 plus maybe, but give me one, like a good reason to build there and not build on salt. Like I just don't see it. TVL. But what is TVL? You're saying that there's more money on the network and therefore there's

money to transact with it. Yeah. I mean, there's more users and more money. I'm not sure. I'm not sure the more users thing, but liquidity is definitely an area where Solana is lacking compared to Ethereum, right? You can do a $30 million trade on Ethereum, and it will not move the price extravagantly for the token you're trying to trade. That's not the case today on Solana. Now, where Solana DeFi excels is capital

efficiency. So if you're trying to do small trades, right, a few thousand, 20,000, 30,000, $50,000, the capital efficiency of Solana is about seven to 10x that of something like Uniswap. But absolutely, when you're talking about big trades and liquidity, that is somewhere where Ethereum is, you know, far ahead. I have to say that I find it incredible that I have two of my favorite Bitcoiners somehow on the stage making the Ethereum argument, which is Alex and Yago, of course. Neither of these guys are building on Ethereum,

to be clear, right? They're both very, very dedicated to effectively moving all of these examples that have been done on other chains and building them on Bitcoin. So I would love to also get some other pers perspectives here wendy and joe i see you guys have your hands up and then we'll circle back around wendy not sure she didn't go ahead yeah i mean i i i'm with yago to be honest, and I was building on Solana. I understand Solana well.

I think why you don't want to build there, Moran, is it has not been very good for support if you're not within. If you're not Armani, you don't get support. And that's been called out many, many times where someone like Armani has three or four projects going and gets all the support in the world and someone building anything innovative doesn't. On the other side, what Iago was saying, it's true. Look at Orca. Who gives you the support?

Who do you rely on to get the support? If I'm building on ETH, who am I getting my support from? I want to understand who the complaint is against. Yeah, I go through. Look, we did have stuff on SUI. I have stuff on AVEX.

I've gotten support from both of their leadership teams a lot. Where I was two years from the very beginning, FTX was an investor in the beginning also. And we never got anything. Although, promise the world if i'm if i'm building to on ethereum who is my support person who do i phone for support i am not currently building on ethereum i would be building on an l2 okay and if you build an l2 who would support? For example, we're working right now with the gaming and NFT people in AVAX.

The foundations is the answer. Dominate. The foundations. Okay. So you're saying that the Solana Foundation didn't get the support that you want. That's the reason not to build on Solana. No, and Ran, you were in our thing at the break point, which is right at the entrance.

You know, as well ran and I'll tell you, I'll be honest with you. We never, ever, we were promised. Everything totally gave us more support than the foundation did. Um, and this is not something that's just me. This is something that's happened. You, if you scroll through Twitter, you'll see it repeated over and over and over where Austin and his team gets called out for not supporting the community. And people who have seven or eight projects get all the support in the world because they're in the circle. But I really want to get to the point that Yago was making.

You look at something like Orca, they were making zero money. You look at something like Jupiter, they were an aggregator, and now they've built their own thing. It's like a race to the bottom with fees. So even if you're developing there, it's really difficult to make a profitable company because the narrative is cheap. And it's microtransactions that are cheap that...

But isn't that in all efficient environments, ultimately the consumer wins when there's, you know, if you're passing, ultimately you're passing that cost on to the customer. And if you're passing a cost on to the customer, the customer doesn't care about how much money you're making. The customer cares about paying the lowest fees. Things always come to efficiency. Things will always eventually land up in the most efficient point. But Ran, Nike could sell sneakers at zero, at whatever their cost is and make no profit. That'd be great for customers,

but Nike won't exist in a year or two. And that's the problem. I think you're using that argument incorrectly. I think someone could also say that because the transactions are cheap, there should be more available fee tolerance to actually go back to the protocol. But there isn't right now. And I would say that's largely because of the lack of TVL. Most protocols will track TVL as one of their main metrics

because in one way or another, TVL brings fees. And so my argument is for Solana, by the way. So I guess I'm arguing the other side for intellectual honesty here. But you asked the question many times, why would someone build on Ethereum instead of Solana, it's just way easier to attract TVL. And ultimately, that comes down to the number of users with larger portfolios. Austin might have the numbers better than I do. I don't have them on the top of my head.

And again, the reason why I'm asking the question is, what I've heard is Solana's not decentralized yet because it's only got one metadata client. Solana doesn't have TVL and Solana doesn't have enough tooling. And that was something that came up yesterday. Now, Solana was also launched years after Ethereum. And so Ethereum got a head start in terms of TVL and tooling and stuff like that. But because we're so early in the blockchain race, to me, I'm thinking, okay, well, I don't need a lot of TVL now.

I'm not looking to trade with institutions. I'm looking to build an application that's going to be used in the future. Therefore, let me build it now on the one that's going to win at the end, which is going to be the cheapest and most efficient. I think they do want TVL now because if you

don't have TVL, you don't have a business for very long in most cases. Obviously, there are exceptions, but in most cases, I agree, but but you can't compare the TVL of which was launched. I don't know the exact number, because I don't know when you consider launched it. But let's eat has got a three to four year head start on Solana. And that's the point you're you're you're frankly, you're making the argument for to some degree outside of the developer side, but network, we all, I mean, argue about the importance of network effects and size, right? Having a head start is a huge factor either way. And I don't really have a dog in the fight here, but like, you can't just say because they have a head start, that's unfair,

or you shouldn't use it. I mean, that's the reality. I'm actually going to like come in here and here and say, I kind of agree with that, that yes, Solana has existed for a lot less time. Yes, if you're grading us on a curve, we're doing far better than Ethereum was doing at this time in its journey. That doesn't matter to someone making a decision where to build today, though. I think that's a very valid future projection argument

to say, well, in the future, things may be better and change and whatever. But today, like what matters to folks is what they're able to build today. And you know what those motivations are. I think TVL is very important for DeFi. It's not important for DeFend. It's not important for a lot of other areas. And it's an incredibly important metric for a certain class of application. And that's a, you know, if that's what you need, if you need $600 million of TVL in

your specific protocol, this is why Lido staked ETH exists. This is why all these sorts of things, there's a ton of really great reasons you might want to do something like that. I do want to go back to the foundation support piece, though, because I think this is actually really key. I think a lot of foundations provide far too much support, and it creates developers that are dependent on the foundations and don't want to be founder friendly at the sauna foundation. We want to be founder tolerable, right? Ethereum did not get to where it is today by handholding a bunch of developers through the process and the folks who sink or swim on sauna. And there's lots of very profitable businesses on sauna. I mean, Metaplex has protocol fees on our NFT minting contract and that, that creates millions of dollars of revenue for them. These things do work. They're just different models. And you know, these are earlier stage projects, sometimes than what you see on Ethereum. How much does it make to be an LP and Uniswap nowadays? Right?

Like, there's there's a lot of these sorts of things where I think if we're being honest, a lot of crypto is still trying to find the long term business models that work out, but it's not a Solana specific problem. Yeah, if I were to jump in here, too, I think we've heard I've heard a lot of like Ethereum versus Solana. I do want to call out that a lot of people are sleeping on the kind of DeFi on Bitcoin narrative, where it's a hated trade by both the Puritan maxis. And by the Solana and Ethereum communities where they you know, look, Bitcoin can't do a lot of the things that these chains can do. But, you know, when we look at Bitcoin, like let's look at BRC20s and NFTs alone. Ordinals are brand new as of about nine months ago, and we're seeing incredible amounts of interest. And that's just kind of, I would say, the tip of

the iceberg. When we look at a protocol, when we look at an L1, you've got liquidity, you've got network effects, and you've got the ability to build different things on it. Those all, I think, are woven together and highlights why a certain protocol, people would want to go build on it. Bitcoin has the largest number of unique users. It is the most liquid asset out there. It has the most potential TVL. And so that's where I think, like, I just wanted to call it out because I feel like we're talking about Solana versus Ethereum, but the title of the space is Solana versus Ethereum versus Bitcoin. And I think that a lot of people are sleeping on this. I mean, what's really cool too is with

NFTs and BRC20s, there's actually DEXs built on Bitcoin using partially signed Bitcoin transactions. Millions and tens of millions of dollars a day is being transacted. This is really cool. Look, I think Solana and Ethereum are really, really cool as well. I'm not trying to come out here and say Bitcoin is better in this regard or something. But it's something that I wanted to bring up because the space is titled that. And I think we've just been talking about Ethereum. Right now, Bitcoin is probably the easiest place for a developer to come

and attract an audience and TVL. And I say this on the basis of the fact that if you look at what Ordinal's projects are able to do, and if you look at what BRC20 tokens are able to do, on the basis really of very, very little, like what's been launched and released so far is extremely primitive. In many ways, unsatisfactory, very garage band kind of stuff, and is attracting instantaneously huge amounts. I think there's a reason for that. People recognize that something earth shattering is happening with Bitcoin right now. It is rapidly picking up new capabilities and protocols, which are allowing it to do more and more. We're going to see this, I think, increase in the same way that last year,

every few months brought something mind-boggling to the world of AI. This year, we're going to see, this coming year, we're going to see the same thing happen with Bitcoin. Every month, every couple of months, we're going to see an entirely new capability added to Bitcoin. And people are very, very excited by that. And so, you know, Ron asked, why should I build an Ethereum versus Solana? Or why should I build on Solana versus Tron or versus, I don't know, whatever. And there's a more fundamental question here. Why are we building blockchains at all? Centralized servers can do everything that we're talking about much faster and basically for free. The reason that you build on a blockchain is because you're building for decentralization. And the reason you want decentralization is because you want censorship

resistance and you want permanence. You want something that you know that you can put your money into it and you can manage your financial life for the next five, 10 years, and then for the financial life of your children and your grandchildren. And there is only one protocol which provides that level of permanence, which is like a law of nature right now. Nothing comes close. you know i i don't particularly like michael saylor and his nonsense but when my interpretation like the best interpretation i can give for for his like there is no second best is i don't know if ethereum is going to be here in 10 years i don't know if salon is going to be here in 10 years but i know for certain that Bitcoin is going to be doing one block following another for the next 50, 100 years.

And that is a very, very big advantage. In fact, I would argue it is the only reason blockchain exists at all. How do you get past? I'm genuinely asking like Dan and the other Bitcoiners. How do you get past the hurdle of your own community hating the innovation? Permission is an element. We don't need this okay one second so that that's the first part of the the question that i have the second part is you know you talked about maybe it being the best place to build right now and and where it's you know the the attention is coming from i i would

argue that that attention is coming from Ethereum users that see activity, that see liquidity, that see opportunity, that will probably extract value and take it back to Ethereum. So one, how do you get over the hurdle of your own community hating the innovation?

And then two, are the users actually Bitcoiners or are they what you would call shitcoiners coming to extract value and take it back to their chain ultimately? The shitcoiners aren't taking value back to anywhere. The only place they want to take it back to if they're taking it back to something is to dollars. So what is a shitcoiner?

A shitcoiner is somebody who's into crypto without any sense of the fundamentals and in order to try and make more dollars. And so, sure, they might want to convert in and out. But that is exactly the point, right? Exactly what you said, I think, is exactly the proof of what I just said, right? People from Ethereum don't have sort of a principled dedication, right? Or a principled choice of the network they're using. They're mercenary. The capital is mercenary. It will go anywhere. There's no long-term loyalty. People like to talk about community and loyalty and NFTs, but ultimately it's just money sloshing around, chasing whatever is the next buck. But your most loyal holders hate what you're doing.

So I've got two pretty good answers for this. One, when it comes to cultural divide, the original Bitcoin OG community was actually very builder-oriented. And I think there's a lot of folks over at Trust Machines, over on Stacks. You also have Tapper Wizards that are really pushing the envelope and moving that Overton window. I think Ordinals really moved that Overton window a lot farther towards the builder side. So yeah, Bitcoin does have a very, I would say, negative and anti-builder community. But that is

changing. And what's funny is that it doesn't have to be cultural. It's purely profit and business incentives that will align them eventually with that more of a builder type community. Because if your customers want to use BRC20s, NFTs, et cetera, and other Bitcoin L2s, if you don't build that for them, someone else will and they will capture that value. So ultimately the market of people speculating and trying out these different assets on Bitcoin will lead to, I think, moving that conversation further towards the builder side. Now, when it comes to network effects and how those are lasting, I'm actually writing a piece on this called Casino Games that's coming out soon, where I observed this phenomenon at NFT NYC. So I met at NFT NYC two years ago, and I'm talking to folks and they're like, yeah, I bought this NFT for 0.1 ETH and I flipped it up for 0.3.

And I'm like, cool, congratulations, great job. What do you like about Ethereum? What do you like about proof of work versus proof of stake? Or what do you think about Ethereum's monetary policy? And they're like, I don't know what any of those fucking words mean. Like literally, like none of these people had any idea as to how the protocol worked at all. Now, at first I scoffed and I laughed and I'm like, ah, silly, silly Ethereum NFT people. But then I realized most people who hold Bitcoin probably think the same way. Most people bought Bitcoin because their buddy bought it. And, you know, purely from the speculative mechanic, right? Now, what's interesting, though, is the native token of this speculative

casino is Ethereum. Ethereum has more games in the casino. They've got NFTs, yield farming, staking, all these fun speculative activities. But you need the underlying token, the casino, Ethereum, to do those. But what's interesting is when people speculate and gamble, they ultimately stick around. They have some Bitcoin left. They have some Ethereum left in their wallet, even after the hype cycle plays out. And that's where I think these new speculative games on Bitcoin will introduce more people to Bitcoin, not only from other crypto communities, but other types of individuals, for example, the creative types who are more drawn to NFTs versus the whole sound money narrative. I also think we have to be careful about making

sweeping comments about the community when these communities are largely bifurcated or have subsets and you can't pretend that a few very very loud vocal minority represent the beliefs of everyone else the market tells you what the community believes and right now as we've heard on these spaces in the past few days i believe that uh ordinals are being minted at a one-for-one ratio to n Ethereum. Right? Yeah. I mean, there's just as many NFTs being minted on Bitcoin and people are going and the people doing that are obviously jumping major hurdles to do that versus doing it on another chain. There's real interest there. And so just because there's a few, the, you know, the grand council of Bitcoin sorcerers who tell us what we're allowed to do and not do, just because a few of them

are exceptionally loud, doesn't mean that that is a representation of the community. And so I just think that's really important to note that we can't just say the community hates these, because they obviously don't. If they did, they wouldn't exist. There's maybe 5 or ten thousand total like toxic maxis on bitcoin and you've got more than a million wallets that hold at least one entire bitcoin at this point so the the variety across the bitcoin community and like we saw this you know someone who builds developer tools on bitcoin when ordinals first dropped yeah a lot

of ethereum people came over but it, a lot of Ethereum people came over. But it was a lot of Ethereum people who had all held Bitcoin, had maybe been in the Ethereum ICO, had held Bitcoin since before that time and had used it to buy in there. So there really is a great diversity across the ecosystem. And ultimately, that's why we think, yes, it's all going to get built back here because there are just more users um and i think yoga's point is really key if bitcoin goes away there is no crypto like bitcoin is the base of all of this and we can afford you know the the the ecosystem as a whole could lose thalanna it could lose ethereum if bitcoin goes lose Ethereum. If Bitcoin goes away, I got to say everything goes away. I got to run. Thank you guys so much for having me on. I've got a bunch of meetings to get to.

I do want to leave you guys with one thought, which is folks thought the same thing about governments, that if divine monarchy fell, there could be no order in society. I like Bitcoin. I like Bitcoin, love Bitcoin. There's great threshold Bitcoin on Solana. But it's the assumptions we don't question that often catch us up and cause giant world calamities. So just food for thought. Thanks again. Are you predicting a world calamity on your way out the door, Austin? Always. Okay, good. That's how you do it, man. That's how you drop a mic on your way out of the room. James, I know you had a comment there. austin yeah i wanted to make a few comments just purely

from an investor's perspective i can code but i'm by no means a developer so don't shoot me down but i mean i'm looking at it from the other level i mean at a very simple level you know bitcoin is the biggest network outlet it has those network those network effects, and that's great. And Ethereum is potentially theoretically a close second. But one of the big differences is Bitcoin is leader-less. You can't subpoena anyone from Bitcoin. I think that's very powerful, but it's also the downside. The thing I like about Ethereum is that is that yes perhaps it is more decentralized although

we've seen the number of um validators rise from 350 000 to 890 000 so that's quite positive in terms of decentralization um we've not seen uh ethereum is it has the foundation and they're thinking deeply about some of the the problems and and how to fix them you know probably dank sharding and then sharding and i really like that kind of leadership actually um and i quite it's quite appealing in solana too where they have that leadership but bitcoin you know it's got a bit of a there's a bit of a sort of quagmire at the moment around ordinals and there's this seems to be this scrapping around you know whether they should censor ordinals and things like that and you know and and how to improve those transaction speeds and things like that and there's no real leadership

in bitcoin and that's perhaps a big problem but so that's exactly the point that is literally yeah you if you're relying on leadership then you shouldn't be in the crypto or blockchainpoenaed, that it is leaderless. But I don't see Bitcoin and Ethereum as the same thing. You know, Bitcoin is a store of value, this non-sovereign store of value, whereas Ethereum is this, it's a bit like Amazon Web Services, but with a currency rolled in it. And now people are probably going to hate me for that. But it does, you know, look a bit like that. And when it comes to something like Solana, I'm just looking on DeFi Llama,

and I see there are more devs and arbitrage and optimism now. It's much greater dev growth, much greater TBL growth. And it does worry me about Solana. We've seen a huge amount of hype this year. You look at the amount of funding flows into Solana, it's been massive. Like if you look at the price and fund flows, it's 850% a year today. It's been huge but it worries me because it might be a little bit on hot air whereas you're seeing arbitrage

and optimism grow much more and ethereum is very unloved at this point i i have to say it and this has nothing to do with solana specifically or ethereum or or any of. But if you look at any past cycle in crypto, we always have these hype-driven moments in time. DeFi summer, NFT summer, metaverse fall, all of these things. And rarely do they sustain throughout the entire cycle. I would say just from outside looking in, not even paying attention to any of those metrics, the feeling to me is that solana started this hype cycle of the entire next cycle and probably will just by adhd traders and speculators will be replaced by other narratives at some point in this cycle and that has nothing to do with what is being built there, how much TVL comes in. It just feels like it was like the DeFi summer of 2023 this time, right? And so maybe that won't play out that way. Maybe Solana will drive the entire next cycle. I'm just always hesitant to think that anything in this space will last for a very long time when it first gets its big bump joe yeah i mean i kind of wanted to go back on something you said earlier about the the type of people being very different from one another that's also true for projects right like

austin mentioned something maybe think like i always take this debate from an approach of defy but there are pro there's things like helium and render on solana where solana makes perfect sense right so if you are looking at this from a d5 perspective my point is ethereum is much stronger and even the l2s that are being built on it they've been able to get more tbl than solana has and they started up afterwards um but from other perspectives there is a use for Solana. I'm not saying there's not. Helium and Render being two good examples of that. I'm not sure how they're doing business-wise. I know token-wise, they're down, but token is just a reflection of emotion, not really a reflection of what's really happening at the company. I think that's fair.

Alex, I saw you were sort of applauding there. Do you have any thoughts on that? Or at least previously? No, there was something I was going to say on previous, but we kind of moved past it. Okay, you can circle back. You're allowed. Or not.

Cool. Honestly, I think that we've uh largely covered it and without uh without austin here i don't want to uh you know really uh continue the the quote-unquote debate i do really find that um the proliferation of nfts and ordinals uh brc20s on bitcoin i think in my opinion is going to be very, very compelling through the rest of the cycle, regardless of what the quote unquote community believes it will be. I think the numbers don't lie. And I think that there was a celebrated death of all of that sort of this summer. And now the fact that it's completely rebuilt and surpassed where it was at the very beginning, I think is big news. Hey, Dan, I have to ask you, actually, we talked about it before you got on Alex and I very briefly at the beginning,

what do you make of ordinals trading being banned in El Salvador by Bitcoiners? I mean, that's that's absurd. Like if you're a Bitcoiner, and you believe in sensory and transactions, there is nothing more antithetical to Bitcoin's core ethos than wanting to do that. Look, these are free market transactions. I am not saying that I think that BRC20s are a good investment, to be clear. I am not saying that XYZ JPEG is a good investment. Also, like, I don't know what good art looks like. I'm not a person to evaluate art.

I'm not here to to opine as to, if classical architecture looks better versus modern architecture, but the core root of this and the whole reason why I care about Bitcoin is that it's permissionless. It's permissionless. And in a free market economy, whether people want to buy fucking pink flamingos or they want to go, you know, serve soup down at the soup kitchen, you know, these soup kitchen. These are all subjective activities where we might morally weigh one or the other as better, but the whole point of a free market system is that we should allow it to be permissionless. And the whole point of Bitcoin is that. So the idea that a country bans certain transactions, especially ones as I would say as innocent as ordinals. I mean, look, ordinals are on top of Bitcoin.

If you're a Bitcoin hardcore Puritan Bitcoin maxi, like why wouldn't you want more activity happening on Bitcoin? I think it's completely absurd and antithetical to Bitcoin's core ethos. Libertarian, isn't it? All right, Jago, go ahead. So I think you're, the person who said that, who tweeted that ordinals are illegal in El Salvador is Max Kaiser. And Max Kaiser has managed to build himself a lot of influence in El Salvador.

And I think Max Kaiser is frequently a dope. And the fact that the country of El Salvador have decided to turn him into a senior advisor is an extremely poor reflection on El Salvador. And a huge number of Bitcoiners would much rather no government and no country involve its grubby hands, its authoritarian hands in Bitcoin. And that is what's so special about Bitcoin. I think that is one of the clear dividing lines between Bitcoin and everything else. Ethereum is made for friends. Solana is made for friends. Solana is made for friends. There's this culture of trying to get everyone to get along. And when everyone's getting along, then the biggest players

get to collude. On the other hand, Bitcoin is made for enemies. It's made for people who like El Salvador and who dislike El Salvador, for people who like ordinals and for people who hate ordinals, for people who like lightning network and for people who will never touch it. It's made for Russians and Iranians and Americans and French. It's made for everyone because it's made for enemies. And that is what you want from a money. And it's what you want for a truly censorship, permissionless, open system. You want it to be above any group and you want it to be robust to the requirement like in proof of stake for everyone to come to agreement consensus

needs to be between enemies and not friends and that's the huge engineering triumph of bitcoin i am so stealing that and using it with people y Yago. I think that is incredibly well put. Yeah, I'm going to let that one just be the mic drop on the way out, guys. Everybody, thanks. We'll obviously be back tomorrow at 10.15 a.m. Eastern Standard Time. Maybe tomorrow we'll shit on Jamie Dimon on principle. That seems like a fun way to spend an hour. All right, everybody.

Thanks. See you tomorrow. Bye.