Unchained - Eric Wall and Udi Wertheimer on Why Bitcoin Maximalism Is 'Like a Shitcoin Community' - Ep. 412

Episode Date: October 25, 2022

Eric Wall, crypto blogger and investor, and Udi Wertheimer, a recovering Bitcoin maxi, discuss everything about Bitcoin Maximalism, whether BTC can survive, and whether Ethereum constitutes a threat for Bitcoin.    Show highlights: how Eric and Udi got involved with Bitcoin what Bitcoin was like in the first days how Bitcoin maxis appear to have a script to engage in discussions the philosophy behind Bitcoin maximalism why Eric believes Bitcoin maximalism is like a “weird cult” how Eric thinks that the BTC community has an unspoken rule forbidding criticisms whether Bitcoin has lost intellectual power why people have recently been turning away from Bitcoin maximalism why the poor Bitcoin culture doesn't mean it's the end for Bitcoin, according to Eric the perception of the Lightning network and how people are not interested in faster blockchains whether Bitcoin should increase the use cases of the blockchain, like DeFi, NFTs, and stablecoins El Salvador's adoption of BTC and whether it had an impact what happens to internet subcultures and how the behavior of Bitcoiners could be predicted whether Ethereum is a threat to Bitcoin Thank you to our sponsors! Crypto.com Chainalysis web3 with a16z     Udi: Twitter Eric: Twitter Medium   Episode Links   Previous Coverage of Unchained: Is Bitcoin Doomed to Fail? Eric Wall and Justin Bons Face Off Arthur Hayes, Former Ethereum Skeptic, on Why the Merge Makes Him Bullish on ETH  With the Merge, Will Ethereum Take Over Bitcoin’s Title as Digital Gold?   Bitcoin Culture and Security The Rise and Fall of Bitcoin Culture by Paul J. Dylan-Ennis Geeks, MOPs, and sociopaths in subculture evolution by David Chapman Surprisingly, Tail Emission Is Not Inflationary by Peter Todd Justin Bond’s thread on BTC security model A (brief and incomplete) history of censorship in /r/Bitcoin   Ultra sound money   El Salvador: Previous Coverage of Unchained: Bitcoin in El Salvador: Why Would Cypherpunks Support Government-Mandated Bitcoin Adoption? El Salvador’s Bitcoin Paradise Is a Mirage by Nelson Rauda     Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey all, ever since I started covering Bitcoin in 2015, the community has undergone a large shift. This mostly occurred due to the block size wars of 2015 through 2017, but the culture of the winning side has undergone an even more dramatic shift since 2017. For the last couple years, Bitcoin maximalism has seemed like the dominant strain of Bitcoin culture, at least in perception and online. This past summer, some prominent Bitcoiners began to speak out against maximalism, and since then there's been a noticeable uptick in the number of voices denouncing it. In fact, my two guests today have gone so far as to mock it. Eric Wall and Udi Wertheimer and I originally planned this discussion all the way back in August,

but Eric came down sick right before our recording and because my editorial calendar was full, it seemed like we had missed our moment. But the trend of criticizing Bitcoin maximalism has not died down. And because of Bitcoin's prominence and importance in the overall space, it seemed worth unpacking what happened and what happened and where Bitcoin goes from here. Eric and Udi are Bitcoiners, but don't feel that believing in Bitcoin requires dunking on every other coin out there. I found their criticisms of Bitcoin maximalism refreshing and interesting and hope that you find them thought-provoking as well. And now on to the show.

Hi, everyone. Welcome to Unchained. You're no-hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago, and as a senior editor Forbes was the first mainstream media reporter to cover cryptocurrency full-time. This is the October 25th, 2020 episode of Unchained. Want to know what you missed in the last 24 hours in crypto? Unchained's daily news bits are now on YouTube with biggest headlines in 60 seconds or less. Go to YouTube.com slash C-S slash Unchained podcast. Whether you're Crypto Curious or a C-suite decision maker, you have to check out Web 3 with A16Z, the chart-topping technology podcast about the future of the next internet. Listen to Web 3 with A16Z on Apple Podcasts, Spotify, or wherever you get your podcasts.

Chainalysis demystifies cryptocurrency by providing industry-leading compliance, market intelligence, and investigation support for all crypto assets for organizations like Gemini, crypto.com, and BlockFi. Maximize your potential with the leading blockchain data platform by visiting Chainalysis.com slash unchained. With the crypto.com app, you can buy, earn, and spend crypto in one place. Download and get $25 with the code Laura. Link in the description.

Today's topic is Bitcoin maximalism. Here to discuss our Eric Wall, crypto blogger, and Udi Wertheimer, recovering Bitcoin Maxi. Welcome, Eric and Udi. Hey. Thank you, Laura. So let's just start with how you guys each got involved with Bitcoin. Eric, you actually kind of recently recounted this on a previous show. So why don't we start with Udi?

Yeah, I don't know. Each time I get asked this question, I make up a new story. Let's see what I come up with this time. So I, you know, my background is software engineering. And I think that I always had this interest in decentralized applications. Back then, it didn't mean anything like what people are talking about today was stuff like, I don't know, sharing MP3 files on, on, on, on like networks like BitTorin or whatever. They just seem really interesting.

I think I've somehow heard of Bitcoin through that. And I think I had some attempts playing poker online at the time. That must have been like 2014, whatever. So through poker, I had like this notion of how difficult it can be to transfer money to places you're not supposed to. And also, I think, you know, poker had, like online poker had a big issue where apparently one of the big poker sites turned out to be like a big Ponzi scheme that never had the money. So, you know, I had a good grasp of that concept of money that you don't actually control and you see a number, but it's not really you. So Bitcoin clicked like pretty quickly for me. And I think for most people, it did at the time because it seemed not necessary.

But for me, like I was, oh, I completely understand what this is for. And, you know, over time, I just couldn't get my, couldn't stop thinking about it. I think it's the normal story and start transitioning into software engineering in that space. And then over the years, what would you say your involvement has been? You know, probably I've tried to focus on like consultancy for software projects into crypto space. So either like open source Bitcoin's, stuff earlier on and then whatever crypto projects happened to be. I did a lot of work in the Israeli Bitcoin community,

both for, you know, we had like, there's actually a pretty impressive Bitcoin community in Israel that doesn't get a lot of, doesn't really get into the limelight and the global, you know, global scope of things, but it's actually like pretty active and a lot of people are, You know, since the very early days, I've been helping people to onboard to Bitcoin. So we've had some interesting education efforts there. But, you know, for me, it's been mostly like either software engineering and then over time, I started seeing that actually there's like a financial aspect of this too that that didn't

interest me at all at the beginning. But over time, I got more and more interested in it. All right, Eric, how about you? Why don't you tell us how it is that you got into Bitcoin? Yeah, so I also tend to tell a different story each time. So I guess this time, I'll say that, well, so in 2011, 2012, I was searching for internet subcultures and communities online. And I was into like software security and penetration testing.

And through that way, I was into the dark web a lot, darknet. and I discovered Bitcoin there actually in 2012. And I thought that Bitcoin was the intellectuals. I thought that I'd found an intellectual center online, an internet subculture which had concentrated a lot of the brain power from all different parts of the internet. So I got into it that way. I was studying computer science at the time.

And Bitcoin sort of became parallel to my academic interests. So talk a little bit more about that, like the culture when you first started. And Udi, you should answer too, because I think both of you now are critics of a certain part, a certain dominant part, I would say, of Bitcoin culture. So let's just have you describe what the culture was when you first started. Yeah, so Bitcoin touched on a bunch of different interests and different political and monetary. and computer science fields at the same time. So it was this very interesting intersection between game theory, Austrian economics, computer science, cryptography, cyphorpunk type of communities, all at once,

which I thought made one of the most interesting places to be on online. I thought that if you weren't into Bitcoin and you were on the internet, you were not using the internet correctly. You hadn't found the most interesting place. So, I mean, if you go back to like the old Bitcoin talk firms, it was actually like a very interesting community. There was ideas not only related to Bitcoin, but all types of ideas were discussed widely and broadly. And most discussions included very, very intelligent people, very knowledgeable people. But also people coming into the discussion with many different types of views.

So you'd have like a mix of very different ideas. And the discussions used to be pretty open. You know, people had different ideas, but they were able to discuss them in an open way and constructively criticize each other. There was a lot of different dynamics. There were aggressive types, weird types, but the conversations were sort of fluid and going in strange directions and was very interesting to follow. And Udi, actually, before we ask Udi, just do you want to very briefly say like what you think the contrast is to the Bitcoin culture today? I mean, it's, yeah, it's, it's changed a lot. I mean, now these days, you know, when I got into, when I, when I started to criticize

smaller like shitcoin communities in 2017, they would respond in a very like dogmatic way. They had like a small script that they had been taught. That's sort of how, what it's like to interact with the, with the Bitcoin community today. unfortunately. So Bitcoin has become like a much like a small shitcoin community with not a lot of intellectual stamina or intellectual breadth, unfortunately. All right. So we'll dive more into that. But Udi, why don't you also describe what the community was like when you first got in and then maybe you can talk about how you think has changed? Yeah, you know, I think the, to me, and I'm sure that every, you know, every person remembers it

differently. And by the way, I, did get an important feedback about that from a friend who told me, you know, you tend to look at anything that happened, you know, five, ten years ago with some, you know, with rose-tinted glasses and you seem to all you remember the good thing. So there are definitely a lot of cringe, weird stuff and weird debates and weird, a lot of political arguments early on as well. However, I would say that, to me, at least, it was fun. You know, people were realizing this is a new invention. They're still figuring it out.

And there was a lot of fun involved in doing that. You know, it wasn't, I didn't feel like people were in the most part too self-serious about it. Like, took it super important. Like, this is like, you know, we're going to use Bitcoin to save the world and it's a gift for God. It was more, you know, a fun experiment. And let's, let's find out what we can do and how we can use it. And I feel like that, you know, sense of fun was really lost. And it kind of got replaced with a sense of morality,

as if there is some inherent morality to using and owning Bitcoin. And not using and not owning it is kind of immoral in the sense that if you, you know, if you're exploring other networks and then there's an immorality to, it because you were slowing down the process of Bitcoin fixing the world. To me, that, you know, that's just that that kind of like Eric says, it used to be both fun and intelligent. And now if the conversation is about morality, then really there's not much intellect left. Like it's, it's, you can't really have a discussion about the morality of Bitcoin.

Like some people will think it's moral to own it, I guess. and you're not going to, some people are going to think it's immoral. There's not going to be an agreement. There's not going to be like any discussion you can learn anything from. And, you know, the point about turning into, obviously a lot of Bitcoin people will not like me saying this, but I totally agree that the Bitcoin maximalist community at least, not maybe not all of the Bitcoin community, but the Bitcoin maximalist community seems very similar to the Iyota community or the Ripple community of 2018. And the most starkling resemblance is that you, when you talk to a Bitcoin maxi, you know

exactly what they're going to say. So there's never, ever new information presented in the conversation with a Bitcoin maxi. You can chart the entire discussion before it starts. And that is exactly what it used to be like talking to ripple people and Iota people back then. They had the script that they got from their leaders, not formally and officially, but just just the way of work. They had that script and they knew what they should be saying.

And you could tell exactly what they were going to say before they even opened their mouths. And that's what it's like to talk to a Bitcoin Maximus today. That's what it's like to listen to a Bitcoin Maximus podcast today or a TV show or what have you. So maybe it's fine. Maybe that's the way that you grow community. But it's definitely different. The way that you see this in its most clear form, I think, is when you're disneyed, discussing with a very, with a very aggressive person who's coming at you really, really hard.

And then when you give a counter argument to what that person said, what he does is that he doesn't respond to your counter argument. He just tags another person because it doesn't know, like, what is the fault? What do we say in this situation? What do we do when the guy answers this? Like, that's not in my script. So they tag a smarter person. And then I'm like, why did you tag that person? I don't know that.

I don't know the answer to this part. Like I only have this part of the script ready. So this is what Bitcoin Maxis does also now. Like when you answer them in a too complex way, you go off the script, they get confused. And it's very weird to see people be so sure and be so aggressive. And then they're not able to like even back up their statements to like comments down, basically. I would say that what you're describing here is more like kind of the cultural aspects

of Bitcoin maximalism, but I was curious, like, is there, what would you say is like the philosophy? Like, what are the talking points generally of Bitcoin maximalists? I mean, you know, there's like, there's two ways to look at it probably because and I don't think all Bitcoin maximalists define themselves in the same way. I think there's a kind of a reasonable type of Bitcoin maximalists who would just say, look, I am just not interested in all the crypto stuff. It's either, you know, too complicated, too risky, not interesting, boring. I have, you know, other concerns in life.

I have other things to tend to. And Bitcoin seems to feel a need for me. It gives me what I need. I don't really care about the other stuff. I think that's perfectly reasonable. It's probably a good, you know, probably a good fit for most people looking into crypto, at least at the beginning. So that's, you know, that's fine. But then there's the more extreme type of Bitcoin maximalism, which it's kind of hard to define exactly what they believe in.

but I think it seems to be defined mostly by non-Bitcoin things. So like what defines Bitcoin maximalism? Well, that you're not allowed to use Ethereum. That's what it means. And you're not allowed to use Solana and you're not allowed. That's what Bitcoin maximism is. It's really not even about because if you go and ask most of the Bitcoin maximalism, do you use Bitcoin daily?

Do you use Lightning Network? Do you use most of those people would say no or, you know, maybe they would say yes, but that would be a lie. I'm not saying all of them, but most. So really, it's not even defined by what you should be doing. It's more defined by what you're not allowed to be doing and what you're not allowed to be saying and talking about. Again, for some reason, for apparently moral reasons.

And I think it might, so it stems, I think, from really a place of goodwill where I think in 2017 and the ICO era really 99.99% of crypto were scams. And I'm probably being generous. It was probably more. So, you know, and Bitcorners were just like, you know, some Bitcoiners at the time were already, you know, they made some money in the prior years.

And suddenly they had a lot of new crypto people try to sell them on the ICO stuff. And they, you know, they felt kind of targeted. And a lot of them fell for it and lost a lot of money. So I think that a lot of the anti-crypto stuff kind of came from that era. And it made sense back then. It made sense to call everything a scam in 2017 because everything was almost, you know. Similarly, there was also the whole, you know, block size debate. I don't think we want to get into at the time.

But it also kind of strengthened this defensive idea in the Bitcoin community. And I think that in the context of 2017, it kind of made sense because there were a lot of things to defend against. There aren't anymore. So if you look at the way that crypto projects market themselves today, for example, it's very rare that someone would say, we are the next Bitcoin. I think that the only major point that's still doing that is to certain degree Ethereum, like some of the Ethereum community would say that if is just a better Bitcoin and it's ultrasound money and while Bitcoin is just sound money and it's going to replace it and

just better in every way, that's probably one that still has that to some degree. almost no other coin is doing that. Definitely not the big ones. They're trying to compete with Ethereum. They're saying we're going to be the next Ethereum. So I feel like it's, you know, it's kind of just not relevant anymore to say, oh, you're not, those coins are not a better Bitcoin. Well, yeah, we know. We know they're not a better Bitcoin.

They're not really trying to compete with Bitcoin. They're not saying that they're a faster Bitcoin with faster payments. No one's saying that anymore. So I just think that that ideology is kind of outdated. It used to make sense, but these days it just, I think, you know, if you talk to someone who's coming into crypto for the first time this year or last year and they meet a Bitcoin maximalist, they just, they're just like, I don't understand why this person is saying the things they're saying.

It doesn't seem to, it doesn't seem to relate to the motivations that I have as a newcomer to the space. I don't care that Solana is not a better Bitcoin. That's not why I asked you about it. Like, I don't care. This is not. I understand that. Bitcoin is more censorship resistant and it has a cap supply. I get it. But that's not why I'm

interested in buying Solana. So let's either talk about that or let's, you know, we don't have to have the conversation. So I just feel like it's an outdated narrative and it doesn't work anymore. Wow. Yeah, Eric, do you want to comment on that? And actually, one other thing I wanted to ask you about was I wanted you to elaborate on something you said in the debate you had with Justin Bonds on my show where you talked about how the keynotes at Bitcoin conferences have changed and you said that they used to be people like Andreas Antonopoulos with a really strong technical understanding of Bitcoin. And now it's more like people like Michael Saylor, who, you know, he's a CEO of a public company that has bought a lot of Bitcoin, but obviously is not someone who has that kind of level of programming knowledge of Bitcoin.

And I just wondered if you wanted to, you know, talk about that. Plus, you know, what would you discuss in terms of the shift that we've seen in Bitcoin? I mean, so obviously different parts of the community behaves in different ways. But if we're going to talk about like the cult of Bitcoin, sort of the inner circle, which sort of permeates the rest of the culture also, there is something that has been happening there. There's this eschatological phenomenon where it almost feels like Bitcoiners have this idea that if they just follow the Ten Commandments or,

or the virtues that are being communicated by their leaders, they will inevitably fall into unimaginable wealth in the future at some particular day down the line. And everyone who didn't follow these commandments will die and disappear. So this is basically, and they give you almost like a roadmap for your life also. So it's not only, you have to avoid temptation, like you have to avoid short-term temptation for the long-term goals. And if you do this, you will also, you will get a wife that will respect you, and she will

carry many, many babies for you. So, and if you eat the right type of food, then you will become strong. And so it's these kind of values that have. sort of, so it behaves very much like some weird cult. That's sort of how I see a Bitcoin today. And it does also affect, like, which, who are the leaders that they tend to listen to? And when I think about, like, Michael Saylor, I think of him, like, not very much different than, you know, what Charles Hoskinson is to the Cardano community. It's someone that you can sort of disappear.

he has this mesmerizing quality when he talks. And so does Charles Hoskinson. And Charles Hoskinson has a lot of intelligent things to say about, you know, Netscape and old browsers in the 90s. And he talks in this, you know, worldly type of way about phenomenons and trends. But, you know, it doesn't really get that close to what the actual technology stack looks like and what the challenges are. And one thing that you never mention are the shortcoming.

and the mistakes that you've made. So you just focus on these very positive aspects of the vision and the goal, and you sort of charm and you draw people in that way. And I think this is one of the reasons that Bitcoiners behave like a shitcoin community these days, is because they follow the same type of leaders that only tell them about the gospel. They only teach the gospel. Whereas we used to have normal people that were very into the technology and into the, like, they weren't trying to like push a gospel on you. They were trying to educate you on how this technology works, what the drawbacks are.

And the community was more, like, I don't know, I don't know if I would say like, you know, the community chooses its leaders or the leaders changes the community. I don't know, like, which one of those it is. but it is a symptom of where we are today with the community that we don't have leaders that speak about like the quirks and sort of the negative size and the things that we need to fix and the things we need to get better at, but only talk about, you know, how amazing this community is and that we're the only ones that are on the path for truth. and we are the ones that are going to reach salvation by following this path, basically. Yeah. I mean, you go to a Bitcoin conference, and the main topics you will see are, well, the most popular topic is just macro. We're just going to talk about the macro environment, and then there's going to be probably some smaller tracks about what food you should eat and what kind of religion you should have, like literal religion. And very, very few discussions about technical things.

And even the actual technical discussions are usually about, like, you know, tools that people built, like, a new type of wallet or a new type of. You don't get, like, when you go to, you know, to DevCon in Colombia, you'll see talks about MEV and you'll see talks about, you know, what are the risks in the move to proof of stakes. a lot of the talks will be critical to certain degree. And if there are going to be discussions about the risk, they're going to be discussions about the stakes that were made and how to fix them. And you just don't see any of that at all in a Bitcoin conference. I think there are two reasons. One is that as part of the cult, you're not really allowed to criticize any decision

that was made in Bitcoin in the last five years. And the other thing is that not much happened in the last five years. So what are you going to talk about? You know, like if you want to say, if you want to talk about like kind of the Bitcoin roadmap, what are you going to say? Like you, I think the most honest thing you could say as well, you know, in 2017 we kind of, at least publicly, we kind of doubled down on the whole lightning thing. And I think if if we look at lightning in any sort of objective way, we can pretty much determine that it didn't make a lot of impact. Like that's the nicest thing I can say about it. You know, like it's, it's just didn't make a lot of impact.

Like there's very little users and very little activity and it's just not, you know, no one cares. That's that's the absolute nicest thing I can say about it. So, okay, so if we want to talk about the Bitcoin roadmap, it's not an official roadmap, but, but what it turned out to become the roadmap in the last five years, I think the only kind of way to discuss it is being disappointed by it and, and, and, and thinking about what we can change for the future, there's really not a way to say that it was great because it wasn't. I think you can't you can't say that it was phenomenal.

If you look at the last change to Bitcoin, it's been Taproot, I guess, and me and Eric Love making fun of Taproot. I recently went to a, I was on stage on the Mainette conference and I asked the audience how many people, I asked to just people raise their hands if they ever used Taproot before. and there was one person in the audience of, I don't know, a few hundred people raised their hand. It's just no one is using it, okay? I'm sorry. And I know. And just explain, that's like a, I forget it.

It's like a multi-sick something or other. I forget what it is. It's, you know, in the way of Bitcoin upgrades, it's like this complex mix of multiple things. Probably like the most immediate benefit is that it makes multi-sig a little bit easier. and a little more private and a little bit. But, you know, it's a very marginal thing. It was the introduction of Schnoor signatures and like localized abstract syntax trees in a combination that allowed you to do like more complex script and multisignatures,

for example, in Bitcoin. Okay. But in practice, it's, you know, it's not, currently it's not very used and, you know, maybe, you know, in a few years you will see it pick up to 1%, 2% usage. And I mean, okay, it's fine. There's nothing wrong about it. I just think that you could really, I think it makes sense to be honest with yourself and say, look, there just wasn't a lot of impact made, not by Taproot, not by lightning.

And maybe that's what Bitcoin people want to optimize for, minimal impact. That's not completely unreasonable. But if that's the case, then I think we should be honest with ourselves. And that's not the way that things are presented. Lightning is presented as a major success, and Tapu was a major success. I mean, it just wasn't. You know, like there's no way you can. I don't think it's necessary to say that they were failures or something like that.

But it's just minimal impact. And that's the nicest thing you can say about them. One thing I would say about this transition we've seen in terms of the people that are kind of the big names in Bitcoin is that just even I, as a journalist, would say, I've noticed a shift in the sources that I would consult about Bitcoin things. And I actually do feel that the censorship of the Bitcoin subreddit was a big driver of this cultural shift. Because I feel like people who are intellectually curious and just want to know the facts and kind of like, you know, then make their own judgment. I feel like when you get the sense that there's a place where people kind of are trying to make you think of.

a certain way. Like, you sense that and you don't like that. You know, you want to go elsewhere where you don't feel like people are trying to, like, force you to think a certain way. And so I do think that that subreddit when it became a place where, you know, certain views were just forbidden. I do think that that really changed the culture of Bitcoin, not only in what people thought, but in terms of what types of people it attracted. Because, again, those intellectually curious people, they would sense that and like not be interested. We, we, we, actually discussed this a lot in the debate, again, that Eric and Justin had about Bitcoin, but I don't know if you guys want to add anything on that. And actually, the last thing I would

add is I do think even the Dragon's Gen Slack Channel, which was a place where just a small number of insiders would get together and kind of plan different PR campaigns and memes to shift public opinion in their favor. In this case, they were on the small block side of the block size wars. I do feel like maybe that's a similar thing, again, where, you know, it's like this. kind of controlling of the media and just trying to shape people's minds. But I don't know if you want to, yeah, talk about that. The way I view it is, you know, there was definitely at least two political camps at the time. And we know that one of them had, you know, the certain control over the Bitcoin subrated

and they had the famous Draginton group. But it's like political groups are allowed to organize. I don't see it, you know, I don't see an issue with, you know, it's fine. They had similar motives and they decided to organize and optimize for their desired outcome. I don't see that as like a problem. And obviously the other side did it as well. You know, they had Bitcoin.com and they had their own discussion forums and I think it's fine. But there's certainly maybe an unwanted outcome that, you know, one side won and the other side lost and the side had lost lift. and we ended up with this kind of one way to think.

Everyone else just moved on. So for a certain period of time, I think it was beneficial because we didn't have to fight all the time anymore and we could focus on other things. But as time progressed, it just I think became more and more obvious that there's just one allowed confirmed narrative lift and everyone else just went elsewhere. So that, you know, that might have been a loss to lose all of that intellectual power.

Some, you know, some people, you know, especially like, again, I think it's great that we don't have those fights anymore. That's good. But it was at the cost of any sort of discussion, I feel like. So maybe not the best one. So in a moment, we're going to talk about why it is that now we're seeing a wave of people kind of turn on maximalism. Plus, we're going to run through a whole bunch of, basically, issues that Bitcoin is facing in the next few years. But first, a quick word from the sponsors who make this show possible. Eager to make more informed decisions around crypto using data you can trust, chainelysis is here to help.

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Get up to 8% cash back instantly. plus 100% rebates for your Netflix, Spotify, and Amazon Prime subscriptions. Download the crypto.com app now and get $25 with the code Laura. Link in the description. Back to my conversation with Eric and Udi. So here we've been talking about how maximalism became a very dominant part of the Bitcoin culture. And yet this summer, a number of people have been turning on maximalism. It's been really fascinating to watch.

And I wanted to hear your thoughts on why this is happening now. It's a part of mine and Udi's master plan, of course. Well, yeah, how did you guys, why don't you guys start about, you know, how it is that you turned on it? Well, my Mossad operator called me and said, look, this Bitcoin thing has been going on for too long. And we're paying you for years to make it stop to, like, do something about it. and I realized I might lose my job. So I called Eric immediately. No, I mean, it's, I think, you know, I've had some conversations with other people about, you know, this general topic for a while.

And I think that a lot of people, both people who have kind of publicly left the Bitcoin Maximilist camp and also a lot of people who are, who stayed and are even some of those who are loudly supporting the Bitcoin Maximilist camp, I think that a lot of them, would agree at least privately with what we're saying here and have been concerned with this for a while. You know, for the more public figures, there's definitely a sense of kind of audience capture where, you know, maybe someone with a large audience on Twitter or YouTube or whatever feels like they can't really say the things they want to say because if they do, they will be canceled and lose their audience and maybe they're a source of income and so on. to me, when I started realizing that it's really affecting, you know, one, the way I think and two, the way that I am allowed to speak about things, I was just like, okay, you know what,

I'm just going to cut off completely. I'm just going to rip the Band-Aid off and I'm not even going to leave room for questions because I don't want these people in my life anymore. So I was very aggressive about it. And I think a lot of people end up, you know, in the Bitcoin Maximus community, see me as is like a central enemy in the plot. But, you know, for me, the benefit was I don't have to deal with that anymore. You know, like it's very obvious where I sit now and I don't need to like be cautious

around what kind of things I say. But I think that a lot of people have similar failings and maybe I don't feel comfortable being as abrupt as I was. But, um... Well, I think one turning point was when Nick Carter revealed that he was. He had invested. Yeah. And then he was attacked on Twitter for having invested in something that wasn't strictly a Bitcoin project. And then he ended up writing this really long blog post saying, hey, if you thought I was a Bitcoin maximalist, then here's some news for you. I'm not. But I feel like Eric Voorhees long before that even also. But he was sort of like the outlier for a long time. But Eric, what are your thoughts around how? this shift happened. A lot of people will sort of straw man the position that I have and that Udi have and Nick has, you know, that we think that maximalists are toxic and they're mean,

but to me that's never been the issue. Like when, for example, when censorship started to happen on the Bitcoin subreddit, initially I did like go to the other like RBT and I think that, Maybe this is the new Reddit because we need a censorship free separate. But I later went back to the Our Bitcoin Forum. And the reason that I went back was because the core developers were still active on our Bitcoin. So our Bitcoin remained the intellectual center. So the only thing that I really, really care about is, you know, goes back to why I got into the space in the beginning is because I thought that I'd identified an intellectual center on the web

or intellectual conversations were happening. And so for many years, like when I, around, well, not that many years, actually, but around like 2018, 2019, where I would, first of all, I wanted to get like drive chains into Bitcoin. I wanted to extend the hash rate of Bitcoin to apply to other chains so that I could experiment with other functionality without, like, harming the Bitcoin base layer. Later, I found out that there was a great technology for this called Roll-ups, and we're now looking at introducing that, thanks to Udi, by the way. Udi has been trolling people on Twitter and directing hundreds of thousands of dollars of money that has gone to research projects, which actually I've been sitting on the Human Rights Foundation side and delegating that money into roll-up research on Bitcoin. Anyway, so for a long time, I was trying to think of how do I get enough trust in the Bitcoin community so that I can have enough respect and trust within the community to express certain ideas about different ways of architecting side chain systems, roll up systems, and I wouldn't be shunned out of the community.

So I cared very deeply about maintaining the respect and maintaining my identity within the Bitcoin community so that I could change the community, so that I could impact the community. But I think what has happened recently is that Bitcoin is no longer an intellectual center, and I therefore don't really have an interest in changing that community. Like those are not people, the loud bitcoinsers today, they are not really a community that I see, you know, I don't really see a way of changing them to become, to turn into a community that's, you know, there's any purpose really in getting them on your side. So what I think has changed now is that, you know, now we basically say, fuck it. let's not try to, you know, walk on our toes to cater to what this community feels and things because they're not going to teach us anything. They're not going to, you know, make us understand cryptocurrencies or Bitcoin or macro in any insightful way anyway. So what we're doing now and what has changed sort of this summer is that we're now thinking,

okay, so the Bitcoin community sort of sucks, but there is still a great. cryptocurrency here that's called Bitcoin that still has very interesting attributes. Let's try to invite people into being bullish about Bitcoin, to being positive about Bitcoin, but they don't have to associate themselves with these other people that we understand. They look like weirdos. They look like a shit coin community. They're not very smart. But that doesn't mean, like that doesn't have to be the be all and end all of Bitcoin.

You can still be a bit coiner. And there are people who will listen to what you have to say, give you good. feedback and we can sort of create a community for intelligent people who like Bitcoin. This is the reason that, you know, we sort of said fuck it and just came out and say we don't, we don't associate, we don't identify with what the community is right now. So, you know, this is why I think people are coming out and saying, you know, like, I'm not a Bitcoin maximist. I don't identify with those people. I don't have this, you know, I don't have weird food politics or I don't have, you know, weird views on how I should conduct myself

in a human being just because I like Bitcoin. So we're just pushing all that aside and we're doing it not to just destroy Bitcoin or destroy Bitcoin community. We're doing it in order to sort of clear the field, like do like a spring cleaning for new things to grow in this forest that has become overgrown with a bunch of rotten, fruits and meat eating flowers. Yeah. Yeah, I just, I think of that maybe similarly, but also a little differently. What we see is the Bitcoin maximalist community on Twitter and in Bitcoin conferences,

I think it's a very, very, very small portion of the Bitcoin community, very, very small. That is true. That is true. That is true. But whenever people say this, it sort of. takes away the attention from the fact that it is pushing the important people away. Like Nick Carter, for example, who's the best spokesperson probably in the world when it comes for Bitcoin mining and the climate aspect of Bitcoin mining.

Well, there's real, yeah, there's real damage done by the small group, very real. But it's very small. It's very contained. Like if you look, if you go to a conference and the podcasts, it's literally the same. 10, 15 people that interview each other on their own podcasts and then go to the same conferences and talk about the same things five times a year and five different conferences. But it's literally the exact same thing and exact same people. So it's very small and contained.

So like kind of the way I look at it is, you know, the real Bitcoin community, you know, there's a recent paper from Grayskill saying that 80% more than 80% of Bitcoin holders also hold other cryptocurrencies. 80% plus. So that that idea of only holding Bitcoin is almost extinct. It doesn't exist in the real world. The real bitcoins are, in my view, and based on just the conversations I'm having with people who are Bitcoiners,

the real bitcoins as far as I can see are very similar to the ones that we met in the subredits five years ago or seven years ago, whatever. You know, when I go to crypto conferences, I meet people who hold Bitcoin. Almost all of them. Not all of them, but definitely the vast majority of them. They're Bitcoiners. Sure, they're more interested in maybe in Ethereum or more in Solano or what have you. But the whole Bitcoin, they see the value in it and they have no intention of not holding it.

So kind of my goal and interest with this speaking out is that I'm hoping that we can get more of those people. or the vast majority to kind of speak out and say, hey, yeah, I care about Bitcoin a lot. I believe in the future of Bitcoin. I want to help improve Bitcoin. I also like Ethereum. I also like whatever. Maybe I dedicate 90% of my time to those other things, which is reasonable. You know, people will hold dollars.

They dedicate most of their time to their job and their family and not to the dollars that they already have. if we believe the Bitcoin is money, then most of the Bitcoin users are not going to be obsessed about it 24-7 around the clock every day and every time they breathe. But they have some interest in it and they do want to make things better. And I think it would make a lot of sense to shift what we see on Twitter to better reflect that because that's the reality. The reality is that most people who hold Bitcoin are not insane about their diets and they do not all subscribe to the same church.

And, you know, they have, they're very diverse set of people and institutions, you know, and what have you. So I think we need more of that. You know, like Eric mentioned the grant for Rolups, for Rulap Research. It's interesting. A lot of the money that goes into these grants is coming from the crypto world. It's either crypto funds or crypto exchanges because they're the ones making money, right? So when the time comes to donate to some nonprofit stuff that's related to Bitcoin, most of the money is coming from these people.

It's not coming from Bitcoin maximalists because they don't have money to donate. So it's coming from these institutions. And I think that if we bridge that connection, and Eric kind of mentioned that I was trying to do that last year to make that bridge so that we can gain funding, but also, you know, research. and some discussion synergies with the larger crypto community, which used to be part of Bitcoin. It didn't used to be like two separate things.

It used to be Bitcoin and crypto hand in hand. Bitcoin was seen as like the king of crypto. That's the term that people used to use. It's not used as much now because the Bitcoin Maximus community kind of rejects that. They're kind of saying, no, we have nothing to do with crypto. And crypto is bad. It's scams and it's Ponzi schemes.

And we have nothing to do with that. Bitcoin is entirely different, while in reality the major use case of Bitcoin is participating in the crypto economy. That's still the main thing that people do with Bitcoin, right? They buy Bitcoin and then they use it as collateral or they trade it into other coins back and forth. So that's the main use case. Yeah.

So let's, I just want to describe one quick thing here before moving on because I think there's like real problems in Bitcoin that we need to discuss. But there was a recent article in Coin Desk that was titled The Rise and Fall of Bitcoin Culture. And the writer is someone who has been in Bitcoin since 2012. And at a certain point in the essay, he calls out this kind of what he would term kind of a recent culture change in Bitcoin. And then he says that this is the aesthetic best described as boomer uncle on meta. and he describes Uncle Bitcoin as Bitcoin only, wanting Ethereum to be a security more than the Securities and Exchange Commission, Q&ON style conspiracies about Joseph Lubin and consensus,

uses outdated terms like ICOs and all coins, revealing they are trapped in 2017 Time Warp. Hyper-Bitcoinization is inevitable, even though nobody knows how a Bitcoin-based deflationary economy would work in practice. Proof-of-work is the only viable consensus mechanism for all possible use cases until the heat death of the universe. And then the last is some kind of Michael Saylor inspired esoteric Bitcoin Metaphysics, which I thought was hilarious. And of course, he also mentions, he said, you already know Uncle Bitcoin only eats steak. So it was pretty amusing. But so we've talked plenty about the culture. But I want to talk about now about the risks to

Bitcoin since, you know, as we've discussed, the culture, I think has kind of put a damper a little bit on some of the intellectual discussion in Bitcoin. For people who are interested in learning a little bit more about how Bitcoin's security model is under threat due to the over-reliance on fees, I would urge you to listen to the debate that Eric and Justin had on the show not that long ago. There's a number of things who are sort of running out of time. So I just want to talk about some of the other issues. We can circle back to that. But first, let's just talk about lightning, which has been discussed as the major scaling solution for Bitcoin. However, you know, there has hasn't been crazy adoption on it. At the moment, it ranks 74th amongst all defy protocols

in terms of total value locked. Udi, I saw you kind of mocking a tweet from Samson Moa of Blockstream who said, the Lightning Network has a theoretical throughput of 40 million transactions per second. That's the equivalent of 14.4 terabytes size blocks every 10 minutes. So, Udi, do you want to just start with there? And just in general, talk about, you know, how the perception that matches maximalists have about lightning as a scaling solution compares to the reality? Yeah, I think what happened, you know, we kind of backed ourselves into a corner there because in 2017, the main argument against Bitcoin and against the small block camp was that Bitcoin is low. In order to facilitate the needs of the mainstream, it needs to be with way,

way bigger blocks and the blocks needs to be faster and all of those things. And kind of to win the narrative over there, I think what a lot of the small camp people kind of said as well, for that we have lightning. And lightning will fix that. And since all of those competing coins like Bitcoin Cash and presumably, you know, I don't know, ripple and Ayur, Iota and to some extent, Ethereum, they're just saying they're faster Bitcoin. Well, don't worry about that. Lightning will be faster Bitcoin and it will be way faster. But it turns out that's not what people want. People are not sitting around waiting for a faster Bitcoin.

That's not why all of the attention to Ethereum and Solana and other layer ones happen last year. It's not because they're fast. It's because people wanted to do those activities on defying with NFTs and frankly just gamble. And those networks allowed them to do that. they weren't concerned so much about speed. They just wanted to make sure they're not paying $50 per transaction or whatever, which is unusable. So that's the only thing they cared about.

All of the other stuff about fast, micro payments that are settled instantly. No one cares. I think we kind of backed ourselves into a corner when we were like, well, lightning is the future of Bitcoin where it didn't even have product market fit. So we can discuss the technical merits of lightning and why it doesn't work very smoothly right now. I would say it doesn't.

But I think, you know, we can talk about the technical reasons for it, but I think the real reason is there's just no product market fit. And if there was, then either the technical problems would have been fixed because there would have been a clear profit motive to fix them. Or, you know, the technology would be changed to the point that maybe would even be unrecognizable, but it would work. But clearly people don't want it. People do not, aren't currently looking for a payment,

network that allows them to use Bitcoin quickly. That's just not a thing that people are interested in right now. If there were, there are tons of ways to solve this problem. But it's just not a top priority for anyone. So you feel like actually a lightning adoption has been so simply because it's trying to solve a problem that people don't have. Pretty much. Yeah, pretty much. And it's, it seems like the interest that people have is not in the payment use case right now. It's just not, It's just not where people are. And where there is some advancement in crypto payments, it's usually with stable coins and not with Bitcoin. Because paying with Bitcoin is, you know, for tax reasons and a lot of practical reasons, it's just a pain.

So it's just isn't very, very much in demand. A lot of people don't want to sell them their Bitcoin. They want to buy more and stack it and have, you know, and hold it for the long term. They don't want to use it to pay for things. So it just, the part of market fit doesn't seem to be there. I'm not saying it never will be. But right now, it doesn't seem like it's a major use case. Well, let's talk about where the crypto market has gone and then kind of how Bitcoin could try to fit into some of these things that have taken off.

Either of you can jump in on any of these issues. I'm just trying to get through a bunch of topics more quickly. So obviously, defy, you know, there was defy summer. It was like definitely a big thing for a while. obviously has dampened down with the rest of the crypto market. But, you know, one of the benefits of that is the auditability as we saw all these different collapses with like Celsius and Voyager and whatever, at least, you know, these loans made with the defy protocols, they, you know, the lenders were able to get their money back. So clearly there's certain benefits there. We could also look at the fact. And Udi, I heard you talk about this on what Bitcoin did. Metamask is the most popular wallet probably at the moment. Obviously, it's an

And I think maybe I don't remember if it supports other chains at the moment, but definitely doesn't support Bitcoin. And then the other huge trend of the last few years has been NFTs. They tend to be priced in Ethan Saul. So again, Bitcoin is sort of out of that market. I don't know, you know, when you look at these different trends that have happened in crypto over the last few years, you know, when you look at any of them, do you see a place for Bitcoin to fit in?

Or, you know, why do you think that Bitcoin has been completely cut out? You know, in the defy front, obviously, rep Bitcoin exists, WBTC. On Ethereum, it's pretty big. It's probably the most popular or the most used, you know, asset on Ethereum after EF itself and stable coins. I would assume. I think that's correct. So, and that's, you know, so like, that's pretty good. And I think it proves that there's demand for that kind of stuff for using Bitcoin as collateral on other chains.

I think it's very unfortunate that the Bitcoin, you know, the Bitcoin maximalist community seems to kind of, if best ignore this completely, if not even assign some immorality to that use case. But at best, it ignores it. And I think that's too bad because it shows that there's a real need and a real demand for use of the Bitcoin asset. even if not the Bitcoin network, but the Bitcoin asset in that way. And that's a good sign. I think that there's probably still some opportunity left there that is kind of no one capitalized on yet because it's this kind of weird taboo topic in the Bitcoin community. But I think that over time hopefully will fix itself.

So that's one thing. You know, the NFT front, it's totally like I think it's a real shame that there was no attempt. It might be too late now. I don't know when the NFT marketplace kind of wakes up again and if that happens. But it's kind of a shame the Bitcoin community kind of distanced itself from it. And, you know, NFTs started on Bitcoin with Rare Pipe's way back in the day and on counterparty, which was sort of a layer to Bitcoin. That was a long, long time ago and didn't have the name NFTs, but that's exactly what they were.

And they had a marketplace and they had some activity. and they had their own sense of drama over there. And there is like this small micro community that's still kind of doing those things. But at large, the Bitcoin community seems to have dismissed NFTs completely as a scam. And I just feel like, you know, if the goal with Bitcoin was to make it as a currency to be used as payments, and we know that most people don't want to use Bitcoin as payments right now or crypto at all as payments. Like most people are not interested.

Except for with NFTs. Exactly. Then whenever there's a group that pops up that shows that they do have that willingness, and that's exactly what NFCs were. Like they, you know, they had volumes in the billions of dollars per month with people paying with ETH or with Seoul. It didn't exist anywhere else that people were willing to pay with ETH. And those are new people.

by the way, a lot of them at least were completely new. So those people that went to YouTube to look for a tutorial and then download and made a mask, set it up for the first time, probably made a lot of mistakes, did the whole stick of self-custody, which is usually very difficult to, you know, explain self-custody to newbies. But for NFTs, they went right for it, even though the UX was horrible. You know, so they were really motivated to do this stuff. And the Bitcoin community was just completely dismissive of that. Like, you know what? Yeah, there seems to be millions of new people who want to go through the crypto funnel. And we don't want to be part of that at all.

We have no interest in even presenting Bitcoin as a alternative there. And that's very unfortunate, I think. And I hope that for the next time, you know, I don't know what the next big hype cycle is going to be. Who knows? but I don't know, maybe it's gaming, maybe it's something else, who knows? But I hope that next time we can collect ourselves and come up with a way to present Bitcoin as an alternative currency alongside ETH and Seoul and stable coins and what have you. Because we have to because if we're not, if the next 10, 20 million people are on boarded to a world where Bitcoin simply doesn't exist, then it will just end up being this niche thing. that only has people who won't boarded five years ago and very few new people.

So I think we need to find a way to do it in a way that, you know, in a way that is not scammy in a way that we're, you know, it's going to be different. It's not going to look like Seoul because we don't have a Bitcoin Foundation that is funding all of those things. It's going to be different. It's not going to be a for-profit thing probably. But I think we should be there.

We should participate somehow. Eric, what are your thoughts on all of these different, areas that Bitcoin is missing out on right now. Yeah, so I think the Bitcoin community has identified one important aspect here, which is that in crypto or in Bitcoin, and it's going to be pretty important to be the payment rails for stable coins. So this is something that the Bitcoin community has actually successfully identified, and this has been a theory of mine for quite a while,

that whatever the rails for stablecoin becomes, cemented within the industry, it will be very easy to then later integrate the native token for which that system was built. So if you do it, for example, if you have a roll-up, for example, an Ethereum roll-up, and that becomes the dominant crypto payment network, then it will be very easy to get native Ethereum into that payment rails. But if it's lightning that becomes this payment rails, then it'll be very easy to get Bitcoin. in. So whichever sort of payment mechanic that becomes popular, that's going to pave the way for then introducing that coin. But right now, most people aren't making Bitcoin or ether payments

that frequently. But people are using stable coins. Like stable coins is one of the killer apps of this industry. And I was listening to Michael Saylor at the Hodel Hall conference, where he successfully identified this, which I thought was very interesting. where he said that, no, we have to make, we have to use stable coins on lightning because people use stable coins. If we can get them to use lightning and stable coins, then it will be easier for them to then just transition into using Bitcoin. But now here's the problem.

So if you then take this, like if you think about, okay, let's use stable coins on lightning, this becomes a technical challenge. So the lightning labs has a theory. for how to solve this use case, which is that they want to piggyback on the liquidity of the existing Bitcoin Lightning Network so that you don't, like if you want to use USDT, you don't need a link of channels

with USDT liquidity through all those links in order to route USDT through the Lightning Network. What you do instead is that you just need stable coin liquidity in the first link and in the last link. And for all those intermediate steps, you swap from USDT, into BTC and then Bitcoin, the Bitcoin liquidity of all those intermediate paths, the Bitcoin liquidity

can be used and then you just convert in the last step. So this is an idea that would leverage the liquidity of Bitcoin in order to transfer stable coins over the Lightning Network. Now, the problem is that when you do this, when you try to use Lightning in this way, not only do suffer the routing fees of the Lightning Network, which can be substantial, actually, because in the Lightning Network, you don't pay based on how much data you're pushing through the network.

You're paying based on how larger you're actually, like the amount that you're paying. That's what you get charged based on. So you have a fee based on how big your payment is, and then you also have in this situation, we have

two other fees also. You have to pay a spread, from swapping stable coin into Bitcoin and then you have to pay a spread again of paying of swapping Bitcoin into stable coin again. So there's two spreads here

and these spreads like now it depends on who are you connected to and who's your route with. It's not like there's one central order book where all this liquidity is trading has to do like where have you connected to what their liquidity situation look like.

So the fees that you will get hit by trying to transfer the centralized stable coins are probably going to be pretty substantial. They won't be competitive compared to other cryptocurrency networks. And you're also using one of the most complex decentralized technologies to transfer a very centralized coin. So it doesn't really make sense to try to merge this already centralized coin through this complex decentralized mess that has all those. of these ux quirks and then also pay a bunch of fees on that but i mean this insight requires a level

of analysis and and that's the problem right it requires analysis and that's not something that is abundant in the current bitcoin climate and ecosystem like that's not a discussion that's going to happen uh so we've talked about this odi i think that you said well you know there are some people that are funding these Bitcoin-only type missions very aggressively, that they may just, you know, eat the fees for the users to sort of push this into reality. But my point is that so even in the cases where the Bitcoin community is able to identify that there are some use cases where Bitcoin sort of needs to get into, then the intellectual rigor of the community is not such

that they're able to discern what is a viable technological roadmap for these experiments anyway. And this is sort of the sad thing. And when I was listening to that conference, when I was listening to Saylor talk about this, they had questions afterwards. So people

came up and they asked questions. And no one dares to question, like, ask these difficult questions. They're not saying, but what about, you know, the swaps here? Like, what about, what about the UX of this. Are we actually, is lightning really going to be a good?

Lightning is not even that good for transferring Bitcoin at the moment. Are we even sure that this can be competitive to transfer these stable coins of all different sorts and flavors? So there's, you know, there's just no pushback because you don't want to speak against your leaders. Like they, it's all, it's too much fantasy and there's not enough reality. and I don't think that the current discussion climate in Bitcoin is sort of doesn't really foster the type of realism that you need to have in these debates. Here's what I think, Eric.

I see this differently. I think that as far as, you know, people are focusing in the Bitcoin community more on, like, practical use cases like stable coins, maybe, I don't know, maybe NFTs in the future, maybe something else. As long as there's an interest to focus on. where there is actual demand. Like, people have the demand for using stable coins. And as long as the Bitcoin community has some focus on that,

I think things will work themselves out. I think that's the main thing that's been missing. Like, there's been, for the last five years, there's been this drive to not listen to what the market wants and to reject what people seem to be demanding and to have like this moral superiority of, we know what's the moral thing to do. And if you're trying to do something else, you're wrong.

If we're taking a step back and saying, well, you know what? It looks like we need stable coins. We need to figure that out somehow. Then I think people will figure it out. It'll take time. But I think eventually they'll find a way to do it. Maybe the way that it will be solved is by using stable coins in a new system that will get to the name lightning because the name lightning is good and has a good brand recognition. But other than that has nothing to do with the lightning network whatsoever.

That's fine. I don't know. Whatever. But I think as long as people are allowed to focus on those things, probably someone will figure something out. The main issue was that was like experimentation with this thing was almost illegal in the Bitcoin community before. And if that changes, I think that's the main thing that needs to be broken. And then I'm optimistic. Okay.

We're going to wrap up with two topics. One is El Salvador. One of the biggest narratives for Bitcoin adoption the past year and a half has been El Salvador adopting Bitcoin as legal tender. By and large, it seems many Bitcoiners view this as a positive development, but other people are critical, noting that El Salvador's president, I.E. Bekele has authoritarian tendencies. Obviously, that's antithetical to the original cypherpunk ethos, which obviously would not be aligned with like a kind of strong man state. So what do you make of this support for El Salvador's adoption of Bitcoin amongst a lot of Bitcoiners, even though at least for some of their initiatives such as the Bitcoin bond and just the general usage of Bitcoin by Salvadorans don't appear to really be taking off? Yeah.

So I think I thought it was, to me it was very, very clear that this type of thing is something that we got to approach with humility. we don't want to be caught cheering for an authoritarian on stage, jumping around like fan girls, and then being super bullish about like lightning network becoming the payment rails for the entire country. Because if we do that, if we're like cheerleading that narrative, we're going to fall on our faces. Like there's not going to be any, like the volcano bond isn't going to get filled most likely. And, you know, Buckele might do things that doesn't reflect. well on Bitcoiners if we're sort of singing his gospel. Problem is that we did all those things.

So now we look very stupid, unfortunately. And I thought that was very, very clear that we should say, hey, okay, that's great. You guys want to use Bitcoin. We'll come and we'll try to help you use these tools as an effective manner as we possibly can, we can try to teach you. But, you know, falling in love with this whole El Salvador story and thinking about moving there and talking about how great everything is in El Salvador and great Buckelis, that is obviously like a huge strategic misstep for the Bitcoin community that the community unfortunately committed.

Yeah, I don't, I mean, you know, I don't want to talk about the politics of El Salvador because I don't live there and I don't know. And there's a lot of, you know, I don't know what Buckele is really like. I have no idea. And it's really not of my business. So like my approach to this is I don't think I should be criticizing him. I also don't think I should be vehemently supporting him. That's, that's, you know, just like any other world leader that I don't know much about.

I think more than anything else, it's kind of unfortunate. I'm not really concerned about how the Bitcoin community reacted to El Salvador as much as I'm kind of sad that there wasn't anything else to react to in the last five years. So like, that's ideally in a better, in a, in the best case scenario, this would have been like small news that no one would have paid attention to. That's, that's the truth. Because the El Salvador thing is also low impact. And, you know, we can discuss like.

how they could have done it differently and whatever. But it's just low impact. What you would want to see is more focus on the high-impact things. And then the El Salvador thing, you know, it would be a fun conversation to have once every three years. But that's it. That's what it should have been. So there's this great article by David Chapman called geeks,

mops, and sociopaths, which I think everyone should read. And it talks about what happens to internet subcultures. You first have the geeks and then you have the mobs and then you have the sociopaths. And I think the problem with cult-like behavior is that it's very predictable. So a sociopath, for example, will very easily identify what are the strings, what are the things that I need to say in order to get all these people to trust me, to get them eating out of my hand? So the Bitcoin community believes that it is, that they're cyber hornets and that they're, that they're, they create this toxic shell around the culture of Bitcoin, which makes it very safe. My argument is that it's acting in such a predictable, almost algorithmic way that if you

just identify how to play those notes, you can immediately become a very influential figure in Bitcoin. And I think this is what Michael Saylor is doing very successfully. I think that this was what Bukeda did also. Just say the things that the community gets turned on by. and they pull down their pants immediately for no money is what they're doing so this article that I'm referring to highlights that perfectly how it works the psychology the dynamics behind it and I think that everyone should read that it's a lesson I think that you know just because

you are behaving in a specific way doesn't mean that you're impervious to to infiltration And if you want to have real protection, you need to be chaotic. You need to have free flowing ideas. You need to be a bit random. There can be an ethos. There can be a philosophy. There can be ethics that you try to withhold and values that you try to preserve. But if your whole community is algorithmically responding to what people say in a very predictable way, then you have no defense.

You have no defense. And this is how they're behaving at the moment. All right. let's move to the last big topic. This maybe actually is something more serious and important to focus on. As I'm sure you're very well aware, Ethereum has made a number of changes in the last, I guess, little over a year that have changed the monetary supply to the point where a lot of the Ethereum community says that ETH is quote unquote ultrasound money.

Certainly the issuance has been drastically reduced. It is what people say is the equivalent of three Bitcoin halvings. And on top of that, when you combine potential high usage on the Ethereum network, you can actually get a truly deflationary currency, which Bitcoin won't be for another, like, over 100 years. So I was curious, you know, how you thought the competition from ETH and Bitcoin would play out and how maximalism is affecting that competition. And, you know, basically whether or not you think Ethereum really is a threat to Bitcoin at this point.

Yes. I'll say something quickly, Udi, and then you can take it from there. one core thing here that I think is super interesting is that Bitcoiners, big part of their belief of why Bitcoin will become the global store value and the supreme monetary asset is because Bitcoin's supply is finite. It's ultimately scarce. It's the scarcest asset. And therefore, other currencies that if you have two currencies and they're next to Bitcoin, the other currency will just fall in value a little bit faster than Bitcoin will preserve more of the value. So this sort of market dynamic will just push in favor of Bitcoin, sort of this Adam Smith's invisible hand or what have you. It's just a market effect that Bitcoin, because it's most

scarce, will ultimately dominate everything. But so Bitcoiners still have some arguments along that way. But if you look at the specific supply mechanics, now Ethereum is probably going to reach net zero supply inflation quicker than Bitcoin does. And when Bitcoin reaches zero percent inflation, then Ethereum might already be heavily into the negative. And it does it like, so what Bitcoin is trying to say here is that, well, it doesn't matter like what the actual inflation.

rate is anymore. It's the predictability of the inflation rate. It's the it's the trustlessness and the ability to validate this monetary policy that is the important thing. But supply and demand, if you have a supply side that is shrinking faster, I mean, this was the whole theory of the stock to flow model. The whole theory of the stock to flow model was that the one that has the scarcest supply goes up higher in value more quickly. And I think, you know, this was this has been a huge mistake by the Bitcoin community to play this supply side narrative so heavily because there's always going to be these alt coins that can out-compete you on that aspect. And this is what we're seeing now.

So we played this sound money meme very, very hardly, very, very strongly. And we're going to lose on that aspect. Those are just some of the thoughts that I have on that Southern. I think for Bitcoin predictability and neutrality are the two things that matter the most. Those are the value propositions that Bitcoin has and other assets don't. And whether or not, you know, how valuable it is, none of us knows. But I think that if Bitcoin has a unique value proposition, that's what it is. It's the neutrality and the predictability of the monetary policy, you know, centuries in advance.

And I think it's possible that the market will value this at this more than ETH. If it doesn't have that, I don't think ETH can ever have that. I don't think that's a bad thing. I think ETH is different. But I think they're each fulfilling very different needs. So you're not worried. You don't think that Ethereum is like a threat to Bitcoin in that regard. I'm not worried in the sense that, you know, I always my, you know, my investment thesis for Bitcoin has always been, I don't know,

the world is going to value that what Bitcoin has to offer or not. I don't know, right? How is, how can anyone, how can any of us know such things? I, I understand what Bitcoin offers. And I think there's a chance that the world will value that very highly. And maybe not. Either way, I don't think it's going to be influenced by ETH a lot. ETH is doing something else. Like, Bitcoin does not have the ability to compete with what ETH is doing. And the way that I usually try to explain what I mean is that the Bitcoin technology, the Bitcoin network and the Bitcoin blockchain, they all exist only for one purpose, which is to facilitate the Bitcoin, the asset. So Bitcoin, the asset, is the focus of all of that.

On the other end, for ETH, I would argue ETH the asset would not exist for any reason other than to facilitate the existence of the Ethereum platform. that's why the eth asset exists. So they're very different things. The Ethereum platform is supposed to be like a development platform for things to be built upon. Bitcoin is not. Bitcoin is a specific thing. It's a specific asset.

I don't think Ethereum can do a good job of doing both of those things. And I don't think Bitcoin can do a good job at trying to be a development platform. That's not going to happen either. So they're very distinct creatures. You know, my thesis for Bitcoin, whether it's value. they're in the future or not, I don't think it's going to be influenced a lot by Ethereum and vice versa. So I'm not worried that Ethereum does something that hurts Bitcoin, no.

Interesting. They can coexist and also they can both disappear. We'll see. You know, on that point of narratives in the Ethereum community, I kind of feel like I have to say this. You know, we're talking a lot about the Bitcoin community, but I think especially for people who are listening into this who are probably mostly not from the Bitcoin community. I think the important thing to take away, in my opinion, is that this kind of thing that happened to the Bitcoin community is not unique to Bitcoin.

It can and does happen elsewhere. And it's, you know, Eric mentioned ripple and Ayura. They're very obvious cases. But we're seeing that on the Ethereum side too, this sort of maximalism and assigning morality to certain, you know, financial positions and immorality to other. I think, you know, with all El-1 war, we saw that happening very violently last year. I think a lot of like kind of Ethereum figures were felt kind of almost forced by their audience to take a very extremist view and saying like, oh, you're trying out Solana. Don't you know that Solana is like a scam and it's a VC trap? And if you're playing that, then you're hurting other people.

So it's literally immoral for you to check out Solana apps. That kind of thinking is not healthy. It's not good. Yeah. Don't go there. Yeah, I do think it's a less dominant strain in Ethereum culture, but you're right that it does exist as well. So one last thing, one last thing.

What Udi said about the predictability of Bitcoin and the monetary policy, I think that Bitcoin could maybe actually have an upper hand versus Ethereum with just this predictability narrative. Like maybe even though Ethereum could be more ultrasound and have deflationary supply, maybe that could be very alluring, but maybe Bitcoin could be even stronger with having this very predictable narrative. Now, I think that what sort of ruins that is this wrench that has been thrown into the spokes of the wheel where you have people like Peter Todd talking about that we have to,

we have to change the monetary policy of Bitcoin, to introduce tail emission in order for the security budget to work. So the people who do get into these intellectual, esoteric elements of this debate will then have to now balance these two arguments between the predictability of Bitcoin and then the uncertainty of the security budget of Bitcoin. Maybe those two things can't really search other out. I don't know. So that's sort of where the complexity is in this question. Yeah. And that's exactly what. going to say about the programability that if one of the technical solutions to resolving the security problem is to increase emissions, then obviously it changes that. But anyway, okay, you guys,

this was super fun. Obviously, there's so much that could be said about Bitcoin maximalism. Somehow we had this whole discussion. We didn't even get to Eric's rainbow chart. There was just a bunch of questions I had at Jettison. But you guys, why don't we just end on where it is that people can learn more about each of you and your work? Twitter. Be a good Bitcoins or eat your, don't eat your vegetables. And don't listen to Eric and Udi. They're just trying to foment division and they're trying to ruin everything. So don't follow those guys.

That's my recommendation. Okay. And Oudy, do you want to, I mean, so Twitter, I guess, yeah, the links to your Twitter accounts will be in the show notes. Yeah, definitely my Twitter account. I'm not going to spell it out for you because, My last name is really long. So if you really want that, there's going to be a link below. All right.

You guys, it has been such a pleasure having you both on Unchained. Thank you, Laura. It's going down forever, Laura. Yeah, I guess that's what you would say at this point in the cycle. For this forever. Thanks so much for joining us. today to learn more about Eric, Udi, and Bitcoin Maximism, Chego the show notes for this episode. Unchain is produced by me, Laura Shin with help from Anthony Youen, Matt Pilchard,

Juan Ivanovich, Pam Jemdar, Shashonk, and CLK transcription. Thanks for listening.