Is BIP444 An Attack on Bitcoin? | Rob Hamilton - What Bitcoin Did

Episode Transcript
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(00:00):
To even introduce a moral caveat to the argument is now moving of, like, the boundaries and how Bitcoin has worked up to this point.

(00:10):
And I think you're regressing and ceding ground to people who would want to attack the network.
Bitcoin's not a democracy.
Bitcoin is anarchy.
It is rules, not rulers.
You're running a node because you're validating transactions.
Everything after that, the influence in what your node has, very quickly compresses to almost nothing.
you are attacking the network you're threatening to orphan miners you're threatening to reorg the

(00:34):
chain you are threatening to change the rules which everyone had previously agreed upon
rob hamilton the third the giggler how are you doing doing great how are you i'm good the uh
the quote-unquote bitcoin civil war is heating up again we've got a thought proposal podcasters

(00:57):
being blamed, which I'm very angry about. As the bugle boys will tell you, this is the most
honorable job you can have in Bitcoin. What's going on? It's a priest-like calling.
To become a podcaster truly is like being a monk. Yeah.
We're keeping Bitcoin afloat. People just don't realize it yet.
That's right. All of Proof of Work actually, podcasters are the underlying substrate of

(01:22):
Proof of Work. How have we got dragged into this fork wars?
Well, let's maybe catch up for those at home who don't have the full background and context.
There has been, I would say over the past two and a half years, a growing frustration among users of Bitcoin who are not fans of the Bitcoin blockchain being used for non-monetary data.

(01:52):
This is inscriptions and ordinals and all of that stuff that gets tied into Bitcoin.
And as a refresher, the way Bitcoin works is that if a transaction is valid by the rules of consensus,

(02:15):
even if your personal node doesn't see it before, it will accept that transaction in a block, right?
a very simple example of this is
I technically can make a Bitcoin transaction
that doesn't pay any fees to the miner
right
I could just have no fee
if a miner would have put that into a block
it would get accepted and confirmed

(02:36):
by the rest of the network even though you never would have
seen it before because by default
nodes will not relay they will filter it out
they have no incentive to include it
they have no incentive to include it exactly
and so
that is kind of the
baseline of just
how inclusion of transactions work in Bitcoin.
Now, I would say myself and others

(02:57):
have very regularly pointed out
that if you wanted to stop this behavior
of pictures on Bitcoin,
you are going to require a consensus change in some way.
Because as long as these are consensus valid,
miners are optimizing for revenue,
and they're going to include these things in a block.
It looks like a pseudonymous user, Dathan Ohm, has come forward with a soft fork proposal, which goes to do that.

(03:30):
Now, before I even jump off into that, there was a post on the mailing list a Bitcoin developer named Portland Hoddle put forward and said,
Hey, I have an idea. Let's reduce the output of all transactions to 520 bytes.
And this would basically be a very clever way of reducing op return at the consensus level.

(03:51):
Because an op return where you're posting data is actually part of the output of the transaction.
So if you make all outputs must be 520 bytes or smaller, you're effectively curbing op return.
Luke Dasher proposed in reply to this his own idea of a consensus change that would include more things than just the op return stuff.

(04:14):
Dathan Ohm has come forward saying that since that BIP, that proposal on the mailing list
didn't have any pushback, that there was enough consensus to start writing up a BIP.
At the bottom of this proposal, though, it does say credits to Luke Jr. for the original

(04:34):
draft and advice of what this larger consensus change, which has now been proposed.
Well, I just, I think it's worth looking back a little bit.
So this whole debate that's happened for the last 18 months, maybe even two years at this
point, it's been a long time, all came down to whether filters actually work, I think.
If filters worked, then we wouldn't be having this discussion.

(04:55):
So is this the fact that they're now trying to do a consensus change?
Is that almost an admission on that side that filters don't work the way they at least want
them to?
Well, I'm going to give the charitable steel man interpretation of their side.
They believe specifically the most recent release of Bitcoin Core, version 30,
changed, and to be clear, I am specifying a championing and a steel manning of their argument,

(05:20):
not my personal belief, is that with the updates that were made in version 30,
the default node client will no longer filter operaturns smaller,
sorry, larger than 100 kilobytes.
the previous limit in the default software was 83 bytes.
They would say proponents of doing a consensus change

(05:44):
would be that this kind of makes the default reference implementation malicious
from their perspective,
and that now you must do a consensus change to stop this.
The deeper point that I would pull the thread on
to your point about filters working or not,
But filters, from my perspective, don't work if there's economic demand for those transactions.

(06:08):
A really great example of this was larger op returns were being included in blocks prior to there even being a version 30.
Miners would set custom configuration flags and build their own node software to be more permissive and open and would allow these transactions to get through.
You also have projects like Peter Todd's Libre Relay

(06:30):
that were relaying these transactions
and preferentially peering to get to miners.
And then the actual best example out in the free market
of the Bitcoin block space market,
you can view it that way,
that every 10 minutes,
there's four megabytes of block space available in the market
and people who pay the fees bid them.
The mempool of unconfirmed transactions,

(06:52):
the pending ones, was so empty
that miners realized that they could actually
start making more revenue on margin
if they lower their minimum fee rate
from one sat per V-byte to 0.1 sat per V-byte.
So even though 99 plus percent of nodes
were running a filter that did not allow these transactions
that were paying too little of a fee in,

(07:12):
they still got included in the blocks.
So the moment there's economic demand there
and the miners are trying to profit maximize,
the filter argument starts to fall apart.
From my perspective.
Yeah, no, that makes sense.
And so if you need like a proliferation of potentially even over 99% of nodes doing this
for filters to actually work, like Notts did quite well.
It got to, I don't know, 20% of all nodes.

(07:35):
I'm sure there was some-
20, 22, something like that.
Yeah.
And there's probably some funny business in there.
I don't think, I don't even know how you account for that, but like it did sort of surprisingly
well.
It definitely caught me off guard.
How has Core 30 gone since that launch?
Because obviously that is kind of the crux of this whole issue.
So Core 30, as of right now, is the number one client deployed on the network.

(07:55):
It's kind of, it's a little over 10% now.
Mononaut's been keeping a close eye and track on it,
with the number two implementation actually being Core version 28.
Can you give some context to that?
Like normally when Core release an update,
they're obviously nowhere near as contentious as this one.
How quickly do people actually upgrade?

(08:17):
Oftentimes, people aren't rushing to upgrade.
Just realistically, like, you...
The way Bitcoin Core version releases work is every six months,
they just...
Because Bitcoin is a never-ending project.
It's not like they're trying to hit quarterly earnings
or trying to do something.
So they set a rough heuristic that every six months,
we're just going to take everything that's been merged

(08:38):
in the past six months and tag that into a release.
Most of the time, unless there's like a brand new feature
you're looking for,
you're not rushing to update right away.
The beauty of Bitcoin is that it's backwards compatible
and that you can run an older version of the Node software.
The Bitcoin Core team, though,
will actually do patches like a minor release.

(09:00):
So instead of like version 28, it'll be 28.1.
They'll do minor releases backdating.
So if they make a security fix in version 30,
they'll go back to version 29 and 28
and also patch those up as well.
So the kind of standard,
you can do it from like a end of life support
or like the three most recent versions,
Whatever's the most recent and the two previous ones are the ones that get patched.

(09:21):
So now there's a version 28.3, which has all of the security patches from version 30, right?
Typically, it doesn't go this fast.
I think, in particular, this release has gotten so much attention.
People that wanted to signal support for Core may have upgraded sooner,
just like people were upgrading to run the latest version of Knots to signal that support.

(09:45):
so I would say it's happened way faster than normal but I don't have the hard data in front
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That's B-I-T-K-E-Y dot world and use the code WBD. Okay, and then so this is now being proposed,
is it bit444, is that correct? It's not technically correct. And so to explain this,

(12:24):
Luke is the original maintainer of the BIF repo,
the Bitcoin Improvement Proposal Repo.
He was assigned that, I believe, by Gregory Maxwell
back in, like, 2010 or 2011.
For the... Amir Takhi put... for the initial BIP,
someone had to maintain it.
They... Luke took that job.
A little over a year ago, a couple other maintainers were added

(12:47):
because Luke was so busy, he's only one person.
They wanted to have more support structure
to be able to assign BIPs and do things.
there was an internal message among the BIP maintainers saying,
should this be BIP444?
And they have an internal process where they say,
okay, I want to sit and listen.
And if anyone has objections, let us know.

(13:07):
And if there's an objection, we won't give it the number.
Luke saw this internal discussion and assigned BIP444,
kind of jumping the process.
So it's not officially signed it.
444 is a really catchy way just to surmise what's going on, though.
so memetically it's already been assigned that,
but I know some of the other BIP maintainers are frustrated

(13:27):
that it was prematurely assigned a number,
especially when Luke is so closely tied to this.
There's a rule that you really can't self-assign a BIP number,
and Luke is the original draft of this BIP,
so it's kind of in the gray area of self-assigning a BIP,
even if he's not the literal offer.
But even, like, I understand what you're saying there,

(13:47):
but really, who cares about the number?
but that's not the important signal here.
Like what they're claiming is,
this is like an emergency soft fork
that needs to happen quite quickly.
What do they actually want to include in that?
Yeah, so this-
Well, actually, probably a better way of framing that
is what do they want to take out?
So what they want to take out,
let me just read it through here.

(14:09):
The first one is op returns that are less than 83 bytes.
83 bytes or less, right?
So making the previous, before version 30, relay policy, making that consensus enforced,
of 83 bytes being the maximum.
Pushing data, I'm going to speak not in the literal technical terms, but just talk about

(14:34):
the spirit of it.
Basically, any sort of pushing of payloads that are larger than 256 bytes, which is how
you push data onto the stack
unless you're using
an old legacy
multisig.
This is basically what they're trying to take out is how

(14:55):
inscriptions people
put a lot of data on chain.
They put it 520 bytes
at a time. They have decided
Dathan and Luke and whoever
helped write this bit has decided that 256
bytes is
not valid. That's
the size of a key. So they're saying basically
you can push keys in the stack. You can't push it.
whatever random other stuff you want on the stack.

(15:17):
They are also making invalid unspecified taproot,
like script versions and tapleaf versions.
So Segwit introduced these upgrade hooks
and mechanisms to upgrade scripts,
and we turned on taproot.
We turned on Segwit v1 is a taproot address.
They want to disable all of the ones that are undefined

(15:39):
as well as all of the taproot tapleafs.
They want to disable the taproot annex,
which is a place where you can park data.
Intentionally, it was thought to be able to be part of just over time, wanting to be able to have data to commit for...
You can use it for, like, lightning symmetry. You can use it for, like, lightning protocol stuff.
No one's using it today, though. So that's marked invalid.
All of the op-success opcodes, which are basically how you do upgrades in TapScript.

(16:02):
So if this were to activate, we could not upgrade Bitcoin for the next year.
We couldn't add any new opcodes.
And also removing op-if and op-not-if from Taproot.
so you can't actually use any sort of if-then conditions within a tap leaf.
The logic behind this is that if you're using an if branch,

(16:25):
you could just make a new tap leaf that has the full condition over there.
This is how taproot works where you can have one address
that has many, many, many ways you can spend from it.
Their rationale is if you're using a different spending condition,
you don't need to use opif or notif.
You can just use a different tap leaf.
So that is the general summary.
the ultimate target for that one is stopping the inscription envelope for how all of the ordinal

(16:46):
inscriptions were being done. Okay. I want to get into some of what that actually means technically,
but before we do that, I think the important thing to address here is that they're claiming
that this is a temporary soft fork. Correct. And this will run for 12 months and then everything
reverts to how Bitcoin works today, as far as I understand it. Yes. I mean, we're going to get

(17:08):
into whether you think this fork will even happen or not.
But if the fork happened,
how much, like what odds would you ascribe
to the fact that this is temporary,
not a permanent thing?
Oh, 100% it would be temporary
because the idea would be this activation client
would self-turn off the rules in a year.
Now, what would happen is six months from now,
there would be another,
let's assume this activates six months from now,

(17:30):
there's going to be another question of,
do we extend this?
But the default behavior will be deactivating.
um so i think being as charitable as possible taking them at their literal word and how the
code works it would by default if nothing else happens turn off in a year okay fair um and then
let's get into the what this actually kind of stops in bitcoin so clearly what they've done

(17:53):
is they've gone through every single place where you can put arbitrary data on chain and remove
that ability but what implications does that have on how bitcoin actually works today um well a
couple of things.
There are users
who are using Bitcoin
today that fall
into some of these categories that get invalidated.

(18:16):
One of the prominent examples
is Liana
Wallet. This is
they, I'm wearing
my Miniscript shirt today. They use
Miniscript with Taproot.
And with Taproot,
you can, they're, some of the
versions of how they actually use the different Tap
believes actually uses op-if and not-if.
Because actually, you can save on fees

(18:39):
and have a smaller transaction
if you use an op-if or not-if.
That actually is a way you can save money
without going into the mechanics
of the taproot control block and all that.
There are cases where you actually
have a smaller transaction
and less data on-chain if you use an op-if.
And that would be...
Now, this is a contentious term.
Some would say confiscatory.

(19:01):
Technically, since it's only for a year,
you're just freezing customers' funds for a year. You're not confiscating them.
There are people who also use-
Personally, I don't see a huge distinction between those two things.
Like the thing that Bitcoin does is enshrines property rights.
And if you're-
Absolutely.
Arbitrary, well, if you're purposefully freezing someone's funds for 12 months,

(19:24):
that is a complete line for me. Like that's unacceptable.
I would agree.
That's if people are using Taproot today in this particular way.
Certain Taproot could, yeah, not everything in Taproot, just certain ways people use Taproot.
But people are using it this way right now, correct?
Yeah.
And so if anyone who is doing that, if this fork happens, those funds are frozen for a minimum of 12 months.

(19:46):
Yeah.
I mean, it's hard.
This is where it gets a little bit tricky because I understand this is a soft fork.
It's backwards compatible in the sense that old nodes will still be able to run.
But have we ever had a soft fork before where funds can be frozen if you're using Bitcoin in a particular way?
So there's one example.
Let me answer that question and go back a step.

(20:07):
So to answer that question, I think the only corollary I've been able to think of is back in 2010, Satoshi changed.
He had a commit called MISC changes.
And in there he actually disabled a bunch of opcodes the thing is no one was using them this is your opcat cat your ups op substring like multiplication division like he had all these other op codes that he disabled but no one had

(20:36):
ever used them before and when you say no one do you literally mean no one no one no okay no one
had ever used any of them because this is like this is in 2010 right like there was not as much
developer mind share and like good tooling to do different things in Bitcoin. So no one had ever

(20:57):
used any of these. And that's probably the closest. We disabled a bunch of things, but no one was
using them. And it was a fraction of a fraction of the market cap of what it was today. Right.
But with things like SegWit and Taproot, there was no, there was never a potential for that to
freeze users' funds. So this would be like really discarding that first one, which was very early

(21:17):
days this would be the first time that had ever happened and that kind of calls into question like
i understand it's a soft fork but that doesn't feel like a soft fork to me that that isn't fully
backwards compatible in that sense so let me um so two things before we go deeper about what a soft
fork is um there is a clause uh dathan had updated getting feedback from people that there is basically

(21:41):
an exemption for if a UTXO was made before this activates,
you can spend the money out of that one time.
So in theory, I could have my money frozen.
I get one transaction to pull it out.
It's technically complicated because if, let's say,
if I have 10 Bitcoin at one of these addresses
and I send one Bitcoin to you,

(22:03):
I send nine Bitcoin back to myself and change,
which means that nine Bitcoin,
which usually has the same spending rules,
would just get frozen for the year.
So that's one piece to call out.
But you can get around that
by just sending it to yourself in a different...
Yeah, you would do a full send to a new wallet,
and then you can get around that.
Now, for what a soft fork is,

(22:24):
this is a soft fork.
It is a restriction of the rules.
Typically, the way soft forks are thought of in Bitcoin
is that you take an opcode,
let's say, like we added time locks.
Peter Todd got time locks added in 2014.
What we did to turn that on is we took an opcode

(22:45):
that previously all it did was automatically pass.
So it was the most permissive thing ever.
We said instead of just pass no matter what,
let's encode rules that enforce time lock logic, right?
So you're taking this like infinite possibility
and you're constraining it.
That's a way of doing a soft fork.
All of this is technically a soft fork
because you're saying,
hey, this thing that allows you to do things

(23:07):
now can't do anything.
So you're kind of like shutting it off.
So it's technically a soft fork.
I think to your point, though,
we usually associate the reason
why we prefer soft forks over hard forks
is the maintaining of user rights
and not breaking user space.
Like that's a term that's a classic
from just open source development

(23:28):
is not breaking user space.
You want to specifically make sure
that you're not doing anything
when you change the software that takes existing users property rights and infringes upon them
and there's probably no software project in history more important in that sense than bitcoin um
so where are we at with this because like obviously nots got a decent amount of people

(23:51):
really hard to know how many how many bitcoiners were actually sort of supportive nots but if you
just go from like node count as an example it's roughly 20 percent um obviously not all those
people will be on board with the soft fork so let's say it gets like 15 percent of traction 10
15 percent of traction like what happens then so um the fork would activate at a certain block height

(24:14):
i am taking the proposal as it's written right now uh dathan has already talked about changing
when it activates and other details which i think is just ill-advised if you're saying
hey, I'm putting out some code,
you'd be expecting, like, you have to now coordinate it.
His proposal currently is February 1st.

(24:34):
A block height that's roughly February 1st, right?
Because block time is never exactly over 10 minutes.
But if you, so February 1st, roughly,
is when this would activate.
And what would happen is that you would now have
certain nodes on the network when a miner finds a block.
The question is, that block that comes in,

(24:54):
is it following BIP4444 rules?
Is it following the rules of the new client?
If so, nothing's changed.
Where you would have something called a chain split
is that let's say the miners have not upgraded
and a new block gets produced,
you would have a chain split
because the 444 nodes would reject that block

(25:19):
saying it's invalid because it violates one of these rules.
And because it violates one of these rules,
you would be in a position where some nodes on the network would accept the block and some would not.
And at that point, it becomes a question for the miners,
what block chain tip, the most recent block, are they going to build on?

(25:40):
Miners can only build on one blockchain at a time.
They can't dual mine two different ones.
So you would then have a conundrum of what would happen.
And there's a bunch of game theory we can go through there,
But that would be the decision point is a new block would get found if this activation client launched.
The code has been released.
Funny enough, like Bitcoin technical lore, it was the code was pushed to the UASF organization, which is where in 2017, Shaolin Fry put out the UASF client.

(26:14):
So this same exact repo that hasn't been touched in eight years had just gotten an update with this new code.
Yeah.
I would speculate that someone who previously was involved with the UASF efforts, which Luke is known to have been involved in those, would have given up access to the org to let Dathan push that code.
I don't know.
But that would be a reasonable straight line suspicion because Luke was a very big proponent in putting forward the UASF client.

(26:41):
Yeah, I mean, we obviously, we can't know, but that seems like an easy conclusion to draw.
Right.
So if that happened and obviously a proportion of the hash rate would likely go to this new version, like you would imagine some of the ocean miners would probably move over.

(27:01):
Obviously, this is kind of, oh, do we get to the point where this is just like longest chain tip wins?
or what happens if, say, 30 blocks get added to Bitcoin as we know it today
and then 30 blocks later another one is found on Bitcoin 444 version?
So that's an important distinction, right?

(27:21):
To make the math easy, let's just say it's at block height 100.
So at block height 100, let's say we're going back,
like it's at block height 100 just to make the numbers easier to say.
At block height 100, this activates.
And let's say we get to block 130 with these new rules.
Block 131, even if it is BIP444 compliant,
the BIP444 nodes are going to reject it

(27:43):
because blocks 100 through 130 are invalid.
So what you would actually have is two separate chains being built.
Yeah.
And the question then becomes,
where is the hash rate and the mining pools actually working on?
The only public statement we've gotten from any mining pool
is F2 pool, which is 12% of the network,

(28:06):
has said they're not going to run this.
Right?
The game theory, though, would be,
and this is for me to charitably steel-man
the proponents of the UASF,
this UASF's proponents to champion it,
like steel-man it,
is that even if initially
the UASF chain does not have enough hash rate,

(28:30):
there is a game-theoretic outcome
where because their rules are tighter
and let's say like 10 blocks goes by,
what you're going to have happen
is that if the other miners went over to the UASF chain,
they would basically roll back the entire non-UASF blockchain.

(28:53):
Because what would happen is you,
let's say those 30 blocks get found
and then all the miners push over to the other side
and they start mining and catching up
and that becomes the longest chain tip.
the 30 blocks that were mined
violating the USF rules disappear
because all the nodes reject them
and they're no longer invalid.
This is what's called a reorg,
a reorganization.

(29:13):
Typically, it's never really talked about
outside of like a 51% attack.
Like you could have 51% of the hash rate,
make your own blockchain over here
and then publish it all.
And then you would wipe out
all of the transactions
that happen on the other chain.
The game theory though,
is if you're running a USF client,
is that you're doing a tightening of the rules,
which means that all blocks that you would find

(29:33):
are also valid on the non-UASF nodes,
and that's where you can get this reorg dynamic to happen.
It's really a question of how attach rate would be going over there,
and I haven't seen any mining pool
or large-scale miner come out in support of this yet.
So if that did happen, though,
would we be in for very large reorgs?

(29:54):
Yeah.
So then the question, it would be a very large reorg.
Let's take that 30-block example, right?
That would be a five-hour, roughly five-hour rework.
If it's one block every 10 minutes, six blocks an hour,
30 blocks is five hours, six times five is 30.
That would be a five-hour rollback of the on-chain history.
Now, what can be done as a counter to this

(30:17):
is what's called a URSF, user-rejected soft fork.
You effectively, what you could do is just pick a block
after the UASF activates, find a block,
and say we're checkpointing so that for this
to be on my blockchain, at block height 101,
you have to have this block hash.
And this block hash violates the 444 rules.

(30:37):
So you effectively then, if a URSF were to happen,
that would permanently split the network.
But to even put forward a URSF,
you'd have to actually see a threat
or a real credible demand for the UASF to begin with.
And a reason to want to reject it.
And I haven't, to be transparent,
I haven't seen the support yet from anyone.
So as it stands right now,

(30:58):
Do you just think this will never happen?
As of today, with the information I have,
I don't see this happening. That's my personal opinion.
I have tried gauging interest.
And so...
The last time a UASF that wasn't...

(31:20):
A contentious UASF was proposed was back in 2017.
This was called SegWit2x.
it was basically a compromise with Usegwit
and doubling the block size, right?
It was a couple of things.
And with Segwit2x, what you had happened was
there was a lot of speculation on if this was going to happen or not.
And then Bitfinex listed a futures market

(31:43):
for what the price of this UASF token would be worth.
It ultimately fizzled out.
There was like, what people would do, just to be clear,
is if you had one Bitcoin on Bitfinex,
you'd have one Bitcoin,
and you'd also get this future
and you'd be able to sell that future
and buy more Bitcoin.
Right?
And that was a strong signal

(32:04):
because the miners are not going to want to mine
on a blockchain where the token is worth less
than the other chain.
If you have a split
and you have to figure out which is Bitcoin,
the miners are more likely to build on the one
that's going to make them more money.
And if everyone's selling a UASF fork,
they're not going to,
even whatever reasons,
they're not going to want to mine
for 10 cents on the dollar.
Right?

(32:24):
So I've been trying to suss out.
It's also just an expression of economic demand.
You may hear the term economic nodes.
It doesn't matter that you have 10,000 nodes spun up on AWS.
It's how much throughput and how much validation is that node processing?
So the nodes at Coinbase, way more important
because those nodes are validating millions of Bitcoin in the UTXO set

(32:48):
from everything they custody and have on their exchange.
That is inherently more important than someone who just spun up a node on AWS
and doesn't have any funds tied to it, right?
And the expression of a futures market
is the ability for economic actors to say,
what do they value more?
Miners can still choose to mine on whatever chain they want,
but it gives them price information

(33:08):
because the proposal of a user-activated software
brings market uncertainty.
You don't know which side's going to win.
You don't know what's going to happen.
Are people going to sell early because they're not sure?
It provides a lot of instability,
just uncertainty of Bitcoin as a network architect
And that's usually what Bitcoin's prided on is like, TikTok, next block, every 10 minutes block's going to happen. And only in these kind of consensus fights do you have this uncertainty. And the futures market is a way to try and price that uncertainty. It also gives an option for if you are a believer in this user activated software, the only way today that you can buy UASF Bitcoin is with the futures market because it doesn't exist on chain yet.

(33:47):
So if you buy Bitcoin today, you are buying economic support for both chains.
Because remember, in that block height 100 activation, let's say in block 99, you have 10 Bitcoin and there's a chain split.
You get 10 Bitcoin on each side of the chain split.
So if you buy Bitcoin, you're giving economic expression to the entire network.
But if you want to explicitly signal, hey, I really want to support this UASF effort,

(34:11):
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(37:09):
was quite new to bitcoin in 2017 i got i got in in 2016 but i was pretty light touch and i was just
following along sort of the tail end of the box size walls and it wasn't really until bitfinex
launched that futures market and you could actually see where real demand was that i felt
any kind of confidence in which way this was going to fall. And I find it funny that I've
obviously seen you on Twitter trying to build these futures markets and trying to sort of go

(37:33):
people into betting you. People are calling it like fiat games, but I think people either forget
or don't understand that this was a really important dynamic in 2017. I think it's a thing
that people in Bitcoin do where the term fiat, I get it sometimes with insurance. Insurance is fiat.
It's like, well, insurance predates fiat by thousands of years.

(37:54):
Sorry, like this predates fiat currency as a concept.
You can't just call things you don't like or don't understand to be fiat.
That's not how the etymology of words even mean anything, right?
The futures market too, I think this is a really important point.
I'll hammer it home again is that the only way today you can economically express interest

(38:14):
to want to signal to miners that this is the chain that has more value
before the fork happens is a futures market.
If you buy Bitcoin today,
you're economically supporting both sides of the chain.
If you want to actually short the non-UASF chain
and economically signal and support the UASF chain
is a futures market.

(38:35):
And miners, at the end of the day, are profit maximizing.
That's just baked into being selfish and maximizing.
That's just how Bitcoin works.
And if you're going to actually want to try meaningfully sway your voice and consensus,
that's an important thing.
Because otherwise, what you're going to have happen is like when Bitcoin Cash forked off,

(38:56):
which is unrelated to the futures market.
But UASF was going to activate, and so Bitcoin Cash forked off.
People just took their Bitcoin Cash chain, sold it, and bought more Bitcoin.
So avoiding the futures market doesn't solve the problem.
If the chain split happens,
people will freely economically transact
in their own self-interest,

(39:17):
whether you like it or not.
You want the futures market to exist
because you want to avoid a messy breakup
and a chain split and a divorce
if it could be clearly economically signaled ahead of time.
UASFs are a market uncertainty event.
Futures markets bring price certainty to that, right?
It's not gambling.
It's interesting too,
because as I've said here,

(39:38):
I have very high conviction
that it's not going to happen.
So for me, I don't view it much as gambling.
I view it as a certainty.
And I've been very publicly transparent for...
There are a lot...
And this is the other thing too with a market signal.
A lot of people will posture on Twitter,
especially in the world and day now
of like large language models
and like the asymmetry of people can kind of like

(39:59):
with a couple of lines of code
make a really big social imprint.
The LLM tokens can't actually participate
in the futures market because you need Bitcoin, right?
So actually having Bitcoin is how you actually express this.
I built an on-chain futures market,
which we don't have to get into,
but it uses taproot and it uses op-not-if
and you have different time locks.

(40:20):
So you can, without a custodian,
trustlessly verify and express an on-chain futures market.
And I totally open sourced it.
So anyone can go run off and have fun building on it.
And the reason that works is because
if Bitcoin, as we know right now,
is to continue to exist,
then those coins get frozen.
That's correct.

(40:41):
So the way the on-chain contract works
is that to simplify it,
there's two main spending paths.
You have a spending path
which violates the rules of BIP444
and that expires let say in May And then you have a path that follows the rules of BIP444 that and I sorry I know it not officially called that but it just very catchy mimetically to call it that So you have

(41:05):
the UASF, the side that the UASF is not enforced, and that expires in May, and then the side that
enforces the UASF expires in June. Now, if you think the UASF client's going to work,
you don't care that I can spend the money sooner a month before you, because those will be consensus
invalid because I have an opt not if in there. So it's a way you can actually on-chain trustlessly

(41:28):
finalize and settle knowing that you can actually express your interest. And you also can imply
odds, right? So my initial proposal was I'll put up one Bitcoin, someone else puts up one Bitcoin,
and then you have a 50-50 odds. I could put up two Bitcoin and you put up one Bitcoin,
which then means you only need to be right 33% of the time, right, mathematically for it to express.
no one has taken me up on it yet

(41:49):
there's been a lot of
well that's gambling
and to that I say
I'm very highly confident
and I want to be able to sell
the UASF coins today
I would love to lock in a sell today
I don't want to have to wait
to get on an exchange
and move UTXOs around then
and deal with all the uncertainty
of block production
I just want to sell them today

(42:09):
and so I'm trying to pull the demand forward
which I think a lot of the people
who are on the side of the UASF
aren't a fan of, because this is an important piece.
If you promote, you want to do a UASF,
and you put all this effort
and put it on the developer mailing list and on a BIP,
and you're trying to get miners to activate
and trying to do an update.

(42:30):
If the effort fails, you haven't lost any Bitcoin.
You get to kind of like asymmetrically attack the networks,
like the resources, the time and resources of people
to try and coordinate a hostile, contentious,
user-activated software.
But then if it all fails and no one mines on it
and everything just stops,
and you come back with your tail between your legs
back onto the main chain,

(42:51):
you haven't lost any Bitcoin.
So the futures market is actually putting in economic costs,
saying, oh, you really believe this is going to happen?
Let's do it.
So the proposer of the BIP, Dathan Ohm,
has agreed in spirit,
but not formal details on doing this with me.
I haven't found anyone else, though.
And I think that's a very weak economic signal,

(43:11):
if no one else, because I'm willing to.
And inbound, people have, I haven't asked for it,
people have come to me saying,
hey, I have 30 Bitcoin, 50 Bitcoin, 100 Bitcoin
I'm willing to put into this bet.
So I now have an order book of people
that want to sell the UASF fork chain,
and I can't get any market liquidity
on the other side of the bet,
which actually shows you that, like,
at least with Bitcoin Cash,

(43:33):
you were able to sell it for, like, 0.25, 0.2, 0.1.
I don't even think you're going to be able to sell it
for 0.001.
Like, there's just no economic demand
on the other side looking for this chain at all.
So you're just basically trying to get people to put their money where their mouth is and
bet on the future of Bitcoin.
But like you've had, so Dathan said he'll do it in principle.

(43:53):
Have you had anyone else or is it literally just him?
Because I know you called out Mechanic and Luke as well, I think.
Yeah.
And then they blocked me on Twitter.
Okay.
Interesting.
So if this doesn't go through as a soft fork, what do you think they're going to do?
Do you think they will hard fork or do you think they'll just come back tails between
the legs and try something else?

(44:14):
It's an interesting question.
I could see both possibly happening.
Luke, for a long time, has championed the idea of a hard fork
to change the proof-of-work algorithm
to remove the centralization of mining.
He hasn't expressed...
Fire the miners, right?
This has been a long-held, I would say, heterodox...

(44:34):
Sorry, unorthodox opinion Luke's had compared to other developers,
but that's something he's always thought would be
kind of like the real nuclear button.
would require a hard fork though.
The problem, you would have to basically fire the miners
because otherwise if you're using the same chain,
you're just another Bitcoin Cash or Bitcoin SV

(44:55):
where you're using the same hashing algorithm
and very trivially, people can just reorg
and attack the network.
And that's not a great place to be.
So is it possible?
Yeah, I don't know what they're going to do though.
It's interesting because I've also heard rumors.
I don't know if these are true before.
I just want to caveat that though.
that the Ocean legal team are going around to other miners

(45:16):
trying to kind of legally warn them
against supporting the current Bitcoin chain.
Yeah, so those are rumors I have heard as well.
I'm actually pulling it up here on the mailing list.
I'm pulling it up right here.

(45:37):
so on the mailing list
if you give me a second
I think the
someone had made a
a comment to that effect
that
that someone was
like someone at Ocean
or people associated with Ocean
were actually talking to

(46:00):
mining pools
I have never sat in on any of those conversations
so it's
I don't work at a mining pool
so it's just speculation on my part too.
But that is my understanding of it,
that there's been a pressure.
And to be clear, the pressure hasn't been for the UASF.
The pressure up to this point, from my understanding,

(46:21):
was just not running core version 30.
So I don't know if that's changed anything with this proposal,
but it's something I would say is relevant to keep in mind.
Yeah, not a good look, I don't think. I mean, who knows if that's true, but if it is, certainly not a good look.

(46:42):
Sorry, I have the exact quote now. Greg Maxwell on the mailing list said,
Another issue which you have not mentioned is that prior to you making this proposal, Dathan,
I received minutes from a meeting which noted that Ocean Mining was the true author of this proposal
and would be presenting it under a false identity in order to conceal their involvement.
so that is

(47:02):
what Greg said
and
Dathan's response was
you've fallen victim
to some false rumors
though I'm in direct
communication with some
Ocean employees
and the BIP was
originally drafted
by one of them
I am not affiliated
with Ocean in any way
so
take that for what it is
okay

(47:22):
and I also know that
Mechanic has
come out and
outright denied that
and said that this
isn't anything to do with ocean so i mean i don't want to get too far into like the speculation
because we just don't know there's something that um mechanic said on one of his videos that i found
strange and i want to see if i'm misunderstanding this um but he was talking about the transactions

(47:45):
that can be included and have been included in because of v30 now um and one of the examples
he used was like some AI generated porn video of a Bitcoin dev being put on chain.
And I think Marathon with a pool that mined that block, well, they included that transaction.

(48:06):
And he said that if this was still going through Slipstream, they would have refused that as a
transaction. Again, who knows if that's actually true, but that's a claim that he made. But that
That seems very counter to everything he's trying to do with Datum and Ocean.
The idea of being policing how miners organize their block templates.

(48:28):
Yeah.
Yeah, I agree.
If the entire, from my understanding,
with Ocean and decentralizing Bitcoin mining
and the actual template generation, right?
So for those that aren't familiar,
the way Bitcoin mining pool works is you usually have one node at the mining pool
that organizes the block,

(48:49):
and then they send the block headers to all the miners.
You don't need the full block on your ASIC.
The ASIC actually doesn't even look at the full block.
It just looks at the header of the block,
which has all of the commitments
to all of the information that's relevant
for doing the actual mining hashing operation.
The mission with Datum and Ocean would be,
the problem is that you have one node that organizes,

(49:13):
let me just take,
Mara is like 5% of the hash rate.
So 5% of the hash rate has one node doing all of the work for it.
Mara is probably a little different because they have their own mining pool and they own all of their own infrastructure.
You and I cannot go sign up to use Mara's pool.
It's all their own internal stuff.
So maybe like a foundry that's at 25% roughly of the network would be a better example where you have a bunch of people that are mining and or Antpool, which is like 17%.

(49:40):
So you have like Antpool, you have a bunch of people that go and organize transactions.
but like all the mining at antpool,
there's like one antpool node
that's actually organizing the block templates.
And the idea would be if you're making block,
if you're trying to decentralize it,
you wouldn't want to be emphasizing
and celebrating choke points
of kind of the block space market.
It's kind of contradictory to the whole mission.

(50:02):
I generally agree with that,
but I'm quite sure if Mechanic was on the pod,
he would have his own colored add on that.
I mean, if you want to come on the pod again,
Mechanic, you can do.
I want to know, can we get a little bit think boy for a minute?
Why do you think this sort of culture war has both come to Bitcoin in such a meaningful way over the last couple of years and then seems to just be accelerating at this point?

(50:26):
I think there is a mix of earnest concern that, and earnest is from their perspective.
Like, I would say Luke earnestly has consistently held this perspective and position in Bitcoin for a long time.

(50:47):
And you have a lot of people cargo culting, following him, not fully understanding second, third order ramifications and things.
Myself and many other people disagree with Luke.
um
the
I think a lot of people
were

(51:08):
aimed to Bitcoin after the block size wars
so they've been reading about it
almost like hearing like oral history
passed down by a fire of like this is what we did
to take the Bitcoin network we ran the nodes
and we ran the client and
the Bitcoin bugle actually put out a funny article
which was uh
Bitcoin plus plus Gettysburg so Gettysburg
I know you're not from America but Gettysburg is a

(51:28):
I know,
Civil War.
Yeah,
so doing like
Civil War reenactments
of like battles
and I think that's what's happening
is we're kind of having like,
we're doing a live action role playing
of like the block size war
and we're gonna,
like everyone's just trying to like
rally together and reenact it
like a muscle memory thing
but it's mostly people
who were not here
in 2017.
So I think there's a bit of like

(51:49):
a social status game
of also seeing
I'm rebelling against the system.
Bitcoiners are naturally disagreeable
and rebellious to begin with.
that is being focused internally
around the governance of how Bitcoin works.
And they were already discontent
with how Bitcoin was working.
And then version 30 gave them an opportunity
to make this not about how Bitcoin technically works,

(52:12):
but about a governance issue.
So those meanies at core are doing things
that are destroying Bitcoin as money
and we need to take back the network.
So I think it's a lot of that.
And it's also just like social cloud bait engagement too.
you post this stuff, you get a lot of like eyeballs, a lot of attention.
It's kind of just like, you know, the price is flat, it's trending down a little bit. This is

(52:35):
just something to keep everyone occupied. Like genuinely, like I don't view it as a big credible
threat. I haven't seen a single mining pool come forward with it. I haven't seen a single business
come forward saying they're running the USF client. Like this is not like, yes, you write code and
you've released the code for a USF, but you have to actually have the miners and the economic actors
of the network agree with it.

(52:56):
Otherwise, you and I, Danny,
could write a UASF tomorrow.
That doesn't mean it means anything, right?
And I just haven't seen the commensurate demand
to actually facilitate a successful UASF.
Maybe it's worth getting into
what is actually needed on their side to do this,
because we've not really talked about that.
Like, obviously, the Luke and mechanics
of the world running this isn't enough.
What do they actually need?

(53:17):
They need hash rate,
and they need economic actors to enforce this.
For example, if Coinbase's node
just to be blunt, if Coinbase's node isn't running this,
they're going to accept whatever block has the most cash rate and work.
Now, if Coinbase hypothetically came forward and said,
we want to support this effort,

(53:38):
all of a sudden now you have 2 million plus Bitcoin
that are saying, we will not accept the other fork,
which is a meaningful thing.
You would want businesses to come forward
and say that they want to support this effort
for the economic demand, right,
that they're signaling for.
You're going to want a reasonable set of nodes
across the network that are also running this

(54:00):
to make sure the transactions propagate.
That is an important part of this.
And you need hash rate.
Because the miners are the ones
that are actually spending the capital
to advance the state of the Bitcoin blockchain.
And if no one's going to build on your fork,
you're going to fork and then you're going to stagnate
because instead of having 100% of the hash rate
blocks every 10 minutes, you get 1%,
which means that it'll take you six hours to find a block instead of 10 minutes.

(54:25):
So you would want this to all happen without there being...
This is actually a really important point, too.
You want this alignment and agreement prior to the activation,
which is why you would want signaling.
You can signal with your node.
Miners can signal that they're going to support this.
And the reason why you want that is, let's say this happens for 40, 50, 60 blocks.

(54:45):
is Coinbase going to roll back
their chain
six, seven hours
and all those withdrawals?
Because they're not going to be able to
Absolutely not.
Right.
Right.
We've had chain splits before.
Back in 2013
there was a bug
where the Bitcoin network
was down for like 30, 40 blocks
and
we were able to reunify the chain

(55:06):
but like
Bitcoin's a lot bigger now
and so
like
I think it's very unlikely.
Bitcoin wouldn't die
to be clear
if this happened, right?
If you're holding Bitcoin,
you're holding it for like 10 years,
like deep cold storage,
this action doesn't impact you at all.
Like even if there is an old reorg,
it doesn't bother you at all.
Just the funds that are moving

(55:27):
during this reorganization.
So they need hash rate,
they need economic support,
and they need that now.
Because they're proposing to activate
in like 83 days.
That is incredibly fast.
That's very, very aggressive.
Usually at least a year is given
to try and organize these things.
let alone they're not final with the code yet.

(55:48):
The actual final activation client code isn't totally done.
So they're not...
Miners and businesses and the DevOps teams at these companies
aren't going to be like, oh, here's the code.
Let me just load it up into my cloud infrastructure real quick
and get running, right?
They're going to want to look at what code are you actually changing,
which is a problem too because this UASF client

(56:09):
is based on top of a knots build,
which means you can't cleanly patch on this feature
into Bitcoin Core
which is where all of the real economic demand is running.
So that's additional engineering friction.
And one of the big criticisms of Nott
being that the code isn't reviewed properly

(56:29):
so essentially you have to go through
and review every single line of code.
Yeah, exactly.
Exactly.
So they need support and they need it now.
They need hash rate support,
they need business support.
They need a futures market.
They need people who are actually willing to put Bitcoin up on the other side of the bet to signal that they want to buy the UASF coin and sell the non-UASF coin.
And they need all three of those for this to be successful at this point.

(56:51):
Because otherwise, if they miss any of those, the chain's either going to stagnate or the chain's going to go and people are just going to market dump it.
And then the miners are going to switch back over to the other chain because it's not going to be worth it to them anymore to mine it.
Because they only get three Bitcoin per block for mining it in the block subsidy.
and if everyone's, like it activates
and everyone on the UASF chain
is moving coins around just to sell them,

(57:13):
to crash the price,
the miners aren't going to mine there anymore
because the three Bitcoin is going to be worth 0.03 Bitcoin
or whatever, right?
So they need all of these things to actually,
they need a futures market,
they need mining support
and they need economic node business support.
Just on this sort of,
this is an impossible question to answer,
but as a kind of a directional answer,
how many of the people who have been

(57:34):
sort of very vocally supportive of Knott's,
do you think are also going to be behind this soft fork?
Because I've definitely seen some
that have been very big Knott's proponents
say they're not in support of the soft fork.
Yeah.
I think that a lot of people
who were supportive of Knott's
because they disagreed
with the software governance of Bitcoin Core
are not in favor of a UASF.

(57:56):
So it's already, you're starting from a,
because no one who is,
people who are not running Knott's
are fine with things as is.
because that's the client they're running.
They're fine running the default client
of Bitcoin Core.
The people who would run NOTS,
that would be your contingent
that would be willing to fork over this,

(58:16):
and that, I think, is going to fracture.
There's no way to directly tell or know
at this point.
Once there is a final UASF client,
you will be able to run that
and signal to the network,
I'm not just a NOTS node,
I'm a UASF node.
But again, I think a lot of people
who for whatever reason
have their own disagreements

(58:37):
of how Bitcoin development is going
are not going to be okay with a UASF.
So that's to be seen on where that lands.
I find it really interesting.
The thing that is most interesting about this
is kind of the psychology of the people
that have been stirred up by all this drama.
Do you think it comes down to people
thinking they're more important to Bitcoin than they are?

(58:58):
Like obviously running a node matters,
but it matters to you far more than anyone else.
Running a node only matters for you.
It's a selfish endeavor to run a node.
The node, you run a node,
presumably because you are sending and receiving Bitcoin.
That could be once a year.

(59:19):
It could be once every five years.
It could be once every five minutes.
You're running a node because you're validating transactions.
You are validating that the blocks that are being found
and the transactions that are in those blocks
are following the rules of consensus.
everything after that
your
the influence
in what your node has

(59:40):
very quickly
compresses to almost nothing
and if it wasn't that way
it would be almost
like a proof of stake
of proof of AWS
who can spin up
the most nodes
on the network
to like do voting
like Bitcoin's
not a democracy
Bitcoin is anarchy
it is rules
not rulers
and the rules
are consensus
right
which is why
I think at least

(01:00:00):
to your point
on like people
believing they're more important
I think they would just misunderstand the role their node has.
It is a supreme guardian of the rules of the network.
Beyond that, it can't influence much outside of it.
By design, to be censorship-resistant money,
you necessarily, because if I could run stuff on my node

(01:00:21):
or a bunch of my buddy's nodes
and actually put serious pressure on how the network gets organized,
then I'd be able to censor transactions, right?
So it's just kind of like the asymmetry of Bitcoin
as a decentralized permissionless network
that you have these properties.
So I think maybe it's a little bit of education and enablement
for people to understand what their node's actually for.

(01:00:43):
I will say that the UASF effort is at least consistent.
A UASF is how a node can boss the rest of the network
at the consensus level.
So in that sense, it's ideologically consistent
and it is necessary but not sufficient
to actually change Bitcoin.
I want to bring up a tweet I saw
um i've actually i pulled this up on the show i did with marty and hodl and eric casein um but

(01:01:09):
this is from bit pain and i think this like this really summed up kind of one of my big concerns
about this whole thing um okay this is the part that i think is the most relevant it's once you
grant the state that you can take efforts to mitigate illegal illicit material they start demanding it including for money monetary transactions they don like and if you If you accepted that you have a community moral imperative to censor you don have a leg to stand on it all over and like to me that the big concern here is like if

(01:01:37):
if this kind of like c-spam narrative c-sam narrative um gets any real traction then
And how long until some government agency starts saying we have to censor these transactions?
Right.
I agree.
I agree with that base premise is that if you start providing this moral layer in which

(01:02:01):
how bytes are encoded into Bitcoin blockchain of being acceptable or not acceptable,
it's a very slippery slope that doesn't require much leaps in imagination to do that.
Now, to steel man from my understanding, the other side of the argument is that this is not about you. We are not gating the moral use of Bitcoin as money for monetary transactions. We are morally gating non-monetary use cases.

(01:02:28):
And they would argue that they're drawing a line at monetary versus non-monetary, that we will moralize and push out all the non-monetary stuff, but everything that is monetary will be held.
I would still put forward that you have now moved Chesterton's feds and made moral any part of the argument.
To even introduce a moral caveat to the argument is now moving of, like, the boundaries and how Bitcoin has worked up to this point.

(01:02:55):
And I think you're regressing in seeding ground
to people who would want to attack the network.
Yeah, and I don't even think the money,
sort of non-money transactions don't even matter in this.
It's that you're proving that you can do something.
Yeah, I think Mr. Hoddle had a really good tweet
where he said the most bullish thing
is a failed UASF attempt
to show how censorship-resistant Bitcoin is.

(01:03:16):
But even if some of the most predominant developers
who also happen to be CEOs of binding pool protocols,
right like could be seen you know having this big like effort to be able to push the scale
and having them fail would be pretty bullish for the censorship resistant kind of um resiliency of
bitcoin as a protocol that can't be cajoled and pressured using these like legal uh framings and

(01:03:39):
moral framings it's interesting because probably for over a year now the not side of this argument
have been claiming that core and you and shinobi and all these people have been like attacks on
Bitcoin. Well, Shinobi is Bitcoin Core,
but yes.
He's Bitcoin Core
and he's Adam Back.
They've been claiming that you're an

(01:04:01):
attack on Bitcoin. Do you think this
poses the risk of actually being an attack on
Bitcoin? I mean,
UASF is an attack on the network
by design.
And attack
because it's challenging
the existing consensus rules, right?
Like, now
to be charitable for the other side,
they would frame this as we are applying a hot fix to the network this is like an emergency patch

(01:04:28):
which is why they say that usually you have a year plus for uasf we're doing this in 90 days or less
because this is actually an emergency hot fix this is not an upgrade right this is like a secure
emergency security patch um you are attacking the network that's what you're doing you're saying i
you're threatening to orphan miners,
you're threatening to reorg the chain,

(01:04:50):
you are threatening to change the rules
which everyone had previously agreed upon.
You could say, I am doing it for good,
or I must do this now because the actual attacker
is core in version 30,
but from a consensus level, it is an attack.
Now, we've done it well before.
Technically, we did it with Taproot and with SegWit.

(01:05:12):
We made changes to the network.
Like we said, hey, we're going to make some changes and do some new things.
Those things were non-controversial.
They also were non-controversial because everyone who disagreed forked off with Bitcoin cash.
So a chain split in like a UASF, like this is almost kind of like a divorce.
Like it starts socially and people that were around in 2016 as the block size wars were heating up

(01:05:33):
would have kind of described this like escalating kind of like social tension in general.
And then ultimately it ends in a divorce and you have a chain split.
And then the people that don't fork off, they have better consensus on activating SegWit.
Bitcoin Cash forked off before SegWit activated because they didn't want to do that.
So ultimately at a governance level, this is how disagreements within the anarchy system, which is Bitcoin, get resolved.

(01:05:58):
People self-select, run different software of their own choosing, and opt out of rules or rule changes.
So it is an attack.
It doesn't mean it's necessarily a bad thing.
I'm just saying that like if you're changing the rules of Bitcoin, you are doing an attack on the network.
And, you know, depending on what side you fall on, maybe it's justified and maybe it's not.

(01:06:19):
We need the are we the baddies meme here.
If you had to kind of predict what happens next then, what do you think will happen?
You don't think this soft walk will happen.
So what do you think will happen to the vocal support of that?
And I'm really talking about kind of the mechanics and the loops of the world.
Do you think we'll see rage quits?
Do you think they'll come back to Bitcoin and change the messaging?

(01:06:40):
Or do you think even if this doesn't happen, they'll try something else?
If I had to guess, I believe they are going to fork off.
Because I believe they put a lot of time and effort and reputation on this framing.

(01:07:01):
It is...
And do you need to hard fork that?
Maybe.
Well, we'll start off with the UASF.
They may, after the UASF, say,
okay, we also need a hard fork
because we need to change the mining algorithm
or the difficulty adjustment
or any other odd number of things.
I know for sure they're going to do the UASF, though.
I take them at their word
and believe them that they're going to do this.

(01:07:25):
Now, from there, I would welcome them back.
I would love, maybe a controversial opinion,
I'd love for the Bitcoin Cash people to come back over
and just have one big happy family again.
Like, there's so much we agree upon.
I would rather us be together.
But at the end of the day, you can't force or control
who people associate with, and that's their own decision.

(01:07:49):
Now, for the larger future, like,
them as people, I don't pretend to understand
how Ocean's business or governance
or any of those things work.
Like, I don't, like,
they could attempt and fail and just everything keeps on going back to where it was before.

(01:08:09):
It could happen. I don't know. Right. That's much more of a question for them because they
would be able to more to finally say how they're going to act. And if we got the UASF, do you think
there'll be a URSF? Do you think there'll be a rejection of that? And with the reorgs being the,
I guess, prime issue there? Well, so here's the thing is that you would be able to pretty

(01:08:33):
quickly understand is that even a threat? Because after like five blocks, 10 blocks,
you're not going to have to worry about anything. Because you'll see where the hash rate is.
You'll see where the hash rate is. And you can run a node on each chain. So you can see I'm at
block height 100 and you're at block height 105. And you can just sit on the node and see what
block are they at. And I think as an actual heuristic, like with the actual like this is

(01:08:58):
over. This is my
personal theory. But after 100
blocks, this is an
important thing about how Bitcoin works. When a miner
finds a block, they have to wait 100
blocks before they can take that Coinbase output
and spend it. And once you
get to a point that miners are now able to withdraw
funds
that they've mined on this chain,
they're not going to reorg themselves out of money.

(01:09:21):
So after like 18
hours, if there's
not a serious split in hash rate,
I don't see it as a
likely to have a rollback.
And then at that point,
you don't need to do a URSF
because it's fine.
Exchanges could just pause withdrawals
for X blocks.

(01:09:43):
That's a great way an exchange
can protect itself.
They can just say,
hey, for the next X blocks,
we're going to hold off on withdrawals
because there's network uncertainty.
So that's a way of doing it.
If you're transacting in Bitcoin
and they're moving forward with this,
don't do a large Bitcoin transaction
until the dust gets settled.
Or just wait for more confirmations.
Instead of like six, which is like an hour,

(01:10:04):
maybe wait a day.
And then I think pretty quickly
the dust would settle after that.
But I think it would be way premature
to do a URSF when no one's in the futures market.
No one believes in the futures market
that this coin's going to be worth anything,
the URSF coin.
None of the miners have signal support for it.
None of the businesses have signal support for it.
I can't even find one Bitcoin of liquidity
on the other side who wants to bet

(01:10:25):
on the UASF coin,
and I have at least 100
that wants to bet against it,
I think it's way too premature
to do a UASF
or even think about it.
You might have pissed someone
off enough today
to get that one Bitcoin of liquidity.
I will happily take...
You name your...
You give me the coins.
I will very happily...
I can fill probably
just on my inbound interest

(01:10:46):
hundreds of Bitcoin.
And if it actually gets serious,
there could be more.
It's going to be interesting.
It's such a mess, man.
I'm looking through the BIP.
Right now, there's been a lot of discussion on the mailing list, as well as the repo of people kind of talking through about this.
Version 30 being now the largest node implementation, I'm looking at Clark Moody's dashboard at 10.76%.

(01:11:13):
It's hard to say where this support's really going to come from.
I don't know.
Like, I'm thinking through the game theory.
I talked about chain splits,
talked about futures contracts,
talked about mining, game theory, and reorgs.
I think it's been a good high-level summary

(01:11:35):
of all of the latest pieces,
but it's moving fast, too,
which is also just a...
As of this afternoon,
Dave Thinome was saying
that he was going to maybe change the activation height,
which it's really tough
because once you start changing it,
people take you less seriously
because you'll just, like, move the deadline again.
and so I think it's a signal of weakness.

(01:11:58):
So they're trying to figure out
what they're going to do next.
I would guess they're going to move that backwards,
not forwards.
Yeah.
All right.
I've also, I'm not allowed to,
there's a telegram room
where they talk about the fork and the opportunities.
I have been banned from talking about prediction markets
in there and talking about futures markets
because I've been trying to find someone.

(01:12:18):
So if they are trying to stifle the economic demand to express pro BIP444, pro UASF Bitcoin, I think they understand that there is an economic demand there. So I think that kind of like seals it. The money talks at the end of the day. You can do long debate threads and you can do long kind of like esoteric hypothetical what ifs.

(01:12:40):
a futures market is actually the market finding mechanism for resolving this. And the fact that
they're trying to choke the liquidity so no one can express pro 444 UASF sentiments,
it's not looking good for them. I saw you did start a prediction market as well. Was that on
predicts? Yes, I did. I did start a prediction market. I just tried to look at it, but it says,
it says the website's like temporarily down. They are. So as a funny note, I had never used

(01:13:06):
the website. Everyone was refusing to reply to me. So I went and made my own prediction market
on Predix, P-R-E-D-Y-X. I have no affiliation with them. It is entirely custodial, just to be
clear. Entirely custodial. I went and set up a prediction market on the likelihood of this UASF
activating and being the most built chain. And the percent is currently at 2%.

(01:13:34):
oh damn when i checked a few days ago was it like seven or something well then i i go in there and i
put hundreds of dollars in and bid it down so i currently have i've put up 2.5 million sats to win
2.8 million sats so those are the odds like implying the size of the odds here um and so i go in there
every day and i just bid it back down because i'm pretty convinced it's no so um if you annualize it

(01:13:58):
I'm getting like a 30% yield on that Bitcoin
as long as the custodian doesn't rug me.
So I feel pretty confident.
And I haven't found...
Well, it's just making a bet.
I'm just...
I have high confidence in it.
So Predixite was fun, though.
I'd never used that before.
And so then I made a prediction market on
will Luke or Mechanic acknowledge a prediction
or futures market to be legitimate that is in motion

(01:14:20):
because they refuse to legitimize.
They just call it a big bet and I'm a liar.
They won't elaborate further.
So I made a prediction market on
will they legitimize a prediction market?
and then I made a prediction market on
like will Luke and Mechanic
acknowledge a prediction market as legitimate
because they just say
but what are the odds on that one now?
that's at 14%
so there's 14% on that

(01:14:40):
I did a prediction market on when they would actually release the code
which already resolved
they released it on November 7th
so that already resolved
I made a prediction market
will Dathan Ohm still do the on-chain futures contract bet with me
because I'm not sure if he's going to
that's currently priced at 19%
well that's free money for him
well that's what I said
it's free money for you buddy
I've been having fun with this idea of trying to constrain prediction markets as like gambling or

(01:15:04):
it's just information finds a signal in a way. And it's just one of these things that I've been
having fun since no one will take me on the trustless non-custodial auditable one to make
my own market elsewhere with different risk trade-offs. But I just want to price some risk.
It's all insurance, baby. I'm just pricing risk. That's a perfect segue to talk about Anchor Watch,
Rob. You're such a pro. How are things going at Anchor Watch? Doing great. Yeah, everything's

(01:15:28):
going great at Anchor Watch. A couple people have asked
all of these changes
and do not impact us at all. We use
pay-to-witness script hash and
there's no restriction on what we're
doing as it relates to this UASF so
our customers are not impacted.
Won't be an issue at all.
It's been going well heading into the end of the year.
We're looking to be launching some new vault
variants and product offerings as well as uninsured

(01:15:50):
custody around year's end
so keep an eye out for that.
Can you talk about what they look like yet or
is that still under apps?
I'm happy to. There'll be versions where customers only have to hold one key, where additionally, with uninsured, you'll be able to set it up in a way where we co-sign with you. But then it goes to your self-custody. And then a year later, if you lost your key, we can help recover it later. Right? So there's never, the only way that we could act to move funds without your permission is because the funds haven't, like you lost your key and you haven't been able to move funds for a year.

(01:16:26):
Also sitting at multi-institutional custody,
just kind of finding new ways to be able to meet customers
where they're at with their own preferred custody key model
and being able to, you know, meet people where they want,
you know, right?
At the end of the day,
we want to be able to help people secure their Bitcoin
however they see fit
and being kind of a tool to help empower them to do that.

(01:16:48):
You know this BIP, different BIP now,
that Jesse Posner and someone else from BitKey
as put forward,
which is basically a way of,
as far as I understand it,
you can explain how this actually works,
allowing collaborative custody,
but where you as the person
they're collaborating with
can't actually see
the Bitcoin transactions they're doing
if it's not including your key.

(01:17:09):
Is that something
you'll be able to implement?
And maybe if I've explained that badly,
maybe you should reframe it.
No, no, no.
So at the highest level,
I'm just explaining how most,
if not all,
collaborative custodians work today
is maybe I give you a key,
you set up a wallet,
this would be like an Unchained or a Casa
or a long list of many others.
Or a BitKey.

(01:17:30):
Or a BitKey, of course, yeah.
So the BitKey team, they worked on this.
The BitKey team was a lot of work on the BitKey team.
The way it works today is the service provider
to be able to help you transact
and maybe load up the app and see the balance,
they have to see all of the transaction data.
So you give them what's called an output descriptor.
This output descriptor is like the full body

(01:17:51):
of all of the metadata for the wallet.
The trade-off here, though, is that the service provider can see all of your transactions
and knows all of your deposit addresses and knows every time you use a transaction.
This new BIP would allow us to basically do a key exchange.
And by default, I can never see your on-chain activity.
But if you need me to sign to help you out, you can then reveal information to me that

(01:18:15):
allows me to use my key to sign your transaction.
So it allows for better default privacy.
I mean, that seems like a massive upgrade because the big trade-off with any kind of
collaborative custody is the privacy one.
If this is removing that,
that's probably a pretty huge for you.
No, I think it's a massive
upgrade in thinking
about the user experience and the privacy
trade-offs when it comes to self-custody, but having

(01:18:37):
someone able to help you in the event
you need help. And so your
default happy path could be just using your own keys
and the service provider
would never be able to understand or define anything
about how you're using Bitcoin. Not because
they're hiding it, it's because they actually
don't know. So I think that's a very good just like first principle basis of kind of like improving
the custody model for sure. I think it'll take some time for it to get into the ecosystem.

(01:19:01):
Ideally, we'd want to have hardware wallets supporting this so you can interoperate with
it. You'd want to be able to even use it with Bitcoin Core. Like you want to get a reasonable
proliferation of like the wallet and software to adopt this. But I think in a time like in a
realistically two years from now, maybe we'll start seeing it more widely adopted,
but definitely keeping an eye on that very cool i'm bullish on that bit less so on bit 444 we're

(01:19:25):
going to get a lot of hate for this rob but um i think it's an important conversation i'm glad we
managed to go and get into it um anywhere you want to send anyone apart from anchor watch before we
close out uh yeah i guess uh i'm rob one ham rob the number one ham on twitter i'm rob at primal.net
on Noster. If you are a big proponent of this UASF, in my pinned tweet, I talk about the

(01:19:51):
importance of futures markets. I've been tweeting out a lot about the actual on-chain contract. You
can start looking at the code and understanding, asking questions, getting audited. I would love
to be able to facilitate more market making. And what's great about it too is it's peer-to-peer.
I'm not just two individuals putting money together into a Bitcoin transaction.
like i and that code is fully open anyone can go run off and do this you don't need to involve me

(01:20:14):
at all um and i would encourage you if you're interested and you want to kind of uh if you
have high conviction and it's uasf working um hit me up on twitter and um we can talk about
going through the code and getting something set up love it man it's um it's we will definitely
get some hate from this it's interesting whenever you talk about either core 30 core in general um

(01:20:37):
Bitcoin knots, like the amount of comments I get is unusual.
I think there's probably a lot of bots.
My favorite, and since I am an avid follower of the 40 hours per week podcast program that
the Bitcoin Bugle does, I'll get YouTube subscription notifications when you come out with a new
show.
And it's wild that within three minutes of a show being uploaded, you'll get multiple

(01:21:00):
comments.
Like people who have obviously not watched it.
It's always the first comments that I get come through on a video are always about knots
pretty much.
Right, which makes you question how much of this is organic versus real user interest, which is why the futures market is beautiful.
Because a bot can't put up Bitcoin in a trustless, non-custodial smart contract.

(01:21:23):
But they can run LLMs all day and just kind of astroturf the ecosystem.
This will be a fun test when you upload this with my name as a key line hit and your podcast.
the amount of random unrelated comments that are going to show up within the first hour
of people who definitely didn't watch it and they don't comment on anything else and they have no
actual user footprint or anything um it'll be very interesting to see yeah the comments are like

(01:21:46):
definitely come in before they could have watched any of the video but but we'll see it's all good
it's all fun and games um everyone missed the part at the very you gotta you gotta just giggle
you gotta giggle giggling is free giggle
is legal and it's good for the soul you got to be doing some giggling i'll let you get back to
everyone will have missed this at the very start of the conversation but you're

(01:22:07):
not larping on twitter today you're actually larping yeah uh so uh lisa nifty nay uh is here
at the at bitcoin park for there's a bitcoin veteran summit and she was doing a lark the
live action role play how the bitcoin network works if you ever get an opportunity to go check
one out, I would highly recommend it. It's a lot of fun. But Danny made me abandon a room full of

(01:22:29):
veterans on Veterans Day to go do this podcast. And so they were none too happy about it. And
right after I got this call, I'm going to go run downstairs and host BitDevs. So I'll get a little
bit of redemption there. There you go. I'm sorry to all the veterans out there. But this conversation
was great, Rob. Thank you, man. And I'm sure we'll speak soon. We were going to do a show totally
different on the Hero's Journey of Bitcoin, but we'll have to park that one and we can do that

(01:22:52):
next time.
Absolutely.
Sounds like a plan.
Thanks, Danny, for having me.
Thanks, mate.
Bye.

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Is BIP444 An Attack on Bitcoin? | Rob Hamilton

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Is BIP444 An Attack on Bitcoin? | Rob Hamilton