 Jameson, welcome back, my friend, how you been? Not bad, just trying to stay corona-free. That's it, you know, you gotta stay corona-free, keep yourself healthy, and sit back and watch the government. And it's, in all its glory, its wisdom, his infinite wisdom completely screw things up. Well, these are the times that a lot of us wait patiently for. Those of us who are preparing, you know, or we're waiting for one of those eventful days where some of our preps actually come in handy. The funniest thing, though, like, there's actually a couple of funny things about this. The first thing that I notice is the people who are like really against guns, all of a sudden aren't against guns. You know, they realize, wait a second, if I, you know, if shit hits the fan, I'm gonna protect myself. No shit, Sherlock. Things really change when your local government starts sending out notices saying, you know, we're not gonna be responding to certain types of emergencies. I've been watching videos, and this probably, this is actually, this predates even what's happening with corona, but I've been watching videos in California when they bypassed that law where it's, I think it was like, something like, it was like non-violent, like small misdemeanor, against it will not be enforced. All these people are walking into convenience stores or any stores like, in broad public, they don't give a fuck. Yeah. It's loading, I'm like, what the flying fuck? The incentives have been misaligned and, you know, people are taking advantage of the new rules to the game. And people forget the first rule of a cohesive society is the protection of private property. If that is not enforced, there is no society. Whatsoever. And so when you have something in California, a state that has, I think, more population than all of Canada, not enforcing the very notion of somebody going onto your property and stealing anything they want. I've even saw beyond just stealing, I've seen people squatting on private property on their lawns and the cops are like, meh. Well, and then it's compounded when the laws additionally make it so that the property owners can't enforce their ownership of property. So, you know, the authorities won't enforce it and they won't allow the actual, you know, citizens to enforce it. What are you going to do? That's really when things become chaotic. My question is, why does anyone even stay in California? More and more like Texas and Florida are looking like the spots to be. Yeah. Well, I guess you got that SoCal weather, but I guess Texas and Florida also have pretty good weather. And it's cheap from property, man. Fuck, Austin. Like I'm from Toronto, Canada. Our property is just retarded, just insane. And I have property in Texas. I'm like, whoa, I can get like this for this. Like this is awesome. There's still the, you know, California has some appeals still left to it. Though I think, you know, anyone who like goes to San Francisco, for example, can see the deterioration of the city there. There's still the whole Bay Area culture and, you know, innovation happens here. But I think that, you know, they're not going to be able to hold on to that. Like it's already waning, you know, even with my company, we're 100% remote, decentralized, like no central headquarters that people go into. And I really think that's the way of the future. And, you know, it just, it happens to come in handy with stuff like what's happening right now. We don't have to worry about changing people's behavior because the behavior we were already undertaking for several years just happens to fit well within the new model. And talking about behavior, it's been interesting sitting back and watching how the Bitcoin market has been responding to everything. It never does what you expect, does it? No, but yes and no. Yes and there's a cadence. Like people were complaining with the big drop to happen. I think it was like two weeks ago or a week ago whenever it was, but that wasn't just because of the market. That was also, we have poor plumbing within centralized exchanges that caused issues. And with any liquidity crunch, all assets are sold at the top. So Bitcoin will be sold, gold was sold, stocks are sold. It's a race to get liquidity which is cash to sit on because you just don't know what's happening within the market. There's no trust. There's no bottom in sight. You don't know which assets are going to increase. But I just saw on Twitter, like a minute ago before this, that Bitcoin this week has been less volatile than the S&P. Oh, right. Yeah. That's crazy, right? Is the traditional markets or the shitcoins now? And for me like, I want your take on this. You know, a lot of people within the Bitcoin community talk about store value as a value proposition. Now, I understand the narrative. I understand why that's important to brand it a little bit better. I get the digital gold aspect. I understand it. But more or less, I personally don't see it as a store of value as of yet in its current form. What needs to be talked about a bit more and not really within the Bitcoin, well, we're preaching to the choir, but what needs to be talked about more to the general public is it's not the store of value. I wouldn't suggest my brother, hey, put the last $10,000 you ever have in Bitcoin. Maybe it goes up, but maybe tomorrow you hit 40% and like 99% of investors are emotionally driven. Like even if it drops 10%, it's like, oh, my money's gone. My value prop is here is an asset that is censorship resistant, that is divisible, that is portable, that you know for the last while, 11 years now every 10 minutes, a block has been mined. Like this I think has to be more of a, I don't even say selling feature, but the story for like general public, like regular people and I think within the next year or so, people will be looking, like people are gonna be looking for different assets. Like our parents' generation was real estate. They could buy real estate for an affordable price. The dollar was stronger. I remember here in Toronto, my parents bought their house for $200,000 in the 80s. The house is worth about 1.7, 1.8. Right now no one's gonna afford that and people think that house is gonna go to $4 million. Like come on, come on, come on. Like let's be reasonable over here. But I think Bitcoin is the real estate of let's say the millennial generation and under. And so where do you see it? Like what's your thesis within the next like year or so within this space or Bitcoin in general? You know this is tricky because we're basically talking about like how do you evangelize the unique properties of Bitcoin to people who know nothing about the complex inner workings. You know you don't wanna start going into all of these details of how it operates cause people's eyes glaze over and in most cases you end up having to have long hours or days or weeks long conversations about how money even works in the first place because not many people know that. So if they don't have any frame of reference then what's the point of trying to extol the virtues of Bitcoin? But I spent my first several years trying to do the evangelism thing and you know talking to all my friends and family and coworkers and anybody who would listen and a lot of people who wouldn't listen. And I ultimately I think that most of that was a waste that you know 99 points something percent of the people who I spent time trying to convince they didn't get interested they didn't investigate they just thought I was a lunatic and moved on. And you know sure many years later a number of them come back to me and they're like why didn't you try harder to convince me yada yada yada and then the 1% who did listen were like man I'm really glad that you took the time to tell me all these things but I think at an even more fundamental level you know it's not about trying to convince people that it's secure or it's divisible or whatever. I if I like to still all of these properties to kind of the the root cause of what I think creates those properties it's the nature of it being an open collaborative project and that creates just better fundamental incentives and better game theory around whatever the resulting properties of the system will be. And so I think it may be a lot easier to explain to someone who they've probably at least heard of the Federal Reserve or the US Treasury and say well would you rather have your money and the properties of the money dictated by a handful of people who meet behind closed doors and don't even tell you why they decide to make certain changes and you know they may have their own incentives that you don't even know about that are you know linking them to various other entities in government or Wall Street or whatever that can result in some really screwed up things happening that they decide are good for everyone in general or do you want money to be a more open transparent project where you know if you want to you can voice your opinion and argue with people about what you think the properties of the money should be and I think that's just a much simpler way of trying to say well fairness in general is kind of a silly concept I mean because everything is subjective and so we can never really say that we're going to be able to have type of money in existence but at the very least we can guarantee that with transparency with a lot of people watching what is happening to the system and you know raising a fuss if there's anything weird going on that they think is not very well aligned with the incentives of themselves or other participants in the system then that ought to at least have a better chance of not necessarily being better for everyone but hopefully at least being less harmful for people and that's kind of like the way that we've seen the politics I guess of Bitcoin play out over the years is that it has become harder and harder to make changes that are controversial and like the level of controversy that is required to get something blocked from happening in Bitcoin just keeps going down and down and down and we keep ossifying the protocol to the point that eventually I think it's going to become like almost any other internet protocol where it's just not even worth trying to change it anymore because nobody's going to agree to any changes what is the heuristics though right now people are wondering what is the process for changing something within the Bitcoin code? Yeah, so you know because there is no central authority that is even deciding what to change and we have standards there is a Bitcoin improvement proposal process but even that process that has been in place for I think seven or eight years there's no requirement that you go through it you can anybody can propose anything that they want it's just it's much more likely that if you go through that process you are more likely to converge upon whatever consensus is and you you very likely will not find consensus for whatever is you're proposing I mean I don't know the stats off the top of my head but I was looking at just general like code change request in the Bitcoin core repository a month or so ago and found like the vast majority of code that has been proposed ends up not getting accepted and you know that could be for a million different reasons so the players are you have somebody who is controlling the GitHub for the Bitcoin core client right you have minors who decide which client they want to use you have developers who are responsible in the open source network to support the network and then you have I guess exchanges that have a lot of say in it because you're holding a lot of Bitcoin say of all these different players that have some type of influence within the governance of the Bitcoin protocol well yeah it is it is I and I have you know an hour long talk that I gave a year or two ago about this governance process and the the synopsis of that is that the governance of Bitcoin is basically the complete inversion of every other system of governance that we are traditionally used to we are both in the public and private sector used to hierarchical top down command and control you know there's one person at the top and they control another layer of people and those people direct another layer and eventually at the very lowest level you've got the plebeians essentially who have no no power but in Bitcoin it's the exact opposite where every individual participant who at least goes to the trouble to run their own code to run their own node and basically decide what rules they want to enforce that is at the very lowest level each individual actor making a million different decisions you know based on a million different variables in their own perspectives and then what the system is the definition of the system is basically what sort of organically bubbles up as the I guess you would say almost the the subset of whatever the agreement of all those different diverse opinions are it's not a system of voting it's it's very actually hard to quantify consensus in the system because it is this organic process I have a follow-up question so Segwit happened what two years ago something like that how did that how did that take place how did that consensus come together to activate Segwit yeah so you know that was a fascinating multi-year long story and you know essentially the code for Segwit got merged into a number of different Bitcoin clients and the the thing about making consensus changes is they're very difficult there's multiple different ways to do it you can do it in a backwards compatible way or a non-backwards compatible way in general the ethos of Bitcoin is to do everything in backwards reinforce people to change their code if they're not paying attention for any number of reasons you don't want to break their money and so the code itself got merged without too much contention it was a it was at least a year long process you know a lot of thorough review but then the question is how do you activate that code and there had been at least three or four different styles of activating consensus changes in Bitcoin over its history more recently it's usually minor activation and in particular with Segwit it was I think requiring something like a 95 percent signaling of miners over the past you know 2000 blocks or so the past couple of weeks to really lock it in signaling for people who are wondering is downloading the client and pretty much raising your hand saying we accept this client it's it's basically that the when you're when minors are doing signaling they are putting a small amount of data inside of the blocks that they are creating that basically said it it is a claim that they are running code that is compatible with whatever that feature is but you can't actually prove that you're running that code but that's a whole other kind of low-level minutia argument but um you know due to all of the contention around scaling and and what different entities in the ecosystem wanted maybe a year went by and Segwit didn't get activated and the minors were basically dragging their feet and we ended up having a series of kind of compromise proposals that happened and and then and that was all happening simultaneously with other groups of people who were saying you know what screw you guys we're actually going to go create a whole different network a whole different money and we don't need your permission that ended up becoming Bitcoin cash but then there was also this whole Segwit 2x thing going on that was kind of a compromise proposal of okay we'll do the soft fork but also do do a hard fork and suffice to say I think there was some um good political maneuvering that resulted in a compromise proposal that allowed a lot of people to save face where we ended up activating Segwit and then at the last minute uh the just the support for that just kind of collapsed and it was a good thing that it did because there was actually a bug in that code where if people had been running that then the whole network would have ground to a halt but it was it was a fun you know couple years of history there yeah it was it was interesting to watch I always view these blockchain networks almost like organic organisms that turn into like these like nation kind of states online or like even like family members right any of Bitcoin cash and like Bitcoin as feed and like all these like derivatives like Bitcoin go I can't keep counting there there is at least 50 different Bitcoin forks last night and of course most of them are worth nothing nothing yeah yeah you know ZIFS law power law I'm interested for the question though is a question for myself is there will come a point in the future I forget what it was was like 21 I forget the date but where miners will not mine they will not reward no more for the block right then what yeah that is one of the major questions around the long term sustainability of the system and it is one of the reasons why the developers who are generally against just making block sizes larger and larger and larger to keep fees low because at some point we do need a sufficient level of fees to sustain the hash power now this is where it gets tricky because like there is no level of hash power at which the network is secure against computational attacks it's all relative the network would function fine if the difficulty was a difficulty of one like it was when Satoshi first started mining blocks however that would mean that basically anybody with a CPU could create their own blocks and the network would become really chaotic so you know what is the desired level of of hash power it's quite honestly as high as possible like we we want it to be so high that it is not feasible even for like a first world nation state to be able to gather sufficient level of hash power this is pure open market free market capitalistic systems in place is very simple I'm putting resource in which is my capital to find the cheapest electricity whatever source of electricity I can get I then have to have an housing unit meaning a warehouse or whatever containers I have to then buy equipment some some ASX they have in half life so whatever the half life is I must then hire engineers and people to maintain this stuff I must then have hydro all this stuff where there's a massive overhead and I much I must crunch the numbers and it must be worth it for me at least of a twenty twenty twenty to thirty percent per dollar to earn my return on that my question is what is the what is their propositions they like what are the probable is there a base minimum fee that has to be in place for the miners to be incentivized to increase hashing power well so the the question basically comes down to what is the cost of mining and there is no easy answer to that because there are so many variables some of which you just mentioned and and ultimately this is why mining is so competitive and ultimately mining results and people being incentivized to seek out the cheapest forms of energy and we're you know we're even seeing people go to the extremes of setting up little boxes basically in the Arctic where there's oil drilling going on but lots of excess natural gas that is just getting burned off into the air because there's no way to transport that so it's the energy is just getting destroyed so I think the less interesting question is you know how much do we need to pay the miners and the more interesting question is how easy can we make it for miners to contribute to the network so like like you were saying right now miners are very industrialized they're going to extreme links to you know find little bits of better efficiency so that they can increase their profit margin and eventually put the other miners out of business if they can't you know keep competing now that's one way that mining has evolved over the past five or six years but it's not necessarily the only way I would really like to see the tide of mining swing back into a decentralized nature and by that I mean my optimal scenario for Bitcoin mining is basically a miner in every house and of course these would not be miners like we know it right now you're nobody is going to want to have really loud you know fans going that are heating up their houses and making things uncomfortable for day to date living but rather there might be other places where we could find energy efficiency gains you know one of those ideas has been there's actually been a few prototypes and some limited production but along the lines of creating miners that are actually just space heaters you know for people who live in really cold climates or for more regular use is miners that are actually submerged inside of your water tank at your house that heat up your water for you hmm and that type of stuff is like you're already going to be spending electricity to create heat for various things and if you can spend that electricity and create the heat but also be mining some Bitcoin then maybe you can basically subsidize your regular day to day operations and and I think the only question from that is well how do we then make the actual like IT administration of these devices easy enough that the average household doesn't have yeah they don't need to deal with any complexities of like you know plug-and-play that's yeah it basically needs to be plug-and-play but from a theoretical standpoint that seems to be feasible it also seems to have pretty well aligned incentives it's just a question of you know can somebody figure out how to pull off that ease of use yeah it's the transforming of one energy source that's being wasted into another one but also this brings up the question then or the point is it comes to a point where industrial mining is not profitable hence why it would go back into a decentralized matter because if I can plug in a device and let's say my I'm I'm in a cold climate I'm in Canada so we have seasons and winters cold here we have long winters so if I can plug something in and a lot of houses already here they're still in the old school way like a electric you know they already use the use electricity to heat yeah so if I can plug something in and it may you know for regular miners peanuts like I don't give a shit for making 200 bucks what the hell is that I need to make millions but if I can earn let's say even 150 bucks a month off of this thing that covers my hydro bill right yeah yeah so you know I actually theorized on this I want to say in an article back in 2015 or so where I was saying you know we we could potentially get to the point where if we can undercut you know industrial highly scaled up mining because it might actually there might actually be away where you can have a slight loss then that effectively prices out all industrialized miners and forces decentralization in the system it's just a question of can you figure out a way to get these devices deployed and basically help subsidize people's ongoing energy costs last question since it's not impossible to change root code in Bitcoin so it's been done in the past and there's always this question of 21 million has been baked it's a psychological number it's not a definite number it's not this is fine and this is it there's only 21 million it's a accepted consensus since the beginning of Bitcoin there's only 21 million Bitcoin do you ever foresee the possibilities of something similar to segue at least in the conversational manner in the future obviously this is way way in the future where there is even like a 10% chance of possibly that gets extended beyond 21 million well it's certainly possible and I believe that we are going to have multiple contentious changes over the long term that are proposed I think you know segway was not the first contentious proposed change by any means it was just one of the longest drawn out and I don't know and it resulted in yeah a ton of drama that there were plenty of dramatic proposed changes in earlier years but they were generally contained within the developer mailing list so I think that in the short term we're probably going to see contentious proposals around privacy improvements I think they're going to be various actors that are anti privacy improvements for various reasons then the question becomes you know and it's we're not even really talking about a hundred years from now it's really more like maybe 15 20 years from now that the block reward is going to be really really low you know after a few more haveings and depending on a variety of factors like the exchange rate at the time and the transaction volume at the time and the transaction fees at the time then we very well might find ourselves on the precipice again doom and gloom and naysayers that warn of you know mining death spirals and all of this other stuff that has come up before but they may have a stronger argument around it if there isn't you know sufficient level of predictable transaction fees but it is far enough away that I'm not worried about it because we have had some points in time where transaction fees I think have reached almost the block reward and of course that was during some extreme usage and congestion but you know we've seen that we've already gotten fairly close there it's certainly possible and I think that if Bitcoin doesn't completely die and collapse then most likely we will continue to see more usage and more contention to you know get block space which means more active markets that are bidding for block space in the form of transaction fees and that's going to create good tension that essentially it forces people to be more judicious in their use of the block space so it incentivizes innovation for people to use less block space in a variety of ways whether it's through you know sharing transaction data with like coin join type operations and aggregating signatures together and that's going to become a thing the next year to or of course going to second layer networks be it something like lightning network be it side chains like liquid or drive chains or or root stock etc etc as I do believe we're going to continue to see evolution the economic incentives for people to become more creative and how they're using Bitcoin like a living organism pretty much cool Jameson I just want to thank you so much for sharing your thoughts if people want to know more about you and what you do what's the best resource you can find everything I've ever done in the Bitcoin space at lop dot net or if you want a direct shortcut to my educational resources on there just go to Bitcoin dot page thank you brother always a pleasure thanks for having me