 Well, welcome back everyone to the video for of Sailor Academy's live series Bitcoin for everybody just a reminder. This is a companion series to to sailor.org Bitcoin course which you can find at learn.sailor.org slash prdv 151. I'll make sure that all of that is in the descriptions and in the comments. And I'll also make sure that I put in the chat along with the discourse discussion forums, so that you guys can keep this conversation going amongst yourselves. So we have a good show lined up for you. Obviously, Stefan Leveri's with us as always hosting and we have Jimmy Song who is a Bitcoin developer educator and entrepreneur, and the CEO of MicroStrategy and the trustee of the Sailor Academy, technically my boss, Michael Sailor so with that, Stephen if you want to take it away. Thank you very much Michael so yeah so welcome back listeners and viewers today we're going to talk a little bit about some of the basics of Bitcoin technology and Jimmy and Michael are going to help us by teaching us a little bit about that and maybe providing a little bit of commentary in and around these ideas as well. So maybe if we just start. So for, so for those of you if you go through the material, we've got a few videos and a few podcasts and a few articles that explain a little bit around how Bitcoin works under the hood. And so I guess today we might just talk through some of that, and I'll try to ask some of the questions that maybe a new person might have. And I'll also keep an eye on the chat as well so if you have questions in the chat you can make sure to ask them there. But perhaps we could start with you Jimmy. Can you give us just like some overview. How does you know Bitcoin work if I you know let's say I send a transaction to you. What does that look like on the Bitcoin network. Yeah, transaction is basically a bunch of bytes and and it has some information about it. The money that you are spending. This is what we would call the transaction inputs. And then where you are sending the money the, the, you know, places that you are sending it to so these are the transaction outputs. You can think of each of these outputs as sort of like a mailbox for a particular person. And you're sent when you send money to them you anyone can send money into that mailbox but only the person with the private key can unlock them and do something with them and that's that's how Bitcoin works. You know, it's based on some public key cryptography essentially anyone can send to your public key or a hash of the public key as it were. But only the person with the private key can actually, you know, spend it so that that would be the analogy that I would use. And so it's like, it can be a tricky thing when you're first coming into this, because you might not have, you might not have a good analogy to think of it like you might just be thinking oh my normal bank account I just send $50 to from here to this to this other person. But in Bitcoin land, it's very different that there's no think of it like there's no pool system it's a push system in Bitcoin land. And so in Bitcoin land, you have, you can think of it like as Jimmy was saying it's like, it's like there's this ledger up in the sky. Or in the cloud if you will, and it shows transactions from A to B, but we don't know that we don't necessarily know who is behind those transactions. And so it's what you're doing is you are essentially your Bitcoin wallet or your Bitcoin software is in some sense it's signing a message to say I want to send, you know, 0.1 Bitcoin from this address to this place on the ledger. And one way to think of that is the network is in some sense saying yes this is a valid transaction or no that's not a valid transaction we do not recognize that. And so that's a little bit of the interplay there. And so, perhaps if we could just talk a little bit about how that network works and that ledger. So perhaps Jimmy if you could just give like an overview what what is that. Yeah, so the ledger and Bitcoin is called the blockchain but it's, it's, and you can think of each block as a page in the ledger and it's a new page is added essentially every 10 minutes. And it has a list of transactions, or a group of transactions that get that get added and these are new transactions in the ledger and anyone that has that is running a full node implementation or the Bitcoin software. So it validates that that page is consistent with the other pages of the ledger, and that it's consistent with itself that it. So it isn't, for example, spending the same output twice something like that. And every, everyone that's running this software needs to get the data from some some other nodes on the network and this is done through network programming, typical. Transfer involves stuff like transactions and blocks and things like that. And it usually like blocks propagate in a few seconds so do transactions but the entire network knows about it very very quickly. But as you receive it you're not just saying oh this this must be good you verify yourself the software verifies everything. To make sure that it follows all of the rules including you know is it trying to double spend is a creating money out of the hair is it are all the signatures valid is you know, is it doing anything that it shouldn't be doing. If it doesn't meet all of the rules then the software will simply reject that block and refuse to add it to the ledger so each page has is validated by the software on a continuous basis as new blocks come in. As our transactions in case you know you want to know hey I just received the payment but it isn't in the ledger yet. Once a block is found then it goes into the ledger and that's how that works. Excellent. Michael let's bring you in here as well so maybe if you could give any thoughts that you know what are some things that a person who is new to Bitcoin what are some things that they might be getting wrong in their sort of mental model of how Bitcoin is working because they're comparing it to the fiat world do you have any kind of analogies or any useful kind of things to them to think about. I think I think most people are still always used to an instantaneous response from a single server with a degree of fragility. Like I try to do something and I immediately get either a green check or half the time I get rejected by the bank you're not supposed to do that thing and and there's that that sense of of central authority and confirmation and I think with the Bitcoin network because it's so decentralized and fault tolerant, you do something you don't get the immediate response the good news is no one's going to give you a red mark and say you can't do it. The bad news is, you have to be patient and wait 32 minutes for you know three confirmations to go through. And, and there is a degree of, you know the price we pay for this like post apocalyptic mission critical fault tolerance is that maybe six confirmations is better than three confirmations and the wallet that you use or the software that you use may give you different feedback and may have different degrees of confirmation they require. So I think that a person is not comfortable with Bitcoin, they're just used to a pass fail break not break instant thing. When you get used to Bitcoin you realize that there's an entire, what is it like quantum spectrum of like how confirmed something is, and, and it's a good thing, but you have to get used to a new paradigm. Yeah, that's a great point to make there Michael. And I think maybe Jimmy if we could get you to help explain so Michael was talking about this concept of confirmations and how having more confirmations means you are more secure so Jimmy if you could just touch on what is a confirmation and why is it that having more makes it more secure. So, the word blockchain comes from the fact that we have a link list of blocks it's each built block is built on top of another that's one way to think of it. And in order to, and at any point, there may come across, you know, a group of blocks that are equally valid. And that might that might be longer than the current set of blocks that you have in your ledger and in that case you're supposed to take the longer one. That's how the software is designed. Now, the idea of a confirmation gets into mining and I think we will wait a little bit on explaining exactly what mining is, but suffice it to say that each block requires a significant amount of energy in order to get. So your, your transactions in that block are secured by the energy spent for what's called the proof of work the the mining aspect of Bitcoin. And, and if you have three you have three times as much security around the transaction that you did. The blocks are built on top of one another you can imagine that if you pulled the third block down that you're essentially toppling the other two on top of it so that's how it's secured it's it's three times as much security for three confirmation, as it is one confirmation. But yeah, that that that level of security around your transaction is an important concept that Michael pointed out. And also I think it might be useful as well just to contrast bitcoins security versus other things so typical examples would be Bitcoin against other fiat monies and Bitcoin against gold. And so what are the kinds of security levels that we're thinking of when we're thinking about Bitcoin perhaps Michael if you could comment around some of the, I guess the ways that we when we use these different techniques or different options. How do we think about the, the security and the settlement, you know, like what someone like Nick Carter Michael the settlement assurances of these three contrasting options. Gold Fiat Bitcoin. Well I guess I guess with with Fiat you have the appearance of instant settlement but the substance of not having instant settlement so so you have a paradox there where where you think something happened but in point of fact, perhaps the final settlement hasn't happened for two days three days four days seven days and can and with some things like, like with bank wire transfers. It could be as much as 30 days. I've, I've seen. So, with the matter of of transaction verification and securities is a tricky one is hard to know that you've actually moved the money. And I guess, I guess the other part of security with regard to fiat is, is if you have money in a bank how secure is the money in the bank and, and you've built up this layer of assumptions like I lost money in two banks in the world. I lost money in an Argentine bank and I lost money. Let me let me rephrase it. I only lost money overnight in two banks in the world. I lost money slowly right and and every bank that ever put money into you know if you put money in a bag you're losing 1% a month or 1% every quarter, everywhere in the world, but I did once wake up and lose all my money in two banks, and the first example of lack of security was an Argentine bank where I had a million dollars in the bank, and it was in dollars, and in the morning the government passed the law converting it to pesos at $1 to a peso. And in the afternoon the government devalued the peso to 10 dollar 10 pesos to the dollar. And the next day I had one tenth of what I'd had the previous day. And so that illustrates the risk of a political risk in a bank right, and I guess the, the other example is in Brazil I once lost a million or $2 million in Brazil. And that was an example where the CEO of the bank, stole the money or made a bunch of insolvent loans bankrupted the bank through accounting fraud, and the bank got decapitalized. And I ended up standing behind all the other creditors we never got the money back. So I guess, I guess with fiat right, you've got political risk you've got execution risk and company are banking risk. With regard to gold I mean that the security issue is, assuming you're owning the physical gold, you're putting it in a vault. I mean, maybe a vault in New York City or a vault in London, and I guess then you have the, the, you have the banking risk the bank might actually lose the gold, and then you have the political risk. And you have another type of, you know, multiple political risk right the risk the gold gets seized or the risk that the gold gets taxed in the local jurisdiction. I think that I'm, I think with regard to Bitcoin. And one nice thing about Bitcoin is, you manage to take out so many layers of risk and as you take out the political layer. You take out the corporate layer of risk. Because you take out so much complexity, then you've got fewer things to fail. And I guess the, the other, the other thing you do is you take out the political attack surface. I think Bitcoin is like more secure, because you can move a million dollars of it from New York to Malta in an hour, and you can move it from one custodian to another or you can personally custody it or you can multi sing it, you know, like three people custom. So you don't really, you don't have the option to simultaneously hold a million dollars of gold with your cousin in Malta and yourself. You know, so you don't have those options with physical things you don't really have those options with Fiat, but with Bitcoin you have a lot of these security options and, and I think that means you get functionality but also I think that the lack of the political attack service means that I can pass along New York City taxing gold, because I know it's there. I know it's hard to move the gold, but there's no point in passing along New York City taxing Bitcoin. You know, and my point of course is the taxes 100% that's the risk right you lost it all, but I wouldn't wouldn't really bother with regulation that might actually devalue the asset. If I thought that it was impossible for the regulation to be successful. And so I think with Bitcoin. You don't you protect yourself from the corporate risk because you don't have to trust a company. If you do trust the company, you've got 1000 other companies and they're all they're all competing with each other to earn your trust and as soon as they if you were to lose that trust, all the Bitcoin would leave within 48 hours so so you've just got a much better degree of security from any corporation you would ever trust you don't have to. And then you've just got a lot less political risk because it's the most mobile property on the earth. Yeah, that's a really excellent explanation and one way to think of it is that Bitcoin provides us assurances that the fiat banking world simply cannot provide us and Bitcoin gives us these possibilities that unfortunately are not possible with physical gold. So these are some of the ways to think about Bitcoin as something different from what we currently use today or what most people are currently using today. So yeah so listeners don't forget you can ask questions in the chat obviously try to keep them focused on the technicals aspect of Bitcoin. That's the theme for today. And we might also now touch on some Bitcoin mining so perhaps Jimmy if you could give us just a high level overview. Bitcoin mining and just the high level overview on how that works. Yeah, so Bitcoin mining is a lot like physical gold mining. I'm told that for a gold miner what they have to do is, you know, process somewhere around 40 tons of dirt and rock in order to find one ounce of gold. And Bitcoin it's similar, except it's done in the digital realm instead of the physical realm so instead of processing dirt and rock you have to process lots and lots of different numbers and each number, you know, it has the possibility of being that ounce of gold. But it's actually very very rare and it's attached, essentially to each of these pages in the ledger so as you create the page one of the things that you do is you look for this particular input that will get you the right output which we call proof of work. And it is just as rare at well it's far more rare than gold is in the physical earth and it takes a lot of computing power to go through it. And that process of doing it is called mining in Bitcoin and it requires a lot of electricity instead of, you know, chemicals and, you know, people that that process this stuff in the physical gold world. So like finding gold. It is very difficult but once you found gold it is relatively easy to verify that it is gold so it has this asymmetry you can use you could put the gold into onto a touchstone to check that it is gold you can do different chemical tests and so on. It's fairly easy to verify. Whereas with with and it's similar for proof of work it once you found it it takes noodles of energy to go find it but any cell phone or computer can very easily verify because you put the input into the what we call the hash function. You get the you get the expected output and you can verify very easily so it's an asymmetric function and each page in the ledger needs a proof of work in order to be inserted into the ledger this is one of the rules by which Bitcoin runs. If you try to give a new page in the ledger that doesn't have proof of work in it that doesn't have this gold nugget essentially attached to it, then it is rejected by the rest of the network and that is proof essentially that a certain amount of energy has been spent in order to find this particular to that gives the minor the right to insert this page into the ledger and that enables them to get 6.25 bitcoins currently in block subsidy as well as the fees that were in the transactions themselves. Excellent and so it's you know bitcoins are being mined over time on average 10 minutes is that's when a new block is found obviously can be more can be less and that then also moves alongside with the difficulty adjustment and so on but I guess just to keep it high level. We can think of it like mining is kind of like this decentralized lottery and so when you put in when you are contributing hash power as Jimmy was pointing out chart 256 hashing. And now you need specialized equipment to do this nowadays that's called application specific integrated circuit so that's called ASIC. So basically Bitcoin miners go and set up an operation where they run many of these ASICs and then they contribute hash power to the network and then depending on how much hash power they're contributing that's how much. That's their probability of winning the next block. So I guess those are some of the ways to think about that. Now I guess some of the common questions that people might have around the energy mix right so there might be you know how much of renewable versus or how much of wind and solar and gas and hydro or coal power. So I think that's that's an open question we don't you know there's obviously research around that so currently there's a actually a fair amount of renewable energy that is going into Bitcoin mining but we don't know exactly you know where that would go. But if either of you would like to offer any comments around the energy going into Bitcoin mining and whether you've got any thoughts on where you think that's going. Yeah, I mean I have a few. Just with regard to energy consumption. What we know that the, that the average price of commercial energy is is like 11 cents a kilowatt hour and for consumer residential energy about 13 cents a kilowatt hour. And the Bitcoin network runs on profitably around two cents. It has been running two cents a kilowatt hour. There's this massive search worldwide for the cheapest possible energy so the competition of Bitcoin mining I think is driving all of the miners to the edge of the power grid. The ideal energy source is going to be energy that has no commercial usage, and has no residential usage, because otherwise they would bid up the price of the energy, and then energy that is going to come from one of two places either it's like super cheap renewable because you've got a waterfall or geothermal source and there's no other use for it, or it's, it's stranded capital that's been abandoned, you know, a plant that would otherwise be shuttered and the capital would be destroyed. And this is the marginal best use for the economy. So, the nature of Bitcoin at mining economics is to drive a very entrepreneurial quest to recycle marginal energy at the periphery of the world grid. This is the way that it will naturally move Bitcoin mining away from population centers, where the end from it'll move it away from dirty power near population centers because that's going to be not only the most expensive energy. But also the most politically unpalpable like you can imagine if you set up a coal power plant in the middle of Manhattan. That's probably going to be the one that's going to be least popular politically and going to be the most expensive. And it's going to naturally gravitate toward the least politically. And there's a lot of energy sources that are most renewable that are that are least bit on by anybody else that are that have the lowest variable cost and there's there's a certain economic beauty to that. Yeah, that's a really great explanation on the energy markets dynamics might also be a good point just to talk a little bit about Bitcoin miner compensation. Jimmy, if you could tell us a little bit how Bitcoin miners compensated for their work. Yeah, so each block, when they find the proof of work each minor gets what's called a block subsidy and this is based on the schedule that was in the original software code actually. But currently it is 6.25 bitcoins per block. In the first era, the first four years roughly 210,000 blocks. It was 50 bitcoins per block. And that was every 10 minutes for the first 210,000 blocks it was 50. The next 210,000 blocks it was 25. Next 210,000 blocks it was 12 and a half so 50 plus 25 plus 12 and a half currently it's at 6.25. If you can do the, you know, converging series that ends up being 100, 100 times 210,000 is 2.21 million. That's where we get the 21 million limit for Bitcoin comes from. But yeah, that's right. It's on your shirt. Yeah, so that that's how we get 21 million bitcoins because it asymptotically goes to 21 million as a result of it having every 210,000 blocks. But in addition to that minors also get all of the fees that are in each transaction so when you send the transaction in order to incentivize the minor to include it in the ledger. Each person that creates a transaction includes a fee. And this could be lower or higher depending on the current state of the network and how many other transactions are trying to get into the ledger at the same time. So this is the fee that the minor gets to take current. So just to give you a rough idea. Currently, there's a 6.25 block subsidy, and about a 0.75 fee. The general revenue that each block gets so minors are currently getting somewhere around 12% of their revenue from fees. Now as we have more and more, this will change a little bit. So after the next having will have each minor will be making 3.125. And if it goes up to say one Bitcoin per block in terms of fees, then they'll be getting some somewhere around 23% of their revenue through fees and the having after that it'll be closer to 40% and so on. So depending on where where fees go that that'll be the case. One way to think about that that I really like is from Lynn Alden who described the security of the network as being secured by these two things, the block subsidy and the fees. So if you think about it the block subsidy ultimately comes from the holders because it is expanding the supply of Bitcoin, just like we, you know, inflation in a fiat economy is a stealth way of taxing everyone this, at least with this it's explicit. The holders are paying for about 88% of the security right now, and 12% is of the security is being paid by the people that are actually doing the transacting. This shifts more and more as we have more having. So one of the more common questions that people ask is, well what happens when there's no block subsidy well I and I would basically tell them. Well, at that point then the people that really should be paying once paying instead of being subsidized by all of the holders of Bitcoin. So they're getting instead subsidized. They're not subsidized at all but they actually have to pay the miners for the security that they are receiving for their transactions. Excellent and we got a question from the chat, they were asking, has the halving already happened so there was the most recent halving was last year, I think it was April or May, May 2020. There have been three halvings so far in Bitcoin's history and they'll be every four years there'll be another one so that's just a high level there. And might also be a good point to also talk a little bit about some of the attacks that people bring up in the, in the mining world. So, you know, I think the most common one people talk about is the 51% attack. So perhaps, Jimmy, if you could just give an overview what is a 51% attack, and then how does what are some of the defenses that the Bitcoin network innocent in essence has against the some of these potential attacks. Yeah, so the 51% attack is where one entity controls over 50% of the mining hashrate on the network. So that means that, among other things they can reject the other blocks found by the rest of the network and always have sort of a longer chain than everybody else again a chain in the chain of blocks is always built on top of each other so whichever is longer is supposed to be taken by by the software. It's based on the accumulated proof of work or the accumulated difficult problem that consumes energy that is in each block. So, if we were to have a 51% attack there, there are several varieties but the main one that people talk about is the double spending attack you, you could for example deposit a large amount of Bitcoin to an exchange say trade all of that for fiat money, and then after that, which all has happened, reorganize or introduce a new set of blocks that are longer than the current set of, you know, pages in the ledger essentially it's a it's a it's a longer ledger that that has instead of paying the exchange to yourself in which case you would be able to keep the Bitcoin and get the cash that you traded it for. So that that's one attack that could possibly happen. The other ones are something like the empty block attack where they would just deny sending any transactions and it would essentially be a way for whoever is controlling that 51% to deny any transactions from coming into the network. There are mitigations for this I've written entire articles on how that would work. But essentially, if there was sort of a centralized entity that control more than 51, 50% of the network, the rest of the network would be highly motivated to create a decentralized consensus around something else, because if it was centrally controlled that's obviously bad, especially if they're attacking the network. And it doesn't have to be if they're not attacking the network then they would just be another member of the miners basically. But if they were attacking the network then there would be motivation for the rest of the network to come to some sort of consensus, decentralized consensus and go from there and you know that that's basically what I wrote in the article if you are interested it's on Jimmy song that medium calm debunking the empty block attack. Now Michael any comments to add just around the Bitcoin network and how it in some sense either incentivizes people to help the network or it or it sort of adapts in response to different. Sure. I think that mining dynamics are pretty fascinating here. And the and the entire way that the protocol evolves is just genius. For me, following this last having about 900 Bitcoin get mined every day and that makes it a at the current market price about $45 million a day and revenue or about $18 billion a year. So $1 trillion of mining revenue against about a $1 trillion monetary asset sitting on the network so call it almost 2% solely less than 180 basis points or so, but of that as Jimmy points out maybe only 2 billion of it is the transaction and that's like less than 20 basis points. So you have this large subsidy this mining subsidy early on in the first 25 years of the network, we're bootstrapping the build out of the entire Bitcoin security network with these block entities and by the year 2035 or so 99% of the Bitcoin is out there so the last 1% comes over the next 100 years. And so you could see this as a sprint and the first 24 years. Right now, it's obscenely lucrative to set up a minor. So I think a couple of things. First of all, the network itself the mining process, unlike gold mining gold mining is is a bunch of effort to find gold. Bitcoin mining is a bunch of effort to find Bitcoin, plus to provide security plus the process transactions. So the Bitcoin networks doing three things right now the gold mining network does one thing. Now, the beauty is, if we could get everybody in the gold industry to agree to stop mining gold and cryptic cryptographically stamp their bars of gold. Then we could cut you know $100 billion a year worth of gold mining to zero and keep the existing gold bars and their price would go up through the roof right I mean you could imagine, because you're not wasting energy looking for additional gold to to inflate the supply of gold with Bitcoin mining. What you've got is a protocol that automatically does that for you, the new blocks go away. The transaction fees become all that there is to run the network but and that means that the holders don't get diluted. In theory, you know, the transaction fees then have to grow but that but but the assets under management of the network will go up by a factor of 10 to 100. So when the Bitcoin network is 10 trillion 20 basis points will be the same $20 billion, but the difference will be right now we're giving a massive subsidy to any entrepreneur in the world to develop really good and so you see that generate what we've created is a massive global competition in technology to provide Bitcoin security, and it has specialized into a six and it will, it will increasingly specialize down one dimension. And that's really great for the security network because that means that whoever wants to attack the network in the year 2035 is going to have to marshal not just a lot of money and not just a lot of electricity but they're going to have to marshal a lot of the right hash power and that hash power will be like eight generations of computing technology ahead of where we are right now and it'll be very decentralized. The second part of this is, is because Bitcoin mining, it's truly global permissionless no one has to ask permission to do it. What that means is that you, you have a, a monetary force to spread decentralization of the Bitcoin protocol to the ends of the earth without you know and how is it decentralizing. It's decentralizing to the jurisdiction with the cheapest energy, and with the most supported political regime. So contrast this to if I had a trillion dollars of gold sitting in a vault in New York City. Okay, where's the security coming from for a trillion dollars of gold at a vault in New York City. It's not coming from Iceland is not coming from China is not coming from the North Pole. It's coming from the security guards at the bank in New York City. And by the way, it's coming from the bank that isn't the principal and so the bank, you know, and by it might be against the law to provide good security and Manhattan to the gold right so it's a very fragile situation where where you don't have any incentive to make the security of the gold network better, and you don't and you don't have any incentive to make the transaction processing better, and you have no incentive to spread the gold to the ends of the earth and put it in a North Pole 100 feet down right, because that's not the way it works. But I think with Bitcoin mining, what's really fascinating is we're now in a sprint from the year 2021 to 2035, where you have the most entrepreneurial corporations in the world and anybody and any jurisdiction can go after that $18 billion a year. And it's a mad rush to get the data center to get the hardware but to find the energy and, and if you actually pick a jurisdiction. Pick, pick, you know, you know, quote, Bonzo land if I go to Bonzo land and I set up a Bitcoin mine and then the politicians make it illegal. Well, mining leaves Bonzo land. Right. And so the mining is going to find the the most supportive political environment. And if I go to yo yo land and it costs 10 cents kilowatt hour you're getting squeezed out in yo yo land. And if I can't get the hardware that doesn't work but if I can't get the hardware but I have a lot of money I'm going to go build my own chip. So what I see, which I just think it's just absolutely brilliant is the mining industry for Bitcoin is on about a 24 year aggressive bootstrap to decentralize itself to find free energy to find friendly jurisdictions. There's a massive amount of money to be paid right if if you're in yo yo land and you actually make Bitcoin line mining 10% taxed. You lose all the revenue and it goes to, you know, happy land. And so the Bitcoin mining problem is going to, and the Bitcoin mining industry is going to decentralize a set of very specialized technology nodes. And this with a very favorable political jurisdiction with favorable energy economics, and it's going to go to the four corners of the earth. And like, keep in mind like people in Manhattan novel the money right. So all the money's in Manhattan. There's no incentive for someone in Ireland, or the North Pole, or the middle of Sub-Saharan Africa to provide transaction processing and security for people who are rich in Manhattan with the gold standard, or even with the fiat standard. You know, no one anywhere else in the world is going to do something to help someone in Manhattan under the fiat or the gold standard under the Bitcoin standard. It is truly the most free open competitive market for security and for transaction processing. And the part that's expensive, which is finding the Bitcoin. Well, it's only expensive in the first generation of Bitcoin when it needs to be because because the holders have a vested interest in double subsidizing the miners to make that work. And then when you get out in the year 2035 2040, all of a sudden you've got $100 trillion of monetary energy on the Bitcoin network that's probably going to be 20 basis points, even 10 basis points, because the transaction fees will probably go with like the log, as opposed to linearly, you know you're not going to have to pay 100 times as much to process a transaction that's 100 times as much money you'll pay like 10% more or 20% more. So what we're building toward is a network that could very well secure $100 trillion and do it with a 10 basis point a year fee, and it will be secure because it got hot it got radically decentralized in the first 30 years. And it got radically specialized you're going to have 889th generation Shaw 256 or Shaw whatever. And I know there's other ways we'll get more specialized to but and the miners get there, not, there's no cliff where all of a sudden the block subsidy goes away. And, and so they're going to get weaned off of that gradually. And even in the four years after the next having when they're slightly unprofitable they'll have all the sunk cost and all the other hardware so you've got this natural dynamic to turn the miners into holders and the toddlers to, and then to create this like three legged stool of the people with the with the Bitcoin, the ones with the technology and the ones with the energy. All of them are working together to stabilize this entire network ferociously as fast as they can. And, and the highlights the decentralized nature of the network which is truly a thing of beauty. You know, I use the phrase, you know, Bitcoin to swarm of cyber horn it's growing stronger behind a wall of encrypted energy. And, and I think that my little soliloquy about mining it illustrates what's going on there which is, there's just a very profitable wall of encrypted energy that anybody can throw up anywhere in the world and if the politician leaves somebody be desired they get squeezed out if they get behind in the technology they get squeezed out. If the politics don't support them they get squeezed out. If they run out of energy, they get squeezed out but but the swarm continues because it's just so decentralized. Yeah, that was a fantastic explanation Michael thank you very much for that. I think it might also be a great point now just to talk a little bit about the development of Bitcoin so we're talking a little bit about the technology of Bitcoin. What does it mean that Bitcoin is a Jimmy what does it mean that Bitcoin is open source and how is it developed. Open source means that the code is all out there for anyone to examine and fork if they wanted to copy it and create and create their own Bitcoin they could. And in fact many have open source also means that development is done out in the open. So there's no sort of like secret code that's being inserted at any one time or anything like that which close source software does all the time. For example, you know if you know Google changes its terms of service on a particular piece of software. You know it's usually because there's something underneath the hood that they might be changing up or and so on. But open source means that it's all open for anyone to see and you can go right now to github.com slash Bitcoin slash Bitcoin and you know look at the software and read the C++ code and Python code that's all in there. As far as your other question about how Bitcoin development happens. It's done through a typical open source collaboration so at any time anyone can submit what's called a pull request or changes to the software. And anyone has the right to do that if you if you're a coder you can submit a pull request at any time what what is necessary in order to actually make it into the software is for a lot of people to review it for any critical mistakes or anything like that. Make sure that it works that it does what we wanted to and you know from an economic and even philosophical point of view why you know you have to essentially justify why this change should be in the software. Now if you can't do that and if even a few people disagree with you then it's not going to get in the in the software generally it is done by consensus where a bunch of people review the code and then it gets merged into the code only if there are no like outstanding objections that haven't been addressed or something like that. So that's how it works. Some pull requests take years to get through. I know Carl Johan Alm for example, maintained SIGNET for a couple of years before it actually merged in. You know there's I think Sears Provost has worked on the hardware wallet interface for years before it got merged in and so on. So there it's it's not necessarily a quick road and unlike software at other places it's not move fast and break things and if you break anything in Bitcoin. There are some serious financial consequences so as a result everything is done very carefully very slowly very conservatively and that's that's how we have the Bitcoin software we have today. Thank you Jimmy and Michael if you've got any comments to add just around Bitcoin development and the technology around it and your your view of that if you've got anything you'd like to add. I think it's an extraordinary example of probably one of the best successes if not the best success of open source development in our lifetime. And you couldn't have said that after one or two years, but I think that after 12 years I think you look back at it, you know and shake your head and wonder it's pretty extraordinary. You know as a long large hodler, I would say my general views towards software is a measure twice cut once. Move forward, thoughtfully, carefully, you know and you know I think there's two types of, you know there's two types of mentality right you've got the engineers that keep on adding bell. I want to add bells and whistles as fast as they can because they think that features make their product successful. And they tend to have sexy products but oftentimes they collapse under their own weight because either of attack surfaces or instability, or what you find is a long tail of features and you add the 11th feature and it's appealing to 0.01% of the people. So, I think that there's that's one idea and then there's the other idea which is just less is more and what's the simplest possible thing you can build that will, will meet the requirement of the market. I think that Bitcoin's already there right Bitcoin could be a $10 trillion or $100 trillion network based on what it has. So, you kind of have to weigh things on the side of don't break it more than improve it. To it, you know, to a certain extent, there's a lot a lot of things that people want that if if they're not built into the core protocol, they'll probably get built into the layer twos, you know, either lightning or they'll be built into, you know, and look at it is I wish Bitcoin was better faster more functional, or you could look at it as, because Bitcoin is isn't faster and more functional. That's a business opportunity for someone. Look, I would like love them or hate them financing Coinbase have businesses worth $100 billion because Bitcoin isn't a good defy trading network thing right. Fine, Square will have their business opportunity they added the ability to move Bitcoin to a square cash tag instantly for no fee. Okay, to the extent that that no one else does it as quickly then it's an opportunity and squares got $100 billion market cap, which means the square can go raise $10 billion if they want and then they could hire 10,000 engineers to work on that if it made economic sense then they would do it. The one thing that Bitcoin must provide to be successful is integrity and trust. That is, I mean that call it trust integrity, maybe you could add security right at the end of the day. You don't really need to add more functionality they're nice to have but the free market being the free market if there's not enough privacy in it someone's going to come up with it with a layer to privacy solution. And if there isn't enough speed in it someone will come up with that. And if there isn't enough simplicity. One in simpler interface someone's going to come up with that. And so rather than, then getting obsessed over driving a lot of new functionality to Bitcoin. I think the right thing to say is what do we have to do to the protocol to keep it from becoming obsolete or less secure. There are legitimate things like that. But otherwise, you know, let the squares and the PayPal's and and the Google's and and the finances and the coin bases and every and every venture capitalist and every other crypto, let them all obsess over the seeming functional deficiencies of Bitcoin, and they can go and they can build their thing that plugs into it because I think that if you look out at what seems clear to me is that we're going to have a world with 8 billion people with a mobile device and you're going to have 100,000 Bitcoin banks and Binance is a Bitcoin bank and Coinbase is a Bitcoin bank and Square is a Bitcoin bank and anybody that takes a Bitcoin address even PayPal is a Bitcoin bank, you know, they all have some kind of underlying Bitcoin asset layer and they're using the protocol for settlement. So the world in the marketplace is much more complicated, not not just technically complicated, politically complicated, like, you know, in Nigeria, it's probably legal for someone to do certain things but not other things and many of the things that we're doing in the US probably aren't legal to do in Venezuela or maybe might not be legal to do and pick a jurisdiction. So the type of bank that is compliant politically, and the type of bank that is compliant, you know, that has the right technical capability, that's going to change every single month and every single place in the world. So fast, that it's going to take a planet full of people. It's going to take hundreds of thousands of companies and millions and millions of people to try to keep up with that. You can't centrally solve it. So I think that the real principle for development is humility, humility and open and open protocol and integrity and security. We're providing people something which is going to store the monetary energy of the world and move it on occasion. Like, not, we don't have to move it fast. I mean, the truth of the matter is if you want to move a billion transactions a day, those banks will do it and then you can imagine square settling with strikes settling with PayPal settling with Binance, once every 24 hours with a single thing on the blockchain. And maybe settling with somebody that spends up a bank in some country that didn't exist two years ago that all of a sudden exists 24 months from now, you know, when that happens, you're just going to want the underlying protocol to be trustworthy and to be rock solid. I think we just, what is the word, leave something for everybody else to do. Right. Like, it's okay for, you know, for 100,000 Bitcoin banks to launch in cyberspace and have a profit motive and they can all code what they want. And it's okay for someone to, you remember that if you want brittleness in the system you try to keep any bank from failing but isn't a current, it's a principle of Austrian economics, you should let the bad banks fail. And the equivalent in cyberspace for Bitcoin is, if the bank is a software application that's doing lightning payments, you know, on channels between, you know, 97 million people with beautiful functionality, you know, and retina scanners. Some of them are going to fail, right? Is that you have a bad mobile app? We should, we should let people take risks and innovate fast. And, and then we should make sure that we protect the integrity of Bitcoin and let them plug in. And if they're successful, maybe they'll be the next Snapchat or Tik Tok or Facebook or whatever. And for every one Instagram, there's going to be like 18,000 Instagram wannabes and they all failed. And they all, you know, and the secret to Instagram was not the features they had, it was the features they didn't put in the system. You know, and so maybe it'll be that these banks, all the software engineers that have the great brilliant ideas about this new feature that everybody needs. Maybe they'll be the ones to build the thing that fails because people didn't really need that feature or maybe that was just one genetic mutation too many. You know, and it turns you, it turns you into a creature that can't survive in the jungle because you reach too far. So, I think humility, security, trust, integrity and, and yeah, there's some things we got to do in Bitcoin core to stay compliant with the latest, you know, latest generation of hardware or some network protocol or else we become the dinosaur but but you figure out what you got to do, you do it very thoughtfully, very carefully with consensus. And if we all know that we're going to become obsolete if we don't do that, you won't have a hard time getting consensus. And then when you have that split, and what you want to do, you know, let, let Jack Dorsey take his best shot at it and let Jack Mahler's take his best shot at it. Let's see what CZ does and let's see what you know FTX does and, you know, and the market will sort it out and, and the winner won't be the best engineer. It may not even be the most deserving right and that maybe someone will have the best product in the world and some politician will just take it from them. It's like those, those move national geographic, you know, movies where they show like the strongest best animal in the jungle that through no fault of its own had like a rock dropped on its head and then the lion eats it you're like well that's not the one that's just dies. That's nature right sometimes it's unfair. And so you want you want to survive for the long run. We're back to the core principle decentralization and robustness and and and create a very very natural connection amongst all of the, all of the software developers in the Bitcoin ecosystem, and have off chain development, as well as on chain development and let most of the genetic mutation take place off chain because, you know, like, if it if, if I actually put myself done using the square cash application and it works a million times faster, and I can only do in the US well that's good for 98% of the people in the US and then and they'll do that and then, you know, when someone in Africa can't do it that way because then that that creates an opportunity for somebody else to create their own business and and or the person that made all the money doing the thing in the US may very well take billions of dollars of the money they made doing it in a compliant way in the US and do it in an open source way on a lightning protocol, you know in a stateless fashion somewhere else and just we should bottom line is you shouldn't overthink these things. Great. So yeah so I guess to summarize that then we can think of it like Bitcoin core is intentionally being very careful and very considerate of the vision of the project and so, while the code is open source anyone can contribute to it, in terms of what Bitcoin actually gets into Bitcoin core there are very high standards obviously and so things don't just get in willy-nilly right and as Michael was pointing out, we can have innovative like the more faster innovation happening at other layers above that so the protocol level is sort of like the base bedrock that we're all relying on that the 21 million and certain limits and certain controls that we want and that we rightly want in place and then above that people can build other software that interacts with Bitcoin, or you can build a business that interacts with Bitcoin, and then we can think of it like if you are a retail individual you may not necessarily interact with Bitcoin on the base layer yourself, you may be using some other higher layered service or some business, but of course, the aim is to keep it profitable also so you know over time that anybody can run a Bitcoin full node. So I think we're coming to the end of our time today so probably a good spot to wrap up but I suppose you know listeners if you haven't already make sure you are following Jimmy Jimmy do you want to just tell the listeners where they can find you online. Yeah, you can find me on Twitter at Jimmy song I am also on medium at Jimmy song I have a weekly newsletter that goes over a lot of the technical happenings in Bitcoin Jimmy song that's up stack.com. And yeah my website is programming Bitcoin.com that website comes from this book programming Bitcoin it's published by Riley it is a technical. You know treat us on Bitcoin it'll help you learn the entire Bitcoin protocol as we've been talking about I have a couple of other books as well, the little Bitcoin book and thank God for Bitcoin which you can also find on that website. Yeah. And so for those of you new to Bitcoin make sure you follow Jimmy he's a very highly respected Bitcoin educator in the Bitcoin space and he's obviously very technically gifted and able to teach people. Many other and he's trained many other people to themselves become Bitcoin developers and contributors so listeners make sure you check check Jimmy out and go follow him. And so I suppose that's probably bringing us to the close for this session, but of course go to sailor.org, you can find the Bitcoin course there and you can sign up and it's all free material and you can learn at your own pace. So, Michael if you've got anything, I guess you want to close out with. Thanks for being with us today, and we appreciate your support. Keep up the good work everybody. All right well that's going to do it for us this week again. Thank you Stefan thank you Jimmy thank you Michael thank you everyone for joining us. We're actually going to have the final unit of Bitcoin in two weeks this same day the week same time. The time zones will be in the in the course if you go through the course we have it there we have it on Twitter, we have it in the comments. So thanks everyone for joining us and we'll see.