 What's up guys welcome back to another episode today? I have a very special guest I got Jameson Lopp which is a team lead at Bico creator of Satoshi dot info and founder of Bitcoin SIG comm Jameson welcome to show how you doing? Not bad this space is always you know keeping us on our toes So there's never a dull moment and so what do you say is the most interesting thing in the space currently today? So, you know, I've been doing this for a number of years and I've been going down the rabbit hole in terms of the technology and Trying to understand You know how the actual protocols work in it and everything but really over the past year I've kind of popped up out of that Technical rabbit hole and have been really looking more at the the human side of things that the sociological Aspects of these consensus systems and so I think most people are well aware that we've had a lot of drama and forking and People going off and doing their own thing. So it's really interesting I think to see how the quote-unquote governance of these ungoverned systems really operates What's your take on all these forks lately? We had you know be cash Bitcoin cash You have Bitcoin gold and I heard now there's like Bitcoin silver and diamond all these different forks coming out Yeah, it's it's really it's reminding me of the like 2012 2013 altcoin boom So I think that you know, this is just another cycle repeating itself where we saw it around 2013 with proliferation of altcoins People figured out it was easy to make them and they could you know raise a lot of money Then you know earlier this year we saw a similar type of cycle with ICOs and now I think we're starting to see the beginning of a cycle with the new type of altcoin the altcoin airdrop to the Bitcoin holders and It's going to continue until the market cannot bear it anymore And I think you know We might be getting pretty close to that point because we're having customers come to us at bit go and ask us if we're Going to support x y or z and we're like, I don't I don't even know what you're talking about like How are we going to support something we've never even heard of so it's definitely we're getting to that like Long-tail distribution of like it's not really going to be worth the effort for the Engineers to try to support all of these things because they're going to have less and less value That's a huge issue in the space to just not enough smart people that can develop these very complicated technologies Talking about governance What's your philosophical take or what's your opinion on like is there a governance model with within Bitcoin? I Think we're trying to figure that out right like there. There is no official written Rules or constitution though, you know, there's a lot of blog posts of people who try to draw parallels between Like the American Tri-cameral system and in Bitcoin or or other, you know governance systems and Bitcoin, but I think that those are just sort of Loose approximations and they're always going to be missing something here or there So we're still trying to figure it out now We know, you know, you've got two main options in these permissionless systems Then you've got your your voice and exit as usual It just so happens that exit is a lot easier in these systems than it is in most other, you know Hierarchical governance so people are exiting and we're going to see how well they do and you know what the market thinks of their exits and So earlier this year we had seg with the activated. I don't know what the percentage is there I think it's above 15% activation It's been bouncing around 10 to 15% like by transaction volume And do you think that had like a drastic change within like code and code out of this like so-called governance model that we have? it definitely showed some issues where the Bip9 like minor activation For soft forks was shown to have an issue where it's basically giving this like voting power or veto power to the miners so the miners use that as kind of a bargaining chip over the course of a year or two and You know frustrated a lot of other Participants of the community So I think that like you're probably not going to see that type of activation get used in the future for other soft forks We we may seem more, you know user activated soft forks so that the miners don't really have that option You know, it's going to be the the community As a system in general that is going to be telling the miners like this is what we want and we're going to pay you for it And talking about mining You know, it's very expensive to set up mining especially in Bitcoin. So there's a large overhead cause Do you see the actual mining ecosystem within Bitcoin changing in the next couple of years? Definitely, I've been approached by a number of different entities that are you know working on their own new initiatives and a lot of this was just born out of the frustration of what I was just talking about of the miners getting Into a position where they're blocking Upgrades to the network and so there are a lot of people out there a lot of early adopters a lot of very well Capitalized people who see the centralization of mining as one of the bigger problems that Bitcoin is facing right now And they're willing to put in the time the effort the resources to make mining more competitive and therefore more decentralized So, you know, we heard about Dragon Mint, which is supposed to get up and running early next year and I've I've also been speaking with Fellow locally who is doing some interesting stuff with waste energy And I've also heard from some other groups who are working on their own initiatives They're you know gonna use new fabrication plants new type of ASIC designs and The system is going to kind of get out of this deadlock phase You know break the monopoly if you will and get more competition injected into the system So I heard about that. It's so there's new there's new designs for the new ASICs coming out Yeah, I think there are multiple different companies working on their own ASICs So, you know the the basically bit main near monopoly that has been in place for the past year or so is definitely going to be challenged and my my funniest Not not I'm gonna say my issue But my one of my funniest remarks I give people people is complaining about energy consumption when it comes to Bitcoin sir I'm like do you realize how much energy consumption is in your Visa card? How much energy consumption there is on the banks and everything so it's like it's a drop in the fucking ocean compared to Everybody else, but it's easy to get upset about because it's easier to approximate to figure out how much energy it is It's just that people don't have any idea how much energy get used for for all these other systems because it's you know hidden Behind various veils. There's no like single number that you can just pull out look at Mm-hmm, and still talking about mining. I mean, I have no idea for this answer. Maybe you do know Is this even probable like is there reasons why we can't use solar energy to start powering our mining rigs? No And in fact so like one of the things about mining is Bitcoin uses exactly as much energy as the users of the Ecosystem are willing to pay for and that basically gets reflected by the price So, you know, everybody knows, you know, what the subsidy is You know what miners are getting paid then the actual dollar amount is just based on the price of Bitcoin itself so as a result you have people who can get into you know Competitive situations of finding, you know cheaper and cheaper energy. So renewable energy is definitely on the horizon, you know, I think what we see In China a lot is actually like hydro electric energy and and really what you see is It's not that miners are just going out setting up shop and sucking up a lot of electricity What they're doing is they're going and they're finding the excess electricity that is already available and making use of it Because otherwise it would just get wasted thrown away not used So they're just using in many cases electricity that is already being generated You're right over here in Ontario. We create so much access like excess electricity that we have to sell it to New York State So fuck we should just divert that to Bitcoin mining farms. Yeah. Yeah You know, that's what I mentioned the guy that I met with recently who is actually here in North Carolina. They A while ago, they bought this tire Re-manufacturing like waste processing plant where they take old tires And they basically burn them up and then they get all of the the waste byproducts separated and sell those out and they realized You know, we're generating a lot of heat and a lot of electricity from this and they were selling it back to the grid At you know, like one or two cents per kilowatt hour and they realize we can take that throw a bunch of older mining Cash power at it and be much more profitable by using that electricity ourselves rather than reselling it back to the grid So, you know, we talked about earlier with all these forks So we had different like evolution in 2013 on these all coins and then we had the ICOs in last like year or so And now we have all these forks and then as you mentioned one of these air drops coming out to Bitcoin users Is there anything that is really concerning for you currently and moving forward? Well, I mean, there's there's always the the scalability issues But I'm not as concerned about that because there's a lot of people working on them What is really more concerning to me now? is that even though we've had these contentious hard forks there has not been a clean Sociological split so there's still a lot of fighting and and really the The the war for Bitcoin if you will has moved from a technical scaling argument to a social Like branding argument. So now, you know, you have the Bitcoin cash is Bitcoin or the Bitcoin cash is Satoshi's vision You know, all of the the rhetoric has basically pivoted a little bit. So instead of it being You know, this is our vision for Bitcoin It is now this is our vision and we've implemented it But you have to go use this fork and now we're gonna do, you know, big marketing drive So the the game has changed a little bit, but there's still this massive argument and really Battle for I guess mindshare and general like user acceptance What do you say do you believe in like a free market? Like let's say you have Bitcoin cat Well, we do have Bitcoin cash and we have Bitcoin at the end of the day the best product wins or the best system wins. I Believe so. Yeah, and I mean, I think that the market is Speaking right now every moment. It's telling us, you know, which system that it thinks is more valuable You know, I have various reasons why I believe that the the various statistics For for Bitcoin cash might be a bit overinflated That but that's like one of the reasons why we're we're seeing all of these airdropped altcoins is because they can then use the very easily manipulated market cap metric To to make it look like they're a lot bigger than they really are because in reality the vast majority of Bitcoin holders are not keeping track of all of this drama and They're not gonna go try to find the right software to be able to claim Their coins on a fork to sell them or you know convert them to something else And so really I think the vast majority of coins on these Airdropped forks are just locked up and probably never gonna be touched So the market caps for them are even more inflated than the market cap for Bitcoin Which you could argue is inflated because there's probably you know Several million bitcoins that have been lost forever and they're never gonna get used What's your take on all these whole futures markets? I think they're going live like mid December Yeah, that's exciting Some some people seem to think that they're gonna open up opportunities for institutions to short Bitcoin into the ground But I'm I'm expecting probably the opposite. I mean Shorting Bitcoin has almost never been a very good proposition I don't think that like increasing the volume of the shorts is gonna really change that it's you know It's such a scarce digital asset The and the demand just continues to increase So we'll see I think most people agree that it will be like providing better liquidity better price discovery in general I'm actually curious To witness one scaling is implemented like let's say we have lightning network whenever that goes live and that gives more Accessibility cheaper transactions micro payments can actually be utilized. I'm more curious then what the price would actually reflect the value of Yeah, and and this is Something that I've been thinking about and talking to people a lot recently is really like what is the value of a new global payment system versus the value of global sovereign store of value and It's kind of hard to to find like good metrics on that of like what is the what is like the level of Value that could be captured by a payment system versus a store of value You know, obviously you need to be able to send money in order for the money itself to have value but Does the ability to do cheap fast small payments really add that much value to the system? It's hard to say and it's one of those things, you know We're just gonna have to to see What happens as we roll out the system, but like the whole lightning network thing is It's complicated and we're doing we're building something that's never been built before and You know, technically it it is working now like you can use lightning network protocols on the main network It's just very very early stage. You really shouldn't do it unless you're highly technical but we're gonna have to go through a you know growth cycle here of Experimenting and failing and fixing the problems and moving forward So, you know, there's gonna be a lot of issues with lightning network both at the Microscale the single payment channel scale and at the macro scale and I wrote an Article on coin desk like two years ago just talking about all the potential complications that might come up And of course, there's probably plenty of unknown unknowns as well But the reason that I'm bullish on it is that there are so many people that are dedicated and are devoting You know their skills and their resources to continuing to improve it So it's the same that we see with any of these technologies. You see a lot of skeptics. We say, oh, it it's not good It's not working or it's not the bait they give against lightning network They're saying it's more centralized or it makes Bitcoin more centralized. Oh, yeah And and that's you know any of these arguments of saying it makes it more centralized It's hard really to have Quantitative arguments about centralization unless you're setting up a lot of metrics beforehand of saying like this is how we're measuring decentralization I Think that the more important thing rather than saying like centralized versus decentralized is like does it retain its permissionless aspects Or are we moving to a like custodial trusted model? And so I think that what what you see happen a lot with the rhetoric in this space, especially against lightning network is People make arguments for why it is more centralized and then they they kind of Slippery slope you from sent more centralized into like a custodial Trusted solution. So like you could have a fairly centralized lightning network that's still permissionless non custodial those two things don't have to go together but In general, I think the best way that I can describe This network is just by like looking at the internet itself. And so We're just building routing layers on top of Bitcoin exactly like, you know, TCP IP Routing layers were built on top of the ethernet layer And that's how we have a scalable internet right now Like if if the entire internet worked at the like level zero ethernet layer, which is a broadcast to everyone Communication protocol we wouldn't be able to do what we're doing right now We wouldn't be able to stream video and do high bandwidth stuff because everybody else on the internet would have to receive and Relay this stream and everybody else's streams So, I mean, this is a like tried and true method for scaling, you know decentralized global protocols So I think at that like macro level, it's going to work out fine We're just gonna have to deal with a lot of edge cases and minutia that we find along the way What do wallet providers or service providers need to do once a lightning network is implemented? Well, they're gonna have to start running lightning nodes that can speak that protocol They'll have to start storing a little bit of extra Stateful data. So like each time you update the payment channels, you have a little bit of data that you need to keep track of It is, you know more complicated than Bitcoin because it's Bitcoin plus a new protocol there in many cases though going to be able to use libraries, which is Basically what a lot of the developers are working on right now is the low-level libraries that are gonna Abstract away a lot of those complexities But they, you know, they will need I'm sure to make a number of changes from the like user experience side that's one of the things that I'm really interested to see is how well we can abstract away these complexities because I think that in a an optimal future where lightning network is Used by a lot of people the the average Bitcoin user should not necessarily even need to know whether or not they're making a Transaction that it's just a simple on-chain transaction or an off-chain Transaction the the software should just handle that all under the hood and it should just work when they click the button You guys have a rough timeline Well at bit go we are working on payment channel stuff Though we have kind of like a multi-phase rollout where we're gonna start off and only be doing payment channels Internally between our own customers Because we we can do that basically now as soon as we get it up and running Without needing like anybody else in the ecosystem to have you know lightning network compatibility and so we can already save our own customers a lot of money by doing off-chain transactions whenever possible and Then you know we're going to continue to monitor see how the rest of the ecosystem starts to catch up and and you know Once we've implemented our stuff internally to be compatible It should be easy to then hook it up with the rest of the lightning network as it comes online now in terms of You know how the engineering process And progress at other companies and the ecosystem has been going it's actually been kind of disappointing right so You know bit go was one of the first companies to implement segregated witness and we actually were a few weeks late We we anticipated having it ready on the activation date The only reason that we didn't was that be cash came out of nowhere and we had to scramble all of our resources to prepare for it but The it's really weird how like a lot of these Bigger companies and the ecosystem have actually been a lot slower to implement changes. So That's that's fine for us. I mean, I guess we'll just stay small and nimble and you know stay ahead of everybody else We're just waiting for the rest of the ecosystem to catch up at this point Yeah, we have a long way to go. I think the money and the greed and all this Fascination I'm getting rich quick is outpacing the realities of the technology and the capabilities. We need to have a good crash Yes That's right. Fortunately. I mean really, you know the that the two-year trough of disillusionment You know it was it was kind of disheartening, you know looking at the price and not moving for a long time but We got a lot of work done because we weren't looking at the price Mm-hmm. So any final thoughts like any advice for anybody who's interested in getting the space whether it's developer anybody Like what would you suggest to them? Yeah, so I maintain a list of educational resources on my website at lop net low PP net That's got pretty much everything you need Starting from high level going all the way deep down into the protocols if you want to get into actual software development There are a number of good resources especially like chain code labs and Jimmy song who Are doing developer education there and They have a lot of good resources both online and doing like physical in-person classes but really if you already know software development the best thing to do is just Find an open source a software repository Check out the code and start contributing you can contribute documentation. You can contribute tests You know, you don't have to jump in immediately and start making like major Functional changes to just get your foot in the door. Cool. Well, Janice and thank you so much for coming on the show and Talk to you soon brother. Thanks. Yeah, cheers