 Andrew asked about Moore's law and Bitcoin scaling. It has been nearly six years since the one-megabyte block-size debate began. If Moore's law has helped true, computational speed and memory capacity should have increased by a factor of 8x since then. Accordingly, do you think decentralization would be compromised by increasing the block-size limit from 1 megabyte to 8 megabyte? Can the average node now handle an 8 megabyte block? As easily as it could, a 1 megabyte block in 2013? That's a great question. First of all, Moore's law isn't exactly a doubling every year. It was, at its peak, an approximate doubling every 18 months. Furthermore, we are already seeing the fact that Moore's law has slowed down. In terms of the pure increase of the number of transistors on a chip and the increase of clock speeds and things like that, things have slowed down. Of course, everybody is writing articles as to why we've hit a ball and will never exceed it. I'm skeptical about articles like that, because we've heard that before. Nevertheless, we're not quite at a factor of 8x, but that's not the problem. The real issue isn't storage, and it isn't CPU capacity for being able to validate blocks. The really important bottleneck in decentralized open-public cryptocurrencies and blockchains is network bandwidth and network latency. Moore's law has not operated on network bandwidth at anywhere near the rate it's operated in CPUs, but also in hard drive storage. In fact, one of the big problems with network bandwidth is the last-mile problem. Yes, you can stuff a hundred times more into an optical fiber than you could ten years ago, but the problem is that optical fiber hasn't reached here. Maybe I have coax if I'm in an advanced country. There are a few very densely populated first-world development-nation metropolises that have fiber to the home. That's a fairly rare phenomenon. It represents a tiny percentage of the overall installed fiber. Maybe you have coax through your cable modem. We're looking at speeds of about a hundred megabits, and it's kind of stagnant in terms of development. If you go down to DSL, then you're really looking at speeds of up to 25 megabits at best. Most rural areas, you'd be lucky if you get 10 megabits, and in many cases you can't even get half that. What we're talking about is the impact these kinds of choices have on decentralization. Bandwidth is an important consideration, and this has an impact not only on people running nodes, wallets, and other activities on the Bitcoin network, but also more importantly on people running mining. The end result of putting pressure on bandwidth and latency would be further centralization of mining. Mining is already centralized because of its reliance on chips. Furthermore, the other impact it has is on what's called IBD, or the initial blockchain download. The initial blockchain download is when you start a node completely fresh, with no reference to anything... other than a single hash of the Genesis block, and you try to bootstrap it to get the entire blockchain bootstrapped off the Genesis block. That means they have to download the entire blockchain, not only download it, but validate every transaction in every block... from the beginning, while simultaneously changing the rules as the consensus rules have evolved. Essentially, what these nodes are doing is going back in time to January 3rd, 2009, and they're replaying history... as if it's happening in real time as fast as possible. That initial blockchain download takes at best about six hours on a really powerful machine, with very good bandwidth... and able to download 250 gigs at this point in Bitcoin, almost impossible to do on Ethereum right now. We see these scaling problems on many different blockchains. Again, that affects the decentralization of nodes. Moore's law isn't the be-all-end-all of the scaling problem. There are broader scaling problems that have to do with bandwidth, there are scaling problems that have to do with unequal access to hardware... and there are scaling problems which relate to how you bootstrap a new node for the first time. All of which means that increasing the block size may be possible at this time, from one meg to eight meg. Maybe, I'm not entirely sure, it is necessary or advisable to do that on the base block size. There's another consideration, which is my personal opinion in the scaling debate. The scaling debate demonstrated that we have a very narrow window in which we can see changes to the base protocol. Eventually, it will be possible to make any changes, because of a lack of consensus, because of ossification of the protocol... because the protocol has been embedded into too many hardware devices. Then it becomes a matter of choices. What are the changes that need to be done in the base layer and what are the changes that can be done in the base layer... but could also be done in layer two? My personal opinion, privacy is the change that needs to be done in the base layer, and it needs to be done before the window closes. Scaling can be done in the second layer quite effectively, and we will also need some scaling on the base layer... in order to support even more scaling on the second layer, but our real focus right now should be privacy, not increasing the block size further. That's just my personal opinion. So, after the recent bug, there have been some calls for a more rapid ossification of the Bitcoin protocol. I'd like to hear your thoughts on that, but also in the context of if Bitcoin really succeeds, eventually there will be pressure on the developers to influence the protocol as well. It's a good thing they're not in charge. It's also a good thing no one's in charge. It's funny, because if you look at the history of Bitcoin, there's a series of moments when one or other group goes, but we're in charge and then quickly discovers they're not, because the very expression of power actually causes it to evaporate. So, we are all in charge, as long as none of us try to stick our head above the parapet, and pretend that we are ultimately in charge, in which case we get yanked back down. Developers, miners, merchants, exchanges, all had to learn that lesson throughout different parts of Bitcoin's history. Developers may come under pressure, and I'm glad you're using the term ossification. I think I coined that in 2013. We are going to see every other protocol, like every other technology. TCP-IP got stuck in IP version four, and then we said, oh, that's okay. We'll just upgrade everything to IPv6. Nineteen years later, it's happening any moment now. We're still 40%. We're growing. This is going to happen to any protocol, so the question is not whether it will happen, or even when it will happen. My most important question is, what can we put into the protocol before it happens, and to that the answer is privacy. So, I've been saying this now for three years, and in fact, at some point I was really concerned about scalability, and then I changed my mind, and part of the reason I changed my mind is because I realized the debate over scalability showed that ossification was already happening. We were unable to get agreement on a hard fork that changed the core protocol. The fact that we were unable to get agreement on that meant that we were probably going to get unable to get agreement on other things, which meant that ossification was already setting in. And at that point to me, privacy became the biggest urgency, and scalability became a second importance. Because you can solve scalability at layer two, you can't fix privacy at layer two. A quick question about Bitcoin's anonymity. Will that issue be resolved on layer two? I hope not. It's a really good question. So, a lot of people think Bitcoin is anonymous. It is not anonymous. It is loosely pseudonymous, which means that if you expend an enormous amount of effort on operational security, and you do it very carefully and very well, you may retain anonymity for a limited period of time. That doesn't sound like a good thing, right? Now, anonymity is a very touchy subject. To many people, the idea of money being spent anonymous is a terrifying possibility. A possibility that will surely mean the end of our civilization. Of course, the first form of peer-to-peer anonymous, untraceable money has existed now for 5,000 years. It's called cash. It was completely peer-to-peer, completely anonymous, completely fungible, unforgible, and self-verifying, and civilization didn't come to an end. In fact, the idea of surveillance on all forms of money is a relatively recent idea. It was born in 1971 under the Bank Secrecy Act, signed by President Nixon, who we thought was going to be the worst president ever. And there is no bottom. Don't ever assume that surely they can't go that low. Oh yes, they can. There is no bottom. And then that dream started in 1971, and it died on January 3rd, 2009. Not immediately, but we put the first nail in that coffin. Bitcoin needs to be much stronger in confidentiality and privacy on the base layer. We learned a very important lesson with the internet. IPv4 didn't have enough security, didn't have enough encryption, didn't have enough anonymity built in. We tried to retrofit these things with IPsec and SSL and Tor. When you try to do it on the second layer, it's not as strong. And then the people who use that second layer stick out like a sore thumb. Why are you using encryption, ma'am? You must be doing something wrong. And so as a result, we have to do this on layer one. So I think that's our biggest priority in Bitcoin. There's a bunch of technologies, if you're interested, read up, bulletproofs, taproot, graftroot, confidential transactions. And then if we do that well on layer one, we can do it even better and even stronger on layer two.