Bitcoin and Ossification w/ Jameson Lopp

And I thought it would be a great time to just sit down and chat through a lot of this. Because this topic of ossification, which we'll define when we get into it, this topic of making protocol changes to Bitcoin, better privacy, better scalability, all this stuff has been talked about relentlessly over the years and a lot of the things that I was promised when I got into the space don't seem like they've come to fruition at least as they were promised.

So as there's been kind of a revival around this concept of can we make changes to Bitcoin, specifically with covenants, I think it's a really good time to dive into just this topic in general. So I'm excited to talk about ossification protocol changes, a lot of different things with you today. But before we get too deep into that, why don't you just introduce yourself? I know you haven't been on the show before and my audience is not a bitcoiner only audience, so they may not know you.

So I'd love for you to just introduce yourself, tell people who you are and then we'll dive into the topic at hand.

I'm the chief security officer at CASA where we basically focus on helping high net worth individuals set up extremely robust multisig self custody. And I guess the short version of a lot of why I do what I do is I feel like Bitcoin is fundamentally a collaborative open project. And so the most important thing that we can do is continue talking about it, researching it discussing it and proposing ways to improve it.

So I guess you could say that I see ossification as kind of an existential crisis to one of the fundamental strengths of the project.

And I think something that would be helpful here, if you don't mind just kind of defining how you view ossification and specifically if there are, like, natural and unnatural types of ossification, because that was something that was really interesting that you brought up in your debate with Jimmy Song in Lugano, which I was able to go back and watch, was that there's, like, natural ossification that will happen and there's unnatural types that we can force into place.

So maybe just define ossification and kind of hit on those two different ways that ossification can happen.

And that basically means that when you have a protocol, which is just a fancy technical way of saying a shared communication language, in order to accomplish some specific task, that protocol, the value of it grows as the network grows, as the number of entities using the protocol to speak the same language with each other grows, and as the size and the value of the network grows, it also becomes more and more difficult to coordinate changing the protocol.

So, you know, you can almost think of it as, like, you know what, how difficult would it be to make fundamental changes to the English language or any language that has a billion adopters? Those type of changes do sometimes happen organically over extremely long periods of time. But you can't just make sudden changes. Otherwise it would be chaos and confusion, and people would no longer know how to talk to each other, and the value of the network would kind of drop off a cliff.

So this we've seen play out with network protocols like tcpip, like smtp, email protocol. Really, any of these fundamental protocols that hit mass adoption with hundreds of millions or billions of people using them tend to ossify. So this is the natural progression, I think, of a network kind of collapsing under its own weight. It becomes unable to change because everyone understands that trying to do so would be a net negative for the value of the network.

And what we're talking about these days with Bitcoin ossification is almost more of a artificial, preemptive, accelerated ossification of saying that, well, bitcoin ain't broke, don't Try to fix it. There are unknown unknowns, and any change that you make could have negative consequences. Therefore, we should stick with what we know, stop changing the Bitcoin protocol and just kind of declare it ossified, even though there's no one who can declare it ossified.

Due to the sort of game theory and governance of Bitcoin as a protocol, if enough people are apathetic and going to veto or not participate in upgrades and changes, then it's certainly possible for preemptive ossification to happen.

We're in this gap right now where we do have the chance to still do that. It feels harder and harder. Like, I feel like that natural ossification since I got into Bitcoin in 2017, I'm a little bit of a late bloomer when it comes and comes to the terms of when we got into the space, but it seemed like there was a lot more openness at that point.

Obviously there were the block size wars and that was not a consensus change that went through, but there was a lot more kind of discussion and ideation over what could happen seemingly leading up to that and, like, kind of hit a wall. And it feels like in the last few years that I've been in this space, there hasn't been much progress. And do you feel like that is just the natural ossification? Like, we do have many more people in the space now in 2024 than we did in 2017.

Or do you think that that's some sort of, like, narrative taking hold, that's preventing people from having an interest in proposing changes or trying to get them through softworks, et cetera?

On one side, it seemed like the quote unquote, big blockers were more in favor of giving miners more governance power in determining the future and path forward of the protocol, whereas the small blockers were more in favor of the independent node operators retaining more power. And I would say the independent node operator idea won out. And along with that seemed to come a fair amount of trauma.

And the result was that we didn't even really have anyone seriously suggesting consensus changes for several years after that. And so then we did get the taproot upgrade. But ever since then, even though we've had some proposals, a lot of the proposals have not come with proposed activation parameters. So it's like we still have a decent amount of brain power that's thinking about ways to improve Bitcoin.

But few developers have the interest in becoming a consensus change champion and having to deal with all of the negativity that goes along with that.

But there's definitely been a lot of examples of when people do propose activation methods, they get hit pretty hard for it. I know someone was proposing activation methods for Ellen Hance a couple days ago on Twitter and was immediately called out by Bitcoin core dev as being an attack on Bitcoin because they were proposing activation methods. Which is that feels kind of like where we're at is even just the idea of not even having people run the code.

But even just saying this is how this could be activated is kind of an attack somehow.

And at the time I actually went to go become a moderator of the Bitcoin XT Reddit, which is one of the many reasons why people like to cancel me every now and then, because I dared to go against the sort of mainstream consensus at the time, but it was, it was less That I was like in favor of that particular block size increase BIP and more, that I felt like it was a negative way of maintaining discussion, healthy discussion in the space. And so I get it.

I mean the bitcoin moderators have the whole thing about if you don't maintain some semblance of order within your walled garden, then it can turn into wild weeds and overgrowth and the sort of quality of the discussion can go down. But I think that it went down significantly just from that one rule and they were a bit heavy handed about that. But you know, we have so many different platforms now that we can discuss things on.

And kind of to your point, I think it's almost, it's almost asking for trouble of even talking about proposed consensus changes on social media. Because I mean the vast majority of people on social media aren't even really relevant or participating in consensus, technical consensus changes for the network.

Like having open, nuanced, calm, rational discussions. Like obviously I'm not saying anyone should just go crazy on either side and start attacking, start attacking people. But if you can't have that calm, rational discussion, you're never going to find consensus. And ultimately you will then by default be choosing to leave bitcoin as it is. If you have.

And so that's the feedback loop that it creates of the type of interactions that you should expect to get on there. You know, Reddit is kind of similar with the upvote, downvote system in the sense that if, if you go against the grain of what the terminally online redditors are thinking, then you're, you're just going to get downvoted into Oblivion.

Once again, the quick, witty retorts that don't take much effort to read and parse and think through logically are going to outperform the longer form nuanced discussions. So I'm kind of of the mind that for those longer form nuanced discussions, the better platforms are mailing lists or potentially just simple linear discussion forums that aren't manipulated with upvotes down votes, likes, so on and so forth.

I want to kind of pull us back to why this discussion today. And it's felt like for a long time that we're kind of at a fork in the road in bitcoin, where if we leave things as they are, there's general agreement, there's a very limited ability to support a good portion of the population on Bitcoin as it is today. Even when we're talking lightning. I think the number that you gave in Lugano was 100 million.

I know there's been different estimates, but I think 100 million is probably the most consensus that I've seen around roughly how many users we could support even with using lightning, because they still require lightning channels for each of those users. And if we leave things as they are, we're necessarily choosing that we're going to limit who can access the base layer and the bigger or not bigger, but equally as important issue in my mind is that privacy on Bitcoin is obviously quite poor.

I think you said in a podcast that we did while we were at the Plan B forum in Logano as well, was essentially like privacy is the antithesis of how bitcoin was designed. It's designed to be transparent. It's designed to reveal all of this information to the world. And to go against that grain is incredibly difficult with the way that it's built today.

And so we kind of have these two paths right now where self custody is going to get more and more difficult and privacy has gotten more and more difficult. Even just in this year, we've seen how much harder that has gotten and how app level privacy is very vulnerable to state level attacks. So those are kind of the like the two pillars that I view as core to freedom money.

And it feels like we're kind of at a fork in the road where if we don't choose to improve those two things soon, that natural ossification is going to be too great, the weight of the network will be too great to be able to improve on those two things. I'm curious, what, what's the driver for you? Like I've heard you talk about this very loosely in the past, but I've never seen such a concerted effort from you to talk about this topic as I have at the point before.

I'm in Logano in your blog post on X recently. So I'm curious, what, what was kind of the breaking point, if you will, or what's the main driver behind you wanting to kind of spark these discussions now?

Anyone who's been around for a cycle or two should find this odd. And why is it odd? It's because in my opinion, all of the activity is going through a few centralized providers. It's going through the ETFs, the custodians, and a large portion of the inflows into Bitcoin as a monetary system are now happening through a few gatekeepers. And so they're not using many on chain transactions. And this is a way of scaling Bitcoin.

And in fact, you know, this was one of the first proposed ways to scale Bitcoin. Hal Finney talked about, I think in the first few months of the network he said, oh, we'll just create a bunch of Bitcoin banks and they will, you know, offload a lot of the on chain transactions.

And so, you know, there are many ways that we can scale Bitcoin, but if we're not continuing to make improvements at the protocol level, then I expect that the scaling of Bitcoin will come with the trade offs of more centralization, less sovereignty, less privacy in general, the continued erosion of several of the most valuable attributes of this network And I put out some posts recently where I was basically saying that one of the things that should cause people concern is the

fact that it's entirely possible for the bitcoin exchange rate to go to the moon while we continue to erode these fundamental properties. And so that's why I think bitcoin is an amazing system. And it's gotten 15 years, almost 16 years so far, because the game theory and the incentives were all somewhat magically aligned.

But I think that this is one particular area in the game, a theory where the incentives are not aligned optimally for the sort of the long term health and longevity of the ecosystem.

And so kind of tying that all together, I think that that actually can create a negative feedback loop where if we have more and more money and quote, unquote, bitcoin adoption coming in through a few centralized providers, that actually further disincentivizes the continued improvement and evolution at the protocol level. Why? Because nobody is going to care about the protocol because they're not using the protocol.

To put this in context of one of my favorite network protocols to talk about, smtp, I think if you ask the average person right now, is email a global mass adoption success in terms of network protocols? And they would say, absolutely, I use email every day. Everybody I know uses email every day. It has billions and billions of users.

But if you're a really technical guy like me and you look at the actual architecture of email network and how people are using it, nobody is actually using the email protocol. The email protocol is used by probably a few hundred or few thousand entities. 90% of people who are using quote, unquote email are actually using one of 10 centralized providers.

That this is sort of one of the ways that email was scaled out, and that's a whole 40 year history that I've talked about of how that happened, because it wasn't always that way. In the early days, lots of individuals or almost every corporation ran their own email servers and they were running a quote unquote node on the email network.

And over the decades, due to a variety of problems that came up mostly around spam, the bar to operate as a sovereign email node on the email network got higher and higher and higher until we ended up with basically a dozen gatekeepers owning super majority of the network. And so the point being, I find the path forward of Bitcoin doing that same thing to be fairly likely if we're not out here screaming about it and trying to prevent it.

And maybe it's all for not, you know, maybe I undertake all of this and yell about it. And you know, a few decades from now, we'll look back on my post and people will say, well, he was right, we should have listened to him.

I never have any problems. Inevitably, when I get down to it, 99% of those users, I go, okay, what wallet are you using? And they go, oh, I'm using wallet of Satoshi and I'm paying another wallet of Satoshi user. Okay, yeah, you're not using lightning. You're sending a transaction by just changing a field at a database. This is totally centralized. It's not actually using the Lightning network. And it's kind of a growing theme. I've heard the same thing.

When people talk about privacy, they'll say, I'll just use an exchange to make payments and I'll pay from Coinbase because then I know that when I pay someone, they'll know that it came from Coinbase. But they're not going to know who it came from. They're not going to know the rest of my funds. They won't have any visibility into what I do. And I see this as a growing quote unquote solution that people see is I'll just use centralized providers.

And I think even when we get into this kind of this promise that I was made by many of the loud voices in the space when I first got into bitcoin was basically there were two things. We'll build everything we need in layers and anything that an altcoin, or I'm sure they use the terminology shitcoin implements that's good, will bring it back into Bitcoin and we'll improve bitcoin. And we won't need that altcoin. It'll just test what we need, we'll build it into bitcoin.

Unfortunately, neither of those things really happened. None of the stuff from other chains has been brought back into Bitcoin. And then scaling in layers has become increasingly difficult. All there is really today is lightning.

And lightning is a fascinating technology and can be very powerful, but has also not been the self custodial success that I think it was also initially pitched as we're actually scaling lightning to individual users who actually have their own channel and hold their own keys has been, has been minimal. And those promises haven't played out. And if we ossify, those promises only become harder and harder to happen.

So yeah, it's just really interesting to see that where even in the last, I feel like six to 12 months, we've seen a shift in the lightning space where lightning's supposed to have solved these problems. Again, these are promises that were made to me on social media. I'm not saying that it was actually feasible, but there were promises that were widely talked about in the space when I got into bitcoin.

And yet now we see many lightning wallet providers shutting down because they're having too many issues solving the problems of lightning for their users. We're seeing a shift in focus to custodial solutions, whether they're full custodians like in the traditional sense of wallet of satoshi, or they're custodians in the sense of an E cash mint, where people want privacy and they want a simple UX so they give up custody to get that.

And it all hits on the point that you made where people are not actually using bitcoin, I would argue, because it's too hard to do so for self custody in many scenarios and it's too hard to do so privately. So people are looking for alternative solutions. And because we don't have good building blocks to build out things that help with self custody and things that help with privacy on Bitcoin, that path seems to be the one that's been chosen.

I know I kind of got into a lot and fell down a rabbit hole there, but any kind of thoughts around that, like that scale in layers idea? I know I'll bring it back into a concise question.

So I know in your debate with Jimmy Song, one thing that you brought up that really struck me was you talked about if we don't make changes to bitcoin that give more building blocks to developers, the scale and layers scenario becomes increasingly complex or even impossible to be able to scale out and build the things that we want.

We're already seeing that with the limitations that Ark has, with the limitations that Spark has, with the ways that they're essentially having to hack around, the lack of covenants, and we're already seeing that play out right now, which is even earlier than I expected to see that play out. But could you maybe dive into a little bit More of that idea of like, if we don't change Bitcoin scaling in layers becomes increasingly complex or centralizes or introduces custody, et cetera.

So I would say over the past year, for example, we have seen a lot more quote unquote layer 2 bitcoin projects. But I think it's important to look at them and analyze them to see what are the trade offs that are being made. And so you did comment on E Cash mints. The trade offs there being you can get really strong privacy, but generally with rug pull risk because you have a custodian running the mint. I think Fediment improves upon that somewhat.

So what I'm seeing and like, one of the reasons I keep talking about one of the reasons we want better building blocks at the base layer is because if you're building a layer two right now, then most likely you're, you're either doing pegging into a custodian or a federation, which is not great, or if you want to make it more quote unquote permissionless and censorship resistant, you're having to come up with some crazy game theory.

And one of my favorite examples, I don't know if you're familiar with the spider chain concept by Botanics or Botanics. I'm not sure exactly how they pronounce it, but suffice to say that they've come up with this idea of sort of rolling cycles of multisig wallets that kind of act as the pegging, staking layer in between the base chain and the second layer that they are building. And it's just, it's extremely complicated and it's hard to analyze the game theory.

And this is one of the reasons why, you know, there's a number of, you know, kind of economic and technical parameters that are involved in all of this. And it's really hard to say what the optimal ones are. And so that's going to probably a multi year process of them going through multiple phases to try to tease out how do we make this as secure as possible.

Or you know, if you look at bitvm, it's, it's just, it's complicated and you're trying to do even fairly simple logic in a more permissionless manner has a lot of overhead. My favorite though was the one that just came out a week or so ago, the covenants with hash collisions. The short version is, yeah, we can do covenants on bitcoin. The only caveat is you have to burn tens of millions of dollars worth of electricity doing proof of work in order to find some hash collisions.

And so look, that's really cool. Like you totally nerded out on this idea and you proved that something is technically possible. But I don't care what's technically possible if it's impractical and feasible, to the point that I don't think that it's actually going to get much adoption. Like we have to find the right path forward where the technical improvements and whatever we're building can actually be used.

Otherwise we're just kind of sitting around mentally masturbating, basically saying, oh, look at this really cool idea I came up with that nobody's ever going to use. So if we actually want to progress the ecosystem forward, we have to find the practical stuff. And so the way that I look at it, and I think it was actually Adam Back who used this term a number of years ago, but he said, you know, I look at the Bitcoin base layer as a cryptographic accumulator.

And so I think that that makes a lot of sense in the context of second layers, especially if we're talking about the, the low level functions and operations that will be most useful in order to make building permissionless second layers easier for people. And basically that is if there is some set of operations that is either impossible right now or requires you to do just a ton of gymnastics in order to recreate. But you can distill that down into like one opcode on the bitcoin network.

That's where you have potential orders of magnitude of improvement of efficiency and developer friendliness that can then boost, accelerate the future development of the entire ecosystem. That's how I think we should be looking at improvements to Bitcoin is if it can greatly simplify the burden that we're currently putting on Layer two developers, then it's something that we should be interested in.

And so I wasn't able to go to the recent conference in Boston OP next, but it looked like there was a lot of good discussions there. And one thing that I saw happening from some of the social media discussion was a lot of those layer twos, they're already building stuff, but they've done the analysis and they can show in many cases, if we had this one opcode, it would greatly improve X, Y and Z aspects of our second layer.

And so that's why I'm in favor of things like opcat and RE enabling some of the old opcodes on Bitcoin. And I think that it's, it's possible to do that safely. We don't need to be afraid of, you know, edge cases if, if we build a proper safety framework around it.

So like it is expanding lightning, allowing things like channel factories, has a lot of interesting use cases.

Comparing that to the user experience of what we will have with Covenantless Ark is wild because instead of being able to just use one or maybe two opcodes to commit to transactions only looking a certain way in the future, which is necessary for the ARC protocol to function smoothly, you have to do these massive pre signed Bitcoin transaction collaborative things between all of the users and around and the ARC operator.

And it gets crazy compared to what it could be, like you said, with relatively simple changes to the base layer, something like opcat, something like opctv. And you can't assume that just because you can do something means that it will gain adoption. And the harder the user experience hurdle is to get over, the less likely it is to actually see use.

And the best case in these layer twos is generally that the user experience will be drastically worse than it could be with simple changes to Bitcoin. But in many of these examples, they actually lose the trustless nature that we come to accept with the base layer. Like normally our barrier of entry is I want to be able to get funds out no matter what. And there are generally unilateral exits and things like ARK and Spark.

But a lot of the things like anything, basically anything using bitvm for a bridge is not trustless. You need one operator to one operator or a threshold of operators to be good or to be apathetic for funds to not be lost or stolen. And you lose that trustlessness because you don't have ways to build layer twos that have those trustless bridges.

And yeah, it gets really weird because it looks like we're like trying to scale in layers right now when we don't actually have the building blocks to do it in a way that's approachable from a user's perspective, or trustless or extremely trust minimized.

I did have, someone was, was asking me recently how we should be thinking about making protocol changes going forward because they felt like that something shifted where it used to be. Oh, we have this great idea for a future of things that we could build on top of it. And that's how we ended up saying okay, we should add these lock time opcodes and we should fix transaction malleability so that we can do Lightning network channels and get all of those benefits.

And it feels like I think a lot of people are pushing back against the idea of us just enabling more building blocks without specifically saying, okay, we're only doing it for this one use case. They're afraid that there's so many use cases out there. Some of them might be bad, some of them might be immoral. Somebody might get scammed because somebody builds Ponzi scheme or builds some sort of pump and dump. Call it nft, Project, Token, Project, whatever.

This is kind of tangential, but I've seen what you might call the Bitcoin puritans or moralists overlapping a lot in the Bitcoin ossifier space of basically, you know, we, we, we basically want to gatekeep Bitcoin to only be what we consider to be pure monetary transactions. And if you're using Bitcoin for anything outside of what we deem to be appropriate, then you know, you're a shitcoiner and we don't want you on our network. And, and that has kind of seeped into the whole.

How do we improve Bitcoin space to be greatly afraid of? Well, if you can't prove that this change won't be used in a way that I disagree with, then I'll never agree to run it on my node. I don't know, I don't even really want to engage with those type of people in argument. And I'm hopeful that they're just a tiny vocal minority, but you know, it is. It is a fundamental conflicting perspective. And I think how people see bitcoin, many people see Bitcoin in many different ways.

And I've always been quite open about the fact that, you know, I'm a technologist and I see Bitcoin as a database and, you know, there's a protocol around how you buy space in that database and make updates to it. And I'm kind of a hardcore free market maximalist that if someone finds a use case for block space that fits within the constraints of the protocol and they're willing to pay market rate for it, then they're not a spammer, they're just a consumer of block space.

And the permissionless nature of the protocol is such that you don't get to gatekeep them. The only gatekeeping that happens is from an economic perspective.

But what they're unwilling to admit from what I've seen because it's not convenient, is that not making changes also has unknown unknowns. And trying to quantify that one is more than the other, I think is. It's naive and it goes. It's actually ahistorical. Just look at what happened to email, for example. Not changing the email protocol had unknown unknowns that were unforeseeable because what happened was the rest of the world changed as the protocol hit mass adoption.

A lot of new problems came along and they had to get solved. And one of the only people who tried to solve the spam problem at the SMTP layer was Adam Beck. But guess what? He got ignored. So I wonder if I'm going to end up being the atom back of the bitcoin protocol in regard to this particular issue, I certainly hope not. But point being, I expect, you know, if Bitcoin ossifies, the world will continue changing.

There will be more problems and those solutions are going to get haphazardly bolted on, generally in a centralized manner, and we're just going to end up with more gatekeepers.

Someone is now serving a sentence in jail because one transaction that Chainalysis says was his was used to buy a domain for a centralized mixer, which was a whole nother topic that there were centralized mixers because privacy was poor. But he is said to have done that because there was no privacy in between that. What seems to have happened, just as a side note, is that he traded Bitcoin peer to peer, frequently.

And it's very, very likely that at a bitcoin conference he bought bitcoin from the operator of bitcoin fog, and then had that link directly to the funds that that bitcoin fog operator then used or sorry, he sold Bitcoin to that bitcoin fog operator, Bitcoin fog operator, used those to purchase what he needed and the lack of privacy landed him in jail.

I would say that that's pretty imminent and necessary that the average person has access to privacy to protect them from what at least over the last four years has been a clear attack against Bitcoin and against privacy and cryptocurrencies. Just like scaling. Yes, maybe. The fee market right now is ridiculously low, which is potentially a problem on its own.

As you mentioned earlier, that we're hitting a bull run and no one's using the chain, which is an interesting combination that has, as far as I know, never happened before in the history of bitcoin.

We've already decided on how we're prioritizing low cost of on chain transaction versus low cost of auditing the system. That's already decided. I don't expect that to change. But what I do think will eventually become an issue will be fees, you know, sustainable thermodynamic security and cost of sovereignty. Basically this is, you know, some, some people have said, well, should everyone be able to own their own utxo? You know, that's, that's kind of its own debate.

But my, my point from my presentation that it'll probably be published in the next few months was that I think that we should desire to have an adjustable block size that takes into account all the different stakeholders in the ecosystem and prioritizes safety, of course, prioritizes node operators not getting priced out from auditing the system, but also prioritizes the economics of block space.

And so, you know, I would argue that right now the block size should actually probably be smaller than it currently is if we had an appropriate adjustable block size algorithm.

And then I went out and I looked at all of the other systems, at least all of the other major cryptocurrencies that have adjustable block sizes and tried to understand the game theory around them. And the only one that I thought didn't completely suck was actually Monero. And the main reason for that, as I'm sure you're well aware, is because although it does give miners the ability to increase the block size, they can only do that if they also increase the fees.

Right, so there's actually that economic component.

It's a really fascinating system and one not meant for just permanently increasing the block size, but handling short term amounts of increased on chain activity and then shrinking blocks back down to a size that's, that's reasonable. It's a really interesting one. I don't want to get into the details, but I'm glad that you, you looked into it and covered it a bit too because it's one that's been working very, very well in practice for a decade now.

So circling back to this topic of ossification, I think maybe the harder thing to actually discuss. I love the theory, but I'm really curious on what you think for what are the real steps we take towards helping bitcoin to continue to evolve? I know you talked about block size in that presentation. We've talked a lot about covenants and other potential changes like opcat.

You briefly mentioned the great script restoration, which we'll maybe get to a little bit more later with the listener question. But what are the actual things that we can do? It feels like to me every day it's getting murkier as to how would I go about, hey, I have this perfect privacy bitcoin improvement proposal. How do I get that done? Or is that something that's worth pursuing?

So maybe just your thoughts on what are the actual steps that we can take as people who want to see changes continue to happen in bitcoin?

And I would say there cannot be a well defined process because ultimately what does it all come down to? Rough consensus and running code. It's very hard to quantify. That's why it is rough consensus. But I think one potential problem is that there just hasn't been a improvement proposal that has gained significant momentum and collaboration from people. It seems like it's always been like a few people over here, a few people over there.

And really if you want to build consensus, it's kind of its own bootstrapping and network effect problem. You, you have to actually get boots on the ground and start talking to a lot of people and get them interested and get them, you know, devoting time into contributing to that idea and voicing support for it and trying to move it forward. And it seems like Jeremy Rubin was the, the last person who really tried to do that. And unfortunately it rubbed some people the wrong way.

It is kind of a delicate process and it may even be the case that you should not champion your own proposal. I think some people may see that as a red flag in and of itself. So maybe if there's something that you really want, it's better for you to find other reputable people in the space to champion.

There's a lot of other proposals in OPCAT now and great script restoration, but it feels like that's kind of happened because a lot more people in this space, not just the devs working on the proposals, are actually willing to talk about this stuff publicly and have conversations around it. I think that's definitely a key point. It's. Yeah, rough consensus is very, very rough and it does require almost like a. It's more a social aspect.

Like obviously the technical proposal has to be sound for there to be any chance. Obviously that's how it should be, but it ends up being more of a social effort than it is a technical one. Once you have a good technical proposal and that hurdle is just so high these days, it feels like.

And I'm like you, this is like the perfect example of this process going wrong is you're letting your emotions get in the way of the sort of cold, stoic logic of looking at these things and how they're going to potentially improve the network.

And so you just need to ease into it slowly and steadily, you know, slowly building consensus and getting your champions together to show that your proposal does not have any substantial objections.

Obviously, I know maybe there's some things that just can never happen that you would love, but maybe on the practical side something that you think needs to happen in Bitcoin that you'd like to see adopted.

I do like greatscript restoration because I feel like it would be better for us to just do a one and done, you know, just get it over with rather than fighting about sort of one off opcodes here and there. If we can have, you know, one clean sweep of that, that would be great. Medium term, like over the next 10 to 20 years, I think the quantum computing issue is going to potentially reach a critical point.

I gave a presentation about that a month or so ago and it's, you know, it's sufficiently far away that I think people aren't concerned about it. But also, as we know, it's very difficult to change Bitcoin. And this particular change I believe is going to violate some principles of Bitcoin one way or another. The point being that if we.

And so then the real question is going to become, do we either sit on our hands and allow lost funds to be stolen by quantum adversaries, or do we say at some point, okay, this has gone far enough and we're going to do a soft fork to essentially make those funds unspendable. So one way or another, that's going to violate a principle of, basically the principle of your key is your coins.

Either either those coins are going to get stolen even though the adversary didn't originally have the keys, or the keys will no longer be useful if that owner still has them.

Well, that's where layer twos actually come into play. And layer twos and centralized providers is effectively, if a lot of adoption happens through centralized custodians or if certain layer twos gain sufficient mass adoption, those things can actually effectively act like a block size increase from the economic perspective, as they are offloading a lot of demand from the base blockchain.

So there's a lot of transactions that might have originally happened on the base blockchain that no longer happen. And so that can cause a drop in fees for miners. And simply because we don't know in the long term future what all of these different variables of supply and demand are going to work out to I think that having a static block size limit, whatever it is, like there is no magic number, I think that is the right number.

One of the main reasons that a lot of the block size proposals back in the day were dumb is that they were just magic numbers. And so I think in order to really fix this aspect of the game theory of Bitcoin as an ecosystem, that similar to how we have difficulty adjustments right now for the miners, I think we need to have block space adjustments that take into account all the different variables that can lead to a healthier, unhealthy environment for the economics of block space.

I think there's this weird assumption that either 4 megabytes is just perfect, like what we've chosen is somehow perfect and we should never change it, or that we know exactly what the size should be like. Oh, we should have 1 megabyte block sizes or something. And I'm not really sure how people can think that they know exactly what the perfect block size is. When we're talking, hopefully hundreds or maybe even thousands of years in the future.

There's no way to predict what it's going to look like.

And the reason why you want this constant backlog with a robust fee market is twofold and possibly more. One, of course we need to pay the miners and we need to make this sustainable in perpetuity as the subsidy continues halving. And two, it actually incentivizes people to use block space efficiently. So if your blocks are too big, nobody is going to even bother building layer two solutions. At least not, not for, like, cheap transactions. Maybe if there's other functionality and.

I could easily see game theory start to break down if the layer twos are the primary consumers of block space. And they're all competing with each other over this. It is once again, it's a type of pure free market capitalism. But that could be problematic and in fact ultimately harm the thriving layer two ecosystem. And we're thinking really out in the future right now there's so many variables we're probably not even imagining as very difficult to even talk about.

But I'm just trying to tease out some of the potential future problems. Because if we agree that natural ossification is a thing, then I think that if we wait so long until these problems actually become problems, then we may not actually be able to do anything to adjust course and be able to resolve them at the base layer.

So last question that I have, we've touched on it a little bit throughout, but not in a really concerted way. So I just wanted to circle back. We touched on self custody a little bit more or like building better layer twos. But when we talk about privacy, what's your view around how that fits in? Like, can Bitcoin continue to be called Freedom Money if privacy is not approachable for the average person?

Is that something that you view as essential as improving self custody or ensuring that we can build proper trustless layer twos? Where do you see that fitting into this

conversation?

And you know, it could get pretty interesting right now, even if you, if you give up on the idea of Sovereign Lightning Network as a like mainstream adoption thing for people to be using, I do think Lightning Network could easily have a place in the future of a vibrant layer two ecosystem of essentially acting as bridges between the different layer twos.

And so that could get pretty interesting from a privacy perspective if you could hop between any number of layer twos trustlessly, instantaneously. Would that hopefully be able to greatly improve privacy? Of course, as we're well aware, the state of privacy on the lightning network continues to be explored and when weaknesses continue to be found and we'll need to continue hardening it from that perspective.

Yeah, man, a lot of different things going on here, but I feel like I got a lot more clarity out of our conversation. So thank you for our time diving through my questions, but if you're down, I've got a few listener questions that we can walk through and maybe just kind of do a rapid fire Q and A. Sure.

Okay. Awesome. You did touch on the great script restoration already a bit. Was there anything you wanted to add? Bob Summerwill said, I would love to hear your thoughts on the great script restoration as a potential. Let's fix it all. I think you already pretty much answered that, saying that that's one of the reasons you like it. So you could kind of do it on one go, but anything else you want to add there?

We've had a few kind of half assed ways of doing that over the years by like counting signature operations and stuff, but that hasn't been able to capture all of the potential complexity of validating transactions. So, you know, Rusty seems to be making good progress on that and I think he actually just published a draft biped for it in the past week. So, you know, it still could be a year or several years away from happening, but I'll be keeping an eye on it.

The other main focus of really a couple questions was basically what's your view on getting better privacy at the base layer? I know we just touched on this a little bit, but I want to shift the focus a little bit. So like Kayabanurv, who's a dev in the Monero community, he asked, what's your stance on privacy bips? If opt in privacy could be added today magically for the computational and bandwidth cost of a Schnorr signature, would you add it or do you best.

Do you see privacy as best done by L2 Solutions? I guess getting more to the theoretical if you could have that, would you be behind it versus the pragmatic, which is probably that you wouldn't be able to get something like that through consensus.

So to get to give a kind of counter example, I think that one of the best practical ways that we could improve bitcoin privacy today without protocol changes would be to get Everybody to use PayJoin. It's already a thing. All we have to do is get people to actually implement that interactive protocol whenever you're accepting payments. But I don't think it's going to happen. And, you know, just asking people to do anything seems to be too high of a burden.

The hard part is the user experience of lightning hasn't quite lived up to expectations, but I think that's definitely an issue. There is the user experience getting there. I guess if you could do it in a perfect way where the user experience was just the same as making a standard transaction, you could probably get much better, much better adoption. But if we're still looking at needing to move coffee transactions to a second layer, base layer changes could help that bridge.

Like especially when you're moving funds into a layer two. That's one of the weak points right now of lightning is the on chain footprint is quite detrimental unless you do things a very specific way. So those on chain changes do help those layers that get built on top have better privacy in the bridging in and bridging out or pegging in and pegging out scenario. But yeah, thanks for jumping on that one. Another one to get into.

I think we already answered quite a few of these in just our conversations. But another one that's an interesting kind of thought experiment, and I think we'll probably end on this one, is if you could rewrite bitcoin today as a brand new protocol, what would the core of it be? What are the core kind of differences that you would have in a bitcoin that you think could solve the problems that we've talked about throughout today. It's a pretty general question, so just dive in.

Maybe if there's one or two specific things that you would change if you had the ability to kind of wave a wand and build bitcoin differently.

Yeah, Bitcoin, the tricky Thing is, as I said earlier, you really don't want to screw with the game theory. And so I think I would go back to really what we've already spent a lot of time talking about, which is the one aspect of the Bitcoin game theory that I think needs improving is this sort of idea around block space economics. But that is a long term problem.

I'm not really convinced that there's anything at the protocol layer that would necessarily be a 10x improvement for user experience and adoption. I think most of the friction around that just has to do with key management. And I don't have a fundamental solution for a protocol change that would fix a lot of the key management issues.

Awesome. Well, I think that's all of the main questions that I had. Like I said, I think we hit on the majority of these already in our discussions. So if you listeners asked a question and I didn't cover it, let me know and I'll see if I can get a text response or something from Lot. But I think we walked through the vast majority of it. So any last thoughts or kind of closing things you want to bring up, Jameson?

So hopefully this will help people better understand a lot of the thought process behind different views and better understand kind of where we're coming from when we say that there are some good ways that we can make changes to Bitcoin to keep it a useful tool for freedom, to keep it free to money. So thank you so much for your time, Jameson.