← The Peter McCormack Show
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- [00:01]
Peter McCormack
Welcome to the what Bitcoin Did Podcast.
- [00:07]
Adam Back
Hi there, how are you all? Welcome to the what Bitcoin did podcast where you get to hear from the best minds in Bitcoin and crypto. I'm your host Peter McCormack and this week I've got a very, very special interview. I've got Bitcoin OG and Blockstream CEO Adam back, but first I do have a message from my sponsors. So let's talk about BlockFi. If you want to use your crypto without selling it. Whether you're paying off student loans, buying a house or starting a business, BlockFi helps crypto investors use their Bitcoin ether and Litecoin without selling it. Backed By Mike Novogratz, BlockFi is the leading crypto to USD lender in the US servicing over 45 states with interest rates as low as 7.9% and they have a special offer for the listeners of my podcast. If you sign up@blockfi.com whatbitcoindid you will get $25 in free crypto added to customer collateral loans under $10,000 or $50 in free crypto added to customer collateral Loans over $10,000. And applying takes less than two minutes. And next up, I want to talk to you about Make It Rain Again Mentioned these guys a couple of times now. If you need help with the marketing of your company or project, you won't do much better than working with these guys. They are the best in the business for SEO, paid predictive and social media and I know because I've worked with them. They've also helped me out with the marketing of the what Bitcoin did podcast, which they've done a stunning job for. They're based in LA but servicing clients worldwide. And they also have a special offer for the listeners of my podcast. If you mention what bitcoin did when reaching out to them, they will provide you with a free SEO audit. So to find out more, head over to makeitrainusa.com okay, onto the interview with Adam. So chuffed to get this. I keep this spreadsheet at home with all the target people I'd like to interview. Adam's obviously way up there at the top and when they said he was in London, could I see him? Of course I could. Of course I could. So this was really cool. And it's really cool actually because I've been reading a lot of the old bitcoin talk threads recently, looking at some of the old email chains when people are discussing bitcoin and it's just so super Interesting to see all these people you now see on Twitter having these conversations back in the early days of bitcoin. And if you don't know Adam's background, he was the inventor of hashcash, a proof of work system used to prevent email spam, which was also cited in the Bitcoin white paper. So his credentials speak for themselves. In the show, we talk about the history of bitcoin, we reflect on the last 10 years, and Adam also gives me an update on the launch of Liquid. I really hope you enjoyed this as much as I did. If you want to support the show, there's a section on my website which helps explain everything you can do. That's@www.whatbitcoindid.com. and also if you want to email me you've got any questions about the show, feel free to reach out to me at hellohatbitcoin didt.
- [02:22]
Peter McCormack
Com.
- [02:25]
Jameson Lopp
Good to see you again. It's going to be very difficult for me to do an interview with you without asking quite a bit about the past. I'm. I've been in this space probably a lot less than most people, especially yourself, a couple of years, and recently I've been digging in the past, reading old bitcoin talk threads and looking at old emails that are sent between various people at various times during the history of bitcoin. Some of my questions might feel a bit basic at times, but I've got so many things I do want to ask you. So we're a decade in. What are your overriding thoughts now as you've essentially been in the project since the start?
- [03:05]
Peter McCormack
I mean, I think, you know, people on the cypherpunks list were interested in privacy technology, things like Tor remailers for sort of email privacy. And there was, you know, of the applied cryptography, things related to privacy that people were interested to achieve. The hardest and most kind of holy grail application was a deployed electronic cache system with some privacy and cash, like guarantees like, you know, bit error, immediate final settlement, things like that. And so that dates back to what, 20 years now or something. And so it's pretty exciting to people who were researching that, trying to figure out ways to make that work and watching a couple of different systems try and fail for various reasons, like because they were centralized or I think that was the primary failure in the past and also at the interfaces. So Wei Dai, in his B Money proposal, which was a 1998 proposal, said something interesting which was he wanted to see an electronic cash system without an interface to banks because one of the original systems by David Chaum. He made centralized electronic cash servers very good privacy properties. But the way he envisaged getting money into and out of it is you deposit money in a bank account and it would issue you with coins and you could deposit them for a credit in your bank account. And so his company went bankrupt and Double Spend Database was probably sold on ebay at the time or something, and that was the end of that. So I think that one of the most interesting things about bitcoin, even though the privacy properties are worse, it is decentralized. So it's a fabric that can survive any one company. It's very survivable. Individual companies can come and go, users can join and leave, and it will keep running as long as there's an incentive for miners to mine it, which is as long as there's a market value of any kind, that will be the case. The hash rate might go up and down, new equipment will be bought, different suppliers will be providing different services. But that survivability is always the missing ingredient before.
- [05:47]
Jameson Lopp
And do you think of Bitcoin now as still a project that can succeed or fail, or do you think we're at the point now where it's beyond that kind of beta feeling, where we're. It's a success?
- [05:59]
Peter McCormack
I mean, I think there's a phenomena called the Lindy effect, which basically means the longer something has continued to be robust and survive, the more confidence people have that that will continue to be the case. And so it's definitely a lot further along on that curve. And I think another site was hypothesizing in the past that there should be a point at which it has a bootstrap where even if hypothetically all major governments outright banned it, it would continue. In the same way that kind of gray market goods are continued to be supplied, particularly in the electronic domain, even if governments or let's say MP3 sharing things like that, it's not something that any particular government approves of typically, but it's very hard to stop. And so, I mean, for electronic currency like Bitcoin, my hypothesized bootstrap was that everybody knows a friend of a friend who would be willing to OTC trade for paper cash. And there's pretty robust markets for OTC electronic cash these days. And there are like millions and millions of users. And you do see very interesting evidence that this is the case. This kind of bootstrap has happened because some countries that have had a lot of bitcoin interest when on official terms, they Ban it. The local bitcoins and other OTC platforms see a huge spike in use. And basically that means it's time for the regulators to dial back their, you know, controls, because they have more visibility if they regularize it than if they ban it. And it continues in a gray market where they have no control and less visibility.
- [07:55]
Jameson Lopp
So do you think that in some ways that's bitcoin's greatest achievement, that it has been able to survive despite whatever a government wants to do?
- [08:04]
Peter McCormack
Yeah, I mean, it's has a couple different uses, but I think the sense of resistance properties where you can. There's no policy about who you can send to. There are not identities. I mean, there's some kind of pseudonymity. The privacy is not perfect. It's quite a lot of traceability. But ultimately it's very difficult for somebody to prevent you sending money to somebody somewhere else. And it has no awareness or care about which location the recipient's in. And then you have the kind of bearer properties. So it's very hard to freeze, very hard to seize. Probably harder to seize than some physical gold coins or a small gold bar in a safe or something, because that's a physical item that could be found with a bitcoin. You'd never know, ultimately, if somebody was put a reasonable amount of care into it. It'd be difficult to find a bitcoin short of, you know, like contempt of court. Like things where you suspect they have some or you have some evidence they have some and you demand they turn it over. Okay, that's. That's the ultimate recourse. But for users, I think an interesting concept is sort of the true Name concept. So there's a science fiction book by, I think it's Verna Vinge called True Names. And it's basically the concept that if somebody knows your name, they have some kind of power over you. Where if you're kind of obscure and knows who you are, or that you have an involvement in bitcoin, or that you're involved in some online discussion group about politics or current events, or have you. Then you're much more immune to interference.
- [09:48]
Jameson Lopp
Sounds very Jameson Lopp.
- [09:49]
Peter McCormack
Yeah, I mean, I think some people who have acquired bitcoin have done so in different ways. So some people just, you know, why transfer money to an exchange and bought the bitcoins? And that's, you know, basically at this point, all of the exchanges have KYC information, have your scan of your passport and so on. So those bitcoins are pretty much, you know, linked to you. But There are people who, you know, had more of a privacy thoughts in mind early on when they accumulated bitcoin or they did so before there were exchanges. So their bitcoin were bought in a coffee shop at different times for a few hundred dollars in cash or something like that. And so those are much less linked. And so from an asset protection and not standing out as an easily identifiable person who has bitcoins, then those bitcoins are in a way more valuable for that use case.
- [10:52]
Jameson Lopp
Right. Okay. So whenever people ask me about bitcoin, there's a handful of podcasts, I point them in the direction specific interviews. And there was one you did with Epicenter a while ago. I'm going to ask you a question they asked you and that's a very simple question, but the answer was I found really interesting and I kind of want a version of it on my podcast. So it's a very simple question, but what is bitcoin?
- [11:14]
Peter McCormack
What is bitcoin? So it's a lot of things, I guess, but I mean it's a kind of virtual commodity. So I think the kind of shortest version to somebody who's not, you know, isn't aware of it and maybe isn't, you know, computer science kind of specialized skill set is to say it's electronic gold, basically, you know, it's. And it's also a bearer electronic cash. I think the gold like aspect is just to say that it has scarcity. There are a maximum number that can be mined and the cost of mining goes up over time as the scarcity increases and that it's sensor resistant and hard to seize and freeze. So I think those are the key and interesting things. And you know, some people think about Bitcoin to say because there are different things you can use it for, different users have different benefits in mind when they use it. So some people were thinking, oh this is great, it's very cheap, low value payments, lower fees. And other people were more focused on the sort of unseasonability and others were looking at it as an investment concept. Those former two properties are very interesting. So they'd like to invest in the potential future value of that. And so people with different use cases have different ways they would want to see bitcoin optimized. So I think that caused some of the past debates about scalability and things like that. But I mean ideally you would want. Bitcoin has some pretty interesting properties that are interesting to many people and you would want scalability for the primary reason that you would like anybody who wants to Use those features to be able to, and to be able to do so at a reasonable cost. But, and I think with scalability technology like Lightning that's, you know, that's closer to reach. And lightning is being actively worked on for a couple of years now and is getting much easier to use and more channels, more users and very fast adoption curve, very high energy. Lots of people doing software development at the protocol level and the application wallet and integration levels say that's well underway at this point. And I mean it is a slightly different use case. So you would use like a, a wallet that supports lightning. I would expect that most smartphone wallets will support both within the next kind of six months to a year. And actually if you're using a smartphone wallet, it will probably be by default making and receiving lightning payments because you know, it's a wallet. I think on, on a smartphone you would typically not want to put more than you carry on cash in a physical wallet. And those are the kind of amounts that lightning can cope with very well and where the security trade offs are reasonable.
- [14:33]
Jameson Lopp
Okay, so I'm going to ask a few historical questions because it's really interesting for me and I think for other people who weren't around then. Okay, firstly, are you more excited now or than you were when you first discovered Bitcoin and the potential. Actually, let's go with the question first. When you first read the white paper, did it feel different from all the other projects or was it just another attempt? Was this just another digital money? And we'll see what happens.
- [15:02]
Peter McCormack
I mean, I did think the decentralization was interesting and you could see a connection to like Wei Dai's B Money and Xabo's BitGold concepts which were kind of outlines, not like directly implementable. And so I think that was interesting. And so my, you know, I had two thoughts. One of them is that it's really not very private because the previous electronic cache systems were providing extremely robust cryptographic privacy, but we're only able to do that via a single server. So they had single point of failure. Another thought was the security of the finality is unusual. So normally in cryptographic systems, let's say you're using PGP encryption, the cost to encrypt is a fraction of a second. The cost to decrypt without the keys is hundreds of years of supercomputers. So really an asymmetric security model. Whereas with Bitcoin it's more like an evenly matched arms race between the people that want to see the system operate normally and Some entities with mining equipment that want to disrupt it. And so the lack of an amplifier on the defensive side took some getting used to. But I think ultimately money works because people want it to work. And Bitcoin has benefited from even people who are on the attack side in terms of breaking protocols or hacking things. Finding Bitcoin super interesting and say, reporting the bugs rather than trying to exploit them. In the very early days at this point, it's quite robust. Those were two thoughts. The third thought was, well, that's pretty interesting. Let's see if it bootstraps. Because you bear in mind there was zero market value, no marketplace, no transactions, but just for fun, basically, like the pizza transaction and things like that, and just people paying people for no reason, like no exchange of goods, like, here, have some coins to show that it works kind of thing. So I thought, oh, that's pretty interesting, and that maybe we'll see if it bootstraps. And then maybe as that became evident, then I was thinking, well, my skill set for most of my career has been in applied cryptography, working on protocols, including electronic payment protocols with cryptography that maybe I could use that background to, as the previous systems had very good privacy, but didn't bootstrap. Here we have something with kind of weak privacy that is bootstrapped. Maybe we can incrementally improve on it. I mean, it's much more challenging to have those kind of privacy features in a distributed system, but there are different things you can do. So that's kind of where confidential transactions came from. And some other ideas. Confidential transactions got implemented in the Elements open source project that blockstream worked on and in the Liquid Network, which is the exchange settlement kind of bitcoin sidechain.
- [18:29]
Jameson Lopp
I've got some questions on that coming up soon as well. Okay, so when was the tipping point? In the early days when it went from being, okay, this is an interesting project to okay, this is really exciting, we're really onto something.
- [18:48]
Peter McCormack
Well, I mean, I think I thought the concept was very exciting because you got to bear in mind that I spent a lot of my free time for probably half a decade there in the late 90s, early 2000s, along with a number of other people trying to figure out different ways to make it work, or puzzling over previous electronic cache systems to make them peer to peer respendable or achieve other properties. As you saw with Weidai's bmoney and Nick Saba's bitcold, that the idea that you could use hashcash and proof of work to mine a Coin and try to make that decentralized was something that occurred to people within a year of being familiarized with the proof of work concepts that, you know, that concept was there. But there were technical hurdles for technical economic, incentive, game theory hurdles that people didn't manage to overcome that Bitcoin finally did. So definitely the idea that this is a very interesting intersection of crypto technology and societal kind of impacts, which is something that I find interesting in general, like PGP and Tor and things that shift the balance of power and the Internet itself, publishing and so on. So I mean, I certainly hoped it would bootstrap, but it wasn't clear if it would. And there was a previous electronic cache system by David Chaum. He moved to the Netherlands, operated a company called Digicash and there was a demo electronic cache server that he set up. And, and the company made the assurance that they keep the demo running and it would never issue more than a million coins. And you could ask for coins just by emailing, they'd send you some like a faucet. And so I had some of those coins and a few, some of the people on the cypherpunks and crypto lists, it occurred to them to try and seize the opportunity to bootstrap this currency. So they did. They sold T shirts and low to medium value items using it. And they figured a few thousand people, because it only had a million units, would maybe achieve a stable value. And because they called the tokens beta bucks, like dollars, people had a hint that, well, maybe it should be worth a dollar. So they would typically use that as an exchange rate. And so that that was in progress. And I'd sold a couple of things on it as well as probably a few hundred other people. And then Digicash went bankrupt. And that was the end of the double spend database. And so your coins were not provable like electronic cash system is. If I give you a coin, you have to rush and deposit it to the bank. Otherwise I could spend it somewhere else and you wouldn't know. So that feature was lost. So that was informative. And so the idea that Bitcoin might bootstrap was connected in my mind with that event. But still it was an unknown. I think when it got maybe up to a dollar, which took quite a while for there to be exchanges from the price to be a dollar, that could have felt like, okay, well that sounds more like reaching the same kind of stage as the digicash kind of unsanctioned experiment by a bunch of guys on the mailing list.
- [22:29]
Jameson Lopp
And then when we hit $20,000, how did you feel?
- [22:34]
Peter McCormack
Well, I mean, that was like a pretty good price. And personally, I'm expecting that Bitcoin has enough utility and potential value that we'll see that and more in the future. I mean, it's always had a lot of deep volatility cycles. I see the market price mostly being driven by the future potential and investors who are trying to invest in that future potential or interested in the digital gold asset protection and sizable characteristics as a kind of countercyclical or insurance against geopolitical instability, basically. And gold has some of that too. So bitcoin has some advantages to gold too. You can send it at a distance at very low cost. You can verify that equivalent of SA it so you know that it's a real bitcoin. Even a smartphone, wallet or refer to servers that tell you that, and you can verify it for yourself at pretty low cost. With gold, you have gold ETF inflation, physical gold has sometimes been mixed or forged or what have you. And so you could see bitcoin becoming a competitor to gold. And if you look at the private ownership of gold, which there are various estimates for, that would already imply a quite optimistic price for bitcoin. Per Bitcoin, as people say, when you think about it, there are only going to be 21 million coins and there are billions of people in the world, some reasonable percentage of who might find it interesting to own a little bit of bitcoin. There are certainly some countries where there is a kind of tradition of having private ownership of gold as a form of investment or savings, or where the local currency is fairly high inflation or something just as a way to hold on to value. So bitcoin can, I think, potentially compete in that area. People talk about the volatility, but I think longer term that will decrease and presumably at some point it will get to the top of the adoption s curve, like Internet use and cell phone use, where basically everybody who is interested in the use case has heard about it and has adopted. And at that point it should be in a more stable state. Now, of course, gold is still relatively volatile, but I could see it getting to something like that and that would be more of a stable value.
- [25:33]
Jameson Lopp
So I listened to an interview with Murad this week on Pompe's show and he said we need a volatile Bitcoin to become a global digital asset. The only way it can do that is to be volatile, to increase in price quite quickly. So I, I don't find the volatility something I worry too much about. Do you find. So back to the other question I was asking Sue. Do you find it more exciting now that it's Bitcoin has a global infrastructure, it has institutional interest, it has various different responses from governments. There's like it's a whole new set of problems to negotiate. Do you find this more interesting now than back when you're, when, when you originally discovered it and you're looking whether it can bootstrap? How do you compare the two?
- [26:23]
Peter McCormack
Well, I mean it's definitely bootstrapped in several regards. I mean also in that kind of it would continue even if somebody tried to shut it down. But also a number of governments, I mean some governments have kind of officially discouraged use or allowed use but discouraged exchanges and different trade offs. But for the most part it seems to have been accepted and regulations have been created to accommodate it in a lot of countries. But I mean I think it's interesting to look at the differentiated use cases. So the use cases that only bitcoin can do because if you look at those, those are the areas where existing systems can't compete with it. And so I think those are the censorship, resistance, permissionlessness, right? You can just install a smartphone app and somebody can give you some money. There's no like registration, sign up, approval kind of process. And then you know, sensor assistant, payment and bearer ownership are things that basically banks and other forms of payment can't compete. And there's a use case for that in the world. I mean there's a use case for physical cash in the world and it's, you know, most societies acknowledge that there's a need for physical cash for a trade off between privacy and state controls or things like that. So Bitcoin provides that in the Internet domain. So I think the use case is here to stay and there's not really any scenario where that can go away. But I do think it's those unique differentiating things which are the most interesting thing to me in the beginning and still now where some people may have a more kind of investment use or looking with interest when a kind of more whether a sovereign wealth fund would buy bitcoin or something. So I mean of course it's fine and interesting if they do. But I don't think that's a differentiating use case, right. I mean that's more like a gold investment by the central bank of a country as a gold reserve or something. The interesting use case is the end user sort of self sovereignty that they can achieve by having some bitcoin. Now of Course, companies invest in all kinds of things. Right? Companies and countries invest in all kinds of things, including startups that are making self publishing software or encryption software. So it's certainly to be expected that different investment vehicles would invest.
- [29:27]
Jameson Lopp
Okay, last kind of historical question. During the last 10 years, has your thought process, has it been any significant changes in your opinion or thought process with relation, with relation to Bitcoin?
- [29:42]
Peter McCormack
I mean, it's, I think it's still, you can understand Bitcoin at different levels, but I think that even the people who are implementing details of the protocol or thinking about cryptography protocols or incentives and game theory are effectively still learning things, which might be surprising to some people. But I think, for example, the fork issues that happened last year with the, you know, the uasf. So apparently yesterday was the anniversary of the cancellation of the 2x Bitcoin, 2x fork. So I think the way the game theory played out there was instructive to everybody on with all viewpoints. And the fact that Bitcoin completely shrugged off basically a large segment of the business and mining community and said, no, this is what the users want. And the economic incentives basically forced that to happen, was very positive for confidence in the long term store of value, potential and immutability, which I think is pretty key. You can't have a business lobby or some special interest coming along and saying, well, this is a nice Internet protocol you have here, but we want to modify it to optimize for this use case. Actually, there's a quite interesting analog with Internet protocol governance going back to, I think, the early 90s, where within the ITF there was a period that was largely universities and academics and practical developers working on protocols. And as Internet companies became companies building browsers and different appliances became larger and more influential, some of them started to think that they should have control of the Internet protocols. And so they tried to bring about a governance change in the Internet in the ITF system so that companies would get formal votes and they would be able to basically coordinate between a few companies to haggle over what they were going to vote on and change Internet protocols. And it was similar to the UASF situation that ultimately the people who were historically working on Internet protocols were able to reject that. And I think that was a very good thing because, you know, a very sort of commercialized control would be a much less valuable Internet. It would be, you know, more restrictive and optimized for commercial interests. So it would trend back towards a kind of walled garden centralized control thing. And I think a lot of value actually comes from it being an open network with protocols that are basically open and for the user's interests. So I think that there was a mirror in Bitcoin going through that phase to say, no, actually we want an open protocol process where basically there's a consensus decision making process where there's technical consensus, which means that the technical community agrees that an improvement has no significant and valid technical defects or better alternatives, and then also consensus among the users and investors and so on. And there was also very interesting kind of some people were convinced and proven completely wrong about the influence of miners in the situation. They literally thought that that miners decided on the protocol by the blocks they produce. But some people saw it, some people didn't. But anyway, the forcefulness with which that was proven and the short time period with which that view folded and collapsed was instructive and interesting. And basically it's kind of like the.
- [34:04]
Jameson Lopp
Is that bip148 proved to that point?
- [34:08]
Peter McCormack
Yeah, I think so. And the sort of game theory that led to the cancellation of 2X, which I think was that they realized that the miners support was only philosophical because basically if a miner is mining gold and they happen to have a big plot of copper to be mined over there, and some business guy saying it would be better for us if we mined copper instead, and the miners said, yeah, that would be good for us, we have a copper mine. And then we support that philosophically. But then they realize that the market price for copper is like 1% of the market price for Bitcoin. They're not going to mine that for very long or they'll be bankrupt. Right. Presuming the cost of mining it is the same. So I think the miners basically conveyed we can't mine unprofitable things for more than half a day or something. So it's not going to work unless the market agrees. And it's kind of same thing for companies, right, if they're selling something different that people don't want to buy. Basically it was a kind of market influence story. And the other subtle thing is that the users who are running full nodes and the businesses and many of the smartphone wallets of cross check against a full node these days, their software decides what's Bitcoin to them. And so if a miner mines something which is incompatible with that they don't even see, doesn't show up in their software, it doesn't look like they got paid. And so essentially the miners have to follow those rules, where some people had the misconception that they decided those rules and the rest of the world would automatically follow. And that's, you know, just technically not the way it works in practice.
- [36:02]
Jameson Lopp
Yeah, it's quite interesting. So another journey I've been on is going through the history of the scaling debate and just seeing at the different points, the different views people had from, from the very, very early days. But during that I found a quote from Barry Silbert where he said the, there were essentially three parties minus companies and devs. And he said when we tried to come to an agreement and the devs weren't part of the conversation, it was very easy to come to an agreement between the companies and the miners. And I thought, well, of course, because it's entirely financially motivated, whereas the devs seem to come much from a long term user perspective, philosophical perspective. So I just kind of found it a very strange statement.
- [36:49]
Peter McCormack
Yeah, I mean, I think it was no doubt done with good intent in the sense that as well as having a commercial interest, they were interested to see adoption, which basically everybody is too. But at what cost? Right. So if you.
- [37:03]
Jameson Lopp
Time frame.
- [37:04]
Peter McCormack
Oh yeah. On a practical basis, I mean there's another interesting aspect of that which is the three groups you mentioned, the, the businesses, the miners and developers, is that there's another very important and ignored group which is the users and their economic views. And that's basically what won the day. And actually the developers had, I mean the developers are very conscious going back many years ago that they don't want control and they don't even want the appearance of control because that's risky. Bear in mind, in the early days it was unclear if Bitcoin would be banned in major countries, for example. Right. And so in effect the UASF and BIT148 was not supported by most of the developers. So there was really more grassroots, some small group of like a couple of developers, one of them pseudonymous in fact, which is kind of interesting. Shailen Fry implemented that and a couple of people, a couple of technical developers supported it vocally. But largely it was kind of user groups, a number of small and medium sized businesses and bitcoin embassies and bitcoin meetups and so on that were most vocal about it. And I think the other thing that helped is you got a preview of, of what the market view would be because people just say, well, some of the businesses would say, well we have a million users and we represent them. And that's hard to evaluate in practice. Right. They don't actually know that if they continued on that path, if they would have zero users the day afterwards. And so the, the Bitfinex put out a future which then allowed you to see a market price. And the market price was very low compared to the business and miner support. So I mean the miner support, which it turned out was philosophical and not economically able to follow through on that was kind of inverted. I mean the price was under 10% and I think the miner support, the philosophical support was in the 90% at one point. But nevertheless, the economic viewpoint of the market pretty much immediately prevailed with pretty convincing finality. So a lot of good things to learn from that. And I think a number of the people involved in the 2x were kind of on the fence or were a bit hesitant about the whole thing. They just wanted to. Some kind of progress on scaling maybe didn't. Weren't quite as connected with the technical consensus process that comes from the IETF history. So I think there were reasonable debates to happen about it. Right. I mean, I do think that this kind of 128 megabyte block size stuff is nonsense. That doesn't make sense in a. Oh yeah. But I mean, I don't know, I barely pay attention to that. But I mean some interesting things may come out of it because they seem to be. Now you're talking about the bitcoin cash having another fork within itself into two or three forks be cash. Cash, yeah, because it's. What is it? It's sb. I'm not abc. Yeah, they need a better name than abc, but okay, yeah, so those two groups, I mean, you know, it will maybe be instructive to see how that plays out because some of the players in that seem to be going at it with a different perspective, like at least claiming posturing. But this time the miners are going to be more aggressive and burn money basically for a period of time. So I mean, the whole thing is within a small percentage of the overall hash rate because the hash rate of the whole thing is like what, 5, 6, 7% or something of Bitcoin's hash rate. So you're talking about sort of 2 or 3% pitted against 2 or 3%. But there seem to be a couple of big players who might have the pockets to kind of have a hash rate fight. But it'll be interesting because I suspect that even so, it will come down to the economic views of the users.
- [41:55]
Adam Back
Next up, I talked to Adam Moore about Bitcoin and the launch of Liquid. But before that I have a message from my show sponsor, BlockFi.
- [42:01]
Jameson Lopp
Need to make a payment, but don't want to sell off your crypto blockfi can help. Blockfi is the leading crypto to USD lender in the US servicing over 45 states. Use your crypto to do things like buy a car, pay off your credit card, or even pay your taxes. There's no need to buy tokens or pay a membership fee to get started. You can visit blockfi.com whatbitcoindid to learn more about using your crypto without selling. They have a special offer for the listeners of my podcast. If you sign up@blockfi.com whatbitcoin did, you can get $25 in free crypto added to customer collateral loans under $10,000 or $50 in free crypto added to customer collateral Loans over $10,000. And applying takes less than two minutes. Well, I thought one of the things I thought was most interesting out of that, which I saw yesterday, was Roger Veers tipping his hat to Cor about contentious forks, because he's essentially experiencing one himself now.
- [42:55]
Peter McCormack
Yeah.
- [42:55]
Jameson Lopp
And I think he's probably reflecting on that, thinking, okay, I get it now. I thought it was quite interesting.
- [43:01]
Peter McCormack
Yeah, I mean, it's good, it's good to, you know, I think it's positive for people to acknowledge that they're wrong about something. And I mean, in a technical domain, people are very happy to do that generally. Right. You know, they have a technical view that their protocol version is better and they argue forcefully. And if somebody points something out and they go, oh, aha, yes, you're right, okay, forget what I was saying. That was rubbish. So there's no kind of pride in my proposal is really striving to find the best solution. If somebody has a better solution, you're excited to adopt it. Right. So it's harder for people to do that in politics. And I think a lot of people participated in the scaling discussion as if it was politics or something, which is not a good direction because that's where the fiat currency is. It's controlled by politicians and banks that are influenceable in a pinch by central banks that are subject to moral hazard. Ultimately, the genesis quote about moral hazard from Melvin King and so on. So yeah, but I think, you know, some people learn from the previous fork and some people are learning from the new fork. But people learn by different ways. Some people learn by analytics, some people learn by doing and seeing.
- [44:31]
Jameson Lopp
It's kind of one hell of an immune system that Bitcoin's built up this last 10 years. I was discussing it with somebody else and said, I was saying it's anti fragility, its immune System, you know, going through the civil wars, the Mount Goss collapse, Silk Road collapse. You know, there's so many things like China banning so many things. It's kind of incredible that it has survived. Why do you think it. It continues to survive because of that?
- [44:59]
Peter McCormack
Well, I mean, like I said, I think Lindy effect. Well, Lindy, but. But I mean, I think the anti fragility is. Is basically, you know, the people with an interest to see it, to use it and benefit from it and see it as socially valuable. So they will do things like argue for UASF and adopt, you know, install 148 and make economic statements in the market like short the future or you know, sell one coin and buy another. And so I think the economic forces are very important. And the technical anti fragility is also. If there are technical defects found, people will fix them. So it's kind of like aircraft crash investigation. Right. It becomes more robust over time because any issues of a technical nature are fully and thoroughly investigated and robust fixes in place and deployed.
- [45:57]
Jameson Lopp
That's one of my favorite shows.
- [45:59]
Peter McCormack
Oh, I watched those. Yeah, they're great.
- [46:01]
Jameson Lopp
So it actually got me over my fear of flying. I just have a real bad fear of flying. And I've watched so many of those, it's like they've kind of. They've kind of fixed everything. And my dad was an aircraft engineer and he said the final problem to fix is relying on pilots because the majority of problems come down to them.
- [46:15]
Peter McCormack
Yeah.
- [46:16]
Adam Back
Wow.
- [46:17]
Jameson Lopp
So look, we've covered them. Obviously we would cover a lot. And I. There's probably 100 more questions on the history I'd love to ask you, but I do also want to ask you about liquid, because, you know, that's the project at the moment. Some people are not going to understand what a side chain is. So can you give the briefest explanation of what a sidechain is?
- [46:33]
Peter McCormack
Yeah, so it's kind of an auxiliary chain. So you've got the main bitcoin chain, which I think is the most sort of robust and secure, partly because of the economics of the situation, network effects and the amount of infrastructure, like ways to buy and sell and connections to merchants and things like that. And so there's an interest to build additional layers. So one layer is lightning, which is on top of bitcoin, but preserves most of the bearer properties of bitcoin. Security model's a little bit different, but ultimately you have automated recourse to the bitcoin chain. And so sidechains are another layering technique. So it's a way to make another blockchain that is connected in some technical way to Bitcoin and be able to move bitcoins into the sidechain and use them in there and bring them back out again. So a key part of that is that there is some kind of firewall between Bitcoin and the sidechains. If the sidechain were to have a technical issue, it, it wouldn't affect bitcoin. It would only put at risk people who'd opted into the sidechain. So it becomes a vehicle where people can try new things. And that's exactly what we did. Right. So we, with the liquid side chain, we implemented confidential transactions and confidential assets, which are pretty interesting cryptographic things that have some quite good cryptographic security assurances and basically make similar security assumptions as the digital signatures used in Bitcoin already. So they're much less technical risk than snarks and other things that people have contemplated in some altcoins. But nevertheless, it's a new thing and it has different trade offs. Those transactions are bigger. And a sidechain is also the kind of sidechain we built is a federated sidechain. So it's not being mined. Right. Rather, its blocks are being signed by two thirds or over 2/3 of members and the members are exchanges, basically exchanges and institutional traders and things like that, who anyway have the infrastructure to host in a secure data center like their hot wallet and their cold wallet and things like that. So we give them another box with a hardware module in it that is a block signer. And so there's a peer to peer network between them which users can join and receive and validate blocks, kind of similarly to the way you do in Bitcoin. But the blocks are actually the analog for miners is this fixed set of signers. And so one of the interesting things about Bitcoin is that miners can join a leave dynamically and actually you don't even know who they are. They're kind of anonymous. Right. And that's a feature. So with the sidechain there's a different trade off, which is it provides less assurances in some ways because it's a fixed set of signers. I mean that could be changed with software or with users agreeing to port the state of the chain into another set of signers.
- [49:57]
Jameson Lopp
So it's slightly more centralized.
- [49:59]
Peter McCormack
Yeah, yeah. And I mean the, the use cases for.
- [50:02]
Jameson Lopp
But is it almost like. Sorry, so if it was, it feels like almost like you're describing a settlement layer into exchange. So they can trade with each other quicker, faster, but then they can settle back to the main chain.
- [50:16]
Peter McCormack
Yeah, so you can take sort of this pegged bitcoins, which are called lbtc, you can take them back to the main bitcoin chain. And if you're going to cold store them, you be advised to do that because it'll be more secure. But what liquid is providing is an alternative to leaving coins in the custody of a single exchange. So what you can do is withdraw liquid bitcoins and other liquid assets from an exchange into a hardware wallet or a smartphone wallet. And now you're not vulnerable to the custody failure of a single exchange, but you're still trusting the sort of this automated peg that is secured by the hardware modules and all these servers. But if you were to consider the scenario where all of those businesses decided to steal your money, it would take 2/3 of them, so 11 out of 15 at the moment, in order to take the bitcoins that are held in the automated peg. And so there's certainly a spotty history where further in the past, more than recently, individual exchanges have failed or lost custody of funds or suspected that the exchange operators might have even taken them and pretended to be hacked or something. So when you have funds out of the exchange, but in liquid format, you're less exposed to that because an individual exchange could do its worst and it wouldn't be able to take the funds now. So the idea is basically because the network's faster, it's more plausible to keep your funds off an exchange and deposit them when you want to trade. And to be able to take arbitrage spreads, you want to be able to move money quite quickly. So one of the bottlenecks today is that more on the fiat side, it takes days sometimes to get money into an exchange, and by the time it gets there, maybe the spread is gone. So it's kind of like frustratingly slow. You can see the trade kind of drying up while you're waiting for your transfers.
- [52:34]
Jameson Lopp
At the same time though, then, therefore, this could probably kill off a lot of the arbitrage opportunities.
- [52:40]
Peter McCormack
Well, it's a trade off, so you get deeper liquidity. So basically you get more volume and the spreads become lower, but the overall volume grows. So there are reasons why this is beneficial to driving trade volume in general, other than the arbitrage, which is you get more liquid and deeper markets. So sometimes people try to do a transfer or transfer Bitcoin and then sell it and take a local wire transfer. And sometimes they fail. Because today, because liquidity is too small in some countries for like a medium sized business transfer or something. So you get more use because those liquidity problems get fixed. And lack of liquidity has been one of the factors the regulators have used against approving ETFs so far. So it's another kind of input into having a deeper, more liquid market. And the other thing is kind of user trust. Right. So if users are able to trade with lower trust, they will be more inclined to trade. So other than having coins in your own custody and depositing to trade them, there's a possibility to do a kind of atomic trade. So two users can have assets in their wallets which are kind of managed by the automated peg. But they can place an order while keeping their own custody, place the order on the exchange, so they can use the exchange's order book and matching, but they haven't deposited their coins. They've sent like a partially signed transaction to trade. So let's say, you know, I want to sell a Bitcoin for $6,500, I sign a half of the transaction to swap one Bitcoin for $6,500 and you do the other half because you want to buy Bitcoin and then that can get matched in the exchange order book. So all the exchange has is kind of partially signed orders. So the worst that could happen is somebody could be forced to pay 6,500 for a Bitcoin and they can do that without hacking exchange. They can just go on the market and do that. So it presents a lot less sort of risk. So ultimately you should be able to transact without exposing yourself to individual exchange custody. And so that's kind of incremental step forward from today.
- [55:13]
Jameson Lopp
So are LBTC collateralized by real main chain bitcoins?
- [55:20]
Peter McCormack
Yeah. So what happens is there's an automated peg. So as a user who wants some lbtc, you would probably go to an exchange and deposit Bitcoin and they would do it for you and let you withdraw lbtc. And that's the rock, which is one of the early people to implement this and make it available directly to users. That's how they do it. So you can deposit a Qubit client or maintain Bitcoin and you can withdraw, maintain Bitcoin or liquid Bitcoin. And they manage a pool of liquid Bitcoin to do that. So they're kind of swapping it for you.
- [55:53]
Jameson Lopp
You can't create liquid Bitcoin without real Bitcoin, right?
- [55:56]
Peter McCormack
Yeah. So the full nodes verify that. So the functionary is verified, but you as an individual user, if you're running a full node, you run a liquid full node and you also run a bitcoin full node. And it will complain if you don't have a bitcoin full node running to check against. If it sees a transaction coming on the network from somebody claiming to peg in, it will check that actually those funds exist on Bitcoin where they claim to be and that the bitcoin node agrees that those are real valid funds verified by the bitcoin node and that the peg in transaction is valid before it will recognize it and show it to you as liquid Bitcoin on your node. So if you're, you know, running a full node on liquid is, you know, it will be a little bit more expensive than Bitcoin because these transactions are bigger and they have lots of crypto in them. So kind of like dozens of signatures per coin. But you know, it's within reach of a power user to do it. You can run it on a desktop with, or a fast laptop with know, consumer Internet connection and keep up. So it has that kind of degree of self reliance that you can see that what's happening is what's claimed to happen. Now of course you are trusting that the exchanges operating the full, the functionaries we call them, these kind of hardware servers don't gang up and two thirds of them take the bitcoins out of underneath. If that were to happen, you would see it, but there wouldn't be much you could do about it apart from legally complain that they stole your money or something. Right.
- [57:44]
Jameson Lopp
The game theory isn't there to do it though, right?
- [57:47]
Peter McCormack
Well, right. So the operators of the network have, I mean they're not miners, so they don't get a mining reward, but they economically benefit from the increased volume of faster trades. And so they have an incentive to see the continued operation of the system. So it's a different kind of incentive, but there's an incentive to not interfere with its operation. Basically.
- [58:12]
Jameson Lopp
Okay, like a weird comparison. You'll probably hate it, but it does. There are some sounds a little bit similar in some ways to AOS in terms of.
- [58:23]
Peter McCormack
I mean, I think one key difference, I don't like AEOs, but yeah, I mean, I don't know a huge amount about it, but I think one key difference is that it's a automated peg with hardware modules where as far as I understand it with AOS there's a lot of discretionary behavior and phone calls where things are decided and stuff like that. So there's no, you know, there's no mechanism for anything like that in Liquid. So it's, you know, it's a peg, but it's automated and it's enforced by hardware modules. So you know, I think. But the people who. It's for traders, right? So the people who are trading on exchanges, the exchanges know who they are. It's not like permissionless censorship resistant assurance anywhere near what Bitcoin would be. So for people who are looking at the use case of benefiting from Bitcoin sensor resistance and bearer status and things like that, they should use a Bitcoin chain. Liquid is a different trade off. It's another kind of layer two and it's an incremental improvement over giving a single exchange sole custody of your funds. That's it. Right. So if the alternative was you deposit money on exchange and you're worried the exchange will make a technical failure and lose all the funds. Okay, Liquid will help you because you can take them off the exchange until you're ready to trade, knowing that you can deposit them within a minute or two.
- [59:54]
Jameson Lopp
Right. Okay. Okay, that makes sense. Okay. Is it trustless?
- [59:58]
Peter McCormack
No. So apologies. No, no, there was a healthy discussion on that topic over the last few days. So the, I mean, the point is that I had to ask. No, that's fine. Yeah, so the point is that you can validate what's going on. So I think before we released. So, you know, Liquid has been running since late September, but we're playing catch up, releasing software to support different features and there are more things to come as well. Right. So we released the block explorer that can inspect liquid network transactions and Bitcoin transactions. So it's a Bitcoin explorer too. And we also released the full node so that people can run a full node and have a higher assurance that this information is correct than looking at the block explorer which we're running. So you have to trust us, that information reflects what's actually happening in the network. So you can inspect it. And I think before we did that, people, every time you release a new technology that's kind of complicated as different trade offs, people try to wrap their heads around like, okay, what does it do? What is the security model? Who can use it? And I think people had an assumption that it was exchanges only could transact or hold assets in it, or that it was a private network and you wouldn't be able to look at it. And that wasn't the case. But putting four nodes into people's hands and themselves as power users, being able to create an asset on it and get some liquid bitcoin and transact with it peer to peer, kind of. Oh, that made the point for them, right? Oh, okay. You can transact with this more directly than we realized. That's cool. But, you know, the trust model is, is what it is, right? It's a trade off and it's an incremental improvement on single exchange custody. But the assets in it are, particularly the liquid Bitcoin are IOUs to that automated peg. And if the automated peg were to fail in some way, you'd have an iou. You wouldn't have bitcoin. So it's not as bearer. So I think the, the interaction is you have closer to trustless control of an iou. But what good is control of an IOU if the person who has the actual assets won't give them to you? Right? So that's the distinction. Now you can argue. And that's typically inherently the case for many types of assets. So bitcoin is a special asset class which is directly bearer. Liquid bitcoin smells bearer. There's an automated peg that you have an IOU to. But other assets that you see in blockchains, like Fiat coins, US Dollar coins, Telera and Gemini US Dollars and others have some inherent custody risk, which is, does the company that has the funds in a partner bank's account, like dip into the funds or does the bank seize the funds or something? So you have that kind of risk, and that's a palpable risk because it's still pretty hard in some places for exchanges to maintain stable banking relationships. So it's typically not that they had the funds frozen, but the bank decided to stop offering service to them, and then they have to go find another bank and transfer the money. So there's that kind of risk and sort of custody risk. And another one is people have used color coins and tokens and all the different terms for it, but basically the equivalent of some kind of shared interest in an enterprise. So whether that's a profit share or a share ownership or some kind of token, there is trust that the money that goes into it, will the company even build a product or keep the money. That's definitely happened in a lot of cases. If they do build a successful product, will they share the profits with you or will they keep them? And even completely aside from blockchains, for example, with a Kickstarter that went into the Oculus Rift, the people who kind of funded that company got some alpha hardware, and the founders of the company sold it for billions of dollars and so you have to pay attention to what you're buying. So if you're buying a piece of Alpha hardware or a kind of vanity token that shows I was there, I donated to build the early stages of this project, doesn't mean that they'll benefit. And typically the investment contracts on a lot of historic sort of blockchain tokens that were claimed to be investments have very defective investment contracts, kind of anti investment contracts that say it's a donation. If you read the fine print.
- [65:04]
Jameson Lopp
That's interesting. So I interviewed Brendan Ike and obviously researched the Bat token as a donation. I don't think anybody who bought the Bat token thought they were making a donation. So I've been through that as well. Yeah, you can create, you can issue to. Well, you can issue assets on liquid.
- [65:24]
Peter McCormack
Yeah, yeah, exactly. So I mean actually you can. Some users have got themselves a small amount of liquid Bitcoin which is the fee currency on liquid. And to create an asset is just a special kind of transaction. So the fee for creating an asset is nominal $0.10, $0.20 or something. Right. So you can do that and then you have a key as the asset issuer which allows you to, you have control of the issue, you have ownership of the initial issued assets and then you can transfer them to people. And there's an optional feature where you, you can make it like a one shot issuance. So there's a defined number of coins and that's it. You don't have the ability to make any more. And there's an option where you have a second key which is a reassurance key which allows you to issue more. And you know, in a conventional stock, company stock scenario people do that like they take another investment round and they issue some more stock which dilutes the existing stockholders. So there are reasons that you might want to do that.
- [66:37]
Jameson Lopp
So you, so you could create securities on.
- [66:41]
Peter McCormack
Yeah, I mean you could. Well, you can create assets.
- [66:44]
Jameson Lopp
Now can you create a shitcoin on.
- [66:46]
Peter McCormack
I mean it doesn't have mining, but you can certainly create coins with arbitrary claims about what you're going to do with the coin, what it's used for, what software you're going to build or what company it represents. But the ability to create a token test token is a separable question as to whether one of the exchanges would list it. And there are some people who are working on security tokens, so basically working with existing stock exchanges to issue tokens that represent regulated security securities. And so I think in those they would take steps to ensure that the Customer is like in some way approved to buy a security in this country? Yes, like an accredited investor or I guess a customer of a online brokerage or something like that. I mean, not everybody may be familiar, but a lot of existing financial products are restricted to different countries because they're different rules. So it's quite common in Europe that you'll see if you read the fine print of a structured product, it'll say not for sale in the US or something and vice versa. And that's because the tax rules are different, the ownership rules are different, there are different restrictions. And so for regulated securities you have those kind of questions. So I think they're typically done in partnership with a stock exchange or something.
- [68:33]
Jameson Lopp
Right. Okay, just a couple more questions on that. We've rattled. Well, we haven't rattled through many of my questions, but we've covered a lot. So you can do private transactions within Liquid or Elements? Is it both?
- [68:48]
Peter McCormack
Yeah, actually you can compile the Elements codes and put the right configuration into its configuration file and use it on Liquid. So it's compatible. So it's kind of open source. Liquid itself is. The full node is open source as well. So the difference is basically default configurations to auto connect to Liquid network with the right parameters.
- [69:12]
Jameson Lopp
Okay, so my first question is if you can offer private transactions on Liquid, are you potentially going to be facing questions from regulators around KYC and aml? Is that something that you're thinking about or worried about?
- [69:31]
Peter McCormack
So actually, when we first introduced confidential transactions, we had a thesis that blockchains that are fully transparent like Bitcoin, there's a lot of financial institution interest in understanding blockchains and using them for different applications, that the complete transparency would be a problem for adoption. So they would see thesis was they would see this and think that's very interesting, we could drive value from it. But it's so transparent and public that we're scared to use it because we would divulge our trading positions, how much we're paying our suppliers, when we're doing a deal. And so some public markets have a public ticker or delayed publication, but other markets are not like that. And so we thought, okay, this is probably a necessary ingredient, confidential transactions, to see widespread practical adoption. And when we did release it, I actually saw that that was how they took it. They took it positively, that that was a needed thing, that they could have basically commercial confidentiality and still derive the value of a publicly auditable blockchain. So there's that. And I mean in the Liquid domain, the users are customers of exchanges, basically. Right. So while to take bitcoins out of liquid, you basically need to do it with the exchange. And there's a security reason for this, which is that the peg outs go to a cold wallet controlled by the exchanges. So each exchange has a cold wallet and the hardware module enforces that the peg out goes to those cold wallets. It's just an additional security mechanism. So the only way to peg out is to do it for an exchange. And the exchange has users. All the exchanges have. They know who their customers are. So some of the participants are institutional traders, so their customers themselves as well.
- [71:50]
Jameson Lopp
Right. And where do you personally stand on privacy with the main Bitcoin chain? And do you think we have a potential, another civil war coming with regard to that?
- [72:00]
Peter McCormack
I mean I'm, you know, that's, that was my first reaction to Bitcoin is like the privacy needs to be improved and fungibility as well, which is a related concept. So yeah, I mean I would personally be very interested to see confidential transactions and things like that make their way into Bitcoin as they, you know, as people get more confidence about them and as the technical trade offs are better understood and the assurances, you know, maybe the efficiency improves. Like the size, they're a little bit big, like a couple of kilobytes. So they're maybe about 10 times bigger than a regular transaction. But to me, you know, if you could, if you could pay $0.01 for a clear tax transaction or $0.10 for a confidential transaction, I'll take that confidential transaction. And I mean also there are a confidential transaction is a more powerful transaction. So it's quite common that people will break bitcoin transactions up into multiple transactions basically in search of privacy, particularly like value privacy. So if they're doing cold storage and they have 10 bitcoins, they'll kind of like make 10 one bitcoin stashes. And then if they want to dip into it to buy something, they will know that, okay, the person can see this transaction, but it's coming from one bitcoin, not from 10. Right. And so that means that for some uses there are actually lots of transactions. So if a confidential transaction can do that same guarantee, but with a single transaction, then it kind of displaces multiple transactions. So the fact that it's bigger is not as big painful was that as you might assume at first. So I think it's pretty interesting to see what people think about that because bitcoin generally only accepts opt in changes that nobody has a clearly articulable reason why it would be a bad thing kind of thing or something like that. One of the interesting things is the breakdown of views may be along different lines, orthogonal to the arguments about scaling. So I think scaling to my point of view is well achieved by lightning layer two, because that has much more scalability. I would say on chain scaling has very bad scalability because the overhead grows beyond linearly. It grows like N squared. So that's a bad protocol to be scaling because you push things up by 100 times and now you have 10,000 times the overhead and that at some point becomes untenable. So lightning kind of solves that. But for fungibility and privacy Now I participated in a Reddit discussion thread a few years ago and I posed a question actually that Trace Mayer had put about what do people consider users and investors? What do they consider to be the key differentiating properties of Bitcoin? If Bitcoin lost its property, if they would be much less interested. And it seemed like there was almost universal agreement on privacy and fungibility being key amongst users and investors. Okay, it's just a small group of them because that's the Reddit community. But you know, the Bitcoin Reddit is like a million users these days almost or something. But there may be people that would have concerns about it, right? Like maybe they think it might decrease a little bit the chances of certain types of investor buying it, or certain regulations or financial products built on top of it being approved. But I would argue that a more fungible private Bitcoin is more valuable to its core use cases. So yeah, no, I agree.
- [76:15]
Jameson Lopp
Okay, conscious of time. Final question. So we've had 10 years. Where do you see Bitcoin going over the next 10 years? What would you like to see? What do you think is going to be important for it? And what do you think we might be talking about if we've sat down in another 10 years time?
- [76:33]
Peter McCormack
So I'd like to see more fungibility and privacy make its way into Bitcoin. And in each release there are major release of Bitcoin reference and the protocol bips. There are usually a few kind of incremental privacy improvements like Dandelion is one thing that's happening at the moment. And Schnorr signatures have some advantages and the taproot and graft root stuff has some advantages. So there's a kind of continuous incremental. But I'd like to see some bolder things too, like the confidential transactions or things with effects in that area. And so in terms of the Evolution other than that, I mean, I assume we'll get 10 years is quite a long time. Maybe we'll get closer to the top of the S curve and see some more stability and wider adoption and wider groups of people using Bitcoin for different reasons. It has a lot of interesting properties that people can use it for quite diverse reasons and I think much more usability. Certainly ETF products don't provide the same guarantee, but as a way to get investment exposure, they're a lot simpler for many people. So I had kind of friends ask okay, how can I buy it? And call in their broker every year or so and asking like, is there any way I can buy it? And I think, you know, within some countries there are a few like exchange traded note products and things like that. But you would assume that those kind of financial wrapper products would start to be available so that it becomes easier. And I think the other direction you see is some of the online brokerages have added Bitcoin as a asset that you can buy through their platforms. So that's another direction. And the retail offerings are becoming wider as well. Like Square for example, with their Cash app you can buy Bitcoin. And I hear their bitcoin sales are growing quickly. I mean they're public companies so their kind of quarterly statistics are published.
- [79:03]
Jameson Lopp
Wow. Okay. This has been everything. I thought it would be very easy. Great conversation. So many things I didn't get into. But that's fine. You can just finish off by telling people how to keep an eye on what's happening at Blockstream with Liquid in yourself and who you want to hear from. If you want to hear from anyone.
- [79:21]
Peter McCormack
Yes, I mean to keep up with what we're doing, there's a blog on the blockstream.com site where we post updates and there are a lot of things in the pipeline other than the Explorer and Liquid full node. So we'll be putting out a version of the Greendress wallet with liquid support which will make it a lot easier to manage liquid assets. And also working with Trezor and Ledger on hardware wallet support. So that will improve the security and provide another option for handling liquid funds. And for people who are interested to try things out, there are. There's an IRC channel, the Bitcoin core community. Slack has Elements channel where people are talking about elements of Liquid and try it out and read the guides. There are some kind of power user how to guides on elementsproject.org, which is the kind of open source site for Elements. And if you're an exchange or trader or OTC proprietary trader. Certainly get in contact with Blockstream or be interested to connect you with an existing exchange or potentially join as a member as the network grows.
- [80:47]
Jameson Lopp
Fantastic. Thank you for coming on, Adam.
- [80:49]
Peter McCormack
Thank you.
- [80:51]
Adam Back
Amazing. Okay, so what did you make of that? Did you enjoy that as much as I did? God, that was great. I could have spoke to Adam for hours. I love talking to him about the old stuff. I've been researching some of it myself, reading old bitcoin talk threads, reading old email chains, just seeing what was going on in the early days. It's so super interesting. I could have, honestly, I could have spent hours with the guy. Totally fascinating and I hope you enjoyed it as much as I did. Look, if you want to support the show, there's a whole bunch of things you can do. Firstly, you can think about becoming a patron. So head over to patreon.com whatbitcoindid there's some options there. I think I've got over 30 now, which is very, very cool. You can think about becoming a show sponsor if you're interested in that. Feel free to email me on hellohatbitcoindid.com and we can organize a time to have a chat about that. Downloads are growing super fast. Probably going to do over 100,000 this month. So yeah, feel free to get in touch if you want to sponsor the show. You can leave me a review on itunes. Also click the subscribe button. Both of them help with my ratings in iTunes. Hopefully a 5 star review if you think it deserves it. You can follow me on social media. I'm on medium, I'm on Instagram, I'm on Twitter, I'm otbitcoindid on everything and if you reach out to me I will most likely reply. You can check out my website, that's www.whatbitcoindid.com. loads of useful resources on there, different ways to navigate the podcast and you can also sign up to my email newsletter on there which was meant to be a daily but I've got so super busy I can't do it every day. But somebody has volunteered to help me which is really cool. So hopefully that will be coming back very soon. And lastly you can share the show out with your friends and family. Okay, thank you, thank, thank you, thank you to everyone who supported the show in any way. You have coming up to a year anniversary. I can't believe it. Coming up to my 50th year show. It's crazy really. But thank you so much for all the support. It's been a lot of hard work, but a lot of fun. And I just appreciate everyone who helps in any way. You do. Okay. I'll let you go. Have a great week, and I'll see you soon.