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- [00:03]
A
If you don't agree with the current rule set of Bitcoin, you should fork. Bitcoin is rejecting certain type of consensus valid transactions. That's an attack on the network that will show that Bitcoin isn't really decentralized, it can be co opted. That would be very, very bad for Bitcoin. The whole thing is a lie. The support is a lie. They want to force a group of people into submitting and doing what they want them to do. If you could change Bitcoin with 50 hash rate, we got, we got big problems in the future.
- [00:35]
B
In the end, it's the economic majority of users who decide what bitcoin is. So if they fork off and they don't bring along with them everyone else, then that's not bitcoin, even if in their minds it still is. He's trying to bend history and he's trying to fully bluff it into existence because they have no other option at this point.
- [00:53]
C
Wicked. Mr. Hodl. I've been asking Mr. Hodl for probably checking three years to come on the show and you finally cracked.
- [01:00]
A
And before, before you, it was. Peter's been asking me for like three, four years before that.
- [01:05]
C
So I'm actually Peter's here in Oslo and he was pretty mad. He told me to say fuck you.
- [01:14]
A
If Mechanic was doing this shit when Peter was doing the show, then I probably would have went on at that point I didn't think any podcast really like I want to say needed me, but I didn't really have much to offer I think until now because Mechanic is just distorting history and I'm not really happy with that.
- [01:38]
C
Yeah, I mean we should probably introduce the two of you because if anyone's not on bitcoin Twitter, they probably don't know who you two are. So let's start there. Hodl, you start because you've been around for a long time.
- [01:47]
A
I mean just someone that got into bitcoin relatively early. But I, I got hooked and I've been hooked ever since. I would say I was definitely, I wouldn't say I was part of the block size wars. I didn't have any meaningful impact. But what I did try to do was get as much information out to bitcoin Twitter because I was following the conversations on Slack, on irc, different platforms at the time. I thought bitcoin was being attacked through a certain group of people that are trying to break compatibility with older nodes. So my mission at that point was just to spread as much information as it possibly could to get as Many people on board with the bitcoin mission, man, that's pretty much it.
- [02:41]
C
Awesome. And Wicked, you're the man with the data. Do you want to tell everyone who you are?
- [02:45]
A
Sure.
- [02:45]
B
So I did not get into bitcoin very early. I was a degenerate trader for a while, so the first time I traded bitcoin was in 2013. But I was poor and didn't huddle my bitcoin, unfortunately. So I, I, I became a real bitcoiner, I'd say, like in 2020, kind of that era. And ever since, I've been obsessed with bitcoin data and building visualizations and dashboards to try to present that data in easily digestible ways.
- [03:23]
C
Well, I think the two of you are two of my favorite accounts on Twitter. But, like, when so Wicked dropped me a DM Hodl, and he basically was like, Mr. Hodl's finally up for a podcast. We should do it. But, like, why does Mechanic annoy you so much? Maybe we should start with why the two of you are not sort of four bit 110. Because, like, this is a lot of the pushback that I got on the podcast that I did with Mechanic is that I didn't necessarily explain myself enough. But you two start, and then I'll,
- [03:46]
B
I'll say where I'm at, I believe that bitcoin is best to use as money. I think that the use of bitcoin for arbitrary data is really dumb and inefficient. Right. I don't think that it has a future, so I don't think we need to do anything to try to prevent it. I think it will just die on its own. And I think the proposal going forward with BIP110 doesn't really stop it anyways. It's more of just a virtue signal. So I don't, you know, I don't support anything that doesn't actually stop what we're, you know, what we're upset about. And then the fact that it will kind of peter out on its own, which it already kind of is, is just proof that we don't need to change bitcoin for that.
- [04:32]
A
All right, yeah, I'll take a little bit of a different approach. I'm the believer that I think that if you don't agree with the current rule set of bitcoin, you should fork. You should try and either do a soft fork or try and do a hard fork and reach enough support or consensus to, to do the change you, you want. The problem here is that when you build consensus you see it through the network, you see the nodes dropping off and coming on, you see exchanges talking about it, you see miners talking about it, you see all different platforms talking about the new consensus rules that are trying to get Bitcoin because it's supposed to improve Bitcoin in whatever way. BIP110 doesn't have any of that. BIP110 started off with BIP444 and that didn't go anywhere. So they had to go back to the drawing board and start, you know, redo things. And in my opinion, when you set the threshold of 55% to try to activate something that is an attack on the network. I think if you are championing Bitcoin, you want to see every upgrade go as smooth as possible. When SEGWIT was introduced, the threshold of activating SEGWIT was I think 90%, 95%, 95%. The devs, the core developers, not just the core developers. Everyone was in agreement more or less that unless you have wide majority of support, you're going to get a split. There will be a split at 55%. Let's say they get 55% of the network to start signaling and say there is a soft fork and now Bitcoin is rejecting certain type of consensus valid transactions for a year. That, you know, that's an attack on the network. That shows that proves that Bitcoin could be co opted by a few individuals and some lawyers threatening a couple of pool operators on U.S. soil. And that will show that Bitcoin has, isn't really decentralized, it can be co opted and in my opinion that would be very, very bad for Bitcoin. The framing that he's trying to paint is it's a lie. The whole thing is a lie, the support is a lie. Comparing it to bit 148 is a lie. All everything is a lie. And now I just have to ask myself why, like why is he lying?
- [07:24]
B
I have an idea why. So when, you know, my response was basically to do with technically why I disagree with pip110. Right. But I think now that it's actually trying to be activated, it's, you know, the, the truth is that it has very little support, right. And now they've gone into full bluff mode. And so he's trying to bend history and talk about things as if, you know, bip 110 is still going to succeed and he's trying to fully bluff it into existence because they have no other option at this point.
- [07:58]
A
So his theory with bip148 he was said, I'm pretty sure he said it on your podcast, was that we played a game of chicken. But the game of chicken would only be played because we thought that the bitcoin core side, the segwit side, would win because of the support that it had. Like it had unanimous support. The only people that wasn't supporting it was Bitmain, Coinbase and Roger Ver. Like that's more or less it here. You don't see anybody coming out. You don't see any exchanges, you don't see anyone with any hash power. You see none of it. You see a few people on Twitter. It looks like the accounts were made in 2023. And people that I've never heard of before are all of a sudden they call themselves bitcoin maximalists. And they have a monopoly on nodes somehow. Even if you say every knots note is real, that's still 20% of the network. That's not the majority of the network. That's a minority of the network. If you consider that all real notes, which I don't, I don't consider all 20% of them being real notes. But he's making it seem like he's got this monopoly. It's a, it's a user activated soft fork. These miners are going to do what the users want. But guess what? I'm a user also. I have a validating note as well. And I am not a part of your user base. I'm not part of your group. You're trying to centralize bitcoin. It's like you're painting this group that has all the say in the world and they are the plebs. And miners just work for plebs. That is crazy. That is just crazy talk.
- [09:48]
C
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- [13:47]
B
Should I share? I mean, I can share my screen and show you some of the signaling periods from segwit which will help kind of frame the. I think. Okay, yeah, get your reading glasses on because I know the font super tiny. Okay. So this is a bip110 signaling dashboard that I built. Its primary purpose is to track the bip110 signaling. But then I also added the seg signaling periods as well, if you wanted to compare the two. So you know, you can basically see them side by side or you know, top and bottom. Right. So here's bip 110 on bottom, and here's SEGWIT on top. Let's focus on segwit though. Each of these bars represents a signaling period, which is a 2016 block period. And for BIP. Sorry, for SegWit with BIP9, the signaling threshold was 95%. Right. Which means that in any given 2016 block period, they needed a thousand nine hundred and sixteen blocks to signal support in order for, in order for SEGWIT to activate. Okay, so what you're seeing here is like these are the signaling periods. It started late 2016 in November, and right away when it started, it already had, you know, over 20% of the block signaling support. You can hover over any of these little lines to see which block heights were signaling support.
- [15:22]
A
Okay.
- [15:24]
B
But basically, you know, that's, that's the idea. And then you progress through each period and you see that, you know, support for SEGWIT kind of grew over time. And then at the very end it, you know, gradually then suddenly went to 100% and Segwit activated. So that's, you know, maybe this is, this is a good reference for the history when we want to get into the history. If you have your reading glasses on, you might be able to see these little markers here which are the, the client releases. So, you know, core version 13.2 was released at the, at the beginning of 2017. And then there's also some of these UASF clients as well. If you hover over these blue markers.
- [16:07]
A
Okay.
- [16:07]
B
So that, you know, that sets the stage at least.
- [16:11]
A
Yeah. So the signaling says one story, but there's obviously a lot more to it than the signaling. We quickly realized that we weren't going to get past 20% because Jihan and the rest of the Chinese pools and miners, they felt betrayed by, I guess, bitcoin core. But bitcoin core wasn't at the Hong Kong meeting. There was, you know, in 20, this was 2016. I'm pretty sure there was a few bitcoin core developers. Adam Back was part, part of the group of people that went and they tried to reach consensus with some of the miners. I think BTC China might have been there. And at that, at that meeting they came to terms that the miners would start signaling for SegWit. And. But Bitcoin core is going to have to release a hard fork to 2 megabyte block size limit. Now remember, SEGWIT is a block size increase, so this would effectively be 6 megabyte block size limit instead of it being 4 what it is today if everything is used. Luke Dash Jr. The agreement was that so he released this hard four client, but Jihan wasn't happy. He wanted this hard four client to be part of the bitcoin repo. And that wasn't what was discussed. Like the agreement was that they will release the software to hard fork bitcoin and you guys start signaling for Segwit and then we'll go from there. Well, Jihan and some other pool operators, they felt betrayed that the agreement fell through. Now mind you, this wasn't the entire bitcoin core group of people that flew to Hong Kong. This was about maybe like three or four people that flew to Hong Kong. Many of them didn't fly to Hong Kong and many of them didn't care what agreement they had in Hong Kong. I personally didn't care what agreement they had in Hong Kong. Are you kidding me? You're telling me you're going to go to Hong Kong and try to dictate the direction of bitcoin at a meeting? I don't think so. I don't think that's how it's going to work. But that happened. So you had all the different types of ideas you had. Like before they came to terms to a two megabyte hard fork, you had Gavin Andreessen pre2050 that wanted 30 megabyte block size limit. Add in back suggested a gradual increase to 2, then 4. I think that's 6 megabyte block size limit. Like everyone had their own ideas, but what these pool operators wanted was Bitcoin core to do something for them. And they, they wanted Bitcoin core to release the client under their repo. Kind of the same thing's happening today. You have a group of people that want Bitcoin core to do something with their, with their software. And that's not how this works. You don't tell a team that's been working on this project for 15 years how to, how to work on their software. And it is their software. Bitcoin consensus rules is something that all implementations share, but different implementations will have different policy set. And not only different implementations, but different versions of the implementations will have different policy set. And there is no way that you can tell somebody what they can or can't release. You have a say on what you downloaded, what you don't download. You have a say on what gets adopted and what doesn't get adopted. But you have absolutely no say in forcing people to write code for you and then telling them they have to release it here. This isn't a company, this isn't a business. These are, these are, you're not their boss. If you don't like it, you could just move on and compete against the implementation. But this is not what they've been doing. This is not what the big block hard fork has been doing. This is not what the bip110 guys are doing. They want to force a group of people into submitting and doing what they want them to do. But that's just not how this works. Now, when it comes to consensus rules, yes, they obviously can't change anything without the majority of people agreeing on that change. In that sense, you do need consensus from the community or a quote unquote ecosystem, not the community. So that's another thing I want to mention. Mechanic always talks about this community, the singular community. Bitcoin hasn't had a singular community probably since like 2012. I would make an argument that in 20, like in 2009, 2010, sure, you probably had a community. There was a handful of developers you could contact every single person on the network. Most likely there was a community. But as time went on, as bitcoin got larger, there became many communities. By the time I got into bitcoin, there are already many communities. There is not a singular community that gets to decide what happens with bitcoin. But Mechanic wants you to think there is. Like, Mechanic wants you to think that it's an ethos that these node runners have to run. That's another thing I want to talk about is nodes. But he thinks that there's this group of people that we call node runners. And these node runners get to say on what happens to bitcoin and the pool. The miners and the pool operators are going to. They're going to bend the knee because that's exactly what happened in 2017. And again, he's trying to conflate the two. The two scenarios. And it's just, it's. They're not the same. They're not remotely the same.
- [22:26]
C
To be fair to Mechanic, I sometimes say bitcoin community. And it's not. Not because, like, I think there's a single singular community.
- [22:32]
A
It's.
- [22:33]
C
It's like. How else do you describe it? It's just a word.
- [22:36]
A
Well, that's. That. That causes confusion. And every time.
- [22:39]
B
The bitcoin ecosystem.
- [22:40]
A
Yeah, that's what I just said. Yeah. I mean, if you go to my search history, I've been fighting this fight for a decade now because there's so many different aspects in bitcoin. You have the trader community, you have the mining community, you have the Twitter bitcoin Twitter community, you have the Reddit community, there's an IRC community, there was a slack community, there was a lot of different outlets where people like there and talk bitcoin.
- [23:06]
B
And it's not just the spammer community,
- [23:10]
A
there's a spammer community. Yeah, there's a whole jpegger community. There's just, There is just a lot. There's not one singular community that are just running nodes. Every person that's accepting Bitcoin transactions that's using a node is part of the Bitcoin ecosystem. And he might not be on the Bitcoin Twitter community, he might not be on the Discord community. So I have a really. This isn't just now. This has been happening for a very long time. The community has to stop. Gold does not have a community. Cars, people that drive cars don't have a community. Dollars don't have a community. There are many communities of people that hold dollars. If Bitcoin is to be successful, it has to be the same way. There should be no singular community of people that have a say in what happens to Bitcoin. That's the defeats, the purpose of this whole thing.
- [24:12]
B
Well, well, it already, it already is that way. Right, which is what we're saying. And if there's any singular community that wants to try to hijack Bitcoin, then they can go ahead and fork off and then they can be in control of their fork, which they may deem to be the real Bitcoin, but it doesn't really matter because in the end, it's the economic majority of users who decide what Bitcoin is. So if they fork off and they don't bring along with them everyone else, then that's not bitcoin, even if in their minds it still is.
- [24:38]
A
I mean, that's what's happening with the BCAT guys. They think that it's Bitcoin even though it's not the most worked chain. The whole point of Bitcoin is to solve the double spend problem. Like you want the chain that has the most amount of work that secures your transaction from double spends. Doesn't matter to them. They think that because their white paper is broken, it's not bitcoin anymore. It's, you know, their vcash is bitcoin. But whatever. The other thing I wanted to mention is these nodes. He has a thing with these nodes, like run a node. And this isn't just him. Like, to be fair, this is a lot of people, a lot of people out there are just telling people to go and run nodes and that's not good. So for a couple of reasons. It's one thing if you're using download a node to accept Bitcoin transactions, you know, or if you're running a lightning network, you have channels open, you need a node for that you're an economic actor. That's fine, that's good. That's what we want. There's another reason you want to run a notice to support the network. Now, in order to support the network, you can't just download knots and just let it run thinking that you're supporting knots. You're not supporting knots. You're just a symbol. LinkedIn network. In order, if you want to serve the network, you have to at least at the minimum, go into your router settings and port forward to 8333. So you could at least serve blocks. So you're able to help bootstrap newer nodes if you're not doing those things. If you're not receiving Bitcoin with your node and you're or you're not helping the network grow with new nodes, you are a resource hog. You are a net negative to the network. You're not helping the network, you're not helping in consensus. You're not doing anything. You're just taking bandwidth away for no reason. So please, if you want to help the Bitcoin network, at least at the minimum, just port forward to 8333. So at least you're helping bootstrap new nodes. And the better solution is to have a wallet that you accept Bitcoin to have to connect it to your node. It's connected to your node. Now, you are an economic node. You're actually, you have a way to reject blocks that you don't like. Now you actually have a say. If you don't like the way Bitcoin core is doing things and you want a fork in the future, you, you know, and you have, you know, your, your family's connected to your node, you have a couple friends that are connected to your node, your wallet is connected to your node. And if enough people do what you do and they reject those blocks, well, then you get us a, a fork, you get a successful fork and you move on. And, but that's why I'm really a
- [27:15]
C
thing that people are doing in terms of like downloading knots and just leaving it running. Like, surely these people are downloading knots and then connecting to a spiral wallet or whatever like that. They're not just downloading it to Virtue Signal, surely.
- [27:27]
B
I think that it's probably a mix and I'd hope that most people who are downloading any node or connecting it to their wallet. But the truth is there's probably a good amount of people just downloading a node to Virtue Signal as well, right? And then on top of that you have things like very clear cyber attacks with, you know, pumping node count numbers. And this happened, by the way, with SEGWIT as well. Like there was like pumps in the node counts at times that were clear cyberluck attacks with, with various clients, both in support and then against segwit. But you know, speaking of nodes, there's another dashboard I have which is the Bitcoin node count. And this is using Luke Dash years data. So, you know, this is directly from his website. I just presented it on, you know, my own dashboard. But here, you know, you can see basically the, the node counts of core V30 plus nodes and orange knots nodes in green. And Those are non bip 110 knots nodes and then bip 110 nodes in blue. And anytime you see any of these spikes, right, like this spike here or this spike here, right? Or these earlier spikes, these are Cybil attacks. They're very clear cyber attacks. It's basically someone spinning up, you know, thousands of nodes all at once, probably on, you know, a virtual instance like AWS or something. And then, you know, they do it for a little while and then it collapses. What you want to see happen for real node counts. And this also, we saw it like with SEGWIT adoption, we saw this, right? You see older nodes go down at roughly the same rate as newer nodes coming online. And that tells you that, and staying online. And that tells you that, you know, these, these, you know, these, these nodes running the new client that is in favor of this update are real people, right? And so for example, I mean, to give them credit, you see how these non signaling or these, sorry, these non bip110 knots nodes, it's trending down. But then the bip110 nodes are trending up. Like this is probably real, right? Real people turning off their older knots and then updating to bip110. This, this is not real. You know, like this stuff is not real. So when you see on Twitter, like, oh, bip 110 reached 25% of the nodes. That's because someone spun up 10,000 nodes overnight, right? And that's why you can't really trust those numbers whenever they spike.
- [29:58]
A
It also doesn't really do anything. So Bitcoin is cyber or civil resistant. It doesn't do anything. It just like, okay, so you spun up 10,000 nodes, okay, now what? Like, congratulations, it does nothing to the.
- [30:13]
B
Well, so again, to go back to the earlier point in the game of bluffing, right, Because I think especially in the end game here, where they're starting to realize this thing's not going to work now they have to start to paint a narrative. Like, for example, oh, so many people on the network are running this. Are miners really going to risk, you know, those people rejecting their blocks and forking them off the network? And so when you have a higher node count, it's something that you can kind of bluff with and say, oh, there's so many people who are running it now. Obviously it's, you know, it's like it's not going to work because I don't think miners are dumb enough to fall for that. But what it does do is it probably convinces other people who are dumb and don't really understand this to maybe switch over or, you know, they, they get worried and they start fighting things.
- [31:02]
C
Right.
- [31:04]
A
All right.
- [31:04]
B
So I think it's. I think it's just bluffing ultimately. Right.
- [31:07]
A
If you understand.
- [31:08]
B
And the other thing. So one more thing. It could also be a false flag on the other side. So. Right. It's not necessarily that the BIP110 guys are sibling their nodes to try to bluff. It could also be that the anti bip110 guys are sibling their nodes to make them look like clowns.
- [31:24]
A
But again, it does. Okay, I guess. But if you understand Bitcoin, it really doesn't matter. Congratulations, you spun up 500 nodes. It doesn't do anything, man. Right. You just spend money for no reason. You wasted money that you could have bought bitcoin with. It makes no sense.
- [31:42]
B
It's very cheap to do this because you can use one singular blockchain and then point tons and tons of nodes to that same blockchain. So it's not like you need to have a terabyte hard drive per node. You're literally just spinning up tens of thousands pointing to the same underlying chain. So it's extremely cheap.
- [32:01]
A
Well, mechanic is also counting on is that if there's a fork that eventually that that side of the chain will wipe out the legacy side of the chain. And that's why it's important for everybody to run bip 110. So again, these are like half truths that he's saying. It's true that the minority chain in a soft fork can override the legacy chain 100%. And that was what we. Well, that was what a lot of people that are running bip148 nodes were counting on. If there was a fork eventually because of what was happening on the legacy chain at that point, there's empty blocks fees were going through the roof. Bitmain was holding it, holding the chain hostage from adopting SegWit. The idea was that. And we also knew that there was
- [32:52]
B
a few bitcoin ports, the mind share of the devs. Yeah, you're about to say that.
- [32:56]
A
Yeah. And we also knew that there was a bunch of. Not a bunch, but there was a few bitcoin core members, developers that were running BIP 148 nodes as well. So the idea was that the economic activity would quickly flow to the minority side once we actually had a split, like a real split.
- [33:18]
B
Also can I jump in real quick? You had enough hash rate even before flag day, which was August 1st, you had enough hash rate to at least get you crawling through the chain. So like even, even, even with you know, a fifth or a third of the hash rate that gets you block times of you know, whatever, like 40 minutes, 30 minutes or 40 minutes, which is, which is reasonable. But if you have no hash rate and you, you fork off now you're talking about block times on the order of like you know, days, which, or weeks even, which is like crazy.
- [33:53]
A
Your chain, your chain comes to the halt and then you have absolutely no chance of overtaking the legacy chain. You're so far behind that it's just not realistic for miners to switch over at that point. So like his thing of trying to scare the ecosystem into thinking that oh no, if bip110 forks, it has the chance to wipe out the legacy chain is honestly like it's so far fetched it's not even like worth debunking.
- [34:23]
C
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- [36:54]
A
All right, well for one we know like we were talking about Segwit nodes before we had for about almost a year when Segwit was released we had 90% of the network, 90, 95% of the network was running a Segwit ready node. So we knew that there was more than enough support to one segwit at the time we learned. So Bitcoin was in really bad shape those years. The fork wars were well on its way and during that time fees started to go through the roof and at the same time while fees are going through the roof a bit main well with their pool and pool and via btc every block that they mined was Empty. So that was just building more fee pressure on top of the spam attack that was happening. The chain was wrecked, man. Like the chain was not, it was not good. Like we weren't getting lightning anytime soon because we need a malleability fix. Bitmain was preventing that from happening. Hard times, hard times. So there was a bitcoin core Slack channel. There was a group of people that got together and they're like, all right, well we need to do something about this. This isn't good. Like what's happening right now isn't good. Then we learned that Bitmain wasn't even selling machines. They refused to sell machines to people that were like pro Segwit or I don't remember the details exactly for that, but it was bad. So Shallon Fry, who was at that point, he was a pretty well known Litecoin developer, decided that he obviously also held Bitcoin. And he was a developer, he knew how this works, he knew how these things were. He pitched the idea of a user activated software, BIP148. And he convinced a lot of people in the Bitcoin for Slack on Bitcoin Twitter that this was the right move to make. Because what was happening on the network, we didn't have time anymore. So pools took. So the way we upgrade Bitcoin is the safe way is bip9. It basically allows pool to signal readiness for an upgrade. And instead of them just signaling readiness for an upgrade, they took that and they weaponized it. They basically used bip9 to prevent segwit from happening. Now again, there was really no one against segwit like everybody. Like the network was, you know, the node count, real nodes that were running 03.13.1. They were, you know, it was, it was super, super majority of the network. It was a very, very small minority that was preventing an actual upgrade to make the network actually better. So, you know, the justification was there for uasf. They, you know, if miners, if pool operators want to pay out their miners with UTXOs that are valuable, they're going to mine the chain that the users, the ecosystem, the economic nodes want them to mine. They are, they work for the network. It's a thing that they do. So it made. There was more than enough justification at that point to do a UASF. Jihan did not want UASF. He did not want users activating SegWit. He was really against that. He did not want to set that precedent. So there's a lot of, in between, a lot of things happening between that and the activation of actual segwit. But to make a long story short, he ended up bending the knee. He ran bip 91, which other pools ran bip 91. And then we instantly got a hundred percent of signaling way before August 1st. Like we never even reached that flat date.
- [41:14]
B
So just to give you some context, you see that in the data right here. So the, the non signaling blocks are these little gray lines, if you can even see them. Right. Maybe I'll change the marker. So it's this gray, these gray boxes here. And basically right after that meeting, you see, you know, virtually everyone stops signaling or sorry, everyone, everyone starts signaling and all of the non signaling blocks disappear. And that happened well before August 1, which was in the next period. Yeah, so just some context.
- [41:44]
A
So, yeah, and that was James Hillard doing. James Hillard went to Bitmain and basically he gave him an out. And they took it. They took the out. And then that's basically how we got segwit enforced. Bip110 is nothing like that. Bip110, they're really. Besides a few loud mouths on Twitter and the cyblo of nodes, there really isn't any support. We don't have exchanges making comments about BIP110. There's no one talking about it. The threshold that they set was 55. And by the way, a 51 attack is exactly what they want. Like if this gets, if this gets. If somehow for some magic unicorns are flying and they start giving fairy dust and this succeeds somehow, this would literally be a 51 attack. If this gets activated with 55, you understand, like, do you see? Like, it's not the same. It's completely different. The mechanism of activating is different. The reason of even doing it is completely different. It's. The whole thing is different. And I view it as a literal attack, not as like, you know, this is only. Let's do this temporary and see what happens in another year. No, like, I think if you could, if you could upgrade Bitcoin, if you could Change Bitcoin with 55% hash rate, we got bigger problems. Like we got, we got big problems in the future. That's not a good thing. But again, I think it's so unrealistic. If it was realistic, I will bet you anything that people will be talking about user rejected softworks. Like, you know, you would have people talking about it from the mountaintops. But this is so unrealistic to the point where I'm kind of mad at myself that I have to come on Here and do this because I really don't want to give any oxygen to it. But Mechanic has tried to distort history so bad that he maybe come out and do this. It's. I mean, do you think it's the same? Do you think it's similar?
- [43:50]
C
No. And the 55% is one of the biggest issues I have with it because like I think so segment was 95%. Taproot I think was 90%. It's like an overwhelming majority. 55% is just not even close to that. But like realistically wicked. What do you think will happen? Do you think they will get anywhere close? Because as of right now is there's six or seven blocks or something that have actually signaled for this.
- [44:11]
B
Yeah. So I, I changed this dashboard to be looking at the BIP 110 signaling now. And so in, in stark contrast to Segwit, you see how sparse the blocks are coming in. For BIP110, their highest signaling period had had seven blocks, which was the last period. And you know, they got a little lucky and got two blocks early on in this. In this period. Okay. But it's still, you know, nowhere near the threshold they're aiming for, which is 55% or 1109 blocks. I don't think they're going to reach that threshold. Even if they got all of Ocean's hash rate, for example, they'd be in like the low dozens of blocks. Right. Because it's a couple percent at most. So even if Ocean fully signaled, which by the way, most Ocean miners are not, which is interesting and telling, but even if Ocean fully signaled, that wouldn't be anywhere close. And what you really need is you need to coerce larger mining pools to come join you in order to get it over the threshold. Right.
- [45:19]
A
Which is definitely a possibility because this all started with if you are running a pre 30 bitcoin core node, your accomplice to criminals, I don't put it past them to have their lawyers write an email to some of these pools in the US but even that though, even if they go and they could somehow force foundry into mining bip110 signaling bip110 in the next, not maybe now, but say in August or July. Foundry doesn't own those machines. Right. Like the only, at least from what my understanding, the only, the only entity that actually owns the hash rate the machines is Mara. And they're about 5%.
- [46:16]
B
Well, they're the only ones who are solo mining. But you have large entities like Riot and other publicly traded Companies that control their hash rate, they're just pointing at pools right now.
- [46:26]
A
But now if you think, if you're riot, you own Bitcoin, right? Right. Like your whole business resolved around bitcoin. And if you think this pool is going, because I'm pointing like I'm, I'm pointing hash rate to this pool, the chances of bitcoin being devalued becomes higher. I would rather stop mining than being forced to point hash rate at, at a pool where I know that the value might. Yeah.
- [46:52]
B
You think it's an attack, Right. You don't want to support an attack.
- [46:56]
A
Yeah, of course. So if you, if you're, if, if you're holding bitcoin and if you view this as an attack and because you're an institutional miner and you have to point hash rate to a certain pool and that pool is now being coerced into doing something that you think is an attack, you simply, you'd stop mining, you liquidate the machines and you call it a day. Like, you don't continue on with it.
- [47:16]
C
I mean, you don't even have to do that. You just point at different pool.
- [47:19]
B
Well, but if you're a large miner, you might have some regulatory constraints. And so a lot of the reasons why they point at foundry is because it ticks all the boxes.
- [47:28]
A
Right.
- [47:29]
B
And so it's hard as one of these large miners just to switch pools. I think it's what Mr. Hoddle saying,
- [47:34]
A
you don't switch pools, just turn your miners off, you turn your rigs off. Yeah. You sell your machines.
- [47:38]
B
Yeah.
- [47:38]
A
If you're stacking bitcoin, you stack, you sell the machines for more Bitcoin and you call it a day with the operation. Like, you just do it on a smaller scale or you stop mining in general, like you just, you stop. You know, that's kind of what I'm hoping happens. I mean, if you are like, if you do hold Bitcoin and you are one of these institutional guys that is pointing cash rate to one of these pools and you think it's an attack, you stop mining. Like, you don't switch, you don't switch, you just stop.
- [48:05]
B
You're saying if they're legally pressured and the option is mine on this fork that they believe to be an attack, or shut off their rigs. Now, if they're not being legally pressured in a way that is going to coerce them, then the optimal result is just to ignore it.
- [48:20]
A
Right. Yeah.
- [48:22]
B
Which I think is the most likely outcome is that most mining pools, even the American ones, will probably just ignore this and then continue to mine.
- [48:29]
A
But again, the pool, the pool themselves, the pool operators themselves could be all for it. But you have to convince the people that are pointing hash rate to your pool to continue pointing hash rate to your pool. That's what I said. That's what I mean by like the only ones on Americasaur that has the machines themselves that are like you could coerce into doing something is Mara. But the other ones are pools. They're not miners. I know that mechanic is trying to change the definition of a miner. Oh man, this so like he did so many things. So since that came out, they're trying to change the definition of a miner. They're trying to tell you that it's not the person that owns the hash rate, it's not the person that owns the machine who's the miner. It's the person that's constructing blocks. Okay, fine. But that has never been true in the history of bitcoin. Since the launch of bitcoin, never has a person with a solo mine with their CPU constructing their own blocks, templates. What they were doing is whatever got into their mempool, that's what got mined. We trusted Satoshi software to do that. That's what we did. They want to make you think if you're not selecting your own templates, if you're not creating your own templates, you're not a miner. Crazy. Absolutely crazy. They're also, we're in a world now where they could rent hash rate and because of Dayton, because of you have like SV2, you're able to use somebody else's hash rate, someone else's miner. And you can signal it through your node. Yeah, run it through your own node. And that's what makes you a miner. Listen, this is great technology. Mining is improved. I'm not saying mining the mining pool software hasn't gotten better. It's gotten better and that's fantastic. But in the end of the day, the person with the machine, if he's renting that machine to you or not, he is the miner. The guy with the hash power that has a say on where his hash power is going. He is the miner. You are just a person that's renting hash rate from that entity. That's all you're doing. And the fact like if we had, now I want to be honest with you, if we had these options in 2017, if Datum existed in 2017, there's probably a good chance that we've got wouldn't gotten way, way, way over 20% of the hash rate right from the get go. Right, but we didn't have that custom software that allowed you to create your
- [51:04]
B
block template, rent hash and signal with it. By the way, these most recent miners who have been signaling, right, so peer to peer money roughnecks and then store of value up here. I think I'm guessing these are rent the hash miners because I haven't heard of them before. Whereas you have Barefoot Mining, who, that's Bob's company. So he's obviously not a rent a hash miner. But you are seeing some blocks come in from these, rented as you should from this rented hatch rate, which is interesting.
- [51:39]
A
You should see it if you're going to spend dollars that you could have gotten Bitcoin with, but instead you would rather go and buy some hash rate because you think it's more important for the health of the network to buy hash rate. Because if BIP110 doesn't succeed, Bitcoin is going to die. Then you should start seeing more blocks that are being signaled by those, that group of people. But it's still not enough. Like, you know, if all of a sudden we saw 80 of the network doing it, then okay, I get it, but we're not seeing that. Like, you know, we're not, it's very.
- [52:14]
B
Well, unfortunately, 80% of the hash rate isn't up for rent.
- [52:17]
A
Yeah, yeah, there you go. But help me understand what happens though,
- [52:21]
C
because like it doesn't look like they're going to get 55, but they're still going to do the user activated software anyway.
- [52:26]
A
Danny, that's, that's the thing. That's the thing. I don't think, I don't think they want to activate it through miners. I think the point of this is they wanted to activate with the uasf. They don't care about the. I mean, like, can I talk through
- [52:40]
B
this real quick just technically, because I think there's a lot of confusion around how soft forks activate, right? And especially in regards to user activated soft forks. So when you're first trying to activate a soft fork, you know, typically you give the miners a chance to reach some threshold to do a minor activated soft fork. In the case of Segwit, they used bip9 and it was a 95% threshold. In the case of, you know, RDTs, they're using 55%, right. Or bip110, they're using 55% threshold. So if the miners reach that threshold in any given period, right. If they mine that many blocks, then it gets locked in and activates when the user activated salt fork kicks in is basically when you reach some sort of flag day. And in the case of Segwit, you had a flag day in August, on August 1st, and in the case of BIP110, they're not doing a particular day, but they're doing a particular block height. So it's called this mandatory signaling period. It starts at block height 9061, 632. And basically at this block height, all of the BIP110 nodes begin rejecting any blocks that come in that are not signaling, right? So if you look at the version here, you see that little one that's orange, right? If a block comes in and it doesn't have that one in the version, then it gets rejected. So that's the idea. And the problem is, if you don't have enough blocks coming in that have the ones even when you start rejecting the ones that don't, then you won't actually even get through this mandatory signaling period. And you're not going to actually even reach the activation because the activation doesn't happen until, first of all, you get through this entire period, then you get through the lock in period, and then activation starts, you know, roughly 4,000 blocks, right? 4,032 blocks after this mandatory signaling period. So if you have blocks just trickling in, right, you know, a few a day or, you know, whatever, like maybe even, maybe a few more, maybe a dozen a day at most, right? You're not going to get through these two periods to actually even reach activation before the chain is abandoned completely because it, because. Because it will have fallen so far behind the legacy chain that it won't even be worth championing. Championing anymore. You know what I'm saying?
- [54:58]
C
So you think that they won't even reach the activation? You don't think they'll ever actually do this?
- [55:03]
B
No, because. So you know, again, like as soon as you reach this block height 961632. Okay, this is when mandatory signaling starts. So even if they're lucky, and let's say they get lucky, they get the first block signaling support. There's no chain split. The Legacy miners and the legacy nodes are still following this new, you know, this new block that has the new rules to them. It just looks like, oh, this is just an ocean block that has more restrictive rules. Whatever, we're going to accept it. We accept all these ocean blocks anyways. You know, these blocks are most likely already running bip110, so they're not accepting, you know, like larger OP returns and that type of thing. So it's not like we can't accept these. We accept them. And then all the legacy nodes and miners just, well, the legacy miners just start building off of that. And so as soon as a legacy miner finds a block on top of the BIP110 block, that's when you get the split. And one of the interesting things about this dynamic is that the legacy side always starts with a one block lead, right? Because the BIP 110 side, their blocks are accepted by the legacy side. So at best they're even, but at worst they're behind by a bunch and they always start behind by one block, which is a huge advantage when you're talking about a hash rate split which is blown out. Right. If you have less than 10% signaling support for BIP 110 or even fewer, because it's probably going to be less than 1% when you get a one block lead on the legacy side, it basically blows out very quickly and you might crunch through 100 blocks on the legacy side and only a few blocks have trickled in on the bip110 side. And I think by then, maybe within even a day or two, you'll see the BIP110 people fold and say, well, it's not worth.
- [56:55]
A
Well, that's the question going forward. That's the big question. I remember NVK a couple years ago. I had a, a thing with him where he basically thought that they weren't even going to attempt a software. And I had a pretty good idea that they were going to attempt it. Like why wouldn't they? The only question I had was what are they going to do after the soft fork doesn't succeed? Yeah, like that's the main question. That's the big question. And when you ask the mechanic or when you ask any one of these Bitcoin 10 supporters, they don't have an answer for you. They don't. There's no answer. There's no. Well, so we thought the people that ran bit 148 nodes honestly thought that the network was in danger, like really in danger. It might have been different story if the subsidy was a lot lower, but we had a pretty high subsidy at that point. And there was no reason why antpool or via BTC needed to stop mining empty blocks, especially when they had covert ASIC boosts. Like, you know, there's no reason for them to stop doing what they were doing. This is different. Once this fails, they're going to have to make a decision, do we continue on and compete against Bitcoin? Are we going to be a minority fork? Which means they're going to have to add replay protection, which means they're going to have to either lower the difficulty or change the hashing algorithm. This is something that Luke wanted to do for a very long time, or maybe even merge mine with bitcoin. There could be a lot of different ways to keeping a minority chain alive, but they're gonna have to flat out say, okay, like this is what we're going to do. But to date, every time I ask them what happened, what's the plan if this doesn't succeed? You should have a plan. They don't. No one has an answer. Like they don't. They don't tell you what's going to happen because they don't know. They have no idea. I have a feeling that nothing's going to happen. And this is literally going to be a non event. It's going to come and go, but it would be interesting. The right thing to do would be like, you know, just call it a day, but. And compete. But I don't think that's what they're going to do. They're just going to continue after it fails. We're going to continue hearing how we have to start a new software with different rules. We have to continue doing something until something sticks, so.
- [59:17]
B
Or you'll get something like bip 149 where you just extend the activation.
- [59:22]
A
Yeah, maybe something like that. And then we just have to hear more bickering for longer but for the next year. Yeah.
- [59:29]
C
I mean you, you sort of hinted at something there, Ms. Toddle, which, like that was kind of. My guess is that maybe if this doesn't get through the activation period and they, they do decide to fork, that they will. Like Luke said, he wants to fire the miners. Do you think that that has any chance? You think they will just completely fork off and have their own new algorithm?
- [59:45]
A
And if, if Ocean didn't exist, if there was no Ocean, yeah, he would have fired the miners a long time ago. But unfortunately for him, he gets paid. His salary relies on shots with the six miners. So firing the very miners that actually give you a salary, it's going to be a tough thing to do. So I don't know. I have no idea what they're gonna do. I don't. I don't think they can. I don't think they're in the position to fire the miners because of what mechanics job like Luke's A mechanic's job. They work for Ocean. Ocean is a SHA256 mining pool. So you're gonna have a hard time firing the guys that are paying your salary.
- [60:31]
B
You could resign from Ocean if you thought, I mean if you think ultimately that Bitcoin with SHA256 is compromised or hijacked. Right. And put yourself in Luke's head. Maybe it's not worth working for Ocean and being on that chain anymore. So he might just resign from that and then start his own chain.
- [60:50]
A
I don't know. Maybe not speculating on that.
- [60:53]
C
Do you, do you think we make a mistake by even talking about this? Like if you think it's as like inconsequential, it's going to be like a nothing burger. Should we just not even be talking about this?
- [61:03]
A
Danny? That was my main thing of why I didn't want to talk about like even like you having mechanic on. The more we give this like the more oxygen we give it, the, the more like they have a chance of making. Still wouldn't succeed. I don't think it will ever succeed. But they could make it more.
- [61:20]
B
I don't think it matters.
- [61:21]
A
Yeah, I don't think it really matters, honestly. But it's, it's, it's just an unnecessary drama. But the reason I wanted to come out was because this guy was just flat out just making up things from UASF in 2017 and trying to correlate that these two things are the same. That this is going to succeed because B48 succeeded. Like, are you kidding me? It's completely different scenarios, completely different thresholds, completely different like everything. So that was my main purpose of coming on. But I'm with you. I don't know, like I maybe release it after.
- [61:57]
B
I think it's important, I mean I think that the failure of this user activated soft fork is historically relevant and actually, you know, hardens Bitcoin's consensus at least the way that we think about it. Right? Because if it, if, if, if we prove, I mean what we've seen in the past is okay, you know, you had this movement bip148 that may have contributed to pushing Segwit over the edge and getting it activated.
- [62:26]
A
Great.
- [62:27]
B
So you know, the network users and the economic nodes are uncontrolled and, and they can push through updates. That's a great thing for Bitcoin and its consensus. But now on the other side of the coin you have a minority, like an economic minority, right? A loud minority who are trying to push through a change and when they fail, that's also good for bitcoin. It shows that it can't be hijacked by a small group of people. So I think it's actually like, it's relevant to talk about it, it's relevant to track it, which is why I built this dashboard. And I think when it fails, it's actually bullish. For bitcoin.
- [63:03]
A
I. I keep saying that this is like, I don't want them to stop doing it. Like, I'm. For a long time, I had 110 on my Twitter handle thing. I think this is. It will be a great learning lesson for a lot of people. I think people are going to learn how bitcoin works from this. I don't think it's a bad thing. I only think it's a bad thing with how they're framing it. Like, I think if you don't agree with bitcoin core, you should compete against them, right? Like, I don't think that's such a bad thing. That's fine. Go ahead and compete. Where it gets dicey is when you start making shit up and then you start comparing the two things that there are. Because you label this UASF and BIP148 was UASF. They're not the same. They're not remotely the same. But just bamboozling people thinking that they have some sort of power where just false framing of what a note is, like, why you run one. What's the point of running one? Just a bunch of things that he's been saying is just. They're just lies. Wrong, flat out wrong. So, I mean, that's definitely important to correct. But I think the more oxygen we give, I mean, it'd be good to talk about after it fails, I think, you know, like, yeah, go back to it. But I don't know, man. I. I really don't have an opinion. I think it's going to fail regardless. But I just think that the shit that he was saying is just. It's crazy, crazy talk.
- [64:32]
B
I would maybe just say real quick, if you don't mind. So, you know, I have this expected fork time on this dashboard, this KPI at the top right here. So if you want to stay up that night, assuming where you are in the world, this is utc, so it's probably going to be pretty early for most people. You can watch as they fork off, but, you know, that's when everything kind of comes to a head, is early August.
- [64:58]
C
That's. That's when you get the popcorn out. All right, well, yeah, I'm gonna, this conversation is gonna be put to bed now. Maybe Hodl will do one after. But I wanted to ask you Wiki, because I saw you tweeting about this morning. What's, what did you think about Sailor? Selling bitcoin?
- [65:15]
B
Yeah. Yeah. I mean, it's, what was it, like 0.004% of strategies stack. So I, I, you know, I compared it to if someone was holding one bitcoin and they said, I'm never going to sell any bitcoin. But then they sold like 3,000 SATs. I mean, that's basically the equivalent here. So it's pretty much a nothing burger. I think even in the last call he said he was going to inoculate the market by selling a little bitcoin. And I think that's basically what he's doing right now. He's giving the, giving the market a little, a little vaccine just to make sure that, you know, they know that it's possible for him to sell it. But at the moment it's really nothing.
- [65:55]
A
Didn't he sell bitcoin like in 2017, like 2018, 2022?
- [66:01]
B
Yeah, he sold like 900 bitcoin or something like that. So, yeah, it's not like he hasn't sold bitcoin before.
- [66:08]
C
He's just testing liquidity. But the interesting thing there, why is he trying to signal this to the market? Do you think it means that he's going to start selling bitcoin in real size in the future?
- [66:20]
B
I heard, I heard something about like S and P inclusion and, you know, I don't know, there might be some reasonings around that, like you have to show willingness to move around your bitcoin and sell some and buy some. I don't know if that's true or not. I think he's just trying to, you know, be a better buyer and seller of bitcoin and time markets and do all sorts of crazy. I mean, I don't know. You've said before, Danny, on your show that you don't really think this strategy works long term because eventually Fiat dies. And so you can't really play these fiat games in the far, far future. But in the meantime, you can play the fiat games and you can try to arbitrage fiat while stacking more bitcoin. And so he's just finding more and more creative ways to do that.
- [67:12]
C
But so you're thinking this is really just a bit of a nothing burger?
- [67:15]
B
Yeah, I mean, it's such a little amount doesn't really matter.
- [67:18]
A
A bunch of Nothing burgers. Everything's a nothing burger.
- [67:23]
B
Let me know when he sells more bitcoin than he buys in any given quarter. That's when would be a better signal.
- [67:29]
A
Yeah, that's if he's buying all that
- [67:31]
B
Bitcoin, Mr. Hodl said. If he's buying bitcoin at all. Yeah. Show me the bitcoin on chain.
- [67:36]
C
You don't actually believe that, right, Hoddle? You don't believe he's not actually buying bitcoin?
- [67:40]
A
No, no, no. I definitely think he's buying bitcoin, but I think that there's a lot of exaggeration at play. I refuse to believe the amount of bitcoin that he's saying he's buying is the real amount.
- [67:52]
C
Wait, so you don't think he has like 850,000 bitcoin or whatever he says he has?
- [67:55]
A
No, I don't think he has 850,000 bitcoin. He definitely has, you know, hundreds of thousands. I'm not saying that, but I don't think it's 850,000.
- [68:05]
B
I would take the other side of that bet. I mean, there's no way that he's buying, you know, that much bitcoin and then not requiring Coinbase and his other custodians to segregate it and then show him the addresses where it's held and then checking it himself. I mean, I think strategy is probably running their own nodes. They're probably checking all of the addresses where the bitcoin is held.
- [68:26]
A
Coinbase could show you an address with bitcoin in it. But how do you know?
- [68:30]
B
Yeah, but the other thing is, if your strategy, and you're the largest. I've seen a lot of entity holding bitcoin.
- [68:39]
A
I've seen a lot of big regulator entities in the space go down for these exact things. They were saying they were doing what they really weren't doing. So I just don't believe anyone anymore.
- [68:48]
B
I'd imagine that he's checking notes with other entities, other institutions, making sure that there's no overlap.
- [68:55]
A
It's Coinbase, man. Remember, Coinbase was stuck with dust UTXOs, millions of dollars in dust UTXO, so they couldn't move for like, six months. So I don't put anything past them.
- [69:08]
B
Yeah, but again, as a relative percentage, I mean, millions of dollars sounds like a lot to us, but as a relative percentage, you're talking about 0.001% of what they're in control of. So, I mean, I think even numbers like that don't really matter.
- [69:20]
A
No, dude, that's at the price of bitcoin. Back then, if they kept having those dust transactions and they never consolidated, it would have been way more than a few million dollars in the future. Like, you have to know how to treat Bitcoin's UTXO model. And Coinbase at least at that point had no idea how to treat Bitcoin's UTXO model.
- [69:40]
C
Yeah, I think that's the key point though. Like at that, at that point, like, I'm sure that, I'm sure they've got better processes now.
- [69:45]
A
Yeah, yeah.
- [69:46]
C
I can't see, I can't see Saylor not owning that bitcoin. Like he. That would be a very large scale fraud. If that was not the case.
- [69:53]
B
There's no way he's not checking it. I mean, I don't know. I'm not really buying it. Also, you have on chain sleuths like Sani, you know, giving what they believe to be the addresses where the bitcoin's being held and it kind of, you know, matches up pretty well. So I don't know. I mean, I'm not convinced. You can't, you can't fully trust it because, you know, it's like if it's not being put out there as proof of reserves, then it's difficult to 100 trust. But it's also, I don't think there's any reason to believe that they don't have it.
- [70:21]
A
I mean, now that Cash app did a proof of reserve. Well, river did a proof of reserve. Kraken's done a proof of reserve. Like at this point it's kind of shady if you're not doing a proof of reserve.
- [70:35]
C
Yeah. I did an interview with Jeff Walton who's from Strive the other day and I asked him about proof of reserves. Like, I have no idea why you wouldn't do it. It's such an easy lift. Like, it's not that, like these are huge companies, they could very easily afford to put a team on that and get it spun up in like a week. Like, I don't understand why you wouldn't do it. But he just said the market doesn't demand it.
- [70:52]
B
Like no one has one reason. Could be if you're kind of buying bitcoin through shady entities because you're buying so much that you need to go OTC and kind of get it from shady places. That might be a reason, but I don't know. That's speculation.
- [71:09]
C
Interesting, right? I've got to go. I have a dinner, but I'm very glad we finally did the podcast huddle and wicked awesome to meet you. It's fun.
- [71:18]
A
Yes, thank you. Tell Peter I said hello, and I will be. After this fails, let's. Let's have another chat.
- [71:26]
C
Let's go. We can do one in person, maybe.
- [71:29]
A
All right. Yeah. If you're in New York, let me know.
- [71:31]
C
Cool. All right, thanks, guys.