WEBVTT

1
00:00:00.100 --> 00:00:17.460
[upbeat music] What is going on, y'all? Welcome back to Blockspace Live. We've got Colin Harper and Charlie Spears, your co-hosts, coming at y'all fresh as daisies after a week in Las Vegas for Bitcoin 2026.

2
00:00:18.160 --> 00:00:23.540
We've got a fun lineup, uh, for news today and a really spicy interview coming to y'all.

3
00:00:23.620 --> 00:00:36.490
So, to headline the news, we've got Tether proposing a merger of 21 Capital, Strike, and Electron to create, what would you say, Charlie? Like, the chimera of public Bitcoin companies? The chimera. It's the, uh- Yeah...

4
00:00:36.500 --> 00:00:46.280
it's the super soldiers, the super soldier chimera of Bitcoin. Yeah. Super soldier chimera of Bitcoin in what could be one of the most explosive mergers yet in the industry.

5
00:00:47.120 --> 00:01:01.600
Following that, we have Drive Chains, uh, a Drive Chains developer and longtime Bitcoin developer, Paul Starks, on to talk about his eCash fork and why he thinks it's really important that we fork Bitcoin right now.

6
00:01:01.640 --> 00:01:04.700
Please stay around for that one. It's gonna be fun. [laughs] Charlie's got some great questions for him.

7
00:01:05.300 --> 00:01:21.440
For our third, or second news item, we've got news coming out of Mara that they just purchased a 500-megawatt combined cycle gas plant for 1.5 billion from, uh, from, uh, FTAI Infrastructure, the Lone Ridge energy site.

8
00:01:21.780 --> 00:01:28.080
Huge M&A deal. More on that to come. And then to close out the show, we've got a little bit of a prediction markets palooza.

9
00:01:28.120 --> 00:01:42.140
We've got a number of news stories that kinda show the current state of prediction markets, including insider trading, newcomers coming to the show, and Polymarket saying that, "Hey, we're gonna start tapping chain analysis to make sure that people don't insider trade on our platform."

10
00:01:42.840 --> 00:01:53.000
Ooh, chain analysis. So Blockspace goes live Monday, Wednesday, Friday at noon Eastern, featuring quick hits on the latest in Bitcoin mining, AI, and emerging tech.

11
00:01:53.020 --> 00:02:02.240
We feature your favorite guests, the hottest topics and guests of the day. Make sure to hit subscribe if you're watching on YouTube. Hit the bell to get notified when we go live.

12
00:02:02.300 --> 00:02:19.000
If you like what you hear, you'll love our newsletter, newsletter.blockspacemedia.com. And this stream turns into a podcast later, anywhere you can find podcasts, Spotify, Apple, RSS, Deezer, if that's still around.

13
00:02:19.080 --> 00:02:28.880
It's on there. This show is brought to you by CleanSpark, ticker CLSK on Nasdaq. More on them later on the show. Let's kick it off. Colin, we're back from Vegas. We're fresh as daisies.

14
00:02:28.960 --> 00:02:39.040
You know, the big irony is, even though Vegas is like the sunniest, hottest place in the world, it was the least sun I've ever had in a four-day- [laughs]... consecutive period. [laughs] 'Cause the whole time was inside.

15
00:02:39.080 --> 00:02:54.430
But while we were there, Jack Mallers went on main stage, and this time it's not El Salvador, this time it's Tether. I'll kick it to you to explain what the deal is. We will get to Tether in just one minute.

16
00:02:54.680 --> 00:03:07.400
First, really quickly, for all of our mining peeps out there, we've got to hit the hashrate index update. Yeah, coming at y'all with some data from our premier Bitcoin mining provider at Luxor and hashrate index.

17
00:03:08.120 --> 00:03:19.180
And, uh, I, I hate to spoil the party for everyone. It's a little bit of the same of what we've been seeing. Hash price is doing a little bit better, $36.76 per peta hash per day.

18
00:03:20.080 --> 00:03:26.300
Bouncing off of those all-time lows, sub $30 per hash per day, but still pretty slim pickings out there for anyone who's still hashing.

19
00:03:26.920 --> 00:03:36.760
It's looking like, unfortunately, we will have a positive difficulty adjustment of about 1%, uh, r- probably today, uh, maybe, uh, you know, in the early hours of tomorrow.

20
00:03:37.160 --> 00:03:48.640
We're 96% of the way through this current difficulty epoch. Blocks coming in an average 10 minutes and 18 seconds. And hash rate is just absolutely puttering along here, man.

21
00:03:48.700 --> 00:04:05.140
You know, we kinda, I talked about this on some of my panels at Vegas, but, like, if you zoom out, you know, over the last three months, it's, you know, besides this big surge in February, it's basically been flat, and we haven't really seen much activity on the hash rate side of things.

22
00:04:05.160 --> 00:04:15.760
And as we've covered on the show in the past, this is really throwing difficulty for a loop. We've had one of the most chaotic and volatile difficulty environments over the last quarter that we've seen in a long time.

23
00:04:16.340 --> 00:04:28.360
Out of the last two, four, six, eight, 10, 12, 14 difficulty adjustments, 10 of them, or excuse me, nine of them have been negative, and we're gonna get a positive one here coming up.

24
00:04:28.760 --> 00:04:47.180
But again, uh, just to kind of rehash something I've said on past streams, this is the craziest difficulty environment and the most volatility we've seen since the China mining ban, and it's, it's even getting to the point where, yeah, the drawdowns and difficulty aren't as extreme, but the oscillations are greater than what we even saw back then, so.

25
00:04:47.260 --> 00:04:54.060
Yeah, difficulty adjustments look like Trump's opening and closing the Strait of Hormuz, but it's the mempool this time.

26
00:04:54.070 --> 00:05:01.820
[laughs] I mean, if you, if, uh, one, there's only one, um, like, little detail beyond just the hash price that I'll bring up, which is the transactions per second.

27
00:05:01.900 --> 00:05:10.680
As you can see there on the hashrate index dashboard, um, where we hit a little bit over 6.3 transactions per second on average this, this difficulty adjustment so far.

28
00:05:11.120 --> 00:05:21.440
For the person who doesn't know, seven transactions per second is actually kind of up, like, near Bitcoin's top bound. So what's interesting is Bitcoin fee rates are low, but there's tons of transactions.

29
00:05:21.780 --> 00:05:31.540
They're just transactions which are not very competitive or urgent. Um, I'll just give you a little teaser here. Uh, I spent the time in Vegas. It's the degens who are doing this.

30
00:05:31.600 --> 00:05:42.940
So, um, hopefully I can get a little insight on this and provide some color. If you pay attention to Blockspace channels, maybe I'll put something out about it. Before, uh, but enough about that.

31
00:05:42.960 --> 00:05:54.440
Let's get into the actual news. Yeah, this is super interesting. As you were saying, this dropped at Vegas. Um, I believe the last day of the conference, uh, is, is when- Yeah... Mallers, uh, announced this.

32
00:05:54.880 --> 00:06:04.160
Actually, it was right after I got off the main stage. It was me, and then Mallers went on to talk, and then Afroman after Mallers. Honestly, kind of a wild lineup.

33
00:06:04.220 --> 00:06:11.360
[laughs]Yeah, as I said in the newsletter today, quoting my favorite band, My Morning Jacket, it's one big holiday at, at, at the Bitcoin conference, right?

34
00:06:11.980 --> 00:06:27.400
So Tether is in, is proposing a merger plan for 21 Capital, Strike, and Electron. Now, 21 Capital obviously being the Cantor Fitzgerald-backed Bitcoin treasury company helmed by Jack Mallers, bootstrapped by Tether.

35
00:06:27.740 --> 00:06:34.350
Good portion of Tether's own Bitcoin seeded 21 Capital's treasury. They received shares in return for that. We'll get to that in a minute.

36
00:06:35.000 --> 00:06:45.000
But it is the public-facing company in this cohort, while Electron is the Bitcoin mining management company that manages a good chunk of Tether's hash rate.

37
00:06:45.140 --> 00:06:53.110
According to this press release, there are 50 exahashes that Electron manages for Tether, representing, you know, give or take, depending on the day, 5% of Bitcoin's hash rate.

38
00:06:53.110 --> 00:07:02.400
It's a little bit more than that actually, if you consider where hash rate is right now, like 960, 970 exahashes. And the third piece of this is Strike, uh, Jack Mallers' payment company.

39
00:07:02.780 --> 00:07:11.590
You know, depending on how you wanna look at it, it's like a neobank similar to Cash App. I believe they have payment capabilities, according to this press release, to like 100-plus countries.

40
00:07:11.600 --> 00:07:27.380
Buy, sell Bitcoin, send Bitcoin. So if this merger comes to pass, you know, per my point about the Bitcoin chimera, you, you basically have this full stack Bitcoin services company.

41
00:07:27.560 --> 00:07:40.540
You've got mining, you've got payments and capital markets, and you've got the Bitcoin treasury company element. And you got the exchange obviously too with Strike. So again, a w- just, I, I, I think it kind of is, is...

42
00:07:40.580 --> 00:07:57.980
It's easy to overstate and also easy to understate maybe what this deal would mean in terms of Bitcoin companies on public markets, because it would be kind of a one of its kind in the sense that it has all of these stacks, uh, layered on top of it for all the different elements of the Bitcoin ecosystem.

43
00:07:58.300 --> 00:08:06.520
Let me get into share structure in a second here for- Yeah... how, how likely it is that Tether's gonna be able to p- pull this off, because they are proposing it. They also have a lot of voting shares in Strike.

44
00:08:06.580 --> 00:08:17.060
But Charlie, wanted to throw it over to you for quick second thoughts. Yeah. Yeah, so, uh, super interesting you say it's a chimera. This is kind of the company that like Nakamoto's been trying to build. They...

45
00:08:17.240 --> 00:08:33.700
With media, whereas, uh, Tether, Strike, 21 went lending. I just think it's the Titanus Electron energy, 50 exahash, uh, under management. Now, that may have been kind of an open secret. I don't even...

46
00:08:33.920 --> 00:08:40.880
We may have said 50 exahash on this podcast or in our writings before, but I don't know that it's been like officially confirmed.

47
00:08:41.380 --> 00:08:54.320
So now that the merger is happening, Tether, 21, it's public that big s- 50 exahash under Electron, I would assume that's going to increase. So we had Ra- we had Rafa, or as you say, his name is Hoffa,

48
00:08:55.260 --> 00:09:03.720
uh, uh, on the pod. Mallers gets to be CEO again, so he gets to be the guy to, to go out and announce everything going forward. What's up?

49
00:09:04.160 --> 00:09:14.000
Well, this is what's interesting about this, is the structure of the company, it will... Mallers will be the CEO if this all goes through, but Hoffa is being, uh, proposed as the president.

50
00:09:14.050 --> 00:09:24.300
So there'd kind of be this dual helm approach, which makes a lot of sense. You know, Jack as the CEO overseeing the Bitcoins and maybe payment side of things, and then Hoffa coming in with mining.

51
00:09:24.330 --> 00:09:34.920
And also, I would imagine a, a decent amount of capital markets expertise- Mm-hmm... that you, that you would want in this. And so- So ex- so explain to me the share structure, because that's kind of interesting.

52
00:09:35.000 --> 00:09:46.080
Looks like Tether's main contribution to this was just Bitcoin, which I don't know, have we seen like a, a, a similar like contribution to one of these things in that much Bitcoin ever? That's a lot. Yeah.

53
00:09:46.160 --> 00:09:53.820
It's a really, really good question. Um, I'm sure there are other deals, especially privately, where Bitcoin- Yeah... was exchanged for equity, I assume.

54
00:09:54.340 --> 00:09:59.870
I have to say, this is one of the first times I've seen, um, outside of Bitcoin mining, a structure like this.

55
00:10:01.510 --> 00:10:12.880
So just to start off, when 21 was announced, uh, Tether con- contributed 24,500 Bitcoin to 21 Assets, 21 Capital, valued at roughly $84,000 per Bitcoin.

56
00:10:12.920 --> 00:10:21.740
Then they, uh, contributed an, an additional 4,422.69 Bitcoin, um, in exchange for additional Class A and Class B shares.

57
00:10:22.019 --> 00:10:37.580
So that's where the majority, or, or if not, if I believe all of Tether's equity in 21 Capital comes from. And its ownership stake is as such. It owns, uh, 45.1% of Class A shares. That's roughly 156.3 million shares.

58
00:10:37.600 --> 00:10:48.540
But the important thing here for this merger is it owns 156.3 shares, million shares of Class B common stock, which is, uh, for voting, uh, on, on matters for 21 Capital.

59
00:10:48.620 --> 00:11:00.760
So it has a 51.3% share of voting control in the entity, which I don't know what its structure is for, uh, the, for Electron and... or what its ownership of Electron and Strike is.

60
00:11:01.380 --> 00:11:13.220
Um, there's nothing public out that in terms of SEC filings. No, Electron obviously probably, uh, or Tether probably has a decent stake in Electron as its, you know, premier partner and as its, uh, principal client.

61
00:11:13.680 --> 00:11:24.900
I imagine also a little bit in Strike. But in, in terms of how this, in terms of the public entity with 21 Capital, Tether has majority of the chips to vote on this.

62
00:11:24.940 --> 00:11:38.520
They also sold some of their original stake to SoftBank, which has a 30% Class B stake. So if SoftBank wants this to happen, Tether wants this to happen, y- the, the, it's, it's almost foolproof, right?

63
00:11:38.620 --> 00:11:48.140
I, I s- I, I kind of am treating this as a foregone conclusion that the combined entity will emerge sometime w- within this year. You know, I don't know what the timeline for closing a deal like this would be.

64
00:11:48.220 --> 00:11:55.470
M&A moves much more slowly than I think a lot of people think. So, you know, we might see it close at the end of next quarter. Maybe they'll move fast. Yeah.

65
00:11:55.480 --> 00:12:07.800
But, um, as it stands right now, Tether has the voting power to make this a reality, it seems to me, if they really want this to happen, which obviously they do given the press release. So, uh, yeah. No.

66
00:12:08.180 --> 00:12:20.292
Probably the most interesting M&A deal so far this year.Yeah, and, and so the big question is Tether's, besides... It's like besides, uh, Bitmain, Tether is like the other ma- like, most important company in Bitcoin.

67
00:12:20.352 --> 00:12:28.882
And the big question has been, they have been in the gray area as far as, like, with their position with the US or their footprint in the US since their genesis.

68
00:12:29.132 --> 00:12:39.632
Prior to the genesis, even Bitfinex being located in Singapore, Tether coming out of Bitfinex, um, this is their major step across the Pacific.

69
00:12:39.672 --> 00:12:55.932
Foothold in the US, controlling interest in the company, which appears to be, uh, taking a close second place behind strategy in the, like, how prominent, uh, the financial presence is. So I think

70
00:12:57.012 --> 00:13:10.392
that probably wraps this story up. We have as our next guest, Paul Storke, very soon. But before that, gotta get a word from our sponsor, CleanSpark. [gentle music] We are CleanSpark,

71
00:13:11.332 --> 00:13:23.772
America's Bitcoin miner, a publicly traded company with the largest operating hash rate. Powered entirely by self-operated infrastructure across four states.

72
00:13:25.572 --> 00:13:37.052
This is our proof of work, and we are setting the standard for what's next. Learn more about the intersection of energy and Bitcoin at CleanSpark.com.

73
00:13:39.832 --> 00:13:52.432
We have one of my favorite, most interesting people in Bitcoin next. We got Paul Storke talking about how he's gonna fork Bitcoin, the Storke fork, you might say. Uh, Colin, I think we just bring him on up here.

74
00:13:53.052 --> 00:14:02.892
Let's do this. You're muted, Colin. Paul, welcome to Blockspace Live. Hmm. Paul, thanks for joining us, man. Thanks for having me. Yeah, thanks for having me. Yeah, thank you for joining us, man.

75
00:14:02.932 --> 00:14:08.892
We're just gonna throw you right into the fire with this one. Do it. Paul, what in the Sam Hill is going on? Why do you wanna fork Bitcoin?

76
00:14:08.932 --> 00:14:21.772
Well, you know, I was a Bitcoin maximalist basically my entire life until now, but really I have some concerns, and I think that competition is, you know, the, the cure for, for all ills.

77
00:14:21.892 --> 00:14:31.712
Um, and I think we've been complacent and overconfident for a long time. I mean, one thing is we were on the security budget panel, so these... We, like the four of us, we're like the four doom and gloom people.

78
00:14:31.752 --> 00:14:42.992
But then o- opposite us is most of, like, Twitter, most of, like, the culture is just saying, "Oh, Bitcoin is perfect. Bitcoin is immortal. Don't break Bitcoin."

79
00:14:43.692 --> 00:14:50.652
Like, that was the op next message, was, "Don't break Bitcoin," for, you know, the, uh, until we got this quantum distraction, but we'll get to that.

80
00:14:50.972 --> 00:14:56.592
But then it was like, you know, like Michael Saylor's like, "Bitcoin is hope." Jimmy Song is like, "Bitcoin is God."

81
00:14:57.352 --> 00:15:05.972
So we got all this like, everything's perfect, but then some of us have, you know, a few concerns, and I have a lot of concerns, and I wrote a lot of them down for years.

82
00:15:06.632 --> 00:15:11.391
And, um, I'm just worried about, like, I think we're going in the wrong direction.

83
00:15:11.592 --> 00:15:18.572
And I think not only do we have these problems, but we get less and less honest about them [laughs] over time, and we have more and more in denial about them.

84
00:15:18.612 --> 00:15:29.672
And so that's a situation where instead of just having a perfect ingredient with like one or two problems, we have something that's sp- we have this attitude that's spreading that is, um- I think- Yeah. Yeah.

85
00:15:30.152 --> 00:15:41.612
I think before we get- So other than that, it's going perfectly in Bitcoin. [laughs] Well, before we get into like the, the specifics of the, the fork, I wanna... You, you know, I hadn't read...

86
00:15:42.092 --> 00:15:59.162
Y- you know, we went, we went to Vegas shortly after you announced this fork, so I didn't really have time to like dive into the eCash.com and the, and your rationale, and I'll kind of invite you, uh, to reprise, uh, what you're saying here, which i- uh, which is I think on the number, number four of your Q&A.

87
00:15:59.972 --> 00:16:08.892
Um, do you really think that a fork, your new coin, that can defeat Bitcoin? What's, what's your response?

88
00:16:10.152 --> 00:16:21.692
Well, uh, you know, honestly, I'm glad that you asked that because I think a lot of people, you know, jump to conclusions. Um, so I'd like to clarify that I don't plan on selling BTC. I- the way I see it is this.

89
00:16:22.072 --> 00:16:29.912
We're on the Titanic, and we, we are headed sort of for an iceberg. I think we'll probably miss the iceberg, so I think it's less than 50% chance.

90
00:16:30.512 --> 00:16:38.252
But, you know, if we hit that iceberg, we're all gonna die, and you know, it's women and children first, so we're gonna freeze. You and I will be freezing to death. That doesn't appeal to me.

91
00:16:38.632 --> 00:16:45.852
So I'm like sawing apart all the deck chairs and, like, the dining room table. I'm make, trying to make more life rafts, you know, like really, really fast.

92
00:16:46.252 --> 00:16:54.732
And I gotta tell you also, one thing that maybe I didn't emphasize, uh, is that I think we'll miss the iceberg, so maybe there's only a 20% chance we'll hit.

93
00:16:54.812 --> 00:17:05.032
And I also think that eCash, it might not be enough to save our lives if we hit the iceberg. So I think I'm actually gonna miss twice. This is giving a lot of people an opportunity to point and laugh.

94
00:17:05.612 --> 00:17:10.792
I'm happy to avail them of that opportunity or whatever, you know? Do, get, get whatever that you like.

95
00:17:10.832 --> 00:17:20.092
But I, I think honestly, we may be, uh, in a, in for a rough time because it's very difficult to change culture anywhere, especially in Bitcoin.

96
00:17:20.632 --> 00:17:29.722
And I think also it's very difficult to fight the network effect, so I don't know. But yeah, I think basically there will only be one winning cryptocurrency, which is part of why I was a maximalist this whole time.

97
00:17:29.772 --> 00:17:36.612
That view has not changed one bit. So I just think maybe it will be a different one than BTC, and it will be one that preserves the ownership set.

98
00:17:36.692 --> 00:17:41.312
I think the ownership set is much more important than people give credit for, and I can give a couple examples of that.

99
00:17:41.392 --> 00:17:55.912
But I think a lot of people intuitively already know that, but other people, I think, really believe there's something magical about what Bitcoin Core is doing, and that they're just really great developers, even though they haven't developed anything, and 99.999% of the ideas came from Satoshi.

100
00:17:56.012 --> 00:18:02.062
Um, and instead we've just done new ideas that are, that suck and are terrible, such as SegWit, Taproot, and Lightning Network- Well-...

101
00:18:02.062 --> 00:18:07.732
which have all been a complete waste of time and have derailed the whole growth of the industry. So Paul, um,

102
00:18:08.712 --> 00:18:16.552
one quick question, and then I would love for you to kinda lay the background here for some of our listeners who are not familiar with the proposal of exactly what the eCash fork does.

103
00:18:17.072 --> 00:18:23.894
But I guess a-Tag-on question to that before you explain, uh, what the fork is, uh, trying to accomplish and the changes it makes.

104
00:18:24.384 --> 00:18:31.894
It would suc- per your last point, would success for you then look like eCash being the number one cryptocurrency? Right, it would. Yeah.

105
00:18:31.984 --> 00:18:39.344
I think there'll only be number one- uh, there'll only be one that wins, I think, and even in the long run, many of the fiat currencies will kill, [laughs] kill themselves also.

106
00:18:39.964 --> 00:18:48.564
So I don't know exactly what the far future looks like. It might be like dollar and crypto, which is like dollar is like, you know...

107
00:18:48.584 --> 00:18:53.704
My friend, I have a very funny friend, but he would call them like slave bucks or whatever. He would say like there'll be like the,

108
00:18:54.684 --> 00:19:02.804
the regulated mainstream one, and then there'll be like the internet, like confusing one that's like for the uber- uber man. But, you know, it could just be that, you know, one takes over.

109
00:19:02.844 --> 00:19:15.654
But yeah, I don't, I don't really get that much the need for like, you know, 55 cryptocurrencies. Okay. So s- uh, sorry, Joey- Yeah... I have a, I wanna, I wanna inject a question here. Okay. Okay.

110
00:19:15.684 --> 00:19:23.444
So Paul, in your, in your justification, it's, it's honestly pretty compelling. Um, I respect the like arguments you give for why you're doing this.

111
00:19:24.084 --> 00:19:32.204
Um, a lot of it is you want to provide a viable competitive alternative. Um, uh, if, here a hypothetical scenario.

112
00:19:32.784 --> 00:19:49.204
If eCash somehow, uh, is able to spark a change in culture and direction for the Bitcoin network, would you consider that a success? Yes. Yes, absolutely. Okay, Colin. Yeah.

113
00:19:49.324 --> 00:19:58.184
So Paul, just, um, give us, give our listeners a quick rundown of the most salient changes as you see them in the eCash fork. Like what are, what are you real- I think- What are you trying to ch- change? Yeah.

114
00:19:58.204 --> 00:20:09.184
I think, well, one of them, there's two things about it that I think people could wrap their head around. One is I'm really trying not to change as much as possible, so that's... I'm gonna unpack that in a second.

115
00:20:09.244 --> 00:20:15.184
But then secondly, you know, I'm a big shill for these merge mined L2s that I call drive chains. That's really the meat of it.

116
00:20:15.224 --> 00:20:25.814
But these are kinda related because I can activate drive chains without changing any lines of code in Bitcoin Core. So that's also what I think we should do in BTC right now with Bitcoin Core, we should just do that.

117
00:20:26.364 --> 00:20:31.664
We can activate this software without changing any lines of code in BTC. That's also what I plan on doing on eCash.

118
00:20:32.004 --> 00:20:43.304
But really, I, I think I'm one of the few people, maybe I, I'm perhaps the only one, I'm not sure, but I'm doing this hard fork where I'm not really betting on me being a benevolent dictator of the fork.

119
00:20:43.353 --> 00:20:56.084
So like the L1 is gonna be exactly the same as Bitcoin Core in every way, and that is to invite anyone who likes Bitcoin Core over to the L1, 'cause it's gonna be basically exactly the same, both now and in the future.

120
00:20:56.484 --> 00:21:08.534
And as for many of the L2s, many of them will, will try to be very similar to successful altcoins such as Zcash and, you know, other, other ones that actually have a point, Monero, that have like an actual purpose to them.

121
00:21:08.544 --> 00:21:14.244
And so I'm trying to give everyone what they want, and as you can imagine, that has made me a very hated figure on Twitter.

122
00:21:14.984 --> 00:21:25.164
Because people don't like it when you give them what, what they want because that makes everything else they've had in their mind look bad by, by comparison, but, but, uh, that's the...

123
00:21:25.304 --> 00:21:36.664
Really the idea is for me, I'm not, I'm, I'm, I'm, I'm very agnostic. Like I don't, I pass no judgment on what the user wants. So when Roger Ver says he wants large blocks, I just say, "Well, that's, that's true."

124
00:21:37.364 --> 00:21:42.604
But other people say, "Oh, you know, he shouldn't want that," or, "He actually wants something else. He actually wants the Lightning Network," or something like that.

125
00:21:42.664 --> 00:21:55.014
And then same thing when like people do Monero for privacy. People say, "Well..." S- t- people try to say that's an insincere want. But I try to give everyone what they want. That's why, that's my shtick. So, uh, yeah.

126
00:21:55.014 --> 00:22:03.534
And it, it sounds like you embrace the reality that they're just irreconcilable differences of opinion, and you try to say, "Okay, well, then in that case, then,

127
00:22:05.424 --> 00:22:15.164
then your drive chain implementation at least allows for people to express those differences of opinion while somehow being related to the same network." Am I understanding that correctly?

128
00:22:15.364 --> 00:22:21.384
That's exactly right, and also that's part of why I'm so dismayed that it's not, hasn't been prioritized.

129
00:22:21.684 --> 00:22:30.404
So of course, it sort of hurts my feelings a little bit that we're not, we don't jump at, my idea doesn't jump to the front of the line for everyone. But, you know, I could get over that.

130
00:22:31.004 --> 00:22:40.524
Um, first of all, like we haven't done any ideas. Like we haven't done OP_CAT or something, which is 13 lines of code, and that was in the original client. And so I think we've lost the ability to soft fork.

131
00:22:40.804 --> 00:22:46.344
That's why I think this, this issue, this whole issue is very, very, very like high-dimensional. So you have to...

132
00:22:46.384 --> 00:22:57.664
Like people have different like groups where they think, you know, like we should ossify, or they think, you know, Paul is just bitter about his idea not being respec- But I think it, it's really hard, if you consider all the facts,

133
00:22:58.784 --> 00:23:07.284
uh, I think it's bizarre that this idea is not, uh, this is kind of a meta idea. So this idea says, I mean, we've been losing people constantly left and right.

134
00:23:07.344 --> 00:23:18.724
So like, uh, we originally lost the large blockers in the scaling war, then we had to bet everything on Lightning even though Lightning basically doesn't work, and it certainly cannot scale to eight billion people, which is the whole sh- shtick upon it.

135
00:23:18.744 --> 00:23:29.964
And that's what, you know, big cultural leaders... Y- you know, like I've seen Michael Saylor say many times like, "Oh, Bitcoin will scale through using Lightning and these other layer twos and layer three protocol."

136
00:23:30.004 --> 00:23:33.964
He's like, "This is just like a thing." But this is the m- idea in everyone's head. And then of course like on,

137
00:23:35.224 --> 00:23:43.704
you know, on, on Nostr or on Primal, like they have everyone, they have the little Lightning icon is everywhere even though none of the, uses the Lightning network. So the whole thing has become...

138
00:23:43.744 --> 00:23:50.684
Again, this is speaks to my point about bad ideas spreading, and like we have like a zombie team that's like biting people and infecting people. It's flipping.

139
00:23:50.764 --> 00:23:56.454
You know, and so it can be, it can go really fast as to when the... But anyway, the point I'm trying to make is we've been losing people.

140
00:23:56.484 --> 00:24:03.984
We lost the s- large blockers, we lost the privacy people to like Monero basically and Zcash, we lost the dark net markets and that, we lost...

141
00:24:04.024 --> 00:24:15.404
And the stablecoin volume is on stablecoin that was originally Omni, that was originally Mastercoin. This was originally, all these were Bitcoin projects. Uh, Ethereum, this was a Bitcoin project.

142
00:24:15.584 --> 00:24:26.184
These were all Bit- all these were Bitcoin projects, but we've, we started losing them. And although in the past people would have a big conversation about it, like when Ethereum came out, it was taken for granted.

143
00:24:26.304 --> 00:24:31.414
Everyone said in 2015-We will just do side chains. We will have smart contracts on Bitcoin.

144
00:24:32.294 --> 00:24:40.014
There was like Rootstock is the answer to this, Blockstream is the answer, the answer to Ethereum, but now we have more and more sour grapes.

145
00:24:40.334 --> 00:24:49.394
It is harder to talk about it now than ever before, where someone will do something new, and, uh, we'll all just sort of shrug, and we'll say, "Well, we never really wanted that.

146
00:24:49.434 --> 00:24:59.834
We never really wanted privacy on Bitcoin anyway," even though that's something that 0% of people would have said back when this stuff was first- when Zcash was first proposed as, like, zero coin on Bitcoin.

147
00:25:00.514 --> 00:25:08.754
S- so Paul, l- latching onto some of the stuff that you just said there, you know, Michael Saylor's on stage waxing poetic about the brilliance of Bitcoin L2s and how it's gonna scale Bitcoin.

148
00:25:08.854 --> 00:25:14.414
But part of, uh, of, of m- understanding from what you're saying is the tooling for that obviously has not been prioritized.

149
00:25:14.514 --> 00:25:24.474
I mean, like, you just mentioned Op_Cat, Op_CTV, all these things basically got shelved, um, kind of overtaken by the quantum talk, which we can touch on in a second. And but you also said that you are not...

150
00:25:24.554 --> 00:25:32.474
Uh, you don't have necessarily sour grapes about your proposal being prioritized- Yeah... but I think a lot of people would say it seems like you're jumping the queue to get it put in by hard forking.

151
00:25:32.514 --> 00:25:42.484
What would you say to that criticism? Well, yeah, the queue is moving too slow, but I mean, I proposed it in November 2015. So how, how much slower could it possibly get? I just, I don't understand, like, what...

152
00:25:42.534 --> 00:25:53.754
And then it's, it's not, I don't think, like, if there were any evidence the queue worked, then that would be easier to, like, agree with. But I think Op_Cat really is the smoking gun.

153
00:25:53.794 --> 00:26:03.414
It says there's this tiny, tiny thing. It basically does nothing. It just takes XY and puts XY on the stack, and it was in the original version.

154
00:26:03.914 --> 00:26:14.274
People have te- There, by now, if someone had said there was stuff about, like, stack, you know, elements, stack size, by now, if anyone had any kind of problem with it, you know, it would have been very, very, very easy to...

155
00:26:14.374 --> 00:26:26.834
This is, like, the perfect candidate, and a lot of people had, it had enormous support from all the roll-up Stark, Starkware guys, and they have lots of money. So it's kind of like, what is the problem?

156
00:26:27.754 --> 00:26:33.394
Um, uh, you know, it, it's not just empirical. Like, I've talked to many... A lot of these people are very good friends of mine.

157
00:26:33.454 --> 00:26:41.074
Like, so even when, back in the era of Scaling 1, Scaling 2, Scaling 3, this was like 2015, 2016, um, we were talking to...

158
00:26:41.174 --> 00:26:57.154
So, like, uh, I don't wanna, like, necessarily name any names, but, like, one of the biggest people in the space who you guys should interview, and he's a super nice guy, and he's super experienced, Eric Lombrozo, he was talking about how, like we used to do, he and I agree completely about, like, we used to do these soft forks all the time.

159
00:26:57.434 --> 00:27:04.174
They were never controversial. The, in my view, the opcode soft fork should be treated exactly the same as any other pull request.

160
00:27:04.454 --> 00:27:16.014
It's just a tiny detail that you have to have 51% hash rate upgrade before people can safely use it. But there's a tiny, tiny detail that does not m- mean anything.

161
00:27:16.074 --> 00:27:23.654
It just means that there'll be a little flag in the software, and because the miners will periodically update. You know, maybe they don't update as fast as people like.

162
00:27:23.734 --> 00:27:31.194
I think that's great that they don't update because why screw up... You know, who, just think of all those people, like, when do you update your phone? When do you do, like, Windows update or whatever?

163
00:27:31.214 --> 00:27:41.054
Everyone's like, we got normal people, like, installing special weird stuff on their computer to stop it from up- upgrading because it's so annoying. But eventually, you know, when you set up a new thing, you upgrade.

164
00:27:41.474 --> 00:27:49.934
So we can't do the soft fork, uh, and it's become political purely as a consequence of the scaling, you know, what happened with SegWit.

165
00:27:50.424 --> 00:28:02.214
This is, all this is deranged nonsense that is not a shred of truth or value in it at all, and it's just an excuse for everyone to just start weighing in, and the whole thing is, is crazy. And, uh, that's, that's what...

166
00:28:02.254 --> 00:28:06.314
You see what I mean? It's not just about not having BIP 300, like my favorite little BIP that I wrote.

167
00:28:06.674 --> 00:28:16.254
It's like, this is the community that we're in, the c- you showed up to a community, and it's, uh, it's full of people who make their decisions in a, in a, in an insane way.

168
00:28:16.314 --> 00:28:19.994
So how many other decisions are being made with this screwed-up logic?

169
00:28:20.054 --> 00:28:29.744
And I actually po- wr- I wrote a long post called The Derangements of Bitcoin, where I just listed something like 40 or 50 bizarre decisions we have made.

170
00:28:29.744 --> 00:28:38.794
These, uh, include, like, you know, prioritizing the Lightning Network, like, near the top. But then I have all kinds of minor bizarre ones also, like there's no BIP 39 word list in Bitcoin Core. Like, what?

171
00:28:38.854 --> 00:28:41.814
Like, why not? [laughs] Like, it's all just... So I have an endless list.

172
00:28:41.874 --> 00:28:49.824
You can check out my post, The Derangements of Bitcoin, where I just- Well, BIP- And that list is only- BIP 39's not se- BIP 39's not secure, even though everyone uses it. [laughs] Yeah. I don't know.

173
00:28:49.824 --> 00:28:55.554
It's like, I s- this, yeah, the ship has sailed on that. And they say, "Well, we need, it needs to have, like, a version number or something." Yeah.

174
00:28:55.574 --> 00:29:05.514
And it's like, not really, because it's just a way of converting integers to phrases, so it doesn't really need a version number. Not, it's not, like, mission critical. But that's the logic.

175
00:29:05.634 --> 00:29:17.854
So, uh, I wanna ask you some specifics about the fork, and I think it's kind of interesting. Um, a lot of, there's a l- like, uh, how the fork actually happens is, is pretty interesting.

176
00:29:17.874 --> 00:29:30.774
That can be, you know, can go a bunch of different ways. Um, I was looking through your, your Q&A, um, and it looks like, so fork ETA this summer, I think it's, like, August, is it? Yes, late August. Okay.

177
00:29:31.414 --> 00:29:45.034
Okay, August, and then at the moment of the fork, uh, we have to figure out how the, how the network produces blocks, and you are, uh, doing a one-time difficulty reset to the minimum difficulty value.

178
00:29:45.134 --> 00:29:50.354
Explain why, h- what that is and, and why, uh, you chose to, to do it that way.

179
00:29:51.194 --> 00:29:58.314
Well, I have to say, like, maybe minimum might be, like, the minimum asterisk, because of course there's, like, the CPU era, and then there's, like, the ASIC era.

180
00:29:58.354 --> 00:30:10.134
So, but, but what I'm basically thinking is, like, if, if you had, like, 100 block erupters or something, like, you had, like, very, very, very, very, very low investment in mining, and you, how would, what would it take to find, like, a block every, like, five minutes or something like that?

181
00:30:10.194 --> 00:30:16.494
So what I mean is I'm cutting it way, way, way down, and there's gonna be a lot of chaos at the moment of the fork probably, a lot of blocks- Right.

182
00:30:16.554 --> 00:30:22.964
I mean, won't, won't just a bunch of miners rev up a few older ASICs and then- Yes... basically mine every single- But that's what I'm hoping will happen... every single block?

183
00:30:22.964 --> 00:30:27.154
Um, because I, because I don't know what the, um... It's a cost-benefit analysis, and I don't...

184
00:30:27.194 --> 00:30:40.970
You know, if you hit it too high, you'll never find any blocks, and it could, like, kill the project on its first day when it's getting a lot of attention and maybe a lot of s- So it has to, it's much better to have too many blocks-Uh, than too few in this case.

185
00:30:41.070 --> 00:30:51.170
I don't think there's anything bad at all about, like, the finding, like, 2 or 3,000 blocks in, like, one day. It just means the difficulty will ra- ramp up. You gotta find the, the equilibrium somehow.

186
00:30:51.790 --> 00:31:02.470
And as it- But what if there's a situation in which you have, like, two miners basically just, um, orphaning each other's chains, like- You could, but, uh, I think that is not, um...

187
00:31:02.490 --> 00:31:12.059
Well, yeah, first of all, there will be, like, full dis- like, as I've just said, like, I expect chaos, like, the week of the fork. So, uh, it will not... Six confirmations will not be enough, and it will have...

188
00:31:12.110 --> 00:31:18.680
You kind of have to wait. Really the network will be unusable until, you know, the, the- Until hash rate stabilizes, and there's, like, a, kind of, an equilibrium, yeah...

189
00:31:18.690 --> 00:31:31.270
yeah, until blocks are something like one every [laughs] 10, between 30 and three minutes when you have... But it will, uh, you know... I, I'm not sure. Theoretically, yes, it makes it easier for...

190
00:31:31.310 --> 00:31:36.510
But it depends on how many people get involved. So if a lot of people are getting involved, they may try to reorg each other.

191
00:31:37.310 --> 00:31:46.230
Um, think about even though from a block's point of view it might look completely insane, but from a human point of view, I don't think it really will look that insane.

192
00:31:46.290 --> 00:31:58.930
It will be, like, a really weird day, and then maybe another second really weird day during which you will probably not, like, you won't reliably count yourself as having received money, um, for...

193
00:31:58.970 --> 00:32:05.510
You know, you'll be like, "I need to wait, like, until whatever, until Friday or something, you know, to make sure that this..." Because this is just the network is in a bizarre state right now.

194
00:32:05.520 --> 00:32:15.430
It's just coming into existence. And so, um, you know, like, it even will be strange, but it won't be, it won't... It's not like it'll be, like, ruined for months.

195
00:32:15.650 --> 00:32:22.190
It'll just be, like, this weird p- piece of time, and eventually someone will jump, like, you know, whatever, like 500 to 1,000 blocks ahead.

196
00:32:23.010 --> 00:32:37.170
And it may be sad, but I do think usually the proof of work works just fine, where usually people just shrug and they say, "Well, we, we gave it a try, but it's time to fold because if we fold and join the longest chain right now, we can just start...

197
00:32:37.330 --> 00:32:47.369
We can go back to finding blocks on it." So I think it will work out because Satoshi's design is very good. But we'll, we'll find out. Uh, we'll be pushing it obviously to some extreme in this particular case.

198
00:32:47.589 --> 00:32:56.630
Well, so I, on that last note, I have to ask, I mean, are, are you going to be doing outreach to mining pools and miners trying to get support for mining this thing?

199
00:32:56.710 --> 00:33:06.690
I think that actually that is sort of the tail wagging the dog, right? Like, people tried to do that before, and they didn't succeed at all. And I, I told them, so this was back in SegWit2x, and I told...

200
00:33:06.760 --> 00:33:17.070
You know, it's very bizarre. Um, with, with SegWit2x, if that had been a soft fork with 83% of the hash power, it would have certainly succeeded, and there would have been nothing that the...

201
00:33:17.110 --> 00:33:23.350
And so the entire scaling war would have been a completely different outcome. But instead they tried to do this hard fork, and they tried to say, "We'll get commitments from people."

202
00:33:23.690 --> 00:33:30.510
All the miners backed out because what it ends up being is it's a commitment to losing money, um, in that particular case.

203
00:33:30.890 --> 00:33:37.430
So I just think in this case you just set, you set the difficulty low so the miners can make money, and then you try...

204
00:33:37.450 --> 00:33:47.710
You know, it's gonna be the market price on one hand, and then the difficulty, like, the, the i- the imputed price, you know, the imputed cost from the difficulty.

205
00:33:47.770 --> 00:33:59.130
So you, like, you can have two networks where one is, like, you know... Say for example let's compare BTC and Bitcoin SV, and you know, BTC is super, super high price but super high difficulty.

206
00:33:59.190 --> 00:34:09.590
So you subtract, and this is the profit, and then you could also have Bitcoin SV, very low price, everyone hates it, uh, but then, uh, very low difficulty.

207
00:34:09.730 --> 00:34:16.090
And then those two could have, like, they could have, like, a very similar, you know, profit margin or hash price or whatever people would be saying today.

208
00:34:16.730 --> 00:34:26.719
Um, and so you just have to g- make sure that difference is okay, and, uh, yeah, that's the, that's basically the logic is, like, so, like, a commitment doesn't mean anything compared to what that number is.

209
00:34:26.780 --> 00:34:32.170
So if that number is there, people will mine. If the number's not there, people will back out of the commitment.

210
00:34:32.230 --> 00:34:39.780
So the answer's kind of no, although I hope that, you know, as people find out about it, some miners are, like, they contact with questions, they say, "What algorithm is this?"

211
00:34:39.830 --> 00:34:45.110
Which is the same as Bitcoin SHA-256d, and stuff like that. So I think, um...

212
00:34:45.130 --> 00:34:59.470
But it will all be driven by, you know, the price and if there's an actual, if there's actual value to this, to this idea or any of the arguments, or if there's people believe me that a competitor to Bitcoin is an important and valuable thing to help make sure that we're not, you know, making too many

213
00:35:00.810 --> 00:35:12.440
m- m- mistakes that we never correct in BTC world. Uh, one last question about the details. It looks like... Yeah, I saw you tweet you have, quote, "seven drive chains in development right now." Um,

214
00:35:13.350 --> 00:35:23.050
you kind of gave us a little teaser, you know, like a Zcash styles drive chain, like a, um, a prediction markets drive chain. You've been a big prediction markets guy for a long time. Right. Great to see that.

215
00:35:23.090 --> 00:35:30.330
Very, very validated today. Um, they're just not really on [laughs] blockchains necessarily. Right. Yes. Uh, but- So I wanted to change that.

216
00:35:30.340 --> 00:35:40.400
And so the, what I proposed for prediction markets back in 2013, it was much better in many ways than what you have today with Calchain PolyMarket. I'm actually curious why. It had the mu- Yeah, dive into that...

217
00:35:40.410 --> 00:35:41.770
had the multidimensional markets.

218
00:35:42.090 --> 00:35:54.600
First of all, also, you know, everyone can thank me for the automated market makers and stuff, because that was invented by Robin Hanson, who wrote a paper in t- 2002, but almost no one on the internet could understand this paper, and I had to scour the internet for alternate explanations.

219
00:35:54.700 --> 00:36:02.910
But he invented... M- uh, so did Max Keiser. Max Keiser had a different version called, that he called the virtual specialists when for, uh, in the, in the '90s.

220
00:36:04.190 --> 00:36:16.210
Um, but, uh, it was Robin Hanson's logarithmic market scoring rule and this cross-product, uh, uh, market scoring rule that I, I put that in the TruthCoin white paper, which was about Bitcoin prediction markets in, in 2013, 2014.

221
00:36:16.770 --> 00:36:26.210
And then I was showing that around to the people at the time, like the, this was, like, Dan Larimer or Vitalik Buterin or whatever, and that's how it escaped containment and made it into Ethereum and got big with it.

222
00:36:26.610 --> 00:36:30.100
So a lot of this stuff was suggested by me. Um, but yeah,

223
00:36:31.050 --> 00:36:46.690
s- the cool thing that I r- also wrote into the TruthCoin white paper was the decentralized oracle, which is a problem that a lot of people thought could not possibly be solved because it's an incentive where everyone has a, a reason to lie about the outcome, so they can trade against theReal outcome and just extract all the money.

224
00:36:47.350 --> 00:36:51.370
So every, this is a situation where you don't know how many people there are, and everyone has an incentive to lie.

225
00:36:51.790 --> 00:36:58.130
But I wrote this paper about the peer-to-peer oracle, and even we had o- o- old people, uh, you know, we had...

226
00:36:58.250 --> 00:37:08.050
So like if you go to bitcoinhivemind.com, I still have the very old endorsements up there from 2015, which are like Peter Todd, Andrew Poelstra, uh, we got like Roger Ver is up there.

227
00:37:08.190 --> 00:37:25.100
Um, so it's like, uh, so you can see, um, I was very proud of, of achieving that because this is the truly decentralized prediction market that can't be shut off, and this can hit some, this could hit some categories that are too taboo even for Kalshi and Polymarket to hit, and they would just live immortally on a...

228
00:37:25.120 --> 00:37:33.230
So that was what I proposed a long time ago. So this is another reason why I'm kinda like sitting around l- and you're looking at Bitcoin. Now, of course, Bitcoin has done very, very, very well.

229
00:37:33.430 --> 00:37:47.350
You know, the price has w- skyrocketed. We have changed the world, we've changed the culture, we have the president coming to speak in, in 2024 at the conference. So we've changed a lot.

230
00:37:47.430 --> 00:37:56.250
Uh, you know, we've b- we've been a big success. But really, there's all this other stuff that we could be do- Like whatever happened to the Namecoin project, and then this is fractured into other stuff.

231
00:37:57.110 --> 00:38:02.800
You know, like, uh, what's it called? Like, um, I forget, but there's many different ones like Handshake, right? Isn't that one? Yeah.

232
00:38:02.810 --> 00:38:06.680
And, uh, even like Michael Saylor tried to do decentralized identity with Orange- Yeah, he did that...

233
00:38:06.680 --> 00:38:15.810
but then he realized, oh, he realized- He announced it, but I never- He showed up, and he was like, he thought this was a real technology industry where people did things, but then he looked around, and he was like, "Oh, I'm not supposed to do anything here."

234
00:38:16.280 --> 00:38:23.710
Okay. This is part of the problem. Yeah. Okay, so, uh, I gotta throw a couple hard questions in 'cause you, you said- Sure... you know, people are afraid to talk about the taboo.

235
00:38:24.310 --> 00:38:37.330
Um, let's talk about the, uh, the money because, uh, there are investors in this. You did pass the hat around. Right. Um, there's people who are invested in the fork. Can you talk about this?

236
00:38:37.410 --> 00:38:52.430
Can you talk about the, the reason, rationale, and your mindset behind raising money, and then- Of course... you're forking and giving out the eCash tokens that would otherwise have gone to Satoshi. Di- discuss this.

237
00:38:52.850 --> 00:39:02.700
Yes. Yeah, this has been like a huge, um, like people are very, very interested in this, and they, and some of them seem to think it's like some huge knockdown argument. I don't think...

238
00:39:02.950 --> 00:39:17.990
So if one, okay, one thing to emphasize is we have a second version that does not have any financing and does not reassign any coins, and it does n- absolutely none of these things, and it still brings all of the same L2 technology to Bitcoin, and it doesn't change,

239
00:39:19.030 --> 00:39:29.310
it doesn't actually change Bitcoin into a hard fork, and it doesn't involve any code changes in Bitcoin Core. That, that second version is just what BIP-300 is. That's what BIP-300 has been the whole time.

240
00:39:30.010 --> 00:39:32.210
So there's this alternative this whole time.

241
00:39:32.250 --> 00:39:46.210
Now, I think part of it also is you can see, I knew from the block size war that doing the fork involves a lot of people weighing in with their opinion who have no skin in the game, and it is a, it is an upset.

242
00:39:46.310 --> 00:39:49.790
It does disturb, you know, disturb, it's a, you're a disturber of the peace.

243
00:39:49.830 --> 00:39:58.990
It's like when Gandalf is labeled a disturber of the peace at the beginning of Lord of the Rings, and now the little farm guy is mad, but all the kids want the fireworks and that type of a thing. Yeah.

244
00:39:59.030 --> 00:40:09.310
So it's like you've been labeled a dis- That's exactly what has happened, of course. So there's a, the thing about that is there's a kind of stigma for supporting the fork, and I knew that we had to change reality.

245
00:40:09.679 --> 00:40:14.690
Like even if we just change the reality, and we set the precedent that says, "If you try to improve Bitcoin..."

246
00:40:14.750 --> 00:40:22.570
See, 'cause right now the precedent is if you try to improve Bitcoin, you go to op/next, and then people write an article that says, "Don't break Bitcoin."

247
00:40:23.090 --> 00:40:26.390
And, but nothing happens, and, uh, it's, and it's really miserable.

248
00:40:26.440 --> 00:40:37.110
And like people like Jeremy Rubin also, they put out CTV activation client, and then he quit after a day, and he quit, not only did he quit CTV, but he quit all software, he quit all Bitcoin development.

249
00:40:37.170 --> 00:40:42.010
He, so far as I know, he quit all computer science development for like a year and a half, and then he...

250
00:40:42.570 --> 00:40:54.980
So like it's, we have to change that so that it says, as the story more goes, if you propose an idea for Bitcoin that has some merit in the world, where you, you have, it has some possibility of adding value,

251
00:40:55.910 --> 00:41:00.290
then you can get millions of dollars. So that's, that's part of the, it's to flip the...

252
00:41:00.350 --> 00:41:09.330
And it's also partly to say like these people who are haters, they are not, you know, it's, there's a big difference between people putting their money around...

253
00:41:09.460 --> 00:41:14.970
'Cause like what makes a good investment is it has to look like a bad investment, but it has to be a good idea.

254
00:41:15.290 --> 00:41:28.810
Because if everyone knows that it's a good idea, the, you know, it's like if people say, like this is like people would come up to me from time to time, and they'd say, this is, has nothing to do with Bitcoin, but it'd just be like, oh, they, they'd ask for my advice with investing 'cause they know I have like a background in economics, like as if that's gonna help.

255
00:41:29.230 --> 00:41:40.510
But they say like, "Oh, like I love Apple, so I'm gonna buy some Apple stock or something." Or they say, "Oh, I think Elon is smart." But it doesn't matter. Th- this is just like with the difficulty in the market price.

256
00:41:40.960 --> 00:41:50.420
The current stock price could maybe be too high on a popular company, and then many unpopular companies that might be on death's door, they might be a buy because the price is so low.

257
00:41:50.450 --> 00:42:01.630
So to make the investment good, it has to appear unpopular, and it has to appear unpopular but actually be, have a lot of merit. So that, that, a lot of it's partially like, um, on purpose.

258
00:42:01.810 --> 00:42:05.410
Um, I think- Wait, wait, is it, is it... Wait, hang on. So are you...

259
00:42:05.530 --> 00:42:12.550
Maybe I'm misconstruing this, but you're saying part of the reason why you wanna dole out the eCash, uh, equivalent of Satoshi's coins is because it's unpopular?

260
00:42:12.910 --> 00:42:19.470
Well, you look at how it, like it triggered people, it got everyone to talk about it. It was fairly- Definitely. And, and sorry, just to interrupt one more time.

261
00:42:19.530 --> 00:42:23.610
Like, can you understand why a lot of people are uncomfortable with this part of the proposal? Yes.

262
00:42:23.620 --> 00:42:33.670
There's certainly- Because like ultimately, like that pro- that, it, the eCash tokens are the private property of whoever owns those coins, right? And we're just saying Satoshi. Precisely. No, I do understand why.

263
00:42:33.730 --> 00:42:40.040
And I even understand why everyone uses the phrase, "Steal Satoshi's coins." Because I kind of- Okay, I, I'll defend you with that one.

264
00:42:40.099 --> 00:42:46.650
'Cause you're, like y- I mean, technically, but it's like pe- people think that it's Bitcoin- You're giving him the coin... people think that it's the Bitcoin that he's given. Right. No, I wanna...

265
00:42:46.670 --> 00:42:53.518
Well, let me fully flesh this out because obviously this has been-People have been like s- so obsessed, more than I could have ever ex-...

266
00:42:53.558 --> 00:43:03.228
I mean, I thought that there would be some element of this, but I had no idea that this would be like the, the huge thing that would like send this into like millions of commentary. So, um,

267
00:43:04.498 --> 00:43:14.938
the, it's true that we're not actually taking any of Satoshi's coins, and I suppose it's theoretically true that I could probably sue people for slander, 'cause it's like they're accusing me of a criminal act, or so not that I would care enough to do that.

268
00:43:14.958 --> 00:43:19.558
But, but the phra- there's a sense in which they are right, because in Bitcoin,

269
00:43:20.818 --> 00:43:31.918
w- we don't, people in Bitcoin, we don't think of Bitcoin as purely, um, I'm not sure how to phrase this, but it's kind of like we assert that, we assert something about the common good with Bitcoin.

270
00:43:31.978 --> 00:43:44.638
Like a lot of people see Bitcoin as like a common civilization-wide project. And so it's not just like, oh, Paul does this, whatever, like Chris does this, Jeff does th- whatever, just, you know.

271
00:43:44.758 --> 00:43:53.777
And it's like w- there's this idea of what's best for everyone, and it's kind of like a political party. They don't just say, usually a political party doesn't just say like,

272
00:43:54.768 --> 00:43:58.377
"Vote for us because we're gonna steal everyone else's stuff and give it to..."

273
00:43:58.398 --> 00:44:09.318
They often do this sometimes, but they don't say like, the, a political party's message is that they are f- they are advocating for the public good. They're saying, "Life would be better if we

274
00:44:10.558 --> 00:44:22.618
improve the roads," or whatever. So this is a sense in which it's right, is where I'm saying it, life would be better if we switched tracks to this track where Satoshi has hundreds of thousands of fewer coins.

275
00:44:22.638 --> 00:44:28.938
So there's a sense in which, um, they are right. Um, but there are also many senses in which it's like the perfect idea.

276
00:44:29.078 --> 00:44:36.738
So, um, I mean, at one, one pro- there's another issue to bring up is that, so like after I just say there's some merit to what they say, there's also,

277
00:44:37.778 --> 00:44:45.878
there's also like at least two more senses in which there's absolutely no merit to what they say whatsoever. So the, um, two of them would be this.

278
00:44:45.958 --> 00:44:55.278
One is that they kind of, these, first of all, these people are presenting themselves, many of them are saying something like, "Well, this idea is perfect except for this one flaw, taking Satoshi's coins."

279
00:44:55.738 --> 00:45:02.558
Well, we know perfectly well these people would've criticized BIP300. They probably would've criticized OP_CAT. They would've criticized like OP_RETURN.

280
00:45:02.758 --> 00:45:08.818
They, just, these, some of these people just criticize all kinds of stuff. They would have hated any hard fork under any circumstances.

281
00:45:09.918 --> 00:45:18.438
Um, and so the, the, the premise that they would, you know, the, what, what they're rep- what they're representing is as like as if

282
00:45:19.438 --> 00:45:24.498
the project would be improved and they would become a supporter if I d- if I just change this one part back.

283
00:45:24.938 --> 00:45:33.198
I think we know that that's completely untrue, and the fact that they even talk as if it's true, I think it says a lot about like how poorly thought out, like with their own positions.

284
00:45:33.458 --> 00:45:42.278
But speaking of that, my second point, I mean, I have more points even than that, but the second point is that they, they, these people are kind of, they ha- wanna have it both ways.

285
00:45:42.318 --> 00:45:49.198
They wanna say, "Well, this is a worthless fork that everyone should ignore, and it's gonna be worth zero," in which case Satoshi doesn't lose anything at all.

286
00:45:49.518 --> 00:45:55.218
The coins, they, they have to equivocate on how valuable they think this property is, that I'm supposedly depriving Satoshi.

287
00:45:55.228 --> 00:46:03.358
If they, they think, "Oh, this fork's gonna be a huge success, and all this is gonna be worth a ton of money." And then it's like, oh, that's, Satoshi is losing it.

288
00:46:03.578 --> 00:46:12.478
So these people kinda wanna have it all the different ways. It's just an example of how just people complain, and, um, you know, I think everyone should emulate this task.

289
00:46:12.518 --> 00:46:16.867
Instead of launching new altcoins, we should have lots of, this is, cuts the, splits the difference between,

290
00:46:17.978 --> 00:46:29.678
um, like privatizing the side chain, which is like what an altcoin does, and they say, "We'll launch this," you know, something like a Solana or whatever, where A16Z has like 20% of the whole supply.

291
00:46:31.318 --> 00:46:34.458
But Bitcoiners get nothing. We, we should do this more in Bitcoin.

292
00:46:34.618 --> 00:46:42.778
Um, I'm trying to set the example that, um, we should do this because, you know, you, we have the situation where all Bitcoiners get free coins, including Satoshi.

293
00:46:43.558 --> 00:46:50.598
Everyone gets free stuff, and then the, the founder has some reason. But there are even more reasons for that as to why I did it. Some of them are that the hard fork is very hard.

294
00:46:50.638 --> 00:46:58.998
You have to coordinate people in advance. The network effects are very strong. You need to hit the ground running with like a new team, like kind of on day one you wanna have all the software.

295
00:46:59.038 --> 00:47:07.078
Is it better to do a hard fork and say, "We're gonna do this software later"? When will that software be finished? And so then a lot of stuff will have happened in between.

296
00:47:07.117 --> 00:47:15.878
So there are lots and lots and lots of reasons why this was a very, very, very clever decision. But yeah, it, it does appear superficially to go against the property rights idea of Bitcoin.

297
00:47:15.908 --> 00:47:23.137
And so that's, I think, why people have tried to latch on. These are people who would've criticized anything about it that they thought they could get away with, and so it's all yeah. Yeah.

298
00:47:23.178 --> 00:47:32.538
I mean, I'm empathetic to the reality that you just can't have like the, the cold start, the, the, it's just impossible to have a perfect cold start to a blockchain these days. Yeah.

299
00:47:32.578 --> 00:47:42.578
You can't recreate the how Bitcoin emerged. Colin, I think you had a, a, another hard question. Yeah, I, I have one last hard question, um, Paul.

300
00:47:42.638 --> 00:47:52.938
So maybe this would be better as a closer, but I'll just go ahead and throw it in. Um, a lot of hard forks have failed. In fact, every single one of them. Yeah, I would agree.

301
00:47:53.258 --> 00:48:01.778
Um, out- outside of, you know, edge case, uh, or, or early on- B- BCH is still going along, but it's, it, it lost But it failed in the sense of like it didn't ne- none of them replaced Bitcoin.

302
00:48:01.918 --> 00:48:07.838
None of them- Yeah, right... actually have anywhere close to the market share that you- Yeah, but we know that I already know that, and I'm trying to do it anyway. [laughs] Right.

303
00:48:07.878 --> 00:48:10.918
Well, so that's why I wanna ask, like what makes you think this was, this is going to succeed?

304
00:48:10.958 --> 00:48:19.618
And kind of a second part to this question, similar to the mining pool one, are you gonna be doing outreach to exchanges and market makers to assure that there is a market for this thing? Well, yes, a little bit.

305
00:48:19.658 --> 00:48:22.608
But, uh, I think, um, okay, well, first things first.

306
00:48:22.608 --> 00:48:33.618
So the, w- if we had to make a list of all the serious hard forks, I think it would only be BCH really, because Bitcoin SV was a hard fork of BCH, and it was also, you know, it was crazy.

307
00:48:33.998 --> 00:48:37.958
Craig is a crazy person, and everyone, you know, everyone's like, "It was all just a bunch of nonsense."

308
00:48:37.998 --> 00:48:45.658
But I think some of these people have later acquired teams that, where they thought, "Well, we can make this work somehow."

309
00:48:45.678 --> 00:48:59.326
But I think Bitcoin Cash actually was something of a success in that when it laun- when it was mainstreamed, when it first came out in August-Not when it when it first came out in August, it was ignored because SegWit2x was still being done at the time.

310
00:48:59.546 --> 00:49:06.866
But then later in November, when it was, like, debuted, when they canceled SegWit2x, it rose to become number two on CoinMarketCap.

311
00:49:07.606 --> 00:49:19.266
And it, and now, and also it, it, when it hit number two on CoinMarketCap, it was 15% of BTC's price. The infamous flippening event or- Right. And that was- The flippening... Vitalik had that quote, that, that tweet.

312
00:49:19.286 --> 00:49:27.456
He said, "Congrats on this, seriously." That kind of became a meme for a short time after that, where people would just say, "Congrats on this, seriously," about, like, [laughs] random things, which was funny.

313
00:49:27.786 --> 00:49:38.906
So if so- if it debuted today at 15% of BTC's price, which is certainly not, you know, I'm not guaranteeing that or even whatever, but I'm just saying, if it did the exact same thing that Bitcoin Cash did, that would put it, like, number three.

314
00:49:39.126 --> 00:49:47.526
It would be, like, next to Ethereum sort of now. So- And Bitcoin- Uh-... Cash flippened in hash rate too. They were pr- they were neck and neck for, like, a week or two there.

315
00:49:47.646 --> 00:49:55.626
Yeah, and- And there's a lot of stuff that went on in the background with Bitmain- Yeah... swapping machines over, and Jihan Wu supported that fork a lot. So, like, uh- He did.

316
00:49:56.226 --> 00:50:03.856
Um, I think Bitcoin Cash made it- You know, I, I, I don't know if we would call that or ga- Like, is that winning or is that an attempted coup, right? I mean, I think that that's an open question.

317
00:50:03.866 --> 00:50:12.166
Well, I think Bitcoin Cash was... You know, I, I had a lot of friends who were large blockers, but I've sent emails at the time, and I sent public, made public statements, and I was on...

318
00:50:12.206 --> 00:50:21.276
There was a SegWit2x list where they, it, it surveyed all these technical people to say, "How do you feel about SegWit2x?" Basically, everyone said, "Don't do it," including me, or they said it wouldn't work.

319
00:50:21.726 --> 00:50:32.266
So I was on this list. This was long before. This was, like, after it came out in, like, whatever, May or June 2017. So I was always a small blocker. I'm in favor of small blocks on L1.

320
00:50:32.326 --> 00:50:43.206
That's different, completely different from L2. So when Bitcoin Cash came out, I said, "Well, this is a bad idea, actually." Hard forking once from one megabyte to eight megabytes, that just kicks the can down the road.

321
00:50:43.456 --> 00:50:54.146
And so I, I think this is more like a [clears throat] BIP-300 is more of, like, a kind of, um, permanent idea because it's built into it the idea that you have these new L2s that would compete.

322
00:50:54.436 --> 00:51:07.375
And so any idea that you might want later, you can still get within the paradigm. Um, Bitcoin Cash also, like, it decided to just, like, make all these other changes, led to, like, these assert zero bugs.

323
00:51:08.026 --> 00:51:12.966
Uh, like, you know what I mean? Like, they would... They forked Bitcoin, and then they started changing, like, every line of code. So I don't...

324
00:51:13.086 --> 00:51:16.206
Someone should go back and do this, this research project, but at one point,

325
00:51:17.446 --> 00:51:32.246
I think it was maybe March 2018, I tried to look, and there was something like 30, 30,000 lines of code had been changed from Bitcoin Cash to BTC, including, like, renaming various variables were named, like, block stream, block size lim- like, just silly stuff like that.

326
00:51:32.266 --> 00:51:35.906
This, all this makes it really hard to do, like, the code diff or whatever.

327
00:51:35.946 --> 00:51:47.786
My conception is completely different, where again, I'm hard forking specifically to create a competing coin, but the L1 software is gonna stay ba- e- essentially equivalent to Bitcoin Core.

328
00:51:48.686 --> 00:51:50.646
Um, so I think that actually a lot of this stuff...

329
00:51:50.666 --> 00:52:03.396
I had, I did a little research project where you could track a co- I said, if the coins were, like, third parties, and you just meas- meas- measured BTC, Ethereum, and this coin, um,

330
00:52:04.326 --> 00:52:10.905
and then you plot them over the time that they came out, uh, this is maybe a little, like, confusing, but basically I had...

331
00:52:10.926 --> 00:52:23.326
So as the, as the candidate, you know, as the kind of, like, what you might call, like, the, uh, the independent variable or whatever, I was like, so you either do BTC, Ethereum, Bitcoin Cash, or BTC, Ethereum, Solana, or, like, Avalanche.

332
00:52:23.366 --> 00:52:31.206
Did, like, a little list of coins, and you can plot how did they do as a percentage of the market cap over their first, like, year or two years.

333
00:52:31.526 --> 00:52:40.406
Bitcoin Cash does by far better than, you know, Solana, than Cardano, than all these other things. So even though I was not a supporter of Bitcoin Cash, I think it did do very well.

334
00:52:40.426 --> 00:52:53.946
I have a, a couple other, you know, points of data if you're interested, which is that one was for all... I think people are much louder when they wanna do their little commentary, but really the UTXO sets don't diverge.

335
00:52:54.006 --> 00:53:04.206
So ab- about a year after Bitcoin Cash had hard forked, more than half of the UTXOs were the same still, uh, a year afterwards.

336
00:53:04.276 --> 00:53:13.466
And this was, a year afterwards was, like, a m- you know, that might as well have been a million years afterwards because so many people weighed in, like, the, you know, the same week or, like, right after, and then people are buying and selling their coins.

337
00:53:14.286 --> 00:53:22.446
Uh, it also includes situation where maybe if you wanted to sell 10% of your Bitcoin Cash, for example, you have to split the whole UTXO.

338
00:53:23.486 --> 00:53:31.546
So it, it would look as though you'd split the, like, a, a whole UTXO of maybe if you have seven coins there, but really you only sold a little bit.

339
00:53:31.606 --> 00:53:38.966
So I, I, I really think that, uh, there's, like, a couple more points I could mention about that. But overall, I think people...

340
00:53:39.036 --> 00:53:43.766
The own- the Bitcoin owner is very happy to just keep all the coins and say, "You know what?

341
00:53:44.326 --> 00:53:53.506
These technologists are feuding, and I'm just gonna take all the coins, and I'm gonna keep them in a giant pile like Smaug, the dragon," and they're just gonna lie on all the coins.

342
00:53:53.986 --> 00:54:05.066
So everyone's got an opinion because the h- what the hard fork does is it says, it's... A hard fork is being loyal to the Bitcoin owner. It says, "I'll give you credit for all your coins for free."

343
00:54:06.566 --> 00:54:19.066
And, but what is it disloyal to? It's, it's a challenge to Bitcoin Core. It's a challenge to the, the media environment. It's saying, "Well, hey, the culture," you know, it's saying these people, you know, it's...

344
00:54:19.186 --> 00:54:26.066
So it's kind of an insult to Bitcoin Core, or it at least introduces competition, which is no fun. Like, what if I said, "Oh, I'm gonna..."

345
00:54:26.106 --> 00:54:33.746
I told you guys, "Oh, I'm gonna start my own, like, mining podcast, and I'm gonna whatever," and you'd be like- [laughs]... "Well, wait, another competitor that I have to deal with?"

346
00:54:34.206 --> 00:54:42.466
But, but there's this difference between who is it competing with, and those people would obviously have some kind of problem with it, especially on the off chance that it succeeds.

347
00:54:42.606 --> 00:54:43.926
'Cause what would the history books say?

348
00:54:44.426 --> 00:55:02.950
Then, then no one would be listening to them, and then everyone would listen to me, and I would say, "Well, I proposed this idea in 2015, and then they didn't do it, and so then after I did it, I was proven right, and they, you know, it was all a big waste of time what they were doing."Uh, you do bring up a good point, which I will, uh, wrap this up with.

349
00:55:02.990 --> 00:55:14.790
'Cause we do, we, we have to get onto the rest of our news. Uh, you do present a good angle, which is it does challenge the media because I'm sitting here going like, man, if Paul succeeds and this fork really rips,

350
00:55:15.810 --> 00:55:26.930
like can we have Paul on the podcast anymore? [laughs] Well, I'll keep coming back on the podcast, guys. Obviously, yeah. You're- It's a good one. Yeah. You- And I, I think that's... It really does speak to...

351
00:55:26.990 --> 00:55:36.110
I think, like there's a lot of people who are good, who are critics, but, you know, we were at the Bitcoin Conference all this past week in Vegas, and you're still an invited person.

352
00:55:36.190 --> 00:55:40.950
You're a, you're a close, long friend of a, of a lot, you know, in the Bitcoin community.

353
00:55:41.030 --> 00:55:53.590
So I thought it really spoke to like people's like, at least, you know, respect, uh, for you and your efforts over the past decade now of, uh, you know, speaking your mind and your opinions. I wish we had more time.

354
00:55:53.670 --> 00:56:06.720
I'd love to dive into the four to kill by block size for, of the fork, but unfortunately we gotta move on, Paul. Uh, where can people go to find out about this fork? Rarely do I think I let a CTA happen for a hard fork.

355
00:56:06.750 --> 00:56:18.250
Yeah, where can people know about where you're trying to kill Bitcoin, Paul? Yeah. Well, yeah, there's the ecash.com website, and then I'm, I'm Truthcoin on, on Twitter. Yeah, you- How did you get that domain?

356
00:56:19.570 --> 00:56:26.130
The ecash.com? How did you get ecash? It was just available. It was, and I was completely fl- I was thinking about what to name it, and I was just like, you know, it was a complete fluke.

357
00:56:26.170 --> 00:56:36.710
I, I talked to- Do you have the mortgage of the farm to give that up, Paul? I got a shill competing... Um, no, I tell the whole story on, uh, on Joel's podcast on, that I recorded last.

358
00:56:36.730 --> 00:56:45.690
So I think these are, should hopefully end up on ecash.com, like whatever I do, I think I will try to put it there so that there's a repository of. So I go into the whole story, but it was just like a kind of a fluke.

359
00:56:45.770 --> 00:56:53.670
It was all available, and you could just buy it for a very cheap amount, and so that's what I did, and that's how it got the name. I was, I had a couple like other different names maybe in mind.

360
00:56:54.110 --> 00:57:07.490
But yeah, so that was ecash.com. Um, you gotta have a good name. And, um, what's the other thing? Oh, the four mega- Yeah, the lowering the block size on L1. Yeah. That's to make it- Yeah... even more decentralized.

361
00:57:07.590 --> 00:57:18.090
Hey, it, it, it, it's, uh, uh, Luke Dash Junior approved. Really close. Like, but you, can you broadcast 40 kilobytes over a ham radio? 'Cause wasn't that the Bunker coin angle or something?

362
00:57:18.550 --> 00:57:26.910
Um, well, I think the idea is just, just to make it so that, you know... Okay, so we want cheap full node, and we want like it, it to be easier to hide the physical location.

363
00:57:26.950 --> 00:57:35.390
So there are many benefits of smaller block size. And since I'm giving people access to unlimited L2 block size, we really don't need, you know...

364
00:57:35.430 --> 00:57:46.010
You could- People look at like the, the gold window or something like that, or what, how many transactions Bank of International Settlements does versus the Fed versus like, you know, Bank of America or something, or versus Chase Manhattan.

365
00:57:46.110 --> 00:57:51.479
So, um, we really don't need the L- Th- this is the issue, is you kinda, people, again, people wanna have it both ways.

366
00:57:51.550 --> 00:57:57.990
They wanna say, the large blockers say, "Oh, L1 should be, you know, everyone should transact on L1."

367
00:57:58.050 --> 00:58:08.550
That's, that's actually makes the full node very expensive and difficult to hide physical location, et cetera, et cetera. But then people say, "Oh, people should transact on L2s."

368
00:58:09.210 --> 00:58:16.930
Well, yeah, that's ex- that's what I believe. So we actually don't need... When you settle on L1, that's kinda like, you know, when you go to the airport and you swap your dollars for euros or something.

369
00:58:16.990 --> 00:58:27.590
You j- You don't do that as often as when you actually s- pay on the L2s. So and then when you pay today, like, you know, if you pay in America, it's like inside the Fed system.

370
00:58:28.330 --> 00:58:36.590
Um, y- that, that's just like a, most of... You know, it's, you don't have like an account at the Federal Reserve or the Bank of International Settlements. You know, normal people don't need one.

371
00:58:36.650 --> 00:58:44.810
So they're effectively on layer three or layer four, like their whole lives. You know what I mean? Like they just join the commercial bank at layer three, and then they just stay there.

372
00:58:45.330 --> 00:58:57.170
They don't need to like have an account at what would be L- L1, which would be like the Bank of International Settlements or something like that. So, so that's kinda part of the thinking behind that.

373
00:58:57.250 --> 00:59:07.120
Paul Sztorc, thank you so much for coming on the show to talk about the Sztorc fork. [laughs] Thanks for having me. Yeah, appreciate you hopping on, Paul. Yeah, appreciated.

374
00:59:07.190 --> 00:59:09.250
Um, and it was a g- a pleasure to see you in Miami.

375
00:59:09.260 --> 00:59:18.170
Thanks for a fun panel, and, uh, we'll probably get you back on again sometime between now and August, and probably around launch, uh, if it comes to fruition, to talk a little bit more about it. Okay, great.

376
00:59:18.230 --> 00:59:32.710
All right, Paul. Thanks. Thanks very much. Adios. I think, uh, I think I'm sold on the idea that Paul's alignment is chaotic good. [laughs] Um, I think that that's, I think that's my takeaway from that conversation.

377
00:59:33.510 --> 00:59:41.390
Uh, we'll see what happens with it, and, uh, if you think about throwing tomatoes at us- He would say that he's, he would say he's lawful. He would say he's lawful good, I would say. [laughs] Right. Yeah.

378
00:59:41.430 --> 00:59:47.410
I'm, I'm Paul- Well, when he was talking about like, we just need, like forget with all these altcoins, we should be just doing [laughs] a bunch of hard forks, right?

379
00:59:47.430 --> 00:59:55.560
Like, that's what made me think of that, 'cause it's like fomenting chaos with the idea of leading Bitcoin towards a direction that he thinks would be better for it. Whether or not- Yeah...

380
00:59:55.560 --> 01:00:06.350
you think that's right, I, I, that was my reading from that segment. Okay, but we'll, we'll get back to news. We've got two news items to round out the day, but first, a quick shout-out to our sponsor, Luxur.

381
01:00:06.750 --> 01:00:12.390
This episode is brought to you by Luxur Commander, Bitcoin miner management software for enterprise solutions.

382
01:00:12.930 --> 01:00:24.900
Commander gives you real-time fleet monitoring, bulk remote commands over your fleet, and Intelligent Miner, an automated profitability engine that runs every five minutes and adjusts power settings to live hash rate markets and energy markets.

383
01:00:24.990 --> 01:00:36.370
ERCOT backtests show 10% more profitability with Intelligent Mining versus binary mining. Commander Pro is $100 per megawatt or a 25 basis point pool fee adder.

384
01:00:36.710 --> 01:00:46.030
It's roughly half the price of competitors, but you can try it for free for 60 days. So if you wanna learn more and interested in getting started, go to luxur.tech/commander.

385
01:00:47.990 --> 01:00:58.604
All right, and with thatWe will move on to our next news item of the day. Big M&A activity in the Bitcoin mining AI space. It's kind of an M&A news show today. Yeah.

386
01:00:58.634 --> 01:01:11.834
Mara agrees to acquire Long Ridge Energy platform for $1.5 billion. So Mara is going to acquire this Long Ridge energy site from FTIA Infrastructure company. They're a, a kind of an infrastructure provider.

387
01:01:11.894 --> 01:01:19.854
They do a bunch of stuff in the, um, energy space, also in some tran- transportation, uh, for a total transaction value of approximately $1.5 billion.

388
01:01:20.434 --> 01:01:32.294
This deal will add 505 megawatts of combined cycle gas power at a plant in Hannibal, Ohio, with more than 1,600 contiguous acres, uh, added to Mara's energy and compute portfolio.

389
01:01:32.914 --> 01:01:41.434
Now, Mara already has 200 megawatts of Bitcoin mining at this site as they continue to move further into an asset-heavy model.

390
01:01:41.474 --> 01:01:50.554
Those of you longtime Mining Pod listeners might remember Mara was asset light for the longest time, choosing to host in the majority of their spots where they're mining now.

391
01:01:50.614 --> 01:01:59.934
They are bringing all-- most of that infrastructure in-house. A few more pieces of context for the deal. Of that $1.5 billion,

392
01:02:01.054 --> 01:02:12.474
this is an interesting piece of the deal, uh, $785 million of that comes in the form of debt that Mara is assuming from, uh, FTAI.

393
01:02:12.554 --> 01:02:23.754
So, uh, I, I believe they will be making up the rest of $715 million on the acquisition, some combination of cash, maybe, uh, debt. Uh, I'm not-- They didn't really disclose how they're going to finalize the rest of it.

394
01:02:23.774 --> 01:02:36.294
But that $785 million debt that it is assuming from the prior company is being backstopped by a bridge loan from Barclays. So they've got a little bit of... Oh, go ahead, Charlie. Oh, no.

395
01:02:36.354 --> 01:02:47.154
Yeah, I, I think, yeah, I think this is, uh, really, really interesting. Uh, oh, you know, re- remember, a year and a half ago, the, like, Mara was mainly-- They were not full stack.

396
01:02:47.254 --> 01:02:57.563
They were really middle stack just in the, like, almost entirely, like, hosted or just host, you know, powered, powered deals, uh, like, hosted machines category.

397
01:02:57.654 --> 01:03:08.014
And they've pivoted really hard, added a clear AI strategy. Now they're buying full stack, a gas plant. I mean, this is huge.

398
01:03:08.074 --> 01:03:15.214
So apparently, maybe you already said this, but so it already has, like, 200 megawatts of their existing Mara capacity and adds another gigawatt.

399
01:03:15.854 --> 01:03:28.913
So to have, like, full stack, like, energy production, gas plant, you know, full stack gigawatt in the pipeline, and it's going towards AI HPC. Construction starting, I believe, in the first half of next year.

400
01:03:29.434 --> 01:03:35.094
Pretty significant. Yeah, that's a good, uh, thing, uh, good context, Charlie. So they've got the Bitcoin mine there.

401
01:03:35.234 --> 01:03:41.934
As far as I understand from this press release, they are going to be completely shelving that and retrofitting or bulldozing, depending on your definition, right?

402
01:03:41.964 --> 01:03:49.714
'Cause as I understand, it's really hard to retrofit these mines. Yeah. You typically are building it up from the, from ground zero to service AI loads.

403
01:03:49.754 --> 01:04:00.354
But so it will be p- uh, converting all of that to AI and HPC workloads. As Charlie said, build-out is expected to begin the first half of next year. When ready for service, mid-2028.

404
01:04:01.394 --> 01:04:09.514
Uh, Mara also has multiple pathways to expand capacity of the site to up to two-- 600 gross megawatts over time through a combination of grid expand and on-site power generation.

405
01:04:09.564 --> 01:04:12.834
So looks like they're bringing their own power for some of it, maybe expand on the grid.

406
01:04:13.294 --> 01:04:25.394
But, uh, net-net, you know, with the 500 megawatts combined cycle, that's 500 megawatts of generation, and then they can also, at-- with what's available at the site right now, add 500 megawatts of consumption, uh, with that nat gas.

407
01:04:26.034 --> 01:04:37.414
So this builds on, as Charlie was saying, Mara's AI aspirations. They recently signed a deal, a strategic partnership with Starwood to develop some of their data centers for AI.

408
01:04:37.494 --> 01:04:51.734
And then obviously, they also closed their majority stake in Exion, the data center subsidiary of the French EDF, their national grid operator. So Mara really starting to barrel into the AI and HPC narrative with this.

409
01:04:51.794 --> 01:05:02.024
Also, just to double tap on something Charlie said, uh, they are bringing in more of a full stack approach. Now they have this gas plant that they just purchased. Uh, this, uh... Well, they're purchasing it.

410
01:05:02.134 --> 01:05:08.494
The deal is expected to close next quarter. They also have a wind farm in Texas too. TBD what that's going to be used for.

411
01:05:08.594 --> 01:05:19.004
Probably not very- I just have a hard time seeing, maybe I'm naive, but I have a time-- hard time seeing a wind farm being, uh, appropriately suited for AI HPC. Oh, you took the words right out my, out of my mouth.

412
01:05:19.054 --> 01:05:29.254
Exactly. And like a gas plant is literally the ideal- Mm-hmm... short of like a nuclear build. Gas plant's like ideal for AI HPC. It's really ideal for any type of compute.

413
01:05:29.754 --> 01:05:36.754
But espe- It's, it's, uh, in-- as far as I'm aware, pr- superior than a wind farm for the AI HPC deal. 100%.

414
01:05:36.894 --> 01:05:47.374
And I, I would imagine that, that, that wind farm is going to be a grid optionality play with the bit- with Bitcoin mining assets, right? Like sell when- Yeah... prices are high, mine when prices are negative.

415
01:05:47.904 --> 01:05:56.074
And now a quick word from our sponsor, Ligos. Hedge funds are getting liquidated. Is your Bitcoin safe? It's not just Bitcoin's price drying up.

416
01:05:56.374 --> 01:06:09.484
Hedge funds, whales, lenders are all going under after the notorious 1010 and two-five liquidation events. Counterparty risk is rampant, so it's more important than ever to know who actually controls your Bitcoin.

417
01:06:09.514 --> 01:06:19.474
And with Ligos, that is always you. Do not become the next FTX or Celsius victim. If you're working with another loan provider, do yourself a favor and move over to Ligos.

418
01:06:19.754 --> 01:06:30.474
They are our preferred Bitcoin lending company here at Blockspace. They use Bitcoin native c- smart contracts to secure your stack and make sure that you always hold the keys to your kingdom and nobody else.

419
01:06:30.514 --> 01:06:42.014
With Ligos, you always know where your Bitcoin is. No, no bridging, no rehypothecation, just competitive rates as low as 10% APR. Go to ligos.finance to learn more.

420
01:06:42.114 --> 01:06:48.244
On to our last story, which is a collage of a number of stories related to prediction markets, because they're just all over the news recently.

421
01:06:48.874 --> 01:06:54.974
First one I wanted to start with, Gemini Eye's prediction market challenge to Kalshi Polymarket secures derivatives license as shares surge.

422
01:06:55.014 --> 01:07:05.230
So GeminiJust got approval from the CFTC to have a derivatives clearinghouse license, which will allow them to settle their own derivatives and prediction markets trades. So this is really important.

423
01:07:05.270 --> 01:07:11.090
They don't actually have to go out and partner with a prediction market to offer these services. We've seen some exchanges do that.

424
01:07:11.330 --> 01:07:19.210
Uh, you know, they've been going to Kalshi and to, uh, Polymarket to have the prediction markets listed on site, like syndicated through the exchange. But

425
01:07:20.210 --> 01:07:29.490
you have to have CFTC approval as a broker-dealer, um, to, uh, to clear these prediction markets, and that's what Gemini has secured here.

426
01:07:29.550 --> 01:07:37.470
As the prediction market race heats up, this has been one of the more exciting, I would say... Can we call it a sub-sector adjacent?

427
01:07:37.530 --> 01:07:44.690
I mean, a lot of these prediction markets, as Paul was talking about, were crypto native. Now it's, the, it, it, it's kind of a mixed bag, right?

428
01:07:44.790 --> 01:07:52.790
Like, you, you can use crypto to, uh, to use these prediction markets to fund your accounts. They also have credit card and debit card and bank integrations now.

429
01:07:53.550 --> 01:08:06.380
Um, but it, it's been one of the hotter sub-sectors and adjacent sectors to the crypto industry currently. And, um, not necessarily for the best reasons, or at least it hasn't been getting media attention- Yeah...

430
01:08:06.380 --> 01:08:16.290
for the best reasons. So also coming from CoinDesk for us today, the same day as the Gemini news, Polymarket is tapping Chainalysis to bring Wall Street-level oversight to crypto prediction markets.

431
01:08:17.090 --> 01:08:23.830
Also known as, they are, uh, Polymarket is approaching Chainalysis to spy on its users to make sure they're not insider trading.

432
01:08:24.390 --> 01:08:34.490
So I'm reading directly here from CoinDesk, Polymarket has par- partnered with blockchains analytics firm Chainalysis to monitor trading activity and crack down on potential insider trading on its crypto-based prediction markets.

433
01:08:35.170 --> 01:08:45.570
And as for why they're doing this, one last news item before I throw it to you for some second thoughts, Charlie. Yeah. Um, actually I wanted to save that one for the end, so we'll do this one.

434
01:08:47.070 --> 01:08:54.840
Um, the Green Beret was just the start. New data suggests military insider trading crisis on Polymarket. Now, we covered on the show, uh, two weeks ago I believe at this point- Yeah...

435
01:08:54.950 --> 01:09:09.670
a Green Beret that was involved in the Nicolás Maduro raid in Venezuela actually bet on the markets for an invasion of Venezuela and for the outcome of the operation, and he ended up netting a few hundred thousand dollars from it.

436
01:09:09.750 --> 01:09:44.930
Uh, according to this anti-corruption data collective, it's a nonprofit research group, um, there were more than 435,000 markets and f- 54.4 billion in cumulative volume from January 2021 through March 2026 on Polymarket, and they believe that across these political markets in Polymarket, long shot bets, like the one the Green Beret did, typically succeed at 14% of the, 40% of the time, and military-linked contract success rates have topped 50% in some cases, indicating that there are plenty of guys like the Green Beret doing this insider trading.

437
01:09:45.650 --> 01:09:46.410
Yeah. So,

438
01:09:47.430 --> 01:10:02.170
uh, I love these stories because it feels like we're getting, like, the salacious stories of, uh, you know, a bu- a, a bear market while we're, while, while the poly markets and prediction markets are having a, a bull market.

439
01:10:02.910 --> 01:10:10.610
Um, we always knew that Polymarket and the leaders would partner with, uh, Chainalysis-type firms. Like, there's no way that

440
01:10:11.730 --> 01:10:26.079
you get full embrasure, you g- you get embraced by US capital markets, and you have serious insider trading. Now, a lot of people, you ask the common person, "Should insiders be allowed to trade on these markets?"

441
01:10:26.110 --> 01:10:30.370
And everybody will tell you no. But that's because everybody is kind of dumb.

442
01:10:31.030 --> 01:10:43.770
And, uh, my hot take is, like, I've been pretty critical that, like, Polymarket's technically launched on Polygon, never really needed a blockchain. Kalshi, does Kalshi even use a blockchain? Like- I don't think so...

443
01:10:43.810 --> 01:10:51.730
these, these prediction markets don't really need blockchains. I think a lot of these things, stable coins. It's just incidental to these that they've used blockchains.

444
01:10:52.550 --> 01:11:06.130
But there's an interesting dynamic here, and I've made this point on this show before, which is the whole point of prediction markets is to allow, uh, information disparity to reveal itself in the market.

445
01:11:06.230 --> 01:11:10.930
So, like, while this may seem like a bug, it is a feature.

446
01:11:11.450 --> 01:11:26.750
I'm not advocating for people to go and do this, I'm just reflecting on and I'm stating, like, the, the, the usefulness of prediction markets is so that a Green Beret can bet on the Maduro, uh, on the Maduro raid 'cause they know it's gonna happen.

447
01:11:27.150 --> 01:11:42.790
That's the whole reason these things are useful. But, so the, here's an interesting scenario. As the big prediction markets get the integration and, like, blessing of, you know, regulated American market structure, um,

448
01:11:43.750 --> 01:11:56.670
you can't stop prediction markets from popping up outside the US market, and being in the ir- unregulated gray market area. Now, they may have less volume, but the thing is, and this is where blockchains really shine.

449
01:11:57.150 --> 01:12:04.820
Blockchains, because they're permissionless, uh, you can go and launch it, and it's really, really difficult to shut these things down.

450
01:12:04.890 --> 01:12:25.510
So as, uh, some of these get, you know, white, y- you know, get the, the blessing of the white, uh, you know, fully regulated market, these gray market or even black market regulated, uh, unregulated markets, p- poly market, uh, prediction markets on blockchains will be where the insiders go to trade.

451
01:12:26.030 --> 01:12:31.990
Now, they'll be pushed to the edges. There won't be as much liquidity. It'll pr- probably be less profitable. But, like, because

452
01:12:33.250 --> 01:12:40.950
these markets are public and they're interlinked, the gray markets will impact the white markets.

453
01:12:41.730 --> 01:12:52.560
So it's like the, the insiders will be able to reveal their existence and their knowledge, um, as well as people who are not insiders seeking to influence these, these white, these more white markets.

454
01:12:52.650 --> 01:12:54.650
But it's really interesting.

455
01:12:54.710 --> 01:13:08.114
And to me, uh, the majority of these blockchains are really just allowing regulatory arbitrage-So, uh, it's gonna have this very interesting feedback loop where blockchain's become a little more relevant again, I think.

456
01:13:08.214 --> 01:13:16.984
Y- More- So you're, you're almost kinda saying, like, if they're not gonna do this on Kalshi or Polymarket, there's going to be a f- fly-by-night prediction market- Yeah... that they will trade on. Absolutely.

457
01:13:16.984 --> 01:13:23.044
And it doesn't really matter 'cause b- the other markets will then converge on that decision because- Exactly, and the other markets- Yeah... will look at that.

458
01:13:23.114 --> 01:13:35.314
The other markets will look at the information revealed in the other gray markets, um, and they'll have, and it'll reflect in the, you know, larger white market. So it's, it's really interesting.

459
01:13:35.374 --> 01:13:46.534
I just don't know how you stop this, because once you're able to make money from information, information wants to be set free. Just as a general information theory believer here, um, information wants to be set free.

460
01:13:46.874 --> 01:13:49.574
The information will be revealed, and you cannot control it.

461
01:13:49.654 --> 01:13:59.374
So, you know, you can only control what happens in your own house, within your own borders, and, but you can't affect that information will be revealed, uh, outside of your control.

462
01:13:59.934 --> 01:14:11.064
O- 100%, and I think you're right to point out, you kind of, to a certain extent, want the insider trading on the pred- prediction markets, otherwise they're not as useful for forecasting the events. Yeah.

463
01:14:11.064 --> 01:14:13.394
And so that's one issue.

464
01:14:13.614 --> 01:14:23.294
But the other issue that they also have is an oracle problem, and we'll close out with this, 'cause we didn't, I- I didn't wanna cover this as a standalone segment when this came out a couple weeks ago. Yeah.

465
01:14:23.354 --> 01:14:30.874
But it's just so interesting, um, and it kind of pl- it plays into this whole theme about how these can be manipulated. So,

466
01:14:32.494 --> 01:14:42.154
uh, this is a Decrypt article that is syndicated in Yahoo Finance, French Weather Agency Alerts Police to Sensor Interference After 35K Polymarket Payouts.

467
01:14:42.714 --> 01:14:53.044
So TLDR, some French guy went to the Charles de Gaulle Airport, went out on the runway, and went to one of the weather sensors that Polymarket uses to settle the weather

468
01:14:54.034 --> 01:15:08.414
forecasts for Paris, and he put a blow-dryer to the thing to make it rise in temperature so that his bet would pay off. Watch this. I, uh, this is what I understand to be the CTV video, uh, showing this interference.

469
01:15:08.654 --> 01:15:23.074
I could be wrong- Yeah... but this is what was shared on Twitter. So the guy goes up there, gets what looks to be a hair dryer, guns the sensor, walks away, and he's a few $10,000 richer. Yeah.

470
01:15:23.104 --> 01:15:36.734
And obviously this isn't, I guess you could say this is a, a subsect of insider trading, but to me, it's interesting to think about the edge cases in which these prediction markets can be tampered, and people have gotten very creative at ways to rig them in their favor.

471
01:15:37.354 --> 01:15:45.014
So- Yeah... I just thought that was such an insane thing to do, you know? [laughs] Like... Yeah.

472
01:15:45.174 --> 01:15:55.414
I don't know th- I think this just gets more insane, uh, for the foreseeable future, um, because there's opportunity, there's financial incentive.

473
01:15:56.034 --> 01:16:12.154
Um, it means that it's gonna be way- we're, we have a lot of fodder to talk about over the coming years, because it's gonna be a hair dryer today, it's gonna be, uh, you know, gonna be- Gonna be a false flag nuke the next day [laughs] Gonna be a false flag nuke the next, oh, man.

474
01:16:12.634 --> 01:16:29.234
[laughs] Dangerous, dangerous subject, but, uh, this is the reality we live in. Make sure you watch Block Space to catch all of our, uh, hot takes, and, uh, not-so-insider information, uh, sometimes, uh, as far as news.

475
01:16:30.214 --> 01:16:39.994
Otherwise, thank you so much for watching Block Space this week, uh, live from Vegas on Wednesday, back now at our home turf on Friday.

476
01:16:40.314 --> 01:16:50.154
We go live Monday, Wednesday, Friday, uh, noon Eastern every week, me and Colin, featuring the guests and stories that are breaking, that are making the news this week.

477
01:16:50.554 --> 01:17:07.634
Make sure to like and subscribe if you like this podcast to become the newsletter, newsletter.blockspacemedia.com. Otherwise, we'll see you all next week. Have a good weekend, y'all. [upbeat music]