Transcription
Even if a quantum computer was capable of taking those coins, I don't think it would be economical even at 50 bitcoin. So, what do you do with the these coins? Um, do we burn them? Uh, that that's uh something that Isabelle advocates for. My Casey um and I have collaborated and worked on a a solution called hourglass.
Distinction between nuts and core is that uh it's just relay policy um or what not not people call the filters, right? This is just relay policy. It's it's your personal what your personal me looks like. Uh it doesn't affect what goes in on chain. That all goes to miners. And so like in my opinion, they they don't matter. Um the only thing that matters are fees. Fees are the best filter.
The the whole fiat system is just incredibly dysfunctional when you come down to it. But what's nice about Bitcoin is that Tik Tok [music] makes block. You know, it's it's our lifeboat. And um uh that's why I I dedicated my career to working on Bitcoin.
Hi Hunter, thank you so much for coming on the podcast. Um, uh, thank you so much for coming here.
>> Um, before we get started, maybe give the few people that listening, uh, and that don't know you and unaware of like what you're doing, uh, a little bit of an overview of who are you and like what are you doing in Bitcoin?
>> Yeah, I um, uh, I go by CryptoQuick. Uh I chose that name in 2005 and I used it on Free Node and uh then I um uh bought the domain cryptoclquick.com in 2009. I hadn't heard of Bitcoin and uh even though it had come out that that same year. Um, I think the first time I heard about Bitcoin was like in 4chan or something. Um, but uh, and I I remember downloading it and just not knowing what to do with it cuz like uh, I had on my laptop and I just didn't it it it like if you don't, you know, mine or buy like it it doesn't click. And so um uh later on uh I I'd start working on databases professionally. Uh I worked on a time series uh NoSQL database called uh Inflex DB. And um that kind of made me think of Bitcoin as just like a really inefficient database. I didn't really understand the monetary uh use case essentially. And uh in 2018 2017 I uh got into web 3. Uh there's ETH Denver is a uh popular um conference where I'm from and uh so big web web3 crowd there. And uh in 2021 uh I found a job working on the Filecoin protocol. I'm I'm a Rust developer. I've been writing R since 2018 and they needed a Rust version of the uh protocol. And I had a number of friends who were just telling me like you need to read the Bitcoin standard. Um, and so I read it and I was only like a month into my job and after reading that it kind of changed my perspective on a lot of things and um I became like really hard to work around. Um, and so later I um that year I'd focus fully on uh more on like um uh Bitcoin. Uh I was really excited about layers like lightning and RGB and and the next year I I joined a company called DBA where I'd work on the bit mask wallet and uh work closely with RGB team as well. And uh in last year um I needed to pivot. And so I focused on what I think is probably the um one of the bigger problems in Bitcoin, which is uh the uh threat that quantum computers could pose to it. And I started a startup called Surermont Systems. And that would uh uh that would be where I write the first draft of BIP, what would become BIP 360. And we've written it several times since then. Um I think it's like the third or fourth time. And uh it's uh we we just we wrote it I think hopefully for the last time um with the help help of my u coworker and uh um just u I I would call her a professional peer um Isabelle Fox and Duke and then also um uh my co-author is uh Ethan Halman. he joined uh uh earlier this year and really shaped uh reshaped how the the direction of the BIP. Uh earlier the BIP was sort of like not as aligned and uh how like core devs like to do things and Ethan with his experience and uh background um he uh he lives in Boston. He's a cryptographer. he lives for or he worked for um Cloudflare, but uh he's on their postcloud cryptography team and he engages with the Bitcoin mailing list regularly. Um yeah, he he helped kind of align the BIP in a in a better direction and hopefully it'll have more chances for success.
Um, BIP 360 essentially is uh um it it I like to say it like it makes Bitcoin more quantum resistant. Bitcoin is already largely quantum resistant. 2/3 of the supply is in held in addresses that are public eashes. Those are fine. What you got to worry about are uh Satoshi's coins. Um there's 1.7 million P2PK coins. uh Satoshi's coins are principal among them but not all of them [cough] and [clears throat] what we think of Satoshi's coins are um it's actually like according to what L calls the Poshi pattern or actually I don't know if he found the Poshi pattern originally but he wrote about it um in in one of his blog posts really good I think it was like was Satoshi a greedy minor and it turns out Satoshi was not a greedy minor he had a specially configured weird minor that like would kind of like let other people mine if he wasn't mining. Um sort of and the uh and let's see um uh essentially BIP 360 what it does is it fixes a flaw in tap routt. So tap routt um I mean I hesitate to call it a flaw because it's it's really nice. It's really neat. But like as we as we head into a world where elliptic curve cryptography is no longer secure and we can't rely on it for um securing value long term uh or at least um having an exposed public key, right? That's that that could be a really big problem because quantum computers could take a public key and turn it into a private key. That's the theory. Okay, it [cough and clears throat] excuse me.
And so um what what what's nice about taper is that so so taper there's uh two ways to spend from a tap routt address and you put coins into it and uh um there's the keypad spend which allows you to make use of uh what's called signature aggregation and it should signatures [snorts] and uh that's um uh really nice because like you can put as many signatures as you want into a 64 byt uh um signature. It's amazing what they were able to figure out with that. But um unfortunately uh every type of address is based on an uh what they call an internal key or um it's it's it's just it is a public key and um having elliptic group cryptography involved in Azure's generation I think is problematic for tap and uh if you want to hold coins long term uh um against um you know this potential new regime uh will need to disable with the keypad spent. So there's only the script path spent and the script path. [snorts] It's very interesting. The script path is very involved. Um there's uh there's an old proposal called mast. Um and the idea is uh originally it was like you know it stood for Merkelized abstract syntax tree. uh computer scientists understand this as basically like a data structure used for um describing uh code essentially and uh so it' be a way to like it originally was I think it was an op code for Bitcoin script and it would allow you to essentially um elide or omit uh parts of the script that you didn't need to um that so like let's say you had like a branching conditional in the script in the locking script script being um Bitcoin script being like the contract language that that that's in the script hub key uh the output and actually you can you can have have it in the witness as well and puts what they call the um script sig but or witness but uh yeah there's all sorts of script in uh bitcoin It's It's pretty cool, but it's also quite limited. Uh for good reason, I think. Um I think I mean for a long time I think the small blockers were were pretty correct about their uh their approach. Um but then again, you know, uh uh I I work with uh my supervisor, his name is Mike Casey. He's a notorious big blocker and um he he's not he's not he's not very vocal about his opinion on big big blocks. Um but uh he's been working on me for the past uh year that I've been working with him and he's he's convinced me of a few big blocker arguments. Um maybe the big blockers were right, but ultimately um Bitcoin doesn't work that way. Um and so uh we decided that as a community we would try to scale with layers and I think that's a perfectly fine approach.
Uh there um one of the complications of postcore photography is that it's uh larger um signature sizes uh generally and sometimes even larger public key sizes especially in the case of MLDDSA not necessarily the case in swings. Sphinx keys are like 32 bytes. [cough] Um but unfortunately sorry [cough and clears throat] um yeah I actually u traveled uh uh with an illness and so um try trying to medicate but it's it's funny um [snorts] uh I was working with uh um a company called default and so um there's his name is um Franchesco Madona. Mhm.
>> And he's uh uh uh actually a physician by training and so it's very conven when when we met he had a bunch of medics in for me and it was good. Yeah.
>> Yeah. He's a great guy.
>> He is a great guy. Yeah, for sure. And very popular here and um really crushing it with uh that project here in Logado. It's really cool to see uh everybody just come up to him and everybody loves him. Yeah. And so um yeah, I'm involved in uh Bitfault. I'm involved in um uh Andro. Uh Andro is a side chain platform that's incubated incubated by Mera. And so um we uh we're essentially working on we have a signet now actually uh for a 53 prototype. It's not fully finished yet, but um cuz like one of the next things we want to add is uh post chronic cryptography. And so um I feel like we've been talking a lot. Uh do you have any questions?
I >> I have I have a lot but like I find it really interesting. Yeah.
>> Um and and I think the most interesting part for me is is the quantum computing stuff. Um because this is one thing that comes up quite a lot actually if you think about [clears throat] what comes up against Bitcoin from other people. Um it's from very uninformed people that comes to like the environmental thing uh or there comes like oh like it's just like digital so like it's controlled by the CIA like lately on Twitter. Um and so there's a lot of like weird things. Um and one of the arguments that comes up um quite often I would say is the quantum computing stuff.
>> Uh and so maybe before that like maybe let's make a little bit of overview. What is even quantum computing and like why does it pose a threat uh towards Bitcoin? Like what what is like the threat level there?
>> Yeah. Um, quantum computing essentially is uh um F Richard Fman when he uh I think he he wrote a paper on it in 1982 and [snorts] he uh he basically described it as a way to um use make use of physics in in computation and um what's interesting is you can make use of things like interference patterns um to uh constructively interfere with um numbers that would sort of like kind of so there's there's something called Hbert space where you can essentially encode say a public key in um I'm probably explaining this really badly cuz I'm not I'm not a quantum physicist but uh uh I much more familiar with the other side of it which is post quantum cryptography and but regardless um the way I would explain it is that a a a quantum computer when usually they're super cold they they have to be cold very cold and uh they have cubits so quantum bits and they um can encode the public key in some set of registers and then you have some other working memory and uh shor algorithms came out in 1993 or '95 or so and uh it was the first instance that we we had of a algorithm that could demonstrate quantum advantage. Um and there might there like maybe more trivial problems that quantum computers can solve. Now uh uh Google Willow demonstrated one recently that they say demonstrates quantum advantage and that's cool but Sh algorithm is probably like the um like smallest non-trivial circuit that can be uh run on a quantum computer in my opinion. I I mean this is just what I've seen. Um there might be others but there's of course you know like um hello world in a quantum computer is uh basically like um a quantum random number generator. um you put a hatamard gate and then you have a C not gate and then you uh can get uh perfect entropy but um perfectly random numbers from just the noise and uh the quantum realm and but uh shows algorithm is interesting because uh essentially like [cough] it uses quantum 4 transform so Uh it's uh uh basically a way to find patterns and um and they they call it periodicity. Um there's something involving prime numbers and anyway it it can use uh that along with a what they call a modular arithmetic oracle. And uh that's also a deep problem that's still somewhat unsolved I think. Um but once they're able to solve it, I think it just requires more gate depth and uh of course lower um er uh noise and so uh you or or or or more error correction codes. But uh no noise is a problem with quantum computing, but um basically uh you can solve that either with error correction codes or post-processing um some combination of the two maybe. And so it's it's all just like um at this point it feels more of an engineering problem than anything. And like uh it's just a balance of the the right software and the right hardware. And uh the NSA has been working on this problem for a long time. It turns out um in 2013, Edward Snowden leaked a the existence of a secret project that the NSA had for creating a um basically a what they what we would call a nowadays a a cryptographically relevant quantum computer. Um in 2013, they were spending $80 million on this program. they're working with the University of Maryland and um also maybe like one or two other defense contractors like Rathon and Honeywell are uh top candidates for what they were doing. And um [snorts] nowadays they're spending way more and I think the Chinese is spending even more than us and the United States. U and so it's kind of like a bit of a race. It's um it's concerning me because the NSA seems clearly concerned about the about the problem they caused. Um and then they also uh recommend uh and work with the National Institute of Standards and Technology or NIST. Um they work with them to establish cryptography standards. And so like as a Bitcoiner, it looks like on one on one hand, you know, Lana say caused a problem by creating this spooky technology that only they can run. Like it's it's the these these machines are billions of dollars to develop and millions of dollars to maintain. They have uh they require to like two special kinds of coolant, liquid helium and liquid nitrogen. and the they're usually situated with like large cryogenic equipment. So, one place they um colllocate with is Fermy lab in Chicago. The they're kind of like the American CERN. And so um they have like particle accelerators and that sort of thing. But then like in order to operate those they need cryogenic equipment. And uh uh there's a company called Psych Quantum and they're working on optical computers that uh but the thing is with optical computers and and the the optical part can be room temperature maybe but the detector still needs to be uh chilled and uh so [cough] [clears throat] yeah the um there's uh the they're working on pretty advanced designs. They have some really interesting uh developments. I think something like I forget all the the figures for their blueprint stuff now, but it's it it looks pretty good. And um I think it might be adequate like enough to uh um break uh uh like what Bitcoin uses uh the elliptic group photography algorithm is called SECP 256 K1 and came out in 2000. Um and around that time also crytographers were pretty aware that uh elliptic cryptography could be broken by quantum computers someday by show algorithm and uh so there's a possibility Satoshi was aware of this and it's interesting and from the very first Bitcoin client even on Bitcoin 0.1 uh they um he uh he designed it in such a way that although if you're receiving a payment you receive to uh like a one address or paid to public key hash um mining rewards would actually go to public keys like directly to it's just like an actual 626k1 65 byt full public key and that's an interesting decision Because in hindsight, what that means is that uh um 1.7 million Bitcoin spread out across 34,000 addresses or keys. Um Acha hates it when I call them addresses. Uh uh she she's like, "No, that's that's those are keys." [snorts] Um okay. Well, uh regardless, um they they're about an average balance of 50 Bitcoin each. Um it's interesting because like right now even if a quantum computer was capable of uh taking those coins, I don't think it would be economical even at 50 bitcoin. Like these these computers are so like crazy, you know. And then uh uh you know I I spoke to the CEO of Syquon and I asked him like what keeps you from what would keep you from you know um using your quantum computer against Bitcoin? He says, "Well, we have government contracts and we wouldn't want to jeopardize those." That's a nice answer. That's really cute, but what if the government paid you to attack Bitcoin? I I didn't think to ask him that question at the time, but uh it's just a question that lingers in my head now. I'm just like, hm. Anyway, um we have solutions. Uh we've been looking into postcography a lot for uh BIP 360. Uh we're not including it directly in BI 360. 560 only. It's It's very specific. It all it does is it creates a new um address output type similar to tap routt except it just disables the keypath spend and there's only script path spends now. And then you you commit directly to what they call the Merkel route. And so uh um uh as I was talking about the mercalized a uh modern tap routt implement well I like taproot essentially took the old mast idea and they kind of in my opinion kind of bastardized it. um you commit to complete scripts but you create like a Merkel tree of them and so we call them tap tap leaves and they it's a binary tree and uh but it's a binary Merkel tree and so what that a Merkel tree is just like um it means that there's like a hash uh it's like every every layer of the tree is hashed and depends on the the um leaves above below it. And so um what's interesting is when you go to spend a tap leaf you need to provide the um if there is another al alternate like uh uh branch in the tree then you um uh need to provide the what they call the alternate script and uh so now it's uh now we call it the Merkel alternate script tree and that's that's kind of like the the new um backronym Let's call it that for masked. Uh and basically uh the you you pick you you pick like amongst any number of scripts that are already committed to in that tree that you want to spend from. And so what's neat is that you can decide if you if you had like coins in a 360 address uh which we demonstrated in um a workshop last week at Tapco. It went really well. Uh had my whole team there. It was really cool. And um but you when you go to spend the coins in those addresses uh you can you can pick um a tap leaf that says like oh I want to spend only you know lip to group photography or I want to spend from postcore photography. Uh I could pick u a number of algorithms that I might have generated in advance. Uh could be SLHDSA or MLDDSA. Uh I'm working closely right now with Ethan and uh guy his name is Conduition and um also Alalu Sunundukun um also known as Rose Beef from Lightning Labs. He's been doing a deep dive in his sphinx and um [snorts] so we're all trying to solve this problem and um uh we we'll have a uh a bip hopefully for SLHDSA. SLHDSA and MLDDSA are both recommended by NIST, which is kind of like a red flag for many bay coiners. I get that. Um, we're very skeptical of whatever the NSA and NIST tells us. I mean, NSA and the NIST, they they they're both glued to the hip. They no cryptography gets recommended by NIST that doesn't also go through NSA approval process. And so, um, I can see why that's pretty suspicious cuz like the NSA like caused a problem and then they gave us the cryptography to solve it. Hm, interesting. Uh but what what's interesting also is that uh there's a variant of sphinx. Um so sphinx and so sphinx is DSA and MLDDSA is crystal deliththium. Crystal lithium is uh special like lattice based cryptography and so lattice cryptography is just it's like all forms of cryptography. We're just trying to create a problem we think is would be very difficult for computers to solve. And um l crytography is based on what's called the shortest vector problem. And so whereas like elliptic cryptography uses the discrete log problem. I won't go into like how those things work cuz I that's very academic. But um uh swings on the other hand it uses uh hashbased cryptography and uh hashes are quantum resistant like that's why public hash you know is is a is not um something we think of as a uh vulnerable to short algorithm. it could be vulnerable to Grover's algorithm, but Grover's algorithm is not a um I don't think that's going to be a concern for a very long time. I could be wrong, you know, like this this technology could get very advanced within our lifetimes, but for now, I think the near-term threat is yours because of the way it scales. And um and so um Sphinx uh it's hashbased. And so it's what's interesting is that there's a variant of Sphinx that a lot that commonly most common implementations use uh um Shaw 3. It's not really used in Bitcoin core. There's like a like a mini like a tiny uh implementation of SHA 3 and Bitcoin core technically but um um with with Hashbraphy you can uh also base that on shhatu and chhatus are extensively used in court and so if you trust that shu works well and is secure then we should I think base uh bitcoin's implementation on chhatu And what's interesting um I might add an interesting note for like most Bitcoin owners to um appreciate is that uh the NSA does not recommend Shot 2. They're not hot on it at all, which is weird to me. like they might have made just something like so good, you know, like um and so we're kind of like going a little bit off of the beaten path with uh as like do say at least as um defined for uh Bitcoin, but I think that's the appropriate way to go. And what that that does is that results in a transactions that are about one or two kilov bytes. [cough] Um, what's nice is that we can put the the signature in the witness. So, that gets a 4x discount. Um, but yes, it can be quite large. It would limit Bitcoin's TPS to maybe, you know, like right now we we enjoy maybe 3 or 4 or 5,000 transactions um per block. This might make it max out more like at most a,000 um transactions per block. probably a lot less because you know you can have multiple signatures in a transaction. And um but regardless like what this will probably result in is like um blocks that are closer to the 4 megabyte limit as established by SegWit in 2017 and as it as it gets adopted. And um that that'll that'll be like um I think that's like a good first step for like having a gold standard for having uh safe place to put your coins even if it is more expensive to spend. Um right now that's not too big of an issue because you know we're we call it subset summer. I don't know if you've seen the mele recently but it's pretty you know pretty cheap to transact on chain so
>> very empty.
>> Yeah. So, we got to solve one problem at a time in my opinion, you know, and so Bit 360 maybe SLHTSA and then we'll have to figure out how to scale that. And there's a couple other ways to scale. Um, there's uh but yeah, I don't want to get too far ahead of uh myself. I feel like I I I've answered your question and and beyond.
>> Yeah. But uh it it is so interesting because we we like I think in the heads of a lot of people there is this moment where all of a sudden like on one day quantum computing is turned on and we figured it out and all of a sudden like everything breaks which uh I like from what I understand is kind of like not entirely the case.
>> Yeah. Like it's it's almost like a bit of a um what do you call it? a uh um what's the term? It's it's like an the imitation game. It's like with Alan Turing, you know, like when when he broke the Enigma code, [clears throat] the um British military didn't want to like they they didn't want to let people know that they broke it. And so even like sacrifice ships with thousands of sailors uh in in situations where they they knew in advance like there would be an attack and and those people lost their lives because the the British intelligence they were like well I have to conceal the the fact that we um have completely broken this code and so we can't let them think that you know uh and it did arguably turn the tide of the war But still um there was like a game theory behind uh how they sort of uh were able to capitalize on that information information asymmetry and uh there's there's nothing more asymmetric than uh a quantum computer. Quantum computings are quantum computers are not sovereign computers. They're not something that you can just don't trust verify, right? That's um unfortunately yeah that's just how it is.
I also found it interesting um what you said in the in the beginning where you said it's not economically viable uh to break it up because the bitcoin that you would get from that is is not uh for the cost that you would need to run the um computers and like to acquire the computers and all of that which is an like an interesting argument I've never looked at with like uh it's it's not it's not a MacBook that you pay for thousand and like you plug it in and all of a sudden like oh like now I got them. Um and and so it's like the the economic viable is that also like with the growing market cap of Bitcoin and the growing price of Bitcoin that like um the threat also gets closer of like breaking those things
>> maybe um I mean I think the market cap is largely a function of the problems we're able to solve and so as Bitcoin as we solve more problems in Bitcoin it's just like its utility scale availability. Lightning is a great example of that. Um, you know, the the actually it's not a great example in my opinion now now that I think about it because there's only about 5,000 Bitcoin locked up in the Lightning Network even now, which is interesting. Um, doesn't compare to rap Bitcoin or even like tapered adoption. So, um, that's um, that's a whole, you know, another thing. But that said, um I think there's a lot of capital that is sitting on the sidelines that is not being invested in Bitcoin right now because there's this everpresent threat that I even like in 2012 there was a thread on Bitcoin talk where they were talking about this problem and like it's it's it's been a like probably the most salient FUD that's hung over Bitcoin um in this whole time. you know, like you mentioned like the environmental issue earlier. I think DS Batten, for example, has done a great job, a fantastic job of diffusing all that. um Andrew Andrew Bailey as well and just like you know just basically like you know like Morat Al like the the environmental arguments like they're just so flawed and and nobody brings them up anymore now because like you know it's it's quite clear that actually bitcoin is very bitcoin money is very beneficial for um the electrical grid and uh gridless in Africa actually is uh um doing great work on that on sol solving that problem for basically solving like almost like a chicken in the egg problem Like what's cool about what I love about proof of work is that it basically establishes a direct correlation between um energy and value. It's like the sci-fi energy money that you know like we read about sometimes in like old sci-fi books and it's um uh uh by by establishing this link we sort of uh have a monetary incentive to produce more energy than we need. And so when it when um uh when it's truly needed by people rather than ASIC miners um such as in in cases like in Texas when there they have like a uh grid failure um there's like um winter storms or or during the summer the the the the Bitcoin runners will shut off and they they will return the energy to the grid and it'll be made available to the people who really need it. and they have a moni monetary incentive to do that because of demand response agreements and um uh uh it's it's amazing aligned incentives. It's it's and so the environmental argument I think is is done like like and also like even like e-waste, right? Like uh we have um like I have an S9 that I I still use. It's It's not necessarily profitable, but I use it for heating and I I we changed out the the fans for Noctuas and it's great heater and I um send some the hash to I send the hash to my my um landlord actually. Yeah. Um and so um whereas like uh uh the quantum FUD is I think um probably like one of the bigger glaring issues of our time. And hopefully once we solve it then that just uh unlocks uh Bitcoin to be at least as valuable as gold because gold does not have this problem and has much higher market cap. Um what gold the problem gold has obviously I think is in which we'll also probably see in our lifetimes is uh um asteroid mining. And so like Elon Musk he demonstrated a fully reusable rocket um uh just a couple weeks ago um and it went off flawlessly. It's amazing. It's amazing technology they're building. And um that's going to like I mean they already launched 90% of the payload in orbit anyway. And so I I think like Astro Money will be a very real existential threat to gold. And there are two companies actively working on this technology. There's uh Transa and Astroforge. And so I'm I'm watching them very closely as a Bitcoiner.
Yeah, the gold comparison is always interesting. Uh and uh I I actually like a gold versus Bitcoin debate was my orange pilling moment. Um where I I kind of wanted to get into this and this was my first Bitcoin video was a gold versus Bitcoin debate. It was Peter Schiff with I think Eric Faz I think it was.
>> uh it was was a really fun video. uh and uh it it was always like the problem they're describing really well like Peter Schiff also like describes the problem field really well and then they
>> there's a lot of overlap there's a lot of common ground between Bitcoiners and gold bugs
>> and and that's where you see like for example Larry Le was a gold buck and now he's into Bitcoin and now he's fighting with the gold bugs in it's really fun
>> uh and and this is like this is a really fun thing also um but I it's just like when you compare it to like there's like nothing going for gold outside of like it's very old. Like the like it there's a very long track record. That's the only real argument for gold at that point.
>> Well, uh I mean it's it old. It's old as a I mean it's a good argument in that like you know the Lindy effect, right? Um yeah, if it's been around for a while, it's probably going to be around for a while. It's just until it's not right. There's there's also like you know technological disruption aspect in in things. And so um ultimately it's a commodity money and it can be debased by the abundance of the cosmos.
>> Um just one more question on the on the and this is like maybe a bigger question because uh you follow it like 100% like cool versus nuts thing. And it's really interesting for me how emotional it is and like how big it is.
>> It is so it's it's it's been a soul sucking debate I have to admit. um so crushing even spiritually like just so difficult to to to engage with sometimes um demotivating even. But um yeah, it sucks. But um and I've lost a lot of friends in the Bitcoin community. Uh I used to be um I would say like pretty closely aligned with Jakamo uh here in Logan. Um uh but um after this debate, you know, we're all calling each other dishonest and liars and talking past each other and
>> sad.
>> It is. It's very sad. But um you know, I I [sighs] uh I mean I look I mean the I I get where they're coming from. I understand like you know we need to focus on the monetary use case because like Bitcoin is the lifeboat, right? like as American, I see uh um Trump has uh you know signed the one but beautiful bill what he calls it. Um it uh locks us in for $2 trillion of deficit spending over the next decade. Um we're already at $38 trillion takes us like closer to more like $60 trillion. And of those $2 trillion of deficit spending, we're spending um a trillion on debt payments. So we're basically paying debt with more debt. which is unsustainable. And so like we're probably well on track for probably like doubling our de our our debt within the next decade. And that coincides also with um uh the solveny of uh entitlement programs like social security and Medicaid and th those will be if if the if the US government ever um were to go back on those social contracts, right? like that would be a breakdown in like the American social contract and like I mean we're already seeing like a little taste of that with the government shutdown right now and like um
>> are they still shut down?
>> Yeah,
>> it's crazy.
>> It's very unfortunate. Yeah. Um it's very dysfunctional. The whole fiat system is just incredibly dysfunctional when you come down to it. But what's nice about Bitcoin is that Tik Tok makes block. You know, it's it's our lifeboat. And um uh that's why I I dedicated my career to working on Bitcoin and because I think it's it's also one of the biggest problems of our time, which is the problem caused by central banking. Inflation is the most regressive tax there is in that the poor can least afford it and and it's it's essentially like monetary expansion and the price inflation that results from it. Essentially is um uh take from the poor and give to the rich program because like the rich they can take as many loans as they want against hard assets they own and so they they they're having a great time. And then you know the rest of us like we're trying to like you know you know afford food you know and so it's it's um I think I think it's going to be it's only going to get worse obviously and eventually it'll get to the point where um I I I think that the lifeboat analogy is really selling because what people will see is a sinking ship the fiat system and they'll see these lifeboats they'll they'll blame the lipot and not the uh the iceberg that caused this whole problem, right? And so um that's a little further out problem that uh I think um people uh who are working on like the Bitcoin citadels on the various parts of the world those those people are doing uh important work also because I think there will be a period of time where there will be a substantial amount of social change and and just cognitive dissonance as people begin to realize that you know like it's It's similar to like the situation outlined in the mandibles, you know. It's the book it's um just it's I worry it's going to be very chaotic. I'm actually reading a um a book now called when money dies. It's about
>> I heard about that.
>> Yeah, it's about um the essentially why Germany and and the hyperinflation that rose to that led to the the rise of Hitler. And um uh that's what happens when you know like like you have you have you have a very uh it caused a lot of anger a lot of turmoil and it's very um I would say uh scary to think about to put your head in that space and I just have to every time I think about it I have to come back to the fact that we have Bitcoin and that that is like you know that that's the um what they call the orange pill you know it's like it's like um It's I if if I didn't have Bitcoin, first of all, I wouldn't give myself permission to learn about these things because I wouldn't I would be so hopeless. I'd be so black belt, you know. Um and the best cure to that is the orange pill. So,
>> I love that analogy. Um I I I want to bring it just quickly back because like um I wanted to allude to another question. Um because I was kind of wondering now like please correct me if I'm wrong but I don't feel like oper that huge of a topic that this was made out to be. What's so ironic about operturn is that it is the um it is the least like resource inensive way to use Bitcoin. Like it doesn't go into the UTXO set of database which is checked on every Bitcoin transaction uh because that's how we uh prevent double spends. So it doesn't go into there. It doesn't use that. It doesn't benefit from a witness discount um and so it actually displaces more denser transactions. Um so so they reduce chain bloat. Um they're they're kind of like you know a net win for Bitcoin I think aside from the fact that they don't you know really contribute to the monetary use case unless they're used for say scaling layers um commitments but or or you know merge mining or something. But it's it's such like a in my opinion like such a um it like it like for for people people who really get Bitcoin like understand how Bitcoin works you know it doesn't seem like a big deal because you know there's um the not not only does it is it is it the light the least resource intensive use way to use uh Bitcoin least harmful to node runners right then uh but also Um it I it's just a matter like the the diff the distinction between NATO and core is that uh it's just relay policy um or what not not people call the filters right this is just relay policy it's it's your personal your personal mele looks like uh it doesn't affect what goes in unchained that that all goes to minors and so it's just like like a like the difference between really policy and consensus is enormous like like it might as well not even exist in my opinion So, I'm a fan of Libra really because like it's kind of um uh Peter Todd's uh implementation um of uh like fork of Cororin because it's uh it just you know it takes the the logic to the for this logical conclusion which is that um uh for lack of better way of putting it really policy is just fake and gay. It's not like a real thing. It's it's your own personal you know mele you know but it doesn't do anything. it doesn't do anything in my opinion. Um and and and there are lots of arguments about this. You know, we go back and forth. It's a constant thing like do filters work right like in my opinion they they don't matter. Um the only thing that matters are fees. Fees are the best filter.
>> I I see that the same way and that's why like I kind of wanted to ask of like there's a small issue and we are debating it so hugely. Do you see a risk that if there's like a big issue of like implementing the quantum and like implementing other changes down the road that uh we kind of get so separately like the we're fighting so big on an issue that we cannot decide on something and don't really move on or like is that
>> I think it could be the most ironic outcome actually is that like for example like Chris Guida you know um he's a very vocal kn advocate and well we both agree that like we need BIP 360 you know it's I It might be like the one thing
Where, like Bitcoin, is like, "Oh, well, this is actually a very real threat, and we need to rally around it, and we need to do something." And I have faith that that's how things will turn out because it's a real threat, and like, you can actually only choose like Bitcoin or not Bitcoin. I mean, not so, uh, like loop dashes also, so like, like safe Bitcoin.
[clears throat] Which, which I strongly like disagree with. Like, I, I always get really cautious if someone says, uh, "We need to do this change in order to save Bitcoin," because there's like very rare instances like where we really need to do something, and like this excuse will is always used, usually by shitcoiners. It's like, "Oh, like here I found a mistake with Bitcoin, buy my shitcoin." I mean, of course, like that's not what he's doing, but and it's very different, but, uh, I, I just got very weary about that. Like if someone like, >> every Bitcoiner should be worried about that.
Um, uh, about like, uh, the the the fact that, you know, there there are any number of justifications for changing Bitcoin, adding more functionality to it, um, doing all sorts of things that could fundamentally alter the dynamics and game theory behind it that make it a $2.5 trillion dollar asset. And so, um, uh, there's that. There's also, you know, the counterargument is that it could be worth more if we had more changes. Um, covenants are a good example of that, like Bitcoin 19, right? Um, uh, >> but regardless, um, I, I, I think, uh, and and you said like chronic computer, like the threat somewhat feels real. It's, it's not really real real that yet, really real in my opinion. Uh, when it does become like, is this like, like, like, is it like a few years or like even like a few decades out? >> Um, it could be any of those options. It could be, it could happen never. It could happen, it could have already have happened, and people are just sitting on a bunch of keys. >> Um, >> the the it's any of those possibilities, unfortunately. >> Shinger. >> Yeah.
Um, and so, you know, we have a, a, a feeling of expediency and, um, we, we hope to have something viable by either the end of the year or maybe might bleed over into next year a little bit, but like, um, and and and, uh, uh, we want to launch our federated side chain, uh, platform that, uh, will have, uh, uh, support in two of the three side chains that we're, we're going to be launching, will have native support for post-quantum cryptography. Is it just a matter of time till like old coins that don't get updated, like, uh, Satoshi, that like never, they will be broken up? >> Well, yeah. So, this is an interesting, um, argument, um, that that we, we have even internally. Uh, so, there's Isabelle, um, and Mike, my Casey. Uh, they're kind of like the other two people I, I work with, and, um, and and we have even much larger team. Want to make sure, uh, uh, Jeff and, uh, Andrew get credit for their work as well. But, um, uh, the great, great people, uh, developers that we have that are helping me, um, spearhead these changes.
But, um, the thing with, uh, uh, this argument, there's, there's basically three, three camps. There's, um, uh, uh, so Isabel often, uh, argues for the, um, confiscation of those coins. Uh, the argument being that 1.7 million Bitcoin, at least. Um, technically, it's might be closer to 6 million Bitcoin that are qual-vulnerable, but the majority of those coins are in reused addresses, and so, um, uh, that that problem is, um, I think less of a problem because those addresses are also quite active. Um, I think 90% of those have been spent within the past six months, and so, um, people have the keys for those coins. They'll move those coins to safe addresses, safe, uh, uh, places to put them, uh, if the, if the threat manifests.
So, what do you do with the these coins? Um, do we burn them? Uh, that, that's, uh, something that Isabel advocates for. My Casey, um, and I have collaborated and worked on a, a solution called Hourglass. And so, um, the idea is basically is to limit the spend of those, uh, P2PK, uh, coins, um, in some way, either like one Bitcoin per block or, uh, maybe just one spend per block, but regardless, it, it would like stretch out, uh, uh, that problem so that the market could absorb that liquidity. Um, there's, uh, [cough] you have a, a less impact on the markets, and so, uh, that would be one way to sort of like, um, like be in the middle ground between confiscation and full liquidation.
Um, I'm of the opinion that the markets will eventually absorb it. Um, the inflation will be transitory, to use a turn of phrase, and, um, uh, it'll be like a one-time event where there'll be cheap Bitcoin, maybe for people who are like in maximum fear mode, I guess, but, um, uh, it'll, it'll the coins will be, um, essentially, uh, custodied by people with higher conviction, as it always happens, right? Like, I mean, Bitcoin has, you know, these cycles and downturns and all this, and I mean, like people see, like, you know, it loses $20,000 in a single day, and I'm like, well, you know, I mean, that's, and I, I remember a time when that would have completely wiped out all of Bitcoin's value, and now it's, you know, it's, it's still a thing, you know, it's, it's, we get through this. Bitcoin is antifragile, you know?
I, I really truly think it's, it's one of those things. I, I have the almost faith in Bitcoin's capability to succeed and solve every problem that we have in front of us, um, that's why my entire network is in Bitcoin. I do not trust any other system more than Bitcoin. Um, and, uh, that's also why I dedicated my career to understanding the problem that quantum computers pose to Bitcoin and how we might be able to prevent that. It's so interesting, uh, because, um, once you really go down the rabbit hole of seeing all other assets, seeing Bitcoin and what it is, um, as I also did, um, I just declared all my wealth in Bitcoin and [clears throat]. It's, it's almost a logical conclusion. And if, if people ask me, oh, like, isn't that risk? Isn't like, do you don't you want to diversify all of that? I'm like, if, if you have a boat that you know that will work, and then you have three other boats that you know are a little shittier than than the one boat, are you putting your your kids and your wife on other boats? Like, just so like one of the family? It's like, you put it all, all on the one boat that you know works and doesn't sink. Uh, yeah, diversification is, um, I think, uh, like, um, not, not as, uh, salient, like a point when you, when you have, uh, such like a big paradigm changer as Bitcoin, like it is the, um, yeah, I, I think it's like the, the, we're, we're, we're coming to a, a complete fundamental shift in how we do finance as, like, a society, and, uh, Bitcoin is, is core to that, is, is the fundamental. And, uh, so, um, yeah, there's no reason to be all in, uh, not, not to be all in on it, in my opinion, other than the quantum threat, and we just need to solve for that, and that's fine, you know, to be worried about it.
>> Uh, one last topic, uh, I, I want to touch on is is scaling Bitcoin, um, with Lightning, with Fediment, with like so many different, like things that are going on. Um, it, I feel like it's still like early, because I use Bitcoin every single month. I mean, uh, payment, I, for example, do like on-chain transactions, um, and so like I do everything on-chain because, as you said, like, it's super cheap. I send money to around the world and pay like $1 or like 7 cents or like maybe $2 for it, like, it's nothing. Uh, compared to like the fiat system, you, you pay like $20 for the same thing. Um, so right now, uh, it's, it seems like early for like all those scaling solutions, but at some point, like fees on Bitcoin on-chain will be coming up, and you're like, okay, like, do I want to send $500 for a fee of $100 or $200? Probably not. Um, how do you look at like Lightning, Fediment, maybe other solutions? Like, what are you kind of like seeing?
>> I, I love all the scaling layers that are being worked on. I think it's a very important problem for us to solve, and, uh, um, it, it is like, it, it was like, in some ways, like a barrier to to adoption in, in, in many ways in the past. Uh, and so once we solve for the quantum problem, then we'll need to solve for quantum scaling, which is even harder. Um, I think maybe the, the best solution I can come up with for that is actually, it's technically, I didn't come up with it, is Ethan Halman. He came up with it. Uh, I called it Bitzip. Um, he introduced in the Bitcoin mailing list as like a way to scale, uh, post-quantum cryptography on Bitcoin using Stark proofs that are aggregated by miners. And so, um, basically, when a, when a, a miner, they'll see like a bunch of transactions that come through, and they'll aggregate them into a Stark proof and commit to that, uh, for each block. And that would be, I think, the way we, um, we solve for that is just using Starks. It's, it's kind of similar, uh, to what Ethereum is trying, or, or has planned for, um, their, uh, solution to the problem, but, um, the, it's not automatic. I, I don't think it should be automatic. I think people should need to move their coins to quantum-safe addresses.
Um, because in order for that to work, um, so, so the thing is, the Ethereum solution, uh, essentially is to commit to, uh, what are called bit 32, higher called deterministic wallet secrets, um, that are kind of like further up the cryptography stack than what are used to, uh, the actual secrets used to generate, um, the keys for addresses. And so if you can go further, further up, then you can commit to a secret in inside deeper inside your wallet that isn't revealed or or exposed on-chain, and you can sort of like upgrade all the Ethereum addresses. But what they'll do, what in order in doing that, they break anybody who has generated an Ethereum address that, uh, um, was generated like in isolation to a 32 wallet. So, like anybody using MetaMask would be fine, but like, uh, certain, like contract addresses won't be upgradable or spendable or usable. Their, um, their, uh, the, like people with like old JSON keys will be completely screwed out of their Ethers. And so, um, that's, uh, that's something I don't think will map well to Bitcoin. Um, I, I think Bitcoin should be like a voluntary thing. There shouldn't be, uh, confiscation built into the protocol. So, like, I'm, I'm, I'm against burning, honestly. Um, but, uh, I just, I, like, we've never done this, and, like, Ethereum has. We haven't. Um, and so, you know, like, I, um, I, I don't think the solution will work well for us. Um, I think it would be better just to develop a new system that's opt-in and voluntary. People are proactive. People ultimately understand, not your keys, not your coins. And the change that quantum computers ultimately, um, introduce is just the fact that public keys become just as sensitive as private keys.
>> So, so many interesting topics in there. Um, but with, I just saw like, we already at like our one hour. I completely overlooked the time. It's, it's, it's so different in person. I do, I did like maybe 20 or 30 episodes now in person, and I always see like those true episodes for like four or five hours, and I always ask, like, how can I do that? Um, in person, it's so much easier. It's like we're just getting started. Um, but, uh, asked one question to each and every one of my guests, uh, and the question is usually like, what can we learn from you besides Bitcoin? I will add with you, like quantum computing and crypto cryptography. So, like, what else, uh, could we learn from you?
So, um, I have a, I have a blog, um, cryptoquick.substack.com, and, um, I post about, uh, Bit3 stuff all the time, but on there, I also, a couple years back, I, I wrote an essay where I, I, I wrote, "Bitcoin is a Great Filter." And I, I basically think, I posit in this essay, Satoshi may have been an alien.
>> Computer, by the way.
>> Yeah. Well, I, I think it makes a lot of sense, especially if you think like, you know, there, there, there could be some civilization out there where they've been operating, uh, their monetary system, uh, in a way that's similar to Bitcoin, and they, uh, probably have been observing us for a long time, and watching us make the same mistake over and over again. Michael Saylor, you know, he, he talks about how like throughout civilization, we constantly just debasing the currency that results in societal collapse, and, um, like the Roman Empire, right, is a great example of that. There's many, many examples in history. Uh, in, in our our holiest biblical texts, we forbid, you know, usury or riba, right? You know, um, uh, uh, just like debasing the currency, and they, they also have like debt jubilees and the kings, you know, it's, um, uh, I, it's just like, it must be so frustrating for an independent observer who knows there's a better system watching us make the same mistake over and over again, and for us to like finally have the technology in place to implement something like Bitcoin, you know, we just need to tie all the right pieces together in just the right way. Um, yeah, you know, maybe, maybe just send out an email to the cryptography mailing list under a pseudonym. And then, I mean, of course, it also explains like why Satoshi seems so selfless, you know, like, who, who is what human would be so selfless to create something as magnificent as Bitcoin, but then not spend their coins when it becomes adopted? I mean, what is Satoshi waiting for right now, you know? Um, and, uh, I, I think it's just because, you know, he, he left, and, you know, you said, you know, like, you know, and, uh, uh, economy, if you'll have it, you know, and so, um, uh, or money, you know, and so, um, I, um, yeah, I, I think, you know, the, the only other thing I, I would draw attention to, aside from like the quantif, I think is just that, um, uh, I, I, I, I, I've been doing, um, a lot of research into, uh, like, basically, um, the alien agenda, um, as, uh, um, Richard Dolan has written about. So, it's interesting. I wrote, uh, in 2020, two books came out. Jet Booth, "Surprise of Tomorrow," fantastic book, makes a very good case for like the deflationary effects of technology and how they might transform our economy, and that's really cool. Uh, Rich Dolan explains like, like, uh, some really interesting concepts in his book. Basically, uh, how, um, there's, uh, there's a high possibility that, um, human humanity has, uh, maybe 40,000 years ago, had some like gene inserted that made us more creative. And he also theorizes that he goes over like thousands of, um, what, reports from the Mutual UFO Network, or MUFON, like abduction cases and things like that, and tries to find correlations, meta-analysis, and it's just fascinating, you know, like there might be, you know, other alien civilizations actually here on Earth already, and, um, and they have various, you know, motivations, I guess, and, um, and he thinks that we're all heading towards like a, um, AI, 5G totalitarian regime.
>> Yeah. Awesome. We, we have an entry in the podcast, uh, where the previous guest is asking a question for the next guest without knowing who the next guest actually is. And the previous guest asked you the question, what is the biggest industry that will be disrupted by Bitcoin outside of the financial one?
Wow. Um, oh, that question for me is easy because I work for MEA, and MEA often times themselves not as like a Bitcoin miner or even like AI inference. It's, they they consider themselves an energy company because we have all these energy deals. And so I think the biggest industry that would be disrupted is the energy industry, utility.
>> I, I think so too, actually, and it's a really nice one. If you dive deep into Bitcoin, you're like, "Oh, wait. Like, >> every energy producer will be a Bitcoin miner, and if not, they will get out of business." >> Right. [laughter] >> Right. Exactly. >> And it's interesting because you already see it now that like Bitcoin miners get into the energy producing game, and it's just a natural thing because they have such an huge advantage over the energy producers that >> waste energy, >> right? >> It's like, uh, that was a big one. I think I learned that like, I don't know, like eight months ago or something like that, and I was like, oh, [ __ ] like the, >> Gridless is the company to watch >> in that regard. Yeah, I think so. >> And, yeah, also we had also Daniel Batten already on, like you mentioned, uh, DS Batten, um, and, and so he, he's really, really great in like explaining that, and >> yeah, it, it has been a great podcast. Thank you so much for for being on, Hunter. Um, before I let you go, where can people find you, ask you questions, and also like kind of find all the resources that you provide?
>> Uh, yeah, you can, um, learn more about Bit3 by going to bit360.org. And, uh, you can also go to my website cryptoquick.com, and, uh, there's a bunch of links there too, and, uh, it's a Substack. Uh, please sign up for that, cryptoquick.substack.com.
>> Awesome. And thank you so much, Hunter, for being on. And also thank you so much for everyone that is watching and listening for joining us today. As always, I'll be back tomorrow with another episode. Bye-bye. [music] This content is for educational and entertainment purposes only and does not constitute financial advice. Nice.