S16 E11: Paul Sztorc on Roger Ver

Layer Two Labs CEO Paul Sztorc begins his defense of Roger Ver in a characteristically funny and somewhat self-deprecating fashion: “Well, I just wanted to throw my hat in the ring, you know. Free Roger! I think that, it’s true that, Roger hired me away from where I was working at Yale. So I guess that just means I’m a paid shill and everyone should ignore everything that I have to say.”

Yet for the remaining 3 hours and 45 minutes, Sztorc presents a series of very compelling arguments about what Bitcoin was like in 2014 and why the charges against Roger Ver are blown out of proportion – to the point that the entire case might be the result of a targeted witch hunt.

Also, financing the startups which laid the foundation of an entire industry is no small feat. Even if some bitcoiners felt let down by Roger’s endorsement of the Bitcoin Cash fork, they can’t erase his contributions from history. Among the toxic maximalist circles, BitPay is mostly remembered today for pushing the SegWit2X project in 2017 – but what the company managed to accomplish only a few years prior was pivotal in Bitcoin’s history. After all, enabling BTC payments to some of the most popular merchants and services was a big deal in an era when the best-known use case was buying drugs on Silk Road.

BitPay provided a much-needed counterbalance to the “black market money” narrative, which kept the regulators at bay and in a state of relative confusion in a time when the Bitcoin project was younger and more memorable. And for many OGs including Paul Sztorc, being able to convert their internet money into physical objects was truly magical.

There’s also a lot to be said about Blockchain.com, a tool which enabled non-technical bitcoiners to visualize their transactions just by pasting addresses. It was a major breakthrough which also raised awareness about Bitcoin’s lack of privacy and unintentionally accelerated the development of blockchain analysis companies. Without Roger Ver, this kind of service wouldn’t be available to regular users so early on.

One can also make the case for the virtues of secessionism and how Bitcoin Cash showed everyone that communities surrounding decentralized projects can disagree, fight for their diverging vision, and eventually settle the dispute with free open source code. Though it wasn’t Roger Ver but Amaury Sechet who created Bitcoin Cash, advocacy for different ways to upgrade the software is important and teaches the entire ecosystem important lessons.

Overall, I believe that having Roger Ver active in the world of Bitcoin is a net benefit and he’s much more useful in this role than sitting behind bars for a tax evasion charge that doesn’t even come with clear terms of payment. Personally, I agree with the points Paul Sztorc has made and have signed the petition to free Roger Ver. If you agree with the ideas, I recommend that you sign it too. Also make sure you read the Motion to Dismiss to better understand the nuances of the case.

Even if you still hate Roger and think he turned “Judas” in 2017 when he supported a chain split, even if you believe that the existing charges are “karmic justice” for other issues from the past, he is still a valuable asset to the entire community who invests money in various projects and reminds everyone about the libertarian roots of this movement. It’s better to have Roger Ver around to speak his mind than to completely surrender to the temptation of Saylorism. Free Roger, then let’s continue the fight to fix the money!

As for Paul Sztorc, I have a lot of respect for the fact that he still remembers the days when there was Bitcoin and nothing else… and he’s working every day to build the tools that might reunite the community. Hats off to his Drivechains initiative, may he one day conquer the BIP process and convince the miners to activate the soft fork!

Listen to Paul Sztorc talking about Roger Ver’s case on YouTube, Twitter/X, Spotify, Apple Podcasts & More!

This episode is sponsored by LayerTwo Labs, SideShift.ai, Citrea, NoOnes.com, Bitcoin.Com News, and HODLing.ch

Time stamps for this interview with Paul Sztorc, in which he talks about Roger Ver’s case:

Introducing Paul Sztorc (00:00:54)
Paul’s Connection with Roger Ver (00:01:42)
Roger Ver’s Contributions (00:02:54)
Challenges at Mt. Gox (00:03:59)
Bitcoin’s Early Days (00:05:05)
The Evolution of Bitcoin Conferences (00:06:18)
Tax Evasion Claims and Bitcoin’s Value (00:08:23)
Roger’s Generosity and Alliances (00:10:34)
The Block Size War (00:11:39)
Michael Saylor’s Skepticism (00:12:29)
Roger’s Early Bitcoin Investments (00:13:13)
Roger’s Influence and Marketing (00:14:26)
The Role of BitPay (00:15:38)
Roger’s Vision for Bitcoin (00:18:48)
Aftermath of the Block Size War (00:20:06)
Playing the Villain (00:20:45)
The Scammer Accusation (00:21:18)
The Block Size Debate (00:21:35)
Satoshi’s Conflicted Views (00:22:22)
Mt. Gox Video Controversy (00:24:23)
Self-Custody Awareness (00:25:03)
Roger’s Involvement with Mt. Gox (00:26:57)
Historical Context of Criticism (00:29:06)
Debate Dynamics (00:31:00)
Roger’s Support of Craig Wright (00:36:22)
Legal Battles with Craig Wright (00:40:14)
Romance Scams and Reporting (00:40:53)
Karmic Justice and Roger Ver (00:44:16)
Chaos Climbers in the Bitcoin Community (00:45:03)
Debate Analysis: Samson vs. Roger in 2018 (00:46:02)
Clipping and Public Perception (00:48:11)
Economic Growth and Human Welfare (00:49:07)
Performativity in Bitcoin Discourse (00:50:26)
Debate Takeaways and Misrepresentation (00:51:08)
Scaling Solutions: Lightning vs. Bitcoin Cash (00:52:13)
Hard Forks and Community Splits (00:54:43)
Victimless Crimes in Forks (00:57:54)
Toxic Bitcoin Maximalism (00:58:41)
Conception of Money and Community (00:59:03)
Ethereum as the Opposition (01:00:28)
Network Effects and Complacency (01:00:52)
Block Size War and Ethereum’s Rise (01:01:40)
Scaling Challenges in Bitcoin (01:02:52)
Layer Two Labs Promotion (01:04:00)
Drivechains vs. Tree Chains (01:05:15)
Bitcoin.com News Collaboration (01:08:40)
Critique of Current Thought Leaders (01:09:46)
Exit Tax Controversy (01:11:20)
Berlin Wall Explanation (01:21:19)
The Berlin Wall Discussion (01:23:06)
Roger Ver’s Moral Responsibility (01:27:02)
Exit Tax Controversy (01:27:30)
Roger Ver’s Legal Representation (01:28:09)
Greg Maxwell’s Threats (01:29:33)
Birthday Surprise (01:30:18)
Tax Law Complications (01:32:07)
Jameson Lopp’s Tweet (01:35:14)
CoinFlex Bankruptcy Discussion (01:37:01)
Roger’s Video Explanation (01:39:14)
Legal Challenges and Persecution (01:42:43)
Vindictiveness of the Blocksize War (01:43:46)
Discussion on Roger Ver’s Bitcoin Contributions (01:44:56)
Twitter Controversies and Public Perception (01:46:00)
Taxation and IRS Issues (01:49:02)
Critique of Tax System (01:50:05)
Roger Ver’s Future and Clemency (01:52:39)
Plea Deals and Coercion in Legal System (02:01:29)
Justice System Inequities (02:03:59)
Introduction to Alexander Vinnik (02:05:07)
Comparison with Roger Ver (02:06:18)
Plea Deals and Legal System Issues (02:06:39)
Vinnik’s Sentencing and Release (02:08:39)
Negotiations for Prisoner Exchange (02:09:50)
Details on the Trade (02:10:46)
Question from the Audience (02:12:54)
The Exodus Question (02:13:02)
Forking Bitcoin Discussion (02:15:17)
Cultural Apathy in Bitcoin Community (02:20:15)
Future of Bitcoin and Sidechains (02:22:33)
Discussion on Bitcoin Market Dynamics (02:27:41)
Contention in Bitcoin Governance (02:28:31)
Concerns Over Bitcoin’s Cultural Issues (02:30:31)
Measuring Decentralization (02:31:58)
Critique of Mining Centralization (02:32:08)
Transparency and Decentralization (02:34:03)
State Rejection of Bitcoin Reserves (02:40:55)
Bitcoin’s Role in Black Market Transactions (02:44:27)
Roleplay Request on BTC vs BCH (02:48:10)
Orthodox Plan for Scaling (02:49:21)
Competition and Market Share (02:50:39)
Libertarian Party Dynamics (02:53:11)
Libertarian Vote in Elections (02:54:52)
Trump’s Influence on Libertarians (02:56:40)
Free Ross Campaign Strategy (02:59:17)
Comparing Cryptocurrency Market Positions (03:01:56)
Bitcoin Cash Capabilities (03:02:50)
Historical Context of Bitcoin Development (03:04:12)
Language and Technological Change (03:06:27)
Early Bitcoin Innovations (03:09:39)
Ossification and Innovation in Blockchain (03:11:36)
Programming Languages Debate (03:12:43)
Bitcoin’s Imperfections (03:14:15)
Vulnerabilities in Bitcoin (03:15:21)
Power Dynamics in Bitcoin Development (03:16:41)
John Dillon’s Controversial Emails (03:18:00)
Coinjoin Bounty Scandal (03:20:19)
The Role of Competition in Development (03:22:14)
Roger Ver’s Legal Troubles (03:25:28)
Mail Fraud Charges Against Roger Ver (03:27:12)
Hypothetical Perspective on Roger Ver (03:28:44)
Thoughts on Taxation and Consent (03:32:32)
Tax Dollars and Freedom (03:33:53)
Exit Tax Debate (03:35:06)
Roger Ver’s Legal Battle (03:36:04)
Future Tax Laws and Risks (03:36:30)
Legal Precedents and Justice (03:37:53)
Political Influence on Justice (03:38:58)
Dignity in Departure (03:39:29)
Logistics of a Pardon (03:40:30)
Tax Law Evolution (03:41:53)
Legal Advice and Accountability (03:43:14)
Closing Remarks and Thanks (03:44:15)

Full Transcript of My Interview with Paul Sztorc

Vlad Costea 00:00:54 Hello there and welcome to the Bitcoin Takeover podcast. This is season 16, Episode 11. This episode is sponsored by Layer Two Labs and Bitcoin.com News and Citrea and HODLing and NoOnes. And we are live with the CEO of Layer Two Labs, Paul Sztorc.

He’s a polymath. He wrote some great articles about Bitcoin. He created one of the world’s first prediction markets on any blockchain ever before Poly Market. Before it was cool, it was called Hive Mind. But before that I think it was Truth Coin.

Very cool stuff. You messaged me, Paul, and you wanted to get on the show to talk about Roger ver and his situation, and I guess there is quite a bit of stories to be told.

Paul Sztorc 00:01:42 Yes. Hey, thanks for having me. Well, I just wanted to throw my hat in the ring, you know, free Roger. I think that, it’s true that, Roger hired me away from where I was working at Yale.

Paul Sztorc 00:01:56 So I guess that just means I’m a paid shill and everyone should ignore everything that I have to say. I mean, I guess what people don’t should know is that a month earlier, Blockstream had offered me not only a job, but also a partnership. In November of 2014. This is the same year that, if I remember correctly, it’s the same year that Roger renounces citizenship successfully.

I thought he had already been living in Japan for a while, but, so I don’t know. I’m like, I’m often, maligned and hated by both sides and kind of like, maybe like a little bit of a Bill Maher or something. both sides of the Blocksize war, but also beloved.

And that’s, you know, if you have integrity, then that is what happens. So. But so that’s like a tiny I just throw that out of the way at the beginning. But, you know, Roger basically created a lot of what Bitcoin is today. He was the first investor. And it’s like the list is so long it’s almost unbelievable.

Paul Sztorc 00:02:54 And it’s very difficult to even memorize the whole list, but definitely a bit instant, which was huge. That was the only way to like, get money onto Mt Gox. Really, cracking all this other stuff. blockchain.info, ripple before it became like a weird thing. he had Bitcoin.com. He had, like the Bitcoin store for Mt Gox.

I don’t know if a lot of people know this. I think it’s in it’s in some book or another. I don’t know if it’s in Roger’s book hijacking Bitcoin, but at some point, you know, there was there were these problems at Mt Gox. And, and Roger went there as a volunteer to like, help fix these problems.

And actually, they’re working like the whole week trying to get people’s money, get the withdrawals processed and, then, crazy. Mark Karpeles, CEO of Mt Gox, during this crisis, he’s like going to take Saturday off or something. They’re like Roger and some other people who wrangled together to help him out. To help out, like during this time of crisis.

Paul Sztorc 00:03:59 Tell Bitcoin he’s like, oh, when are we? When do we when are we coming into the office? Tomorrow. And Markopolos is like, you know, it’s Saturday. So, you know, I guess we’ll just come back on Monday or something. It’s like absurd in the context. It’s like an absurd thing to say.

But this is like, Roger didn’t just invest in these companies. He was like, really, really, really trying very hard to make them a success with his time and with his, with his like, all of his time and concentration. He was he helped create all of these companies. He helped, like hire all these people. And stuff was very, very, very small.

This is another thing I’d like to emphasize with respect to this, this whole claim of tax evasion, that I think there was a time, it was April 2013 when Bitcoin made it onto the cover of Financial Times, and that was just barely. Roger renounced citizenship, I think, February 2014, so they would have been talking about the 2013 tax a year or something.

Paul Sztorc 00:05:05 But I just I’m trying to emphasize for people that before that Financial Times article on the cover in April 2013, it was a complete oblivion. Like there was literally one. There was a slight bit info charts, I think it was called or Bitcoin charts or something like that.

One of those and it had like a news section and you could like refresh it, like me and my friend would refresh this like every hour or every day. We would check it in the morning. And you’d be lucky if there was one mention of Bitcoin by anyone, anywhere on the whole internet, excluding bitcoin, TalkTalk, but even Bitcoin Talk.

Back in those days, it was possible to read every single post on Bitcointalk that you would log in and you would read everything that was new on this little Simple Machines forum. So I bring all this up just to try to point out to people it was total. No one had any idea what you were talking about. There’s the modern Bitcoin. There is like has all these Bitcoin podcasts, they have all these books.

Paul Sztorc 00:06:18 There’s all these conferences. There was literally nothing conferences. There was this 1 in 2014, in the Javits Center in New York City. Me and my friend went there. We couldn’t believe we were like, oh my God, because the Javits Center is this huge, this huge place, right? It’s enormous to do this big car show there they do.

You know what I’m talking about. Maybe you don’t, but it’s this huge convention center in New York City. And we thought, oh my God, Bitcoin is meeting there. So we go there. I think this is April 2014. Pretty sure. And we go and and it’s like, oh, people were asking people like, oh, where is it? Where is it?

People like don’t even know. They tell us it’s over in like wing E. It was wing E of the job, which is like, it’s like leaving the building and going into like a tiny shed. And then it was like, want the left part? It’s in like three parts, the hall, and it’s like the left third is like the it was so, so small.

Paul Sztorc 00:07:17 The lead speaker was like Dan Larimer, who was showing Bitshares or something. That was the that was in the. But you couldn’t believe it. You just it would be there was, you know, BitPay with their tiny little booth and the Caucasus coins. It was so, so small.

And so I just bring that up, this notion that, You know, this notion that what, like what you would you would if you tried to bring it up to like the tax authorities or anyone, any lawyer or people just would like, they had no idea what you were talking about. It was totally baffling to them.

And so like, you know, I don’t know what their point of view is that he it’s very there was nothing at all like in the in the calendar year 2013 again, after that Financial Times article. That was part because there was this bubble when it went up to like from like $5 to $15 to like, so like maybe like $200 and crashed to $90. So, so that was something and that was kind of the beginning of normal people mentioning it.

Paul Sztorc 00:08:23 But then of course, everyone mentioned it as a joke. That article is just all about, you know, tulip bubbles and whatever. So we can get more into that later. But that is one thing I wanted to bring up that Tim Roth was creating. It was it was investing enormous amounts of hundreds of thousands of dollars, millions of dollars and all of this stuff when it was so, so, so early earlier. You know, Michael Saylor has this this tweet from, I think 2013 or 2015 or around this time where he says, you know, Bitcoin is a joke or whatever.

Vlad Costea 00:08:53 Yeah, that’s 2013. Yeah. He says basically that it’s a scam and it’s gonna go away. And much more than that, it’s going to have the same fate as online gambling in terms of regulation or something.

Paul Sztorc 00:09:08 Yeah. The US government will close it down. And so this was what everyone was saying about during this bubble time. This, as they called it, everyone compared it to tulips. you know, Stephen Colbert did the joke about, oh, backed by backed by the full faith and credit of YouTube comments or whatever.

Paul Sztorc 00:09:26 So like this. Everyone hated it back then. And so their theory that this is some kind of super valuable asset that, and even the idea that he would be able to like, liquidated and cash it out at any price, like it didn’t even have a stable market price. I don’t even know, like what you would use to calculate if you would, if someone sold more than.

I don’t even know what. Someone could go back and see an empirical question. It would be very interesting to go back and look it up and say, how many bitcoins can you sell in the year 2013 without crashing the price 99%, or just having the exchange just like fall out of existence?

I think that the number would be very low. So like that’s these are some of the things I wanted to bring up. obviously with Free Ross, Roger, like Roger, so many of the things that Roger did freely and generously, just giving away all of his time and money and putting himself in in danger by angering these people.

Paul Sztorc 00:10:34 His, he has all kinds of alliances with, like, you know, in Acapulco, the free talk, the radio. like all these libertarian causes that he gets involved in. So, I mean, so now this is okay, this is then the next point, which is the block size law, which is that given that Roger created all this stuff, why why isn’t he the most popular person in Bitcoin?

And this is of course, because you know why? It’s because of the Blocksize war and Bitcoin cash. And you know, who said this was it George Orwell I don’t know. But the first casualty in war is the truth right. So as a result of this dispute, this block size dispute, everyone has lied about everything and rewritten history.

And I you know, I lived through it all. I remember it all. So I’m just rambling here, so feel free to cut me off. But one thing that we can point out is that in like scaling one, which was in September of 2015.

Paul Sztorc 00:11:39 People from Blockstream came up to me and they’re like, oh, it’s so great that, Roger offered you a job. That’s amazing. Everyone was so happy. Everyone was so, like, united and on the same team. now, of course, you know, the popular thing to do is, like, pretend to hate people on the other side and pretend that it was always that way.

Although it is nice to see a lot of people, you know, I saw, like, you know, Jesse from Kraken and stuff, all these people who do, like who don’t entertain that kind of simplistic revisionist. It’s just like, you know, there’s just so much lies about that.

So let’s get into some of these. I mean, I don’t know if we. Is this making any sense or do you have any like, do you want to ask about anything. Or I can just keep going on and on like this. I don’t know if this is a.

Vlad Costea 00:12:29 Well, for the sake of accuracy, I looked up the Michael Saylor tweet and back in December 18th, 2013, he tweeted Bitcoin days are numbered.

Vlad Costea 00:12:40 It seems like just a matter of time before it suffers the same fate as online gambling. So this is the.

Paul Sztorc 00:12:46 End of 20 13th.

Vlad Costea 00:12:48 December. Yes.

Paul Sztorc 00:12:49 Yeah. So this is this is how far behind the times, you know. So what a slow learner he is. Whereas he’s a Roger like had Roger like owned. Roger once told me and I believe him that he he owned a Lamborghini before Bitcoin. When he found out about bitcoin he said, what am I doing with this Lamborghini? He sold the Lamborghini to buy more Bitcoin.

Vlad Costea 00:13:13 Yeah, he said it also on this podcast when he was on.

Paul Sztorc 00:13:17 It’s very believable very believable story. I, I once went to see him. This is a very funny story. and I was going to meet him in person for the first time. We were there’s, like, the hotel breakfast area. It’s so funny. So. So I said, oh, there he is. Oh, yes. Nice to meet you. And then more people are coming in this nice hotel.

Paul Sztorc 00:13:39 They’re coming down to eat breakfast, and then these people are coming by, and then they point them out and they’re like, oh, yeah, it’s that guy from the plane. Oh, the Bitcoin guy. So Roger’s been like telling everyone on the plane or whatever about giving them $5 worth of Bitcoin. He’s like there’s no off button on it.

He’s just like doing this non-stop. You know, like it’s really fun. It was really funny. And I was like, oh wow. I really am meeting Bitcoin Jesus. Because he we’re just I’m just sitting there and then people like just walking by and they’re like, oh, it’s that it’s that guy from the plane who gave us, he gave us $5 worth of bitcoin or whatever.

You know, he the Bitcoin guy. It’s just really funny. And that and he always had this kind of, you know, positive energy. And and yeah we need people to like, you know, make the sale and get out, get the message out.

Paul Sztorc 00:14:26 He would certainly do that. And then many other people, of course, what a lot of small bloggers want to say Bitcoin only got where it was. I’m sure other people, John Carvalho or whatever, they would say something like this. They’d say Bitcoin only got where it was today because Greg Maxwell stopped everyone from changing the code and we would have ruined everything if we had.

You know, and so it’s like, the cryptographers came up with a really great SegWit or something. So, you know, and obviously there’s a little bit of truth to each, perspective. But like, you know, who’s to say maybe creating, you know, BitPay is the same as creating. I mean, it’s a BitPay used to be bigger.

It’s the trajectory of BitPay is also an interesting one. But BitPay used to be like the BitPay was amazing because the it turned the pitch from something I would never do. I would never go into like a store or a coffee shop and say. You should consider accepting this weird libertarian the Bitcoin currency.

Paul Sztorc 00:15:38 And they’ll just be like, what? And it was so awkward. It was so painfully awkward to be a Bitcoin. I just like, you know, just I couldn’t talk to anyone about it. It was horrible. It was really, really terrible. In fact, I have a completely different story about a different time that Roger visited in Boston or something, I think.

And he pulled up this map and it was like, these are restaurants that accept Bitcoin. And we took like an Uber like far out of the way, like, I don’t know, like 25 minutes or something, some sushi place that accepted bitcoin. But then when we got there we had the sushi.

And then Roger of course wants to pay with bitcoin. But then they, they had like no idea what he’s talking about. It was so awkward back then really. It was really awkward and terrible. And I was like, you don’t understand. My friend and I, we really have money, but we just like Bitcoin.

Paul Sztorc 00:16:26 But anyway, BitPay made it so that the pitch was you go into this store, this, you know, this cafe, this coffee shop or whatever it is. And the pitch is, you should accept Bitcoin. You just go to this thing BitPay. Com they give you cash within 24 hours. They cast you out.

You don’t have to hold. You don’t do anything. You just put this little sticker next to the visa sticker. You know, you put this little sticker there that was like ingenious. All that was ingenious. And, so all this stuff was, you know, first I gave you 15% off. You could buy anything on Amazon, 15% off.

It’s unbelievable. You had more privacy, too, because someone else, it was like a market for points or like gift cards. So it’s a way for people to liquidate the cards. and our people have Amazon Turk, excuse me, a mechanical Turk, which is like an Amazon thing. They have credit And they have store credit.

Paul Sztorc 00:17:29 So the liquidate that and get bitcoin get real cash wherever they are. And I mean these are like amazing services. You could buy stuff and then just have it. No one would know that you bought it off Amazon. And now you’re buying it with Bitcoin and you get 15% off. These are like amazing services.

And so then the Blocksize war I mean this thing about the block size more is like, unbelievable. Like Roger. He just loved Bitcoin so much. And he had so much firsthand experience with the the network filling up. And he had this vision of everyone using Bitcoin, which is certainly Satoshi said in 20 years they’ll either be very large transaction volume or no transaction volume.

I definitely disagree with the strategy of using the hard fork to to get 2MB or 8MB. there’s a lot of things that I would have done differently if I were like the, appointed general of the large blocker army or something. I would probably have changed the name. I would have probably made the block size just flatly unlimited because of what happened, ended up happening of like, you have to try to somehow pick the right name.

Paul Sztorc 00:18:48 But really, like Roger’s motivations were very, very pure. He wanted a Bitcoin to succeed. And this, this, this whole thing sort of got out of hand with the Blocksize war and people separated into two different camps. The camps, had a very difficult time talking with each other. and then the block size split, and then, people fought over the name Bitcoin.

Roger had Bitcoin.com. So people didn’t like that because, so so then but then everyone, you know, everyone became politicians real fast. And then they started to say, oh wait, we always hated that guy and whatever. Whereas I remember very clearly there was a time, there were many years where that was not the case. Everyone liked each other more or less. and yeah.

So I mean, there’s, there’s we can talk about the Blocksize war for, you know, til the cows come home or whatever, but, but that is why all these. So, another thing is that after the small blockers won the war, most of the people, as you and I know very well, they became extremely complacent and overconfident and basically deranged.

Paul Sztorc 00:20:06 And, and then without the large blockers, the large blockers went out and did their own thing. They sort of abandoned us in the Bitcoin world. And so now we have the. Yeah. So those are some of the other things, that we could talk about about like what the extent to which people just decided to lie after the fact about, You know, I witnessed things. I witnessed people having breakfast together in a friendly way. You know, 2016 and 2017 and whatever. there’s lots of things to talk about.

Vlad Costea 00:20:45 I think this can be more fun. And I picked this up from the Chris DeRose playbook. He was telling his guests, how about I played the villain? You know, like, okay, he was presenting the case of wrestling, where you have the face and you have the heel, and you play face, I play heel, I’m gonna say, okay, Roger has shield Bitcoin Cash and Bitcoin Cash has underperformed Bitcoin. He claimed that Bitcoin Cash is the real bitcoin. And he made his businesses sell BCH as the real Bitcoin.

Vlad Costea 00:21:18 And therefore these people lost money and therefore he’s a scammer and he deserves to go to jail for this. And I don’t care for what reason he goes to jail. I just want to see this happen because I don’t know. I have a friend who bought BCH and it underperformed and I feel bad for him.

Paul Sztorc 00:21:35 Well, that’s a very good you’re doing a very good, devil’s advocate or a very good devil. perhaps. but, I think, like, I think that it was simply a, I think it was just simply an error by the large blockers. If you’re going to hard fork, you might as well change the name.

And why even why even pick a name that’s even remotely similar? Why not just pick a completely different name? because people prefer the words to mean the same thing on Monday that they met on on Tuesday, or reversed that rather, people prefer on Tuesday. They mean the same thing they met on Monday. Either way, they don’t like the words to change their meeting all the time.

Paul Sztorc 00:22:22 So, I think there’s some, some a little bit of truth to the idea of. But of course, the, the actual evidence of Satoshi’s point of view is very conflicted. You know, he you can go down the line and make a two columns and he’s like, have unlimited size, large block and a half small block. So, and ultimately he left us with the small block Bitcoin.

I don’t agree with a large blocks on L1 as you know I think we can perfectly I think we have access to unlimited block space via the L2 Sidechains. I believe that back in 2014. I still believe in 2015. I still believe it today. If you go to layer two labs.com/download, you can download, you know something that uses small block and then and also download the larger block L2.

And you can make as many a large block of whatever block size you want. So I think a lot of that was a mistake and not what I would have done. but I don’t think I mean, so obviously the idea that, we just wanted someone to to suffer for things that, you know, we don’t want the punishment and the crime.

Paul Sztorc 00:23:35 we would hope that everyone would want those things to be related. Like if people should go after him for if they think that that was fraud, then they should make that kind of case.

I don’t think that the like this is what I’m talking about is that it’s because of what happened with the block size law that people retroactively are saying that they think he’s guilty of some unrelated, thing, which is an unbelievably serious thing to accuse someone else where they’re potentially go to jail for 100 years or and especially because the changes, the charges are almost certainly False. This is exactly what I’m talking about. Is this this, this politically and psychologically motivated reasoning that people do.

Vlad Costea 00:24:23 Yeah. And there’s more to it. People who, for example, saw the video about Mount Gox when he went to Japan and he said, I’m here at the Mount Gox HQ and everything seems to be fine. And the issues are being caused by the financial system, by the mainstream financial system, and not by bitcoin and blah, blah, blah.

Vlad Costea 00:24:41 Everyone’s funds are safe. Maybe someone listened to that and he left his coins on Mount Gox. I guess at the time the case for Self-custody was not as strong as today. You didn’t have a precedent for this. Everyone saying you should withdraw to your own wallet was considered more paranoid than today. And I guess a lot of guys were trading.

Paul Sztorc 00:25:03 this is good. You’re being a great devil’s advocate, but okay, so when Roger made that video, everything he actually said was true. And when he got there and then investigated, they were they did have all the Fiat and they were trying to get it out. And the delays in getting it out, those were not related to any funds being lost.

Actually everything he said the video is like an unfortunate like the timing of the video is like really, really unlucky because Mount Cox had all these different problems and it was only at some later date that anyone even knew that coins had been missing from Mount Gox. And, so, so actually everything he said in that video was true.

Paul Sztorc 00:25:49 As for the case would be for self custody being weaker back then. That is completely false. Back then everyone knew, I think not to leave your money on exchanges. Exchanges had appeared gone bankrupt and left and right. Oh, they were all you’re constantly they were closing.

I think that also everyone back then was much more technically sophisticated just because of the nature of early adopters being more, just more intelligent overall, more more technical overall. So now we have a bunch of normal people who just think of it as this is like buying a stock on E-Trade or something. But back then people knew that, oh, you know, I’m just going to go on.

This is what you had to do. You have to go to CVS or whatever and like wire with like a magic phone. Why are the Fiat do like Moneygram the phone. It’s a bit instant and get like instant credits. And then the whole thing was shady like so shady. and so but again this is the story is I think the story is unfortunately like flipped around.

Paul Sztorc 00:26:57 Roger could have just done nothing, right. He could have just stayed in his apartment and done nothing and watched Mount Gox struggle. But because of Roger’s love of Bitcoin. He voluntarily went down to try to help Mount Gox with their problems, and he crucially reported on what he saw to other people.

Everything he said was true at the time and but then as a result, you have this thing that you can point to. People have this thing they can point to and say, oh, look at this. And they can just put it up next to Mount Gox, goes bankrupt and they can say, well, there you go. It’s a contradiction.

So it’s all flipped around. It’s because Roger loved Bitcoin so much that he got involved with all this. And in the Blocksize war, it is not like people are trying to paint it as though he deliberately misled people so that he could assist Mt. Gox in like, you know, like what’s stealing coins and and then claiming it was a big hack or something.

Paul Sztorc 00:27:58 Is that what it’s none of this is, or I guess they could say that. Try to be saying something like he is, irresponsible in his reporting of the facts, I guess. But I mean, all this gets the story backwards. He could have just done nothing. but we we need a lot of people to take a lot of risks if we want, a project like this to succeed and that, you know, that’s just.

He puts himself out there to do this stuff, to try and give this stuff a chance. and so it is all been reported, in a different and completely different way with 2020 hindsight years later. and the extent of the alignment is. But of course, there’s some truth to, you know, like when you have people who are like this who are trying to be positive and trying to, you know, like a sort of like a salesman or even a CEO type, there is a temptation to just like, get that optimism. and the reason for that is, pessimism is usually a self-fulfilling prophecy.

Paul Sztorc 00:29:06 So even if everything’s fine, if people are too pessimistic, it will all just be ruined. But so you sometimes you need that optimism and, But like, I don’t like. So. Okay. I don’t know if that answers to the full question, but yeah, Mount Gox I don’t think that people I think people did know to get it.

And of course some people are upset, but actually there was there was a well known trade off at the time. People knew, like, everyone is trying to hack your wallet and steal your bitcoins, keep them on Linux machine or air gapped machine. And if you have them on Mount Gox, well, now you can make money doing your arbitrage.

So these people don’t complain when they’re making their arbitrage. But then when they they did not take self-custody I mean, people wanted both ways, you know what I mean? Those of us who just swapped on a mount Gox quickly bought and then withdrew the coins and put them in self-custody cold storage. We’re unaffected by this.

Paul Sztorc 00:30:12 And, but other people wanted to trade, so that’s what they did. Again, you can look and there was even an academic paper about this, about most bitcoin exchanges going bankrupt by they had broken down by name and by trading volume like more than half of each.

But I don’t know, you know, it depends on the year. But yeah, I think like the paper was probably from 2014, 2015 or something. So so back then there was just a back then it was just very small. And again if we there’s a lot of risk in every action.

And if we only take actions that are guaranteed to succeed, then we’re going to do only a very small percentage of all the things out there that are worth doing so. But why don’t you give us some more? I’m sure you’ve got a bunch. I’ve heard a lot of these many times.

Vlad Costea 00:31:00 Yeah, of course I mean, that video was used extensively in 2017 2018 by Blockstream affiliated accounts to point out that Roger has been malevolent.

Vlad Costea 00:31:12 And even when it was sort of obvious that Mount Gox was not solvent, he was there possibly taking a bribe, possibly being complicit to the whole scheme, you know, and it was pretty compelling. And it was also the time in Roger’s career when he wanted to debate everyone.

And his style of debate is very aggressive, to the point that he wants to talk more than you do, and usually you don’t really get the chance to talk. I remember there was this blockchain cruise. I was not there, but I watched all the videos and I think Jimmy’s song was supposed to debate Roger, and that was advertised as part of the event. And Jimmy’s song chickened out. Actually, he didn’t chicken out, he said.

Paul Sztorc 00:31:59 And forth he went back and forth. He walked off the stage angrily at one point. Then he came back, and then he left again, I think.

Vlad Costea 00:32:06 I think he wanted his own microphone or something. Or he wanted Roger’s microphone to be muted. It was one of these two.

Paul Sztorc 00:32:14 Well, you know,

Vlad Costea 00:32:16 And then you had Tone Vaas, who did a poor job.

Paul Sztorc 00:32:22 you know, again, well, I don’t think that this, you know, if the prosecution’s case is, everything ever done by.

Vlad Costea 00:32:29 It’s like the last episode of Seinfeld, you know?

Paul Sztorc 00:32:32 Yeah, it was very funny. I mean, the cruise people are, like, wearing bathing suits, and it’s, like, really hot. And Roger has, like, shorts and, like, a t shirt on. And then Jimmy Song is this, like, cowboy hat in his suit?

Not that that not that we should not that that, you know, but the debate was silly to it was like Jimmy Song is this little. I can’t believe that I still remember this. I have all these memories in my head.

Some of them maybe I wish I didn’t have. They’re so weird, but Jimmy Song is trying to say like Bitcoin Cash is Keynesian cryptocurrency or something like it’s just like word association argument. I just couldn’t believe it.

Paul Sztorc 00:33:09 But yeah, I don’t you know, I didn’t really believe in Bitcoin cash. And you know the Bitcoin Cash people they they have me on or and or refuse to have me on there. Like I know they have me on. And then they say and then I give them my list and why I don’t think.

But you know, I think it’s going to be tough for Bitcoin Cash to succeed. And yeah, we have a nice back and forth. You know they’re very interesting people. Oftentimes when someone is not number one if you’re not number one on CoinMarketCap, this frees you up to be a little more honest and kind of creative sometimes.

Sometimes it also means that you have more self-delusion, but it’s a fun mix, of course. So anyway, like, I don’t I don’t believe I don’t agree with Jimmy Song. I don’t necessarily agree with Bitcoin Cash. I don’t agree with Bitcoin Core. I think the core is mostly wasting everyone’s time. I don’t agree with Michael Saylor. I don’t agree with you.

Paul Sztorc 00:34:06 No, I don’t agree with. There’s so many people I don’t agree with who do I even agree with on basically no one. But, like so that’s not the point. Again, Roger only does he only was like, he’s doing these debates because he’s so excited about he’s amped up on Bitcoin.

He’s like, this is the coolest thing. So, that’s that’s why I don’t think I actually don’t think that that’s true. per se, what I actually think is that most Bitcoiners are this kind of like INTj introverted, kind of like, cool, calculating, but also whatever, like vaguely autistic computer nerd types that I just think most of the most of the Bitcoin community would be interested in a debate, but not as skilled in a kind of oral debate.

You know what I mean? Like they would like to maybe type a debate back and forth on the keyboard. So then Roger shows up and he’s got all this personality and this energy, and he’s he’s like a billionaire and he’s, you know, whatever.

Paul Sztorc 00:35:17 He’s got this great smile or something, you know, just gotta get his shirts and stuff. So I think like that’s I think that’s probably a little bit I don’t really think that it’s like, but also Roger is like a very, very, very practiced communicator. So I do think that these things, like a normal person is at a disadvantage, and they would feel like they would kind of feel like, well, that wasn’t as easy to it wasn’t as easy for me to talk about that as I thought it would be.

I can imagine a lot of people thinking that. You remember that video where that one. Nice. I think it’s like in South Korea or something. And then it’s Luke Dash junior, and some nice lady asks him, like some the simplest question ever to be asked, like, why do you like Bitcoin or something?

Vlad Costea 00:36:01 And he made a very weird face and said, oh, it’s interesting technology.

Paul Sztorc 00:36:06 He is the boss for literally like 2.5 minutes like calculates his answer. So I, I but I don’t think that that I’m not trying to say that that is I just think, you know, we get some weird personalities in Bitcoin, right? That’s what I’m trying to say.

Paul Sztorc 00:36:19 So.

Vlad Costea 00:36:22 Okay, let’s open this can of worms. Roger not only supported but he legitimized the scam of Craig. Right?

Paul Sztorc 00:36:31 Yeah I think Roger fell for the Craig. Right? I mean, he has admitted one of the interesting things is that he has, he’s like he’s publicly made videos saying that he regrets doing that and that he fell for that and he believes that he was tricked. So I kind of think that would settle the issue.

Another interesting thing is that Roger, he like he did that with, I think it was Naomi Brockwell or whatever. He did the interview where he explained why he like how he came to realise that Craig was not he didn’t know about the the version one addresses have checksums at the end of the.

So Roger’s technical knowledge greatly exceeded that of Craig’s. And so there’s a little bit of an irony. Of course Satoshi created that check something like totally out of thin air. He like, there was nothing. There would have just been the public key. And then it was like, maybe it would have been the hash of the public key.

Paul Sztorc 00:37:36 And then all that base 58 check stuff, certainly like created that bespoke. You know, he just kind of so there’s no possible way that Satoshi would not know what that is. So I think that that’s true. And I think that probably as a result of Roger falling for it, probably other people, probably there were probably some marginal people who fell for it who would otherwise have not fallen for, which is too bad.

I think that is probably too bad. Probably. Roger regrets that a lot. I think that part of why Roger was so excited about moving forward aggressively with the large blocker movement was that he thought that, well, the last block of movement has all this stuff, has support from all these miners.

The big business is, you know, whatever, Coinbase, BitPay. So it’s got all this stuff. And then the other side basically has like some technical people, we thought, well, actually we have Satoshi on this side. So it will be like a complete, you know, we’re going to run the table.

Paul Sztorc 00:38:44 We’re going to have the whole that the top of every category. And so you can.

Vlad Costea 00:38:52 Argue that there’s an incentive to actually believe or want to believe that Craig Wright is Satoshi just because he’s on your side.

Paul Sztorc 00:38:59 Absolutely. Well, I think Craig Craig, I think is, you know, a very interesting character, as you know. You know, I’ve sort of joked about him for a while and but I do think he does seem to be some kind of genius, con artist person because he’s just so many people have been conned.

And, I do think wishful thinking is a very powerful, a very powerful weapon that people use. This happens all the time. Tons of people fall for this. You know, like, there’s a million examples of some one politician or another.

And I was hanging out with my friend, and a certain politician’s name came up. I won’t say who was back in the day, though. And then I was kind of like, yeah, but it doesn’t really seem like.

Paul Sztorc 00:39:47 And then my friend’s mom, she just says something like, she said, oh, Paul, I just, I just, I just so much I just want to believe in him. And I was kind of like, yeah, of course that’s it’s very normal. So a lot of people do that. yeah.

Vlad Costea 00:40:08 But let me switch teams for a moment because you.

Paul Sztorc 00:40:11 Have to do anything with, with with tax evasion though.

Vlad Costea 00:40:14 There is something that you ever saw in your argumentation. It’s the fact that Roger actually sued Craig. Right. And won in court.

Paul Sztorc 00:40:22 So there’s Craig sued Roger also.

Vlad Costea 00:40:27 I’m not sure how that one went, but I know that Roger was able to sue Craig. Right. And win in court. And that’s sort of a way to redeem himself. In a way. The damage was already done. There’s no way to put the cat back in the bag after this sort of situation. But he did that, and he did that before. Before Hadlow and Peter McCormack and all the others.

Paul Sztorc 00:40:53 I mean, many people. The normal thing to do when someone takes advantage of you is most people are very ashamed and humiliated and they just they just quietly drop the issue. And you hear about this all the time. This is a fascinating, hear about these romance scams. You know, this is fascinating. I mean, I think it’s sort of interesting.

And, I think part of the way this the scam works is that people who get scammed, they just are not going to report it to the police. Like if you get scammed in some normal way, you would just say, oh, they, you know, I’ve tried to purchase whatever on the gold bars on the internet and the, you know, the reported to the police.

But if it’s this, these romance scams, they pretend it’s, you know, it’s kind of it’s very interesting to look into it, but I think people don’t report it. you know, so it’s probably. And then there’s a lot of this, like, we can go on and on about that, but there’s a lot of, like, really sad stories.

Paul Sztorc 00:41:51 People commit suicide and things are very terrible. But, the normal thing that people do is they just don’t. They just, they don’t tell it. It’s very, very difficult for someone to, like, make a video and say, oh, I was, I was strict and try immediately to, tell all the people who listened to them before to that, that they were wrong about this one thing.

I think it’s, Charlie Munger has a saying, a great saying that I really, really like. He’s a Warren Buffett’s partner. I think maybe they both said it. They shared a lot of. Was these little witty. Yes. I believe he died recently. Right. last year maybe. But they were great.

And I think the saying is, the guy that who tells you it’s time to buy something is almost never around when it’s time to sell. And it’s kind of like these people come up to you and say, oh yeah, you got to buy gold, or you got to buy whatever.

Paul Sztorc 00:42:49 You gotta buy whatever, you know, oil. But then when it’s time to sell, they don’t come back and tell you, oh. So that’s a very rare thing. Yeah. I think that’s probably like the, that’s not a great, you know, the Craig.

But Craig, like, tricked all these people. And, I think one interesting thing about the, the whole block size war is that I think it could, in my point of view, is that the block size were created like many, many, many other problems.

So I think that this, this first problem made this whole pyramid huge number of which part of which is legitimization of altcoins. part of it is the complacency of, in the derangement of the the crazy people in the small blocker movement and then Bitcoin core, you know the ossification of you that we want the scaling more because we didn’t change anything. So we just never change anything now ever. And we should never improve. And we don’t need to worry about anything.

Paul Sztorc 00:43:57 We already have a billion users. and I think that all this stuff is all just like it’s all downstream of that. So not just not to, try to say that that wasn’t the kind of a disaster. I think it was a disaster. But, you know, what can you do?

Vlad Costea 00:44:16 Well, I think for this first part, it was useful to tackle this. I don’t know what I should call it when people are so upset at Roger, for some reason, for some event that happened in the past. And they think there is this karmic justice or whatever, that he should go to jail no matter for what reason?

Paul Sztorc 00:44:35 Because he’s innocent of all crimes. But because some other thing. I mean, this is the definition of, barbaric, behavior. You know, it’s like that’s the end of civilization. but, like, so, like a lot of these people are doing this is the same thing with, like, well, this is my point is that the people are angry about him for these other things, a lot of which is very unfair.

Paul Sztorc 00:45:03 and is just it’s just part of the derangement. Part of it is, of course, that once you split into two camps, now you have unremarkable people lower down the totem pole. So, you know, like, for example, Samson Mao, just for example, has very little actual talent of anything.

You know, it’s not like a great developer or whatever. And, but you can rise if you just criticize the right person on the other side. You can rise, you can climb up. So there’s a lot of people, the chaos climbers, you know, like the Peter Baelish, and they will benefit. They benefited from the scaling war.

You know, they were like, vultures of war, you know, that the people following, following the army, after all the carnage, they feast on the dead bodies, you know, to become more powerful. So then we had lots of people like that, and this is terrible, you know, I mean, sort of. John Carvalho is sort of an example of that.

Paul Sztorc 00:46:00 Also.

Vlad Costea 00:46:02 You presented three very interesting examples I want to say about Samsung that for a while now. Let me talk about this. Regarding Samsung, he debated Roger in 2018 on the stage of a conference which I think was called the economy or something. It was in Korea, if I’m not mistaken.

Someone correct me if I’m wrong, I’m just speaking from my own memories and the main takeaway. But basically, if you watch the whole debate, you’re going to realize that Samson was pretty weak and Roger was more compelling. But if you watch the aftermath of that debate, you’re gonna see that after it. Samson.

So I think his skill, you may think that he’s not worthy of having his spot in whatever in the pantheon of Bitcoin or the Sistine Chapel or whatever, which depicts everyone important in Bitcoin. He does have very good persuasion skills and very good manipulation skills. What he did at the time was to take and frame the whole debate as Roger crying on stage saying, babies are dying because Bitcoin is not scaling.

Vlad Costea 00:47:15 And that one became such a big meme and it turned against Roger, even though if you watch the debate, it’s very different. But it was that exact moment that was framed and posted like a thousand times on Twitter, and people started believing that rudderless this person with mental issues, you know.

Paul Sztorc 00:47:34 Right. Yeah. Well, this is exactly my point is that, the, like, the logic of everything Roger was saying is true. I think Roger, you know, he’s he has so much communication skills and experience that, I mean, he should probably know that, first of all, that anything you say can be clipped.

But, I mean, it’s like you say, you talk long enough, they’re going to get you with some clip or another. You know what I mean? This is the thing. Would we rather people just not get into this because we’re going to raise, we’re going to raise a whole generation of, I do think now partly with, with Trump, too, and with the, you know, the proletariat or whatever it’s called, the young.

Paul Sztorc 00:48:11 But before everyone’s got these stupid cell phones and everyone could just take out a phone, it’s like 1984 tele screen nightmare world, you know? Yeah, I have salon. It’s just everywhere. It’s going to clip you, you know, it’s going to get the clip. The worst thing you’ve ever done in your life.

And we’re going to raise a whole generation of people who never take any risks. And but anyway, I think, you know, the issue is, of course, Roger is 100% correct that, you know, he was very passionate about Bitcoin and he’s 100% correct that his the logic of his argument is completely correct.

And the fact that people don’t, don’t care about the effect of economic growth on the welfare of human beings is one of the top tragedies of our of all time and our civilization. And people don’t realize, you know, you kind of know about communism. So you know that it’s not just about, you know, you can you can there will be a red lines and there will be mass starvation.

Paul Sztorc 00:49:07 But then there are also a million tiny little things, little products that just aren’t as safe or just people aren’t as comfortable. The medicine doesn’t get there in time because the truck breaks down or something. Is a million tiny little things about why life is just not as easy in Communist Romania as it is in the UK or something. but so, but of course, when you clip it, it makes it seem.

Is that what people get annoyed about is of course, if someone says babies are dying, then they think it’s an emergency and we have to drop everything we’re doing to like send the Navy Seal, Seal team six into like where they’re, you know, rather, you know, you know what I mean? Like, it has a certain it has an implication on what the audience is obligated to do. And if you’re just really saying that the trajectory of economic growth is going to be 6.2% instead of 4.1%, and so that last 2% is going to really eventually affect, you know, 500 babies or something.

Paul Sztorc 00:50:11 So it’s not like quite the same thing. But yeah, that’s a that’s what I mean is that, you know, we elevated this whole cast of people who like the substance and who liked the performance, the performative outrage. You know, safe team is a perfect example. Okay, we can go down the list before.

Vlad Costea 00:50:26 We get into safeguarding. Do you remember anything else from that debate? You remember watching it?

Paul Sztorc 00:50:32 I do remember it. I like, I think. Well, what? Do you have something in particular in mind?

Vlad Costea 00:50:40 You remember an instance where Samson looked very bad?

Paul Sztorc 00:50:45 I don’t remember. Is this a debate where he has the lightning payment versus Bitcoin cash, and he goes to the demonstration where he’s, like, sending it, like down the line or something. Is that this? He does that at some point. I don’t remember if it’s this. No.

Vlad Costea 00:50:56 But it does get to this point where Roger asks Samson, so who’s gonna accept lightning transactions? And Samson says, well, you can buy my hats.

Vlad Costea 00:51:08 And that that was his only argument. He said, you can buy my hats. Whereas Roger could go on and say, you know, BitPay accepts Bitcoin Cash and there are all of these merchants where you can use it. So he looked bad there.

But my point or the point that I’m trying to make here, is that you didn’t see any of this being presented because there was one side which was super loud, and there was the other side that was trying to play catch up or be vindictive and prove that they’re on the right side of history or whatever. So they they did not exploit this too much, but it was part of the debate.

And unfortunately, the takeaway from that event is babies are dying, but not this conversation about what you can actually do with Bitcoin and the Lightning Network, not, you know, the network effect of that. It still has. I think to some degree you can still spend it. But it also goes back to, I’m not.

Paul Sztorc 00:52:10 Sure, certainly vindicated on many of his lightning critiques.

Paul Sztorc 00:52:13 So it’s true that like to me, the Lightning Network and Bitcoin Cash or something of equal and opposite reactions to each other. And they are these people trying to find the way the solution is scanning Bitcoin in layers. And both people became very confident in their solution. But this is part of the point is that they had to be because it became political.

And so if you, if you if you were working at like a lightning startup and then you tried to make a critique of the Lightning Network, people would just you would look like a large blocker. So then people would not want to look like that. So then it just created irrationality on both sides. It was really, really terrible for Bitcoin.

This whole this whole split, I don’t know what should have been done instead, other than the thing that I’ve been saying that everyone should do the whole time, which is this L2 sidechain that isn’t saying the whole time that everyone should do. But if you magically took that off the table, I think, I do think probably would have been better to pick a different name, because think about it like it’s tough when you say it’s a real Bitcoin and then it’s at a lower market price, whereas if you just created something new, you could just say, listen, we started at zero four months ago and now we’re all the way up to 300.

Paul Sztorc 00:53:36 I just think that would have been that would have been better for everyone. You know, it would have been better to have two healthy competitors. This is the unfortunate thing, I think, is that it really would have been better to have two healthy competitors, large block ism and small block ism, and it’s unfortunate that we didn’t have that.

We had like the status quo. what do you want to call it? Like the we had the thing that was there before we had, you know, BTC ongoing existence. And then we had this new thing that it was like, you know, I’ve, I’ve, I have published many critiques of Bitcoin Cash. Same name. The timing.

It’s it’s not a good idea. The L1 large blocks not a good idea compared to small block L1 large block L2. is weird with segwit two x to be going on at the same time. Bitcoin cash is launched by Armory and I have have like a list of of what could have been different. the hard fork is very powerful.

Paul Sztorc 00:54:43 This is another thing that I, you know, no one has ever really addressed this. I ask this all the time, but, the Secretary x people, they had 83% hash rate. So if they had done soft fork extension block, they would have won the scaling war and we would be living in a completely different world.

I don’t know, like, it’s just one of those things, I think in a way that probably it was the guys. Right, that made the marginal confidence of, you know, the large blockers that much more. Of course, it’s interesting that Roger one. Another interesting thing about Roger, though, is that I didn’t even know which side of the debate he was on until like very late.

He did a very good job of like not really talking about it for a long time. It was at least scaling three, I think when he. I may be misremembering, but he really like stayed out of it, which I also was kind of impressed by. And I really didn’t know.

Paul Sztorc 00:55:40 I was kind of surprised when he was a lot, because it really seemed like everyone was a small blocker from where I was sitting at the time. Also, there was no large block plan. It was like two megabytes, eight megabytes. Bitcoin XT is eight megabytes. In Bitcoin class it was two megabytes. And it’s like Bitcoin Cash, okay.

Gavin Gavin Gavin Andresen was out there tweeting like no one is advocating an unlimited block size. But then the question is what? Where do you get this number from. So that was this was. These were tough things. But of course at the time blocks would fill up. Then someone told me, I think someone had BitPay, I don’t remember.

I think it was BitPay that like their customer service calls, the phone calls went up by, you know, 40 to 1 or a huge amount when the blocks are full, because and that makes perfect sense. So and of course, we haven’t really seen it’s not like the Lightning Network works. It does not work.

Paul Sztorc 00:56:45 A lot of the people who are working on it admitted it doesn’t work. This is the fascination with covenants. This is the when it does work, it’s because there’s custodial lightning is cheating. Or they have the the submarine swaps, which is every lightning transaction. It also has an L1 transit.

I mean it’s like you know, it’s like kind of. That’s not really that obviously won’t work. You can’t onboard people to the Lightning Network without L1 bites, of which there are not enough. So it’s not like, again, I see this. I see them as very equal. They are just two people who try.

And I don’t understand why someone would look at the Lightning Network and say, yeah, it didn’t work, but they were trying as hard as they could to improve Bitcoin, so they deserve a for effort. I really feel like you could say the same thing about PCH. You could say, well that’s not really working, but at least they tried something that would make if you owned the coin.

Paul Sztorc 00:57:54 If you own Bitcoin before 2017, you got coins on both network. So talk about a victimless crime. I wish I was a victim of more crimes like that.

Vlad Costea 00:58:05 Well you did have bitcoin diamond, Bitcoin gold, Bitcoin In whatever all of these forks that happened in 2017, and at the time, it was believed, I think, that one of the vectors of attack against Bitcoin is to just fork indefinitely until you split the community to the point where nobody can agree what Bitcoin is. And I think that’s one of the moments when we saw the rise of toxic Bitcoin maximalism as a movement that said, no, this is the real one. This is Bitcoin. Everything else is a Bitcoin.

Paul Sztorc 00:58:41 Just well I think.

Vlad Costea 00:58:42 That’s part of the problem with.

Paul Sztorc 00:58:43 The hard fork is that you don’t want splitting. The network is a very expensive thing. And in particular with Bitcoin there is more to it than just people putting out open source software. Like you’re saying with Bitcoin like that, you have you have a conception of the public good.

Paul Sztorc 00:59:03 And what I mean by that is there’s this community and you say we. We want to achieve something. We want to replace central banks and banking with Bitcoin. And, the plan is not to replace it with 10 million coins. The plan is to replace it with, but with one coin, because it’s not like you go, what if you went into Walmart and they had Walmart bucks, you know, are you going to Starbucks which has bucks in the name already?

You know, they have Starbucks dollars. You know, now they have Starbucks, you know, riyals, right. and then so like every, every the whole point of money in the first place is that we got rid of barter and we replaced it with money. So the hard fork cuts against that.

And that’s very difficult when you when you, when you advocate any altcoin you are advocating against Bitcoin. So there’s some some truth to that. I think the toxic maximalism partly recognizes that true fact, but partly it was a reaction to the departure of the the what you might call the progressive, the large block people.

Paul Sztorc 01:00:28 They left the Bitcoin cash. So then there was it was just a death spiral of craziness. And what has gotten done, I.

Vlad Costea 01:00:36 Can argue that they left to Ethereum because a lot of them didn’t build on Bitcoin cash.

Paul Sztorc 01:00:42 Yeah. No I think Ethereum is the opposition party to BTC. Really.

Vlad Costea 01:00:47 It was like the revenge chain. That’s what I call it.

Paul Sztorc 01:00:52 Yeah. And so this is this. So this is the issue with anything that has these big network effects is everything will get lazy and complacent over time. So how do you have competition If there’s one big thing.

It’s very hard. You either have two big competitors. You have like a two party system, you know, you can’t really have you see this on CoinMarketCap. It’s like there’s like the top coins have like this huge market cap.

And then this is the long tail of just very, very low market cap coins that are mostly irrelevant. And they, they kind of none of those are very few of those basically 0%, none of them represent an actual attempt to take over the world as money.

Paul Sztorc 01:01:40 Whereas, Bitcoin certainly does BTC and Ethereum. You know, they’ve always mentioned the flipping. They’re waiting for that flipping. They actually they do aspire to replace Bitcoin and achieve that, that outcome. And so does Bitcoin Cash I would assume the idea is get the adoption bill features that people want and so and then replace the other coins.

But it’s very difficult. It is like, you know, you can easily find people like in the Libertarian Party or in the Green Party in America, these smaller third parties, Labor Party or the Reform Party. And, you know, they really think that they they do things any day now.

You know, I think, you know, but when you have something like with voting and with these coins, every strong network effects, most people need to vote with other people who are voting the identical way. In order for the vote to mean something, they have a chance of affecting the outcome. So similarly, people clump up into these, to these coins. Ethereum was nothing before the Blocksize war.

Paul Sztorc 01:02:52 The early 2016 theorem was 1%, but only after scaling one and two failed to have this resolution. And there was this thing about Sigma will be shipped by April 1st and blah, blah, blah. Never happened that made it. The serum became 30%.

So this is part of why everyone’s so high strong. It’s scaling three, which is not until October, many, many months later. Scaling three was kind of a waste of time because it was this academic conference about people presenting, you know, wind ball and people presenting.

The whole first day it was about privacy, mostly wasn’t even about scaling. So it was this, so that that was the in response to just people’s failure to, Failure to solve the problem in Bitcoin. People went outside of Bitcoin, you know, as they should really. But that’s why the ossification is so wrong.

Vlad Costea 01:04:00 Yeah, let’s get back on track and come back to the topic. But before that, let me plug a couple of ads. First of all, I got to start with yours, Paul.

Vlad Costea 01:04:09 Layer two labs.com. Check out the grand master plan to scale Bitcoin with Sidechains. You have the software that’s available and has been changed over the last few months, and it keeps getting better. I’m also in the telegram chat. I think it’s called drive chain talk or something.

Paul Sztorc 01:04:28 Yeah, it’s a team slash DC insiders, which is a little joke of mine.

Vlad Costea 01:04:34 Yeah. Drive team talk in there. You can actually see other people who are excited about the software, and they can send you some coins. You can basically send transactions to them and receive from them and be part of this community. And what else did I want to mention about it? Oh yeah, I discovered and this comes as some sort of question about drivetrains. I discovered that Peter Todd had a similar concept called tree chains, and I was wondering, what is the clear difference between three chains, which sounds more like sharding and drive chains?

Paul Sztorc 01:05:15 well, okay. this came up at scaling three, in fact. and right afterwards, well, yeah, some other people in the community were commenting like.

Paul Sztorc 01:05:27 That they don’t know what tree Chains is, and Peter Todd doesn’t know either or whatever. But as near as I could tell at the time, he wanted everything to be client validated and, and so but then I asked him this one question. I said, the miners still collect a fee, right? So and he says, yes, of course.

And so then I say, well, if the miner, how does the miner know what the fee, what fee to collect? And let’s say run A node of every system possible of the whole thing. And then isn’t it just the same thing? And then he had no answer to that. And he has never shipped any of this software. So I think I think it was just a poorly formed, formulated idea.

And he never realized that either. It was the same as other ideas that it already existed or that it wouldn’t work, but I think he had never fleshed it out. He thought that it would be different and better, because Peter Todd’s goal for some reason is to have L1 not know about anything which is which is exactly what I do with drift in anyway.

Paul Sztorc 01:06:38 But he really wants there to be no incentive or any ability for anyone to know. So he wants everything to just be like, kind of like open timestamps or something. But that’s that’s both unnecessary pointless and, like not achievable. Because if someone knows that anyone could know and then if it might affect you, then you might know.

But I mean, it doesn’t matter drive students or does with you. But I don’t think that he Peter, understood Peter’s own critique of drive change is so bad, as I wrote, and every single sentence of it was wrong as I made in that giant image. So I think that he doesn’t even really understand, like some of these things that he wants to have happen.

I don’t even think he knows what he’s talking about, like even in his critique of drives. And he contradicts himself multiple times as to whether or not it’s possible or desirable for someone to outsource running a node to someone else. Half the time he assumes that if that ever happens, it’s the end of the world.

Paul Sztorc 01:07:39 Other times, he says, it’s the end of the world. If that does happen. And then he says, sometimes he says it’s not even possible for that to happen. And other times he says, it’s inevitable that it will happen. So. And you can read. If you look at my image, you can you can just see for yourself how how confused it is.

So given that that’s how confused he was like last year, I don’t know what he thought Tree Chains would be back in 2014 or 2015, back when I was in any direction at the same time. so maybe he can put out that’s like I have the software layer two labs.com/download. You can try it out.

And I had the bips. Those bips are many years old now. Pip 300 is only 5 or 6 pages, so. It might not even be five pages. I don’t know, maybe it’s probably something like that. It has nice tables in it too. It’s not like all just decks. It’s like bullet points.

Vlad Costea 01:08:40 Yeah, and I also have to plug news that Bitcoin.com. I reached out to them because I discovered that they have very nice news coverage about stuff that are interesting to me and I don’t find them anywhere else. Like for example, you can find an article from six hours ago that’s called gold. Suppliers face unprecedented demand as large investors flock to precious metal.

And also China calls on us to stop weaponizing trade issues. It’s useful for me to find the sort of news that I don’t find on Bitcoin magazine and whatever. So I reached out to these guys from Bitcoin.com News and I said, hey, I noticed that you guys know the difference between Bitcoin and Bitcoin Cash. Now you’re not advertising BCH as BTC.

You have very good news reporting that I like. So how about I promote this to my audience, which maybe hasn’t checked news at Bitcoin.com in many years. And they agreed to this. And that’s how we came to this moment. I’m not sure where you get your news, Paul, but maybe you can check out news Dot Bitcoin.com sometimes I might.

Paul Sztorc 01:09:46 I mean, in general, I’m very disappointed by, to say the least, every all these. Everything I hear from most people is false in my opinion. Even like the thought leaders are uninteresting. You know, even even the greatest of the great, you know, we got we got, you know, whatever. Peter, Todd, Luke junior, Adam back or whatever. They they keep this stuff. And I just think it’s like. It’s either incorrect or boring or predictable. So I don’t know. But yeah, Twitter is a great or X formerly Twitter is a pretty good place because the good news right from the source people post your podcast is pretty good, Vlad. It’s pretty good.

Vlad Costea 01:10:34 I appreciate it. Coming from you means a lot.

Paul Sztorc 01:10:38 Cases is pretty weird. I don’t know, like you know how money or whatever, but it’s like, I don’t want to.

Vlad Costea 01:10:44 Get into that. Sometimes it’s interesting, other times it’s about astrology of all topics. And I’m like.

Paul Sztorc 01:10:50 Yeah, I don’t know.

Paul Sztorc 01:10:51 I think they are like intentionally sabotaging. It is not the word, but they’re like they’re not going to be pinned down. So they’re just going to be like, if we want to do a whole episode about whatever, they’re just going to just do it. So they’re maximizing the irreverence. Okay. Can we should we talk about the the exit text and how it’s the the craziest? It’s one of the craziest things any country has ever done.

Vlad Costea 01:11:20 You tease that. Let me put another ad, because it’s been one hour and I don’t think I’m going to get this chance again. So yeah, drink some water. Also, Citra is trying to bring some financial stuff to Bitcoin. Syria basically is trying to get liquidity that’s currently on Ethereum with BTC and build the ZK roll up. not chains. What do you call them? Layers where you can borrow your Bitcoin and you can borrow stablecoins against your Bitcoin and have all of these DeFi use cases that you currently don’t have on Bitcoin. So if you’re interested in that into making bitcoin more useful in this way, go to Citron XYZ.

Vlad Costea 01:12:05 I’m actually curious what you think about the ZK rollups.

Paul Sztorc 01:12:10 Me, I think I don’t think that will pan out. Like what? What advantage does the ZK rollups give over? SPV. the the advantage is that maybe there’s an error in the, in the interior of the data. okay. So, like, it’s hard to explain.

I don’t know what the what I wish, I don’t know, like, the audience’s background knowledge, but basically you can look at Bitcoin by itself before adding this other stuff in and then say, okay, Bitcoin has this blockchain. And then there’s SPV mode where you get the headers, which is four megabytes a year, 4.4 and the ZK proof is a way of I mean, there’s different SSC proofs.

So like I’m fully in favor of us using these privacy SSC proofs. I made the Zcash sidechain many years ago. You can look at it, look it on YouTube and try it out for yourself. But the, the SSC rollup idea is like we will put it to an L2 there.

Paul Sztorc 01:13:18 There will be a lot of transactions that we’re not going to see on L1. And then the the summary, the net effect will be posted back to L1. And you know, I’m I’m a pluralist actually. And I do think we should try everything. But I don’t understand what what this gives you overdrive gain. which is the same thing except without the SSC, part.

And instead the hash just covers the whole thing. someone covers the whole thing. And I think the idea is that the SSC proof stops anyone from lying while it’s in the L2. Like as it. Which is. This is an extremely expensive and complicated computational task. By the way, that very few people understand.

And so they do that this and then whereas in drive chain, it’s sort of up in the air. It’s where even we’re very hands off. Anything can happen on that L2, including, theft or some other kind of, mistake. but with drive chain, the idea is just that these are all merge mine chains, and the L1 miners collect fees from all of them so they wouldn’t want.

Paul Sztorc 01:14:36 There’s no one in the system that wants any error to take place, and if any error does take place, it is automatically discovered over this. This is a hash that covers three months of correct activity, so the hashes just won’t match. And so the idea I guess the ZK rollup stuff that would be better in a world where miners are determined even when it cost them hundreds of billions of dollars per year, huge amount of money in the world.

And in a world where miners are willing to give all that up because they’re too lazy to, like, check that these two hashes match and they want to outsource that to the rollup who will collect all that money instead. I don’t think that’s likely, but for now, those people are definitely have it, because the miners have been so, so stupid when it comes to mining and when it comes to drive changes other things. They are passing up all this money and but I just think in the long run, equilibrium, they will not want to do that.

Paul Sztorc 01:15:48 So the smoke I don’t I don’t know what what it gives you that. No. There has never been a time.

It’s very confusing to understand. It’s hard to explain to the layperson who doesn’t have I don’t know how much background information they have, because if I explain how SPV works, they’ll say that’s not how it works on the L2, and they’ll be right, but they’ll miss the point, which is that the reason SPV works is because there’s no one out there who wants there to be something that meets the proof of work difficulty, but the block is invalid.

So that’s the that’s why SPV works, and that’s also why drive chain works and the SSC Stuff is superfluous, I think. it also requires, in order to work. It requires in order to do anything. You have any teeth, you have to do the SSC part on L1. whereas with driving you do not. So, I don’t know, with the plan is for that. People say, oh, we’ll do the we’ll have this thing with opp cat and the hash function, and we’ll make this.

Paul Sztorc 01:17:02 SSC thing on L1 with Bitcoin script. I mean, you sure. So that’s fine. You could try to do that I that would that seems very expensive though in the long run I don’t think anything will compete with drive train at all because drive chain doesn’t cost. There’s no there’s not this crazy L1 cost.

There’s no L1, SSC stuff that no one understands that you still have to build and that requires OP cat. And of course, there’s other stuff With dry chain. All the fees are paid to the miners. So there’s total aligned incentives the whole way. There’s no sequencer. Someone who puts the transactions in that’s just merged mining does that. So I don’t know. Yeah.

From my point of view, I have the answer to all this. And I had it long ago, more than ten years ago. And so I don’t know what what is why don’t other people just do that I don’t know. So like every other L2 transaction, fees are not paid to miners. So there’s just eventually they’ll either be vertical integration with the miners or there’ll be some kind of conflict.

Paul Sztorc 01:18:17 Deltas that are not mined cannot possibly win. In any world where the coin is a success. You have many, many, many people using it on the L2. Billions of people, You know, if everyone makes three transactions a day, it’s trillions of transactions per year. Per year, $0.10 per transaction. There’s hundreds of billions of dollars per year. This number is doubling in value every ten years or so. So this is a huge amount of money. So I don’t know what what is the point of switching. I don’t know what the case now. But you know again I am a pluralist and I think that we should try everything.

Vlad Costea 01:19:04 Okay. Also, what do you think about side shift? Did you ever use it?

Paul Sztorc 01:19:09 The exchange? Yeah. Yeah. No, I did use it. It was great.

Vlad Costea 01:19:15 I usually use it when someone sends me stablecoins or whatever. I want to hold that.

Paul Sztorc 01:19:21 Yeah. It’s great. It’s really good. It’s a very funny. Memes. It has a really funny customer service robot.

Paul Sztorc 01:19:28 Yeah. It’s great.

Vlad Costea 01:19:31 Check that out. Now let’s get back to the rudder topic. To the tax evasion part.

Paul Sztorc 01:19:41 So the United States has this thing to exit tax. This is what they say. Roger didn’t pay or you didn’t pay a right or whatever. We could maybe steal it slightly, but overall, I think it’s the most ridiculous thing ever that we even have it at all.

I guess the steal man would be something like, you were born into this country and you were raised here, and look how nice the roads were. And no one robbed you, and you went to the government schools. Yeah. I mean, okay, so the government school. So there it is.

You know, you went into the restaurant and you ate you ate the steak, right? And now you want to say, oh, I don’t want to pay. So that would be the steelman. So you know about. So I think people who are younger than like 35, they probably have no idea what like the Berlin Wall is.

Paul Sztorc 01:20:37 And this would just blow their minds if we if we described it to them. And you know what? It is of course. Right.

Vlad Costea 01:20:44 I’ll be 33 tomorrow. So.

Paul Sztorc 01:20:47 But you’re from Europe, though, and you’re from a former communist Romania or something, right. So, yeah. So you know what the Berlin Wall is of course. So let’s actually explain it to I hope some people know, but there’s bound to be some people who are who are watching, who are like 18 or something, I think, right, who don’t know what it is.

Vlad Costea 01:21:10 I don’t think anyone listens to this. And there’s 18. But let’s go ahead. Let’s try to describe it like how do you perceive the Berlin Wall?

Paul Sztorc 01:21:19 Well, how do you why don’t you I mean, you know, you’re you’re a European. I mean, I can explain it if you want, But why don’t you explain it? I’ve been talking.

Vlad Costea 01:21:29 Well, it was a physical wall that delineated the two sides of Berlin. After World War Two, you had Berlin being split in four, and there was the British side.

Vlad Costea 01:21:42 There was the French side. There was another side, probably American.

Paul Sztorc 01:21:47 And.

Vlad Costea 01:21:48 There was also the Russian side. And the Russians wanted that to be part of the Eastern Bloc. And there was this Warsaw Pact that basically split the world into halves. And that’s also what led to the Cold War. And one side of Berlin was part of the Soviet Union, not not part of the Soviet Union under the political dominance of the Soviet Union. So.

Paul Sztorc 01:22:16 Yes, of course, no.

Vlad Costea 01:22:17 Communist.

Paul Sztorc 01:22:18 In the eastern part of Germany. So, so Berlin is surrounded by communists. Soviet. Surrounded by communists. you know, the USSR. But this is Little Island. So it didn’t just split the city in half. It encircled the city, and it meant it began as a wall, but it quickly became huge concrete, giant concrete walls, multiple walls, chain link, barbed wire, dogs on runners, you know, like so the dogs can smell people. Huge leveled gravel towers with guards, with with guns who would shoot people on sight and who also had orders.

Paul Sztorc 01:23:06 If you didn’t shoot someone outside, the other guard would shoot you. And then she and giant metal things to block cars and block people from ramming their way through to stop people from leaving the communist part and getting into this one capitalist part of of this, the city of Berlin.

And like it’s the fact that it’s that it even happened is is just is and this went on for, you know, this went on for like years and years and years like whatever. Like who knows? I don’t know the exact number. I think it was like 16. And this wall was built up over starting as a tiny inner wall. And then it became a striking thing. But this was just this idea that.

Vlad Costea 01:23:58 no, it was not 60 years. I don’t know exactly what I’m.

Paul Sztorc 01:24:02 Saying is that I believe it’s started in the 60s. That’s what I tried to see.

Vlad Costea 01:24:06 Oh, okay.

Paul Sztorc 01:24:06 Yeah. I don’t know if that that could even be wrong, because of course that’s.

Vlad Costea 01:24:10 Wrong because the war ended in 45.

Paul Sztorc 01:24:14 And it would have happened before then. But, it was built over many, over many years that they like built like various improvements to it. we could look it all up, but it it’s this. That is what this.

Vlad Costea 01:24:29 You’re right. It it was built in 61.

Paul Sztorc 01:24:32 61. It’s very famously fell in, I believe 1989. Right. And that’s something like that. That’s pretty famous. So.

But, yeah, I mean, if you’re young and you think that, you know, it’s a micro-aggression at school to, like, not have your I don’t know, I don’t want to make the pronouns joke or whatever, but it’s like this, like split people’s family. So this is the silliest.

I mean, silliest doesn’t even mean to describe. It’s horrible thing. Sometimes people’s families were just cut off by this wall. You couldn’t get through there. People have been given because of the threat of nuclear annihilation. The the western troops that were in Berlin, in the capitalist side, they had orders that they could not interfere.

Paul Sztorc 01:25:33 There’s one guy he’s running to escape and he gets shot. He’s like bleeding to death. And they they cannot go out because it’s technically. Soviet land. So the Berlin Wall is is absurd thing. And I think Margaret Thatcher had a quote about, like, every stone bears witness to the moral, like whatever the moral bankruptcy, I think the moral bankruptcy of the society.

So because, so like, that’s what this exit tax is this the most absurd thing, the idea that again. So with Roger, like Roger. he really cares a lot about these libertarian issues. And Roger doesn’t want his tax dollars to be funding these these things that he doesn’t agree with.

And if he is, because it takes this idea of moral responsibility so seriously, and it’s because he really believes in and consent, he knows that if he if he were to just stay and still be a part of this play into all this, then he is complicit. And so he did his out of his own for his own moral reason.

Paul Sztorc 01:27:02 He decided to reject this, this arrangement, you know, the social contract, he says, I explicitly want out. So then he. I mean, it’s the idea that any society wouldn’t allow people to do that is beyond the pale. I think it’s just completely crazy. No, but.

Vlad Costea 01:27:27 He did have to pay an exit tax. And he did. I know, but I’m saying.

Paul Sztorc 01:27:30 That no one should have. I actually, I think in theory the exit tax could be fine if it’s just like there’s a certain amount of paperwork, like the exit tax should be like, you know, $5,000 or something flat, but the, the. Instead they try to do is they sort of say, this is all pay us now all the tax we think that we will collect from you in the near future.

Forget that you don’t even get any of the what. You know, you would think that someone would be able to say, oh well, can I at least still get the services for the near future or whatever? You know, obviously it’s like the whole thing is absurd.

Paul Sztorc 01:28:09 I just think it’s shameful. It’s very shameful. I don’t think that history will, Agree with this and at all. I think it’s a ridiculous thing. I mean, it’s probably won’t help Roger just say that this law is, a ridiculous law, which it is. but if you’re not quite as interested in this topic, we can move on to, like, is Roger guilty with.

The answer’s basically almost certainly no. He absolutely hired this expensive law firm and paid them all this money. I’m sure he followed all their advice. To the letter. Right. So, as I mentioned before, I don’t know exactly, you know, the government’s theories that he sitting on all this Bitcoin that he didn’t. Value. I don’t you know, it had very little value at the time.

They had very little liquid value like the it was not liquid acid at all, so I don’t know. I think, you know, what about this law firm? I don’t they have anything to say. I would personally think that the law firm would be, Don’t they owe us all some kind of explanation? Like, who’s going to hire this law firm now? You hire this law firm and you go to jail for 100 years.

Paul Sztorc 01:29:33 I hope they I hope they produce some kind of explanation. Right? I don’t know, but, yeah, we could also talk about like that. It’s true that Greg Maxwell threatened many times on Reddit. Like he made these insinuations is very ominous insinuations of, you know, reporting to Roger. And of course, Greg is very skilled technically, and he could easily have compiled some kind of report that looks very credible and just send it over out of sheer vindictiveness, which he. This is all very public. You can find and look all this up so it’s very awkward.

Vlad Costea 01:30:18 My girlfriend came with a birthday cake. Okay, you can come.

Paul Sztorc 01:30:22 Oh, my gosh, it’s your birthday tomorrow.

Vlad Costea 01:30:26 Yeah.

Paul Sztorc 01:30:27 Wow. Look at that. Happy birthday.

Vlad Costea 01:30:31 That’s the age when Jesus died.

Paul Sztorc 01:30:36 I didn’t know that. I didn’t know that.

Vlad Costea 01:30:39 Anyway, since he’s.

Paul Sztorc 01:30:40 Only. He’s only dead for three days.

Vlad Costea 01:30:43 Since we’re presenting surprises, I put on the screen what she drew for you. This is number nine of the Privacy Vampires collection, which is you as a vampire, Pepe.

Paul Sztorc 01:30:57 Do I have to click over to my other screen to see it? Let me see.

Vlad Costea 01:31:00 Yeah, you do have to.

Paul Sztorc 01:31:02 All right. I’m going to see it in 40s.

Vlad Costea 01:31:06 I suppose now I’m supposed to be holding to this. I don’t know what to do. I’m just gonna. Oh, I should blow off the can. Okay. 1 million downloads for my podcast.

Paul Sztorc 01:31:22 Oh, you’re not supposed to say it out loud. Don’t you know?

Vlad Costea 01:31:25 That’s how I know it will never happen. So I will stay small. Thank you. Crazy girl. Anyway, did you see your vampire puppy?

Paul Sztorc 01:31:39 I don’t see it. No. How do I see it? Oh, I see it now. Nice, I like it. Wow, that’s really good.

Vlad Costea 01:31:45 It is. She’s very talented.

Paul Sztorc 01:31:50 Oh, someone says he doesn’t pay on the DSV on the phone. I mean, the only logically consistent way to do the accounting for these coins is to say that they, had a value of zero at the moment they were created.

Paul Sztorc 01:32:07 I think this is actually the favorable interpretation to the I mean, how can that even be this person? Richie Rich is saying that. I mean, those things did not exist. He had renounced this this. I mean, I know this is complicated because it’s like, oh, memory dealers and there’s lots of and people are going to argue back and forth.

But, the idea let me like, argue in a different way because the, you know, it’s of course, it’s theoretically possible that that anyone could be guilty of any tax provision. I’m not a lawyer. The tax code is so long.

It’s not it’s not possible to say that someone is is, innocent, you know, of that type of thing, which is kind of partly the point. But the idea that Roger wouldn’t know that he is a prominent figure and the idea that he wouldn’t know after all of his friends, you know, many people, of which a perfect example is Ross, Ross and, Ian and, all these other people that, have had run ins with the law.

Paul Sztorc 01:33:18 He ran. When he ran, he was talking about Waco, the idea that he wouldn’t know that he would be vulnerable to tax accusations is false. He obviously would know, and he obviously would hire. He hired lots of lawyers and spend lots of money on lawyers when.

So it’s it’s extremely farfetched that. that he wouldn’t pay all that stuff. and it’s also like, again, like the ruling the rules are. So there was you could ask to all day and you would not get any answer on. Exactly. But as far as the for coins, they must the it’s favorable to the government to just say it comes in at zero.

And this is all extra capital gains income. That’s how I that’s the only logical way I think anyone could so they would have the value of 0 in 2017 and then these later years, all of which are many years after they were announced citizenship. So I don’t know, there’s there’s obviously a lot of details, but and of course they could get anyone on any type of a thing.

Paul Sztorc 01:34:32 But this, this the premise is that Roger tried to dodge this, this tax back in, early 2014. it’s basically it’s extremely, farfetched to say the least. So there was but of course, you know, they’ll be able to say, you know, they’ll be able to go on and on and on forever about, this thing here or whatever, like the idea of the exit taxes like someone would be earning. I don’t even like. It’s hard to even know where to begin, but I don’t know if that we’ve seen we go back and look at this person.

Vlad Costea 01:35:14 Okay, let’s make this a bit more organized. There is this tweet by Jamison Lopp, which got 1800 likes to 168 retweets to 113 comments. This was on the 27th of January and he said, A lot of you clearly have fallen for Roger’s Roger verse political persecution ploy and don’t actually understand the charges against him, so I’ll break it down. Number one, the IRS says he didn’t pay the correct exit tax in 2014 because his filing reported that he personally owned zero BTC when he had more like 58,000 BTC.

Vlad Costea 01:35:53 Number two, the IRS isn’t overstepping their reach. Going after non-citizens because the bulk of their complaint is related to us. Companies were owns. Those companies still have to pay US taxes regardless of his status. Now the IRS isn’t suddenly seeking to throw were in prison when they could just send him a bill.

That’s not how they operate. They’ve been going back and forth with him for years on this matter. It got to this point because he has chosen not to pay. I bet that even to this day, he could negotiate settlement. The IRS prefers to profit rather than put people in prison.

Astute observers may recall that Michael Saylor had similar tax issues last year, and settled for 40 million so that he could move on with his life, a logical decision. So why is Vir refusing to pay? Perhaps it’s ideological, in which case he’s his own worst enemy, but perhaps he’s unable to pay. Remember that in 2022, Coin Flex when bankrupt, and claimed were owed them 47 million for margin call.

Vlad Costea 01:37:01 He disputed this claim and didn’t pay. Perhaps this is a clue. Why would someone who, by all accounts ought to be a billionaire, refused to pay such a relatively small amount in order to stay out of prison? Perhaps it’s because he’s unable to do so. And yes, taxation is still extortion, but that tends to be pretty a pretty weak argument when you’re dealing with the taxman. So this is what he tweeted. All of this was debunked, apparently. And the motion to dismiss, which is available on free. Roger. now.org.

Paul Sztorc 01:37:36 Yes. again the tax law is very complicated. And then of course, Roger owns many companies around the world. But I think with respect to the coin flex thing, okay. So there’s a lot of conjecture in there, right. So and of course, anything, you know, we did a lot of stuff that we’ll never know that obviously Roger knows best and etc. but the cornflakes thing, that was very interesting to me when that came out, I was kind of like, oh, that’s interesting.

Paul Sztorc 01:38:02 Interesting. Very similar to Jamieson. I was like, oh, what’s going on there? But Roger did put out a video. I can’t remember exactly when it was, but it was within the last two years and I was shocked by the video that Roger put out later. Now, of course, this is a video that between Roger and like a few, 2 or 3 other people.

So we don’t know, maybe maybe there’s just more. Maybe this is more and more intrigue and more more lies or whatever. insert ever expanding conspiracy theory here. But, in this, this newer video and I can’t exactly remember when it was, I think it was around Christmas of It’s 123. Maybe.

See if you can find it, Vlad. Or people in the comments can maybe find it. But he does put a huge video explaining the coin flex thing and explaining that, due to various, you know, like he had one, he apparently went to court and one which is some evidence he’s telling the truth.

Paul Sztorc 01:39:14 And also he had been unable to speak about the case. And so that was why he didn’t say anything about it. And that is adversaries pounced on this, to, you know, basically defame him and even, like, launch like a Roger coin or something. He’s not even allowed to, like, talk about any of this until the now.

I don’t I’ve never understood this about. But this does happen a lot where people are in court and then they say, you’re not allowed to talk about this, which is often very, it’s often horrible for the people who are in. They can’t camp, they can’t tell their story until the court case is over.

I don’t know why this is the case, I guess, but it does seem to be a part of the legal system of many countries or many lawyers advice, because I think it has to do with like discovery and like which arguments people will attempt and stuff like that. So I’m not sure. I don’t know why that is. I would be curious to know why.

Paul Sztorc 01:40:11 But the point is, if you’re interested in the coin flex thing, that would be the. We’re in a situation where there are a lot of accusations against Roger for a long time, the last 3 or 4 years, and you wouldn’t hear anything back. And then suddenly this video shows up, and then Roger was explaining what happened with that, and also why he couldn’t explain himself earlier.

And I was very surprised by what I heard in the video, and it directly contradicted what a lot of people told me that, so I don’t know, it would be hard to say. I did hear a lot of people say that he lost a lot of money, with trading on coin flicks. I don’t know if that’s true.

It could be true. also, these cornflakes people were later shown to have been incorrect about things they said. So. So that’s like the main thing. I think people should watch that video from Roger himself about which I thought was very interesting. Cornflakes video? and, so like then a lot of it was like raw.

Paul Sztorc 01:41:24 So basically the Jameson Law’s argument was like, he the reason he won’t pay is because he can’t. Because he lost all his money. I think that it’s funny because when Bitcoin, everyone always wants to have pretended that they lost all their money, right? So you lose it all in a boating accident or something, so I don’t know if it’s a good thing to to prove that you have a lot of money or, or to actually go with the story and say, oh, I lost all my money.

It’s a perfect opportunity. so that kind of, paints you into a corner either way as to whether or not. I mean, Roger has many times been treated very unfairly by the, legal system, as you probably know. You know about this thing. But he when he was very young, he ran for political office, and then he was arrested for this law that, like, no one has been charged for before or since, for shipping these firecrackers, they’re like farming pests, tools.

Paul Sztorc 01:42:43 And he, like, slept. They were, like underneath his bed, but they’re technically counted as explosives under some obscure thing. They have a tiny bit of gunpowder in them to make a loud sound.

Vlad Costea 01:42:55 Well, I know about that one, because the Blockstream people used it as a way to portray Roger as a criminal. And they said this guy was in prison. He did shady business before, and he’s promoting BC right now, which, you know, by, I don’t know, some sort of weird connection between the two events. You’re supposed to believe that he’s a villain because he went to jail.

Paul Sztorc 01:43:17 Yeah. This is again a mean spiritedness of the Blocksize War was just like people just decided to just say whatever they don’t, the truth be damned, you know? And just whatever argument they think will work. And this is very dark and it’s very terrible. it’s not it’s not a very good thing. So anyway, I don’t know, like, he has, you know, he has been an activist For libertarian causes.

Paul Sztorc 01:43:46 And he has, you know, been persecuted a lot for it. I don’t know why the like I’m not sure exactly what’s going on, but I do think I would be prepared to believe that because Greg hated Roger so much and he had so little emotional self-control even online, and you could see it and it was very, very ugly. And he threatened to do this multiple times. I would bet that he they sent some kind of thing. There is like a program where you can get like 15% if you rat someone out. I don’t know what the percentage is, but you.

Vlad Costea 01:44:25 Mean if you report some tax evasion to the IRS and. Yeah, and they collect supporting evidence and they collect it and they give you a chunk of it.

Paul Sztorc 01:44:33 Yeah. I think that’s hardly even necessary because there’s, you know, Greg is such a vindictive person that he would have probably done it for free. I don’t know if that’s the case, but I would imagine that if someone like him made like a carefully crafted, like report that had like all the arguments like laid out.

Paul Sztorc 01:44:56 And you could probably track down, of course. I mean, part of it is that Roger has given so many people, like $5 worth of Bitcoin, you could probably track down a lot of it online and try to chain analysis or something and try to figure out. I had no idea, but I don’t I don’t know why they would, single him out.

Of course, a lot. This is unfortunate for a lot of people. They just think where there’s smoke, there’s fire. Right. So that’s a phrase like, if they arrest you, oh, you must have done something wrong because you were arrested. so I don’t know, I think that, there’s an awful lot of evidence that Roger is very early in all kinds of other coins as well, like super, super early.

He’s involved in such a long time ago. Like, I like I said, he’s owning a Lamborghini and selling it to buy Bitcoin back in. I guess I would ask you, I don’t know. This is really none of our business.

Paul Sztorc 01:46:00 Of course. And this is like a very invasive situation to be in. But I my impression of Jameson’s tweet is just that he’s just trying to push back against the Irish because Roger does these things with the tape, you know, and he’s like, he’s kind of a little bit like of, you know, like, like a Saul Goodman Better Call Saul sometimes with the some of these gimmicks, you know, and you know what I mean?

So maybe people are just on Twitter that people love to be a contrarian on Twitter. You know, they love to just like. But I think that so if we were going to take this seriously, I would ask Jameson Lopp, like, what do you think Roger’s net worth is like? You really? You think he doesn’t have like 50 BTC somewhere or something?

Like what is the theory exactly? That’s my I guess if we were going to take that seriously, that would be what we would ask. We would say, okay, so you think that he has a net worth of I mean, I don’t know if Roger still has what what what shares does he have in like Kraken or blockchain.info presumably I don’t I have no idea.

Paul Sztorc 01:47:05 May have sold all of them, may have whatever but I just I that would be my my question I suppose you know, do you understand what I’m trying to say. Like I would be like, well, you think that his net worth is like less than is $50 million and that he couldn’t get he couldn’t get loans or something from people or whatever?

Like, that’s the theory. I don’t know, I just think sometimes on Twitter people get a little carried away. They want to they have a clever little thought. We all do it right. We think, hey, this is a little neglected thought. I’ll just put this out there. And, so I don’t think that, I don’t think the Jameson is right, but I don’t think that he is, like.

I don’t think that Jameson is one of these people. There are a lot of people who are just just become deranged by the block size war and by the politics of it, and they’ve just become deranged people. And you can’t you can’t really listen to them about anything on this topic.

Paul Sztorc 01:48:02 But I don’t think that way. But Jameson, I think Jameson is a very reasonable guy. I think he’s just wanted to connect the dots. You know, he says, here’s some dots. And he just threw it out.

Vlad Costea 01:48:14 You know? But this was not the first time that he expressed this sort of view. The irony is that last year, he seemed to be in favor of Roger’s case, that there was something that happened along the way, and he flipped the switch or switched.

Paul Sztorc 01:48:30 Well, he says that, taxation is still extortion in that a tweet. Right. So he’s sort of still I think. So I think mainly the idea of the tweet is that Roger may be broke. That’s the idea. So but that’s what I’m, that’s what I’m that’s my point though is that that seems unlikely to me that he wouldn’t be able to get even from friends or past supporters or something. that seems it just doesn’t sound likely.

Vlad Costea 01:49:02 But what’s really concerning about this case is the fact that there is no number that’s out there from the IRS.

Vlad Costea 01:49:09 As far as I understand, there is no amount of tax money that he must pay. He doesn’t know how much he has to pay.

Paul Sztorc 01:49:18 Yeah, I know, it’s ridiculous. I mean, they always do that every every time, every year we have to calculate our own taxes and then pay. And then if we get the number wrong, we get blamed. And it’s like, well, why don’t you just send me a bill?

And then they’re like, well, I, you know, they want to have that part of their argument both ways, you know. And one hand, they know exactly what it is. And if you get it wrong, they’ll get you. But on the other hand, they need you to do all the work.

You got to calculate all the work. It’s like, okay. It’s quite clever the way they have, the employer and the employer both have to calculate it and send it in. But if it, if it’s the only way to get it to match is to make it the truth or to collude.

Paul Sztorc 01:50:05 Ironically, truth going the peer to peer oracle thing that I wrote operates sort of on a similar principle. but yeah, that’s a, that’s a it’s of course it’s a silly thing. And in the, in most people’s case, we at the end of the day, most people shrug and, and they do consent to it in a way, it’s not the same type of consent as when you go to, you go on Amazon and you buy something, and that’s different than if you go to the bar and you get drunk and then you buy one, you buy shots for you and your friends.

By the time you’re a little bit drunk, the the ability to measure consent starts to fade slightly. So consent is this big spectrum. But my opinion is unfortunately, even though I, I, you know, I’m like, I love the libertarian cause I’m pro liberty.

I’m very anti. I think taxes should be very low. They should be completely different format the. But at the end of the day most people shrug and they do they do consent to it.

Paul Sztorc 01:51:19 And they say, you know what, I agree to pay. And there are actually many, many loopholes that rich people could And some of them do use. theirs. I don’t remember who it was, but one I think someone from the Supreme Court said something like, there are two kinds of tax systems in America.

Like. And, I don’t remember the exact quote, but it’s like a fair one and an unfair one. And both of them are legal or something like that. So there’s all these things, but most people just shrug and they think, well, what if it was ever brought to light?

If someone ever said, how would I face my friends and family if they said, listen, this guy did this loophole and you’ve all been paying everyone who’s been paying such and such. But so most people just shrug and they just endure it. This is because most people are not independent in general, but but, but most people kind of willingly prefer the exit tax for something that happens so many years ago.

Paul Sztorc 01:52:22 I mean, it’s absurd. It’s absurd. And you say that you want out. It’s just it is. It’s a good offense. The. Defense is morality. It’s a very, very silly. Thing.

Vlad Costea 01:52:39 If you watch recent Roger interviews, he seems to have accepted the fact that if he does get clemency from the president of the United States, he’s gonna move back into the US and work with American companies and do basically everything he wanted to give up on when he left in 2014.

Paul Sztorc 01:53:03 Well, I mean, it’s kind of like, Yeah, I mean, the whole thing is a shameful incident because it’s like now it’s just extortion the other way. Right? It says if you want to leave, you’ve got to pay all this money. And then it’s like, okay, wait a minute, you paid, but now you got to pay more money, but you got to pay or you got to come. We got to come back. It’s like, oh my God, whatever. Like, you know, I don’t know what kind of relationship this is.

Paul Sztorc 01:53:36 Like, I just, this is a terrible thing. And for anyone who, you know, I try to sometimes defend. our society and civilization. But this is like, something is ridiculous, but but the reason that I’m glad that you brought that up, because that Elon wrote this tweet about, oh, he left so he doesn’t get the climate, the, you know, clemency.

Vlad Costea 01:54:03 The membership benefits. That was the exact wording that membership has its benefits.

Paul Sztorc 01:54:09 Do we have any idea if we can take this at face value or is this just a tweet? I have no idea. But if we were to take it at face value, then I wrote a counter tweet and I wrote that like, okay, if the issue is that he renounced, then if he anti renounces, then will you give him the clemency because. So that was I wrote that we I to me it boggles the mind. But that’s really what they are upset about. I don’t understand it at all. I don’t, I just like not if it makes any sense, really.

Paul Sztorc 01:54:50 I mean, who are we kidding here? They’ve got this giant tax code. You hire expensive people, like it’s Kafkaesque. And it is, you know, when else would we do this? When would you say, like, imagine you’re, like, in a family. Someone says, like, I really want to be in this family anymore. I don’t feel like I belong here. I’m going to walk out the front door. Again.

Vlad Costea 01:55:21 It’s a symbol of my domicile address. Whatever.

Paul Sztorc 01:55:25 Yeah. I think again, I do think the exit tax in theory. Some type of exit tax is, sort of theoretically logical because you would want you would want to know a couple things like, number one, is someone forcing you to do this against your will? And number two, you realize that this is going to create all kinds of paperwork for us or something like that.

Or are you sure you can’t just come in and out, back and forth? Are you sure you know what you’re doing? So I think like some of it, but it’s clearly in in the case of the United States, we clearly do it in order to deter people from just saying that they don’t they don’t like the services they’re being provided with.

Paul Sztorc 01:56:05 They don’t like the value they’re getting for their their money, and they want to just live somewhere else, privatize the services on some island or something. So, So. But when else would we do this? You know. You say, oh, you work for some company, and then you say, I want to work here anymore.

Oh, okay. We’re going to charge you. You have to do all the work that you would have done over the next few years, and we’re not going to pay you. Then you can leave. So I don’t know. It’s true. You know, I have to really admit, when push comes to shove, there’s no way that I could possibly say.

Because the tax law is so bizarre. And, there is a saying that I believe some lawyers, they have about, like, you can either argue the this I think it’s you can either argue the law or you can argue the facts or something. And the implication is this that you can you either fight the details of the, the law.

Paul Sztorc 01:57:13 You say, well, this technically doesn’t this technically doesn’t meet the definition of extortion. Or the other thing is you just appeal to people’s basics. And like the jury is there. I think they did this with the Hulk Hogan sex tape thing where they said like, oh, you know, you release this sex tape and you filmed these people without their knowledge, then released it.

Would you is there any sex tape you wouldn’t release? And then they got the person to say like, well, maybe if they were younger or something and they’re like, how young? What’s how old do they have to be before you would release in the person they said something, I don’t remember what it was, but it was something like they said some young number.

And then there’s like audible gasps in the courtroom, you know, and it’s just eventually you just because what it is, is any argument ultimately boils down to you have all these chains of prepositions, you know, these sort of these, these connections. You say this is like this.

Paul Sztorc 01:58:13 This is the opposite of that. and each person is going to build their chain. And at the end of the day, you’re just going to look at the two, the two chains, the two different chains. It’s like the blockchain, but you’re going to look at them and you’re going to say, one of these people is just being unreasonable. And I think that’s how that’s sort of how it works.

Of course. so there’s no one who could ever know all this stuff. You know, you will lose them. But the premise is that the, like, tax evasion is for people who know, you know, like this, this idea of the mens rea, the guilty mind, like, you know, that you owe this tax and you just say, well, I’m just going to roll the dice and I’m just not going to pay.

But Roger’s like consulting expensive law firms. And there’s all these emails. It’s this huge paper trail. So it’s like. Blatantly misapplied. Do you understand what I mean? Like tax evasion is like you.

Paul Sztorc 01:59:22 You sell, you know, you have your old boat, you inherit a boat and you polish it up and you give it a fresh coat of paint, and you sell it to someone, and then you never pay the income tax. Like, what’s his name in that one movie, Gran Torino?

He goes, he goes to confession, he confesses, and he says it’s the same as stealing. He says, I never paid the taxes on it. That’s what he says in the movie. that’s like tax evasion. Something that like, only you and you’re the only one who knows about it. And you didn’t say it like, I don’t know, it’s just ridiculous.

No offense. I just I do think it’s ridiculous. And to some, to a certain extent, as a taxpayer and a citizen, my opinion actually would trump the IRS opinion, I guess pun intended. Because really, this is all theoretically supposed to be. Endorsed by the you know, this is supposed to be a rules endorsed by the citizen.

Paul Sztorc 02:00:18 The theoretically everyone agrees to and then theoretically, everyone follows. You know, a lot of theory there, but do you understand what I mean? Like, you know what I mean? Like, what are what are these people even talking about?

Vlad Costea 02:00:32 Well, honestly, I would advise people to check Roger Norberg because this motion to dismiss is interesting. I also put it on the screen for people who want to read this. And the US system is also very strange for me because in Europe we have the civil law, which describes very clearly what the punishment is for every instance, whereas in the United States you can have something as ridiculous as 100 years for tax evasion, while there are actually people who murder other people and they they get jail time for 15 years or less. And it’s very hard for me to compute, because I can argue that one of them is lesser evil than the other.

Paul Sztorc 02:01:21 Yeah. Of course. And we have we have a lot of things. So one of the things that Roger was ensnared by, I saw actually a debate at.

Paul Sztorc 02:01:29 So people do people have a just, you know, the Yale Law School does these debates. And one of them made it on to I think there’s intelligence squared. It may have even been hosted. I can’t exactly remember where I saw it. But we have these things, these plea deals.

So the, the Constitution, specifically the Fifth Amendment. gives everyone a right to speedy trial, but that right is routinely uprooted where, what they do is they say we charge you for this, but if you just plead guilty, then we’ll lower the charge. and that’s. They had Roger do that, too. It’s clearly coercion.

The Founding Fathers obviously very, very obvious that the Founding Fathers wanted the trial to be expensive because they did not want the government to be harassing citizens unless they really thought it was worth it. And they, you know, I think I don’t remember the exact quote, but I think someone, Thomas Jefferson or whatever says like, let better ten guilty men go free than one innocent man get ensnared by, the courts or something.

Paul Sztorc 02:02:53 So they do this stuff? None of it. You know, it’s very weird, but we do have, there are the crimes, and then the crimes have a range of sentences, and then there is the judge is supposed to pick something in there. I don’t know. I have no idea.

So but, you know, people have written a whole books about all this. Lots and lots of books. Some people write books about the judges are too lenient, so we need to put it in the law. And then people write, oh, the lawmakers are too disconnected from the facts of the case. So then it is intriguing.

So one example of this, this is like we’re just totally meandering here. But there is a there are cases when they pass these three strike laws about drugs. And some of these people, they have you find stories where the three times they were arrested for drug possession or something. These are very, very mild, very tame stories. Then they have to be sentenced.

Paul Sztorc 02:03:59 And then the judge, they have interviews with the judge and the judge is like, I don’t know if this person had taken a Baseball bat to someone’s head, then they would. They would be out in seven years. But now this person is getting sentenced to ten years.

Yeah, I think it’s, Well, you know, justice the justice system is very, very, very difficult. And the sad thing is, is that, you know, I think the United States, we have, I think ours is relatively good, overall, certainly lots of room for improvement. But, yeah, we do all these crazy things. They get people to plea.

It’s something like 90. It’s a very high percentage. 90. At least 90% of people just plead guilty. Maybe it’s like 85%, I don’t know. I don’t check the facts every year, but it’s very high. And, it’s very sad. Yeah. And then most people, again, they assume if you’re arrested, you must have done something wrong.

Paul Sztorc 02:04:54 You got arrested. They they sometimes even have the police just come pay you a visit. That can be very bad for your reputation, business prospects and style.

Vlad Costea 02:05:07 Okay, so I have this frame of comparison. Or this benchmark? I found a tweet by Mark Karpeles and he posted this news article from Reuters. It’s called Who is Alexander Vinik? The Russian prisoner being traded for American Mark Fogel. Vinik was the guy behind BTC, one of the world’s largest cryptocurrency exchanges.

He was arrested in 2017, in a small bench side village in northern Greece and detained at Washington’s request on suspicion of laundering $4 billion through the exchange. US authorities linked him to the failure of Mount Gox, a Japan based bitcoin exchange that collapsed in 2014 after being hacked.

Vinik obtained funds from the hack of Mount Gox and laundered them through BTC and Trade Hill, another San Francisco based exchange he owned. The Justice Department said in a statement at the time. Winnik was initially extradited to France and later to the US, where he pleaded guilty in May of 2024 to conspiracy to commit money laundering.

Vlad Costea 02:06:18 He was facing up to 20 years in prison. Okay, so you have this guy who was proven to be guilty and he did stuff that’s much shadier because he stole from people. And then you have Roger, who’s about to go to jail for 100 years plus again.

Paul Sztorc 02:06:39 Or maybe they have that sticker shock, and then they want you to plea out because what they want you to do is give up your God-Given inalienable right to a speedy trial, which is guaranteed by the Constitution. They want you to just sign that away so that you’re complicit in this violation of the Constitution. because when you you sign on again you they really they dirty everyone’s hands, you know, even you were a participant, a participant in the defilement of the Constitution.

And so that’s what they want. They hit you with this big sticker shock and then they say, oh, plead out, you’ll be out and you’ll be out in five years. But you admit that you did everything wrong and that we, the prosecution, were right and we were infallible all the time.

Paul Sztorc 02:07:27 That’s terrible. And in the debate I’ve mentioned about Yale Law School, there was a judge there. The judge says you can probably look it up. It’s probably an interesting thing because the judge says when they start, they open their opening argument. But this plea deals, this nice lady says someone comes in and they accept the plea deal.

She has to ask them, did anyone are you signing this of your own free will or did someone tell you like forcing you to sign to coerce you into signing this? And then she says, the person will say yes, but I know that that’s not true. And Roger said the same thing when he was in court. Back into it.

You know, back in the olden days, he said no, they told me I had to sign this or I would go to jail for even longer. And the whole thing is, you know, but, yeah, I don’t get it. So in that example, though, was that what he actually was sentenced to, or that is what he was, charged with.

Vlad Costea 02:08:39 He was sentenced to 20 years, and then he didn’t go to jail for a single day. Sorry. He didn’t stay in jail for a single day.

Paul Sztorc 02:08:50 So then immediately, he was he was negotiated out by politicians in Russia. Is that what you’re saying? And who did we who did we get for that?

Vlad Costea 02:09:00 let me search again.

Paul Sztorc 02:09:02 Yeah.

Vlad Costea 02:09:04 Mark Fogel.

Paul Sztorc 02:09:06 I don’t remember. Is that some. There’s some Olympian at some point. Who is that? Who is that?

Vlad Costea 02:09:11 Just let me scroll.

Paul Sztorc 02:09:13 I think I do like this.

Vlad Costea 02:09:20 I don’t know.

Paul Sztorc 02:09:21 Okay. This is the issue. If you’re going to, you know, if you’re going to be a libertarian, you need to make friends with, tyrannical autocrats around the world so that you have enough negotiating leverage to. I mean, yeah, that’s we should just throw in with, we should just throw in with Kim Jong un and or whatever, right. As libertarians. yeah. See if you can figure out what this guy did. You must have done something really great.

Vlad Costea 02:09:51 It seems like he was known for controlling this guy Vinik. Or what was his name? Yeah. Vinick with double N and K. He was known to control 80,000 Bitcoin stolen from Mount Gox in 2011.

Paul Sztorc 02:10:08 Given Moscow. Also mentioned, which is that he probably paid. You know, probably paid, you know, Vladimir Putin to help him get out. It’s probably part of the huge slush fund. The Gazprom slush fund, whatever. You know, I don’t know the details, obviously, but it’s very clear that there’s a lot of Russian oligarchs, and a lot of them owe Putin favors in the form of whatever will kill your whole family if you don’t help me with move money around. So, but what about this guy that we traded for? Did we get anything good out of this?

Vlad Costea 02:10:46 I found an article from MSN. I had no idea MSN is still around. she was released from a Russian prison this week after being detained since 2021 on drug charges.

Paul Sztorc 02:10:59 Yeah, I know, but who is who is the person that was that was let out? Who are they?

Vlad Costea 02:11:04 American school teacher was arrested in August 2021 by Russian authorities for trying to enter Russia with 0.6oz of medical cannabis.

Vlad Costea 02:11:15 She was sentenced for 14 years in prison and he was released from Russia on February 11th, 2025.

Paul Sztorc 02:11:25 I mean, I don’t know, it just seems like that’s probably not the whole story. Right.

Vlad Costea 02:11:36 Sounds like a bad trade, though, for the.

Paul Sztorc 02:11:37 Yeah, it doesn’t sound like a normal trade. What year? What year is it this year? 2025?

Vlad Costea 02:11:47 Or maybe it was Is 2024 now, but this was posted by Mark Karpeles on February 12th of this year and the trade happened this year.

Paul Sztorc 02:12:00 Suddenly doesn’t add up, but we’ll probably never know. That person was maybe more important than we’re all led to believe.

Vlad Costea 02:12:13 I don’t know, school teacher. I mean, you do care about school teachers in America, right?

Paul Sztorc 02:12:19 Famously, yes. And there’s a big union. So a lot of voters.

Vlad Costea 02:12:25 You don’t want to mess with school teachers.

Paul Sztorc 02:12:27 You don’t want to mess with that union. It’s a very powerful. Yeah. It’s a very powerful union. I mean, until until we’ll see what once Ellen gets through with it, Ellen’s going to be like, send an email to this union, you know.

Paul Sztorc 02:12:43 This is going to be met with teachers and then send an email to the union. What did you. Hey, what did you get done today? The union. They won’t expect that. I mean, I don’t know, you know, it.

Vlad Costea 02:12:54 Was a weekly report. Not such a big deal. Anyway, you have some questions from the audience.

Paul Sztorc 02:13:02 Oh, yeah, of course you’re the.

Vlad Costea 02:13:04 First one to send questions. Was early NFT bit on Twitter. He says, here’s a question plus follow up I have for Paul. When we’ve become convinced that BTC will not scale vertically and horizontally in a way that preserves users ability to self-custody without prohibitive fees or a dilute, dilutive, dilutive Bitcoin that it will not adopt.

Drive chain one is that we start. When is it that we start talking openly about the exodus? And he used capital T, capital E for the exodus to fork or not to fork. That is the question convincing a significant percentage of the total mindshare and mindshare mini share of Bitcoin to migrate to the fork fork chain will not succeed.

Vlad Costea 02:13:58 Even if all these people diagnose the same cancer we feel Bitcoin is afflicted with. The way I see it, you can’t just hold both coins and signal support for the fork. People would need to sell BTC for X, and that doesn’t fit the profile of what a typical, i.e. conservative Bitcoin would do. So the most obvious choice for the promised land is Monero.

We get privacy by default and mining done by regular users with CPUs and GPUs, the potential here being decentralization of mining by economically relevant actors. The biggest trade off we have with Monero is perfect. Auditability is this acceptable for world money? I’d probably say yes, but for store value That is very debatable. Then there’s Bitcoin Cash, whose network seems far more amenable, amenable to something like drive chain.

Yeah, it comes from Ma in French to something like drive chain with its Open Developer Toolkit. It has also already endured the necessary token split slash price rediscovery ordeal that occurred after splitting with BTC, but suffers from relatively low hash rate, and the philosophically problematic issue of being a big block blockchain aligned with corporate interests.

Vlad Costea 02:15:17 Litecoin has pedigree, comes with proof of work consensus, and its privacy features are much further along than Bitcoin’s with minimal visible extension blocks. Litecoin’s problem is that they’re they’ve always openly marketed themselves as the silver to Bitcoin’s gold. Knowing full well that the analogy is quite silly, it would be tough to shed the cultural stigma for noobs looking only to invest a short to invest, I guess, in a sure thing. After there, are there any other candidates that could one day theoretically be seen as the real Bitcoin? This is the question.

Paul Sztorc 02:15:56 Yeah. Okay. First of all, this person is clearly pretty smart, smarter than average. I just like the comment that I’ve gotten, you know, I’ve gotten like graduate school level exam questions that took three hours that are easier to answer than this question. Luckily, I grabbed a pen in time and I started writing, taking notes on this absurdly long question. But would you mind reading the first part before Monero again? Because I did actually take some notes. But the question is so long and the first part is so important.

Paul Sztorc 02:16:28 Yeah, we said clearly, when we become.

Vlad Costea 02:16:32 Convinced that BTC will not scale vertically and horizontally in a way that preserves users ability to self-custody without prohibitive fees or a dilutive bitcoin that will not adopt drive change. When is it that we start talking openly about the exodus to fork or not to fork? That is the question. Should I go on?

Paul Sztorc 02:16:54 Yeah, because I need the next. This is the part that I don’t remember this next part.

Vlad Costea 02:16:58 Convincing a significant percentage of the total mindshare and mindshare as an meny of Bitcoin to migrate to the fork chain will not succeed. Even if all these people diagnosed the same cancer. We feel Bitcoin is afflicted with. The way I see it, you can’t just hold both coins and signal support for the fork. People would need to sell BTC for X, and that doesn’t fit the profile of what a typical as in conservative Bitcoin would do. So the most obvious choice for the promised land is Monero.

Paul Sztorc 02:17:33 Okay, great, you can stop. I don’t remember the rest of it now.

Paul Sztorc 02:17:36 Okay. It’s a very, very complicated question. If we can all clearly see. I got my notes now. Okay. So the the main thrust of the question is when do we talk openly about the exodus and what this person has in mind is a fork. But then they double back and they say the fork won’t work.

Forking won’t work. This is similar to I told the Bitcoin Cash people that the forking is very difficult because you have to sell one coin, and buy the other in order for them to succeed. And so then one of the things they say is that this is not the typical Bitcoin, but.

The first comment I would like to make in this giant question is that the typical Bitcoin, none of this matters. Okay, so if you were to create if I’m just saying, if you were to go down the road of hoping that a different coin would succeed, such as Monero, such as Bitcoin Cash because the the person is clearly done their research and they know that there are these problems in BTC and it’s it seems unlikely that they will be solved in BTC.

Paul Sztorc 02:18:52 but we don’t know that yet. And we want to like, I’m still trying to tinker with the drive chain software to make it better. Still tinkering with it. I still want to release more sidechains.

I want to rerelease ones that I had in the past working that, temporarily don’t work, or completely unfixable reasons that are just so busy changing other things that make it better that I haven’t gone back yet. so I’m still working on this, but we we have to face the reality that the cultural, as they say, the mindshare and the Share. A lot of these people are, like impervious to thought, and they just think, this is so most most of the miners, the hashes, many of them don’t know anything about Bitcoin.

So then this is just an industrial process. They hunt for cheap electricity. They like the cooling they are these are go getter entrepreneurs and they want to come in, set up all the, you know, build out the mining enclosure, put the stuff up in the server racks, do the cooling so and then make money off of their cheap electricity.

Paul Sztorc 02:20:15 Good for them. Specialization of labor right Adam Smith Wealth of Nations so good for them. But they don’t have any idea what’s going on. The pools are also weird because you have a everything is a foundry is huge. But foundry is like emphasizing KYC, AML, soc reports. Then you have, like the ant pool family of pools. Huge.

And then marathons, like vertically integrated. So I don’t know, they they are not really, on top of things with respect to the Bitcoin project. So this huge apathy over there, as we know in the Bitcoin intelligentsia, we are very much not seeing well, there’s a lot of conflict over what to do and whether or not to like admit to ourselves.

To what extent do we admit that lightning is a failure? Still an open question? like, do we we just quietly shift from lightning, the covenants? If so, when and if so, how? People have been talking about it for years and Jeremy is talking about CES 2019. He put out his activation client in 2022.

Paul Sztorc 02:21:22 Then he quit Bitcoin because people hated it. But now, years later, so will be another three years. And similarly I’ve been telling everyone about drive. Drive change the solution solves everything for everyone. But really, I had no, no activation client until recently. The software that I put out, you know, we test it, there’s bugs and stuff.

It’s really great software. And I’m partially there are bugs because I’m always trying to improve it and add other stuff in cool ways to have like a not not related to Bip 300, but other stuff that just cool stuff the side chain can do, but still like that’s going on and on and on.

Okay, so problems in B2C world we have to hit if it’s either. This is how I think about it. It’s either going to be technologically possible for one single coin, plus it’s it’s layers and etc. one coin will be able to service the needs of all 8 billion people on the planet. Privacy. see scalability, low fees, easy to use, secure.

Paul Sztorc 02:22:33 So that’s either possible or it’s not. Now, as someone who’s basically a world leading expert on this exact topic, it seems very clear to me that the answer is yes. That one. It’ll be easy for one coin to do this in multiple different layers. I’ve written a lot about details.

I have numbers for this long arguments. For this I produced software that does this, you know, in myself in some cases. So I bet that that is possible. If that is possible, then it’s going to be about adoption. Like who gets who gets adoption, which coin gets adoption, you know, eventually reach a runaway network effect.

The next thing to talk about is the network effect breeds this lack of competition and this complacency. And so will we have something where it’s cycles. One coin gets really big, but then it becomes overconfident, which is exactly what BTC is doing. And then it gets replaced by something else and then that thing gets replaced. I don’t think so. I don’t think people want that.

Paul Sztorc 02:23:47 I think people are aware that switching coins is expensive and undermines the whole project and all the success of coins. So I think people are aware of that. And I think this is why sidechains are the key, because sidechains are competition among the L2 s all.

Each of the L2 is its own blockchain, and each of them is so different and independent from the others that you could have some serious competition in internalised in that part of the, you know, the scheme. You have different side chains getting big, becoming complacent, then maybe being slowly replaced.

They could cycle around. So that is what I think is the optimal model. It’s better than all these other things. I think Monaro is definitely getting a lot done in terms of real usage. so Bitcoin cash I suppose. So it’s Litecoin. Litecoin is more used on bit refill than anything else apparently, other.

Vlad Costea 02:25:03 Than no, it’s BitPay. Oh yeah. And that that’s the irony because it’s called BitPay. But the dominant currency being used for transactions is Litecoin.

Vlad Costea 02:25:12 But on bit refill, Litecoin is more popular than lightning. And what’s interesting is that bit refill put a lot of money on the Lightning Network. I think they were the first ones to open a one BTC lightning channel, and they were some of the first to accept it, but it never really took off. So if you ask Sergei, who’s the CEO, he’s going to tell you that he’s disappointed that even Dogecoin, I guess, has higher volumes and he didn’t have to invest any money into making those going big. You know, it just happened.

Paul Sztorc 02:25:49 Right? okay. Let me see the write about the lower hash rate and the the lingering, The lingering perception is, I don’t know, being like the corporate interests. Litecoin is true. The silver to gold. I mean, that is silly. So this person is, smart. okay, that was me. Like the notes here. Okay, Monroe, it doesn’t matter to have individual people, mine and mine. And decentralization is like a poorly formulated concept that doesn’t really make any sense.

Paul Sztorc 02:26:33 If you try to unpack it, you never discover anything. mining already is ruthless. Something where it’s a specialist thing. It’s not a generalist thing. So everyone can run a node, but not everyone can mine. Only you can. Only the elite frontier. If you mind, you will be competing against other miners and proof of work. The competition will be brutal.

And then if you. In ten years. In 20 years, only the elite people will be mining. Just like if you want to do anything else in life, if you wanted to, you know, if you want to make furniture or you want to be a musician or something professionally, you’re gonna have to compete against the state of the art.

If you’re going to be a retailer, you have to compete with Amazon or work with them. So. So it’s just not true that, That you need everyone to run a node and. Excuse me, it’s not true that you need even reminding node, and the CPU, that makes any difference.

Paul Sztorc 02:27:41 So I don’t know. This is a very, very long question, so, but I, I think the issues are you don’t. Okay. They had this idea of what about the typical Bitcoin or the typical bitcoin or doesn’t matter in the free market. What it does is it reprice things. You know, the lower price is the edge because it means that if you actually have a plan to take over and become big with 8 billion people, then the lower price lets you buy in on that and assume that risk and get an appropriate return, if you are correct. So the key thing is not to appease regular. Excuse me. Sorry about that.

Vlad Costea 02:28:31 Bless you.

Paul Sztorc 02:28:34 Excuse me. But we cannot, It won’t be something where it’s like we get everyone in a room and there’s a big consensus to do it. It will be a contentious, very contentious thing. And there’ll be disagreement. And the disagreement you have to weigh. All right. I can make 10 to 1, 20 to 1 or 100 to 1.

Paul Sztorc 02:29:01 Because all these people are wrong. And so the real issue is how do you get the idea into a format where the the competitor coin is going to prevail? at a speed that is too rapid for BTC to admit that it made a mistake, and then copy what you are doing.

So you need some kind of very difficult, some kind of advantage that’s very difficult to imitate. and it’s unlikely that that could take the form of like a patent or something like the law, although maybe now it could now that everything is going like Michael Saylor. Corporate coin, direction. So I don’t know. These are some of my comments, but, yeah, I think there will be anything where there’s not competition. There will be eventual, sickness and.

Laziness and failure and scar tissue and stuff. So. So this is what’s happening in BTC right now. So either BTC will I think, you know, the drive chain software will get good enough and then BTC will escape, or it will become clear that there was some kind of unfixable cultural problem in BTC, in which case anyone else who launches the, fork of BTC with drive chain will probably be able to succeed at that point, is my guess.

Paul Sztorc 02:30:31 But it would be all about conveying the why it is the culture is permanently broken in BTC, and then it would be a huge opportunity to because as this new thing will have a very low price, relative to the $100,000 per hour BTC or something. So this would be like a crazy opportunity to do it again. What happened with Bitcoin the first time? But I don’t know if it really is so hopeless because really I’m the like I’m like a big critic of all this stuff.

But at the same time, the software that I produce is not, you know, it’s not perfectly finished and polished right now. So maybe, maybe my entire argument is kind of not that, it’s not that persuasive because I don’t really have a genuine alternative, even though I have written down what the alternative would be more than ten years ago and made all kinds of talks about it. Maybe that doesn’t matter, because you need to have the actual software be out, before anyone takes too seriously anyone who said that. So that was a really, really long question.

Paul Sztorc 02:31:39 I hope that whoever answered that managed to stick around and get something out of that answer. I tried to do that decent job with it. That was a long question, I don’t know. Hopefully we didn’t scare everyone else. Too scared off. Now everyone else is like, what the heck? What the heck is this about now?

Vlad Costea 02:31:58 Yeah, you have another one from four 86.org who says, how do you quantify whether something is decentralized or not?

Paul Sztorc 02:32:08 I wrote a whole paper about that in September of 2015, called Measuring Decentralization and the argument for measuring the decentralization of cryptocurrency is that it is the cost of the option to spin up a new full node. So that is how I measured the decentralization of individual cryptocurrency in this particular context. In general, the decentralization, I do think it is more of a relational or game theoretic thing where it depends on what who are the people involved and what can they do to each other. And that and that’s in the sense of BitTorrent is decentralized, because normally what you would do is download a file from a server.

Paul Sztorc 02:32:55 But with BitTorrent it doesn’t work like that at all. Everyone just shares someone has the anyone who has the file is a seeder, and then the other people leech. And then when as soon as you’re done leeching, you become a senior. So? So the decentralization could be measured in a completely different way depending on what you know, if you were going to measure.

You could. There’s lots and lots of different things that are totally unrelated to cryptocurrency. You could measure. Or how centralized is this management structure? It has nothing to do with there’s no full nodes. There has nothing to do with it. So, it would be a completely different type of problem. So that was my answer for how do you measure decentralization of the cryptocurrency?

The answer I wrote a different essay and I think January 2017, and it’s called The Mirage of Minor Centralization. And that is why I wrote that article, which is that there is no real definition. You can try to find one. but really, you could say something like the minimum viable mining size or something, but you really can’t find one.

Paul Sztorc 02:34:03 and, and then if you look at my response to Peter Todd, Peter tries to critique drive chain as if it had an effect on minor centralization, but in the process he comes up with multiple, I think, many, many different overlapping definitions of minor centralization, all of which contradict each other. So it’s just a kind of lazy, it’s a kind of no one has had the self-discipline to actually construct the measurement.

So except for me. So in the case of the node, cost is very easily it’s very tangible in very measure, measurable, very tractable with mining centralization. It’s not. And so that’s why I say it doesn’t exist as a concept. You know what I mean? Like if you say what’s height or what’s weight or what’s what’s arm strength, you know, you could measure people’s bench press or how many pushups they could do.

You could average all those things and go to latent variable statistics. but with mining centralization, knowing these people don’t they don’t agree. Well, a lot of people do is they put up the pie chart with the pools, which totally misses the point because the pool, you can switch pools easily.

Paul Sztorc 02:35:20 It’s easy to spin up a new pool. The pools live and die based on their brand, which they have to protect. So someone could have a better brand if you you could have. So let me give you one example of where the pie chart thing totally breaks down. Someone starts, the world’s greatest pool.

Okay, it’s called Roger ver pool or something, you know, and it’s perfectly fair. And it charges the lowest possible fees, and it’s, does everything right. And then everyone else creates these, these terrible pools called, we’ll call them a theft pool. That’s pool one through nine. And these pools just steal all the money, you know, and they and they try to reorg the blockchain and they do everything wrong.

And on day one everyone has 10% of the hash rate. But you have one pool that does everything right and another pool that does everything wrong. And then you press play and then you come back. And two months. Well, everyone will be, you know, the pool that does everything right.

Paul Sztorc 02:36:28 We’ll now have a very high percentage. Everyone’s going to leave those terrible pools. So it looks like something has gotten worse because the pie chart looks worse. But who cares? It doesn’t make any difference. You know, the relevant issue is whether or not there are errors in the system that get corrected.

The whole relevant issue of, you know, separation of powers, like involving more than one person. This has all been about transparency in the past, that you don’t want some king who can just decide, oh, the law is this, and we decide to execute you for treason, because I get to decide if it was treason or not.

And I can make up the law because I’m the king. I can do whatever I want, and, Or I’m the secret police. this is the whole point. Is this a secret police? So getting it out in front of a lot of people, saying, you gotta write down the law first, then you got to charge someone. The people arresting you, the police.

Paul Sztorc 02:37:26 They are not the ones who decide if you’re guilty or not. And the person, the judge who decides whether or not everyone is following the procedure. They are not the person that decide if you are you separated among all these people. So we it’s really transparent what’s happening. that is that is when when decentralization is invoked. in the case of Bitcoin, the decentralization is invoked because of a very tangible issue.

Like you had Liberty Reserve, you had the server Gold Liberty Reserve. They would just seize the server. The adversary would seize the server, and then everyone’s money would be deleted. So that was a single point of failure that was explicitly, you know, caused to fail. So that’s why that in Satoshi didn’t even use the word decentralized.

You know, he used peer to peer because the issue was that instead of having one server that was the source of truth, and you connect to Liberty Reserve or whatever, you have peer to peer. Every single node was an equal peer. And if if 99% of them were eliminated somehow and there was only 1 or 2 nodes left, they could regenerate the whole network.

Paul Sztorc 02:38:45 So the issue of decentralization of my criterion of how cheap is it for this node to copy itself into other nodes and have all these nodes come back, even that is in a totally different, less lesser category of relevance. Who cares about the decentralization is not as important as being peer to peer.

The peer to peer is the huge difference between Liberty Reserve and You know, in Bitcoin. So you have Liberty Reserve Bitcoin, then you have it would be slower for a large block network to regenerate. Then a small block never could be faster. No that is a measurement of no. That is the measurement of the decentralization of the node or of the the cryptocurrency.

In my opinion, for mining, I think it has never made any sense. It is a fake talking point, very poorly understood. People say stuff like, oh, it’s because of heat. They use these fake, these pretentious arguments about where whereas cheap, cheap power is available all over the world and. Like heat naturally is easier to disperse, the more spread out the equipment is.

Paul Sztorc 02:40:03 I have no idea if these people actually believe this rickety, these arguments that they come up with, they make no sense. And they are about nonsense.

Things like as if people are saying it would be better for Bitcoin if you had one miner every square mile in the Pacific Ocean, like as if the like in Euclidean space, that is what we cared about. No one cares about that. Sometimes people try to say, oh, it should be in different jurisdictions so that one government can’t just decide.

I think that’s true. But that’s that has nothing to do with, you know, bitcoin mining and Bitcoin nodes have always been in more than one country. So so again, I, you know, I have no idea what these people are talking about, but hopefully, hopefully that wasn’t too long. Sorry. I know I give these rambling answers sometimes.

Vlad Costea 02:40:55 No, it’s all good. We have some more interesting topic topics to cover. I just saw on Twitter that Montana, North Dakota, Wyoming all rejected bills for state strategic bitcoin reserves over volatility concerns.

Vlad Costea 02:41:12 And it’s so funny. Like of course they were gonna say this. Well what the hell did you expect.

Paul Sztorc 02:41:18 Okay. There’s this documentary Behind the Curve about people who believe in flat earth. And they have a convention at some point. And it reminds it reminds you of a Bitcoin convention. And they, you know, there’s a part where the person says, how long do you think until flat earth is taught in schools alongside globe Earth theory.

And then the person on stage is like, I think it could be as early as next year, and then everyone cheers and it’s like, yeah, that’s how we signed with our stupid, you know, stupid Yes. Unfortunately, the culture has shifted. It has come full circle in a way where at the beginning it was so new that everyone thought.

Does anyone else care about this bitcoin thing? Who accepts it? You get this question a lot. Who accepts Bitcoin? This is why BitPay was so perfect because you could just say everyone or person I o you could say, yeah, you can go on Amazon and get 15% off.

Paul Sztorc 02:42:13 How do you like that? Yeah. That’s explicit. You know, so that would show people up. But we we’ve now we’ve gone we sort of gone. We had a lot of progress. And now we’ve turned back because now people no longer care about why is Bitcoin good. Instead they just care about who else can we trick into buying this?

Can we get the state? Who else likes it? It’s pure social proof, you know. Does Wyoming like does it does the state of whatever like it. And you know they do it over volatility concerns. But really, I think, yeah, there’s so much to say. But probably the States should buy a little bit of bitcoin because they don’t. You know what.

No offense. What are they doing that’s so important. You know compared to most of what they do is a waste of time of course. And they have a lot they have a huge portfolio of US dollars because they have tax revenue that’s coming in. So why not diversify? They own land.

Paul Sztorc 02:43:20 If these states want to build a giant, you know, they could be like a Norway or Alaska or they have this giant slush fund, you know, if they want, if that’s what they want to do. But of course, people I don’t think people really care about that. What people want is the legitimization of Bitcoin. They want to be able to say, look, this really important person thinks Bitcoin is a good idea. That’s what they want to say. All these people doubted me for years. But the governor of whatever says that governor of Indiana says that Bitcoin is a good idea.

Vlad Costea 02:43:55 Sort of defeats the purpose, right?

Paul Sztorc 02:43:57 It does.

Vlad Costea 02:43:59 I had Eric Vassell on the show on Friday night, and he was very adamant about the fact that it’s really pointless. Bitcoin cannot compete with the fiat system if it becomes white market money. You need it to become the sort of payment system that you use when your government hates you. And if that use case is no longer part of the plan or is no longer popular, it’s just going to die.

Paul Sztorc 02:44:27 Yeah, I think he is mostly correct. I don’t think there’s a lot to unpack there, but basically, if this is ironically a similar argument was used against the unlimited blocksize, you know, out and back. And people would say if if there’s only one server, they took it to an extreme case and they said, if the cost of running a full node is so high that only 1 or 2 people can afford it. Then it’s very similar to Venmo, and where, you know, only a few people can run a Venmo node or visa node. That kind of took it really, really far. But,

Vlad Costea 02:45:06 But if you look back on Adam Back’s points of view, I think at one point he was advocating for 32MB or something.

Paul Sztorc 02:45:16 right. Well, yeah, I don’t think, what I was trying to say was if in a world where every Bitcoin transaction like is sort of. For lack of a better word, I don’t know how Eric would have put it, but like if in a world where they’re all.

Paul Sztorc 02:45:38 they’re all like, legally they’re all legal, they’re all they all go through, they could all go through a court. So ironically, this also became, like Craig’s point of view, like that a court if if the source of if Bitcoin’s source of truth is downstream from a court or a government, then it’s in the same category as Venmo and it can’t possibly win. Because all this proof of work stuff, all this node validation stuff, is an unbelievable amount of overhead, a source of risk.

And so you can’t win in that in that direction. So in that sense, Eric is 100% correct. It has to be something that where the tables are turned and the court says this, or the government says this, the blockchain says something else and the blockchain, wins. So I think what I would expand on it a little is to say the black market is very big, but it doesn’t matter. Like you have a certain piece of money that it works in black market transactions and the white market.

Paul Sztorc 02:46:54 And then another part type of money that only works with the white market transactions. Then eventually the network effects will favor the black market money. Or what I should say, the double. Didn’t make any sense.

I was trying to say that, you know, you have like you have two types of money, even if you never break the law and you don’t know anyone who would ever break the law, and you would never go out with anyone who you know would break the law. And, Everyone you’ve known for a thousand years, and you go to the same Bible study together and etc., you’re still trying to figure out which money should I use?

Well, maybe some of my friends have friends who have a trading partner Gardner, who will break the law at some point. So maybe I should use BTC because BTC has got me covered either way. Whereas the Fiat, the central bank digital currency. Is only in the one market. So. that’s the idea. I hope that made some sense.

Paul Sztorc 02:48:03 I don’t know if that answered anyone’s question. Did it? I forgot what the question was at this point. I hope we answered it, though.

Vlad Costea 02:48:10 No, it’s all good. There is a request by Bkc that we roleplay the argument for. The market has decided in regards to BTC and BCH, where I tell you, you know, what’s the point of talking about BCH anymore? Because it’s been how long has it been? Eight years. And it seems like the market prefers BTC over BCH. So this is the real bitcoin. The other one has failed. Why do you even bother to still run it.

Paul Sztorc 02:48:44 which which side am I supposed to be taking? My point of view is that it’s. I don’t know what it is anymore on the list, but it’s like number 20 something, so that’s that’s low. And the misconception is that BTC is number one. And it’s been consistently number one. And so BTC is like if you’re here to win and you want to team up and you know that teaming up involves some compromise, the plan, the current plan is to join the BTC community stack and wait.

Paul Sztorc 02:49:21 Hope that technology is built, that it scales in layers, that I think is the Orthodox plan, and it won’t be the same in the mind of every single person. But that’s the Orthodox plan is to wait, And there’s a lot of evidence for that. Like, I’m a huge advocate of this thing, but, you know, I was sort of building it.

I don’t think I’ve been, you know, building it at the fastest possible speed I could if my life depended on it. I but, but I’ve been slowly tinkering with my preferred solution for a long time. Is this making sense? Like I’m saying, that’s the official plan is the BTC. And then the opposition plan is like Ethereum. And these other things are like third party candidates.

And we should they should either bring the heat to the opposition eath, or they should make some kind of argument for why they should be the new opposition. I think like something like Solana is probably sort of like in that category where they’re trying to say, listen, we’re very similar to eath we completely give up on I don’t want to say give up, but what this is, we pushed the envelope on decentralisation, we push that back towards centralization.

Paul Sztorc 02:50:39 To a very high degree because. You know what’s Ethereum been doing? And we already compared to Bitcoin or Ethereum is already the centralized one. So so this is how I see the world possibly totally mistaken. But my view is there’s the Orthodox number one. There is like an opposition party. We do have frothy competition where the new people come in and try their thing.

It is very difficult to make it, to make an argument that says, we try to think in 2017, we have been declining in market share in terms of the market cap ever since. Certainly, you can make any kind of argument you want after that point. And I think Monero people would they would say, listen, we have real traction among the real dark web.

This is the real users. Everything else is fake. Everything else is easy come, easy go. But still, it’s tough. It’s very tough to make that. With Ethereum, you could point to the fees and you could say, like the fee paying users have been increasing on a logarithmic scale of fees on ether relative to BTC, have been increasing on a geometric scale consistently year after year.

Paul Sztorc 02:51:58 So we have more and more actual users. But my point of view is still that there’s like an orthodox thing, and then there’s an opposition to compete with it. And then this other stuff is kind of almost illegitimate competition because it’s just a distraction, because what are you going to do?

This is exactly what happened with BCH, where you join BCH and then BSV people split off and then b, a, b, c split off. And now so and this is what happens in the Libertarian Party. You have the Libertarian Party, then you have different flavors of liberty. You have whatever anarcho primitiveness, whatever you have this, you have anarchists, and then people can’t agree and then it becomes a farce.

Whereas the smart thing to do is form your group, figure out what you have in common that you can agree on and free. Ross is a perfect example of this, and then pitch it to the two major people and say, we’d like to win something. We’d like to get what we want, we’d like to get something that we want.

Paul Sztorc 02:53:11 And yeah, Trump can do the libertarian thing. And they had the free Ross signs. It was in his speech Trump read from that that article that person had written about how Trump had 20. Trump 2016 had sort of inadvertently been a very libertarian candidate. And then Trump, He sort of thought about, well, actually, what I want is overlaps substantially with the, you know, what these people want.

And then I that every libertarian voted for for Trump. I mean, that’s not true. Of course, some voted for the libertarian candidate. But what I meant to say is in you had a situation before, like, there was a 5% Gary Johnson vote at one point, you know, so you had this in a in a race that was really close.

The Libertarian Party could could take three, 5%. I may be totally wrong about this. I never actually looked this up. This is a very interesting we can look this up in real time. Look up what what percentage of the vote did the Libertarian Party get in this most recent election? I think we can we can confidently predicted it would be much lower than in past years.

Paul Sztorc 02:54:26 but maybe I’m totally wrong about this. I would be shocked. I would want to know who are these libertarians who are voting? Voting to throw the vote away. but maybe there are many out there. my guess is that the there’s normally there’s a 5% libertarian. My guess is that, like, 4% of it turned red. I could be totally wrong. I haven’t looked.

Vlad Costea 02:54:52 So the question which I’m formulating is which percentage did the Libertarian Party gain in the 2020 for US presidential?

Paul Sztorc 02:55:00 I just look it up.

Vlad Costea 02:55:01 And how does it compare with 2020? We can.

Paul Sztorc 02:55:05 Just look at the results because.

Vlad Costea 02:55:08 I’m using rock. I there was.

Paul Sztorc 02:55:10 A Gary Johnson in you know. Isn’t it funny how. I mean, it’s a little ironic that you look through the election results and they have all this stuff about the Associated Press calling the. Because, of course, they thought it would be disputed, but then it’s like it’s totally undisputed. Ironically. Okay. Let’s see. Can’t see. I don’t report it here.

Speaker 3 02:55:36 Let’s see.

Paul Sztorc 02:55:40 I’m gonna wait. I’m gonna make everyone wait on the theme. This is how. This is how we roll here.

Vlad Costea 02:55:46 Yeah. It’s live, it’s unpredictable. You come up with something, and then we have to look it up. And you let me plug.

Paul Sztorc 02:55:55 Jamie, you know we need to have a Jamie. Look it up. I can’t find it.

Vlad Costea 02:55:59 Who’s Jamie.

Paul Sztorc 02:56:01 From? Joe Rogan, you say? Jamie looked it up and he looks it up. Before there was I. There were. You would hire an assistant to just do things for you.

Vlad Costea 02:56:13 I was never that successful, you know, to afford to have an assistant. I still do everything by myself, mostly. Okay. so it was 2% in 2024. This is higher than the 0.74% in 2020, and lower than the 3.28% in 2016.

Paul Sztorc 02:56:40 can we get like a graph or whatever it is? Let me see here. I don’t know if they. Okay. I see this thing on AOL 2016 and 2020.

Paul Sztorc 02:56:50 Elections were the best in the party’s history, but 2024 looks likely to fall far short. I don’t know if that’s that. Seems like it was written before the election. Third party. Party candidates in general received fewer votes in the 2024 election. Yeah. Because I this is my theory is that Trump is so weird that he attracted these people who thought, I’m a third party voter. I’m also weird and Trump is weird. And so that that that’s my theory may be refuted by the facts. No.

Vlad Costea 02:57:24 In 2020, it was much more disastrous for libertarians. Jo Jorgensen got 1.1 76 million votes and that’s 0.75%. Last year they got 2% of the votes. What chase all over.

Paul Sztorc 02:57:50 I think, though, this is a little bit, this is the part where I try to weasel out of being refuted. But what I was trying to say is Trump is so weird. But it is true. In the most recent election, he specifically went to the libertarian convention and campaigned. And I think.

Vlad Costea 02:58:04 I get your point that he took some of the votes.

Paul Sztorc 02:58:07 I don’t know what, like you can go back to. So I don’t know, is this actually the case that. Let’s see. I don’t know, we should really, like, actually have the actual the real numbers there. We know what the heck we’re talking about here, but, I would guess in 2016 also people, even though it wasn’t because Trump was such an outsider.

So I would what I would really like to see is that the three Trump elections versus the and in particular, I would have thought the last one because he so explicitly I’ve never heard of anyone. Maybe this happened, but I’ve never heard of anyone go to the libertarian convention and ask for the vote and make it make an actual reasoned speech about and say so.

Anyway, this is the idea is that my logic is something like this to bring it back to the coins, you know, you you want Bitcoin cash to work. The cash is here. He wants, his thing, he wants, cash fusion. He wants blocks that are large but not too large.

Paul Sztorc 02:59:17 That’s the same thing as wanting to get Ross out of jail. And the options are to create your own political party. That’s the Free Ross party and lose every election and never achieve your goal. Or try to figure out which of the two parties is primed for this. Get a lot of people involved.

Get signatures, go make get make signs and make it a part of the thing, the platform and then of your of your community. First you start the Free Ross group and then you back you provisionally back one side and you say, we are backing you. We want you to free Ross. We will give you our support. If you are elected. We expect you to free Ross. If we if you are elected and then you don’t free Ross.

We’re going to pull our support immediately and vote for the other side and revenge. And we are going to do that until we get what we want. I think that’s what most people do. Like in the UK, they have the pressure group and they’re originally like the Log Cabin Republicans, which was like gay rights for Don’t Ask, Don’t Tell was originally like a red leaning, gay rights issue back in the day.

Paul Sztorc 03:00:40 I don’t know exactly how it all shook out, but I think Bill Clinton promised to do that. And then he did not do it. And then I don’t know if the. Yeah, my guess is is partially the support shifted back to the red, from this small group because then after Clinton, it flipped being George W Bush was red. So this is a very long winded analogy.

I’m sure everyone’s really tired of listening to all this, but, that’s my point of view, is that it’s really difficult to make it work with the number 26 coin. Now let’s look it up and see what it is. I mean, this is more of just us staring at screens and we’re forcing everyone to. Okay, here we go. Where is it? It’s 23. Okay, so I owe an apology, but it’s hard to make it work with the number 23 coin.

Slightly easier than 26. But, I know that this argument is unsatisfying because it’s kind of like, what if everyone just agreed that it was a great idea and then it would just become the first? So it’s sort of a little bit of a circular reasoning, but it’s tough when you’ve had this thing and then what is it? So it’s so the 6 billion.

Paul Sztorc 03:01:56 So you’re 6 billion and that’s you’re in 2020 third place 6 billion, which is of course nothing to sneeze at. But Dogecoin is 33 billion. It’s an eighth place. Solana is 75 billion. In sixth place.

Then you have. You know. And then Ethereum is up. There was 320 billion in Bitcoin is 1.8 trillion. So I. That’s that’s just how I see the world now. Maybe maybe he has something he wants to say.

Is he saying stuff in the comments. He’s saying maybe there’s a bunch of stuff that I’m not seeing here. But that’s what he wanted. What did he want you to say? You’re supposed to be defending Bitcoin Cash now is that what’s happening?

Vlad Costea 03:02:39 Yeah. Yeah. So wait I’m scrolling. All right. You should look at the new Utxo based DeFi and BCH. You’d be amazed what Bitcoin script can achieve.

Paul Sztorc 03:02:50 Well, I think you can achieve quite a bit. I believe that it can. I believe that it could do anything. Bitcoin could do anything.

Paul Sztorc 03:02:56 You know, as an advocate of Sidechains, I do think. We should and we should copy every altcoin and we should copy all kinds of things. I think I definitely believe that you could do assets as utx. So as I wrote a post called Bid Assets. I think it was in like 2018, hardly about that.

So I and I do think we should shed a tear for all of the development that did not take place on BTC. BTC has become complacent and overconfident now. They don’t want to change anything. They’re obsessed with not breaking it so they won’t add features. This is a mistake because the features will slowly build up like contents under pressure, and then eventually Bitcoin will have to either adopt a whole package of features or be replaced by something eventually.

But the question is how long is that going to take and will will BTC course correct before then? Very complex issue. But what else though doesn’t even have anything to say about? Of course you don’t want to. You don’t want to form the Free Ross Party And even the Libertarian Party is too small.

Paul Sztorc 03:04:12 You form your group on your issue, but then you pledge the votes as a block to one of the two main to whichever of the two main candidates you think can get you what you want. And so I don’t see how supporting number 23 coin is going to get you what you want, but maybe the people don’t. By my analogy they don’t think that it is. like winning the election means that you get to free Ross.

But of course, on CoinMarketCap you can coexist without being, number one. But it’s going to be tough because my point of view is eventually the one single coin will just keep expanding until it has 8 billion users, and then it will. The others will be destroyed. Once it’s done replacing Fiat, it will start replacing the lowest cryptocurrency, the second lowest, the third lowest there.

They will still exist, of course, but there will be a little novelty, you know, and it’ll be great. Hayek will be right about competition and money. But I think one thing that guy got clearly got dead wrong was that the competition is frustrated by the network effects and the fact that the the government prefers to collect senior inflation, tax, other taxes.

Paul Sztorc 03:05:43 It was clearly like, I mean, maybe I should reread that book. It’s been a while, the nationalization of money. But he seems to just think, oh, governments declare a monopoly in this, but humans prefer to use the money that other people around them are using. That’s like the government declares a language. But even if the government didn’t declare a language, there would be one. If whenever, wherever you went, there would be mainly one language that people and then you say, oh, we should have different languages compete. And it’s like, that’s missing the point. Right. Because you can invent your own thing. No one’s stopping you. But that’s not the point.

Vlad Costea 03:06:21 And you can learn Esperanto, right? Right. Which is the one language that unites all the languages.

Paul Sztorc 03:06:27 So prove by contradiction. Because even though it is easy to learn Esperanto, no one, no one, in practice, no one uses it. And so that’s exactly the point. You said the language only has use if other people are using it.

Paul Sztorc 03:06:40 So it’s the the competition must take a different form. This is why I like side teams because you exchange everything at par. You have competing separate pieces of software. So.

Vlad Costea 03:06:51 Okay Paul, but let’s go back to your analogy. And I’m supposed to be the one defending BCH. Sure. When you describe the language that everyone speaks you say lingua franca. And that’s, you know, it refers to French, which used to be the language to which everyone would default when they could not understand each other.

But after the computer age, Lingua Franca became English. It’s the reason why I speak English. Because my parents bought me a computer and I had to learn how to operate it. And it seems like technological innovation can actually flip the priorities in terms of language.

Totally. So French became complacent. It had the network effect, it had the intellectuals. It was the coolest language out there to learn it. I don’t think it was classy. It’s beautiful, it’s musical. But then the computer came along and boom, we all had to learn English.

Paul Sztorc 03:07:58 I don’t think it was just just the computer, but I think. you’re. Yeah. To change it. I mean, there was a time when the French was the official, like, court language or whatever. The official philosopher language or something. English was like this vulgar commercial language. There was a time when it was Latin, right?

There was a time when it was Latin. Within the Roman Empire, there was obviously a time before Latin was invented. So, none of us really dispute any of those facts. That’s, So, yeah, the hope is not zero. I would like to know exactly how like, how do you now apply that analogy back? Because. Okay.

Where’s the compute? What, what. That’s exactly right. This is what you need to see is some kind of huge thing that for some reason, the French are not going to get into computers in time, and this whole other civilization is going to be massively producing this computer thing, and the French are just going to sleep on that.

Paul Sztorc 03:09:02 So that’s what they’re saying because they have utxo DeFi.

Vlad Costea 03:09:10 Yeah, I don’t know. It was also funny when I interviewed John Carvalho alongside Derek Roskill. He was saying, you know, Omni previously. Mastercoin is so beautiful and it works so well. Too bad the base layer doesn’t scale to use it because it makes some of the Ethereum stuff pointless. And this is exactly what these Bitcoin Cash people are building.

Paul Sztorc 03:09:39 I think it’s true that like, there was an explosion of stuff built on BTC in its early days, but now later people are rediscovering and prediction markets for example. But even like mastercoin omni coin these. It was like stocks and bonds. This was like stocks and bonds on Bitcoin. And people didn’t know what to make of this. Back in the day people were so confused by this. You know Daniel Craig was what they posted out. Like, I’m I don’t understand what’s going on here. Please, somebody make it stop. You know, you can find all this. It’s hilarious. so people didn’t know what to make of it, but really, it nowadays.

Paul Sztorc 03:10:26 You know, some tokenization and stuff. People can. And we went through a long period of just complete scams, ICO scams, NFT scams. But again, how many argued for our baseball cards on the blockchain. So.

Vlad Costea 03:10:42 Oh, he didn’t say on the blockchain. This was on the cryptography mailing list. That was this idea that you could trade numbers.

Paul Sztorc 03:10:51 Yes. So this is.

Vlad Costea 03:10:52 Blockchain.

Paul Sztorc 03:10:53 He’s saying that there, a digital collectible could have value in the same way that a physical collectible that became NFTs, basically. And then, you know, there have been many examples of someone issuing something that’s like equity, like it’s very similar to equity on the blockchain. Sometimes people have issued debt. I mean, I my memory is a little hazy on this particular one, even though I lived through it. But wasn’t it a Bitfinex or whatever? Also the money. And then they said, well, issue you this coin, but then and we’ll buy it back as the exchange makes the money back.

Paul Sztorc 03:11:36 That happened in like 2016 or something. So that would be like dead debt on the blockchain. So all this stuff, it was people have wanted to invent things a lot. And when they can’t, they invent them a new way. This is why ossification is the kiss of death. But also, you see, the ossification is have a point because every little person has their pet idea.

And we can’t have everyone do that on L-1. So what they decide to do is like suppress all of them. The right answer is to strike a middle ground where you say you experiment on L2 sidechain. If your idea is, and if someone passes on an idea that’s really good, you can shop it around to the other L2.

And you could say, I have my great idea. It’s called Bip 47 payment codes. This chain didn’t do it because they’re wrong. You shop the idea around. There’s multiple L2 s. They’re all trying to compete for users. They pick the best ideas and they ignore the bad ideas.

Paul Sztorc 03:12:43 So I sing the same old tune every time. But that’s because it’s been true the whole time and everyone else is really incorrect. My humble opinion. so it’s true. Omni. All this stuff is invented on L1. L1 doesn’t support it. It goes somewhere else. This is argument that actually there has been a lot of innovation because some people say there is no innovation. And all this Ethereum’s is a big scam and it’s all fake you know. And Bitcoin is the only invention. So some people say that.

Vlad Costea 03:13:22 Yeah I was muted. So of course they they even argued that TypeScript is superior. And that simplicity is a much better programming language than solidity or whatever it’s called on Ethereum. But it goes back. Do you remember seeing that clip from Steve Jobs where he gets asked by a nerd why he doesn’t use some programming language?

Paul Sztorc 03:13:50 Open doc, Is this the open doc thing?

Vlad Costea 03:13:52 I think it’s open, doc. Yeah, and he explains that he builds from the user experience backwards, not from the technology stack.

Vlad Costea 03:14:00 Right. I mean, I’m not saying that Bitcoin should be used this way, but there are some network effects in place, like Ethereum has been around for how long? Almost ten years. And there’s so much stuff that was built on it.

Paul Sztorc 03:14:15 So the inventors of simplicity are very unreliable source as to whether or not simplicity is a great idea. You know, that’s we have a lot of wishful thinking. And, I think the people who say that Bitcoin is already perfect. you know, that doesn’t square with any of the facts.

I mean, why why are people so interested in covenants now? Covenants aka lightning is fucked up. We need to we need to try something else because it’s not going to work. So that’s the technical creme de la creme are there.

And the like, I mean just look at all the different. You can look at the published CVS now. So you can look at the CVS disclosures. People are going to argue that before these bugs were fixed it was perfect. And it’s becoming more imperfect over time.

Paul Sztorc 03:15:17 Who knows.

Vlad Costea 03:15:21 About CVS I remember. So I don’t know exactly why the CVS are reported much later than they get discovered. But I remember sitting at a table with a developer named Patrick who works on Dogecoin, and he was saying, oh my God, these Bitcoin core guys are so annoying because they they disclose stuff and I have to look it up and realize that this library has been unsafe for so many years and I have to fix it.

It’s just that all of these forks of bitcoin need to keep up with Bitcoin Core, and if they forked off at one point and they’re using something which is dated and has some vulnerabilities, right. They can be exploited.

Paul Sztorc 03:16:06 Yes. This is a source of tyranny of Bitcoin Core. They have a source of power as a result of keeping these secret CVS secret. there’s of course many sides to every story. This is partly why I did CUSF 300. Software is a separate piece of software because if you you try to make your own activation client as a fork of Bitcoin for you have to do to patch that, and then you have to do rebasing where they can basically force you to do unpaid labor forever.

Paul Sztorc 03:16:41 And then, if you don’t want to do the rebasing and you don’t want to do the patch that then you have the seeds. So they’re very, very, very vicious. people and their motives are terrible and no one should trust them. but we have to sort of put up with them, because no one has constructed a good alternative.

So it’s really blame all the people making the alternatives also. but, yeah. Like if you ask them, they say, oh, we have to wait and disclose the vulnerabilities because we have to wait for everyone to update, and we have to keep them a secret because otherwise they’ll be exploited. And, and we’re so great, and we have the we have the purest motives of all.

And we in Bitcoin Core is a meritocracy. That’s what they would say. They would say if they’re involved then it’s probably great. And if they’re if it’s their organization and it’s a meritocracy, but if it’s if someone else is involved, then it’s probably terrible. And if it’s a different organization then it’s probably nefarious.

Vlad Costea 03:17:52 Like lib bitcoin.

Paul Sztorc 03:17:55 Yeah yeah of course. Yeah, but that’s human nature of course.

Vlad Costea 03:18:00 Did you read the John Dillon emails?

Paul Sztorc 03:18:04 not really, but I already knew about that. thing that that accusation, from what I had seen before, I wasn’t that, Like, it’s an ad hominem fallacy. Like, who cares who was someone hired by? You know, a bad guy or not, it doesn’t matter. You know what I mean?

Like, what if it turns out that Dillon was hired by Jamie Dimon? But then what if it turns out that Jamie Dimon was hired by Satoshi and Satoshi said. Jamie, I need you to get this into Bitcoin. Hire someone as an intermediary and then have them hire Peter Todd. He’s the only one who can do it.

It’s kind of like who what? What is the point of this? You’re going to change your entire argument if you learn that actually instead it was someone else who had hired him to do the same thing, like, you know what I mean? To hire someone to, like, murder a bunch of children, then it’s still a bad thing.

Paul Sztorc 03:19:09 It doesn’t really seem like it doesn’t.

Vlad Costea 03:19:12 I have no idea how we got here, but the reason why I brought up John Dylan.

Paul Sztorc 03:19:18 You’re arguing about the idea other than it’s something other than its content, is that the content of the replaced by fee is independent of its origin.

Vlad Costea 03:19:31 Of course, but that that’s not why I brought it, not in the context of RBF. What’s also in those emails is the fact that, first of all, John Dillon argues that lib bitcoin is dangerous and there should only be one Bitcoin client and that is core. Secondly, he discusses openly with Peter Todd about 51% attacking other networks.

But the most shocking part, and one that’s very interesting, is the Coinjoin bounty, because there was that bounty that was set up by Greg Maxwell. It was a multi-sig with Peter Wuille and Theymos a 2 or 3 and a mirror talk came up and said, I want to claim the bounty. I have dark wallet. Look, the code is here, you can view it, blah blah blah.

Vlad Costea 03:20:19 My current commented and said that the license is not the best one he could choose. They improved that a bit. They polished it and said, okay, can you send us the bounty? And what John Dillon did was to send money to the bounty fund. He sent like five bitcoin or something, and then he told Greg Maxwell, okay, now I’m a stakeholder.

I’m part of the donors to this bounty, and I should be consulted before any donation or any not donation. Any grant is given from this bounty. So he bought his own seat at the table. And that’s the scandal part, because on one hand he was in private obviously against Bitcoin. He was biased against it and it was what dark Wallet was using and then public.

He was this guy who was saying, I’m buying my own seat at the table. I sent money to this fund and therefore you should ask me, before granting any money to any project that pretends to have solved solve the problem. So no money ever wants to dark wallet because of this.

Vlad Costea 03:21:27 And it was very similar to what Michael Saylor did last year when allegedly he did. This was reported by Matt Odell, I think he spoke with one of those ETF companies and talk them out of giving money to Bitcoin Core development, because they were planning to give like a small percentage of their profits to development for the Bitcoin project. And Michael Saylor allegedly stepped in and said no, don’t give them any money. And it’s very similar because you have a person who buys their own seat at the table and then dictates politically what should be done and what project is the one that should survive and what the budget should be.

Paul Sztorc 03:22:14 It’s very difficult to know, though, when money is given. If the money is given the wrong way, it actually discourages people. So I’m not saying that this happened in either case, but I’m saying imagine a developer who works really hard on something for free and they ship it, and then another person makes it a worse version. And then they say, oh, I want this bounty.

Paul Sztorc 03:22:35 They submit the worst version, and the bounty person says, oh, okay, and then they give the bounty. This is now discouraging to the first person. So I bring this up to say that this whole thing is a tough nut to crack, and that the best way to crack the nut is to have competition. Different pieces of software that compete.

The user will use whichever one is the best you know. If one has better tech, better performance, then it will. Eventually there’ll be a case where one of them will freeze or get slow after a certain time, and the other one will be fast and responsive. So, competition on the user experience is the best. that is the best way.

And it’s difficult to. These grant type, Contests. They have the drawback that they rely on you trusting the person to pay out. I mean, let’s think about it like this. So what difference does it make? The bounty is either for Coinjoin implementation or not, right? Maybe it has to be on core.

Paul Sztorc 03:23:56 I have no idea. I don’t know, I didn’t I don’t I don’t know the wording. I don’t know if what the understanding was when they put it out, but I mean, either they deserve the boundary or they don’t. Actually, whether or not he paid into it shouldn’t really matter per se.

But then if they then say, well, we’ve had people who are in it say that now, so who knows? But this is the whole the whole drawback of this is it shouldn’t I don’t think it should work this way. I think actually the right thing to do is you have the open source development by intrinsically motivated people as the first starting point.

Then you have users, and among these users you have like power users. And I’m talking like, you know, this would be like the Mt. GOX exchange. This would be like Kraken, whatever. This would be like Roger ver. And so you have these people who they’re getting a lot of use out of the product. They really need it to be good.

Paul Sztorc 03:24:54 Then they should do some kind of patronage. I the idea of the ETF just throwing money at Bitcoin development, I don’t know. Probably more likely it would probably be as likely to do harm as good. I’m going to have to go in 20 minutes. Something else to do. I only got 20 more minutes.

Vlad Costea 03:25:18 Oh no. I was hoping we were gonna break the eight hour, 11 minutes, 30 something seconds record.

Paul Sztorc 03:25:28 I mean, maybe I. I’m sure it’s fine. I mean, you know Bitcoin is it’s always something to talk about. We have good questions. I did want to mention that the people who are I don’t know if the people for who are like prosecuting. Roger.

I did want to mention that it’s possibly that it won’t be great for their career if they do this, because you can look at how quickly the world has changed, you know, and people getting canceled for like a joke. They wrote on Twitter like ten years ago.

But I would just say like, why? Like who? Why what? What are they getting out of this, investigation? And where are we going to be in in two years? And that’s I just I wanted to throw that comment out at the end.

Paul Sztorc 03:26:20 It’s like the world has changed a lot. So I don’t know if they want to, like, carefully think about if this is really worth it. This is not a real crime compared to other crimes where, you know someone breaks into someone’s house and steals their television.

Vlad Costea 03:26:40 There’s also something that’s important for context, which was mentioned by Becky in the chat. And also I gotta give a shout out to Richie Rich, to Tomo Morini, Bkc and Con and Ben Fetterman and everyone in the chat for 86 Borg Skydog die or Skydoge actually wants us to spend the remaining 20 minutes talking about Skydoge.

Paul Sztorc 03:27:11 I bet.

Vlad Costea 03:27:12 But let’s get back to the tax evasion story. It seems like one of the most important accusations concerns mail fraud. Three of the charges against Roger are three counts of mail fraud because he mailed in his taxes one of the times he sent it. It was because the IRS lost the paperwork as high as 30 for each charge.

Paul Sztorc 03:27:41 This matter. But it seems as though what they do is they say, I have no idea about this legal minutia, but it does seem like everything is either wire fraud or mail fraud or something.

Paul Sztorc 03:27:51 They just say, oh, you committed a crime, and then they say you also you committed a crime using the post office. It’s like whatever. Like, I don’t know what they’re talking about that this seems. How else?

Like, what are you supposed to physically drive to the IRS building in Washington, D.C. and give them your taxes, like orally by speaking to someone there? Then what are they talking about? Like, I don’t understand, you know, whatever. So.

But yeah, they’re just going to make everything. I who knows. But again, I do not dispute the fact that they can make a convoluted legal case which would ensnare any reasonably would ensnare any innocent person. And so I’m sure they could do that.

Vlad Costea 03:28:44 Okay. Let me ask you this, because at the beginning of this episode, you mentioned that Roger was the first person to believe in your prediction market system, and I don’t.

Paul Sztorc 03:28:56 Know about that, but he did hire me to work. He hired me away from my job at Yale to work on it.

Paul Sztorc 03:29:02 so in that sense. But there were plenty of I posted on Bitcointalk and lots of people liked it.

Vlad Costea 03:29:08 So my question for you is, let’s say that you came to Bitcoin in 2018. You never met Roger in person. You were never aware of what he did for the Bitcoin community. and you are subjected to the propaganda against him. And given this background, you learn that he is about to get arrested and you have access to all the information that you can find on free.

Roger. Now, dot org I think and you look at it and then you read Jameson Lopp’s tweets and you’re compelled to think that he’s evil. Would you still argue in favor of his freedom, or would you believe that there is some sort of karmic justice that should put him into prison no matter what?

Paul Sztorc 03:30:00 It’s a very good question. My guess is that if we were to take this hypothetical seriously and I show up in 2018, I think you probably just think, oh, Roger’s an alt coiner. and I wouldn’t really like form any other opinion about I would just know very little about it in the same way I know very little about like.

Vlad Costea 03:30:20 But it’s still you, right. And Gavin.

Paul Sztorc 03:30:22 Would you.

Vlad Costea 03:30:23 Still read stuff because your pulse starts?

Paul Sztorc 03:30:26 Yeah. I know a little bit about Gavin Wood, but not really that much. You know, creator of polka Dot or whatever, you know, and one of the creators of Ethereum and stuff like that. But I would just be like, oh yeah, because the propaganda is very intense.

I don’t know, like what the question, the question is also like, what did I accidentally or what did I discover between 2018 and now? Like, did I discover all of a sudden, oh, wait a minute. he was the first investor in whatever bit incident or whatever, I don’t know, it’s like weird.

Like, I don’t know what would have happened along the way, but I do think probably people just wouldn’t know that much about him, that they would just not at all. And then, would would you still think that? I do think that the my opinion is colored, in fact, by I mean, like I’ve known it for a long time, I think it’s extremely unlikely that he didn’t.

Paul Sztorc 03:31:23 He he hires lawyers a lot. You know, he would have hired tax attorneys. He would know that he would be he would know that it would be possible that he would be scrutinized. So he would do what they told him to do. so that a lot of my opinion is based on that.

I think if I had never, like, met him in person and find out about him, like after the block size war, and I see Jay Anderson’s tweet, I think I probably would just kind of shrug and just think like, well, I don’t know, maybe, Like, I don’t know, maybe, like, play stupid games with stupid prizes or some silly thing like that, not really knowing that much about it. I do think, And I don’t think that you part of your hypothetical was, oh, look, you would look at the stuff at pre roger.org, but I think that people would not the small block or people who joined after 2018, they would not really read free.

Paul Sztorc 03:32:32 Roger that. And they would probably not really care if you even if they did read it, they would think, well, that’s his point of view. He. Obviously, he’s going to say that because he is being accused of all this. It’s very tough. What’s the actual question is like what I say that he should still be in jail.

I don’t I, I personally think the exit tax is ridiculous and shameful. And I think if it is the it is the Berlin Wall, I think the government is entitled to make some kind of reasonable argument about like securing the border and like switching citizenship all the time so that they could have some exit tax. Our exit text is clearly to deter people from like.

It is clearly to intimidate people and and keep them in the country. It is not rational and it is, mean spirited. The beatings will continue until morale improves. So it’s like, I think it’s shameful. Roger takes consent very seriously. He thinks these actions, the whole the whole idea of taxation is not not consensual to him, his tax dollars.

Paul Sztorc 03:33:53 If you’re an American and you pay money, some of your tax dollars are being used to pay people at the IRS to enforce the tax law here, as Karl Marx used that phrase about manufacturing the tools of your own oppression or whatever. So When someone wants to leave, then you know we should be ashamed of how they don’t like. They don’t want to hang out with us anymore.

And we should be ashamed of that. And we should facilitate their departure in some way. Again, I do think like, you know, there could be some tiny exit tax to reflect the. I mean, one thing would be like, are you going to Bill? Are you going to reimburse people for like all the you use, you use the roads this number of days or do you use you use the public school?

I mean, so, you know, I mean, someone wanted to say how we paid for you to go to public school in California. Here’s what a private school would have cost. Will you pay us for that now? Because now that you’re not going to be paying taxes here, I would entertain some kind of weird argument.

Paul Sztorc 03:35:06 But overall, the exit tax that we have is, you know, just a to shake down. It’s I don’t so I think everyone should be able to come and go to whatever country they want. The more competition among countries, the better. The premise that.

I mean, plenty of other countries do not do this. Of course. Right. You can be a UK expat. You just move to Dubai, then you don’t have to pay us to. Of course I understand. World War two realities, atomic bomb, etc.. the the US Navy is policing the oceans of the world to facilitate commerce.

So, yeah, I understand all that, but, I don’t I don’t I can’t see myself supporting these attacks being enforced. I think we should get rid of it. For everyone. Many other things we should get rid of also.

Vlad Costea 03:36:04 There is also another perspective from which we can look at this. If Roger, with all the resources that he has, with all the lawyers and all the accountants and all the evidence that he can put together and all the fame that he has that helps him get on shows like Alex Jones and whatever to promote his case.

Vlad Costea 03:36:23 If he cannot win, then none of us can.

Paul Sztorc 03:36:28 I think that’s true, yes.

Vlad Costea 03:36:30 And we also have to take into consideration the fact that they came after him ten years later. So maybe that’s you.

You’re an honest guy. You report your taxes correctly, and ten years from now, they come for you because Bitcoin hits $1 million or something, and they know you have some coins because you’re on some podcast and you spoke about it.

We have AI transcriptions can be made very easily and they can search for keywords and then they ask you to pay tax according to the new exchange rate for Bitcoin. You’re screwed. Maybe you don’t have it anymore. Maybe you lost it. But there is no way you can get yourself out of this.

Paul Sztorc 03:37:16 Well, yeah, I mean, I don’t know, it’s like, who knows what tax laws they will write in the future. And normally when they write the law, then it only applies at that point forward. But you never know. I have no idea.

Paul Sztorc 03:37:30 Like I think they will there will be social unrest if the more the more deficit spending that the government does, the more, the higher the price of Bitcoin will go. And then there will eventually be a lot of social unrest, at least.

Vlad Costea 03:37:53 Also, in common law systems, you have this influence of the president, right? If there was a similar case where there was this sentence, the first one of its kind will influence all the others, and basically the subsequent ones will have to get compared with Roger’s situation.

Speaker 4 03:38:14 Right?

Vlad Costea 03:38:18 So he’s sort of the benchmark for this. If he goes to jail, everyone else with a similar situation will go to jail for a similar number of years, even though in the case of Ross Ulbricht, for example, he got two lifetimes plus 40 years and other sellers on the Silk Road and other people were behind the Dread Pirate Roberts account, if I’m not mistaken, got sentences of ten years 1520, so not as much as him.

Paul Sztorc 03:38:58 yeah. like, well, of course it’s a lot of it is like Political, and a lot of it is, unfortunately arbitrary.

Paul Sztorc 03:39:08 But, I do think. well, we’ll have to see, but plenty of places have a worse they have a justice system as much worse. So. But yeah, ours is also not great sometimes, just, Who knows?

Vlad Costea 03:39:29 It’s sort of sucks that after you decide to leave with dignity, you’re put in a position where you have to say, yes, I promise I will come back to the US and work with entrepreneurs. I’m still young. I can still help the U.S. government pay a lot of taxes. I can go back to my previous life, spend time with my family and blah blah.

It it’s a bit painful because I know what kind of guy Roger is. He’s very stubborn and he, when he makes a decision, he doesn’t really want to admit that he was wrong and go back to his previous life and this position. That seems like he is under pressure, basically. And if he doesn’t want to go back to the US and doesn’t concede or doesn’t compromise, it might be much worse for him.

Vlad Costea 03:40:23 So maybe after all, it turns out to be a scheme to get him back in the US and start companies.

Paul Sztorc 03:40:30 And I don’t know, I mean, like you. Okay, if we were talking about the logistics of the pardon, like it would be like Trump likes to push this like America is winning. Pro-america we love America. America is the best place now. Everything sucks before, but now that I’m in charge, America is so great.

So if that’s the that’s the marketing departments pitch, then I’m sure that Roger would play ball even though it’s a silly thing to do. But what are you going to do when they, you know. So I think that I mean, it’s hard to know, like exactly how this was initiated. you know, like who who decided that this would be.

A case that they wanted to take on. I don’t know, and it really is the case that back in 2014. The you know, it’s true that Bitcoin is worth whatever $100. But really there was no there was like no market for I don’t I don’t I it’s just it’s a very dishonest thing with their trying to say that.

Paul Sztorc 03:41:51 You know what I mean.

Vlad Costea 03:41:53 Yeah. Because also the tax laws have changed. It was difficult to label Bitcoin as anything. Back in the day it became a commodity, I think a year later or something. According to I gotta look it up. I’m not sure what the CFTC.

Paul Sztorc 03:42:12 There’s no way like there was no way to like as I was trying to make clear on those stories, like you would go to places, no one had any idea what it was. It was really. But I’m sure that, those tax people made a very, I’m sure that they did something, I don’t know, like, it’s to me, it’s baffling with exactly the argument is, you know, as as I tried to explain, the whole, like, tax evasion is like someone secretly when you involve many attorneys.

I mean, I would like to know, like what? The tax attorneys, if they’re going to put out a statement or whatever with this because they should, explain how it came to be that someone came to them, paid a bunch of money, got legal advice, and now is in this problem.

Paul Sztorc 03:43:14 I think they don’t. They owe everyone an explanation. Shouldn’t they be going around doing damage control and going around to the different golf courses and restaurants and telling other clients to that? Don’t worry, you’re not going to go to jail for 100 years. That’s my it’s one question I have. I don’t know, maybe there’s some explanation. Anyway, I have to go now.

Vlad Costea 03:43:36 Yeah. I’m really sorry that you have to go, Paul. I’m gonna put your pepper on the screen once again if you want your own. These are basically numbered. So this is number nine. You’re a single digit pepper Paul. You’re one of the dogs. If you want one of these, my girlfriend could make them. So message her Special thanks to the sponsors. Thank you. Later, two labs for being a longtime sponsor of the show. Once again, Tripti Hotaling. These guys are experts in Self-custody. If you need anything specialized like a company buying bitcoin, go to them. They’re based in Switzerland. They they offer pretty good privacy.

Vlad Costea 03:44:15 Bitcoin.com news citrate. No ones. I didn’t mention them, but they’re pretty cool. They they are this peer to peer exchange that is trying to empower the global self. Check them out. You can actually make some money and help some other people in Nigeria or something make more money. And yeah, thank you very much guys for tuning in. Thank you sideways for being the most active person in the chat, posting a lot of emojis.

Paul Sztorc 03:44:45 And happy birthday!

Vlad Costea 03:44:46 Also thank you. My birthday is in 2.5 hours As in midnight, you know. That’s not exactly when I was born. And I wanted to say something else before you wish me a happy birthday. Oh, also, thank you to Cryptex. Is that what his name is?

Speaker 4 03:45:04 He’s great.

Vlad Costea 03:45:05 The mysterious guy behind the project. He’s a connoisseur of supercars. I interacted with him a few times. He’s very good at cars.

Paul Sztorc 03:45:16 He’s a big car guy.

Vlad Costea 03:45:19 And don’t buy a Tesla. Paul, don’t buy a Tesla. No. Resist the temptation.

Paul Sztorc 03:45:25 I want the self driving. Yeah.

Vlad Costea 03:45:26 That’s exactly why you shouldn’t get it.

Paul Sztorc 03:45:29 They’re gonna hack my self driving and drive me off a cliff.

Vlad Costea 03:45:32 Exactly. You’re too important.

Paul Sztorc 03:45:34 I hear it’s a very.

Vlad Costea 03:45:35 Get a driver.

Paul Sztorc 03:45:37 All right? Just Uber everywhere. Okay, well, I have to go, but this has been fun.

Vlad Costea 03:45:42 Thank you very much. And thanks, everyone for listening. Bye bye, free Roger.