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S5 E8: Eric Voskuil on Libbitcoin Development, Cryptoeconomics Book & Austrian Economics

Eric Voskuil talks about his breakthroughs with the Libbitcoin project, his new “Cryptoeconomics” book, and his axiomatic view on Austrian economics.

Eric Voskuil is the kind of Bitcoin developer whose understanding transcends computer science. Not only that he is a C++ wizard, but he is also an avid reader of Austrian economics and often references works by Mises and Rothbard.

As a matter of fact, Voskuil (whose correct pronunciation is “foss-kuyl”) refers to economics as an “axiomatic system” – a hard science that can be studied in a framework which works regardless of human subjectivity and behaviorism (more about this view at 33:25).

As he explains in this interview, Voskuil considers that Bitcoin transaction fees are an essential part of the network’s censorship resistance and decentralization. The increasing cost is not an issue, but a fundamental component which ensures financial sustainability and therefore base layer security.

Voskuil is best known in the Bitcoin space for the contributions that he has made to the Libbitcoin project. As he explains, Libbitcoin isn’t just another clone or port, but an entire rewriting of the Bitcoin Core software to bring certain optimizations. The software currently doesn’t have a graphical interface, but is very useful to miners that seek to maximize storage efficiency.

As he mentions during the interview around the 6:30 mark, one of his breakthroughs with Libbitcoin involves moving files that otherwise get stored in the limited RAM to the hard drive. This optimization saves operation costs, since the latter type of memory is more inexpensive.

“I think [that] not being a professional programmer or software engineer, Satoshi fell prey to one of the patterns which is common in software development: premature optimization” – Eric Voskuil

Yet Voskuil combines his passion for writing code with an affinity for Austrian economics. In conversation, he successfully blurs the lines between software engineering and market dynamics. And it was perhaps this inter-disciplinary approach of his that led to the publishing of “Cryptoeconomics“.

Interestingly, the book is a collection of unrelated articles that Voskuil has been publishing in the Libbitcoin-System GitHub repository for years. But it all came together and started to look more cohesive in recent months and thanks to contributions from people such as James Chang, a printed version is ready to ship whenever the pandemic ends.

Unlike Saifedean’s “The Bitcoin Standard”, “Cryptoeconomics” doesn’t have a central narrative or interlink phenomena to establish an ideological standpoint. Instead, it features a rational and ideologically-detached approach that some people may find blasphemous.

Furthermore, “Cryptoeconomics” is already available for free on GitHub. Therefore, purchasing the book is only a way to support the author and keep a physical copy that withstands any possible revisions.

Listen to Eric Voskuil on iTunes and Spotify!

Time stamps:

00:47 – Intro

02:00 – For how long has Eric Voskuil worked on Libbitcoin?

04:00 – Why are Bitcoin repository ports created?

6:30 – Breakthroughs made by Libbitcoin

12:10 – Eric Voskuil’s more advanced activity in Bitcoin

15:43 – Performance optimization

20:51 – Satoshi Nakamoto wasn’t a professional programmer

25:15 – Is Eric Voskuil a computer scientist or an economist?

28:10 – Austrian economics

29:30 – Credit and economic production

33:25 – Misean economics as an axiomatic system

38:54 – S2F (Stock to Flow) is not Austrian

42:20 – Price cannot be proven economically 

44:01 – The value proposition of Bitcoin as money

44:27 – Why store of value is subjective 

45:53 – Lunar fallacy

48:50 – Eric Voskuil’s Cryptoeconomics

50:52 – The Cryptoeconomics books

52:43 – Musing over censorship resistance for a year

54:15 – Economic rational explanation for censorship resistance

56:40 – James Chang’s contributions to the Cryptoeconomics book

59:20 – Cryptoeconomics vs The Bitcoin Standard

1:02:00 – Combining Libbitcoin and Cryptoeconomics

1:06:54 – Bitcoin took years to understand

1:09:20 – Bitcoin security

1:14:16 – Why Trezor offers the best security

1:22:37 – CB750 break pedal

1:24:20 – Is hyperbitcoinization possible?

1:26:38 – Cryptoeconomics on Amazon?

1:27:46 – Improving Bitcoin Privacy

1:29:34 – Take-aways from Vietnam conference

1:33:17 – What happens to Bitcoin if the internet gets regionalized?

1:34:49 – Why the Blockstream Satellite doesn’t solve problems

1:38:56 – The US government as a threat model

1:40:52 – Resilience vs privacy

1:42:37 – Outlawing Bitcoin development threatens devs?

1:51:44 – Bitcoin is not a gambling device

1:53:40 – Libbitcoin institute donations

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Full Transcript

Vlad Costea (00:00:47):

Hello there and welcome to season five episode eight of the Bitcoin takeover podcast. I am Vlad. And my guest today is Eric Foss-kuil… Actually, that’s the way you pronounce it in Dutch, but for all of you Americans out there, his name is Eric Voskuil and he is a developer for the libbitcoin project. And he is also working on a book lately. And you may have seen him at conferences lately speaking about economics because his Bo for C plus plus programming master, but he’s also very acquainted with Austrian economics. So hello, mr. Voskuil.

Vlad Costea (00:01:38):

I’m happy that I get to talk to you. Hopefully talk with you, not to you.

Eric Voskuil (00:01:46):

Yeah, thanks for having me on.

Vlad Costea (00:01:49):

So first of all, I got asked you for how long have you been working on the libbitcoin project? And what is it that you do? I see that you have a repository where you forked the Bitcoin core project, but you’re writing in C++?

Eric Voskuil (00:02:04):

I’ve been working on libbitcoin going it’s it’s in my seventh year now, although I didn’t do a lot of coding and in the past year I worked more on developing other people, raising money speaking and writing to support that. But yeah, I’m still active in the project. Previously it was more full time coding. What was the second part of your question? It was about the C++ repository. That’s, that’s what I wanted to say. Libbitcoin has never been a fork of Bitcoin core or Bitcoin or Satoshis code. If you go back to the history and the little bit coin repository, the first line of code, just a few lines was written by Patrick Straitman. And it grew from there. He was working

Eric Voskuil (00:03:00):

With Amir Taki when they started it. So it’s never been a fork. It’s one of the things that makes it unique. It’s got in many ways, a very different design. So for the most part, I think almost universally you know, with the exception of libbitcoin, other implementations are either forks in C plus plus, or their language ports limited to just port the existing code,uand its structure and design into another language, but libbitcoin. Uisn’t that there, there were a couple of times when,ucode sections,ulike a single class or something was, was used for a time, but there’s no, there’s none of that remaining in libbitcoin anymore.

Vlad Costea (00:03:46):

Right. I don’t get to talk to developers like you very often. So I have to ask you, why is it that you do not necessarily you because libbitcoin as we have established as something different, but why do ports of a repository exist in different other languages?

Eric Voskuil (00:04:06):

So I think sometimes people just do it to learn the code to learn. I mean, you really can’t understand it as a programmer unless you work through the code in thoroughly and a good way to do that is to take a language that you like or comfortable with familiar with and do the port you’ll, you’ll get to the point where you, you know, you do understand all the code, the entire Bitcoin core repository is on the order of half a million lines. It’s a lot of stuff. It’s not just, you know, a full load wallet and UI and stuff, but libbitcoin is, is about the same size. If not bigger, it’s also about a half a million lines of code, but it doesn’t have any graphical interface or you know, it’s, it’s, it’s, it’s a different, it’s a different thing.

Eric Voskuil (00:04:53):

It’s meant as it’s, it’s designed as a developer library with command line implementations for node and, and tools. So it’s structured differently. But the, you know, the reason people do these language ports, you know, or, or many, I guess they just want to learn the code. They want to be able to use it or have other people use it in another language. There, there, there are certain other implementations that are developer libraries, but as far as I know, they’re not very complete. Typically what you see as people will do a language port of the node or they’ll write some utilities or some, you know, smaller libraries, but to write a entire library that gives you access to all of the act aspects of Bitcoin is a pretty major task. And I, I don’t think that’s been done aside from libbitcoin, even in another language. So yeah, people, people just like to work in other languages and like to explore the code.

Vlad Costea (00:06:09):

Okay. So could you mention a couple of breakthroughs that you have had with Libbitcoin project and why you think it’s important for people to know about it?

Eric Voskuil (00:06:21):

Breakthroughs? well the did a number of things that were, I think, very innovative. If you were to design a Bitcoin full node from scratch after knowing the design, unlike, you know, sotoshi you know, presumably evolves the design,uin the first attempt to get it working, which is generally what we call a prototype, right. You’re just trying to, trying to get it all together, trying to figure out what you have to do. Uand that evolved into an implementation, and it doesn’t appear that Satoshi was a professional program or not, not from looking at his, his code or his design, but,uonce you get to that point, you have the advantage of hindsight. You can look at the whole thing and you can step back and say, well, okay, I’m trying to achieve these things. You know, how would I do it?

Eric Voskuil (00:07:16):

What, what trade offs would I want to make? So Amir made certain design decisions that are innovative. I spent a lot of time working in that code kind of trying to make it more you know, tested more well factored more consistent in terms of interface design more reliable, more readable. I mean, these are all things that Amir did a good job with, and I just tried to, you know, apply my energy to making them even better. So one of the, one of the things, the many he did was he, he after the first implementation, which he did, I think using level DB, which is a database that eventually after this I think the Bitcoin qt adopted which later became Bitcoin core. And he, wasn’t too excited about using level DB performance wise.

Eric Voskuil (00:08:24):

And he, so when he did the next iteration, he redesigned the database using memory mapped files. And this had it was a complete redesign, the architecture of the, of the, of the store, which kind of drives a lot of stuff. And it was, it was pretty innovative because basically he came to the conclusion that, you know, really, you only need to append to new data to a blockchain, right? I mean, you get reorgs but you don’t get enough that, I mean, they’re so inconsequential in terms of volume, you know, the reorganized blocks that, and often when they are rigor organized, you’re going to, you’re going to end up confirming those transactions later. Anyway. So he, he developed a memory map file system where you’re only appending data to the files and he implemented those files in terms of headers and transactions in what we call hash tables.

Eric Voskuil (00:09:31):

You know, the primary use of hashing in software development is, is for table lookups and not for the way we think of it in Bitcoin. And these hash tables give you generally, you know, close to constant time lookup for data. So very in other words, it doesn’t matter how big the file gets the cost of looking up something in the, in the file remains constant, which is ideal when you’re looking at code complexity. So he achieved, you know, constant time lookup a great greatly simplifying a lot of code. And but it’s a trade off. There’s a, there’s downside to that architecture, which we still live with and hoping to evolve out of at some point. But th the trade off is, is essentially one of speed for fault tolerance, right? So if you’ve, if you shut down your store in the middle of a ride or something, you could corrupt the whole store, so we can detect that, but it’s very hard to prevent.

Eric Voskuil (00:10:48):

But if you’re running a server and you want high query speed, which is what he was going for it’s ideal. So it’s a extremely fast query server as a result. So it’s one of the things he did. In other words, the use of zero q as a client server interface, as opposed to what you see in Bitcoin D, which is the a, and then later Bitcoin core, which is the 

Eric Voskuil (00:11:17):

Json RPC interface, very, very you know, it’s not securable, and it’s slow

Eric Voskuil (00:11:26):

Doesn’t handle a heavy load. So really designed to sit behind, you know, your, your firewall and feed another machine, which is going to serve up your data. And that’s kind of how companies tend to use it. So a libbitcoin is designed to itself. They’ll sit on the internet and provide rapid securable query service. Does that very well, not so great as a wallet server because people unplug their computers all the time while they’re doing things. So it varies, it’ll lose your database that way with libbitcoin.

Eric Voskuil (00:12:04):

When I started doing more advanced work in the Bitcoin couple of the things that I did was that I was very excited about was one eliminating the mempool.

Eric Voskuil (00:12:22):

Amir had actually limited, had not implemented a store database of UTXOs, and but he did have a, a block pool and did have a memory pool. And I was successful in eliminating both the block pool and the memory pool. So we don’t have problems like you know, running out of memory and having to start dumping valid data, because you’re getting low on memory. And therefore we don’t have to track memory usage. We don’t lose, we don’t lose valuable data that can potentially be very valuable to miners. So working towards being a very optimal mining server as well.

Eric Voskuil (00:13:06):

So we have a, we have what we call a transaction pool, but it’s not in memory. And we never lose transactions as a result. And one of the things that happened, I don’t know if you remember, but I probably do when the, when the price spike to a couple of years ago transaction volume got really intense. And the backlog in the transaction pool got very, very high. And there was a company in a Canadian company that had written a, a high performance web front end on directly on top of Bitcoin. So no intermediate store database or anything just, just right running queries directly to the Bitcoin. As the backend for a block Explorer, the thing was called I think it’s called Voyager. And the during this period implementations that were running block explorers on, on Bitcoin core started failing because of, you know, presumably because of the, a large number of transactions that were hitting the memory pool, but we didn’t have a memory pool.

Eric Voskuil (00:14:24):

So the the query speed remained constant and the servers remained up. It was lightning fast and never had any problems. And then I remember the, the guys who wrote it it was Canadian coin. Yeah. Ken coin. It wasn’t a coin. It was it was an exchange, I think they they were commenting on how they, you know, they weren’t experiencing any problems at all, which I thought was a good validation of the design concept of not just not having a memory pool, so not losing any of the data, but getting off whole performance as well.

Vlad Costea (00:14:59):

Yeah. That’s very interesting to think that a client is much more efficient when it’s operated by miners and exchanges, as opposed to the end users.

Eric Voskuil (00:15:11):

Yeah. Well, I mean, if you’re, if you’re always optimizing for something when you’re writing code, right. These are never clear. Well, I can’t say never. I mean, there’s sometimes there’s clear, clear cut choices that you would do in any case, but typically when you’re looking at performance optimization, you’re, you’re, you’re choosing one thing over another. And Amir chose query service over fault tolerance. And I chose when I opted to eliminate the memory pool I chose to not optimize… I actually think that the memory pool is a D optimization. I don’t think it provides any, any, any advantage. If implemented correctly, storing the storing unconfirmed transactions on disk is is basically using your cheapest resource. The cheapest resource on a computer is the disk spaces is ridiculously cheap compared to RAM. So why you would want to fill RAM with data, that’s going to end up on your disc anyway in the vast majority of cases.

Eric Voskuil (00:16:22):

And that you’d want to have any way, even if it isn’t confirmed yet, if you’re a miner it’s, you know, just, I just don’t see the reason for that decision. I think it was one of, Satoshi’s just kind of just kind of said, well, you know, these are unconfirmed, so we’ll just leave them in a memory, right? Not realizing that you’re going to get, you know, potentially hundreds of thousands of these things from memory, and you’re going to have to start putting them on disk, or are you going to throw them out? And ironically, the computer is automatically going to start start moving that memory often to disc, once memory starts getting full anyway, using virtual RAM, which is not optimal. So by immediately taking any valid unconfirmed transaction and storing it in your, in the same transaction store that you’re storing confirm transactions, you’ve already got them stored.

Eric Voskuil (00:17:08):

So when they show up confirmed, you don’t have to do anything with them. And you can store any number. So the trade off there is that you may end up storing transactions that never get confirmed. Right. And I think that’s the reason why he used a memory pool. Well, we’re not going to store them on disc cause that’s permanent, you know, or we have to delete them and that’s costly. Let’s just store them. And Ram thing is really just when you look at the numbers no transactions generally eventually get confirmed. So you might as well store them. And the cost of storing an unconfirmed transaction is so low that it’s not worth optimizing disc space for. Right. so the other theory was that if you could, if you can sync the chain fast enough, you can, you can just simply wipe out any unconfirmed transactions that are lurking in your store by rethinking the chain, right? Anything, anything that’s been, been stored unconfirmed for a long period of time. If it doesn’t show back up on the network, you’re not going to see it. So yeah, you can clean up just by rethinking. So we prioritize that instead of know, prioritize complex optimizations to keep memory usage low anyway, probably a, probably a bunch of technical mumbo jumbo to your listeners, but interesting stuff to me,

Vlad Costea (00:18:28):

It also makes a lot of sense though, because usually Ram memory is used because it’s volatile. So you can clear it faster. And also it has quicker access times can use the Ram a lot faster than your hard drive. But in the case of Bitcoin, you don’t have such large amounts of data. You’re not loading up, you know, graphical engines that require a lot of memory.

Eric Voskuil (00:18:50):

But if you’re storing, you know, transaction pool and memory, it is a large amount of data potentially enough that you have to actually throw out transactions. Initially we had a, we had a circular buffer, so we’d throw out the old transactions, right? But that can lead to problems. Now you can, you can, you can end up without the required prerequisite transaction, parent transactions for ones you’re already holding. And you, you, you can basically invalidate your, your transaction pool. So then it gets complex, right? When you start throwing transactions out, you have to throw out ones that are not dependencies of other transactions. So, so you have this complex process of trying to try to maintain the amount of Ram that you want to use. But Ram is really on a computer it’s scratched space, right? It’s working space, working memory it’s not intended to be persistent. And if you use it that way, it gets used up pretty quickly. So…

Vlad Costea (00:19:52):

I think you have touched on a very sensitive spot there. And a lot of people will find it blashpemous that you said, that’s the tool. He was not a professional programmer or a coder, but that’s actually the reality. And a lot of people don’t realize it when they first get in the space, they deify Satoshi and imagine he is some sort of God of coding and economics and cryptography and whatnot, but there’s a lot of development that’s needed. And actually, if you look back in history, you’re going to find out that Hal Finney has fixed a lot of issues with the code. And there was an early inflation bug, which produced a few billion Bitcoins and they had to hard fork the network.

Eric Voskuil (00:20:36):

So it’s not a knock on Satoshi. I mean, the fact that he got it done without being a professional programmers is pretty impressive. And also, you know, coding it while you’re figuring it out is it’s a necessary prototyping process. And the mistakes will be made. That’s why, that’s why, you know, rule number one of, of software engineering is don’t ship your prototype because there will be problems. That’s why you do it to find those problems and to find the right design and to figure out what to optimize later. But I think not being a, you know, a professional programmer or software engineer Satoshi kind of fell prey to one of the early patterns that are pretty, pretty common in tougher development, which is premature optimization. He was optimizing for all kinds of things. But when you look at it, a lot of those things were… It was premature to optimize for them.

Eric Voskuil (00:21:37):

How did you step back and look at the design? You would have changed the design. It wouldn’t have needed them, or they were actually suboptimal or they were actually just bugs. I mean there are, there’s actually a consensus. It, you know, you look at it as a bug, it’s just, it’s just nonsensical code, but but it remains consensus and trying to, trying to phase it out. But you know, it was just an optimization attempt to save a few bites here and there and it just didn’t work. It didn’t make any sense. It’s called find and delete. So yeah, it’s, it’s just a process that everybody goes through. It’s just that Bitcoin kind of took on this life and certain parts of it became unchangeable without, you know, without forking. And they’re trying to, you know, people are trying to face those things out, using soft works.

Eric Voskuil (00:22:40):

So that’s good. I mean, a good, good to do, good to improve things. One of the other design aspects of the Bitcoin is that we don’t, we don’t implement new consensus or network features and eliminate the old ones. It’s kind of a, it’s an, it’s an attempt to maintain the history of, of the protocol so that you can go into configuration and set the protocol level you want operate at, and it can operate it at that level. Both in network communication and in consensus. So for example, in the Bitcoin, if you want to turn on a soft fork, you just, you know, by default the ones that people are running are all turned on and some that are you know, pendings know, get implemented and have them turned off. But if you want to roll back to say, you wanted to disable all the soft forks and sync the chain, you should be able to do that.

Eric Voskuil (00:23:55):

And then we do test that sometimes. So the way other nodes typically are implemented, it’s certainly easier, especially given that the way they’re designed to just you know, implement the new code code and delete any other code that would have been required for operating at a lower protocol level. This tends to give us problems when for additional complexity, when people assume that all nodes are implemented that way, where they only, they only implement, you know the latest forks and delete everything else. But we don’t, we maintain, maintain the entire history back to, I don’t know how many, I don’t remember anymore. I haven’t been in the code long, so long. It’s hard to remember, but the protocol level goes pretty far back. I mean, certainly not to first version, but kind of the first stable, you know, no more hard forking versions.

Vlad Costea (00:24:58):

So I gotta ask you something which goes back to your background. Would you say that you’re more of an economist or more of a coder?

Eric Voskuil (00:25:06):

Background wise? I have a computer science degree. But right after college, I went into the Navy and I was a pilot for 10 years. So you know, I, and I don’t, I don’t have a degree in economics but I’ve, I’ve studied that longer than I studied programming in school. So I don’t, I don’t know. I mean, I don’t call myself an economist. I don’t really call myself a programmer either. It’s just, just do things I like I’d say my, my my understanding of economic theory, you know rational economics, I call it because Austrian is a little bit too broad for me, but same idea is as you know, advanced as my programming ability. Certainly not. No, I wouldn’t be qualified to teach anywhere, but that doesn’t bother me. 

Vlad Costea (00:26:16):

Not that it matters anyway, because I can think of people who have the qualifications in the form of diplomas.

Vlad Costea (00:26:25):

They don’t know much other than what they have been told and they haven’t researched much into it, but they’re going to perpetuate what they have been taught.

Eric Voskuil (00:26:34):

Yeah. Yeah. And that’s, that’s, that’s true very much in programming too. I mean, some of the best programmers, you know, people that didn’t, didn’t learn in school at all it’s just something you like and you do, and you get a lot of experience with and you learn and, you know, you spend, you just spend the time and that’s kind of, that’s really how I learned programming in the first place. I, I knew how to code pretty, pretty pretty advanced stuff before I got to college. And, and the programming courses are, were fairly straightforward. You know, the advanced math and physics and stuff was a little bit more challenging for me, but the coding was easy. And you know, economics is kind of in the same thing. I like it. I, I I like, I like kind of the nexus of political and economic theory.

Eric Voskuil (00:27:23):

They’re, they’re, they’re very closely intertwined. And so I just, you know, kept reading and studying and learning. And really when I started, when I, when I decided I wanted to formalize a lot of my understanding, I went and read a book I had been putting off for years. Cause it was just so big. And I, I just don’t like to, I just don’t like to read big books. So I finally went and read “Man, Economy, and the State” by Rothbard. And that was that helped me clarify a number of things. It’s, it’s a very good work. If I find, you know, Mises through “Human Action” and it was just, it was just a difficult to read that doesn’t, it doesn’t write clearly. It’s not concise, you know, it’s it’s an acronystic and he makes mistakes and Rothbard perpetuates a couple of those mistakes and, but tends to clean up, I think a number of the things at least in terms of descriptions you know, after, I didn’t, didn’t add an awful lot of truly new material. I think his work on monopoly was, was his, but but it’s definitely a better read. So I really enjoyed that. And it was after that, that I really felt like I had a more complete understanding, at least in the areas where I was interested.

Vlad Costea (00:28:54):

You know, a lot of people in this space, there are some sort of armchair economists and they like to brag about what they read, but at the same time I saw you in Riga and your understanding goes a lot deeper than most people. You made a whole talk about the importance of credit and that’s something that’s not really mentioned. They speak of a society where we only use Bitcoin and at the same time, promote hoarding, large amounts of money, whereas nothing gets produced as long as you have no credit. Right,

Eric Voskuil (00:29:29):

Right. I mean this without, without, without credit, there’s no production and there’s no products and everybody dies, right? It’s it a nonsensical position, but people just, some reason don’t think of it that way. And it’s, you know, it’s very clear if you read and understand you know, Austrian economics, you’ll, you’ll get it. So I mean, I’ve, I’ve had the experience of, of reading, you know, like the textbook or, you know, something I’m really not deep into and getting, getting to the end, or even getting past one page and just going, what did I just read? I didn’t, it didn’t really sink in at all. And I made it a point when I read “Man, Economy and State” because really Austrian economics at least Misean economics is based on it’s an axiomatic system. And in other words, it’s a series of proofs.

Eric Voskuil (00:30:26):

You start with some assumptions, humans act, you know, people prefer things to now more than later you assume those things cause you can’t prove them. And then you, then you infer from those where you deduce from those, what, what must be true. So these are, these are actually, you know, just analogous to a geometric proof. And so when I read “Man, Economy and State”, I read every word, you know, carefully. And I made sure that in my own mind, I could verify the proof that I was reading. And if I couldn’t, I would spend as much time as it took on a page or, you know, a section or chapter till I got it. And there were, there were one or two places where I didn’t agree. I was like, “Nope, that, that hasn’t been shown, right?”. And I’m, I’m actually would take me, I don’t know if I could even remember off the top of my head.

Eric Voskuil (00:31:29):

But if people read, you know, cover to cover something like that and they didn’t take that approach, I don’t think they would get much out of it. They would, they would maybe remember some high level ideas, but couldn’t really understand where they come from. And that’s what I see more often than not is just, you know, repeating terms and phrases without real understanding. But if you, if you, if you treat it like that, like, you know, I have to, I have to follow the, the line of reasoning and be able to prove this as opposed to just reading something that somebody said and accepting it’s true because they said it you know, you’re going to get a very different understanding and then,

Vlad Costea (00:32:19):

And do you see this? Sorry, I interrupted you, but you see this a lot and lots of fields. And I can think of what happened when I was in college and I did political science and we were being taught such advanced concepts about how government works. And unless you see a practical example and you can point to it and say, you know, that’s one case where it happened. It’s not going to make much sense in your mind. And I think it was the same with the Bitcoin, with the development of Bitcoin. Because in theory, you had all of these scenarios where I can think of, was it the 2013 fork or 2014? It doesn’t matter. The hard fork, they, they interior, you could predict that that type of scenario could happen, but it wasn’t until it happened that they took the necessary precautions because in reality, human nature is kind of reactive. We can be proactive, but most of the cases we are not.

Eric Voskuil (00:33:21):

Yeah. Yeah. I mean one thing that people have to be careful about when they talk about Misean economics is that it is an axiomatic system. So it is not in any way based on observation. And that’s, that’s, you know, you mentioned being able to observe something as you know, understanding and observation helps with understanding, you know, the point of being able to prove things is so that you can understand what’s happening and observe it. But other schools of economics are largely based on empirical study. And Mises rejected that or flat out he, he said that, you know scientific study cannot predict economic behavior cause it’s human behavior and humans have freewill. They changed their minds, they do whatever they want. So there’s actually, Rothbard also writes up a section at the beginning of “Man, Economy and State” talking, you know, rejecting what he calls history, which is this idea of, you know, looking at history and predicting the future.

Eric Voskuil (00:34:29):

In my opinion, neither of them does a great job of that explanation, but it really, it really sunk in with me. And when I say, when I say that I didn’t really do a great job they’re describing an axiomatic system system of logic and proof. But, and we call time preference and Axiom, it’s the Axiom of time preference, right? Human action is also an Axiom and you’ll, you’ll find out like a Wikipedia article on the Axiom of human action, but they don’t describe them clearly enough as axioms, they call them like universal truths or things. That must be true. And that’s just, they’re not, they didn’t prove them. Right. Try to prove that humans act right. Well, maybe we do, maybe we don’t, let’s just assume we do. Right. And then maybe people prefer things now more than later, maybe they don’t, but we’re going to assume they do it, start with those assumptions.

Eric Voskuil (00:35:24):

All right. And then let’s see what we can prove from that. So I think more formally describing because I see people that have read these books and completely missed that, that this is an axiomatic system. This is not based on observation at all. And and then they make arguments that are based on observation. This must be true because we see this or we see that. And like, that’s not what makes it true that makes it maybe repeatable but not truth. Right. So I would really like to see you know, more formalism than was presented in, in those great works is just the next evolutionary step. You know, it’s hard to, it’s hard to speak of speak economics in a symbolic language like mathematics, right. Or geometry, right. You’re dealing with symbols and relations that people can people think of as form a lot.

Eric Voskuil (00:36:28):

I mean, there are formal logic, right. But you can do the same thing with words. But words, you know, don’t look as formal and people don’t quite get the same feeling. If they’re not really understanding what they’re doing. And then sometimes the, the writer, the author of the, the economist, who’s trying to do this kind of slips into, in formalisms and makes mistakes which Mises did. And you know, a couple of, at least two or three times and Rothbard perpetuated those mistakes. And then we, then we see them and, and you, you look at the proof and you go, well, that’s a flood proof. They didn’t prove that. So that’s an error. So I’m getting at is that, you know, this, this, this, this distinction between an axiomatic system approve, which my assists laid out Rothbard clearly adopted is, is not, is not it’s not well understood by people who read it. It’s not always understood that that’s what they’re reading.

Vlad Costea (00:37:41):

Yeah. And I think you have mentioned something very interesting there that Austrian school of economics rejects, or at least Rothbard, as you described, rejects the idea of looking at history and trying to predict what’s going to happen.

Eric Voskuil (00:37:59):

Mises’ major contribution, his main contribution to economics… If you look at it, most of the stuff he writes about is stuff that had been written before, but his main contribution is just explicitly rejecting empirical economics. Right?

Vlad Costea (00:38:18):

Go to the part about stock to flow S2F, which seems to be a popular theory right now in the Bitcoin space. And they say “Hey, look, Bitcoin has gone 10X after the halvings. So it should perform same way, right? Because there seems to be a pattern here”.

Eric Voskuil (00:38:39):

Right? That’s classic, you know, empirical economics, right? We, we observe these things, we draw some lines, some chart, we extrapolate those lines. We use complicated, you know, mathematical and statistical analysis to do that extrapolation for us. But that’s what we’re doing. We’re extrapolating history into the future. And that is not Austrian in any way. That is completely some other kind of economics, right? It may be, it may be good math, but it’s based on flawed economics. What economic theory, rational economic theory, which is the term I use for Misean kind of axiomatic cause Austrians broaden Mises, right? It goes back further and it extends out broader. And there are certain people that call themselves Austrians that do empirical economics. But when you look at rational economics, Misean you know, you have to be able to derive this theory from first principles, from the axioms or other theorems that have been derived from those axioms using pure reason.

Eric Voskuil (00:39:40):

And when you look at a price prediction, you look at, you know you look at an assumption, right? It’s not derivable because you know, prices is a function of supply and demand. Not just supply, it’s quite easy, right? To reject that if you’re not considering demand, then you have a flawed theory. And if you try to say, well, demand, what people will demand is based on the fact that they like fixed supply. Right? Well, there’s another theory. There’s another idea in Austrian economics, in rational economics, that value is subjective. It’s in a person’s mind and that cannot be derived from anything. That’s what subjective means, right? It’s not drivable. And this is precisely why we have the Axiom of time preference. It’s an assumption we accepted as an assumption because we can’t prove it.

Eric Voskuil (00:40:48):

We can’t prove that people prefer now more than later, even we assume it. And we accept that assumption is reasonable and people that are working in that system have accepted that assumption. But if you say, if you say that, well, people will prefer this because it’s fixed supply, right. You’ve just made an assumption. You’ve added another Axiom to the, to the system. Right. And I’m sure you’ll be able to find a person that doesn’t accept it for that reason. Then what does it do to your theory? Right. It’s observably false, but you know, you can certainly assume it.

Vlad Costea (00:41:30):

And there’s a lot of assumptions that are being made and a lot of projections, and I can understand their purpose as self fulfilling prophecies. They hope that is going to happen. And they think that if they talk about it all the time it’s going to catch on and people will believe in it so strongly that they’re going to make it happen. And I have seen people on CNBC and that’s the worst of all examples. I think that’s the lowest intellectual denominator.

Eric Voskuil (00:41:58):

That’s entertainment.

Vlad Costea (00:42:00):

It is entertainment, but they speak of stock to flow and they basically borrow all the jargon that they find on Twitter to basically promote whatever they’re trying to promote.

Eric Voskuil (00:42:12):

Yeah. I mean, price, price may skyrocket and you know, may continue to follow this graph who knows, but you can’t. The only points I ever argue is that this is not proven economically, right? This is so if somebody wants to say, well, you know, this is economic truth, I would say, well, no, it’s not. I mean, you can, you can make some other assumptions. You can do what you want, but it doesn’t follow. Misean rational economic theory at all, it directly contradicts it. That’s the only point I make: if you’re in that school and you want to say something is true, you need to be able to prove it within the system. If you haven’t proved it, it hasn’t been shown to be true.

Vlad Costea (00:43:08):

That’s a very strong statement. I mean, I feel like I should just cut these last five minutes and post them on Twitter for everyone to listen, but I’m not sure who’s going to listen because it seems like people just want to believe what they want to believe in.

Eric Voskuil (00:43:22):

Well, I mean, I, you know, I call it cheerleading, right? What you were describing earlier, which is people, you know, trying to rally other people to buy and drive price up and, you know, fun stuff like that. I wish people would actually, you know, find ways to increase adoption of Bitcoin as money and not just try to drive the price up because the value proposition of Bitcoin is as a money, right. And as a way to avoid taxation on money yeah, you, you could certainly do that by avoiding inflation, but the money’s not worth anything. If it can’t be traded for something that you value. So another, another theory that people have is that you know, Bitcoin can store value. Well, that’s also a contradiction, you know, value is subjective. You can’t store what’s in people’s minds.

Eric Voskuil (00:44:17):

You can only store stuff. What it’s worth is based on what people will trade you for it in the future. And you don’t know what that will be. So nothing stores value money’s a medium of exchange and it can be stored. So, you know, it’s it worries me a little bit that people accept these ideas, people that, you know, don’t really understand economic theory at all, just accept these ideas because they’re repeated so heavily. You know, my value will always be there. Well maybe there, it may not be there. You know, it’s, there’s nothing that’s going to guarantee you that – not Bitcoin, not gold, but not anything. It you know, that’s what we would like to see that you can’t prove that

Vlad Costea (00:45:11):

Then our first interaction on Twitter, you sent a link to your github repository where you, I suppose you have answered all the questions that have come to you in the last few years. And it was an article that you titled “Lunar Fallacy” and you made it sound quite scientific, but it’s basically about the concept of always going to the moon and always pumping the price.

Eric Voskuil (00:45:41):

Well and the theory is that basically the idea is that the, the idea of going to the moon is that the price only goes up over time. Right. And it will go up perpetually forever over time. And that’s disprovable it the price of say, BTC cannot go up forever. And, and that it’s provable why that is the case yet. People still want to believe it. It’s not provable where it goes, you know how, how far it goes, but it is provable that it can’t go up beyond the point where it starts getting sufficient fees because it’s going up, right? Because, because you’ve got more demand for it, implying more usage of it, implying more fees to use it because it has a fixed transaction rate. Nothing else in the world has a fixed transaction rate with competitive fees to transact.

Eric Voskuil (00:46:47):

So Bitcoin is unique in many ways, but people tend to ignore the ways that they don’t like. So you have fixed supply, but you also have fixed transaction rate and competitive costs to transact. Which means the more people are doing it, the higher the price to transact goes up. So the idea is, you know, is that you, you have what you want in a money, which is stability, right? You have, when, when demand increases for gold, more gold gets mined when demand increases increases for anything more of it gets produced, right, except for Bitcoin. But that keeps price stable, which is what you’d prefer in a money, making it a suitable unit of account. Bitcoin is also stable in that when it gets to the point where its usage is high enough, its cost to use becomes prohibitive, which means as usage increases, instead of more getting mined, less gets used. And that’s, this has the same effect instead of an increase of supply to offset that increased demand, you have a decrease in demand to offset that increased demand. And the decrease in demand has the same effect on prices increase in supply, but people just ignore that and assume that no matter how much it’s getting used price will continue to go up. And that doesn’t add up. That was, that was the point of the lunar fallacy is that Bitcoin is a stable money.

Vlad Costea (00:48:34):

So how, and when did you come up with the concept of Cryptoeconomics?

Eric Voskuil (00:48:41):

Well, the term was floating around before I used it, but it didn’t have any grounding. Right. It didn’t, it was just basically whatever anybody thought about economics and Bitcoin or other things like Bitcoin, they would label crypto economics. And I decided that I would like to see… So there’s new, there’s new concepts in Bitcoin. It’s very unique in, in some ways economically, you know, ideas that haven’t been explored before. And there’s also just a lot of basic economic theory that, you know, supports it and supports its understanding. And so I wanted to see rational economics applied to Bitcoin but had everything really, but, but applied to Bitcoin well, and I decided to kind of use the term crypto economics to as an, as, as the encompassing term for rational economics supply to Bitcoin to give that, to give that term some grounding and to give the community a place to go to look for answers, right?

Eric Voskuil (00:49:54):

Like, like you can, there’s a, there’s a lot of places to go to get like this could conferences. You know, scaling for example is a great conference when you want to vet ideas and have people challenge them. You know, Bitcoin dev is a great place to go for challenging protocol ideas and seeing how they hold up. But there’s really, hasn’t been a home for economic theory. There’s just mostly most stuff that passes as economic theory is just cheerleading or price prediction, or, you know, non Austrian type stuff, anything that deals with, you know, various assumptions that we’ve talked about. So anyway, just, just trying to create a home for that. And once there was enough material there, people started asking for a book. I said, well, you know, why don’t we put the book together and create a conference? And my idea was to take the, I take the kind of rigor of scaling Bitcoin from the technical side and the, the the great environment that I’ve experienced in Riga every year in terms of conferences and kind of put those together and have a, have a, have a good community event where we also have kind of rigorous economic theory presented and discussed.

Eric Voskuil (00:51:15):

So anyway, that’s, that’s kind of in a nutshell, the idea behind cryptoeconomics is to try to create this home for rational economic theory and Bitcoin. So

Vlad Costea (00:51:28):

Tell me more about the book. How long did it take you to put it together? How long did it take you to write the articles that can also be found in the github repository? And how would you regard it in hindsight? Because when you first started, you just wanted to answer some basic questions about economics, but then it all came together. Right?

Eric Voskuil (00:51:55):

I don’t feel like it’s ever really come together, but it just started writing, you know, things that were interesting. A lot of it was just when I’d see something that didn’t make sense, I would point it out. People keep repeating it. So I’d write it down and link it. And I got enough of those together. And then I, you know, I, I kept, I kept trying to solve different questions. I’m trying to find a way to prove different things. And you know, for, for example, I, I, I remember musing over the question of census, your persistence for like a year. Before one day I was just walking on the street and it just came to me, I’m like, Oh, this is so freaking obvious. I can’t believe, I can’t believe it hadn’t occurred to me or anyone else that I know of before, which is, you know, the idea that you know, the question is what pays for hash power when there’s a 51% attack, what pays to overpower the censor, who’s going to do that?

Eric Voskuil (00:52:53):

Right. I think Satoshi implied somewhere that the community would band together and do it well, maybe they mail, maybe they won’t, but you can’t prove that, right. You can’t, you can’t you can’t expect it either. You can’t expect it. People act not in their own interest you know, donate money to this cause. So the question was, well, if that can’t be assumed, people are, you can’t assume that people are gonna act you know, in terms of donating money to save this money then how is it, how is it self-sustaining right. I realize that, well, yeah, obviously fees do that, right? Fees rise. And when your transactions are getting censored, they’re not getting confirmed, which means you raise your fee and as you raise your fee and you don’t get confirmed, it continue to rise until now there’s enough incentive for people to mine illegally.

Eric Voskuil (00:53:50):

If it’s, you know, it’s a, if it’s a state 51% attack, they’ll mine, those higher fee transactions, cause it’s more profitable. And there’s an incentive for them to do it. And this is incentive for people to pay for it because they want to get the transactions confirm. So in that sense, Bitcoin has, you know, an economically rational explanation for how it can be censorship resistant. The open question, the thing that can’t be proven is how much people will be willing to pay and how much a, a censoring, you know, 51% attacking, you know, state for example, would be willing to suffer in terms of losses, tax, tax losses, essentially to continue to censor at 51%, despite those higher fee on a higher fee censor transactions getting confirmed. So value objective, you can’t deter. You can’t know who’s going to place more value on which side of that problem, but at least, you know, what the problem is, right. If the value is great enough to people, they will do it. I was great enough to state. They will do it and eventually one is gonna win out.

Eric Voskuil (00:55:05):

So anyway, that is just an example of like one of these ideas that was just kicking around. That’s kind of unique. I mean, that one was kicking around for a long time. I just, just kept thinking about it and we just came to me and now I see people talk about it all the time, which is great. I hope we can do more of that. Get people to think rationally about these problems. You know, because up until that point, the only thing people would say, although we just hard for the money and I wrote up the flaws in that, that idea quite a bit before I found a better solution to that question or a better answer to that question. So anyway, I, I just would write these topics and think about problems and put them together. And I just, sometimes most of them were written on my phone a lot of times on a plane or in a coffee shop, just just had an idea.

Eric Voskuil (00:55:51):

I had a discussion with somebody and I just read all down and post it. And I went back a couple of times and just tried to rationalize terminology and, you know, clean up the text a little bit and just kept massaging it a little bit here and there. And, you know, conference time came along and James Chang was the guy that worked on Bitcoin for awhile. When he first got started he, he made it pretty significant to publish the book. And he did all the graphics that are in the book. They’re not on the Wiki, that’s the one thing that’s on the Wiki is it, is this the presentation graphics that he did? But he wasn’t able to get the book finished before he went off and got some work working I think chain code labs and then more after that.

Eric Voskuil (00:56:46):

So eventually I hired somebody to publish it so that we’d have it for the conference. And James was nice enough to let us use all of the artwork that he had done. And so his his name is on the cover as well, I think. I mean, yeah, yeah. So he also did some, some reviewing and, and editing and, and challenged one of my topics. He couldn’t, he didn’t, he didn’t get it. And and as I looked at it, I realized he was right. And then he went and rewrote it use a totally different argument, which actually improved my improved the content and improve my understanding quite a bit. So it was just, you know, it’s just a process of writing topics until there was enough there to show the book, but it was really all, I, I just hired somebody to, to just put it in a different format.

Eric Voskuil (00:57:50):

It’s all. So just these random topics I wrote, we had a very hard time even organizing the chapters into, into like groups, because they’re not like it’s not sequential. It’s just all randomly interlinked to try to group it somehow rationally. So it doesn’t flow from one end to the other. And it’s much better if you can click on the links and jump around. The book version just has the, the chapter references and the links in the footnotes. But I’m happy with it. It’s like the ideas are there and that’s, what’s important to me. The concepts are there. If I had to do it over again, I probably would do it very differently if I was going to try to write it from start to finish, but I don’t think I could do that. I mean, I never intended to write a book, you know, and I’ve thought about writing other books and never, it just never sit down and do it cause sounds like drudgery.

Vlad Costea (00:58:52):

So it’s a book of economics, it’s called Cryptoeconomics, but how is it different from other works that are related in the Bitcoin space. And possibly the most famous one of them is Saifedean’s “The Bitcoin Standard”.

Eric Voskuil (00:59:10):

Yeah. well, it’s different because it’s not written it wasn’t intended to be a book. It’s one way it’s different, right? It’s just a bunch of random topics that got together. And the focus was not on writing. A narrative focuses Friday is writing answers to questions. So, you know, writing little miniature proofs of, of things. And so the, the writing, I don’t know if you read the book, it’s, it’s very, it’s very different style of writing than most people are used to. And it’s not how I normally write. I actually re write very informally, but when I wrote this, I, I took to heart the idea that these are proofs. So the text is as minimal as I can be and get the idea across. I don’t repeat myself much. I don’t use a lot of empirical evidence. I use, I use, yeah, I use empiricism to explain things sometimes to give some history but not to prove anything.

Eric Voskuil (01:00:14):

And so it’s very terse. It’s very formal in a way, and it can be very hard to read. People have told me before, like, you know, I read this and I don’t get what you’re saying. And I’m like, Oh yeah, I’m not surprised. Sometimes I read my own stuff and I don’t remember what I was thinking. But so again, it wasn’t written for a book audience, you know, if there is such a thing, it was just written for myself. So I can get the ideas down and anybody wanted to go to the Wiki and, and read by thought. So I, I rationalized having it in the little Bitcoin Wiki because somebody asked me, why is it there? I’m like, well, it’s just easy. I was lazy, but, but but I was able to, to, to what’s it called?

Eric Voskuil (01:01:02):

You know, backfit a story which was that, you know, we’re working on the Bitcoin and how do we know what we’re working on? Right. Like we were doing all this work and we should understand the principles behind what we’re trying to achieve and how it works. And so in a way, you know, the Cryptoeconomics goes hand in hand with the Bitcoin as kind of an explanation of what we’re actually doing and how things work and what, and then therefore in some ways what we should focus on and what we shouldn’t really worry about,

Vlad Costea (01:01:39):

It’s really fascinating, you know, because you combine your two jobs basically into something, and there’s a piece of writing, that’s both an expression of your ideas and the manifesto of what you do as a coder.

Eric Voskuil (01:01:56):

Yeah. I mean, I have had the advantage of, of having written all aspects of Bitcoin core code. I mean every, every line of Libbitcoin in one way or another has my, as my effort into it, an awful lot of it, I wrote or rewrote a lot of it, I reviewed and edited and worked with people to help get in, but there isn’t a line of code in that entire pository I wouldn’t recognize. And so coming at writing economically about Bitcoin from that perspective gives me a tremendous advantage because I, I don’t have like a vague understanding of how the code works. I mean, even somebody who’s spent an awful lot of time working in Bitcoin who hasn’t done that level of coding, isn’t going to have a really clear understanding of the code. I can see this just by talking to people who, who kind of, you know, they know their shit, but, but like they will ask questions about how the code works and like guys, you know, and sometimes I forget, right.

Eric Voskuil (01:03:06):

But I do, I do have the ability to jump in there and go, yikes, this is what it does. So I was lucky enough to not only have a background in computer science, but also, you know, I’d started he founded and sold successfully software companies done production quality code, supported Fortune 500 companies where they ran, I know software engineering ended up selling my first company to Microsoft and worked as an architect there for a couple of years. So I understand that, you know, aspect, business aspect, the entrepreneurial aspect, the investor aspect of things and code, but also had spent, you know, decades just reading and studying economic series. So when that started to get interesting to me, I was able to put them together. And I think one of the problems you see with, or weaknesses you see in, in, in different writings on Bitcoin from an economic standpoint is oftentimes there’s assumptions made about what the code actually does.

Eric Voskuil (01:04:19):

Like, what is this system capable of? And you know, like how is it secured? Cause when you start talking about security, you know, that there’s an, there’s an interaction between economics and, and software and you know, cryptography software engineering. And I think without that combined understanding, it’s very hard to do, to put together crypto economic theory. You can put together, some people are far more have far more expertise in crypto or even, you know, Bitcoin development than I do at least, you know, being focused in certain areas. And certainly people that have far more experience with economic theory than I do, but I don’t find a lot of people that have a good level of both. And so I just kind of decided that, you know, it’d be nice if somebody who understood both could put these together in some way, you know, that made more sense.

Eric Voskuil (01:05:23):

So that that’s, I think when you, when you read Cryptoeconomics, you’ll see things where you get very specific about Bitcoin behavior and very specific about economic behavior. And I think when you, when you look at other economic books about Bitcoin, you’ll see that the, the Bitcoin stuff tends to be pretty light. And when you look at technical books about Bitcoin, the economic theory tends to be kind of like, so there’s a limited audience for somebody, you know, reading crypto economics, because you kind of already have to under have a good base understanding of both of those.

Vlad Costea (01:05:59):

Yeah. I can see how that’s difficult because it’s hard understanding Bitcoin is not straightforward. It’s not something that you do in a few months. I don’t think it’s something that you can do in a university course that takes possibly two or three years.

Eric Voskuil (01:06:18):

Yeah, it certainly took me that long. I didn’t, I didn’t start writing about anything about Bitcoin until a couple of years, at least, and the stuff I wrote early on, I just threw it out. You know, I just, I mean, I took some of the ideas from it, but it wasn’t good enough. Yeah, it took me years to get into all of the aspects of the code. And I remember having this like gray areas of my understanding, and I said, I’m going to have to tackle this section of the code because I just really don’t get it.

Eric Voskuil (01:06:54):

And, you know, then I would spend months, you know, coding through some, some new aspect of the code and I do, Oh, now I get it. Now I know how it really works. Before I would just like wave my hands, it was kind of vague. So yeah, just, it just takes a long time. And, and as everybody, everybody has said, who’s been there, you know, you’re wrong and then you’re wrong and then you’re wrong again, you know, and that does, that happens. And I try to limit my commentary to things that I do that I like when it comes to the technology. I, I tend to limit my commentary to the things that I’ve coded in, at least in words, when we start talking specifics, because other stuff, you know, I know at a high level, but I don’t know in detail. And when it comes to economic theory, you know, I’m, I mean, it’s all one thing, right? It’s a system of proof and you can kind of follow the logic and everything, but I tend to, I tend to limit it to certain areas as well. Things that fender interesting to Bitcoin. So yeah, I mean, that’s, that’s important. I think also just to limit your scope to what you know, and to, to extend beyond that. Just if you’re going to go out and learn it.

Vlad Costea (01:08:16):

You received half a dozen questions from people on Twitter and that’s good. It means that, you know, they’re interested in topics that you might comment in a different way from other people. But before that, I just want to follow the topic of this season, which is Bitcoin security. And if you were to advise a new user on how they should store their coins and how they should secure them and how they should conduct their personal security, because sometimes when you go public and you say, Oh, I’m into Bitcoin, you’re turning yourself into a target. So do you have any advice for this sort of both protection of your Bitcoins and protections of yourself?

Eric Voskuil (01:09:02):

Personally, you know, I, I don’t, I don’t I don’t use hardware wallets I don’t have any problem with them, but I, I can’t really advise people on them. I, I I don’t have a problem with them in general. You know, I, I, I was developing one for about a year when I first started out. I learned quite a bit about them in the limits of the technology and the weaknesses, and actually spent a lot of time talking with a guy who sold the company to SEIC. He was contracting with the NSA and a lot of inputs on what the state of the art was. So I find that pretty fascinating. But I did end up… Writing. So I, back when I ran my first software company, I ended up writing certain vulnerabilities, you know, computer computer emergency response team not at Carnegie Mellon, right.

Eric Voskuil (01:10:01):

They keep track of all the vulnerability notices. And I wrote a few of those against a competitive product because you know, they were, you could in further vulnerabilities from their documentation and we got in the spat over it and they sued us. So I’m like, ah, just have cert write these up to confirm them. And they did. And I kinda did the same thing with one of the one of the more popular hardware wallets when first came out and then again, when the second version came out and then again, when the third version came out, they just kept introducing obvious vulnerabilities, right. From their documentation. You didn’t have to take it apart and he just like, read about it and go, well, that’s a problem. And so people put a lot of faith in these things because they’re hardware, I guess.

Eric Voskuil (01:10:51):

I should say that, like, when I, when I looked at Trezor, I didn’t see any problems. I was like, yeah, that’s, that’s kind of stuff that I would do that all make sense, you know? And I haven’t looked very closely recently, but basically when you make something and you call it secure, what we have to do is draw a line around that, right? Like it has these limits. If you can accept these limits, then you’ll get, you know, these are the, these are the results you get and that’s perfectly reasonable. It’s necessary. In other cases, people will describe the limits and they’re completely out of whack with the implementation. And that was kind of the problem I was seeing. So I, I don’t use them because I don’t know, I’m just too lazy. I don’t have any Bitcoin anyway, so you don’t have to worry about it, we had a big boat trip and after the conference in Hanoi and went on and how long Bay, and there was several Bitcoiners there, and it was some terrible, terrible accident on the, on the boat going out to the big boat.

Eric Voskuil (01:11:54):

But I would advise people to not broadcast their Bitcoin holdings. That’s probably not a great idea. I would, you know, I would advise them to keep their keys secret as best they can. There’s a lot of techniques to do them. You know, I, I nothing wrong with the paper wall, as long as he can secure the paper. Watch out for computers that you keep online and your and have access to your keys because, you know, there’s a good chance you’ll get you get some malware and you’ll be out of Bitcoin. I advise people to not keep too much of their Bitcoin in the form of credit for Bitcoin, which means, you know, you’ve got it in some accounts somewhere like Coinbase. So you have a promise and they have your Bitcoin that’s, that’s been shown to be not the best idea.

Eric Voskuil (01:12:49):

And you know, those are the big ones, you know, keep your, keep your secrets secret. Don’t, don’t do stupid things for them and, and, and keep your Bitcoin on your own and, you know, validated and. I don’t know, but, but honestly, it’s, it’s, it’s a hard problem because when it’s gone, it’s gone, it’s no getting it back. And, and when you, when you’re not an expert in software and hardware, you’re trusting somebody this is another problem, right?

Vlad Costea (01:13:33):

Yeah. I mean, I think the last time I had a developer on the show, it was Peter Todd. And it’s interesting that he made the same kind of recommendations. And you also referred to as the most secure of all hardware wallets, not necessarily because it has the best security, but because that’s the most honest and you know exactly what it does.

Eric Voskuil (01:13:56):

Well, that is the best security, right? If somebody is not honest and you don’t know what it does, that’s not great security. That’s the thing about the way Trezor has been developed and marketed: it’s been honest about its limitations. And it’s done fairly simple and reasonable things with this design.

Eric Voskuil (01:14:26):

I believe the first Trezor had a screen on it, right? So you could, you could see what it was seeing. So as long as the Trezor was intact and hadn’t been exploited, you could make certain assumptions if you trusted the people who made it, right? That when you were spending, you were spending to a certain address. It was telling you that.

And there were other attempts to solve that problem without spending the time, money and effort of putting a screen on the device. And those attempts were deeply flawed. And so they would tell you, it had, you know, bank level security, or, you know, it’s the same level of security, of the Trezor, but it wasn’t even close. I’m talking about the Ledger. When the first version came out, it had a solution to this: not wanting a screen problem where you put the USB stick in your computer and you run their software and the software would present you the same prompt basically, right? That this is the address you’re spending to. Well, of course you have to assume the software is not malware, right? That’s the assumption, right? That’s why you have the hardware because you don’t trust your computer. So the malware is prompting you with the address, but in order to solve that security problem, there was a card, a little like credit card looking thing that would come with some numbers, letters printed on it that shipped with the device and they were paired so that it took base 58 characters all of them. And, and the, the, the, there would be a prompt for you to enter I think for the characters from the card and I’m blanking on the specific details, but the, there was, there was, you would enter four characters and that would be

Eric Voskuil (01:16:31):

Essentially validated by the device. And if you didn’t enter the right characters, then you obviously didn’t have the card and the malware didn’t have the character, so it couldn’t produce them. So it couldn’t spend your money. Right. But if you divide 58 by four, I don’t know, it comes out to 14 something. You realize that basically if you use the card a very, very small number of times like 14 then the malware can spend all your money because it now has all the mapping from, you know, the secret characters to the, to the public ones. So that was a pretty gaping hole, which you could discover from the documentation. And, you know, that’s the difference between, you know, what Trezor did and what other people did is they just, they thought through these problems and realized there’s no way for us to do this without putting a screen on the device, at least not any kind of cheap, reasonably easy way.

Eric Voskuil (01:17:29):

So there were couple other efforts to solve that problem by the same company later on. And they had more complicated implementations that have almost the same problem and you know, bootstrapping trust problem. And one was give you another example of a, of a same thing, a hardware wallet, vulnerability, where the secure element was used. And the secure element is basically what you see in, in credit cards now, right? This tamper resistant thing in the card, which basically has your private key in it. You put it in a device and that’s how the device knows that it’s actually your card. And the cost at the time, I actually went to a hardware hacking course in Portland and, and talked to some people that were there, had experienced this. So what would it cost to actually shave this card down and get the secure element and read the secret off the element?

Eric Voskuil (01:18:35):

They said, well, you know, it’s not entirely guaranteed. You might destroy it once to try. And if you try, but, but you know, you probably get it done for about a hundred thousand dollars. I said, well, you, that’s not cheap. Price has come down quite a bit, I think since then, but I even found out it could be done to Seattle where I am and contemplated going out and doing it at some point. But the interesting thing about it was okay, there, it’s fairly reasonable to assume that nobody’s gonna steal your card and spend a hundred thousand dollars to shave it down, to get, you know, a thousand dollars or 10,000 or even 50, or maybe even a hundred, because you might, it might not work. Right. But what if you put the same secret on every card, right? That’s what they did.

Eric Voskuil (01:19:17):

Okay. So advertising bank level security, where every car has got to do different secrets. So you’re only risking what you have the ability to spend with that one card for what, if everybody had the same card and that’s what they did, right? So you just buy one of those cards, shave it down, get the secret for a hundred grand. And now you will know he just put out some malware. Now you own everybody’s Bitcoin. That’s a big difference. And that’s, that’s what I mean by not really thinking through the security architecture. And in actuality at the time there were four batches of secrets and it was advertised in documentation. That that was the case. So basically you would own by shaving one card, you know, the fourth of everybody’s Bitcoin that was on those cards, if you, if you’re able to put some malware on their computer. So yeah, so these are things that were denied and then discussed with me online. And there’s a record out there somewhere of these discussions and the company just kind of kept doing it until they came up with another version and people ignored it. So I haven’t looked at these things in quite a while. But I never discovered anything like that with the Trezor. And that’s what made me happy about it.

Vlad Costea (01:20:30):

I guess this is why I prefer to have developers and people who actually understand how stuff works, as opposed to marketers will tell you, Oh, buy this it’s the best ever. And I’m telling you, this is innovative.

Eric Voskuil (01:20:44):

Yeah. This is what banks use. You should buy it, but they use it differently. Yeah, yeah, you’re right. I mean, there’s, I mean, you’re in business, you gotta market, you gotta tell people, you know, your strengths, et cetera. But but it’s real money we’re talking about. It’s people’s money and you know, you gotta be careful. So I, I, I find it much easier to secure, you know, to, to verify the security of my paper wallet than it is on a piece of hardware. But you know, they, they, they certainly have their advantages.

Vlad Costea (01:21:20):

It should be pretty late where you live. So I don’t want to keep you up past your bedtime. So how about we wrap this up, but maybe ask you a few questions from people who wanted you to answer questions and ask it to be as short as possible. Okay. Because I don’t want to keep you too much and you seem tired and you seemed excited. You said, okay. As an, okay. I can handle it.

Eric Voskuil (01:21:46):

I’m actually, I’ve done marathon call. I think I did a few hours with John. I can’t remember his last name. But I, I’m pretty flexible. And I stay up late, but I’d be, I’d be happy to wrap it up when you’re, when you want to.

Vlad Costea (01:22:03):

Okay. That’s very diplomatic of you. So I suppose the easiest of questions come from Lord Snooty of Bitcoin, and she wants to know what you did with that CB 750 brake pedal.

Eric Voskuil (01:22:18):

What did I do with it? I worked on it today, actually. I ended it up with some three 2,400 and 600 grit, sandpaper, wet sand on the last round and and a wire brush, the hole where it mounts and put it on the shelf to get ready for a powder coating. I don’t know why he wants to know that.

Vlad Costea (01:22:46):

No idea, but he got to receive the answer. So I hope he will be happy. So Victor Erem wants to know, what do you think about, Oh, do you think that hyper Bitcoinization happens and he mentioned that you have been skeptical in interviews and what would be the reason for it not to happen and your reply to find that, and I’ll comment on it. I suppose the most common definition of hyper Bitcoinization is the one that’s mentioned in the popular article on Nakamoto Institute. And that’s the one where it becomes at least to be a reserve currency of the world, if not a mean of exchange.

Eric Voskuil (01:23:33):

Then you got to define reserve currency. Medium of exchange of the world you know what, when is it question, when does that happen or is it possible?

Vlad Costea (01:23:50):

He wants to know why you think it’s not possible because you have expressed some skepticism

Eric Voskuil (01:23:55):

And I, I never, I never say it’s not possible if it’s possible. It is possible. What I say is that there are, there are forces that that maybe make it unlikely, right? It, the, the value proposition of Bitcoin is in, is in avoiding tax. I mean, ultimately all the advantages that we see come from the fact that, you know, we can avoid, say an inflation tax sign. You’re rich, we can avoid border controls, you know, currency controls. We can avoid monitoring so that we don’t pay other tax. You know, basically all these restrictions, I just lumped into one category called tax. So if, if tax is what you’re avoiding, I mean, there’s people that want to collect tax, right. And the easiest tool they have to prevent you from using this thing, that’s avoiding tax and their associated regulations, right.

Eric Voskuil (01:24:57):

Is to just ban it and just say, no, you can’t do that. Right. And it’s a very easy thing to do. And it’s been done to monies before many times around the world. So that implies that it would be challenging, right. To see Bitcoin be both widely used and done. So in the white market where, you know, in other words, with the assumption that it’s completely legal to do all the things that we imagined doing with it possible, but seems unlikely. So, you know, I, I, I refer to big Bitcoin as a black market money, right. It’s, it’s a, it’s a money that works when it’s not allowed. This is what we mean when we say permissionless, right. We, we will not require any permission from you. We will, you know, if you don’t give it, we’ll do it anyway.

Eric Voskuil (01:25:52):

Right. That means your black market from the perspective of the permitting authority. So if by hyper Bitcoin visitation, you meant a lot of use and you weren’t expecting it to be in the white market, let’s say, yeah, that’s very possible. If you’re expecting it to be in the white market, I think that’s a challenge, right.

Vlad Costea (01:26:14):

So mug me, emo Gigi wants to know if your crypto economics book will be available on Amazon and not just if, but when.

Eric Voskuil (01:26:25):

Well I’m working on it through somebody else who’s doing the actual work and that’s going a little slow right now because of all the Rona hysteria. So I can’t really say when, but I can say that I do intend to get it up on Amazon as a Kindle book. That’s the current plan, a Kindle book and a print on demand version. I mean, the contents already available for free right now, so it’s readable, but yeah, I would, I would like to get it done, you know, in the next few months, couple months. But we’ll see things just, aren’t moving very quickly right now. But you know, we got the print version done from nothing to printed in about a month. So if my if my publisher wants to pick w when she’s ready to pick it up, I think it’ll happen pretty quickly.

Vlad Costea (01:27:26):

Also MOG wants to know what you think about privacy projects like Grin and Monero.

Eric Voskuil (01:27:31):

I think improving privacy and Bitcoin is one of the one of the key things that core development really should be working on. You know, when we talk about core development, Bitcoin, we’re really talking about you know, strengthening the properties of the money that make it they give it its value and preserve its value, which is the ability to avoid tax, right. I mean, if you’re a transparent money, it’s not very effective at some types of tax. So I think that’s very important and in terms of implementations, other than Bitcoin I don’t have a lot of experience with them, so I tend not to comment on them. My, my, my general input is that privacy’s important. I will say that I have looked at I’ve looked at some other coins from kind of an investment advisor, you know, kind of give some advice to people sometimes that run funds and do things like that. And, and just looking at the, at the kind of architecture I find a lot of flaws when I look, when I look closely economics laws and also some kind of engineering. So I can’t say anything like that about Monero. I don’t, I really haven’t looked at it. I just, you know, privacy good implementation, not always. Great.

Vlad Costea (01:29:15):

Okay. So what are your main takeaways from the conference in Vietnam that you attended?

Eric Voskuil (01:29:23):

I thought about this one several times today. What a hard question. My main takeaways was, I mean, the big issue with the, with the conference. So it was, it was going along very smoothly. It was surprisingly easy to do everything I wanted to do to get the conference off the ground. And then, you know, then the Rona hit and everybody was, was freaking out and it became very difficult sudden. So, you know, don’t plan the conference during a panic.

Eric Voskuil (01:29:59):

That was a that’s, that’s probably a good idea. I was, I was pleasantly surprised with how many people you know, came halfway around the world at that time to attend the conference. And what a good time we did have that was, that was really C and take away some of the my, my, my takeaways to the conference are more like how to put on a conference. So maybe not though interesting, but, you know audio visual was a little bit of a challenge. We still don’t have the the videos out but they are actually in process there’s approach has been working on them for awhile. There were a lot of problems due to the recording. So you know it’ll be, it’ll be a first time conference, a set of presentations, but it’s all, I think it was all captured and then it’ll all be, it’ll all be legible.

Eric Voskuil (01:31:08):

But I would, I would do that, that part a little differently. I didn’t think it was going to go great cause we were just throwing things together. We, we had, we had a lot of things back out at the last minute because of the Rona. So we lost, we lost our band. I mean, he had to find another one. We lost you know, lost attendees who lost speakers. We weren’t really prepared to do remote audio and we did several of those. We, we had to switch the AV team at the last minute. So there was a lot of, there was a lot of things that probably would have come off pretty smoothly if it wasn’t for that, but now that I’m aware of them, if we do it again you know, that’ll be better. So the takeaway, you know, just, just what to F what to focus on. But, and all it was, it was great. I just didn’t a lot of great people did a lot of the work and made it pretty easy for me, especially the venue and the people that hosted it were tremendous. It was a motorcycle shop. They they took care of most of the local stuff, so,

Vlad Costea (01:32:17):

Okay. So I think another question that’s interesting, but has received a solution lately comes from crypt chameleon, and he considers the scenario where governments balkanized the internet and create a multitude of internets. And how do nodes sync in this situation, and is this a threat to the Bitcoin network? Because there will not be settlements between nodes or how can there be an outside chain to basically monitor the entire situation then sync all the others. But I suppose the Blockstream satellite can solve the solution or the problem.

Eric Voskuil (01:32:57):

If the presumption is that, that the internet is now in, you know, a bunch of independent networks and not an internet, then by definition, that means that these networks are isolated and they’re not syncing and you have different coins, right? You have effectively have different coins. Now presumably the be some way to bridge those networks. And eventually once you did, you know, that there’d be a big reorg on one or the other. Right. so there’s a lot of ways to bridge those, that scenario. There’s a lot of suggestions that people have had. I’m much, much more of a fan of peer to peer solutions you know, crazy kind of peer to peer internets. What was it, Mycelium was one that it was a, I don’t know where that is or, you know, there’s a lot of suggested to these things that like decentralized networks more decentralized than, you know, your cable provider on the other hand, like I wrote it when, when the, when the Blockstream satellite became a thing, right.

Eric Voskuil (01:34:08):

When it was announced, I wrote a kind of a critique of it. It’s not, it’s not a, I don’t think in the book, it is on the Wiki. And I raised some questions and I still have concerns about it because it is not decentralized. Right. and so it puts an awful lot, so it’s meant to solve a few problems and I don’t think it really solves any of them. Well you know, if you’re in the middle of nowhere and you’ve got only one service fighter and that’s your satellite, then you’re completely relying on whoever controls the satellite. And that’s not actually Blockstream. I mean, they don’t actually own these satellites, right. They rent as far as I know, they rent time on them. But even if they did, you know, spaces well controlled by the state and and if they want to step in and do something, they can easily do it just like they could with Coinbase or any other, you know, visible, visible entity.

Eric Voskuil (01:35:09):

So if people could become dependent on it, it’s an easy attack point. So you’re, you’re, you’re putting an awful lot of trust. If you imagine that bridging the entire world, that seems like a really bad idea. Now the, the the counter to that as well, people would supplement it. These were the counters that were raised when I raised these issues, right. They, people would supplement with their own local network, right. Their cable provider or whoever they have, and they’d be able to see the strongest chain. You know, you can always validate, so, you know, what’s valid, but you may not be seeing the strongest chain. And so that gives you, you know, it gives you an alternative, but then again, you’re back to the point of either trusting the central, you know, provider of the world’s blockchain or, or trusting your local cable provider.

Eric Voskuil (01:36:10):

And if you’re, if you’re, you know, you, you have to, you have to kind of question the, the one central one, right? So you’re back to kind of trusting your local provider. It’s, it’s not to me, it’s, it’s better, but, you know, but it’s not significant in my mind, it’s just too much of a, too much of an obvious attack point. I would much rather see, you know, decentralized networks spaces, unfortunately entirely centralized by the state. So anyway, that’s, that’s my that’s my general feedback on it is so you become too reliant on that, you know, space. It can be a problem.

Vlad Costea (01:36:58):

Yeah. I suppose that’s a valid criticism if you’re an American citizen and you know, that United States owns about 90% of commercial satellites in space and possibly military too. So if the threat model is against the U S government, then it’s a valid criticism, but if you’re in some sort of authoritarian country, which shuts down the internet all the time, I suppose the United States can actually be your friend. And that’s why I think that Tor development gets funded because it’s serves the agenda of the U S government.

Eric Voskuil (01:37:37):

Yeah. I mean, Tor was tour was originally developed by the, I think it was the U S Navy, right, as a means for it to communicate privately and it needs to support other people using it so that it has traffic to mix in. And I think, you know I think it, you know, there are issues with Tor and other anonymized hers, but that they’re complex, you know, they’re, they’re, they’re not ideal, but they’re the best we have. And that, you know, there’s people have tried to wed certain aspects of that into Bitcoin. I don’t think that’s a great idea. This is an entirely different and large set of technologies that that need to advance as well. And Bitcoin, along with everything else, you know, is potentially going to become very dependent on them. But you know, I’m kind of digressing on that a little bit.

Eric Voskuil (01:38:46):

I get your point that, right, this, this you know, banana Republic that that denies your Bitcoin access can you know, you can serve people there by having, you know, the one, the one true satellite provider, and, you know, I don’t put it all in the U S I mean, countries work together. You’re talking about a company country that’s adversarial to the U S and and its people. And, you know, I could certainly, if you’re willing to trust other places, it can certainly help. But to me, the there’s, there’s a real vulnerability potentially developed in a scenario where you described a scenario where that bridge is all these independent networks, right, where all these internets have been isolated. And, and now the one bridge is the central point, which is, that’s not a great solution, I don’t think. But there are other solutions to that problem that you know, people have have discussed. And I think over time, those, those things will evolve as, as I think you know, anonymity networks will evolve too. It’s not just Bitcoin that needs these things.

Vlad Costea (01:40:13):

Also crypto chameleon says that privacy is paramount for black market money to survive, but what things would you be focusing on or rank as important to work on in regards to global communication resilience?

Eric Voskuil (01:40:32):

I don’t know, global community, I mean, resilience versus privacy is kind of two different things, right? Public communications, pretty resilient pretty reliable, amazing compared to the good old days. But in terms of privacy, I mean, and indeed media networks are, I think there’s, there’s, there’s lots of people working on them when you, you know, well, outside of Bitcoin as well, not my area of expertise. I’d only say that it’s important, you know, I’m, I just don’t, I just don’t work in that space. I could, I couldn’t tell you, you know, what I think is best.

Vlad Costea (01:41:24):

Yeah. Don’t worry about it. These are just questions from the audience they’re not personal fascinations or anything.

Eric Voskuil (01:41:28):

I wish, I wish I did have expertise in those areas, but I’m not gonna, I’m not going to pretend I do. I really don’t, I’ve used tour. I’ve used ITP. You know I, I understand the general weaknesses and and it’s kind of an arms race and I hope it gets better. Thanks.

Vlad Costea (01:41:50):

The last question for today comes from Mog dynasty. I think I have also asked a couple of questions from him, but it doesn’t matter. I try to cover them all. And he wants to know to what degree you’re worried that retroactive laws will be passed to outlaw current developments in the so-called post honeymoon phase. And why do Bitcoin developers risk this by currently using real names?

Eric Voskuil (01:42:19):

Well at least in the U S and in the West, you know, ex post facto laws tend to tend to not, not get too far. There certainly been some examples, but you know, we’re charged with a crime for something that was legal, that was legal when you did it. Other parts of the world who knows. I mean, if they’re passing ex post facto law, they’re probably in a place where they’ll throw you in jail, just cause I feel like it. So why do people not use pseudonyms? It’s inconvenient and people, some people just want to be known. I don’t, you know, they don’t think the risk is high enough. That’s I follow that category and very public use my real name is my, you know, as my name just about everywhere. Had I, you know, was, I was where I just start over again from where I am now, I I’d consider it.

Eric Voskuil (01:43:14):

But it’s almost like, you know, you know, say Peter Todd, or, you know, he’s a, he’s a, he’s a privacy guy, right. And a lot of people in this space, but they’re also very public about themselves. And I think part of that comes from the idea that, you know, it’s kind of too late for us, but we can help everybody else. And that’s kinda how I look at it sometimes like, look, I’m, you know, I’m like some shit happens. I’m not going to be private, but hopefully I’ve made it better for other people. I guess there’s a counter argument to that, which is, you know, a good example. But I really just, I don’t expect people to do that because you know, like I do, or anybody says, it’s a good idea. They do it. If they want to do it, it’s their choice.

Eric Voskuil (01:44:03):

No, it’s really hard to, it’s just really hard to do, you know, it’s to do effectively and people who understand how hard it is to do a lot of times, they just don’t try it. Cause they know it’s kind of futile.

Vlad Costea (01:44:15):

Peter Todd, it’s funny that you mentioned him because we had a similar conversation, but he spoke in a metaphor and he said that sometimes it’s a bad idea to be, to get off my lawn type of person and be lonely. And it’s good to allow kids to play in your yard because they provide some sort of protection. And if anything happens to you, the kids are going to see. So possibly this is his metaphor for seeing that if he disappears or something terrible happens to him, at least he is public and people will notice, that he disappeared. Whereas in the case of Sitoshi Nakamoto, nobody knows what happened. He might have been killed.

Eric Voskuil (01:45:03):

That’s a very, that’s a good point. Yeah. Peter’s always, always get, gets good points and good analogies. Yeah. Yeah. It’s, it’s, there’s some truth to that, you know, you, you but then again, in some dark corners of the world, you know, famous people would get disappeared or arrested all the time. There was some some fairly well known you know what would you call them? The, the word is escaping me. I know what to mean going on Kong, it just got arrested. I think it was like in the seventies and, you know, outspoken advocate for reform and they just arrested and locked him up. Like it didn’t didn’t stop. So, yeah, I mean, I think, you know, that probably the, the bigger risk is, is, you know, people who are careless about, you know, advertising their wealth or their, you know their Bitcoin and then wandering around in places where people want some. And I think, I think generally people are, are more careful about that than they are about like their own identity and who they are. I mean, a lot of people that work in Bitcoin and have for a long time that probably don’t have much at all. I mean, you know, people have to pay their bills and people might assume they have some, but you don’t really know that’s a good thing.

Vlad Costea (01:46:45):

And some people look out too and they do some background check and they see how long your involvement in Bitcoin goes. And from there they’re going to project some numbers, they’re going to say, okay, so if this person made about $2,000 a month and then come, and that was paid in Bitcoin, then it’s likely that right now, there are so wealthy that possibly it’s, that makes economic sense for me to try to attack them or try to extort the money from them.

Eric Voskuil (01:47:15):

I don’t know. I mean, if they’re making $24K/year, they probably don’t have any bitcoins.

Eric Voskuil (01:47:20):

You know? Yeah. It’s, it’s hard. I mean, people, you know, people people learn it and people have to spend it too. So you don’t know, really know some people that are well known that have big holdings, but, you know, I don’t really know who’s got what cause and I’m around and the people, they just don’t talk about it. It’s good.

Vlad Costea (01:47:43):

Yeah. It’s great. And in the beginning it was this idea of money that’s easy to transfer and the censorship resistance. So the store of value narrative was not really prevalent at the time. Not many people regarded Bitcoin as such,

Eric Voskuil (01:48:01):

No, it’s a money. It’s a medium of exchange. If it’s not useful for that, then it’s literally not useful. I mean, it’s, you gotta be able to exchange it for something to give me anything out of it.

Vlad Costea (01:48:13):

And they actually wanted to have their Bitcoins accepted and as many places as possible because to them, it was a way of validation. It was a way of making people acknowledge that Bitcoin has value.

Eric Voskuil (01:48:27):

Yeah. Yeah. If nobody takes it, it’s literally valueless. I mean, it’s worthless, not worth anything else. Somebody has got to accept it, even if they’re accepting dollars or euros for it, people have to accept it. So you know, I think, I mean, Bitcoin is very useful as a money. It’s just that people have put their own expectations on it. And you know, those expectations are not necessarily realistic, right? Like that it’ll just be this white market money that will wipe out state monies. You know, States have shown pretty, pretty consistently a desire to keep their own monies. And they have a lot of tools to prevent white market usage of other monies if they want to. And they, they do, they use them. But on the other hand, you know, there’s a lot of things that Bitcoin gets used for right now that may or may not be white market.

Eric Voskuil (01:49:26):

And there’s reason for that. Right. I always just example of like, why they have ATM is out in front of surf clubs, right? You have your credit cards, that’s your credit money, right? Your, your account money. And then you have paper money and, you know, they have different use cases and people will take their credit cards, gets a paper, money, go in what you got a credit card. So, you know, Bitcoin’s kind of the same thing, people people want to send money across borders and not deal with currency controls. You use Bitcoin, it’s easy. I mean, I use Bitcoin quite a bit during the conference because, you know, it was an awful lot of international payments in both directions. I was paying for stuff and in in one country and, you know, getting the book done and the conference done and people are paying for attendance fees and stuff like that.

Eric Voskuil (01:50:17):

And it just so much easier and faster than wire transfers, you know, international payments. And you know, I, people like, well, when’s Bitcoin going to, you know, become, you know, useful. I mean, it’s, it’s already useful. It’s, you know, it’s, it’s used quite a bit. But people have an expectation that it will do something else. And, you know I mean, I remember Amir telling me this when I first got started, he was one of the first people I met with. I went out to Spain and spent a couple of days with him and, and cause I was interested in little bit coin project and I wanted to meet the guy who was running it. And yeah, that’s kind of how he described it to me and kinda that’s what I’ve seen all along is, Oh, this is it’s already useful.

Eric Voskuil (01:51:08):

Why are we complaining? You know, it’s been very, very successful. Probably w w you know, way beyond the Satoshi’s expectations, maybe. So, you know, I, one thing I, I don’t, I don’t see, I don’t see Bitcoin as a casino, right. People think, look at it that way. Like, you know, it’s just gambling device, right. Speculate on it and worry about its price every day that you mean that’s not why I got a Bitcoin you know, it can help people. And the price of a unit, a Bitcoin is irrelevant as long as there’s sufficient activity for the coin to exist and be secure. That’s good enough. And and the you know, the, the expectation that it’s just you know, free money is, is, is, is kinda wacky. I think of course people will have it. They want to see the price go up. Great. And then that’s where the cheerleading comes from. You know, if the price goes up because a lot of people using it, that’s great also, but, but you know, it is usable right now. I use it, you know, whenever the occasion arises that it’s more useful than my alternatives.

Vlad Costea (01:52:40):

Yeah. And speaking of usability and occasions, I, a DND

Vlad Costea (01:52:46):

Of my interviews and I ask the guests about which charity cause or where they want the donations that will be sent possibly to this episode. Usually I don’t get any donations, but when I publish something on the website, I put a QR code and I say, 50% of any amounts donated to this address are going to go to some sort of development fund or something, or possibly to the guest if they don’t have a lot of money and they need it. So do you have any preference in regards to where 50% of any donation should go?

Eric Voskuil (01:53:22):

Yeah. I always direct people to the Libbitcoin Institute you know, Tom Pichia and that he’s in New York. And I, and are the trustees of this thing. And it, it’s set up to fund the Libbitcoin development and education. And if anybody wants to donate on my behalf, that’s where I would send them. I don’t have a QR code for you, unfortunately, but there’s a website where they can contact. Yeah. So if I get any donations from this episode, I’m going to send 50% to Libbitcoin. Yeah, I think it’s

Vlad Costea (01:54:07):

Okay. So at this time, I’m sorry I have to say this, but I don’t have any more questions for you, even though I suppose I could have extracted a lot more knowledge, but it’s been almost two hours and it’s about 2:00 PM or later 2:00 AM, sorry. So thank you very much for this interview. I feel honored that you spend so much time talking to me. I suppose you could have done something more useful and productive, not at all sitting on the couch all day. Well, I hope you’re not just trying to make me feel better about it, but thank you.

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