In the beginning, Paul Sztorc realized that he can fix the inefficiencies of modern democracies with prediction markets. And when he discovered Bitcoin, he thought it would be the perfect tool to integrate in an instrument which creates skin in the game while providing people the incentive to always vote for the more competent candidate.
But somewhere along the way, Paul Sztorc has taken a break from his prediction markets crusade to try to also democratize Bitcoin development and allow the free market to choose the sidechain layers that it uses for scaling. His Drivechains proposal (BIPs 300 + 301) relies on the Blind Merged Mining concept and pursues the ultimate Bitcoin maximalist thesis: creating a sidechain for every interesting altcoin use case and making it use BTC as the base currency.
Since we’ve seen a majority of miners signal Taproot activation, the Bitcoin community found itself having “where do we go from here?” type of debate. And if you take a closer look on Twitter, you’re going to find quite a few advocates of Drivechains.
What really caught my attention about the BIP 300 proposal (which has been around since May 2017) is that it can offer a privacy and fungibility sidechain along with a low fee one. In other words, I was impressed by the video demo that Paul Sztorc posted on his YouTube channel and I realized that the possibilities are truly endless.
Basically anything that was build as an altcoin can turn into a Bitcoin sidechain and it’s up to the free market to decide what is useful and what deserves to get further developed. And the best part about it is that it uses the hardest money known to man, BTC.
Of course, there are tradeoffs and risks involved. Two of the most major critiques are mentioned in the peer review section of the Drivechain.info website, and Peter Todd has hinted that there are other issues that he has yet to reveal (though it should be noted that he proposed a similar system in 2013, which he named ZooKeyV).
Nonetheless, it’s going to be interesting to see how the Drivechain proposal evolves in time and to which extent it gets traction from the community. Along the way, it’s likely that developers will also find smart workarounds which eliminate some of the tradeoffs and maximize the efficiency of the project.
When he doesn’t work on BIP 300 and doesn’t envision prediction markets, Paul Sztorc is the biggest fan of Bitcoin Uncensored (a show for which which he stores the complete archive of episodes) and likes to tinker with the idea of immortality through genetic engineering or conscience transfer to robot bodies. Throughout our 144-minute conversation, you’re going to hear more about these topics.
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This episode is sponsored by Vaultoro & Wasabi Wallet
Joshua from Vaultoro is a big fan of the show and I’m happy that he sees potential in my work and supports it without caring about numbers and growth statistics. So I must thank him for his generosity and invite you to check out Vaultoro – the exchange where you can trade with honest money (bitcoin, gold, and silver).
None of this is financial advice from me, but I’m pretty sure that the shiny rock is a better store of value than any fiat currency or “stablecoin”, so maybe it would be wise to use this commodity to preserve your purchasing power during bear markets and get back into bitcoin as soon as you’re convinced that the downwards movement are over. You can also have the gold bars delivered to your house… because you know, if it’s not in your safe then it’s stored somewhere in Switzerland where you can’t touch it whenever you please. For more information, check out Vaultoro’s website.
Also, Joshua from Vaultoro is sponsoring a Lightning Network faucet – he hopes that Bitcoin’s second layer will one day become potent and popular enough to replace the smart contract and tokenization features of Ethereum. And he also supported Giacomo Zucco’s layer 3 RGB Spectrum experimentation from 2019. So if you’d like to get 10 bits/100 sats on the Lightning Network, you’re gonna have to listen to the latest Bitcoin Takeover Radio broadcast and be the first to figure out the secret.
And if you would like to increase your network-level and transaction privacy, you should download Wasabi Wallet on your computer. It routes your connection through the Tor network to hide your IP, it downloads block filters so you validate your own transactions locally without appealing to a trusted third party, and it also connects to your own full node to boost your financial sovereignty. Extra features include advanced hardware wallet integrations, easy UTXO management, address reuse prevention, and even a lurker wife mode.
Wasabi is best known for its link-breaking CoinJoins, which are giving a hard time even to the EuroPol. Use the wallet to increase your financial sovereignty, but don’t do any illegal stuff – use your financial sovereignty with responsibility (also read the Wasabi terms of service).
02:20 – Why wasn’t BIP 300 merged into Bitcoin Core yet?
03:29 – Peter Todd’s criticism of Drivechains
05:20 – There’s so much going on, that it’s hard to keep up with all the developments
05:26 – What drives Paul Sztorc’s chain? (prediction markets, Truth Coin, Bitcoin Hive Mind)
10:47 – Why Paul Sztorc doesn’t like Liquid and doesn’t think it’s a sidechain
14:47 – Drivechains improve on Blockstream’s implementation of sidechains
17:16 – Ageing and death will get cured through prediction markets
20:30 – Annoyances of our immortal future
21:30 – The rampant stupidity in the Bitcoin space
22:39 – Bitcoin’s anti-intellectual streak
24:15 – There’s a lot of blind faith in the developers
25:15 – Contrarian developers and the multiple Bitcoin dev teams
28:20 – Sidechain philosophy and a crash course on the block size debate from an SPV perspective
35:49 – The conspiracy against the public line from “The Wealth of Nations”
38:50 – Sergio Demian Lerner
40:05 – Offensive words are not necessarily wrong
43:10 – There has to be a process through which error is defeated
44:03 – The whole point of BIP 300
45:10 – What’s the difference between extension blocks and Drivechains?
49:02 – Luke Dashjr’s view that previous versions of Core are not really full nodes
50:24 – Bitcoin’s accidental hard fork from 2013 (BIP 50)
54:24 – The Newton and the Leibniz of Bitcoin
54:42 – Plato’s ideal regime where philosophers rule
56:30 – The Bitcoin School of Athens
59:34 – Why do prediction markets matter?
1:00:56 – Robert D. Putnam’s “Bowling Alone”
1:06:38 – Who watches the watchers?
1:10:56 – Rousseau’s idea of being forced to be free
1:12:50 – Why adoption from above is bad, El Salvador & Karl Popper
1:20:45 – Why the US is not as bad as it seems
1:24:24 – Paul Sztorc’s experience with custodial Lightning wallets
1:27:46 – What kind of mining are Drivechains going to have?
1:29:55 – Blocktimes on sidechains
1:32:10 – If you can’t change the block time on sidechains, then how does Liquid have 1-minute blocks?
1:34:20 – RSK vs Drivechains
1:35:20 – Is Bitcoin’s Omni layer a sidechain?
1:37:15 – Describe Drivechains in newbie-friendly terms
1:38:25 – Drivechain video and Zcash side chain for privacy
1:44:10 – More privacy in Bitcoin?
1:50:28 – Why was Satoshi not a cypherpunk?
1:57:39 – Bitcoin vs bit gold in terms of inflation
1:59:55 – What does maximalism actually mean?
2:03:45 – Soft forks used to happen every couple of months
2:06:50 – Decentralization is hard
2:09:00 – Altcoins have become smarter and more original
2:12:10 – Statechains, Softchains, Spacechains vs Drivechain
2:13:24 – Can you build the sidechains features on top of the Lightning Network?
2:17:30 – Mining profitability as the rewards get halved every 4 years
2:20:50 – How can people follow Paul Sztorc on Twitter?