S15 E33: David Bailey on Bitcoin Maximalism & Ordinals

0:46Vlad CosteaWelcome to the Bitcoin Takeover Podcast. I am Vlad and this is a very special episode in which I'm going to talk about Bitcoin maximalism with none other than the owner of Bitcoin Magazine, David Bailey. He used to be my boss at one point. I used to hate him. Now, for whatever reason, I ended up agreeing with him on a lot of topics. And we are here to talk about this. So welcome, David.

1:09David BaileyWhat's up, Vlad? Thanks for having me on. And like always, you're just ahead of the trend. So, you know, you hated me before it was cool. Now, now we're friends again, before it was cool. So there we go.

1:23Vlad CosteaYeah. So why do you think I hated you? Do you have any idea why I ended up thinking, oh, you're such a horrible human being?

1:32David BaileyYou know, this is, I think, the best place for this podcast to start is like hashing out this beef. You know, I'm not sure. I know that there was something to do with you and Flip and some content about hardware wallets, but I don't really know the origin of the beef, but I do know that it inspired you and drove you to create a competing Bitcoin Magazine product, which is actually quite, quite great. And, you know, just so I know, like Bitcoin Takeover Podcast, like we talk about taking over Bitcoin on this podcast, right? That's what this is about?

2:11Vlad CosteaNot really. It's not about taking over Bitcoin. It's about Bitcoin taking over. It's conceptually different.

2:18David BaileyOkay. So tell me the origins of the beef. What was your issue?

2:23Vlad CosteaI felt misused and underpaid and overworked. I was basically a freelancer working full time, not getting enough appreciation for my work, getting the articles that nobody else wanted to write. At the time, Aaron was still working on his book and it took him another four years to publish it. And he was taking all the articles and I was basically taking whatever he was not interested to write. So that's how it all started. But eventually I think I found my way. You know, I realized that I think it was useful for myself to fork off and start my own project, focus on it, because I realized, first of all, I've developed my own opinions about what Bitcoin is.

3:09And secondly, I realized that people care about my work, even if I'm not working for the largest publication in the space. So psychologically, it's really useful to realize that, yes, I'm really good at this and I can produce something myself.

3:27David BaileyYeah. Well, dude, I've been following you for many years since you've gone on your own path. And I have much respect for anyone that goes out there and makes something happen and create something. It's very hard to do. And I feel like overworked and underpaid is probably like the theme of our company across the board. So you know, I wish I could say things have changed, but we're probably more overworked and more underpaid than ever before. So, but hey, Vlad, I'm glad to be here. I'm glad to be on your podcast.

4:06We've come full circle. So thank you.

4:11Vlad CosteaSo we said we're going to talk about Bitcoin maximalism. First of all, what is Bitcoin maximalism? How are we going to define it?

4:20David BaileyYou know, so Bitcoin maximalism, there's really kind of two definitions of Bitcoin maximalism that I've seen come to be. You know, I consider myself a Bitcoin maximalist, the kind of the old school variety of Bitcoin maximalism, which is anything that's done in crypto that's valuable will get rebuilt on top of Bitcoin and Bitcoin will consume all value in the world and there will be only Bitcoin and all, and all other cryptos, or at least all other blockchains will die out to the Bitcoin chain. So that's the old school view.

5:00The new school view, which I feel like kind of got started after the Bitcoin standard in like 2020, is like Bitcoin is digital gold. It will only ever be digital gold. And like the store of value use case is the only component of Bitcoin that matters. And none of the other things that can be built on blockchains are valuable. And so they're going to go to zero.

5:35Vlad CosteaYeah. But I want to make a distinction here because I believe that what you described first really is Bitcoin maximalism. Well, what you described in the second part of your argument is just conservatism. It's just a way to preserve what you already have, but you're not maximizing the use cases. You're not maximizing the markets. You're just saying, yeah, this is it. It's like a natural resource. It was created. Some people call it a chemical element, which I think is stupid, but that's another conversation to be had.

6:06And they find reasons to define this as a commodity, as something that is not software, as something that is not supposed to compete with anything else. It's a being in and of itself. And that's pretty much it.

6:22David BaileyYou know, I always thought that that kind of narrative was like initially just a psy-op that we were running where, you know, we were telling that to like politicians and regulators to kind of get them off our back and not worry about Bitcoin. I didn't know that people like actually believed that literally. And so, yeah, I mean, I feel like I've faded crypto a really long time. I still fade crypto, but the crypto is going to zero narrative. You know, there was just so many years in a row that ETH was supposed to go to zero and it didn't go to zero and it just kept getting bigger and bigger and bigger and bigger.

7:05And, you know, I watched Ethereum and all of these other layer ones go from literally no users to, you know, tens of millions of users, hundreds of billions of dollars. And, you know, I feel like there are some things in the crypto universe that have gotten some sort of traction. We can kind of talk about those if you want to, but I think there are things out there in crypto that have gotten traction. And so I'm very eager to see those things get cannibalized by Bitcoin and for all those users and all that capital that exists on these other layer ones to be absorbed into the Bitcoin protocol.

7:52Vlad CosteaOh, I very much agree with you. I think that was when Vitalik wrote that article about Bitcoin maximalism, and I don't think he was the first one to use this idiom, but he was the one to make it popular. And at the time, what he was trying to say was a response to a comment on Reddit that someone made and said Counterparty, when it's going to get improved, is going to integrate all Ethereum, EVM and smart contracts and everything you can ever think of. And Ethereum is pointless and we're going to build the technology to make every other altcoin pointless.

8:29And that was the idea that started this movement. But eventually it got changed along the way. I'm not going to say hijacked because it's, I think at this point, it's a dog whistle. People are going to hear that and say, ah, you're getting paid by Roger, blah, blah, blah.

8:47David BaileyYeah. No, I mean, I do think that there were different moments in time along the journey where you know, part of the Bitcoin community kind of got peeled off and went in different directions. And so the launch of Ethereum, you know, we lost a lot of solid Bitcoiners to Ethereum who just wanted to build permissionless applications. And then the fork wars happened and, you know, we lost a segment of the community that was really probably considered themselves just like Austrian free market maximalists to Bitcoin Cash and whatever happened after Bitcoin Cash.

9:27And so we've kind of lost part of the community along the way. But there's a pretty big contingent of people I feel like that still hold these views. And, you know, they never like, you know, I considered myself a small blocker during the block size wars. You know, I never thought that these ideas were incompatible with small blocks or incompatible with layer twos or incompatible with any of these like directional visions of where Bitcoin needs to go. And, you know, I kind of walked away from like the block wars saying, okay, well, we've learned that you can't hard fork Bitcoin.

10:06Like that's what we learned from this whole experience. So how are we going to build these things without hard forking? And I, like, at some point along the line, that just kind of became, we're never going to build these things because these things are not useful or worth building. And I never signed on to that train. And I don't know how it became such a widespread view.

10:36Vlad CosteaBut David, do you believe that everything should be on Bitcoin? That every use case for which there's a market, we should bring that home to Bitcoin? Or do you think that altcoins are just fine and we should designate specific use cases to altcoins?

10:53David BaileyWell, I think that all financial activity, all economic activity at the end of the day is going to want to use the best money. And Bitcoin is the best money. So if you start from that kind of first order thinking that Bitcoin is the best money, then at the end of the day, people are going to want to use Bitcoin for all of these things. So the question then becomes like, how do we enable that? And so I could foresee a future where all of these other blockchains, maybe they all become like layer twos for Bitcoin if we can figure out trustless bridging between Bitcoin and these other chains.

11:32Or maybe they get completely re-architected on top of Bitcoin. But I think fundamentally, if people want to do those things, they're going to want to use the best money to do those things. So I do believe in the network effects of money. And I think Bitcoin has won that battle. As long as we don't take certain use cases that people want and cede them to our competitors, we will eventually eat them.

12:05Vlad CosteaYeah, that's interesting to consider, because right now we're going to do something that's going to get me cancelled once again. I have this Brave browser and I have this application that's called Ordimint. I hope that the audio works well, even in this environment. So Ordimint was created by my friend LightRider. And it's a very easy way for you to inscribe Ordinals on the Bitcoin blockchain. And you just pick image. I'm not going to compress this because it actually increases the size. I did some testing before.

12:39David BaileyVlad, what are you doing? Are you committing a mortal sin right now? Stop, please.

12:45Vlad CosteaNo, no, no. I'm going to pollute the timechain, my friend.

12:50David BaileyNo!

12:53Vlad CosteaOkay, so what we have here, we have this JPEG that I'm going, it's 33 kilobytes and it's got to be in the next Bitcoin block. And what I have to do is just hit continue. I need a Bitcoin address. And by the way, I'm running Bitcoin Core right now. And I'm going to fetch this Taproot address, which I'm copying from here. And I'm going to be pasting here. It's directly from my full node. The fees are pretty low. They used to be over 100. And it costs about $510 right now in Bitcoin with a fee for the service of only $3.

13:29So what I'm going to do right now is basically put this JPEG and you're going to ask me what kind of JPEG is this? And that's a surprise. And I can even pay with Lightning. Look at me. Look at this fancy guy. I'm going to use Phoenix Wallet. So let me switch to a window where I can actually show what I'm doing here. I can't. So I'm going to use Phoenix Wallet. I have to go back to here. And so this is Phoenix Wallet, non-custodial Lightning, right?

13:59I'm going to pay with this to get an ordinal inscribed. So I'm going to scan this.

14:08And then, my friend, this is for you, Guacamole Zucchini. I'm going to hit pay. And there's nothing you can do about it. Oh, my God. It even got confirmed. My God. Scandalous. Permissionless money.

14:27David BaileyYou love to see it.

14:28Vlad CosteaAnd now I check the order status. Check status. It's pending. We're going to take a look at it on an Ordinals blockchain explorer. By the way, if you want to get this, which is just a token, it's nothing scandalous. It's nothing that wasn't done before. It's just a stupid token. If you want to buy this, it costs you two Bitcoin during the livestream or 3.125 Bitcoin, which is an entire block reward after the livestream. So there you go. We're going to degen and go viral because we are selling this JPEG on the Bitcoin blockchain, which is a use case that cypherpunks envisioned, by the way.

15:10It's something that Hal Finney fantasized about in emails saying, how about we create these cypherpunk cards that we trade and it's just numbers that we trade with one another. I mean, that was built and it's on Bitcoin right now. And people are going to say, no, you're not using it for financial transactions. But if you go back and you study how Bitcoin has been used, starting from "Chancellor on brink of second bailout for banks," which was a message that Satoshi put into the Genesis block, and all the way to WikiLeaks files being embedded in the blockchain when the price was still low, there's a long history of non-monetary transactions.

15:51And there's also this guy from University of Miami. I think right now he's the attorney for Crypto.com. His name is Justin Wales. And he also came up with this theory that if you use Bitcoin as free speech and you express ideas, especially political ones in the Bitcoin blockchain, you're going to make it subject to the First Amendment of the U.S. Constitution. And it should be exempt from certain regulations just because of free speech. So regulate that, my friends.

16:24David BaileyCool. Dude, I mean, Vlad, I think, I think you can't really say you're punk rock unless you have some sort of group out there trying to actively cancel you. I feel like that's just, you know, that comes with the territory.

16:38Vlad CosteaOf course. But at the same time, you have to realize that this is a legitimate use case. People define this as spam, but they don't know how it really works, right? They don't know it's just the normal Bitcoin transaction which encodes bits of data and puts them inside the block. And there's no real way to filter this, because if you really try to block this sort of transaction, you're only opening up the gates for people to do multisigs in which they put even smaller bits of data. And that pollutes, pollutes, you know, quote unquote, the UTXO set even worse.

17:15And that makes you wonder, are you playing a game of whack-a-mole where each time you whack the mole, you're going to get a much bigger one that you can't actually whack? And is there a market for this? Because that's the more important question. And why are we even here? Are we still libertarians? Do we still like free markets? Or did we turn into dogma pushers? High priests who say, no, it's only moral to use Bitcoin in this way. And the other one is degenerate and you're going to hell for it.

17:46David BaileyYeah, I mean, I think one thing that I've learned through my experience in Bitcoin is that no one really has any idea what they're talking about. And on a long enough time horizon, almost everyone, literally everyone that I can think of has been wrong about Bitcoin in one form or another. And so I feel like unleashing the power of capitalism is kind of the only way to move forward. And like, you know, I think a lot of these inscriptions are, especially right now, very, very dumb. You know, I will say that for all the people that are like, that's not a monetary transaction.

18:23Well, if someone buys that inscription, that is a monetary transaction. So a lot of these Ordinals are creating a lot of monetary transactions. But yeah, I could foresee, I could foresee a future where these inscriptions, Ordinals, Runes have a utility for the world beyond just degening and memeing. Like, you know, people like to say they're unregistered securities. I completely buy that they're unregistered securities. Okay, well, that like, securities are a useful thing. You know, stock and equities, those are useful things. And so, you know, if one day I can issue equity as a rune, that would be useful.

19:14Maybe there's one day where the SEC doesn't exist anymore. And we need people to be able to create companies and issue equity permissionlessly. This could be a solution to that. So I don't know, I feel like everyone who wants to say they know exactly how this stuff will play out really doesn't know what they're talking about. And it's kind of projecting their own morality onto something that is much more complex.

19:43Vlad CosteaAt this point, I just want to ask, is there any other podcast out there that inscribed an ordinal on livestream just like that? Just, we did it. Thank you, Giacomo, for hosting my JPEG for free on your node. I'm very happy right now. I'm just thrilled thinking about how this is going to exist on your node. And by the way, it's a picture of you, David, and it has the text David Bailey on top of it. So everyone who's running a node right now is going to host that JPEG.

20:10David BaileyHell yeah. Hell yeah. I love moving into your nodes, and I thank you for the free rent.

20:22Vlad CosteaIt's only 33 kilobytes, and you can have that for two Bitcoin during this livestream. Don't forget that. We're going to degen. We're going to go viral. If anyone actually buys this, we're going to go viral. We're going to make the headlines. We're going to prove that there is a market for this. I don't know how many degens are watching this, but maybe they're going to buy it later for 3.125. And we're going to buy Supras. We're going to buy Supras. Okay, let's go.

20:52You buy a Supra with that one Bitcoin that you get, and then we're going to flex on everyone who says that this is a scam. Because we have to get into this conversation also. If someone buys this, is it really an affinity scam? If it's voluntary, and if they believe that just because it has this meme power and they can portray it as a moment in time in Bitcoin's history when something happened. Is it really a scam that they buy this artifact and they want to show the others that they own it?

21:27David BaileyDude, that's one of the things that I find most annoying about all the criticisms is the lack of autonomy they give to the buyers to participate voluntarily in these types of transactions. I have bought a variety of rare sats. I think they're goofy. I think they're kind of cool. I get that they're a complete hallucination. I understand exactly how they work. Yet I'm still buying them. How exactly am I being scammed because I choose to participate in something that I think is fun or entertaining? I don't get it.

22:19I forget who it was in my comments the other day that's just like, it's literally impossible to buy or sell a rare sat without committing fraud. And it's like, you know, I don't believe that there can be voluntary transactions between people that know how something works and that by definition can be fraud.

22:33So, yeah, I mean, we get a lot of hate at Bitcoin Magazine and at UTXO Management because we have an OTC desk where we have buyers and sellers of low inscription number Ordinals. These are, like, mostly Bitcoin OGs that have a deep understanding of how Bitcoin works, how inscriptions work. They're not actually transferring the ordinal when they buy and sell. The inscription is just forever static on chain. Yet they still want to do it because they think it's fun.

23:23I don't know why you would want to keep someone from using their money as they want to use it. I feel like some of these anti-ordinal people should go down to Las Vegas and stand outside of a casino and hold up signs and protest people walking into the casino. Don't you know that you're going to lose money in this casino? They should see what the result would be because I bet you every single person would still walk into the casino.

23:55Vlad CosteaWell, I'm not sure if this metaphor of a casino is the most fortunate right now because people are going to say, oh yeah, you just described a shitcoin casino. You're such a scammer, David. You're enabling this to happen. It should only be about one BTC equaling one BTC. You're breaking fungibility by selling one satoshi for one Bitcoin or whatever. How dare you do this? It's not like we had colored coins before. It's not like there was Counterparty before this. It's not like the Omni Layer enabled the issuance of a very specific non-Bitcoin asset that has been traded on the Bitcoin blockchain for years.

24:34David BaileyWhich asset is that, Vlad?

24:35Vlad CosteaIt's something like USDT. I don't know. I hear it's pretty big in Argentina. I was there last November and I tried to pay with my Lightning wallet and they said, what's that? We don't use this here. Do you have Tether on Tron, Binance Pay or something else? That's what we take.

24:58David BaileyWell, Vlad, I think you just need to recognize that, you know, USDT has no value and no one will ever use it. And then it makes, you know, sense why we don't want USDT to come to Bitcoin.

25:13So, yeah, no, I was thinking about this the other day. RGB protocol. Where does RGB, the name, come from?

25:23Vlad CosteaWell, it must be made by some gamer who likes red, green and blue for their video card or whatever. They have these fancy cases and they wanted to bring that to Bitcoin. It can be something else, right? I don't know.

25:37David BaileyI was just thinking that seems like colors. For some reason, I thought maybe it was connected to colored coins, but I don't know.

25:48Vlad CosteaNo, no, no. So if you combine red and green and blue, you get white. So RGB is white supremacy.

25:59David BaileyOkay, that makes sense. I follow now. I follow.

26:03Vlad CosteaThat's why people like Guacamole and Zucchini really like that.

26:08David BaileyNo, I mean, dude, I will say real talk like Giacomo, Luke, some of these guys that are very upset at me for, you know, being okay with people using Bitcoin however they want to use Bitcoin. I do respect them. I do respect things that they've done for Bitcoin. But I don't respect how they want to control how people can use Bitcoin or control what people can find fun or entertaining or valuable for them to do. And probably the most annoying part of having a media platform, and I feel like Vlad, you've experienced this of late, is like, once you have any sort of platform, everyone wants to control how you use that platform.

27:05They want to take away your ability to have your own independent view of what Bitcoin is, and they want to force you to project their viewpoint and perspective of what Bitcoin is. And it's very obnoxious.

27:22Vlad CosteaWell, I'm going to go forward and say that this was all your fault because you enjoyed some free articles from these people, and you thought they were your friends and you can work with them, and they published on Bitcoin Magazine, and now they think they control Bitcoin Magazine just by virtue of having published something on the website. So if anything, it's your fault for allowing them to get this illusion of self-importance.

27:48David BaileyWell, you're welcome, Luke. You're welcome, Giacomo. You know, I won't say that I made you who you are. Definitely, without a doubt, without Bitcoin Magazine, you know, there would be no Luke.

28:07Vlad CosteaOh, that's interesting. That's a hot take. I like it. So you were saying that without Bitcoin Magazine, there would be no Luke Dashjr?

28:15David BaileyYeah, no, I'm just trolling. But there probably wouldn't be any cat JPEGs on chain, so that would be the real tragedy.

28:29Vlad CosteaWell, cat JPEGs, for all of the controversy, actually enabled some markets to get built. Like, people actually build infrastructure for trading. Don't we like free markets? Don't we want Bitcoin to have more use cases than just HODLing?

28:47David BaileyFor sure. Well, also, you know, I think, you know, I do think one thing that's going to be very interesting is like OP_CAT and whether OP_CAT actually gets activated. Like, if it creates like some sort of phenomenon of like, okay, for every future activation, the way to approach it is to create some sort of meme coin or some sort of ordinal so that you can get like a collective group of people focused on making the thing actually happen. It's like issuing shares in an idea, so to speak, except there's no dividends.

29:29But like, I actually think like OP_CAT seems like it's gotten a lot of traction as of late, which is like surprising, surprising how much traction it's gotten, how quickly.

29:43Vlad CosteaBut I've also interviewed Andrew Poelstra, who is the chief scientist at Blockstream, and he was very much in favor of OP_CAT. He said it's the one that enables more use cases and argued that CTV is not enough. It's too limited in the way that it operates. And the purpose of, you know, Jeremy Rubin, when he introduced CTV, he explained, you know, it has these limitations which were put there on purpose just so that nobody can say that I'm destroying Bitcoin with this. And people acted like he's attacking Bitcoin, possibly because he wanted to go through a speedy trial with this.

30:20Now people understand that there's a use case for this. But there's this competing proposal called OP_CAT, which is for concatenation. And the funny story about it is that it was created by Satoshi, and then it was taken out of the code because he was afraid that people can use it in bad ways. Now it was rewritten entirely. It serves the same purpose without actually having the trade-offs. Some of the smartest developers are in favor of it. There is, as I said, Andrew Poelstra, there is Robin Linus, the creator of BitVM.

30:57And there are a bunch of others who really like OP_CAT. But then you go to this social filter system where people say, yeah, but Udi Wertheimer likes that. So if Udi likes it, he's an evil person. And by default, that one's going to destroy Bitcoin. And therefore, by virtue of this logic, I'm going to oppose anything related to this and never, ever allow that to run on my node.

31:21David BaileyYeah, no, it's the same reaction that happened when I said I liked CTV, you know, which is why now I've become a pretty hardcore, you know, pro-ossify. Ossify Bitcoin, you know, forever, never change the code. And that's really the view that I have now. And I'm excited to have, you know, Luke and Giacomo and the OCEAN pool really help kind of advance that view.

31:50Vlad CosteaYeah, I just realized that I have sponsors and I'm supposed to talk about them a bit. So check out Wasabi Wallet, go to wasabiwallet.io, download the wallet, make your Bitcoin more private. You can also put, so since we're talking about ordinal inscriptions and Runes and all of this degeneracy, you can run this fun experiment where you put your ordinal inscription as an input into a coinjoin. And then it's got to be set free into the wild and someone's going to receive it for no reason.

32:21And you can actually track it and you can see where it goes. You can draw a map and maybe issue that one as an ordinal inscription and sell it for 100 Bitcoin. You've heard this here first. I gave you a 100 Bitcoin idea. Do that, have fun. Bitcoin is not supposed to be just this digital gold. But even with gold, you can make jewelry. You can make that case. But anyway, Wasabi Wallet is very cool. And if you're afraid that coinjoining is going to end up with you having your coins restricted from exchanges, there's also this Buy Anything button on top of the wallet.

32:59And what that does is to issue an order to a concierge service. You basically tell through a command prompt that is routed through Tor to the other side, what you want to buy and where you want it to get delivered, you're going to pay with your coinjoined Bitcoin. And then poof, you're going to have it delivered and everything goes on smoothly. Of course, you pay a premium for that, but that's another problem for another day. So check out Wasabi Wallet at wasabiwallet.io. And thank you, David, for sitting through this ad.

33:29What do you think about Wasabi?

33:31David BaileyDude, anything that advances privacy on Bitcoin, I'm all about. So I also like how Wasabi Wallet takes no prisoners and never backs down. So there's something to be said for that as well. Dude, so I had this idea the other day. I etched, I liked your idea of donating an ordinal into the Wasabi Wallet pool and giving someone a random lottery ticket. I had this idea for Runes. I etched a rune on the launch called FIX THE FILTERS. And I had this idea that I want to airdrop all the FIX THE FILTERS runes to all the payout addresses on OCEAN pool, because they publish the address of each of the hashers and a lot of them are compatible addresses to send to.

34:28So I thought maybe we should do an airdrop to all of the OCEAN pool miners. And we kind of take a snapshot at some point in time in the future. So that way there's time for people to join OCEAN pool if they want to get in on this airdrop. And we try to incentivize a bunch of people to join OCEAN pool. What do you think of that idea?

34:50Vlad CosteaSounds like fun. It's exactly the type of attack. I think something similar was done by the Ethereum people with Tornado Cash when they started airdropping coins from the mixer to celebrities and famous people who otherwise would not care about this. But it was a way to show that this is permissionless. This is a protocol that you can use to transact. And it doesn't mean just because you use a tool that's open source. It doesn't mean that you're doing something evil. There's some legit use cases for this.

35:19It can be used for fun. It can be used just because you want to use it like this and you can afford it. And yeah, what can I say? It's a fun idea. I mean, you're making me want to mine with OCEAN just to get that airdrop.

35:37David BaileyYeah, we got to unlock the power of irony. Yeah, no, I feel like generally speaking, another thing that really frustrates me about Bitcoin is like people pretending that Bitcoin works a certain way when it actually doesn't work that way. And so people like listening to the stream, like us saying, hey, we're going to airdrop some runes to OCEAN pool, are like, okay, y'all are having a joke at the expense of all of these people that have fees that they're having to pay on chain. And the reality is that this was always the way that Bitcoin worked.

36:14The person who's willing to pay the most in fees is going to have their transactions clear and it's going to price out whoever can afford to pay that amount in fees. And the system is designed to be a high fee system. And so we need to reconcile those ideas by figuring out how do we make Bitcoin useful for people who can't afford the fees. Like how do we make Bitcoin useful and self-sovereign for more users? And instead of focusing on that question, which is the question, that's the only relevant question to ask and for people to be looking for an answer for.

36:58Instead, it's like, how do we shame people into not using Bitcoin for certain types of transactions? And that's how we'll bring the fees down. And it's very frustrating because there's a real conversation that needs to happen. And rather than deal with real solutions to the real designs of Bitcoin, they'd rather deal with fake solutions for a system, describing a system that doesn't even work as they describe it. So, yeah, I don't know how we advance the conversations. The only way I think the conversation can keep moving is if the fees get so high that it becomes a necessity for people to solve this problem.

37:50That's the only way I feel like the conversation drives forward. Otherwise, we're just stuck in this dead end that we've been in for a while.

37:58Vlad CosteaWell, some people say that you should not mess with the money and it should be boring and stuff like that. And I'm looking at our inscription right now and it was not mined yet. It makes you wonder, shouldn't we use a separate chain that has like 15-second blocks instead of 10 minute blocks and is designed for this sort of degeneracy? Or do you think that the permanence of Bitcoin has a very special kind of value and people are going to look back to this moment and remember that something memorable happened for, how much was it, $500? We had fun.

38:38David BaileyWell, I don't know if anyone's going to remember this podcast in 500 years, but I do know that that ordinal will be around in 500 years. The inscription will be around. So yeah, I think the permanence of Bitcoin is sick. It's what makes Bitcoin unique. And I think that I would much rather pay my fees to a hardworking miner somewhere in the world that's actually doing real hard labor to secure the network than pay my fees to an Ethereum co-founder who is just an oligarch staking their ETH to earn more ETH.

39:18And I feel like the faster we can deprive these other chains of their fee income, the faster we can bring those other chains down and bring their users and companies that are supporting them back to Bitcoin. Bring it back to Bitcoin. And that's one reason I also really enjoyed your interview with Roger, because I feel like the Bitcoin Cash/Bitcoin SV civil wars, that's over. It's undeniable that Bitcoin Cash lost and Bitcoin SV lost and they went on this journey and they realized the outcome of that journey was folly.

40:02And so it's like, let's bring those users back to Bitcoin now. You know, we're not going to be able to permanently ostracize these people from Bitcoin. I don't even know why we would want to do that. So it's like when you win a war, you have to let the people in the country that loses re-assimilate into the society as a whole.

40:32Vlad CosteaThat's a big statement, but I like the part about bringing everything back to Bitcoin. Because as many people know, there are a lot of newbies who buy into these narratives, but pretty much everything from Filecoin to Ethereum was proposed for Bitcoin. Even stuff for Monero, like the confidential transactions, I'm not sure about the ring signatures, but all of this is on some thread on BitcoinTalk. And maybe it wasn't good enough for Bitcoin, maybe we're waiting for a much better proposal. But we do have to understand that in order for Bitcoin to succeed, we need more users.

41:11And if we just give up on users and say, oh, they should use Fedimint, they should buy ETFs, they should never think about holding their own keys, right? Because this is what it's all about. I don't know, it's defeatist, if you ask me. It's the type of attitude that you have when you don't care anymore, you're rich, you made it. And I'm going to get canceled for saying this, but if Bitcoin doesn't scale in a way that enables anyone who wants to hold their own keys in a pretty affordable way, without custodians, then Bitcoin is just a large pyramid scheme, where the sooner you enter, the better the experience is going to be for you.

41:59And I don't have all the answers for this. It's just that I don't feel like me by virtue of having joined Bitcoin much sooner than other people. Do I really deserve to have this sovereign experience more than someone who needs it more around the world? It's about morality more than it is about markets. And I think it's silly how sometimes we treat block space like a scarce natural resource, instead of just thinking, oh, it's storage and data and we can scale it somehow. We can make a compromise.

42:36Maybe I'm going to get canceled for this also, but maybe Bitcoin with 8-megabyte blocks would be just as decentralized.

42:45David BaileyYeah, no, I mean, I think you're probably right that Bitcoin with 8-megabyte blocks is just as decentralized because, you know, we have 4-megabyte blocks now, and I don't think Bitcoin got substantially less decentralized going from 1 megabyte to 4 megabytes. But I do fundamentally agree that scaling on layer one is not viable. Like I said earlier, I think we learned from the block size wars that hard forks are not viable. Hard forks are only viable in a true moment of urgent crisis. Like encryption is broken or something like that. But, yeah, I mean, I have thought about what's changed between the early days of Bitcoin and today.

43:42And I feel like the early days of Bitcoin, there was alignment around this ideological vision for the world of we are replacing the money. We are creating a self-sovereign financial system for the world. And that has been watered down and watered down. And maybe there is a moment coming where people need to basically make clear what is the vision of Bitcoin that they're aligned around. And we say that the great thing about Bitcoin is that all users are equal under Bitcoin, that no one has special rights or special privileges.

44:28But if you can't afford to use Bitcoin in a self-sovereign way because the fees are astronomical, if 95% of the world can't afford to use Bitcoin because the fees are astronomical and they have to use some sort of custodial solution, then all the users of the system are not equal. So, yeah, I do think that there needs to be some alignment of a vision. And I think that if we can build enough popular support for a soft fork that brings some of that power back to Bitcoin, that leads in the direction of self-sovereignty for the individual, then that at least demonstrates that the community still believes in those values.

45:20And I think that you're right, Vlad, like if this just becomes a product that is commoditized by Wall Street and sold in a wrapper and no one ever goes on chain anymore or the individuals never go on chain, then we've kind of failed at what the initial vision was for the system.

45:42Vlad CosteaI just want to read another ad at this point. And David, could you please retweet our interview? I feel like it didn't get much love. And I think our ordinal is going to get mined soon and we need to remind people that they can buy it for two Bitcoin. So, at Hodling SA, we are here to simplify the complexities of Bitcoin security, providing peace of mind through a secure, private and self-managed environment. In the Swiss tradition of precision and security, our services assist you in setting up, maintaining and operating a self-custodial Bitcoin infrastructure, from the selection of multi-signature configurations and hardware wallets to ensuring your setup is robust and tailored to your needs.

46:23Go to hodling.ch if you're a whale, if you're part of a company that owns a lot of Bitcoin or even a small amount of Bitcoin. If you want to have this setup, which does not fall back on BitGo or Coinbase or some other big custodian, and you want to do it the sovereign way, check out hodling.ch. Because first of all, they're Swiss, so they do have some confidentiality, which maybe you will not have with a company from the US or the European Union. And they will help you set up with hardware wallets and whatever.

46:59Everything will be just the right way. I know the guy who is behind this. He's a nerd. I visited his apartment in Neuchâtel in Switzerland, and he has all the hardware wallets. He spends all his time hacking them. I think you're going to be in pretty good hands, especially if it's a multi-sig. So check that out. Now, David, I hope we're going to get more views with this because the discussion is on fire. We're talking about free markets. We're talking about enabling new use cases to Bitcoin, scaling Bitcoin.

47:30And speaking of scaling, do you have any favorite proposal right now? You mentioned OP_CAT, but I'm curious what you think about BIP-300, what you think about Lightning, because that one has been interesting over the last six years. Sometimes it works, sometimes it doesn't. Sometimes it's not good enough, and other times it's supposed to be the only solution. But there's also Ark, and you did post a series of tweets announcing that many layer twos are coming to Bitcoin, and that was last year.

48:02David BaileyYeah, no. So in terms of proposals, I don't want to wade too deeply into the different proposals that are out there because there's so much technical nuance around each one. I feel like I'm not qualified to bless one over the other. I'm a fan of BIP-119 and have supported it for a while. And, you know, from what I've been told and what I've learned to date, I think OP_CAT is pretty interesting. But, you know, again, these things have so much technical nuance to them that I kind of leave them for others. My general view is that what I want is the community to not stagnate towards building, towards a self-sovereign vision for Bitcoin.

48:56And so from the perspective that BIP-300 enables that, I think BIP-300 is cool and interesting. I do think that if we had something like BIP-300, it would solve a lot of these constant inter-community battles that happen because you can kind of just put up or shut up and go launch a drivechain. And you can tinker on these drivechains rather than having to tinker on the base layer. So I do think that's a pretty big benefit. I do think Lightning is cool. We were actually the first conference in the world to integrate Lightning across the board.

49:42Bitcoin 2019 was pretty sick. Not only could you buy your ticket with Bitcoin, but we had arcade games and pinball machines, et cetera, that were all hooked up to accept Lightning. We created a cool experience for it. The period of time of magical Bitcoin, do you remember the Lightning torch?

50:14Vlad CosteaYeah, like how wallet. So I was waiting for my node to sync, and by the time I synced my node, it was over, but I joined the second one.

50:27David BaileySo yeah, how sick was the Lightning torch? That was the fun, inspirational thing, and it's like, you know, now someone would shame you for the Lightning torch. They'd be like, that's not a real sat. That's not the Lightning torch. It isn't real. It's all a figment of a hallucination, you scammer. So, but that's the type of fun culture and environment that I feel like Bitcoin needs for people to innovate and for people to build interesting stuff. And so Lightning has gotten a lot of love and attention. You know, our venture fund, we've invested a ton of money into Lightning companies, a ton, more than honestly I'm comfortable with.

51:13And over time, there's been lots of challenges that have become apparent with Lightning. It's always kind of worrisome to me when we host conferences, like, you know, I get time to have private discussions with people that are kind of the key critical developers in Lightning or in Bitcoin or whatever. And they express their own concerns about the network and where it's going. That's not entirely confidence inspiring. So I feel like Bitcoin needs many, many Lightning competitors, many different layer two approaches that can just battle it out. And I feel like development in Bitcoin needs to be as ruthless and as hardcore as mining is in Bitcoin.

52:09Mining is the most ruthless, open, competitive industry that probably exists on the planet. Why can't layer twos and development on Bitcoin be the same? And so, yeah, I think we're seeing a lot of approaches come. I think some of these approaches are going to necessitate some sort of soft fork. Some of them won't. BitVM and BitVM2 is pretty cool. What's your view on BitVM?

52:43Vlad CosteaI spoke with Robin. He was here on the show just in December. And I think I don't want to overstate this, but I think BitVM is the most interesting discovery that we have had in Bitcoin in years and could be the most important piece of software that people use to build trust-minimized second layers, bridges or whatever. So it should not be underestimated. I did get a press release today from Rootstock. They created BitVMX and basically they had Sergio Lerner, who is the cypherpunk from Argentina, who tinkered with it and created a version of it that I guess expands on more limitations.

53:30What they're trying to do is to get rid of the trusted setup in Rootstock, the RSK sidechain, so that it becomes truly trust minimized. And I think that they put a lot of time and effort into it. And I do like it. I mean, it's cypherpunk as fuck. I like the fact that it's permissionless. I like the fact that it did not require anyone, you know, any of these high priests to express opinions on it, because I'm pretty sure that people like Luke would shoot down any proposal like this and say it's degenerate and it comes from Ethereum or whatever.

54:04But it does computation off chain. And at this point, it's limited to assembly language and only a small subset of developers can make use of it. But it's going to be huge. I think Robin deserves all the support because he really brought something revolutionary and groundbreaking to Bitcoin.

54:26David BaileySo, yeah. So I think that BitVM is pretty, is pretty sick as well. And I mean, we've done like, let's say our venture fund in the past year has done almost 40 venture investments. And I would say at least half of them are working on or experimenting with BitVM. So BitVM has really captured a lot of, I think, mindshare from developers, from other ecosystems, and it's gotten people to like look at Bitcoin again in a fresh lens. And I find it interesting, like when Robin published the BitVM paper, like even the people that consider themselves like monetary maximalists, which I hate that term, but let's just use it.

55:12They were like, hurrah, BitVM. And it's like, I'm surprised the people who hate all of this stuff happening on Bitcoin haven't turned on BitVM. Like, you know, it's going to enable people to use Bitcoin in ways beyond just pure transactions, like financial transactions. So, but yeah, no, I think BitVM is exciting. And I think it's like captured the imagination of a lot of people. That's actually one of the ways that I got into Ordinals and got into inscriptions like fairly early. One, I found out about it through Bitcoin Magazine.

56:02Pete Rizzo and Mark Goodwin and some of the guys there told me about them. And then two, once I started digging into it a little bit, the number of early Bitcoiners and Bitcoin OGs and crypto developers that were coming to Bitcoin to work on it was a huge signal about how much interest there was in doing these things. And over the past year, I've seen all sorts of development teams come back to Bitcoin to focus exclusively on Bitcoin that were playing in like Cosmos or Ethereum or whatever.

56:37And these are like really talented developers that just want to pursue something they find like interesting and inspirational. And so, you know, I'm very bullish on these ideas, like bringing back activity to Bitcoin, even if the ideas themselves don't work out in their current form.

56:58Vlad CosteaYeah, I have this message from LayerTwo Labs. Paul Sztorc wrote this and he said, "Is Blockstream going downstream? Has RGB got you down and brown and ground? After a long day of listening to Peter McRetard, why not feel something for a change? Feel alive, join LayerTwo Labs and make everyone feel sad and frustrated and angry. Our next ritual is at 3 a.m. in the ancient forest. See you there. I'm Paul Sztorc and I approve this message. Or do I?"

57:33David BaileyDude, Paul is one of the coolest people in Bitcoin and the whole LayerTwo Labs team, which like just to clarify before I'm accused, I'm not an investor in LayerTwo Labs, as people like to, you know, come at me for that all the time. But they have like one of the dopest teams, in my opinion, in Bitcoin of like Bitcoin OGs that really get the mission and the vision. So shout out to Paul. Talk about somebody who's been grinding for so long to like, dude, has not forgotten the mission and has like refuses, refuses to stop. So shout out, Paul.

58:13Vlad CosteaI also do like about him that he's trying to unite Bitcoiners. He doesn't... So it's very common in the newly established tribalist culture to say, oh, that's a BCasher. You should not talk to that guy. But Paul is actually trying to unite the communities. He's saying, okay, these guys, they were misguided. They like big blocks when there was no real justification to hard fork to do that. And that's not the right way to scale. Look, I have a much better solution to that. And I like that he's putting the time and the effort into uniting people and trying to bring them together for one cause.

58:53That's something for which I really respect him. I don't like some of the memes that are put out by LayerTwo Labs, but I think that they do reach their purpose. I mean, they're offending the right people and they are getting attention. But I tried to advise Paul that he should deal more with fantasy than with politics, because when you're trying to activate a BIP, just think about the ways in which SegWit and Taproot were being presented and how much of what they actually do was hidden under the rug.

59:23I mean, think about it. Taproot was supposed to make blockchain analysis obsolete. It was supposed to enable more advanced smart contracts, right? How much of that did we actually get? Schnorr signatures. Do we have fully Schnorr signatures on Bitcoin? I don't think so. But that was advertised.

59:51David BaileyYep. No, I think it's true. Like when people say, like, hey, I was never told about, you know, inscriptions or Ordinals were going to be possible when Taproot was created. It's like, well, yeah, you weren't told a lot about Taproot that was actually accurate. Like, you know, it doesn't mean that there weren't people who knew exactly how it was going to work when it was activated, just because your perspective on it was not aligned with the reality. Yeah, I think that one thing that's pretty interesting that a lot of people don't talk about, because it's very taboo, you know, since we're talking topics that get people canceled, is like, now, like, I think fees are going to remain elevated for a while. My personal opinion.

1:00:45And, like, now we have a couple different proposals for how to add new functionality to Bitcoin that in theory should help with the scalability.

1:01:05Like, when one of these is activated, what is the Bitcoin community going to look like on the other side of that? What's the culture in Bitcoin going to be on the other side of a soft fork being activated? Especially if it's a soft fork that, let's say, part of the community tries to campaign against or reject. Will it bring about a new development culture to exist? And once miners are put in the position to activate a soft fork that maybe there's some level of contention around, how will miners behave going forward from that?

1:01:59And so, I don't know. I feel like the community is setting up for, like, a pretty big change, shift. And I don't know on the other side of that shift what everything looks like. But not a lot of people spend time talking about it. I said, I tweeted this one time and people got all mad that I tweeted it. But if CTV is activated, then I think on the other side of that activation, Jeremy Rubin is one of the most influential developers in Bitcoin. And will have a lot of credibility and a lot of, let's say, credibility is really the right word, a lot of credibility.

1:02:48And the next thing that Jeremy Rubin decides to work on or contribute to or propose is going to instantly have a lot of attention. And so, you know, like we're kind of witnessing maybe a new generation of developers come to the surface that are going to have a pretty big impact on the future direction of Bitcoin. You know, that's just, that's like my opinion, but I think it's an important thing.

1:03:23Vlad CosteaBut there is this ongoing character assassination campaign against Jeremy Rubin. I think the Blockstream people really don't like him. And I did see a lot of ugly stuff being posted about him. And at first I used to believe it, you know, oh, this guy's trying to attack the timechain. You know, he's an evil person. He has evil intentions. He's a wacko in his private life. But then you realize, okay, now people agree that CTV is obviously not malevolent and is actually helpful. And people built like the Sapio virtual machine and a lot of interesting stuff that's going to come along with that soft fork if it happens.

1:04:05And you realize, okay, this guy is actually working in good faith. So why is it that we have this opinion of him? And it seems like... So I don't want to make too many controversial statements in this interview. But for me, it seems like Blockstream is more of a political organization than actually a software company because they did write or finance SegWit and Taproot. But it seems like they're trying to shut down anything that is not coming from them. So, for example, there's CTV, not written by Blockstream.

1:04:44They're trying hard to destroy this guy and destroy his reputation in a way that the average pleb who's running a node is not going to like him or support him. And it seems like Blockstream is supporting OP_CAT, which is funny because there is an intersection between Blockstream on one hand and the Taproot Wizards on the other hand. These guys seem to agree on something which is odd from the average pleb's point of view. But I don't know. It seems like Blockstream produces more politics and more posting.

1:05:16I don't want to get into the whole BCH debate where they say, oh, Blockstream is funded by the Bilderbergs and they funded the censorship of debates during the block size wars. I don't want to get into that, but it does seem like Blockstream does a lot of politics.

1:05:34David BaileyYeah. Well, I absolutely respect Adam and Andrew and a bunch of people at Blockstream. So, yeah, nothing but respect for them. But character assassination is a tool. It's a tool to maintain control. And so, you know, like I think the more people that get character assassinated, the less effective it becomes. So, you know, it's, talk about whack-a-mole. It's like, it's whack-a-mole of dissenters. And yeah, I think it's also pretty ironic that the same people that character assassinated Jeremy and now admit that CTV isn't that bad are the same people attempting to character assassinate the next person or to control what gets activated next.

1:06:43And it's like, you know, y'all were wrong about Jeremy. Like, why haven't you reflected for a second that maybe you're wrong about the next thing? And, you know, it's because, yeah, it was all about control. It still is about control. Who controls Bitcoin?

1:07:04Vlad CosteaAnd it's interesting. Let's get further into this, because there is this company that always gets a free pass. They finance whatever they want. They finance Ethereum layer twos. They finance Tron. They made Tron relevant with their stablecoin by allowing it to be the scaling layer for this digital dollar. And it seems like they never get called out. And I don't know what it is that they do, but I haven't seen anyone cancel anyone from Bitfinex. And it seems like these people are untouchable. They can do whatever they want.

1:07:38Nobody's going to tell them that they're attacking Bitcoin. I don't know what it is.

1:07:43David BaileyYeah, no. Well, first off, like, you know, and maybe I shouldn't, but I differentiate between Bitfinex and Tether only because I was, I think I was one of the earliest Bitfinex users.

1:07:57I've always respected Bitfinex because unlike most exchanges that, like, have rug pulled their users at one point of time or another, Bitfinex kind of always figured a way out of their problems. You know, when they had cash seized, I think in Ukraine or something, or when, you know, they got hacked, they lost 100,000 Bitcoins. They issued that debt token, I think it's called the BFX token, which actually worked, which is like another example of a token that actually worked. But yeah, Tether has become this massive organization that is like a massive asset that's like the backbone of the crypto shitcoin complex.

1:08:49It not only finances all of the DeFi that happens on all these other layer ones, and not only does it exclusively use other protocols in order to even be transferred between counterparties, but it also is the number one on-ramp and off-ramp from offshore exchanges where people buy, you know, shitcoins on margin or perpetuals or futures or any of these like financial products on margin. So, you know, Tether is probably the most valuable shitcoin that exists. And, you know, not only do they do all that behavior, but then like the people they work with, you mentioned, you know, Justin at Tron, but also like the second biggest minter of Tether was FTX and Alameda.

1:09:48So like their counterparties that they work with, you know, like many of them have turned out to be just like straight scammers. So it's interesting that like they're kind of immune to criticism. When like they're a hugely influential organization, I mean, they fund Giacomo's Plan B initiative. You know, they just invested a bunch of money into Swan and gave Swan, you know, 1% of the hash rate of the network. You know, I have heard that they were the ones that did Blockstream's last funding round. You know, they, you kind of can go down the list of all the different places that Tether's money shows up.

1:10:38And, you know, to me, like that is something that should be thought about deeply and understood a little bit better. I mean, you're talking about an entity that claims to have 60, 70 billion dollars in U.S. Treasuries. That would make it, you know, one of the largest U.S. Treasury holders in the world. It appears that those U.S. Treasuries sit in a U.S. bank.

1:11:08And you know, those are treasuries that could be confiscated by the U.S. government if the government wanted to. And so it does make you wonder, like how does Tether, how is Tether able to operate with immunity from the U.S. government, unless there is some sort of relationship there and why are they investing so much money into, you know, core critical infrastructure as it relates to Bitcoin.

1:11:40Vlad CosteaI have to ask you, David, are we turning into Tether truthers right now? Because I don't have any tinfoil hat within my reach. I don't know what to do right now. I feel like the Bitfinex'ed guy, but more reasonable than that, because he claims that there are no reserves and we're not making any such claim. We're just saying stuff that's out there and that's observable that they do own a lot of treasury bonds and they do behave in a certain way, which I don't know. I'm not big enough for me to understand how this works.

1:12:14And it seems like every time there was some sort of bank run and USDT got de-pegged, they were able to somehow make it work. Once again, while I can think of Terra Luna, I can think of the Binance USD. I can think of a lot of failed stablecoins that were not able to keep the peg and were not liquid. So it seems to work. By the way, what do you think about Liquid? I think this is a nice way to transition.

1:12:42David BaileyYeah. So I'm pro-Liquid. So I hope that Liquid can take advantage of the market environment right now to get adoption in users. And I feel like this is their moment for Liquid to actually be a viable product in the market. And so like, you know, there's a lot of the Blockstream vision, their original vision that at least the vision that they shared publicly that like I still buy into and believe. And so you know, they called that there would be a fee market in Bitcoin and some people didn't believe that and they were correct.

1:13:25And like they built a product for the fee market when it eventually developed, called Liquid, this product should be booming right now. And so, you know, I respected, you know, actually, we got a lot of shit for Ordinals, but the first NFT experiment that Bitcoin Magazine ever did is we issued NFTs on top of Liquid. They had an NFT platform called, I think, Rarible, I think maybe was what it was called. I forget, I forget the name. So I feel like they should be enabling people to degen on Liquid and they should be using this as an opportunity to prove the power of sidechains. So, yeah, no, no hate.

1:14:19Vlad CosteaTo me, it's interesting that it has this marketing budget. It's so popular among the maximalist circles, but at the same time it has empty blocks. And for so many years it got no traction. And it seems like the degens, which are also institutional, by the way, because the purpose of Liquid, the end goal for them is to tokenize Wall Street. That's what they want. They want to be as compliant and as legal as possible in order to be able to deal with these financial institutions that are interested in tokenizing.

1:14:52But it turns out that these financial institutions don't like regulations either. So they would rather use Ethereum, which for better and worse is actually permissionless and you don't deal with a federation, even though it's debatable with the stakeholders and all of that proof of stake mechanism. But either way, it seems like these institutions would rather use Ethereum than Liquid. And to me, it's interesting. It just proves that we need to create more layers that are trust minimized and actually enable this sort of permissionless transactions.

1:15:27David BaileyYeah. Well, I mean, it's because the core value proposition of being permissionless for most people is the ability to route around laws and regulations that exist. Like, you know, that's the reason that Bitcoin is like a viable alternative to people's local currency, because it allows them to route around their local currency into a system not controlled by their local politicians. So yeah, it's the same with asset issuance. It's the same with secondary markets and who the buyers and sellers are able to be. Like the cost of regulation is a massive burden.

1:16:05And yeah, they're looking for systems that allow them to route around it. And yeah, I forget what your point was about, oh, you were saying that the maxis love it. You know, I have found that the maxis, they often love software and solutions that they've never used. So they like to say that they love something, even though they've never downloaded it. They've never created an account. It's just a good thing for them to signal that they love, even if they've never used it. I think like we could create a fake app right now that we could create like a Twitter account for, and it can say like all the maxi things and it could like not even have a product.

1:16:51And you know, in a year or two, we can get people being like, oh, I love this product. Like this is what you need to be more like, you know, X, Y, or Z, even though it doesn't exist. So that would be a fun psy-op for us to do.

1:17:05Vlad CosteaAs someone who works in media, I can also attest to the fact that people pretend to have read a lot of stuff, even if they only read maybe the title. And if they do agree with the title, they're going to associate that with your name and they're going to think that you agree with them. And it's sad because when I first got into this, the Bitcoiners were the smartest people in the room and the shitcoiners were dumb. But it seems like the shitcoiners are much more smart right now and they do understand monetary theory and economics and all of these ideas that a lot of Bitcoiners pretend to have read.

1:17:42They seem to be much more prepared for stuff like this. And also for layers and protocols and the latest discoveries in cryptography, it's sad to see that these people, by virtue of being more open-minded, they'd benefit from it. And there is a stigma in Bitcoin for importing this sort of stuff. Like, I think ZK rollups get a lot of undeserved crap just because they're brought from Ethereum. I see a lot of that and they say, oh, these are never going to work and they're a bad idea.

1:18:15Keep them in Ethereum's yard or whatever. But they do provide an alternative to something that we don't really have. So ZK rollups are supposed to be an alternative to sidechains and we don't really have real sidechains. I think sidechains are like real free markets or whatever, or real communism. It was never really put into practice because every implementation made some compromises up to this point. But to me, it's interesting. And I think that it's competition that drives up innovation and makes us get much better user experience and helps us scale.

1:18:54But for some reason, you have to get approved by some high priests and get their blessing before you can actually do something and get some traction within the user base.

1:19:09David BaileyYeah, no, I saw an interview, I think it was with Giacomo, where Giacomo was saying that he likes ZK rollups and I think he referred to it as like the Holy Grail or something like that. And so it's interesting, everything that happens in crypto is totally worthless unless you can extract out very nuanced, careful conversations and then we can admit that these things are valuable. One of my revelations from the Satoshi emails that came out during the Craig Wright trial, there are so many people that revere Satoshi as a time traveler or an alien or an all knowing creator of Bitcoin.

1:20:03And I think one of the things that was apparent from those emails is that Satoshi was just a guy. It didn't even seem like he was a group of people. It seemed like it was one person who was just making decisions in a practical fashion in order to get the system to work and start going. Not that every design decision was perfectly thought through or perfectly implemented. And so, yeah, I feel like there are lots of ideas that perhaps if Satoshi was rebuilding Bitcoin today, he would give it a second look.

1:20:44I think ZK rollups are super interesting.

1:20:48Vlad CosteaYeah, and I also don't get the cult of Satoshi because he was so insecure in these emails, even when he was presenting Bitcoin to the P2P Foundation. He was talking with Martti Malmi and he was trying to explain to him that these people may not be on board with such ideas with electronic cash. It's funny because people come up with all of these cult-like theories about what could have been behind the Bitcoin project. But they don't realize that the first implementation had a broken game of poker embedded into it and also had a peer-to-peer marketplace.

1:21:27And Satoshi was having a hard time explaining the purpose of this. I think it took until Silk Road that we actually saw a real use case.

1:21:37David BaileyYeah, I mean, yeah, it's funny. It's like Satoshi was afraid of being canceled maybe, but ultimately he still did it. And the first applications, the killer app of Bitcoin that was needed, the first ones were the degen applications. You know, like, I think it's a pretty hard case to make that meme coins on Bitcoin are more scandalous or more immoral than buying and selling drugs online with Bitcoin.

1:22:12So, yeah, again, it's just like Bitcoin is adopted by the people that are most estranged from the system who have the least alternatives to use. And it's used for whatever they find useful, whether that's like escaping political terrorism or if that's buying an eighth of weed online or if that's, you know, making a funny meme coin and airdropping it to a bunch of miners on a mining pool. It's whatever brings happiness to the user paying the fees.

1:22:51Vlad CosteaIt kind of sucks that we have to wait until this gets minted. So I guess the offer for two Bitcoin is off the table. You're going to have to pay 3.125 Bitcoin for this. And I should show it, at least in this livestream, so people know what this is about. Let me figure out a way to put a picture on the screen. So I have to also ask you about the conferences that you're organizing. What are they about? Why do you still do these conferences and what is there left to accomplish?

1:23:25Because it seems like you had the biggest names already. You had the biggest event. You went around the world. You did one in Amsterdam for two years in a row. Now you're trying to expand into Asia. And what's the joy behind all of this hard work? Because I'm not sure if there's much left to accomplish from a conference organizer's point of view. And you also have hardcore competition from BTC Prague and some other events, like, what's it called? Pacific Bitcoin from Swan.

1:23:56David BaileyYep. Yeah. So, you know, we wrote a blog post back when we announced the first Bitcoin conference. And, Vlad, I'm not sure, maybe you were working with us at that time. I don't remember when you joined or left. But we wrote a blog post called "Make Bitcoin Fun Again," which, you know, is a little ironic, that that's like where the fault lines of Bitcoin are today. But in this blog post, we talk about how all of these things that people are excited about doing on other chains can be done on Bitcoin.

1:24:37And we're going to build a Bitcoin conference that expands the ideological and intellectual frontiers of Bitcoin, and that the nerdiest, neatest, funniest ideas, the conference was a platform for those ideas to be discovered and to inspire people. And so that was the genesis of the Bitcoin conference. You know, in four years we scaled that conference from 2,000 people to 26,000 people, which, like, I don't think has maybe ever been done before with the conference.

1:25:19And, you know, like, we've made a lot of mistakes along the way. That's how we learn, is by making mistakes. But we've built a great product. And, like, now we're trying to take the product to every international market. So we're doing one in Hong Kong. We're also doing one in Abu Dhabi, in the Middle East. And, like, we have plans on entering into some other markets as well. And the goal is to build a vibrant Bitcoin community in every major market in the world. And this Hong Kong conference that's coming up in a couple weeks, like, it's going to be really an interesting conference.

1:25:54There's never been a Bitcoin-only conference before that we can remember or identify in Asia that's at scale. Like, there's been a couple, maybe that's like 100 people or 200 people, but none that are thousands of people. And so, you know, we are selling the vision that, like, Bitcoin is the protocol to build upon for everyone. And we're letting, like, all the ideas that are fringe ideas, maybe to some, but are exciting ideas to others, have, like, a platform and a place. And, you know, conferences are stressful. Like, I honestly, every time a conference happens, I, like, lose at least a year of my life.

1:26:46But, like, I feel like it's never been more important to have a platform for all of the ideas of Bitcoin to be able to come and have a place and have a voice and be disseminated and be debated. And I feel like a lot of our competitors that are trying to build Bitcoin conferences, they're trying to build, like, the purest Bitcoin conference possible, where, you know, they can limit the surface area of what Bitcoin is to a large degree, and they can filter out certain voices from the Bitcoin community that they disagree with.

1:27:24And that's, like, the exact opposite of our ideological view for the Bitcoin conference. Like, the more differing opinions that we can give a home to, the more conversations that we can have around these ideas, the better and stronger the Bitcoin movement gets. Like, bad ideas are also learning experiences and opportunities for the community at large. It's important to have those conversations too. And so, yeah, like, we feel like no one else is doing exactly what we're trying to do, and we feel like we have to do it. And, like, the mission of our company is hyperbitcoinization.

1:28:08So we're going to keep doing this until every single person on the planet has 100% of all their money on top of the Bitcoin value chain. So we got a ways to go.

1:28:20Vlad CosteaI mean, that sounds very cool. And I do have to remark that there's this freedom/libertarian dimension to the agenda of your conferences. There is always something about Ross Ulbricht. There's always something about Assange and all of these freedom fighters. So you do insert a little bit of your political ideas into the events. But this year, I think it's going to be different or special, or I don't know how I should put it, because there's a large number of people who maybe became famous speaking in San Francisco and Miami and Amsterdam.

1:28:57And right now they're saying they would never participate in any event that you're organizing because you're selling ordinal inscriptions. So how are you going to mitigate the fact that maybe a large chunk of the high priests, who are maybe ticket sellers, or maybe they're not, I don't know, they're not going to come anymore? How are you going to fill in for these people? Are you going to replace them? You think they have replacements? Because they think they don't.

1:29:26David BaileyYeah. Well, I will say that there are many different people in the Bitcoin community that have opinions that want to be heard. And we're a platform for all those different voices and perspectives. And so if we lose a certain perspective from certain speakers, we'll find different voices that can deliver that same message. Like the monetary maximalist perspective on Bitcoin, it deserves to have a voice too. It's like, it's not that it should be filtered or censored. Like, they should be a part of the conversation. And fortunately, like, we have a lot of people who are going to be speaking at the conference, bringing that to the table.

1:30:13You know, we take a perspective that there, like, there are no burned bridges with us. And so people who are, like, our biggest critics right now, I hope that in the future, once they see, like, our vision play out and once they have an understanding of, you know, once they see what our product looks like, that they're going to want to work with us and collaborate. And, like, we're here for that when that happens. But, yeah, we're not going to compromise the product because people want to bully us or people want to, like, boycott us. We get boycotted every year. Like, every year there's a different reason for boycotting us.

1:30:57So we're just going to keep building the best product we possibly can. And we're going to do it in a way that's aligned with our values and our view on the direction of Bitcoin. And I think, you know, at the end of the day, like, what people want is they want to be on the biggest stage possible. And so as long as the market keeps delivering our event as the biggest stage in the entire industry, I don't think we're going to have any challenges with speakers. People don't know this, but, like, we have, I don't know, 2,000 people a year that apply to speak at the conference.

1:31:30So there's no shortage of speakers. But, you know, I hope that Giacomo will one day reconsider his view and speak at the conference. So we'd even let him do his "Ordinals are retarded" speech. He just, you know, might not find an audience that likes that speech as much as other places. So, yeah.

1:32:06Vlad CosteaYeah. So I put on the screen the ordinal inscription that I put permanently into the blockchain. It's just that... So let me put it once again. It's just that it wasn't mined yet, but people in the chat were able to see it. They asked, why is it only 3.125 Bitcoin? And of course they were being sarcastic. But what I replied is that last week, it could have been 6.25. So they should be happy about the discount.

1:32:37David BaileyYeah, no, I think that's fair. I think that's fair. They're getting a huge deal.

1:32:42Vlad CosteaIt's a huge deal, because this was made permissionlessly to piss off all the right people. And this is going to be on their nodes forever. So think about it. Do you want the token which represents the ownership of this? Get it. There's only one way. Reach out to me and we're going to make this happen. But seriously now, not that the sale is not serious, you can contact me and we're going to make this work. Seriously, it's a bit hypocritical to be allowed to speak your mind freely and know that you can join anytime to say whatever you want by virtue of your influence.

1:33:17And then you say not just that you're not going to join, but everyone who joins on stage is a scammer by association. Because of course, if you create stuff on Bitcoin that is not monetary by nature, even though the sale of it is also monetary, so you pay fees to the miners, and it's not a token per se, as in Counterparty, it's more of a token like colored coins. In spite of all this, there is this opposition. And I think it's strange, but I think there's also an agenda behind it.

1:33:52The people who are against it have been pushing for an alternative to this. And also the question is, how are we going to pay the miners? Because we just had a reward halving, which is also why this went down from 6.25 to 3.125 Bitcoin. If you want to buy it, hit me up. But how are we going to pay the fees to make up for this reduction in rewards? And it seems like these ordinal people are much more generous than the HODLers. And the question is, can Bitcoin survive only with HODLers?

1:34:28David BaileyYeah. You know, again, I think when people isolate themselves from the broader Bitcoin community to talk to people that only agree with their perspective, I think that they will find that's a counterproductive strategy. And, you know, we're going to have over 20,000. We may have over 30,000. We'll see what the numbers come out to be. So, you know, as much as there's, like, this cancel culture mentality of, like, let's try to ostracize anyone who's speaking or coming to the Bitcoin conference, like, it's not going to work. Like, there's groups of people that, like, go and harass our speakers and try to get them to back out of the event, and, like, harass other attendees to get them to cancel their tickets or whatever.

1:35:28Like, I have refund data on our conference going all the way back to 2019. We've had one ticket refund request. One. All the drama, all the hating, all the shit that's gone down, one ticket refund request. So, you know, I think, like, when they kind of isolate themselves from the community, they lose the ability to claim to speak for everyone. And so I think they'll find that counterproductive. And I think they're going to, if they really want their views to take root, then they need to come and defend them, and they need to communicate them to the broader community.

1:36:13So, yeah. And then I forget what the rest of your question was.

1:36:15Vlad CosteaWell, it was more of a commentary on the nature of these events, and I don't know. Are we still libertarians? I think this is the best question that I can ask at this point. Is Bitcoin still a libertarian movement, or are we captured by the state and we're trying to be as compliant as we can, and we give up on the ability to self-custody just to get the number to go up?

1:36:46David BaileyWell, I can tell you that we're still a libertarian organization, and that the majority of Bitcoin that are held in the world are held by libertarians. And so that should give you some sort of solace.

1:37:09But, yeah, I mean, I think we have to keep reminding people what the values of Bitcoin are and why they matter. And I think that a lot of people are going to take them for granted. But there will come a time in the future where everyone will remember why we created Bitcoin in the first place. That Bitcoin, if we just wanted to create compliance technology, we didn't need to create Bitcoin to do that. It already existed. And to escape the system that came before is fundamentally an act of dissent.

1:37:43And, yeah, I think people will be reminded. I think people will be reminded. So, yeah, this is definitely a libertarian movement, Vlad. Don't lose heart. Freedom maxis for life.

1:37:59Vlad CosteaYeah, it's also about freedom of transactions as much as it is about storing value. I don't know why there's this distinction between store of value and medium of exchange, because it was never a clear line. You could always use it either way. But it seems like right now it makes more sense from a technical perspective to use it as a store of value than to transact with it every day. I understand why on-chain transaction doesn't make sense, but I also don't understand why we can't double the block size after every halving or something, because this can be useful for people around the world who need to use the main chain to open Lightning channels or get on Ark or get on drivechains or whatever it's going to be.

1:38:44And it's going to reduce the costs. And there are two extremes of the spectrum. I think John Carvalho made it very concise in this regard. You have the super big blocks where nobody is able to run a node, so the validation becomes a job for maybe Amazon or Microsoft or whoever owns large infrastructure for servers. And the other extreme is where you can run a node on a Raspberry Pi, but you can't afford to make a transaction. So it begs the question, what's the point of running a node if you can't transact anymore?

1:39:21And it's a bit silly to think of block space as this natural resource that is scarce, when the costs of storage and data, bandwidth and everything are going to become cheaper over time. So I guess it's taboo to talk about hard forking, but there are also ways to increase the block size without a hard fork. We have extension blocks. I think Litecoin does a pretty interesting experiment right now with extension blocks with MimbleWimble. Not too many people talk about that, but I do pay attention to it, and it makes me wonder if we're going to get anything like this.

1:39:59David BaileyYeah, so I don't know a ton about what Litecoin is doing. I really know nothing about what Litecoin is doing. But, yeah, I mean, I think it's an absurd position to say that, like, 1 megabyte block size is the, you know, ascribed block size that is the perfect balance between these two extremes. You know, if that's the case, would people really defend the position that if we decrease the block size by 90%, that Bitcoin would be 10 times more secure? Like, who would make that case? I feel like that's obviously foolish. And I think it'd actually be very harmful for Bitcoin if we could only facilitate 20 million transactions a year instead of 200 million.

1:40:50So clearly there's some balance between the different trade-offs that we're trying to find, and that target should evolve over time as technology evolves and changes. Where I draw the line personally is on hard forks. And so, you know, whatever is viable within Nakamoto consensus, I think, is something that in time will be explored and implemented. It will have to be.

1:41:21Vlad CosteaYou know, you're much more reasonable when I talk with you like this than you seem to be when people read your tweets and they make assumptions about your beliefs, and they say, oh, you're a BCasher, or you're such a large blocker, or whatever. It's interesting. Maybe people should listen more to what others have to say, as opposed to making assumptions based on 255 characters that are being posted on a website. I don't know. Maybe we went too far with this cancel culture, and there's more that we have in common as opposed to our differences.

1:41:59But I don't think anyone involved in these conversations is really trying to destroy Bitcoin. Maybe I'm wrong, but it seems like everyone has their best intentions in mind, even the people who try to filter inscriptions. Good luck filtering this one, by the way.

1:42:13David BaileyYeah. Yeah. Yeah, I totally agree. Totally agree. Like, I have yet to meet someone that I thought, this person wants to see Bitcoin destroyed. And so I do think that people come to their perspectives for the right reasons, even if I would disagree with, you know, where they fall. But, yeah, well, Vlad, I mean, thank you for having me on your podcast. Thanks for getting me canceled, and excited to be canceled with you. Excited to have this commemorative ordinal for this shared cancel experience. And, you know, I hope we can do it again, maybe in Nashville.

1:43:04Vlad CosteaMaybe. I don't know. And it's not mined yet, but once it gets mined, you can buy it for 3.125 BTC. You get a Bitcoin, David, I get a Bitcoin, the other one gets donated to Ross Ulbricht. So 1.125 goes to Ross Ulbricht. I buy a Supra, you buy a Supra, and Ross gets much better legal defense. Maybe next year when the president changes in the U.S., there's going to be much better odds for him to get out. But it's ridiculous. Even if you agree that Ross is a criminal and you agree that he deserves to be in jail, he has been there for 10 years.

1:43:34And there are people with much worse crimes who did much shorter sentences. So we can agree to disagree a lot, but this guy is more useful outside of prison. So thank you, David.

1:43:53David BaileyYeah, I'll just say that there's a lot of people working behind the scenes to get Ross's sentence... And I think it will happen. I think there's a very good chance it happens in this next presidency.

1:44:07Vlad CosteaYeah. So thank you very much, David. I'm going to post this everywhere. I hope we get even more canceled. I hope you guys store this JPEG on your node forever.

1:44:17David BaileyAll right, Vlad. Cool. Thanks. Ciao.