Title: S16 E49: Jay Berg on Bitcoin, SidePit & Maximalism
Podcast: Bitcoin Takeover Podcast (host: Vlad Costea)
Guest(s): Jay Berg (founder of Sidepit)
Published: 2025-10-10
Duration: 4:15:04
Episode URL: https://bitcoin-takeover.com/audio/?name=2025-10-10_s16_e49_jay_berg_on_bitcoin_sidepit_maximalism.mp3
Audio: https://bitcoin-takeover.com/audio/media/2025-10-10_s16_e49_jay_berg_on_bitcoin_sidepit_maximalism.mp3
Transcript: CORRECTED. Base: local Whisper medium.en transcript with automatic diarization, reconciled against a full local small.en (float32) re-transcription with word timestamps, the YouTube auto-captions of the livestream (time-aligned, about 23 s offset) and an older local tiny.en transcript (three-way comparison over the whole episode). 125 doubtful, dropped or garbled stretches were re-transcribed locally from short audio clips (123 with small.en float32, 2 with medium.en float32; medium.en runs were stopped because of RAM limits on the box). The raw transcript's 293 merged paragraphs were re-split into 723 speaker turns using a full-episode local speaker-embedding scan (TitaNet reference voices for Vlad and Jay, 1.5 s and 0.75 s windows), the speaker-change markers in the YouTube captions, and by hand; this includes many short interjections and overlapping exchanges (for example the BIP 148/UASF exchange around 01:46, the "Is that better?" exchange at 02:17:52, the TABConf exchange at 03:16:48, the Zcash price exchange at 03:21:54-03:22:25, the NAKA exchange at 03:40:41-03:40:58 and the closing at 04:14:37). Names and jargon were checked against the title, the show notes and the web: Sidepit (sidepit.com; written SidePit in the show notes), Sidepit ID, E-mini S&P 500 futures, Chris DeRose, Bitcoin Uncensored, Pieter Wuille and BIP 42, Nick Szabo, Craig Wright, Bitcoin Belle, Gavin Andresen, Wladimir van der Laan, Luke Dashjr, Bitcoin Knots, OP_CTV/BIP 119, BIP 300 and drivechains, Paul Sztorc, LayerTwo Labs (layer2labs.com), Citrea, Counterparty, Omni/Mastercoin, Exodus address, Ordinals, BIP 148/UASF and Shaolin Fry, Roger Ver, Bitcoin Cash, Matthew Kratter, Jason Lowery and Softwar, Nassim Taleb, Saifedean Ammous, Gresham's law, NAKA/KindlyMD and David Bailey, Nostr, Zcash, Monero, NYM, Zano, CryptoNote and Nicolas van Saberhagen, Amaury Sechet and eCash, Chia, Barry Silbert, John Dillon, Greg Maxwell, Theymos, TABConf and Christopher Allen, Sean Bowe, Naval, SideShift.ai, Bitcoin.com News, NoOnes.com. Light clean verbatim: ums, false starts and stutters removed; factual slips by speakers are kept as spoken. Intro music omitted. Remaining doubtful words are marked [unclear: best guess].
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[00:00:47] Vlad Costea: Hello there and welcome to the Bitcoin Takeover Podcast. This is Season 16, Episode 49. We are live with Jay Berg, a Bitcoin OG, who's joined in 2010 and was the first person to tweet BTCUSD when the price hit $12 back in 2012. And he's been doing a lot of great stuff. This is actually technically his second time on the show, because during the interview with Chris DeRose last year, he joined as a surprise guest. But at the time, the conversation was not about him and his work and his opinions. It was mostly about nostalgia for Bitcoin Uncensored and the work of Chris DeRose.

[00:01:25] Vlad Costea: Now he's here to talk about his own work, to give us some insights on his own opinions, and tell us all why everyone in Bitcoin right now is wrong. Welcome, Jay.

[00:01:37] Jay Berg: Hey, how are you doing, Vlad? Good to see you again. Yeah, I forgot that this is my second time, but it's been a long time coming. I love what you're doing in the space. And yeah, let's let's get to it. See where this goes.

[00:01:48] Vlad Costea: Now let's start with the hot take. You told me something before we started rolling that basically every Bitcoin maximalist is wrong and that shitcoin, shitcoining is the new Bitcoining or something.

[00:02:00] Jay Berg: Yeah, I would say, okay. Yeah, hot take. Bitcoin maximalism itself was originally a negative term that, you know, got taken over by the people that were called that to make it a positive. I would say the idea of being called a shitcoiner should be the new Bitcoin maximalism. So, you know, anyone who has a feeling of negativity when they call the shitcoiner should just, you know, take it in and become a shitcoiner. We should rename this podcast, the shitcoin takeover podcast.

[00:02:39] Vlad Costea: No, but I disagree with you there because I think Bitcoin is like Linux, right? It's the kernel that everything else uses. So I believe that Litecoin is Bitcoin. Does it follow the same white paper?

[00:02:51] Jay Berg: That's exactly what I mean. That's exactly what I mean. Crypto is Bitcoin. Ethereum is Bitcoin. Zcash is Bitcoin. Lightning is Bitcoin. Liquid is Bitcoin. It's all Bitcoin because in one sense, Bitcoin has failed. And now there's thousands of coins that make up all the components that what Bitcoin should have been in the beginning. So it's funny to say Bitcoin has failed when it's making new highs, but, you know, the mempool is empty. And really, we have not, we have not achieved peer-to-peer electronic cash in Bitcoin itself.

[00:03:26] Jay Berg: But, you know, there's we got somewhere and it's been a crazy 15 years. I guess every four years is like a whole new story and a whole new drama. And now I kind of miss what's happening now. I'm not exactly sure what's happening, but I think both sides are incorrect. Both sides are completely wrong. By both sides...

[00:03:50] Vlad Costea: You mean the filter guys and the ones who say we should increase OP_RETURN?

[00:03:53] Jay Berg: Yes, exactly. So OP_RETURN is definitely it was it's definitely not a good idea. Like cores definitely make big mistakes. And this is a series of bigger mistakes, but the responses, I think, is even worse.

[00:04:10] Jay Berg: So it's it's not such a big deal. Yeah, of course, it's it's a bad move and it's it's after a series of individual moves that got us here. But the question is, how do we get here? And how do we I don't know how to how to get out of here. Right. I think a new civil war is kind of in the DNA of the toxic Bitcoin maximalists. And it's you know, it's a shame that it's come to this. But here we are.

[00:04:48] Vlad Costea: Really? So how do you think this is going to end? You think we're going to fork again, just like 2017? So...

[00:04:55] Jay Berg: I haven't really been keeping up. What I do is I usually make predictions. So I actually predicted this, I don't know, Luke fork or something. I basically predicted they would fork off, you know, just like 2017, I guess. And then we could like, OK, they fork off and then we could like do OP_CTV. Right. I think that's the original sin of Bitcoin and not. So I personally believe that Core isn't even Bitcoin and Knots isn't even Bitcoin. I believe Bitcoin includes OP_CTV. I think OP_CTV had consensus. I think that's the original sin of how we got here and why everything has just gone sideways since then.

[00:05:53] Jay Berg: But there's like a lot of history, many, many years of history. Like you said, I've been here since 2010 or 2009, and I've seen it all go. And it's really difficult to explain where I'm coming from without giving the whole story of where I'm actually coming from. Especially for people that showed up in 2017, 2020, 2023. It's a whole new world where we're at now. And yeah, so it's I like what you're doing. We're bringing in old, you know, OG people. And I used to see you bring in even Bitcoin cashers.

[00:06:29] Jay Berg: Like, you know, it's really a shame that we lost half the community in 2017. Right. And a lot of them were pretty good people, sophisticated devs and stuff. And now maybe we're doing the same thing. So, yeah, it's not ideal. But, you know, here we are.

[00:06:48] Vlad Costea: I'm not sure if it was half the community in 2017. It did seem like a lot of the libertarians were on the side of BCH. And many of the core developers, not many, like a few key developers like Gavin Andresen were first on board with BCH. And they said that's the Bitcoin that they have been working on since they started. Unfortunately, that big block side ended up having another big schism. And I do have my own conspiracy theory about it, that Craig Wright is the state actor that we have been worrying about.

[00:07:28] Vlad Costea: Because everything that he touches ends up in chaos, ends up being destroyed to some extent. Like that man is like the Tasmanian devil or something. Unpredictable. Becomes allies with you and the next moment he stabs you in the back. He sued a bunch of developers. He made some developers lose their mind. Like Wladimir van der Laan. I saw that he has a new name now under which he contributes. I think he's trans. Or she's trans. I'm not even sure anymore. And this all started when the lawsuits were pouring in against core developers.

[00:08:11] Vlad Costea: And it seems like the world hasn't been the same since he landed on the scene 10 years ago. When I think it was a conference in Las Vegas where he was introduced to the world by Bitcoin Belle. Actually no, before that it was that signing ceremony or whatever with Gavin where he fooled him.

[00:08:31] Jay Berg: I mean, that was, that was way after.

[00:08:34] Vlad Costea: Wasn't that 2015?

[00:08:37] Jay Berg: Signing ceremony? I think he was introduced by Bitcoin Belle and then the signing ceremony happened when he was saying he's Satoshi, right?

[00:08:48] Jay Berg: Before that Vegas thing, no one even heard of him, right?

[00:08:53] Vlad Costea: I've watched. So I was not in Vegas at the time. I was like 23 years old. I didn't care much about any of this. But I did watch the YouTube video and I have to say it looked like Craig Wright was the Wizard of Oz. He was there on the screen. He was supposed to debate everyone else on the panel, including Nick Szabo. Who may or may not be Satoshi, but given his recent return and his opinions on Bitcoin and the fact that he seems to be out of the loop and not cognizant of the consequences of everything, it seems like I'm inclined to say that he's not or he's playing a very good role.

[00:09:38] Jay Berg: Yeah, I mean in 2014 I asked him directly if he was Satoshi. He actually said no and I kind of believed him. I don't think it was Nick Szabo. Yeah, I think maybe it was Steve Nash or I think, I'm not sure who Satoshi is. I think if he's alive he'll come back.

[00:09:58] Vlad Costea: Not Steve Nash, that's a basketball player.

[00:10:01] Jay Berg: Oh, what's his name? Nash. Nash equilibrium.

[00:10:05] Vlad Costea: Graham Nash.

[00:10:06] Jay Berg: Nash equilibrium.

[00:10:08] Vlad Costea: No, that's from Crosby, Stills and Nash.

[00:10:12] Jay Berg: No, game theory. John Nash. Sorry, I said Steve. Is he a basketball player?

[00:10:21] Vlad Costea: You said Steve Nash. I said Graham Nash from Crosby, Stills, Nash and Young. Anyway, John Nash, the protagonist of the movie A Beautiful Mind.

[00:10:40] Jay Berg: Yeah, I think the Civil War was the biggest mistake. I think it was the biggest mistake and I really want to apologize for my part in it. I could get into like how that caused where we are today. But I kind of, you know, one of the things I noticed is that, you know, your takes, like I kind of when I say everyone's wrong, you know, including you, Vlad. Like I think I probably disagree with everybody and including like most of your takes on Twitter, but I feel like where we align is, you know, that there's a major problem in the space.

[00:11:18] Jay Berg: It's not healthy for anyone involved. And, you know, I think that on a foundation level, there's, you know, you broke out of wherever, whatever cult you were in and now you're going off on your own and trying to make things better. And I really like appreciate doing that and very few people left doing that. And I think that, you know, moving forward, there could be a new movement. And I think the name of the movement being, you know, shitcoin or something. Kind of like creates the new tent where some of the worst of the worst, like you even told me a story before we got on about someone attacking someone's girlfriend or one of the devs, you know, keep them out and break this this cult.

[00:12:10] Jay Berg: I think get back to the code, get back to the developers and solving technical problems. So.

[00:12:18] Vlad Costea: At the end of the day, we have to ask ourselves if we just came here for this 21 million meme and therefore BTC in its current form is everything that we want to have, no matter how, or if we came here for a purpose which is humanitarian or individualist or whatever, but to maximize human freedom. If you want to maximize human freedom, you cannot do it with the Bitcoin network in its current state and with its current culture.

[00:12:49] Jay Berg: Yes, I have a pretty bland take. I think it's about a piece of software that solves a fundamental problem of electronic cash, peer-to-peer cash. And I think we should have, that should be the focus is, you know, getting this tool working correctly. You know, we, you know, we started 15 years ago and I think we kind of stopped trying to make this thing money like it was intended to be. So, you know, it's a, it's a technical achievement. I think if we take a step back, so where am I coming from?

[00:13:35] Jay Berg: I'm coming from much more of a technical side of things. It could go into like how I discovered Bitcoin.

[00:13:43] Vlad Costea: Yeah, I was gonna ask you this because the average person who will tune in right now from Twitter, they will say, who is this guy? He doesn't understand Bitcoin. Like he talks out of his ass right now. He says, Oh, we should be doing this. He doesn't understand Bitcoin. That's not what Saylor told me.

[00:14:00] Jay Berg: Right. Okay. So let me step. Let's think how Bitcoin happened. Okay. With me. Okay. 1998, the internet bubble, the internet thing, right? So I had a friend that got a job at, I think, spendcash.com, some digital, there was a bunch of digital currency startups, right? I don't know if you remember that.

[00:14:23] Vlad Costea: I was six years old. I can't, sorry.

[00:14:25] Jay Berg: I remember, I remember hearing digital cash and I said immediately I was thinking ones and zeros. I'm like, okay, I have a bunch of ones and zeros that somehow equals a dollar and I could just clone it.

[00:14:37] Jay Berg: So I immediately said, okay, that's impossible because of the double spend. Right. I mean, I didn't even have to get into UTXOs. I was just like, yeah, it just, it can't work. Right. And I just dismissed it. Right. And then, so where was I, what was I doing at that time? I was at Bloomberg, you know, the Bloomberg company, the terminal financial markets. And, you know, so let's say it was like new year's 1999, the Euro, the Euro just came out, right? EURUSD.

[00:15:11] Jay Berg: And I was kind of involved in, you know, doing the tech and the charting and the systems dealing with this new ticker symbol and merging all the old, currencies like the Deutsche Mark or the French franc. Right.

[00:15:27] Vlad Costea: So for context, would it be fair to call you a C++ developer?

[00:15:31] Jay Berg: That was actually C Unix, but yeah, I'm a C++ coder from back in the mid nineties. So I've been doing C++ for a long time. So, so that's when I first heard about digital currency forward back to, okay. I don't know. I'm just going to go into part of my background. So Mike Novogratz had this startup, had this hedge fund called fortress before he was a billionaire. Right. And they would do high free. They would have had a trading arm. And they had this model that was trading, making tons of money a day doing what's called high-frequency trading.

[00:16:08] Jay Berg: Right. And they had a major, they had a major problem. The system stopped making money. So they had an emergency hire. So they hired me as a C++ quant developer to come in and try to fix the system. Right. Long story short, no, they went public 2007, 2008 and I left, I left. And as I was leaving, I said to myself, I was like, you know what? We have some of the smartest people, top coders in the world, like literally, in this team, but the design of the system was such a disaster, right?

[00:16:44] Jay Berg: The top-down approach of the non-technical people. And I thought, imagine somehow we could, the coders themselves could actually build something without needing the business model or the MBAs on top of them. So I went back home, this is by 2009. I said, I'm going to start over. So I decided to build my own machines, you know, hardware, software, I'm going to restart my software career and you know, from first principles next. So here's how I figured out Bitcoin. I was building my hardware.

[00:17:19] Jay Berg: I was trying to overclock my machine. I went to overclock.net and there was a post on Bitcoin. It was a post that was, that was closed because it, you know, people thought it was a scam, didn't know what it was. And it was about how to use your CPU to earn Bitcoin. And I read the white paper, I downloaded the code, I compiled the code and immediately, maybe within two or three days, I immediately knew that this like has changed the world. And this actually was the first time I've ever seen a piece of code that did act, you know, could actually on its own create actual value without needing a business model.

[00:18:05] Jay Berg: Right. And at that moment I was like, okay, the coders are now in charge. And I was all in and you know, from [unclear: 2010]. Okay. So then I tweeted, right. How did I tweet the Bitcoin ticker symbol? So I had, at that point I had a startup that was tweeting, you know, Dow Jones and S&P and soybeans and gold and oil and his new highs and new lows. So actually if you look at that tweet, right, BTC USD $12, $12 wasn't the all time high. It was a relative high.

[00:18:36] Jay Berg: So the company Newberg Consulting would, the product was we're going to tweet relative highs. You don't have to watch the chart all day. But the reason why I bring up the ticker is because this was before Bitcoin had a ticker BTC USD. And actually the first tweet from this system was actually USD BTC. So I went, I have actually have this piece of paper here. I was trying to figure out, is it USD BTC or is it BTC USD? Right. It turns out some currencies use USD first.

[00:19:07] Jay Berg: Some currencies have like JPYUSD or EURUSD, right? USDJPY. So I was, it was so early that even BTC USD didn't, didn't exist yet. So although that was the first tweet of the Bitcoin ticker symbol, there was actually two earlier ones from Newberg that I also did in my system that was USD BTC at a, at a much lower price. Yeah. So that's, that's kind of how that tweet happened. And, you know, from there it was, so I came in as a pure C++ coder, right?

[00:19:46] Jay Berg: Interested in the code and exciting how this is something. And also I was also a trader. I was doing charts for already 10 years. So you could think of it like it was the perfect thing. And I was all in and, you know, from, I guess until 2014, 2015, like it was perfect. Right. Everything was perfect. It was completely decentralized. It was amazing. It was a great environment. It was really no drama. It wasn't actually, you know, it was pretty progressive, but you had to be a coder and you had to, you know, really understand, right, what this could be.

[00:20:28] Jay Berg: But it was, you know, it was a breakthrough and it was an awesome time. And I think people are trying to bring that back, but all right.

[00:20:40] Vlad Costea: Yeah. I mean, what can I say? You've been in Bitcoin since 2010 or something, since you discovered that you've been mining. You've seen every wave of adoption that happened. Even guys like Roger Ver, they joined in 2011 and his wave of libertarians. Like you've seen it all. And you have a point of reference, right? You've seen, for example, I think it was BitMEX Research that posted a Bitcoin talk link. From back in 2010, when there was basically the same argument about putting data on the blockchain and whether or not it should be filtered.

[00:21:21] Vlad Costea: And there was someone who expressed concern that someone's going to put very illegal content in there, like porn or whatever. And you go through that conversation and you realize that nothing's new. And then you go to 2015, 2016, there was the OP_RETURN war, with Counterparty trying to be, at the time it had the first starter advantage, it was maybe the most used token layer around. It was also competing with Omni or Mastercoin, but I think Counterparty was number one. They tried to get the core developers to increase the size of OP_RETURN.

[00:22:02] Jay Berg: And they did, right? From 40 to 80?

[00:22:05] Vlad Costea: Yeah, but it was still limited and I think Ethereum sort of thrived because of this.

[00:22:13] Jay Berg: Yeah, so I think that 80, I think all you need is a hash.

[00:22:18] Vlad Costea: My point is that you've seen all of this and now it's all coming back. But in a much worse situation, in a context that is conflictual, what a company that seems that it really wants to stir the pot and bring, like what kind of people are coming along and they pretend to be Bitcoiners and then they say people put child porn on the blockchain. And you can go to jail for running a node.

[00:22:48] Vlad Costea: Like this is the worst of the worst. It's the slippery slope at the most extreme.

[00:22:55] Jay Berg: Right. And it happened because the people's foundation of what Bitcoin is, a lot of it is FUD. And again, I blame, kind of blame us for this, the civil war. But if you start with a foundation that's FUD, or let's say FUD, something that's, it's too nuanced or complex, so we simplify it. And then people have this flag planted at this is the core, right? When it's really, and then they go in a direction and everything comes back down to this core belief. And if the core belief is wrong, right, you end up with this, what do they call it?

[00:23:34] Jay Berg: You have two competing thoughts in your mind, right?

[00:23:37] Vlad Costea: Contradiction?

[00:23:39] Jay Berg: That's okay. That's okay. Toxicity. No, there's a word for it. It's early in the morning here. Yeah. That's what creates toxicity, literally. It's called...

[00:23:50] Vlad Costea: Cognitive dissonance?

[00:23:51] Jay Berg: Cognitive dissonance. I think almost all of Bitcoin wars and just whole space and all the negativity in the cults, it's mostly cognitive dissonance. And, you know, I used to remember the, I don't know when you got in here, but remember the massive like wars between Ethereum and Bitcoin? Like we really hated each other.

[00:24:11] Jay Berg: I don't know if it's still going on.

[00:24:13] Vlad Costea: It's still going on. I see it. Especially with guys who built a brand out of it, like Jimmy Song or Samson Mow. They just keep going. Like they can't just give them a break. They built something. They're reaping the rewards. And they're like, no, it's a shitcoin because it pre-mined 60 million ETH and whatever.

[00:24:33] Jay Berg: Right, right. So I used to tweet, you know, so obviously, so I used to have this one tweet that just shows like the situation. I used to say Ethereum scales Bitcoin, right? And I would get hate from both sides immediately, right? The Ethereum people would call me a Bitcoin maxi, you know, and then the Bitcoin maxi would call me a shitcoiner, right? And it's those things, right? When you realize when both people attack you in the opposite way, you realize that they're not, you know, it's not a valid...

[00:25:14] Jay Berg: It's an emotional thing. It's an identity thing. It's a cult thing. And I think what the whole, and again, I was never a cypherpunk, but like I kind of like, you know, got into it once Bitcoin came out. The idea of coding is that for good is that you don't, it doesn't matter where you're from. You just read the code, right? And consensus on the code is all that matters. And, you know, the cult is something that comes around when people don't have that foundation. So what happened in, yeah, so that's one of those, I believe I could take each and we could go on, I could talk four hours for each topic and there's like tons of topics here.

[00:26:03] Jay Berg: But each one of these comes from a fundamental core misunderstanding of whether game theory or Bitcoin or what happened before Bitcoin and what, you know, you know, I think Bitcoin is a lot of people have showed up and they didn't know anything about computer science or software engineering. Or innovation. And they understood Bitcoin. Right. And they thought, oh, this is the most amazing thing ever. But and nothing could happen afterwards. Right. And nothing happened before. This is just a one off. Right. And this is my new world view.

[00:26:37] Jay Berg: And that's what created lightning. That's what created, you know, the lightning FUD and Bitcoin FUD. And, you know, and the reason why I'm taking some responsibility is because we needed, so we, when I say we, coders, experts, subject matter experts. Right. There was a war. There was a fork war. People were trying to fork off. And they were trying to fire core. And we needed help. So we invited, you know, the plebs, the normies, and we gave them one liners and, you know, made it easy to understand the fight and then they never left and they took control.

[00:27:22] Jay Berg: So we kind of invited the war. Right. In 2017. We invited the, I don't want to knock anyone, but just because you make a meme doesn't mean it's like there's a lot of nuance behind it. Right. Like, for example, I've never ever said anything about 21 million. Right. 21 million is not core to Bitcoin. Right. If we all wanted to change it to 44 million, that would be fine. Right. It's not core to Bitcoin. What's core to Bitcoin is consensus of the people trying to make peer-to-peer electronic cash.

[00:28:02] Jay Berg: Right. Using code and distributed systems.

[00:28:07] Vlad Costea: I guess what you mean is that the 21 million cap is not in the white paper, because I think on Bitcoin.org, there was a mention about the supply and how it's going to get distributed. And I think it was Hal Finney at one point who talked about all the world's money coming into Bitcoin and what that would mean in terms of price. And he appealed to the supply. But there was also BIP 42, which was applied by Pieter Wuille, if I'm not mistaken. And it was on the first of April.

[00:28:44] Vlad Costea: So some people are confused whether or not that's a joke. But he said he fixed the loop in the code, which basically after 2140, which is the year when the last piece of inflation will have been mined as part of this 21 million, the schedule was going to start over from 50 Bitcoins per block.

[00:29:04] Jay Berg: Nice. What? He said that? I, I would have... If he didn't, if he didn't fix it?

[00:29:10] Vlad Costea: He fixed it.

[00:29:11] Jay Berg: Yeah. Okay.

[00:29:12] Vlad Costea: So it's BIP 42. People can look at it.

[00:29:14] Jay Berg: First of all, I mean, this is really, this is actually my least interesting take. But first of all, the number is not 21 million. It's some like 20,900,000 blah, blah, blah. I don't think it's exactly 21 million, right?

[00:29:31] Vlad Costea: No, because some coins were lost.

[00:29:33] Jay Berg: No, even if they weren't lost, I still don't think it's exactly 21 million. I think it just happens to be. And I do believe that it was a mistake. I think there should have been tail emission. Right. But, you know, for example, one of the reasons why we're here today is because of the FUD of what do you call it? Miner...

[00:30:07] Vlad Costea: Extracted value, like MEV?

[00:30:09] Jay Berg: No, I'm talking about like needing fees, you know, once we run out of subsidy. Right.

[00:30:15] Vlad Costea: Or the security budget.

[00:30:17] Jay Berg: The security budget. I think that's complete FUD. I think that's something that people could grab on to and say, this is the reason why we're doing this because it helps the security budget. Right. Meanwhile. OK, so my core story is that I, you know, I was on the side of obviously I was against Ethereum. I thought Ethereum was terrible for a technical reason.

[00:30:42] Jay Berg: Right. Not not any other reason. It was a technical reason. And the technical reason is the same reason why OP_RETURN doesn't need more than 80 bytes. Right. It's because there's blockchain smart contracts itself is an anti pattern. Right. The reason why Bitcoin works. Bitcoin works because Bitcoin was designed for one thing and one thing only was peer to peer electronic cash and mostly double spend prevention. Right. That was the innovation. And there's game theory. You know, it requires everyone running it to be on the same page wanting to use this for money.

[00:31:22] Jay Berg: Double spends are no good. Right. Double spends are the worst thing that happened to money. And the game theory. Of everyone running it with the miners, at least from 2010 to 2014. Right. With the decentralized mining on CPU. Right. The blockchain or the system itself would achieve the goals. Right. If you wanted to make a system that does something else, you should design it for that particular thing. Let me give you an example. The mistake that putting a VM on the blockchain. Right. Which means what does it mean?

[00:32:03] Jay Berg: It means that somehow the system made for, what was it made for? It was made for double spend prevention. Not necessarily double spend prevention, but double spend choosing. So if there's same money spent twice, it doesn't matter which one is correct. We just want to all agree which one's correct. And we'd say, how do we know? Right. How do we know which one of these double spends is correct? We say, why don't we just randomly choose one? Are we all going to agree which one it is?

[00:32:36] Jay Berg: How do we do that? Is we have a distributed random sample of people mining, and one of them gets to choose the 10 minutes, which one of the double spends. So with each one is mutually exclusive. And when we say censorship resistant, what that means is that imagine the worst person in the world, Hitler himself, was doing something that everybody was against. And he was using Bitcoin. Even he would be able to accept Bitcoin, just like hundred dollar bills, just like a pile of gold. Because he just had to wait six blocks.

[00:33:22] Jay Berg: And his Bitcoin is good. Even if the entire world is against you, they still can't revert your coins. It's censorship resistance in the world. In the sense where it's final, right? Waiting six blocks. Now, I could get into a lot of things. I could get into zero-conf now, but it's only that guy who's really concerned about censorship that needs to wait till six blocks. Otherwise, we could all just use zero-conf and it's fine, right? The game theory works 90% of the time. And this is, I'm off track here.

[00:33:58] Jay Berg: But what I wanted to talk about, what was I talking about? Yeah, the civil war. Oh, yeah, OP_RETURN. Okay, Ethereum. Okay, so now, if you say, okay, we're going to have a virtual machine, we're going to have smart contracts. And what does that mean? That means you could do anything on a virtual machine, right? So somehow, if we're able to do anything, using the same technique that Bitcoin did, right? Why would that work? My theory was, it obviously didn't work.

[00:34:35] Jay Berg: And I could give you an example right now. Right? You know the game Rock, Paper, Scissors?

[00:34:40] Vlad Costea: Who doesn't?

[00:34:41] Jay Berg: Okay, so if Ethereum could do anything, if a virtual machine could do anything, let's take the most simple game, right? Rock, Paper, Scissors, and we're going to put it on the blockchain. So go ahead, you go first, sign a message, say Rock, Paper, Scissors, and I will sign a message, Rock, Paper, Scissors, go ahead. Make believe you're sending a message in the blockchain, pick Rock, Paper, Scissors. And then I'll do the same for $1,000, go.

[00:35:14] Jay Berg: What are you going to say, Rock, Paper, Scissors?

[00:35:16] Vlad Costea: Paper.

[00:35:17] Jay Berg: I say scissors. Right, because of the delay. So literally, the most basic gambling game in the world is completely broken. It just can't work in blockchain.

[00:35:32] Vlad Costea: Well, you could if you had some sort of privacy.

[00:35:36] Jay Berg: Right. Okay, so exactly. So we should design a system specifically for Rock, Paper, Scissors, and it would work better. Now, what is happening? So this is MEV. This is like the most simple understanding of what MEV is. So take the game of Rock, Paper, Scissors, make it very, very complex and obfuscated. And you have AMMs. And you have DeFi...

[00:35:56] Vlad Costea: Which is automated market makers.

[00:36:00] Jay Berg: Yeah. So this is this is the front running. This is the problem. I used I like to say if you could do anything, if you could do anything on blockchain, you can't do anything. What could you do, what could you do on Ethereum? You could do anything you want, which means you can't do anything because the blockchain itself doesn't provide any security for anything, each particular smart contract, right? So what I would say is that that was why I was against it. Because I came from Wall Street, I came from high-frequency trading, right?

[00:36:37] Jay Berg: There we're spending tens of millions of dollars hiring the smartest people in the world to try to get a little advantage. And now they're giving us this blockchain that is just free money, right? And all you have to do is make a complicated protocol, right? And call it, what do they call it?

[00:36:58] Jay Berg: The meme things, right? On Solana. And every single trade that happens, people are just printing money. These aren't fees. This is just, it's just broken. It's just literally broken, right? So what I like to say is the MEV for exchanges is the double spend for money, right? It's like, imagine, you know, double spends were happening all the time and it wasn't solved. It's like, oh, we'll have a workaround. No, that means that it didn't work. That means this design of Bitcoin is broken. You need someone needs to solve double spends, right?

[00:37:38] Jay Berg: So this whole thing was solved, was designed for one particular thing. And if we want to do something else, you need to do something else. You need to design something else. And what happened was, so that's why I was against Ethereum, right? But eventually, you know, eventually, like things started happening on top and it wasn't as bad. And what is it that Ethereum does today or what? Again, today, when I say today, I'm really talking 2019, right? So the last five years, I don't really. Ethereum scales Bitcoin.

[00:38:10] Jay Berg: That's what it does, right? It is the scaling solution, right? Because we had a civil war, right? And, you know, we brought in all these people to help us fight it because, you know, Roger Ver was trying to buy a core, right? As much as his, what's his name, is a weirdo. Luke was a weirdo. Like he was a C++ coder and he had a solution that would give us, it was a hard, it was a block size increase. It did give us more space. And then what happened after the split?

[00:38:47] Jay Berg: We all the coders went back to work, right? To try to create that sidechain, figure out if we could actually scale Bitcoin, right? Because obviously lightning was not the solution. And we could get into that in a little bit. So what happened? What happened was at some point we all realized, oh, there is no two-way peg possible, right? So there is no solution. So we did SegWit. Now we realize there's no solution. So what came out of it? We got APO, we got OP_CTV, right?

[00:39:23] Jay Berg: All the coders spent all this time trying to say, okay, we had a civil war. We said we're going to scale. Now we're trying and we realize we hit a wall. There's no two-way peg. So obviously we need a bigger block, right? But we did find something. We found OP_CTV, right? OP_CTV was the one thing that we found and that could have been the beginning of the solution. We had full consensus on it. And what happened? I don't want to like drop names, but what happened was some of the top influencers just like pooh-poohed the idea.

[00:40:02] Jay Berg: For various reasons, actually for no reason. You know, people like [unclear: even Andreas] and Adam Back himself. So to me, how do you deal with the situation when you have no leaders and, you know, there is no, like, you know, there is no like cult. There shouldn't be a cult, right? You have what's called consensus of the software engineers, of the experts. And the consensus of the experts, right, was that this C++ code, this BIP 119 should be merged and it is Bitcoin. And then once we get that, then we could bring in all the plebs and then we could do this stuff and then we could do all that, right?

[00:40:50] Jay Berg: So to me, that was the original sin. And that's where we are today because we didn't merge OP_CTV six years ago. And I think Bitcoin is, I don't think the current Bitcoin is the actual Bitcoin. I think it's Bitcoin plus BIP 119. And yeah, so here we are today. Mempools are empty.

[00:41:12] Jay Berg: And I would say the worst thing that Core ever did was full RBF. If there was a toxic war against Core, it should have been full RBF. Literally RBF is the fundamental thing that breaks money, is double spends. And the Core protocol of Bitcoin should not be broadcasting double spends at all.

[00:41:46] Vlad Costea: Yeah. Interesting take. I want to explore that, but let me present two of the sponsors, which are actually contextual to your conversation. First and foremost, which is very relevant because you know the guy, LayerTwo Labs, CEO Paul Sztorc is sending his regards to you. And he's still trying to build the two-way peg sidechain, which is called the drivechain. He has the software that's running on the Bitcoin signet right now. You can go to layertwolabs.com/download, and you find the signet version of his Thunder sidechain, which is a big block sidechain.

[00:42:23] Vlad Costea: His zSide sidechain, which is a fork of Zcash that's used for fungibility. His BitAssets sidechain, which is for Namecoin kind of stuff. His EthSide sidechain, which is for degenerate gambling or meme coins or whatever you want to do with the Ethereum design. And he also has a prediction market. So he has the code. He's just trying to get it across. Basically, he created this concept that's called the Core Untouched Soft Fork, which is a way to activate soft forks without core, which involves negotiating with miners.

[00:43:01] Vlad Costea: Right now, it doesn't seem like the miners need this yet. Like, they don't care.

[00:43:08] Jay Berg: What's the URL?

[00:43:09] Vlad Costea: LayerTwoLabs.com.

[00:43:12] Jay Berg: So this is BIP 300, right?

[00:43:14] Vlad Costea: Yeah. Layer T-W-O, not the number.

[00:43:22] Vlad Costea: Yeah. Anyway, they're sponsoring the show and I'm a big fan. And Litecoin seems to be interested in activating this. They're having an internal conversation and there's some testing going on.

[00:43:36] Vlad Costea: To me, this is what Bitcoin maximalism like in its purest form is about. You're maximizing what Bitcoin can do, and you're bringing everything interesting to Bitcoin using the Bitcoin economy.

[00:43:54] Jay Berg: Right. So again, I may be like saying things that kind of against a lot of things, but then what happened was so shit. So then shitcoins happen, shitcoin or your shitcoin, everything's a scam, right? Everything that's not Bitcoin is a scam. And then all of a sudden one day Bitcoin and Lightning is kosher, but everything else is a scam. Like, no, Lightning is not Bitcoin. So if everything that's not Bitcoin is a scam, then Lightning is a scam. If Lightning is not a scam, then everything else is okay.

[00:44:20] Jay Berg: And we have to look at each project individually. But then at some point, all of a sudden we're like, okay, Ethereum is a scam, but Ethereum on Bitcoin is not a scam. It's like if Ethereum on Bitcoin is a good thing, then Ethereum itself is a good thing because I could, I know for a fact that Ethereum scales Bitcoin. I could even walk you through how it works. Right. I've seen it firsthand. Right. Actually on the floor. Right. Independent of how it evolved and pre-mine and all that.

[00:44:52] Jay Berg: Right. If you're saying if smart contracts on Bitcoin is the solution, then you're saying it's not a scam. Right. But I like drivechains. I mean, it took me a while to get there. I think drivechains is fine. I don't think it actually uses Bitcoin for security, but that's a separate thing. That's why I think it's okay. It doesn't affect miner incentives.

[00:45:19] Vlad Costea: Yeah. And the other sponsor, which is also interesting for this context, is called Citrea. C-I-T-R-E-A. And they are an optimistically verified ZK roll up that's coming to Bitcoin later this year. This one doesn't require any kind of soft fork to go on main net. What it does basically is bring Ethereum to Bitcoin. Nice. Everything that is built on Ethereum is going to be available on Bitcoin and that uses the Bitcoin network as a data availability layer, which means that it inscribes ZK proofs on the blockchain for the purpose of operating this layer two.

[00:46:01] Vlad Costea: It's going to be the first of its kind. And honestly, the way in which they pitch it is that they're trying, first of all, to get some liquidity from Ethereum, which right now is doing WBTC. That's actually custodied by BitGo and not very trust minimized. You actually have to trust BitGo that they're not going to censor your transactions or confiscate your funds. Secondly, they're trying to bring all of these DeFi services to Bitcoin, which is borrowing and lending and everything that institutions like BlockFi used to do, but on a protocol instead of a company.

[00:46:42] Vlad Costea: And thirdly, something which I find interesting is that you can also run a fork of Tornado Cash, which might be the best kind of privacy that Bitcoin can get for a while.

[00:46:55] Vlad Costea: Anyway, the URL is citrea.xyz and they will be launching later this year. And they are the reason behind, or part of the reason behind the OP_RETURN war that we recently saw, because the core developers said, well, instead of putting these guys to inscribe data in a way that bloats the UTXO set, we can let them use OP_RETURN. And that one is actually prunable from nodes, so it minimizes the damage.

[00:47:27] Vlad Costea: And then people said, well, they're trying to destroy the soul and the spirit of Bitcoin. It's not going to be Bitcoin anymore if we let Ethereum come to Bitcoin. We should gatekeep this and stop these people from using what we like to refer to as a permissionless network. Anyway, my show is pretty aspirational because I promote stuff that maybe is going to come and improve the current state of Bitcoin.

[00:47:58] Vlad Costea: Is this the first time you hear about Citrea?

[00:48:01] Jay Berg: So is this is this so I just want to say that everything I'm saying and all my negativity about all these projects, that's I'm coming from 2019. In 2025, I have a whole different view. So it's all good. But is this the one that needed the bigger OP_RETURN?

[00:48:17] Vlad Costea: Yeah.

[00:48:18] Jay Berg: OK, but they didn't need...

[00:48:20] Vlad Costea: They don't need it.

[00:48:22] Jay Berg: It's just that, needed like 95 bytes, right? Was that the story?

[00:48:26] Vlad Costea: They don't need this. So that that's what's wrong about this whole story. They don't need this. They can just use inscriptions.

[00:48:33] Jay Berg: No, no, I understand. But even if they wanted to use OP_RETURN, they only needed like 95 bytes, right?

[00:48:39] Vlad Costea: I got to look it up, but I think so. 112 or something.

[00:48:42] Jay Berg: I think, yeah. It's funny because, yeah, although I think it was I'm against obviously I'm against the OP_RETURN change, but I'm not it's not a it's not such a big deal to create a war over. I think that's kind of dumb.

[00:49:11] Vlad Costea: I mean, for myself, as someone who wants Bitcoin to succeed, I see this as a use case that's going to bring a lot of users to Bitcoin, to the Bitcoin economy to actually use Bitcoin in a self-custodial way, not going to these ETFs or not trusting custodians. I think the Lightning Network is what opened Pandora's gate, just like you said that RBF introduced the double spend. The Lightning Network...

[00:49:41] Jay Berg: Lightning Network works by using double spends as well. Let's be clear.

[00:49:46] Vlad Costea: Also, the Lightning Network is responsible for making it normal for people to use custodians because we started out saying, well, it's difficult to run a node. So if you have like five dollars or ten dollars in a custodial wallet, it's fine. And then people became comfortable with it and they said, ah, why should I bother? And then someone came up with the concept of the LSP, which is the Lightning Service Provider, which means that you open your channels with somebody else's infrastructure and they take fees for routing your transactions.

[00:50:20] Vlad Costea: But you're giving up on your privacy and you're giving up on some of your rights that you would have if you ran your own node. So...

[00:50:29] Jay Berg: How did it happen? I mean, I'll ask you, how did it happen? We have like post-Civil War, you have like toxic or you have like a cult, Bitcoin Maxis, right? Anti-Bitcoin Maxis and Bitcoin only. Remember Bitcoin only? Anything centralized was a scam. Fiat was a scam. Bitcoin only, Bitcoin only, Bitcoin only. And then all of a sudden it was Bitcoin plus Lightning, right? Somehow Lightning became Bitcoin. How did that happen? Why didn't they say, oh, Lightning is also like a scam, right?

[00:51:01] Jay Berg: Because it's not Bitcoin. Just like Counterparty or anything else that was using Bitcoin. Right. And what happened? I believe what happened was, is there's a logic, there's a logic that people had, you know, where I somehow know that I could on my own, right, exit the Lightning Network to get into Bitcoin. Right. You know, with this game of double spend. Right. This game of the watchtowers. Right. Watchtowers where, you know, as long as somebody is watching the network, if someone tries to steal your Lightning, you could jump ahead of them and take their money or something like that.

[00:51:52] Jay Berg: Right. Yeah. So that was the second logical connection that happened to, let's just say, Normies, right? Or the cult of Bitcoin. So then they're like, okay, I know that, wow, this is a second idea. And now I understood Bitcoin. Now I understand this is basically Bitcoin because I'm in control. And I know, you know, I could always get it back. And right. But that's not the case. Lightning is not Bitcoin. It was Bitcoin. Even if it was Bitcoin, it's still only a small use case. Right. I mean, Lightning doesn't use proof of work.

[00:52:25] Jay Berg: And also you have a state explosion. And also you always have to be online. It's a different story. It's a different network. It's not a negative. It's not a positive. It's just the layer two. And what happened was you have this hardcoreness of like Bitcoin only and Lightning, but no shitcoins. And what is a shitcoin? There's no definition of a shitcoin. It's just other. Right. It's an other. And then slowly but surely, other things that are getting into the tent. Right. Everything else is a scam unless these like lowest common denominator retards get, you know, allow this thing in.

[00:52:55] Jay Berg: And that's why you end up at the Bitcoin conference. You don't have any, you don't invite Vitalik, but you have president of, President of United States saying Bitcoin, crypto and others. And then the next year it's all, you know, stablecoin, which is fiat running on Ethereum. Right. At the Bitcoin Maxi conference. And then all the tickets being sold at every single toxic Maxi conference are sold in USDs. Right. So it just it just got so out of whack. Right. Where it's, you know, almost...

[00:53:27] Vlad Costea: But it's fine, Jay, because it's Gresham's law. Right. You're not supposed to spend your Bitcoin. You never sell your Bitcoin. You just accumulate more of it and then you borrow fiat money against it. And that's how you succeed. That's what Michael Saylor told us. That's what Jimmy Song says you should pay with your credit card. Right.

[00:53:45] Jay Berg: Of course, it's another another one of these things that makes no sense. Right. Gresham's law has to do with physical silver. It has nothing to do with... Yeah, I hear what you're saying. The good news is that we're kind of back in 2007. Right. We have TradFi, you know, Bitcoin is TradFi. This is the current financial system. Right. Crypto. And we need a new we need a new movement. Right. We need a new cypherpunk movement to, you know, break out of this system that we're in, which is crypto slash Bitcoin.

[00:54:26] Jay Berg: And the crazy part is, hey, I'm here. I'm shitting on Bitcoin when it's making new highs today. Right. We always knew we always knew that Bitcoin was going to go to a million dollars. That was never the question. Question is it being is, you know, is it working as as as money? And the mempool is still at one, you know, it's one sat per byte. And that's like the origin. That's the problem. We forgot the scale. We had right OP_CTV could have been like, you know, we should have done OP_CTV plus a [unclear: hard fork] plus a 2X.

[00:54:57] Jay Berg: Right. Or even more block size increase. And, you know, instead of having millions and millions and millions of currencies, we could have we could have had Bitcoin being used and the wallets were made incorrectly because of this. Right. Because of the another FUD, the FUD of zero-conf. Right. And then OK, so fees are too high, although fees are not high. So I don't know why anyone's complaining. Right. Like it used to be people are against ordinals because the fees were too high. But there are no fees.

[00:55:28] Jay Berg: And if you want to kick out or you want to do a filter, get people to use use Bitcoin as money and ordinals will be dead. Right.

[00:55:37] Jay Berg: Because it's too expensive. The relative cost to putting a JPEG. And, you know, you could have just used OP_RETURN hashes. And you could do anything. And that's exactly, I think, what BIP 300 is. I think so. It's just a hash. Right. It's just a single hash of the state. It's not even OP_RETURN. It's in the actual block. Right.

[00:56:07] Vlad Costea: Anyway, I just want to acknowledge while you're searching for an answer that we have some people talking in the chat and I want to say hello to Dollar Crypto. He says meme is math and privacy, not idolatry and dogma. And there is someone called Stackamoto who keeps teasing me on Twitter and he keeps saying this. And I'm going to read out this question. Maybe I should put it on the screen because it's it's so funny. I don't even know how we ended up here, but we sort of bred this generation of Bitcoiners who think like this.

[00:56:44] Vlad Costea: And it's fine to think like this. And I don't know what's happening. So this guy said on Twitter, basically on the livestream. Chat. Why does Vlad platform these genocidal Zionists? Double question mark.

[00:56:58] Jay Berg: Yeah, I mean, it's just a waste of time.

[00:57:01] Vlad Costea: And Patrick Dugan said Jay isn't a genocidal Zionist. He's a liberal Jewish guy from Berkeley.

[00:57:10] Jay Berg: Well, from Brooklyn originally.

[00:57:14] Vlad Costea: This is where we're at. This is the level of discourse and conversation that we're having.

[00:57:20] Jay Berg: Yeah, no, it's it's it's it's definitely ugly because people made their entire lives. You know, their identity being toxic on Twitter regarding Bitcoin. And it takes a lot to break out of it. So, you know, the first time someone calls you a shitcoiner, it doesn't feel good. But eventually, you know, it becomes it's the way out. But yeah, originally Bitcoin Bitcoin was mostly progressive voters, liberal progressive voters, you know, back in 2010. And it really was no, there was none of this like politics involved. It was just solving a problem.

[00:58:03] Jay Berg: But yeah, I guess I don't know. Yeah, I don't need to respond to like Zionist stuff. I have no no opinion on that.

[00:58:18] Vlad Costea: And there's this guy plastic who said, Hello, Vlad and Jay, show me the money and blockchain will fix it. Vlad, your award manipulator, maxi to maximize is not a thing, I guess that's what he meant. Everyone is a scammer. Show me the money. He mentioned JoinMarket and CoinJoins as privacy, probably around the time when I said that Citrea can give us a copy of Tornado Cash. And I gotta say that they're very different. I mean, Tornado Cash is actually better in some ways. And he called me cheap, said sorry to say so.

[00:58:55] Vlad Costea: Bring a lot of sats, [unclear: your custody], Vlad. Cut the bullshit. You're a propagandist.

[00:59:03] Vlad Costea: I'm gonna switch it off for now. And I'll show it once again. When more comments are coming. I replied by saying I'm a fake plastic propagandist, like a reference to Radiohead's "Fake Plastic Trees." Anyway, I'm a nerd. This is where we're at. Because we can have this conversation. And we can bring back the spirit of 2010 and explain what it was like and how we ended up here. But the people who are not there, yeah, are gonna be in denial and say it was never like that. You don't know anything.

[00:59:35] Vlad Costea: I know much better than you. Show me how rich you are. Because apparently, this is the only way in which you can prove to them that you're worth anything or that your opinion should be taken into consideration.

[00:59:48] Jay Berg: I don't even know who them is anymore. Because now we have a new, a new civil war. And so which side are we? Which side's [unclear: them]?

[00:59:57] Vlad Costea: Yeah, anyway, we have a very interesting question from Julian. Let me put this back on the screen. But before that, let me present the ad for Bitcoin.com news, which interestingly for the development of the block size wars is now orange.

[01:00:16] Vlad Costea: It's not green anymore. They don't promote Bitcoin Cash. They promote BTC. They changed their team. They changed everything. I think also the ownership has changed. The CEO is someone new. And I gotta be honest, they have some pretty good coverage of news, which I like. It's not as US-centric as Bitcoin Magazine and it's not as institutional-centric as CoinDesk. It's somewhere in between and sometimes you find gems from other parts of the world, from other markets which are maybe not directly connected to Bitcoin, but respond to geopolitical events just like Bitcoin.

[01:00:58] Vlad Costea: For example, gold or silver or oil. And they also cover some of the interesting shitcoins that maybe you're gonna discover and be like, huh, this isn't just a meme coin. This isn't just another copy of Bitcoin. It's something that does something else. I remember reading about Kaspa on Bitcoin.com and I think that's an entirely different beast, which is interesting, but I don't understand it very well, even though I interviewed some of the guys involved in it. And they also cover Zcash, Monero, stuff that we can agree that is not a scam.

[01:01:36] Vlad Costea: So check out news.bitcoin.com and thank you guys for sponsoring the show. And now let me read Julian's comment, which was, chill out and tell us how CTV fixes all our problems instead.

[01:01:50] Jay Berg: Okay. All right. So we had a war for scaling Bitcoin. Everyone agreed that we needed to scale. Fees were too high and we decided against a block size increase because we wanted to first, before we do a hard fork, we wanted to squeeze out as much as possible and see if there's other solutions. Right. So we had the hard, we had the soft fork. We did SegWit. Then we went to work trying to figure out a solution for layer two scaling and we hit a wall. But after all the work, right, we came up with, there was a solution, right? OP_CTV.

[01:02:34] Jay Berg: It's a simple, low level C++ enhancement to Bitcoin, right, that has no negative effects, doesn't change anything about Bitcoin. And it was a no brainer. Just merge it, right? So it was just a merge request, just another piece of code, just tons and tons of code that gets updated to Bitcoin every day. It just happens to be that it touches consensus, right? I think this, you know, okay, so what happened? We brought in all these toxics to fight the war for us. They never left. And then Taproot, right?

[01:03:14] Jay Berg: So then Taproot soft fork comes and we have these review teams, right? So you bring in all these non devs, making believe they're reviewing Taproot in these rooms, looking at the code when they've never looked at code before and no one actually went deep into Taproot. I actually did go deep into Taproot. I actually had a knack for Taproot. I said that Taproot, all it does is, you know, all it does is it helps multisig for corporations. And, you know, it's not, I think it's too big of an undertaking for such a small achievement.

[01:03:47] Jay Berg: You're just removing a couple of bytes from the multisigs that no end user really uses. And I think it's out of scope. And, you know, it's not worth the risk, right? But the people that, toxics, the people that, they were all about it and then they felt burned when ordinals happened, right? So never again, then they went ossification, right? So, right, OP_CTV was the result of this top devs, right, coming up with a simple enhancement that helps scale Bitcoin. What does it do? It scales Bitcoin in time versus space, right?

[01:04:31] Jay Berg: So think blocks are full, fees are high, but sometimes fees are low, sometimes fees are high. So when I send you a Bitcoin, right, what if you could, what if the sending and the receiving happens in a different, doesn't have to happen instantly, right? So I could receive it when I want and you could send it when you want. And when do I want to receive it? I want to receive it when fees are low, but I want to make, I want you to send it now and receive it later.

[01:04:58] Jay Berg: That's what OP_CTV did. It's just a simple, genius piece of code that should have been merged, should have been pushed through. But when you have something like that, you ask the subject matter experts for an objection, right? Just how you find consensus. Give me an objection and, right, once you go through all the objections, there are no more objections, it has consensus. And that's what happened. There has been zero objections to OP_CTV for the past five, six years. Zero, not one. Not one objection.

[01:05:31] Vlad Costea: I mean, I think there was one from Andreas Antonopoulos who said you can use this for basically stealing coins or locking them away.

[01:05:44] Jay Berg: Yeah, that's not the case. You could do whatever you could do with, whatever you could do with Bitcoin, you could do with OP_CTV. It's just Bitcoin script.

[01:05:55] Vlad Costea: Something interesting happened and I just want to put this here for the record. If you go to the Cult of the Covenant Telegram chat, which is where CTV is being discussed. Three years ago, Adam Back joined the group and at the time it seemed like CTV was getting momentum and it's going through the BIP process. And he presented every piece of FUD along the way. And when that one got debunked, he said you don't have consensus for this is not how you activate a BIP. He personally created so much chaos and brought with himself all the space monkeys and podcasters who are cheering for him.

[01:06:36] Vlad Costea: And after that, it never really recovered.

[01:06:39] Jay Berg: That was it. Right. All we needed. There was a moment that all Adam Back had to say was, you know what, I have no opinion and take a step back. He just had to say not say something negative and it would have gone through. And I'm not saying it would have changed. It's like the end all be all. But it was the beginning of like a path towards actual solutions for scaling Bitcoin. It was the beginning. And, you know, it wasn't. It's not. And a lot of people like, why?

[01:07:06] Jay Berg: Why do OP_CTV? I want APO, I want CAT, whatever. Right. But like this one was already built, reviewed, coded, ready to be merged. Right. And that this one was up. It was time. And it got poo-pooed by, you know, by some of the big names. And, you know, why? Because there was no money behind it. And I think that's also a mistake. Right. We should have raised money behind it. But that's like water under the bridge. This is like six years ago.

[01:07:34] Jay Berg: Right. Then we had to do the BIP again. Imagine. Right. You come up with you come up with a piece of code, took a lot of time and effort and review. And then it's a merge request. It doesn't get merged in. It gets stale. Right. All that work goes to waste. And then we try to do it again with another merge request. Right. At some like at some point, it's just not worth it. So it turns out what gets merged in things that have a backing of some corporation with a business model like.

[01:08:15] Jay Berg: Now...

[01:08:18] Vlad Costea: I disagree with you here, because, for example, OP_CAT has more backing and has more money behind it. But the opposition for it was much stronger. The OP_CAT people actually had money. They paid the Taproot wizards to promote some of the use cases. They can do zero knowledge proofs. The Taproot wizards really fucked up. Like they had a very simple task to reintroduce something that Satoshi actually created and was neutered so that it doesn't cause the same concerns that Satoshi had when he removed it. And it was backed by Blockstream and it was backed by a bunch of powerful actors in the space.

[01:08:57] Vlad Costea: And still, that one failed. It never went anywhere. And I do believe there was competition between CTV and OP_CAT at one point. Yeah. And whenever OP_CAT came into the scene, there was more money behind it and there was more attention that it was getting. And people forgot about CTV for a while. And then people started coming with other proposals that were along the lines of CTV, like any prevout, which I think...

[01:09:25] Jay Berg: Yeah, any prevout, any prevout is fine.

[01:09:28] Vlad Costea: Or TXHASH or LNHANCE, or there were a bunch of them.

[01:09:32] Jay Berg: You can't get, you can't get past the fact. The fact of the matter is that OP_CTV was ready to go, had consensus, and it is Bitcoin. And it used to be the truth mattered, especially when it comes to code, like the actual ground level truth matter. And in the back of everyone's mind, even if you're trying to push OP_CAT, like what happened to CTV, it doesn't make sense. OP_CAT to me was almost like the original [unclear: four core]. OP_CAT was the Roger Ver. A simple, easy change, one liner. Pop out. I don't think, you know.

[01:10:11] Jay Berg: Yeah. And this also goes to, I think OP_RETURN is kind of the result of, it's kind of the OP_CAT story, right? Where I'm doing other things on top of Bitcoin. For what reason, again? Again, is this because of the security budget? Like what's the reason? What happened to peer-to-peer electronic cash again? What does that have to do with OP_CAT? I'm not sure exactly. It's obvious that we should have 2x by now. And, you know, and things like CTV and then APO and then eventually OP_CAT and all these things, that's fine.

[01:10:51] Jay Berg: But it's, you know, it should be to try, should have been. Again, this is the past. Remember, like we're way, this is all water under the bridge. It's too late for any of this stuff. It's over, right? So maybe we should just skip to what to do today. But, you know, I'm building something that, you know, I'm building something that actually is a fundamental solution to a problem using, you know, distributed systems, you know, like a sidechain. And it's nothing, it's not like on Bitcoin, in Bitcoin.

[01:11:26] Jay Berg: It's just its own thing. And, you know, I think when we're talking about Bitcoin itself, it should be what Bitcoin is for, which is, which was what it was for, which is peer-to-peer electronic cash. And now Bitcoin is kind of the rock around this whole crypto industry. So there's nothing wrong with doing things in crypto, right? Especially if it's ECDSA using the same keys, right? It's no big deal. It's still the same technology. So, yeah, I think the morals are all out the window now.

[01:11:59] Jay Berg: It's a new world. You know, on the one hand, it's positive in that way, where anything goes at this point, as long as obviously if, you know, I don't know, it probably has to be said, but scamming is obviously wrong, right? Manipulation of people is wrong. But somehow these things got, a long time ago, these things got conflated, right? With one coin versus Ethereum, right? Completely different stories, right? And this is why I always had a problem with shitcoin, is what's the definition? There was never a definition.

[01:12:33] Jay Berg: It was just them versus us. And who's us? Well, whoever we let in the tent. And who do we let in the tent? Well, you have a lot of money you get in the tent. Doesn't matter what you've done. Like Elon Musk, right? Dogecoin, that's fine. You get in the tent and we'll let lightning in. And then we have to come up with a new reason, a new separation. So what is it? It's, what do they call it? The ability to exit, you know, yeah, unilateral exit, trust minimization, right?

[01:13:00] Jay Berg: That's all, you know, that's all the same thing. It's either it's on-chain Bitcoin or it's not on-chain Bitcoin. And everything else that's not on-chain Bitcoin needs to be, you know, evaluated independently, not just thrown into a whole thing because he did an ICO, right? Nothing wrong with an ICO. ICO is just the, you know, at this point, it's just the equity play, right? I mean, [unclear: an Exodus address]. So at the end of the day, it's a lot of these things happened from foundational FUD, zero-conf, lightning, blockchain works for virtual machines and all that stuff, right?

[01:13:40] Jay Berg: And that's where we got here today. And now there's another war, which I don't really care about either side. At this point, and yeah, I think we have to forget about this whole, sorry to say, the Bitcoin community is not what people think it is. The Bitcoin community is the crypto shitcoin community. Sorry, I'm sorry to say that. That's what it is.

[01:14:04] Vlad Costea: Oh, that's the hottest take of them all.

[01:14:10] Vlad Costea: Anyway, let me present the last two ads and then we can have a free-flowing conversation also with the responses that were posted in the chat, which I think are interesting. So thank you, Julian and Buddy for being here. I'm gonna address your questions in a moment. So I'm gonna leave SideShift last because it's the one that looks like the Sidepit branding. And no offense to SideShift. I love them. But it's just personal to you that at one point we discussed about having this interview last year, I think.

[01:14:44] Vlad Costea: And you said, wait a second, are you sponsored by SideShift? And I said, yeah, why does their logo look just like Sidepit? I don't have an answer for that. I think it's been like that since 2019 or whatever. Anyway, weird coincidence. NoOnes.com is a peer to peer marketplace that aims to empower the global south. CEO of NoOnes Ray Youssef is known for being a co-founder of Paxful and also left Paxful when it became corrupt. And he decided that now he wants to focus on onboarding the people who actually needs to be part of this revolution.

[01:15:21] Vlad Costea: So if you go to NoOnes and you start trading on their spot marketplace or spot exchange, sorry, or their peer to peer marketplace, you're actually giving liquidity to the people from Nigeria, from the Middle East, from South America, who are users there and who are hustling to also sell the coins to their local communities and so on and so forth in a system that Ray Youssef calls everyone gets a seat at the table and everyone eats. NoOnes also has a debit card that you can use for spending if you're Jimmy Song or whatever.

[01:15:56] Vlad Costea: Not judging here, if you do like using the Visa network to spend your Bitcoin, you can do that. It's n-o-o-n-e-s dot com. Check it out. I think you can even buy gift cards if you want to support these people who are hustling for a living. And last but not least, there is SideShift, which once again has a similar branding to Sidepit and also has side in the name. I don't know exactly what's the coincidence here, but there is a big difference because SideShift is this swapping service where you can exchange something that you have for something that you really want.

[01:16:32] Vlad Costea: For example, if someone pays you in stablecoins and you want to actually get Bitcoin or Litecoin or whatever is out there, Trumpcoin, Melaniacoin, you put your address for the wallet that is going to collect the coins that you want and then you make a payment of the coins that you don't want. There's going to be a swap for which there is a lot of liquidity and the fees are low. Not available in the US, but wink, wink, there are ways you can circumvent censorship.

[01:17:03] Vlad Costea: And yeah, the URL is SideShift, which is s-i-d-e-s-h-i-f-t dot i-o. Check it out and don't hold too many stablecoins in a bull market. Actual financial advice. Now let's look at the chat because some more comments have been posted. Buddy says, I always liked Jay. Vlad is okay. Nice rhyme there. And Plastic says, I admit I'm a bit retarded with property rights because we sort of made fun of the fact that he wants us to show how many coins we own.

[01:17:42] Vlad Costea: And for him it's a proof of stake system where you must say, well, my opinion matters because I hold a lot of Bitcoin. Probably a Michael Saylor fan. And Buddy says, I was all on board with toxic maximalism until the plebs, and he used quotation marks for plebs, openly gave up on self-custody Lightning.

[01:18:07] Vlad Costea: And this is something that I see a lot of lately with people who really believe that lightning was going to be the one solution, which I also did like four or five years ago. And I used to run a node and I was connecting to peers and I was thinking I'm revolutionizing finance and I'm showing these shitcoiners that this is the correct way to scale. And then I lost a lot of money doing this because I was not routing transactions as expected and the costs of maintaining this were pretty high because I had to open channels and rebalance and stuff like this.

[01:18:43] Vlad Costea: And then one day my node just died and I didn't feel like putting it together again. I was like, it was just an interesting experiment. I don't feel like I need to keep this running. It hasn't really brought me any benefits other than virtue signaling with people and making friends with people on Telegram. And I did realize that, of course, this cannot scale. And just because the Peter Todd argument to this is, well, look at the mempool right now, the fees are low and therefore it scales because you can use it.

[01:19:21] Vlad Costea: But of course, not everyone who needs Bitcoin is able to use it at the moment when they want. And they're going to end up being censored by custodians and exchanges and ETFs and whatever or rugged even because they can buy paper Bitcoin that is not backed by anything. So it's unfortunate that you run into this realization that no matter how hard you try, even the Lightning Network paper tells you that you need like 100 megabyte blocks or something. I think it's 128.

[01:19:59] Jay Berg: Think about, Lightning scales, Lightning scales one particular utility of Bitcoin. It was never going to scale Bitcoin itself.

[01:20:13] Jay Berg: The truth is that anything that's not on-chain Bitcoin, this is not Bitcoin, right? So going back to the original, everything else is a shitcoin, everything else is just not Bitcoin. It's not possible to make Bitcoin, like it's not, right? So anything that uses Bitcoin is going to have, it's going to have something that's not ideal, right? So, you know, there's going to be some issues and the thing, you know, so lightning happened to be one that matches with self-custody and, you know, self-sovereignty, but it can't do other things.

[01:20:53] Jay Berg: And, and I think coming back to OP_CTV, I remember as like, right when we were like about to get that final approval from, you know, the talking heads, I think it was Giacomo, is that his name? Right. I call him Guacamole. What was his objection? And this was just finally like, put the nail in it. His objection, he said something to the point of, you know, we just, we just have somewhat, we were just working really hard. It's too much to do for lightning, right? We just don't have time for this right now.

[01:21:30] Jay Berg: Like it's going to take too much mindshare. Like that's, that was his objection to OP_CTV, lightning, working on lightning. And that kind of like just, it just sums the whole thing up, right? Like an actual solution, like an actual like thing that's actually finally going to help scale Bitcoin, you know, it's because he didn't have the mindshare because they were working on lightning. Yeah. That was a shame, but yeah. So what do you want to talk about now?

[01:22:09] Vlad Costea: It is very unfortunate. I looked at the lightning white paper, by the way, and it does say 133 megabytes per block. If this was to scale to Visa levels that were measured in 2016 or whenever this paper got published. Now I'm pretty sure that Visa processes more transactions than it did back then. And we're partially responsible because Bitcoin had sort of an edge when it came out. It had a much slicker experience than banking and banking services caught up. Right now you can argue that Venmo or Cash App or whatever it is that you might be using has a much nicer user experience than Bitcoin.

[01:22:58] Vlad Costea: And it's terrible...

[01:22:59] Jay Berg: Because of the, it's literally because of how the wallets were built. Again, another piece of FUD piece of FUD is that there's such a thing as confirmed and non-confirmed transaction, no such thing as binary confirmed. Right. Once you sign a valid Bitcoin message, as soon as you sign it's on a path towards finality and it's never 100%. Right. One conf just means that, you know, it's a smaller probability of it getting double spent. Right. And this idea that mempool Bitcoin is not good enough is insane.

[01:23:45] Jay Berg: And most, first of all, almost every single time you use money, there's trust. First of all, what are you doing with the money? What are you getting back? Right. Just because you're able to send money trustlessly, but you still want to get something in return, you still have to have trust. There's game theory in every single transaction. And on top of that, most of the time you're dealing with someone you intimately trust, like your friend or even yourself, your own wallet, right? Sending money to yourself. There's no reason why you have to have, the wallets have to wait for a confirmation in order to start spending it.

[01:24:18] Jay Berg: Like all the stuff is just a shortcut because nobody wanted to deal with the mempool, right? Nobody wanted to deal with the fact if I'm sending Bitcoin from my wallet to somebody, that software should know that I spent it. Whether or not it's ever got into a block or, you know, like I sent it, the wallet should be like, okay, this is already spent. Right. And it should go there. Right. And you should be able to have stuff like sending it to yourself could be, you know, should stay in the mempool for as long as you want.

[01:24:52] Jay Berg: Right. And maybe eventually, you know, if you need to like maybe re-spend it, then maybe, you know, to deal with the wallets, you know, you could do the RBF or, you know, parent pays for child, all that stuff. So the reason why Bitcoin doesn't work is because nothing was built correctly. Right. The wallets were not built for the real world. They were built for the extreme case where, you know, where you're dealing with like a hostage situation where the person is going to double spend on you and it's a million dollar transaction for like, you know, a terrorist situation, the extreme version of not trusting someone that's going to double spend.

[01:25:32] Jay Berg: But 90% of the time, there's game theory, there's trust in every single transaction with money. And if you sign a valid Bitcoin transaction, you give it to that person independent of whether or not the miners picked it up or broadcasted it's a valid transaction. Like that was the whole idea. Right. And none of this was built correctly. Everything was built wrong. And that's why Bitcoin is unusable. So what happened? What happened was, and I know this for a fact, what happened was, is that crypto scaled Bitcoin, right?

[01:26:07] Jay Berg: You're like, why? Well, let's just say, let's just say crypto is worthless, but it may go to zero at any moment. But you could swap it to Bitcoin really fast, faster than you could fiat. Right. So you'd rather be holding ETH than dollars if you ultimately want Bitcoin, because you could easily get in there. So it scales Bitcoin in that sense where it's the same kind of technology. It's a way in if you want to go to that extreme. And then in that case, there are wallets that do what you need to do.

[01:26:41] Jay Berg: There are wallets that have instant finality and stuff like that. And, you know, that's what's become Bitcoin.

[01:26:52] Vlad Costea: Yeah, it's an interesting point of view. For the longest time, the explanation that I heard for waiting for one confirmation is that there's this concern that there's going to be a 51% attack and your transaction is going to get re-orged.

[01:27:07] Jay Berg: Yeah, but that could happen after one. That could happen after one block, right?

[01:27:14] Vlad Costea: Or that the fee that you're paying is very low and maybe you're going to have to wait a very long time until there's one confirmation. But you have to wait.

[01:27:23] Jay Berg: If the wallets, the wallets were smart enough, you wouldn't have to wait.

[01:27:28] Vlad Costea: Oh, you mean if we had CTV?

[01:27:30] Jay Berg: No, you don't have to have CTV. Why do you have to wait for a confirmation if, like, what's the scenario? Let's walk through the scenario. What are you doing with the Bitcoin?

[01:27:41] Vlad Costea: You're sending from point A to point B.

[01:27:44] Jay Berg: For what? Who's A and who's B?

[01:27:46] Vlad Costea: A is yourself, B is maybe some online shop selling stuff.

[01:27:51] Jay Berg: Some online shop selling stuff, okay. And what are you buying? Are they sending it to you in the mail?

[01:27:56] Vlad Costea: Yeah.

[01:27:57] Jay Berg: Okay, so you're worried about them. You're worried about you double spending on them, right? So the issue is them having to deal with... They got the transaction. They already see it. They know it's legitimate. And so now the worry is that they are afraid that you're going to double spend on them.

[01:28:21] Vlad Costea: Most likely.

[01:28:23] Jay Berg: What about you? What about you being afraid that they're not going to send you the stuff?

[01:28:28] Jay Berg: So even if that's the case, it's still better than every other digital currency, right? Because if you use the credit card, you could just call in a fraud, right? It turns out that people, humans don't actually do fraud with each other all the time, right? The game theory is not there. You want your thing delivered, right? Why would you even send your Bitcoin before you get your thing delivered? So actually it's probably the best thing to do zero-conf. They should actually say only zero-conf, right?

[01:28:59] Jay Berg: Because you're like, hey, I want to be able to double spend if you don't give me my stuff. How about this? I send you a zero-conf, right? And then once I get my stuff, then I'll push it, right? Maybe that's a better thing. So there's no reason why you need finality or half of, there's still half trust happening. So that whole scenario doesn't even make sense, right? But even so, if they don't trust you at all, right, they could go spend that Bitcoin with a higher fee.

[01:29:30] Jay Berg: So the reason why you, and here's the problem Vlad, the reason why you have an issue...

[01:29:34] Vlad Costea: So basically you're saying that they could do a CPFP, which is child pays for parent?

[01:29:40] Jay Berg: Right, of course. Your issue is this, Vlad, is that you, if it falls out of the mempool, your wallet now doesn't even know that you just spent that money. And you're gonna unintentionally double spend on them without even knowing about it, right? Because you're not doing UTXO management. So this gets even worse. If you're sending your best friend or your grandmother some money, some Bitcoin. There's complete trust, right? You know exactly like you even have her private key, like it's basically yourself. But you still need to wait for what you still need to force the conf because you don't want to double spend by mistake.

[01:30:23] Jay Berg: If you had the wallet that understood what you just did, that's already spent, right? That's spent. I spent it. It's out. You know, I have my own UTXO set. Then your wallet, the next time you spend money it won't double spend on your grandmother by mistake, right? So again, this is another example of the FUD that creates just bad technology and bad solutions in the space. This idea that there's a binary confirmed, right? That somehow, and you know what, one day if somebody has, if there's a two block reorg, what happens then?

[01:31:03] Jay Berg: Everything breaks, literally everything breaks because the entire system is based on, you know, it's confirmed, not confirmed yet, right?

[01:31:16] Jay Berg: You know, it should, at the end of the day, like even Satoshi, I mean pay-to-IP, all the stuff like, the block has really nothing to do with it. The block and the miners just has to do with double spend prevention. But if you are 100% sure that there's trust and there's no double spend happening, that doesn't have to happen. Of course, OP_CTV makes this explicit, right? OP_CTV kind of makes it explicit, but it's still like, you know, it's still fine. And again, so what happened was we didn't scale.

[01:31:53] Jay Berg: We hit, like what happened? We didn't scale. There was no room. Everything was too expensive. And then everyone stopped using Bitcoin because why would I build on Bitcoin if fees are just going crazy, right? So the reason why nobody goes there, because it's too crowded, you know, that famous thing, it's too crowded. Nobody goes there, right? So that's what happened. It was too crowded. Nobody went there. And then all of a sudden nobody went there anymore. And that's why the mempool is empty because it was full.

[01:32:24] Jay Berg: So everyone started building somewhere else. And now no one's going to go build back on Bitcoin until there's a scaling solution, right? So literally, like, how could anyone say this thing's working? When there's one satoshi you provide and no one's using it? And of course you have these subsidies happening. Every single 10 minutes is all this work being done. So yeah, of course NFTs should happen. It's free, right? It's free access. You could do all this NFTs and ordinals. That's fine, right? There's nothing wrong with that. But if you want to, if you don't like ordinals or NFTs, yeah, just do payments and the marginal, like fees so much lower for payments that it will kick all the ordinals out forever.

[01:33:07] Jay Berg: Right? So the answer, I mean, this is the last war, I guess, the ordinals thing, right? It was always like, everyone's like, fees are so high because of the ordinals taking up the space. I'm like, no, it's not. Fees are going to go, fees are, you know, ordinals will take up any fees, right? Because there's no, there's no marginal utility to the bytes that could, for example, a transaction, a peer-to-peer transaction could be a hundred million dollars worth or it could be $10, the same number of bytes.

[01:33:39] Jay Berg: The ordinals, it's just, it's that same, whatever that value is, it's that same value. It can never go more. So money will always take the cake and do it. But the reason why no one uses it because we hit this max and then what do we do? So instead of solving the problem, we do RBF. Okay, that's fine. RBF seems cool, right? Although it's really not needed if you had better wallets, but then full RBF is literally what broke Bitcoin. The whole idea of Bitcoin is that we all agree that we're trying to solve peer-to-peer electronic debt, money.

[01:34:16] Jay Berg: And the one thing that we needed to solve is double spend prevention. That means a double spend is the one thing that we just cannot allow to happen, right? So I could go, if you think like this whole porn thing is fraud, I would say it's fraudulent. If someone's trying to steal from me, it's fraudulent for you to help them steal from me. And if you consider a double spend fraud, right? I don't want you, I don't think Bitcoin Core should broadcast a fraud, right? Of course, it doesn't make sense.

[01:34:48] Jay Berg: In this world where we live in it, all the double spends are no longer someone trying to do fraud with money, right? Like literally you have a hundred dollar bill that's counterfeit, right? You're not going to have a community trying to help the counterfeiter to run away. But the reason why it's okay now is because it's made for RBF, made to push your thing through to get into the one comp, right? So it's no longer considered a double spend, right? But I think the RBF broke a lot of things.

[01:35:22] Jay Berg: And now there's no such thing as a mempool. There's no such thing as, I mean, all the theory that was written about Bitcoin about half the world sees one transaction, half the world sees the other transaction and we need the miners to do it, right? And you also have heuristics, right? You could have heuristics, you could look at different block explorers. Once you see those transactions, you could know that there's no double spend happening, right? I mean, these are all loose ways of dealing with Bitcoin that all went away in theory with full RBF.

[01:35:54] Jay Berg: And for no reason, because instead of scaling, we just started breaking the protocol. So again, I'm not really, I'm not really so negative about things, but I guess this is a good place to go off a little bit.

[01:36:12] Vlad Costea: But I have to say that the marketing for RBF was interesting. They were saying that, well, now you can cancel transactions. You can have this in the UI where you press a button because you sent to the wrong address, you got scammed or something, and you can get your coins back by paying a higher fee. Or if you're in a hurry and you want to have your transaction confirmed, I mean, the whole point of RBF is this philosophy that no transaction is final until it receives a confirmation and this mempool is very relative.

[01:36:47] Jay Berg: Exactly. That's what I mean. This is all a bunch of little pieces of FUD that created this environment, but I have nothing against RBF. Full RBF is the problem.

[01:36:56] Vlad Costea: It's interesting also the history of RBF. It goes back to 2013 and this character who emerged on the scene and he was sort of like the Michael Saylor of his time. His name on Bitcointalk was John Dillon. And supposedly he paid Peter Todd to make a video in which he explains why the block size should stay small by appealing to the slippery slope that if you do increase it, you're going to end up with nodes being run only in data centers. And it was also him, if you read the emails that were posted, basically his account was compromised.

[01:37:34] Vlad Costea: Or so we think maybe that the person running the sock puppet account just decided to publicize it to fuel speculation or maybe make it look more legit than it actually was because there were people suspecting that it might be the same person as Peter Todd or it might be Greg Maxwell or it might be someone from their group. And it's a very interesting read because it was the first time when basically there was this kind of fight and there was an external incentive from someone who was saying he works for intelligence and wants to fund stuff to be happening.

[01:38:18] Vlad Costea: And it was also the first up first opposition that I'm aware of of an alternative client because what actually happened is that there was this CoinJoin bounty launched in August of 2013 as a response to the fact that Zerocoin or Zerocash which were soft fork proposals to increase the privacy of Bitcoin were not going to happen. And they said, well, let's make this CoinJoin. That's the name that they chose for it. Greg Maxwell put up this bounty. It was a multisig in which him and Theymos and Pieter Wuille were going to sign to release the funds.

[01:38:55] Vlad Costea: And what this John Dillon did was to send coins to the bounty address and put himself in a decision maker's position where he said, since I gave you some of the coins that are given as a bounty, this means that if you want to release that bounty reward, you also have to ask me. And it was Amir Taaki who came up with the first CoinJoin wallet at the time. It was called DarkWallet and there was some opposition towards it. First that it was published under the wrong license.

[01:39:28] Vlad Costea: I think that's what Mike Hearn said to him that he should open source it under a better license, which he did. And just a few days later, he was like, okay, I completed the task. Please release the bounty. Let me pay my devs. Let me keep going with this. And in the background, John Dillon was emailing Peter Todd saying that he doesn't like the fact that DarkWallet is using libbitcoin, which was an alternative to Bitcoin Core and still is. It's still being maintained and developed to this day and said that it's dangerous and it can break consensus and this should not be encouraged.

[01:40:06] Vlad Costea: And it seems like the reason why actually Amir never got his reward for creating the CoinJoin wallet was that he was running libbitcoin. And part of this whole idea that Bitcoin Core should be a monolithical entity, something that cannot be challenged, something that should never have an alternative comes from that era. Because just two years later, we had Bitcoin XT and Bitcoin Classic and SegWit2x and all of these alternative clients that were being presented as potentially evil. And the toxic people that you say got hired to do the job of firing Core were actually celebrating that these guys left and they sort of decided to work around Bitcoin Cash.

[01:41:00] Vlad Costea: And then we we only had Core for BTC.

[01:41:05] Jay Berg: Yeah, I mean, I was definitely on the Core side then. I did. Maybe I still do believe that the idea was even the bugs in consensus is part of consensus. The idea was you have to have the same binary executable running. Everyone should have the same binary executable. So that way we all have the same bugs. You know, I guess there was a moment, there was a time where a fork was considered the death of Bitcoin, right? The fork was like, you know, before the first fork, before the Ethereum Classic, right?

[01:41:52] Jay Berg: We all thought that if a blockchain fork, it's dead, right? If the other side doesn't die immediately, if the fork doesn't die, one side will die immediately. But if they both stay alive, it's over. The whole experiment's over. That was the fear. Because the whole nocoiner FUD that we were fighting is, hey, yeah, Bitcoin has no value because you could just make another one, right? I mean, you just made money on trees, you made fake money on trees, and you're saying it's value, but I could just make another one, another Bitcoin, another Bitcoin.

[01:42:28] Jay Berg: Like, no, this was the first one, right? And then if a fork happened and it didn't go to zero, now what, right? You just keep forking forever. And you have an infinite money glitch, right? There was a big fear about forks. There's a big fear about things just falling apart. And yeah, I mean, that was actually I was completely wrong about that. I didn't, I couldn't believe it when Ethereum Classic stayed alive. That kind of changed a lot of things. You know, it kind of opened up this, where we are today, where the whole reason why Bitcoin was supposed to be peer-to-peer electronic cash for the world was that they'd have a single currency called Bitcoin, not a million, not like 10 different currencies, right?

[01:43:23] Jay Berg: And then in order for this to work, you had to have a unit of account, store value and means of exchange, right, for the single currency. But now that, you know, now that you have to go from one to the next, to the next, to the next, I mean, my first post in 2010 was my first ever post in Bitcointalk was, yeah, I love this thing. It sounds great, but, you know, how are we going to do unit of account? Like, how would someone in Europe versus someone in America, right, if you're selling something online, right, you know, how are you going to have a unit of account in the price of Bitcoin when the price of Bitcoin to the local currency changes and you're paying taxes and your employees in the local currency, right?

[01:44:12] Jay Berg: You know, I thought we're all going to try to figure out, to create a closed loop economy of things priced in Bitcoin. And that was the only way that this could work. And we ended up doing it with shitcoins and with crypto and like with gambling. But, you know, that was the original problem I had with this, where the answer, and the answer given then, this is again, this is 2010, the answer given went, well, we could just do an automated, you know, a price feed that will change the price of the widget every five seconds.

[01:44:41] Jay Berg: To represent the, you know, the USDBTC rate. I'm like, that's not unit of account or means of exchange. That's just fake. And that's what we have today, right? I mean, you can't even buy a ticket to Bitcoin 2025, you know, in Bitcoin. It has to be in dollars.

[01:45:01] Vlad Costea: Yeah, I think it's very unfortunate. And you're right that eight years ago, there was the concern that a fork is going to destroy Bitcoin. And there was a lot of uncertainty about what's going to happen. First, it's funny because the same day gets celebrated as both the day when BCH got created and also when SegWit got activated. It was the first of August and...

[01:45:25] Jay Berg: Independence Day.

[01:45:27] Vlad Costea: Both. Yeah, exactly. Both sides of the argument will call it Independence Day, when one side activated SegWit and the other one basically got away from not having to activate SegWit.

[01:45:39] Jay Berg: Yeah, I mean...

[01:45:41] Vlad Costea: And after this, there was the SegWit2x conversation, which was supposed to be this hard fork that was supported by BitPay and a bunch of other companies that signed the New York agreement. And there was a lot of...

[01:45:52] Jay Berg: That was, that was the end of it, though. I think you got it mixed up. The New York agreement was before August 1st.

[01:46:02] Vlad Costea: Oh, yeah, but the New York agreement was pursuing SegWit2x, not BCH.

[01:46:06] Jay Berg: SegWit2x?

[01:46:08] Vlad Costea: I think it went up until November or something, and then they decided they're not going to do it.

[01:46:15] Jay Berg: Because of, right, because of BIP 148, right?

[01:46:22] Vlad Costea: That being SegWit?

[01:46:24] Jay Berg: No, no, not BIP 148. What was the... No, the hard fork. What was it called? BIP?

[01:46:30] Vlad Costea: Yeah, it was BIP 148.

[01:46:31] Jay Berg: BIP 148 was the way to force the miners, force SegWit, right?

[01:46:41] Vlad Costea: Yeah, it's the one by Shaolin Fry, which also got activated on Litecoin.

[01:46:47] Jay Berg: Maybe I'm missing... UASF. UASF. What was the UASF? It didn't have a BIP?

[01:46:54] Vlad Costea: I think it was 148.

[01:46:56] Jay Berg: UASF was 148, right?

[01:46:58] Vlad Costea: Yeah.

[01:46:59] Jay Berg: Okay, yeah. All right. So they blinked, right? So we had we had a soft fork going, right? We needed signaling from the miners, right? What do we need? 87%, 97%, 90%? Whatever it was.

[01:47:18] Jay Berg: So inside Bitcoin Core, there was code that said once X number of blocks in a row had a signaling, right, for SegWit, it would activate, right? That was how we activated the software, the SegWit software, right? So it was already in consensus. And all we just needed was X number of blocks to signal in the OP_RETURN of the Coinbase transaction, right? The signal for SegWit, and then it would activate. And the reason for this whole thing was just so the miners, you know, don't hard fork by mistake.

[01:47:58] Jay Berg: Because here's the truth that people don't understand. Every single soft fork is a hard fork for the miners, right? There's no such thing as a soft fork. And I just want to say the people that don't like Luke anymore, remember he created this idea. I think he created this idea of a soft fork. So there's no such thing as a soft fork. But anyway, so now you have Bitmain holding off, right, with Roger Ver. They're saying, hey, we're not going to signal, we're not going to let the soft fork happen because we want SegWit2x, right?

[01:48:27] Jay Berg: We wanted 2x. That was like the situation. And then Luke created this 148 UASF that says after this point, we're no longer going to accept blocks that aren't signaling, right? We're basically going to force our nodes to implement SegWit. How do we force our nodes to implement SegWit? We force our nodes by ignoring blocks that don't signal for SegWit. So that automatically will hit the threshold of whatever 90% of signaling. And then all our nodes are going to be running SegWit. And this was the game of chicken.

[01:49:12] Jay Berg: Remember, signaling is just right. So this whole signaling thing is just a way for your nodes to say that you're running SegWit. But the truth is, and the secret that they didn't realize was nobody was actually running UASF binaries. They were just signaling as if they were running it, right? Until I actually, why? Because the code was not signed. Nobody could download it and run it because it wasn't, you know, it wasn't signed by like Microsoft or Apple correctly to run on your local machine, right? So I actually, if you look at my [unclear: photoblock] UASF SegWit binaries, so I worked with Luke to actually sign these binaries that I got through the Microsoft and the Apple where it was the only, the actual implementation of people actually running UASF, right?

[01:50:09] Jay Berg: And they blinked. The other side blinked. If the other side didn't blink, we would have forked off. Right? And then Bitcoin, and then Bitcoin, BTCUSD, I believe would have stayed with the original fork.

[01:50:28] Jay Berg: And people don't realize what the decision as to what Bitcoin is always going to be. You can know for sure, just looking at the markets, right? BTCUSD is always going to be Bitcoin, right? The markets are going to decide which one is correct. It's going to be obvious to everyone which one's Bitcoin. And they blinked. It was a game of chicken. They didn't have to blink. If they didn't blink, we knew they would blink because they were not sophisticated enough to write code, right? They were not sophisticated enough.

[01:50:58] Jay Berg: It was too much fear, right, of the unknown to deal with it. And, you know, the bitmains blinked. And I don't know, like, it was obvious that Bitcoin BTCUSD would win as far as the price goes, for sure. Right.

[01:51:21] Jay Berg: And yeah, the game, the idea was that we're going to do 2x later on. But yeah, I think, let me think what happened. Independence Day was the day of the August 1st. Day of the fork, SegWit2x, I think before that, right?

[01:51:44] Vlad Costea: No, the conversation about SegWit2x went until November or something. And that's when I think Barry Silbert's company decided to drop it. And that was not going to happen anymore. And if you look at the price charts, it was also around the time that the big blockers realized that they should not be waiting for SegWit2x. So they pumped BCH. And that's when I remembered that night. It was 20 something.

[01:52:12] Jay Berg: Yeah. And Andreas Antonopoulos sent a tweet congratulating Roger Ver, right? Because at that moment, the price of Bitcoin Cash went above Bitcoin for like a second. There was a moment there. Remember that?

[01:52:25] Vlad Costea: I'm not sure on which exchange it happened. I'm not sure if it really happened. I just know that Bitcoin Cash was second. And it was Vitalik who congratulated Roger Ver. Oh, is it Vitalik? Okay, I'm sorry. And he said, congrats on this. Seriously, it was actually memed. And it was because basically Ethereum was number two up to that point and Bitcoin Cash flipped it for a few moments. I don't think BCH ever flipped BTC on any exchange. But that night, it seemed like something was brewing and people were uncertain for the first time which one is going to be the version of Bitcoin that wins the war.

[01:53:02] Jay Berg: Right. That was it. I think maybe it hit 50%. I think, I only look, by the way, I only, I only look at ticker symbols with the BTC denominator. So I think it hit 50.5, right? Something like that. I don't really recall.

[01:53:23] Jay Berg: So, but when was BCH created, or was it August 1st, 2017?

[01:53:29] Vlad Costea: It was.

[01:53:30] Jay Berg: I know that's when SegWit happened.

[01:53:33] Vlad Costea: Yeah, it was the exact same day. That's why I said that both camps are celebrating their Independence Day on the same exact day. And what you described about the game of chicken is what Amaury, who actually forked Bitcoin to create Bitcoin Cash, described as basically a game where two cars are trying to speed up, threatening that they're going to crash into the other one. And one side basically removes the steering wheel and holds it up and says, okay, I'm not going to steer.

[01:54:07] Jay Berg: Yeah, that was Luke, right? That was me and Luke, right? And, but they could have just, you know...

[01:54:21] Jay Berg: I see. So on November, November 2017, Bitcoin Cash broke 50 point... Yeah, broke .50, [unclear: August the 14th]. Yeah.

[01:54:38] Jay Berg: And so the hardcore, like the real hardcore Bitcoiners back then, we basically were against even extracting our BCH to sell it. We considered going to cold storage to extract our BCH, an attack vector on our cold storage.

[01:55:01] Vlad Costea: Well, yeah, because you had to expose your UTXO.

[01:55:05] Jay Berg: Ignore it. It was just, ignore the whole thing. Worthless, right? That was the thing. It wasn't until years later that I started going to like, you know, my Bitcoin and just extracting the BCH. Do you have any Bitcoin left with BCH in it?

[01:55:22] Vlad Costea: No, I don't think so.

[01:55:25] Jay Berg: Yeah, I may have some here and there, but yeah.

[01:55:30] Vlad Costea: But yeah, you're right. At the time there was this Puritanism. And I think part of the reason why BCH lost is that a lot of these guys haven't really sold their BTC for BCH. Whereas on the other side, people sold their BCH for BTC almost immediately. And it was just this lack of conviction because I've spoken with Peter Rizun. He was on my show. He is the chief scientist of Bitcoin Unlimited and he's still working on it. He's still, he has some sort of chip that you can install on your PC to make it possible to compute gigabyte blocks.

[01:56:10] Vlad Costea: He's still very interested in this and says that right now the bottleneck is not storage, is not RAM, is not Internet speed. It's actually processing. That processors don't have enough cores to be able to handle this.

[01:56:27] Jay Berg: What about GPU? Would GPU work?

[01:56:30] Vlad Costea: I'm not sure about that, but I guess there's a very good reason why he came up with that chip.

[01:56:38] Jay Berg: It's such a shame because the BCH guys, I agree with, I like them a lot. I think they're great. I agree with everything besides, you know, the fork, right? And I think we lost a lot of good people, especially people pushing peer-to-peer cash. And I think what people didn't realize is I came from financial markets. Like even if I didn't admit it at the time, maybe in the back of my mind, I'm like, listen, I'm definitely going to stay with the price, right? And maybe I was on the core side because I knew that the ticker symbol would go with us and the price would go with us and we would win, right?

[01:57:14] Jay Berg: So maybe I preempted it. But yeah, I think they misunderstood. I think everyone misunderstands that the price has nothing to do with the technology. Like the price has a lot more things to it than the technology, right? It's kind of separate. So you couldn't lose the ticker symbol. Whoever lost the ticker symbol loses. And yeah, it's a shame. So I actually proposed at one point a merger, right? A reverse fork, merging back in. Like it is possible, it is doable. Of course, you need consensus and stuff like that.

[01:57:50] Jay Berg: But, you know, there's no reason why we can't bring everyone back and create one Bitcoin again.

[01:57:59] Vlad Costea: Well, yeah, I think the idea behind drivechains is very similar, to give both camps what they want so that they can be one camp once again.

[01:58:15] Jay Berg: Yeah. I have to take a look at drivechains again. I think it makes sense a little bit.

[01:58:27] Vlad Costea: Yeah, but I think the big blockers had something going on until BSV happened. And once again, it's Craig Wright that is to blame because he was never there with the right intentions, as we can see in hindsight. And I think it was convenient for some of them who still believe that maybe there's something to his claim that he's Satoshi to use him and hide behind him and say, well, this guy says he's Satoshi and he's on our camp.

[01:59:00] Jay Berg: Yeah, it's crazy that it became the big blockers and the small blockers when SegWit was a block size increase.

[01:59:06] Vlad Costea: Well, also, if you look in retrospect at the average block size, you're going to see that BTC has much larger blocks than BCH. And what you have on BCH or BSV is just spikes when they were stress testing the network. But on average, they have very small blocks.

[01:59:26] Jay Berg: Yeah, it's crazy that, I mean, I like the tech. I even like the BSV tech as well. Some really good tech. I mean, my favorite, my favorite project is what's that fork? One of the original forks of?

[01:59:45] Vlad Costea: [unclear: The Electromix?]

[01:59:48] Jay Berg: One of the first, one of the original, he was on your show, one of the original Bitcoin Cash, like Bitcoin Unlimited forks. Nexa? It has like, has like Avalanche involved somehow?

[02:00:02] Vlad Costea: Oh, Amaury. Yeah. XEC, which is what he calls eCash.

[02:00:06] Jay Berg: eCash. Yep. See, eCash is actually awesome. Like from a, from a pure technical perspective. Like, I think it's awesome. Like, I really admire that type of thing. So Amaury, that's eCash. Yeah. No, that's great. So I just wish there'd be one ticker symbol. I wish there'd be one currency, but that didn't happen. So that's why I mean, we failed, right? Because you have Ethereum. So the same arguments I use, and again, the same arguments I used to use in 2010, 2011, 2012 against nocoiners, that Bitcoin's going to zero, it has no value.

[02:00:44] Jay Berg: I'm like, yeah, just look at the financial markets. At some point, you have to admit that this is not a tulip. You just see it. If it was a tulip, it would go to zero. And if it crashes and it comes back up. It's obviously there's some value, right? And if you look at Ethereum, against Bitcoin, at some point, you're like, yeah, maybe it's a shitty tech. Maybe it's a scam. Maybe it's a fraud. But at the end of the day, it has value. So if it is a scam, and it has value, logically, let's get to the next step.

[02:01:15] Jay Berg: What does that mean? That means that it scales Bitcoin. That's what that means. And then you could just see actual cases of it scaling Bitcoin, like, okay, now that makes sense. So we forgot to scale Bitcoin. We have this all crazy way of scaling, you know, using all these other technologies. And then people are creating tokens that have value, which is similar to the same, the Blockstream equity token, right? That pushed Liquid, right, for Lightning and all that stuff. It's just an equity token. It's not, you know, if that's the way you want to look at it.

[02:01:48] Jay Berg: But at the end of the day, you know, if it's a scam and it shouldn't have value, but it does have value, then you have to update your priors. So why would it have value if it's a tulip, right? So it means that if you believe that Bitcoin is the only thing that could have value, but this thing obviously has non-zero value, then it means it's scaling Bitcoin. So the day, you know, I made a tweet. The day I realized OP_CTV was not going to happen.

[02:02:19] Jay Berg: I was like, it's not going to happen. It's over. I'm just going to calculate the number of Ethereum that exists and add it to the 21 million. And now that's Bitcoin. Like I wrote that tweet in 2019, right? I was like, okay, obviously Ethereum is now Bitcoin. So now there's 29 million Bitcoin in existence and let's just keep going. That's, you know, like I'm just very practical. Like reality matters, even if nobody understands it for five and five years. That's how we got here in the first place.

[02:02:48] Jay Berg: No one understood Bitcoin in the beginning. So this whole cult and this whole civil war thing is just a waste, literally a waste of everyone's time. And it's a negative for everyone involved. I wish they could find something else that their life could revolve around, like fighting on Twitter. Because I was there. It's unhealthy. It didn't work out. It doesn't work out correctly.

[02:03:16] Vlad Costea: No, and it seems to only get worse. And I think the biggest psy-op was giving people the impression that running a node somehow gives you a vote and your Raspberry Pi matters. And then you basically put the developers in a position where they have to justify everything to yourself just because you're holding a copy of the blockchain.

[02:03:42] Vlad Costea: And it's very silly because I think after the fork in 2017, there were like three years when it was very heavily promoted, this idea that basically nodes are in control of the network, the UASF. That's the way in which Bitcoin is going to evolve from that point on. And then Taproot happened. And what did they do? They went for a Speedy Trial, which means that miners had to actually signal support in the majority.

[02:04:14] Vlad Costea: And it was always like that.

[02:04:16] Jay Berg: Of course. I mean, there's so much nuance and that's the problem with non-developers taking a stand without looking up, without looking towards people that are the subject matter experts. And what happens is you get, when Satoshi said, if you don't believe me, I have no time to explain it to you. Right. I mean, at the end of the day, it takes time. And the problem is the cohort, every four years, there's a toxic cohort that kind of dies and a new one shows up. And they actually realize after four years that what you were saying four years ago is correct.

[02:04:57] Jay Berg: But then there's a whole new group that showed up even worse than before with another thing that they're stuck on. Right. And that became Bitcoin. Right. And it's, again, you just have to look at the stablecoins at the events. And like, come on, there's nothing Bitcoin about Bitcoin, about Bitcoiners. Bitcoiners have nothing to do with Bitcoin. That's why, you know, at the beginning when I said about the shitcoin thing, it's not Bitcoin. It's like, yeah, you know, it needs to be a new movement and people need to work to.

[02:05:32] Jay Berg: Yeah, I actually don't have a solution. I don't know why I keep trying. But yeah, I've moved, you know, again, this is 2019, 2020, 2021. Now there's a whole nother story. Now Wall Street showed up. Government changed. Right. Regulations have changed. Bitcoin is definitely gold. Right. At this point. And the medium, you know, the medium means of exchange is centralized or like even if it's a crypto, like there's nothing decent, really nothing decentralized about any blockchain. Blockchain is just computer science. Right. Trust minimization, all that stuff.

[02:06:19] Jay Berg: Right. It's all basically now we live in a world where Bitcoin exists. And people are writing software to use Bitcoin in various ways. They call it blockchain. They call it altcoins. Right. They call it meme coins. They call it custody, non-custody. It's just, you know, people building things, businesses around it. And none of them is bad. None of them is good as long as it's not fraud. And a lot of the money is being made. And we touched on this before. It's the MEV. Right. If you don't understand why someone's spending so much money on a project and why they're pushing such a thing, it's usually because someone's making money off MEV.

[02:07:01] Jay Berg: Obfuscated MEV.

[02:07:05] Vlad Costea: There is Buddy in the chat. He said, I also came to the conclusion that shitcoins will scale Bitcoin, but four years after Jay. I am still very smart, though. Yes, you are. You're very much ahead of the curve.

[02:07:24] Vlad Costea: People have been telling me, you know, you should change the name of the podcast if you're going to. Include other projects, but I never really found a conflict. And I still see how if we change the culture in Bitcoin, which is something which I'm trying to do with the show, we can still have Zcash on Bitcoin. We can still have some of the stuff that we have seen in XEC and eCash, for example. We can still have a lot of the stuff that is in Ethereum and is interesting as a sidechain.

[02:07:57] Vlad Costea: We can have rollups. We can have so much interesting stuff on Bitcoin if we just let the builders do their thing. And we also, instead of saying that everything that was not brewed by this high council of five people who gave us SegWit and Taproot, instead of saying that everything that doesn't come from them is a scam, we should pay more attention to what markets are picking as the winner use cases. Because to be honest, Ethereum has played this role on the markets where they sort of presented the hot trend of every bull market.

[02:08:36] Vlad Costea: They started out with the ICO, which was really hot. A lot of people showed up and created their own ICO, and that's what formed the bubble. And then in the next cycle, we had the NFTs, and the NFTs were even in mainstream media. If the ICO was just this isolated situation where it was a bunch of nerds trying to scam each other, with NFTs, it actually went to television. You had Paris Hilton talking about it while being invited by Jimmy Fallon. It's something that you would not imagine.

[02:09:10] Vlad Costea: And you saw all of these celebrities putting their Ethereum name service addresses in their Twitter names. And you had Twitter actually letting you put your profile picture to show off that you have a fancy NFT on Ethereum. That was actually a thing. People forgot about that. Ethereum has been sort of a trendsetter from this point of view. And I think right now, Solana is kind of eating their lunch because Solana decided, okay, let's compromise on decentralization and just keep everything on the base layer, which Ethereum was sort of reluctant to do.

[02:09:49] Vlad Costea: But to be honest, a lot of the stuff that was developed was paid by Ethereum from zero-knowledge proofs that are coming back to Bitcoin, because they funded Zcash more generously than any Bitcoiner ever did. And I got to give them credit for hiring academics and trying to figure out because they started out with the shitty design that was obvious will not scale, but they got some very smart people on board. And they tried to backtrack from there. They started from something which was impossible to achieve.

[02:10:27] Vlad Costea: And they said, okay, let's see how we can get there. And when I had Vitalik on the show, he actually was talking about two different eras. He said he started out with the cryptography of the 2010s, and now he's more optimistic that he can pull it off with the cryptography of the 2020s, which is more advanced, scales better, brings new advantages. And maybe you're right, that Ethereum scales Bitcoin, but I do like to call it the anti-Bitcoin, because it does everything that we like to say that you should not do in Bitcoin, from proof of stake and all the way to having a foundation and being more centralized around the leader and having a pre-mine.

[02:11:14] Vlad Costea: I mean, it is sort of the anti-Bitcoin.

[02:11:17] Jay Berg: Of course, anything that's not Bitcoin is going to be not Bitcoin.

[02:11:22] Vlad Costea: No, but I mean, it takes all the decisions that in Bitcoin we cannot, or at least are very taboo.

[02:11:34] Jay Berg: Right. Remember like Saylor, I think, remember that whole thing, there's no second best? I just sent you a tweet, right? It was this, there's no second best. And then, you know, all of a sudden, you know, in 2025 or like a couple months ago, it's like, OK, Ethereum is no longer, there's a second best, right? Like they capitulated with the whole, I forgot exactly what happened. But yeah, it was obvious that people are going to start using alt networks and there's nothing wrong with it. There's nothing special or negative about any of these things, Base or Avalanche or like Liquid or it's all the same.

[02:12:17] Jay Berg: It's just not Bitcoin, right? It's not Bitcoin on chain.

[02:12:27] Vlad Costea: Yeah, I do remember there is no second best. I remember never sell your Bitcoin, which is the new meme that Saylor even tried to push during the Trump meeting. And Trump sort of added deniability to it and said, yeah, that's what they say. I'm not sure if it's true or not. And Saylor was just face palming.

[02:12:48] Jay Berg: That's the weirdest thing. Never sell your Bitcoin. Literally, if you never sell your Bitcoin, you literally don't have enough Bitcoin.

[02:12:55] Vlad Costea: Or you have too much.

[02:12:57] Jay Berg: You should be selling Bitcoin every single day to eat and live. Like, whoa, how are you going to buy lunch if you're not selling your Bitcoin?

[02:13:07] Vlad Costea: Well, there are some people who try to sell you these services where you borrow cash against your Bitcoin and use it as a collateral asset. And they say, well, if you have two Bitcoins, then you can borrow money against one. And then when you have to pay back your loan, you can basically borrow against the other one.

[02:13:26] Jay Berg: And you lose everything.

[02:13:29] Vlad Costea: At one point, yes.

[02:13:31] Jay Berg: So that's what happened to a lot of Bitcoiners. So now they have, instead of, maybe they would have had [unclear: 1.75] Bitcoin from two, now they have zero. Right. So yeah, I would, I mean, I've done it. Yeah. Borrowing is leveraging.

[02:13:56] Jay Berg: Instead, you could maybe you could use, I mean, at the end of the day, you should sell your Bitcoin in order to live. If if you really if you really want to hold on to have all your money in Bitcoin. Right. So now let's say you want to go to a 2026 Bitcoin conference and it costs $1,000. Notice it's $1,000. It's not 0.1 sats, right? It's not 0.1 Bitcoin. It's priced in dollars. Now you have price risk.

[02:14:36] Jay Berg: So you're a Bitcoin maxi. You have you put aside X number of Bitcoin for the you know, for your for your ticket. Right.

[02:14:46] Jay Berg: And by the time it goes on sale, you don't have enough money. You don't have enough dollars because the price dropped. So actually things priced in dollars creates, you know, risk, price risk. So maybe you should sell now, because if the price drops, you're not going to be able to go to a Bitcoin conference. But if you sell now and it goes up, you're going to miss all those gains. Right.

[02:15:11] Vlad Costea: Yeah, but it's going up forever, [unclear: Laura]. Right. Forever and ever and ever. Like, why would you want to hold an inferior asset or...

[02:15:19] Jay Berg: Yeah, because it drops 80%, because it's going to drop 80% again and again and again and again.

[02:15:26] Vlad Costea: Are you predicting this is going to happen in the next year?

[02:15:29] Jay Berg: Not right now. I mean, we just hit an all-new all-time high, right? Amazing.

[02:15:36] Vlad Costea: What do you think is going to be the top this cycle?

[02:15:41] Jay Berg: Well, I mean, it's really tough, a really tough day to ask me this.

[02:15:52] Jay Berg: If we close above 125 by Friday, then I think I mean, I have a chart that will give me the answer right now. If this if this move is real, which I'm not convinced yet, if it is real.

[02:16:26] Vlad Costea: If you want, you can share your screen.

[02:16:29] Jay Berg: I can.

[02:16:30] Vlad Costea: Yeah.

[02:17:06] Vlad Costea: OK, I see it. Figure out.

[02:17:12] Jay Berg: Oh, this is daily.

[02:17:23] Jay Berg: So basically you have these extensions.

[02:17:28] Jay Berg: Let's look at the last one, right? This is the 69,000, right? And we're looking at the previous is 20,000. So we got to...

[02:17:48] Vlad Costea: I don't hear you very well. Can you stay closer to the microphone?

[02:17:52] Jay Berg: Is that better?

[02:17:53] Vlad Costea: Yeah.

[02:17:54] Jay Berg: Well, OK. Yeah, these are not exact because I wasn't prepared for this, but I'm looking at looking at somewhere here. 281 between 224 and 281 would say if this is a real move, but I if this is a real bull market, I mean, it's looking pretty strong. Again, risk. This is like not just Bitcoin, but, you know, global risk on here. So if this holds, which is not sure yet, because this is a very interesting pattern here, we need this to hold substantially and then we could have a new leg up.

[02:18:55] Jay Berg: And, yeah, I think to, you know, 235 to 281 is easily doable, and we'll be in a new major bull market. And then what happens is, you know, 80 percent from there. What is that? Right.

[02:19:15] Jay Berg: So 0.20 times 281,000. Whoa. That's bad. 56,000.

[02:19:25] Vlad Costea: Could be much worse. I think it's going to be 58 because that one has been the meme for such a long time.

[02:19:34] Jay Berg: Right. So then we go all the way up to, you know, 281 and we get everyone back in and then we go all the way back down to where you say, 58. Wow, that's amazing.

[02:19:51] Jay Berg: Right. So then the Great Depression happens, blah, blah, blah. And we go from there to like 58.

[02:20:11] Jay Berg: What I was trying to get at was if if everything's priced in dollars, you want to you want to lock in the price of a thousand dollars. Right. That's what we have. We have a product for you. That's what we have with Sidepit. You could hedge the price risk of Bitcoin by buying dollar futures. What does that mean? That means that if the conference is in a year from now, you buy $1,000 in a year from now with your Bitcoin.

[02:20:54] Jay Berg: What is $1,000? How much Bitcoin is that today?

[02:20:58] Vlad Costea: [unclear: 0.009] something. No, it's [unclear: 0.0075], I think.

[02:21:06] Jay Berg: Right. So what you want is you want, at a certain date in the future, you want to receive $1,000.

[02:21:23] Jay Berg: That makes sense.

[02:21:26] Vlad Costea: Sure. So I did look into Sidepit. I didn't really understand the full extent of it. I see that it's trying to be fair. It's trying to remove the front running advantage that exchanges have on their customers. And guys like Arthur Hayes actually needed to get a presidential pardon for the fact that they dumped on the plebs to buy a new Ferrari. That's actually a quote from the trollbox on BitMEX.

[02:21:56] Jay Berg: Yeah. So the first thing is we have first thing we have is a US dollar futures contract.

[02:22:08] Jay Berg: So it's a dollar and it's priced in Bitcoin and was 788 satoshis per dollar. So this is like what I've this is the purest form of dollar to Bitcoin trading and hedging. It's Bitcoin is the currency. Dollar is the commodity and each contract is worth $500. Right. All you need to do is buy the contract 785. That's the price right now. 785 satoshis per dollar, which equals $127,551. What does that mean? That means in 80 days from now, right at the end of this contract, which is the end of the year, you're going to get $1,000.

[02:23:09] Jay Berg: You're buying $1,000. You're going to get it 80 days from now. That's what this means. And you're using, right. And how much are you paying for it? 784 satoshis per dollar. Right. Which means no matter what happens, right, you're going to have $1,000 in 80 days from now.

[02:23:39] Jay Berg: What does that mean? That means that you just went short.

[02:23:45] Jay Berg: If Bitcoin goes up, you lose Bitcoin. If Bitcoin goes down, you make Bitcoin. At the end, you have $1,000. That's like the that's the reason for. So you're like a farmer. You have corn, you have a wheat field and you want to lock in the price to use these derivative contracts. So this is like, you know, like a Wall Street sophisticated CME derivatives contract. So that's that's the product. And we just you could invert this right now. The fact is, this is a distributed network.

[02:24:26] Jay Berg: And what about the problem of MEV, right? What about the problem of front running? So what we did was we built our own protocol, our own distributed network for the purpose of exchange. So the game theory and the consensus mechanism of Sidepit is just like Bitcoin was made for peer to peer electronic cash. This was made for exchange. And what is exchange? What's the purpose of exchange? First principles, the purpose of exchange is price discovery. A place where you could discover price in a fair, open, transparent market.

[02:25:13] Jay Berg: So we built this, you could call it a blockchain distributed network, whatever you want to call it, this Bitcoin sidechain with a mechanism, an auction mechanism every second where if you were a professional trader, professional speculator, right, you would you know, you would get you would get the fair price in competition with other people. And you do that by eliminating the miner, right? You eliminate the miner, you eliminate the blockchain that was built for money. And we have a new consensus mechanism. But at the end of the day, as an end user, you know, you're just going to have confidence that you're not going to be manipulated in this exchange.

[02:26:07] Jay Berg: So for someone like yourself, who's not a professional, you know, Wall Street trader, right? The difference between us and anyone else is that, you know, Wall Street's not stealing, you know, $5 from you every time you make a trade. But you know, the biggest story is that this is the fundamental mechanism of price discovery. That makes sense.

[02:26:35] Jay Berg: It is a little complicated.

[02:26:38] Vlad Costea: Well, what's impressive is that you built this in a way that it doesn't require, like, you're not the one running the service, right? It's decentralized.

[02:26:50] Jay Berg: Well, so it's that's a loaded question, but it's, it's decentralized in in price. So there's a trilemma, there's a DEX trilemma, which means you can only have two out of three. So counterparty risk, which means who you're trading with, then you have exchange risk, where custody risk, and then you have price discovery. Front running and manipulation. So we chose, we're the only one that actually chose price discovery, which means that to us, our double spend is front running. So it's, it's coming back to that same story of rock, paper, scissors.

[02:27:43] Jay Berg: It doesn't matter that rock, paper, scissors is decentralized. If the custody is decentralized, if every single time you play, you're going to lose. Right? So the first thing you have to do is make the game rock, paper, scissors work. Before we start talking about settlement and risk of, you know, custody, because that's not why you're here. You're here to play rock, paper, scissors. You're not here to do peer to peer electronic cash. If you were, then use Bitcoin. But if you want a fair game, right, you first need to make the game work or you start dealing with decentralized, you know, so we just punt the decentralization to the settlement.

[02:28:25] Jay Berg: And we punt it to trust minimization, you know, BIP 300, whatever the latest and greatest is, but that's not really what's important. What's important is that when you're trading, right, no one, you're not getting manipulated and you have confidence that it's a fair game. And we do that by making a protocol that basically auctions off the sequence of events every second.

[02:29:06] Jay Berg: You think of it, you're familiar with like the London gold fixing price?

[02:29:12] Vlad Costea: No, not really. So...

[02:29:15] Jay Berg: Every single day, there's a price of gold, right? In London, it's the official price of gold, right? It's a different price than the price you're going to use when you go into... You know, the gold store and buy gold. But it sets the stage for the price of gold, right? It's the price of gold. It's the lowest level that all gold is based on, in a sense. That's what we're trying to do for Bitcoin. We're trying to say that every time you do an atomic swap, every time you do a perpetual, every time you do anything, every time you go to El Salvador and buy a McDonald's, if you go to El Salvador today and walk into McDonald's and use your Bitcoin, Goldman Sachs is taking a piece of that.

[02:30:04] Jay Berg: Every single time a swap happens today, someone's manipulating you. With Sidepit, if we create a fair, transparent, open price of Bitcoin that's not manipulated, that basically feeds the rest of the ecosystem, not just Bitcoin, but even the crypto ecosystem. And, you know, this kind of eliminates all the manipulation that Wall Street's doing today on Wall Street and also in crypto and, you know, in Bitcoin as well and centralized exchange, decentralized exchange, all of them. Like, this is a fundamental problem that we think we solved and we're not sure yet until we actually launch with professional traders.

[02:30:49] Jay Berg: Just like Bitcoin in early days, you couldn't really know for sure what was going to happen. Right. So it's going to take time. So, yeah, we're building the baseline of fair price and we actually, although it looks like we compete with everyone, we don't actually compete with anyone. We're actually like, we believe that rising tide lifts all boats and it is a fundamental solution. But yeah, that's Sidepit. There's a white paper. It used to be called Dexchain.

[02:31:23] Jay Berg: Originally it was going to be, so it was going to be a fully decentralized Bitcoin soft fork, like BIP 300. But that was quickly... So there's two versions of this. One of them could be fully decentralized and the other one could have like a business model. Right. We chose the latter. But hey, I'm open to doing an ICO, you know, haven't thought of it in a while. But yeah, it turns out there's not a lot of funding in the space. Thank you, Michael Saylor, to build anything on Bitcoin, especially real stuff.

[02:31:59] Jay Berg: So, you know, you have to get a business model. That's where we are today. Yeah.

[02:32:04] Vlad Costea: On the topic of funding, like I don't want to move away too much from Sidepit because I still have questions about it. But regarding funding, it's interesting to me that the two sides that today are fighting so hard on Twitter are mostly funded by the same people. Jack Dorsey. And I think that's a big one because he's funding some lightning stuff. He is the main investor behind OCEAN, the mining pool. And also supported Luke Dashjr with Knots to go forward. And on the other side, you have Bitcoin Core that receives grants from Jack Dorsey.

[02:32:46] Vlad Costea: And I've seen a very good meme, which I think was taken from Israel, I think last year when there were the bombings with Iran. Basically, when that anti-missile system got triggered or what's the term for it, got initiated or whatever. So basically, Iran was sending missiles and Israel was also sending missiles to counter them. And the meme was that the missiles coming from Iran were U.S.-funded and the shield against missiles was also U.S.-funded. And it was saying your taxpayer's money, also your taxpayer's money.

[02:33:30] Jay Berg: Yeah, that's interesting. Yeah, Jack Dorsey, I mean, I'm actually very aligned with his with his takes on Bitcoin. He actually realizes that Bitcoin needs to be money for it to succeed. Right.

[02:33:46] Jay Berg: Yeah, I think I don't want to, I don't want to knock, I want to stop being negative, but I think like, well, what's what's that Jack's project, the Twitter that he funded? Nostr. Nostr, yeah. You know, Nostr is just like compared to like it'll be number 50,000 out of 50,000 better crypto projects. Like it's it's not sophisticated. It's just whatever. There's nothing wrong with it. I'm just saying it's nothing special. It doesn't. But yeah, I mean, I wish that I don't know if we still have this idea that I see like like funding a project is bad.

[02:34:35] Jay Berg: But there was a time in 2012 where you just have an Exodus address. You tweeted your Exodus address and people sent you Bitcoin and you knew everyone was coming from a full node. So, you know, you gave them a token and you considered you don't you didn't say it back then, but it was basically equity in the project. But you couldn't say it. There was a lot of like wink, wink happening. Right. But of course, it went over everyone's head and they call it a scam. Right.

[02:35:00] Jay Berg: And then the ICOs happen. It's funny because the ICO was like a big problem because, you know, you're scamming people. It's a manipulation. It's a scam. We want to see Bitcoin. So what I did in my first project is I actually launched a actual. So it took all the all like the toxic or let's not say toxic Bitcoin maximalist talking points. Okay. We need, you know, zero pre-mine, no ICO and utility. Right. We want to see another project like Bitcoin, which starts from zero ICO, no pre-mine.

[02:35:35] Jay Berg: It actually has real utility. And I actually built that. It had to do with fantasy sports. And it turns out when you present that to the community and they're like, oh, well, I don't really care about sports. Right. So that was my first indication that all their like hardcoreness is just fake. Right. They don't. They're just cosplaying on Twitter. It's just one big cosplay. And that was like two cycles, you know, cycles ago. So, yeah, funding is a big problem. I really. Michael Saylor's like doesn't fund anything like it's basically anti funding.

[02:36:18] Vlad Costea: Well, the problem is not that he's not funding. The problem is that he stops other people from funding.

[02:36:24] Jay Berg: Yes, but it's even worse. And the real there are still some people that are just legitimate, like good people in the space and they want to stay pure. And a lot of them are in OP_CTV or were. And there was a moment where I said, just put an Exodus address, get some funding and we'll get this thing through. Like that's what had to happen. Right. We could have easily done it, but they didn't want to do it. They didn't want to. It didn't look good. It didn't seem good.

[02:36:53] Jay Berg: It didn't. Right. But that's what needed to happen. We needed to just fund OP_CTV and would have pushed it through. The truth is that nobody wants to nobody wants to admit that we live in a capitalist society and people listen to people that either have money or make money or know how to make money. And literally Bitcoin is money. Like this is about money. So again, you know, I guess, you know, maybe a lot of people that showed up later, they're here for other reasons. But Bitcoin's money.

[02:37:25] Jay Berg: Wall Street's money. Everything's money. Right. Capitalism is money. Money is energy. Nothing wrong with money. And yeah, we probably should get things funded. I don't really have have a solution. I'm just saying that funding. It's crazy how we kind of said funding good people and good projects is bad, too. Right. That's a scam, too. But if you have a corporation with equity holders, you know, that makes money off of a hard fork, off a soft fork, that's fine. But if you do like your own thing and you give money to the people that funded you in the form of a token, equity token.

[02:38:07] Jay Berg: Right. That's bad. Right. So the incentives all got misaligned. And here we are today. So I think that I don't want to show my project too much, but there's a there's nine OK, there's nine billion dollars stolen from everybody every year from speed of light. The Byzantine generals problem in financial markets. Right. It's called high frequency trading and now MEV. Right. We could take that and extract and kind of like kind of give it back to the people and fund everything. And that's like that's kind of the big story of what could possibly happen with Sidepit.

[02:39:00] Jay Berg: But, you know, it's, we're kind of at an inflection point here. We started out as Dexchain. We started out as a open source, altruistic project that meant to be like some sort of Bitcoin soft fork or like fully decentralized. And then we went the other way, you know, looking for VC funding and all that to actually like create like a pure capitalist company. And now we're kind of at the point where we launched the project. It's all working. But in order to get to the next stage, we need more funding and we're trying to figure out if together with somehow use it to enhance, obviously not for altruistic reasons.

[02:39:52] Jay Berg: You know, be very clear here, like I'm not saying I'm altruistic at all, but I'm saying that it could be a win win for Bitcoin technology, for Bitcoin-related companies that have money in the space building on this, you know, this UTXO type of technology. And I think it's happening with some other companies now. Right.

[02:40:25] Vlad Costea: Or you can add Ethereum and you get a grant from the Foundation and basically you're going to be able to launch it and you just renounce the purity, but get the job done.

[02:40:41] Jay Berg: Yeah, the truth is all the grants, they want you to be, they want you to use the token.

[02:40:49] Jay Berg: I guess you could do like a meme coin. I don't know.

[02:40:56] Vlad Costea: But I remember at one point Opera browser did an integration of a Bitcoin wallet and simultaneously they also integrated Tron. And it seemed weird, but it was the Tron Foundation that paid for it. And I think that what they really wanted was to get Bitcoin on their browser. They had no funding for it. So they just went to Tron and were like, hey, how about you pay us to integrate Tron and Bitcoin? And they were like, yeah, sure. And once again, I don't want to diverge too much from Sidepit.

[02:41:29] Vlad Costea: I think it's a topic that needs to be explored more. But Tron is this very interesting project, which simultaneously is a shitcoin, but is also not. Because it's supported by the people who are funding Blockstream and a bunch of other projects in the space. So when it comes to USDT on Tron, they just look the other way. They're like, it's almost like it doesn't exist. Maybe you should use it on Taproot Assets on Lightning. That's what they say. Like, that's the pure way of using it.

[02:42:01] Jay Berg: Yeah, I mean, I think Tron is actually one of the only places in the world. I think it's Iran, right? The people in Iran are using Tron for peer-to-peer electronic cash, right?

[02:42:14] Vlad Costea: Yeah, my girlfriend is from there and her parents sent her USDT on Tron.

[02:42:22] Jay Berg: Right, now it became stablecoins. Before, right before the stablecoin craze, there were actually people using Tron itself. I think now it became USDT. Yeah, so I agree that, although Tron is just a fork of what? I'm not even sure.

[02:42:41] Vlad Costea: Ethereum.

[02:42:42] Jay Berg: Of Ethereum.

[02:42:44] Vlad Costea: I mean, I remember the scandal in 2017 or something that the whitepaper was even plagiarized from Ethereum. Like, it was a pretty shameless clone.

[02:42:56] Jay Berg: Yes, OK, so let's talk about 2025. I'm not sure where the community is. I know you're still you're like an OG now, so you're probably not the right one to ask. But is XRP considered bad still?

[02:43:09] Vlad Costea: There's nothing interesting about it. Like, for me, it's very fascinating how every cycle they show up with the same promise that they're going to replace Swift for payments and there's a new wave of gullible idiots who are buying into it. And it just goes on like business as usual. They haven't improved anything as far as I know. They're not doing anything technologically interesting. They just say, hey, we are these people who are wearing suits and we work with the bankers. And if you buy our token, maybe it's going to be used by the banks, too.

[02:43:43] Vlad Costea: And think about the possibilities that Deutsche Bank or whatever or Bank of America is going to be using XRP for settlements. And then people...

[02:43:50] Jay Berg: What about Stellar? So Stellar is the same technology.

[02:43:55] Vlad Costea: I did see that it pumped. I don't even know why.

[02:43:58] Jay Berg: Not saying it pumped. I'm not talking about price. I'm just talking about I'm just trying to get the zeitgeist of what's considered kosher, what's not kosher, right? Because it's crazy that you said Tron is more cool than Ripple, right? Tron to me seems like like on the outskirts, like close to being a scam, at least what like what people used to think of it because of the whole the way the person behind it and the way it happened.

[02:44:25] Vlad Costea: Yeah, Jay, but look at the chart from 2019 until present, I think. And you're going to see that Tron outperformed Bitcoin. That was when they added USDT on it. And that's when it permanently became one of the top 10 coins. 

[02:44:44] Jay Berg: Is that TRX?

[02:44:45] Vlad Costea: TRX, yeah. And we don't talk about this. It's sort of a taboo subject.

[02:44:49] Jay Berg: [unclear: When you say that.] Yeah. So there's a couple of these. I mean, OK, the honest truth. So here's his actual proof. This is like the final proof that [unclear: crypto] scales Bitcoin. OK, so you think here's a Tron, weekly Tron, it literally against Bitcoin, it's flat sideways. This doesn't move. Not only Tron doesn't move, every single currency that is not a scam is literally sideways forever. I call it sideways forever. This is Ethereum. Besides for that, crazy.

[02:45:44] Jay Berg: Ethereum, it's literally the same price it was in 2016. It hasn't moved. What does that mean? And you can say the same thing, XRP, USD, BTC, because people are using the wrong denominator. If you use the Bitcoin denominator, it's just sideways forever. Everything is sideways forever. Right? It's the same price as 2013 XRP. What does that mean? That means if it's never going to go up or down, well, obviously there's a lot of volatility, but if it's never going to go to zero, it's basically Bitcoin. If you could swap your XRP for Bitcoin instantly or through some exchange, it's basically you could use it as if it's Bitcoin.

[02:46:30] Jay Berg: And that's literally what people are doing. And that's why all these things that seemingly are scams have value forever because they're scaling Bitcoin. And one by one, which is so crazy, what's happening is you could even, you know, you have like a scam like WIF, right? Like a meme, even like a meme coin. Right? Like I think WIF, what's that, dogwifhat? Right? These meme coins are eventually become like a scaling Bitcoin solution. Right? Which is insane. And it's so hard for people to understand how something that's just completely worthless and a joke.

[02:47:09] Vlad Costea: Well, it was the same with Dogecoin, right?

[02:47:11] Jay Berg: Dogecoin, right. So here, so this is WIF, right? I believe, right, that it's never going to go to zero and it's going to be sideways forever. So, yeah, forget about this whole pump. It's just going to stay here forever. Right? So, you know, if you're like some person in Africa or somewhere that has like, you know, makes $100 a month or something, and somehow you have access to some Solana thing and you know, yeah, it's better than, if you think Bitcoin's going to a million dollars and you want to get a piece of it, buy WIF if you need to.

[02:47:47] Jay Berg: Like, that's the point. I mean, it's crazy to say that. What'd you say? What's the other one? Yeah, Dogecoin, right? Doge was the first one. Like, I was so upset when Doge became like when Elon, you know, the whole Doge thing because it's really sad that Doge became what it was and it wasn't Litecoin because it's literally should just be Litecoin. Right? Like, Doge should just be Litecoin. It's, I mean, it's a fork of Litecoin or something, right?

[02:48:16] Vlad Costea: And they're merge-mined, which is more interesting because there's pressure on the miners to sell LTC and hold Doge.

[02:48:23] Jay Berg: Right. And I told the Litecoin guys a long time ago, I'm like, you should just rename, just basically rename Litecoin to Doge and kill Doge and no one will know the difference. Just say this is Doge, Litecoin is Doge, right? Because Doge was made as a joke. The technology is shit, right? And Litecoin is good.

[02:48:46] Vlad Costea: No, the technology is the same. It's not shit.

[02:48:50] Jay Berg: It's the same. It's the same, but Litecoin is, right, but Litecoin should have been the one that got the value and all that.

[02:48:57] Vlad Costea: Litecoin actually has some improvements like MWEB, and I'm not even sure if Dogecoin has SegWit.

[02:49:05] Jay Berg: Right. But the thing is, and that's another thing that people don't realize, and it's pretty sad, is that the price has no correlation to the project, any of the projects. And I could give you a great example is, I say that my favorite project today is Chia. Chia coin is probably my favorite project. And I don't even want to take a look at the price because I have price still down, right, against, not against dollars, against, what is Chia, XCH.

[02:49:44] Jay Berg: Yeah, so maybe it's making a low here.

[02:49:51] Jay Berg: It could be things are changing now with the new regulations and stuff, but yeah, I don't know if there's a correlation to, I don't know if there's a correlation to project and price anymore, especially if you're looking at the BTC, looking at the BTC denominator.

[02:50:30] Vlad Costea: So on Sidepit, will you be able to do all of these trades? And by the way, I think you're the first person I ever see to use Microsoft Edge as a browser.

[02:50:40] Jay Berg: Oh, yeah, I love Microsoft Edge. So, you know, Satoshi used Windows, VS Code, Visual Studio, but yeah. Why? You don't use... Do you use Microsoft Edge? I don't know, I like it.

[02:50:51] Vlad Costea: I don't use Windows.

[02:50:59] Jay Berg: What was the question? Oh, no, no, no, no. So I'm starting with, so, OK, you know, you familiar with the E-mini S&P, E-mini S&P, have you heard of it? Have you ever heard of the E-mini S&P?

[02:51:12] Vlad Costea: Maybe it's an abbreviation for something, right?

[02:51:16] Jay Berg: It's the most active, biggest ticker symbol in the world. It's like where Wall Street, right? It's called the S&P 500 futures contract.

[02:51:27] Vlad Costea: Oh, S&P. Yeah, yeah. I heard [unclear: S&M], like the letter [unclear: M].

[02:51:30] Jay Berg: S&P 500. It's called the E-mini S&P. It's the electronic, so it used to be trading. OK, trading used to happen in the trading floors in Chicago, in the trading pits, called the S&P 500 futures trading pit, right? It was a physical place. People gathered together, right, with jackets and they had hand signals.

[02:51:53] Jay Berg: You've seen the movie Trading Places, right? Trading used to happen physically, right, in pits, trading floors. Are you familiar with that?

[02:52:04] Vlad Costea: I did see part of it in The Wolf of Wall Street, I think. But no, it wasn't that physical. They had computers.

[02:52:12] Jay Berg: Right, no. So there's a movie called Trading Places. So, yeah. So trading used to happen inside a physical location called an exchange place with hand signals and people. And guess what? There was no Byzantine generals problem there, right? There was no delay. Everybody could see everything. So there was no front running. There was no manipulation happening.

[02:52:37] Jay Berg: So the E-mini S&P is basically, it was the first digital electronic 24 hour miniaturized version. And that became where all, if you have a million dollar portfolio or a hundred million dollar portfolio and you want to quickly hedge your risk, you would short the E-mini S&P, right? It's a CME contract. So what we're building is the equivalent for Bitcoin. The high-volume, highly professional place to get in and out of Bitcoin risk, right? The risk, the dollar risk. So it's the place where if you want to buy or sell dollars instantly for Bitcoin or as a, not as a end user, but as a hedger or a speculator or a trader, right?

[02:53:35] Jay Berg: You want to trade Bitcoin against the dollar, you know, Sidepit is the place to go to get the best experience as a professional trader or as an end hedger. And we do that by recreating the physical trading pits in a sidechain trading pit. So where our protocol, our decentralized protocol does what Bitcoin did for physical money, made it digital. We take the physical trading pit, we make it digital. What does that mean? That means that what happens inside the trading pit is there's no front running.

[02:54:10] Jay Berg: There's no Byzantine generals problem. So we take that with our white paper and our protocol with game theory thrown on top that the result is going to act as if you're trading in the trading pits right before electronic trading happened. And that's why we had an order... So we had an Ordinal jacket, that we sold jackets. Right. Just like you needed a special jacket to get into the trading floors, you need a special jacket to get into Sidepit. So we sold 40 OG jackets and then we sold another 40, you know, Chad jackets.

[02:54:49] Jay Berg: So yeah, that was at the halvening, I think. We did that. And then, yeah, so...

[02:54:58] Vlad Costea: Last year.

[02:55:00] Jay Berg: Yeah. So it's, again, it's for, Sidepit is for well, it's for anyone, but it's for like professional day traders. So you have to be a day trader. You have to want to gamble on the price of Bitcoin. The current iteration of it is for traders, people that want to take their Bitcoin and make more Bitcoin by predicting price chart people. Right. Or so what's the actual end purpose? The purpose is if somebody actually wants to hedge their Bitcoin risk, if they want to buy a ticket to Bitcoin Magazine 2026 and they need to hedge their thousand dollars, the act of having a bunch of gamblers in a place gambling gives you price discovery and gives you liquidity so you could do the hedging.

[02:55:51] Jay Berg: So the purpose of an exchange is for the hedgers, but 90 to 99% of all activity is by the speculators. But this is the only place in society where gambling and, you know, is a positive sum. And a positive externality for industry and our industry is Bitcoin. So just like, you know, commodity contracts for gold, for soybeans, for, you know, pork bellies, all that is needed to for gold to create the price, the underlying price of the asset. That's what Sidepit is trying to do for Bitcoin.

[02:56:31] Jay Berg: And once we do that, then, yeah, then we prove the technology with Bitcoin. From there, we would go to, I guess, maybe Ethereum or whoever else has an ETF because that's the end for the business, for the for the VC business model. We're basically saying that, hey, you have Wall Street ETF fund managers that need to need to deal, need to do this shit. So whatever they're doing, we're just going to follow them. And I don't know if there's a Tron ETF yet, is there?

[02:57:08] Vlad Costea: I'm not even sure. Maybe there is, but I don't think so. I think Ethereum got one and there was a conversation about a Litecoin one, but I don't think there is a Tron one yet.

[02:57:23] Jay Berg: Yeah. So so really, we're we're just we're just interested in the reason why I brought up the E-mini S&P. We're interested in the most active high volume assets. So not not like all these little tokens, like secondary and tertiary, right? Because it's a big.

[02:57:47] Jay Berg: We're just focused. Yeah, we're just focused on the biggest asset, which is Bitcoin and the most volatile, which is Bitcoin USD. So right now, right now, you could leverage you could leverage your Bitcoin on Sidepit or you could hedge your Bitcoin on Sidepit with the U.S. dollar.

[02:58:20] Vlad Costea: I think it's beautiful.

[02:58:24] Vlad Costea: It's something that I didn't even know that I want. But now I sort of can't look at exchanges the same way. But once again, I'm not much of a trader. Right. I sort of just buy and hold for many years and then maybe sell or sink with the ship. I don't know.

[02:58:53] Jay Berg: Hey, what do you do during the drawdowns when it went from [unclear: 66 to 16]?

[02:58:58] Vlad Costea: I eat cheap bread and butter and ramen.

[02:59:01] Jay Berg: You just held on?

[02:59:03] Vlad Costea: That's what I've done so far.

[02:59:08] Jay Berg: But what if you but you OK, but what if are you selling all the way down or you're buying all the way down?

[02:59:18] Vlad Costea: I buy all the time.

[02:59:23] Jay Berg: So if somebody wants to I guess the real utility, if you if you're like want to buy a house or you want to get married, I don't know if you're married, but you want to buy an engagement ring or something and you have, let's say you have $10,000 put to the side or the thing's going to cost you $10,000 and you have 0.1 whatever Bitcoin. You're like, hey, Bitcoin just hit 261,000. Jay says it's going to go to 56.

[02:59:45] Jay Berg: Maybe I should hedge some risk and lock in some gains so I could buy my thing. That's the idea. Right. Until we have a Bitcoin economy. Right. The truth is that if things are priced in dollars, you need a you need a place to hedge your risk. Or you think Bitcoin is going from 125 to 261 and you want to leverage. Right. Use Sidepit leverage. And the point is that it's a poker game. It's a professional game where 90, you know, 80 to 90 percent of people are going to lose.

[03:00:17] Jay Berg: But that 10 to 20 percent are going to make a lot of money. And you just have to know that going in. It's a game. It's called the trading game, literally. But there's a positive sum at Sidepit that doesn't exist anywhere else. We get that positive sum by eliminating the manipulation and giving it, letting, bringing it back in. So you could think of it as a professional poker game. So if I told you to sit down at a professional poker table, you're probably not going to want to do it because you're probably going to lose your money.

[03:00:48] Jay Berg: Right. So for now we're saying this is a professional game. But eventually, right, it will be, to most people it will look and feel like any other derivatives exchange. What are the other ones out there? Deribit, BitMEX, CME. But you know that you also know that, hey, we're also we're also like. kind of the real Robin Hood, we are taking from Wall Street, giving it back to the people and creating, you know, fundamental, real technology that could help in a little way. And yeah, you know, I'm no longer like doing any like crypto stuff, really, or even a token. Maybe I should. Hey, if anybody wants to help with what is it? Are Ordinals still happening?

[03:01:54] Jay Berg: Yeah, the Ordinal side of things. I think I could bring that back, especially now with OP_RETURN. I could get into the OP_RETURN drama. I don't know.

[03:02:08] Vlad Costea: So when you say you can bring that back, what does it mean?

[03:02:11] Jay Berg: OK, so the way a Sidepit ID, in other words an account at Sidepit, is a Bitcoin address, right? That's all you need is a Bitcoin address, right? So it's a native SegWit Bitcoin address. But and then when you want to make a trade, you sign a message just like whatever that JSON thing is, you sign a message saying I want to buy blah, blah, blah at this price and you sign it with your Bitcoin key, right? And then you broadcast that. And every node or right, it's more like a Stellar network, but every node needs to then verify your message.

[03:02:56] Jay Berg: How do they get your public key from the Bitcoin address?

[03:03:03] Vlad Costea: You broadcast it?

[03:03:05] Jay Berg: No, you're not. You're signing, you're broadcasting your Bitcoin address and a signature.

[03:03:10] Vlad Costea: Right. So you ask how do they get your private, your public key?

[03:03:14] Jay Berg: Yeah. How do they get your public key? I mean, the only way they can get your public key is from a Bitcoin transaction on chain. That's the way your account is created, is by either holding an Ordinal, by, you know, buying a jacket or by locking your Bitcoin. And we do, if you go into the Bitcoin blockchain and we look and obviously, in order to spend your Bitcoin, you needed to display your Bitcoin, your public key. So that's the trick. That's how you are identified by a Bitcoin transaction. And now you have a jacket, a jacket that gives you that. Now you're a trader in exchange by owning this jacket.

[03:04:02] Jay Berg: Right. Which just exposes your public key. People know who you are.

[03:04:09] Jay Berg: And it's it's just a it's just an Ordinal. Right. We think of it as, we like to say, this current... So this current initial version of Sidepit is a Bitcoin sidechain, layer two or layer one and a half or layer zero. I'm not sure what layer what layer means anymore. It's its own distributed network that uses Bitcoin intimately.

[03:04:42] Vlad Costea: So uses Bitcoin for identity, not for broadcasting trades, just for registering that you are one of the users.

[03:04:48] Jay Berg: We don't use the Bitcoin network. We use Bitcoin. So this is how it works. There's a trading floor. There's a casino, trading pit. If you want to walk into the trading pit, you got to take your Bitcoin, give it to the, lock it up at the door and you walk into the trading floor. Right. So at the door, you make a Bitcoin transaction on the Bitcoin network, go into the trading floor. Inside the trading floor, you continue using your Bitcoin key. Right. But it doesn't go anywhere in the network, it's just internal.

[03:05:27] Jay Berg: And on your way out, you exit back to Bitcoin if you want to. Right. So you could think of it as a long Bitcoin transaction, like maybe like a long like lightning transaction where there's a transaction say I'm locked, now I'm in. Then you buy and sell, buy and sell, buy and sell. It could take a day. It could be as long as you want. And then there's a moment where it's all deterministic and transparent, so the result is known. And then when you're on your way out, you say, I want to unlock my Bitcoin, I want to take my gains or, you know, losses.

[03:06:05] Jay Berg: And then you could, if you want to, take it back to your ID. So it's funny, it looks and feels like DeFi, but the wallet you're using trade has no money in it. There's no Bitcoin in it. You're just reusing the key that once had money. Right. So we don't actually, you know, we don't actually use OP_RETURN or anything for data availability, I guess. So at the end of the day, you're while you're trading. Yeah, you have to understand that you're no longer in a world of, you know, peer-to-peer electronic cash.

[03:06:52] Jay Berg: Now you're in a world where there's, you're in a casino, and if the casino, something happens to the casino, you're fucked. Right. So you have to trust the casino. That's what you get by trusting the casino. You get fair gaming without the trust. This is the trilemma. Without the trust of the casino, someone's going to scam you a thousand times a second. That's called AMMs on Solana or perpetual futures. Right. And most people don't care because it only costs, you know, regular people, it only costs them five bucks a year, but professionals care.

[03:07:31] Jay Berg: Right. So how do we bring on regular people by telling them that Wall Street's fucking you, it's only two pennies, but they're still fucking you, still stealing from all of you guys together. Right. And you guys use us instead of them, you know, we could start getting the revenue from them and funding other things. Right. So it is a tough sell because it looks and feels exactly like our competitors for most people, which is why we're not a retail-facing exchange, we're more of a professional exchange. And this also helps with regulatory stuff in order to actually start trading.

[03:08:13] Jay Berg: You have to kind of be a little sophisticated, which is good for now.

[03:08:20] Vlad Costea: Yeah, it's really interesting the way in which you approach this. But the question is, how does it scale? Because you're going to have to mint an ordinal for everyone. Or are you going to mint all your Ordinals and then sell them off-chain to...

[03:08:34] Jay Berg: OK, no, we just minted. We just minted. So we just minted. You don't actually need an ordinal to trade. It's like it's we just did it as like we just we just did it as like a way to like give you extra extra special stuff. Right. But you don't actually need. You could just come into side with with like locking money.

[03:09:02] Jay Berg: So all an Ordinal is means that, I don't know why it won't scale. You just need it's just it's just a small UTXO, right, that you own that that ID is still going to be needed if you want to. So the way the reason why we have to be like this is because you remember like so the Exodus address back in the day. Remember, at one point you'd say, here's here's our Exodus address, send Bitcoin to this address. Everyone who sends Bitcoin to this address gets our new shitcoin.

[03:09:41] Jay Berg: Right. That's how it started. And all of a sudden people would send you their Bitcoin from like Coinbase and Coinbase got the shitcoin and you got it. You didn't get anything. Right. That was a big problem. So you had to have like, no, it's like, OK, now only send it if you're a self custody or if you know what you're doing. And that became a disaster. So then it's like send it here and then we're going to forward it and forward it. So that's what we do now is, OK, you create a Sidepit ID, then you send your Bitcoin to your Sidepit ID first to make sure.

[03:10:13] Jay Berg: And then and the funny thing is that Ordinals solve this problem, solve this problem by having by forcing people. The concept of NFT is that it's yours and not Coinbase's. So if someone said, send me if I said, hey, I want to send you $10,000 worth of Bitcoin, send me your Bitcoin address. They may give me that Coinbase address, custody address. Right. But if I say I want to send you this cool NFT, they're not going to send me a custody address. Right.

[03:10:44] Jay Berg: It turns out that the way the Ordinal has evolved is it evolved through self-custody. And that's how we were able to, you know, if you look at docs.sidepit.com, I think there's I think I even mentioned how this happened. Yeah. So it turns out that Ordinals opened the door for solving this problem. You know that it's a self custody address that people control and it's not coming from some Coinbase wallet. And by doing that and then forcing them to reuse this address for the rest of Sidepit.

[03:11:25] Jay Berg: It ensures that we're able to verify the transactions in our distributed network from the public key that you're going to keep signing with. Because if you send Bitcoin, Coinbase has the public key and your money is locked forever. So it's kind of like how this thing evolved. If that makes sense, it's probably going to take a lot more time to go through everything.

[03:11:59] Vlad Costea: Right. So I see that you have the beta version that is listed in the Twitter description of the official Sidepit account. Do you have an official launch date or do you have any plans to launch it during this bull market?

[03:12:14] Jay Berg: Yes. So that's the current situation is, you know, we launched the beta basically every last December. So every four months it rolls over to a new contract. Right now we're back on December. Yeah, we plan on launching live. We still have one last thing that needs to happen, which is liquidity provider. Are you familiar with this term for like AMMs and stuff? Basically, there's a chicken and egg problem. In order to enable large trades, you need someone on the other side in order to have someone on the other side, they need to be incentivized by having large trades.

[03:13:02] Jay Berg: So we're talking to partners now to work on building this market maker, get to launch. We want to launch this quarter, but we definitely need help getting there, to be honest. You know, a couple of people that were, let's just say some of the people that we are disrupting don't really need us. They're doing fine without us. And guess who funds exchanges? You'll never guess. People that manipulate them, or I shouldn't say manipulate, make markets, high frequency trading, MEV. Like who do you think funds all these pump.fun projects?

[03:13:49] Jay Berg: People doing MEV, right? Not the end users, not some business model, just MEV. It's free money extracted from everyone. And...

[03:14:01] Vlad Costea: I was not even aware.

[03:14:03] Jay Berg: Yeah, that's...

[03:14:04] Vlad Costea: You would say, well, it's some venture capitalist, right? Someone who wants to make money from the trading fees or whatever.

[03:14:11] Jay Berg: No, the MEV is so much better than trading fees because it's hidden. It's like rock, paper, scissors. It's literally rock, paper, scissors where you win every game and everyone thinks you're just a good rock, paper, scissors player. But really, right, it's hidden free money, uncorrelated alpha that nobody even sees. It comes out of the price. So when you say this is the price I got. Well, yeah, but also someone stole it from you, right? But you don't even know. You don't care even. And even if I showed it to you, like it's only 30 cents. Who cares? I'm going to count that as added to the fee, right?

[03:14:48] Jay Berg: But the problem is that it breaks the markets for the larger players. That's the problem. 30 cents for you, but it's $30,000 for some large guy. So that's why no one touches DeFi. No institution touches DeFi from the buy side. From the sell side, they do, not from the buy side. Which is why today, guess what? There's a billion dollars and more every day traded on Telegram chat rooms, person to person. That's where if you want to buy a lot of Bitcoin, you've got to go to Telegram chat rooms.

[03:15:25] Jay Berg: In the 1800s, if you wanted to buy a lot of wheat or gold, you had to go find the buyer yourself. And then they came up with this crazy idea. Like, why don't we have a place where everyone goes, called the exchange place, where we're going to have price discovery and we're going to have buyers and sellers show up. And that's exactly what we're doing now is that nobody uses exchanges. They're in Telegram chat rooms looking for each other, dealing with all this shitty risk. And we're basically saying, hey, we have an exchange place where all the buyers and sellers should come discover price and get liquidity.

[03:15:59] Jay Berg: So what we're saying is exchange is completely broken because of MEV or HFT, and we're trying to recreate it and we have a solution. We actually have a patent. Used to be, every time I said that, people were like, that's so not open source and shit. But yeah, we have a patent as well. But we do plan on we plan on having a launch event at a Bitcoin event in this quarter. I don't know what's coming up. Maybe Argentina, I'm not sure. But we're looking at different ones.

[03:16:38] Vlad Costea: There's TABConf next week for the listeners. I actually intended to go there. It's just such a long flight and it's also expensive. And it was like...

[03:16:48] Jay Berg: Oh, where is that?

[03:16:49] Vlad Costea: In Atlanta. Oh, yeah, it's the Atlanta Bitcoin conference. That's what TAB stands for. And that's where you find some of some of the smartest people in Bitcoin, like developers discussing very technical stuff. I think from this point of view, it's the conference with most tradition and being technical. But it also had Chris DeRose on stage.

[03:17:16] Jay Berg: What, like 20 years ago?

[03:17:19] Vlad Costea: Seven or eight. But he took off his clothes to make a point that nobody pays attention to what he's saying unless he's taking off another piece of clothing.

[03:17:34] Vlad Costea: And he showed up with some sort of bodysuit that made him look like he has a six pack.

[03:17:42] Jay Berg: I don't remember this one.

[03:17:44] Vlad Costea: Yeah. Anyway, it's a lot of fun.

[03:17:49] Jay Berg: I wish I could show up this year, maybe next year.

[03:17:53] Vlad Costea: Oh, yeah, it's really next week.

[03:17:56] Vlad Costea: It's a good place if you want to meet people who are technical and OG and they sort of hate the culture of today's conferences. And once again, I don't want to take this away from... If it was going to be Argentina, maybe LABITCONF or something.

[03:18:13] Jay Berg: No, I'm not there yet. Like I said, I still need one more thing to happen.

[03:18:22] Vlad Costea: But Paul's going to be there. That was going to be one of the reasons why I wanted to go. And also someone I'm going to interview on the show is going to be there. His name is Christopher Allen, and he's an OG cypherpunk who's been working on smart contracts and decentralized identity.

[03:18:51] Vlad Costea: And I've interviewed the organizer, Michael.

[03:18:58] Vlad Costea: Ben [unclear: Fitterman] in the chat says it's good. I'm from Atlanta, I guess. He said I'm Atlanta. Maybe he wanted to see I'm in.

[03:19:11] Jay Berg: Yeah, I haven't been to.

[03:19:20] Vlad Costea: Which reminds me, Jay, I was supposed to meet you last year in Nashville and we're supposed to coordinate for something. I don't remember exactly what happened. We got sidetracked.

[03:19:32] Jay Berg: I don't know. I think it was a Litecoin, maybe.

[03:19:35] Vlad Costea: Yeah, I was basically, they paid for my flight and I was at the Litecoin Summit. And then I went to the Bitcoin event also. And it was the moment of the Trump. Yeah, that was the event that made me buy Zcash and Monero and Zano and all of these privacy coins.

[03:19:56] Vlad Costea: I was like, I got a hedge against this because it got to a point where I don't identify anymore with this crowd.

[03:20:06] Jay Berg: Yes, but I recommend I recommend separating Bitcoin BTCUSD from Bitcoin at the end of the day. Even even if you hate everything about Bitcoin, but you like some other coin like Ethereum, like if you needed to buy and sell a large amount, it would be Bitcoin because it's it's the it's the like Wall Street currency with liquidity. So XMR, fine, like in the end-of-the-world scenario, your XMR is probably good. Was that your latest ones? You back to Zcash? Wasn't that like from 2017?

[03:21:02] Vlad Costea: Yeah, it was launched in 2016. But to be honest, it was maybe too ambitious or ahead of its time. They started out with this trusted setup that required a ceremony. I actually own one of the six laptops that were used during the ceremony. I bought it from Peter Todd. Basically, they kept on refining on the design and they got rid of the trusted setup and they made the UX more elegant. They don't have public and private addresses anymore. They have the unified addresses that can receive both.

[03:21:39] Vlad Costea: They made it work on mobile, which previously was impossible because of the amount of computation that was necessary. So they made their cryptography better, the hardware also got better. I think that right now, if you look at the Zcash chart, it went up like crazy.

[03:21:54] Jay Berg: What just happened?

[03:21:56] Vlad Costea: Yeah, it just went up 300% in like the last [unclear: three] days.

[03:22:00] Jay Berg: Yeah...

[03:22:01] Vlad Costea: It's finally happening.

[03:22:04] Jay Berg: Yeah, but it's probably a treasury play, right?

[03:22:08] Vlad Costea: Well, the technology is mature now and it has a larger community. It's been brewing under the radar for a long time.

[03:22:17] Jay Berg: But that doesn't explain...

[03:22:20] Vlad Costea: Guys like Naval and whatever started tweeting about it.

[03:22:25] Jay Berg: Treasury management, yeah, treasury.

[03:22:31] Jay Berg: [unclear: Or swap], okay.

[03:22:37] Vlad Costea: Basically, it's what Bitcoin I wish turned out to be because it has the privacy side and it also scales better and it has some of the smartest cryptographers working on it. And I like this. In Bitcoin, it seems like all the smart people sort of left the room.

[03:23:05] Jay Berg: All I have to say about that is I believe that even if it's 100% true, by making Zcash better, by buying Bitcoin and working on Zcash will help your Bitcoin back. I'm just trying to say that there's a complete separation between price and project and I think it's all one. And really, as long as you're doing positive and you're holding something that's not a scam, you should be fine. And the difference between Zcash and Bitcoin and XRP and Monero, it all has to do with vol, you know, this is a very financial markets thing, volatility, correlations, what you're trying to accomplish.

[03:23:47] Jay Berg: Again, I'm talking from a trader's perspective. Long-term, it's a whole other story. Long-term holders or investors or portfolios, right? I'm not that. I'm a pure trader. So all my position is always, my current position always has to do with what do I want to have, right? What risks do I want to have? This is because I've been always 100%, either 100% long or 100% flat with Bitcoin for the last 15 years.

[03:24:22] Vlad Costea: Sure, but what I do see in this is the fact that it's technology that's 100% compatible with Bitcoin. Zcash was supposed to be the Zerocash soft fork for Bitcoin back in 2013. It never happened. They launched an altcoin and they said, let's refine the technology. And it did produce a lot of interesting research because before this, ZK proofs were not practical. And now you see them on Ethereum, you see them coming to Bitcoin. And this soft fork can still happen to Bitcoin if we decide that we want privacy for it.

[03:24:58] Vlad Costea: And this time around, it doesn't require the trusted setup and all the stuff that was considered to be bad 12 years ago. By who? Core developers. And in hindsight, they were not wrong. After the ceremony, they figured out that theoretically there could be an inflation bug that could be exploited and they had to hard fork to change that. And in the case of Bitcoin, if that ended up on Bitcoin, it could lead to a lot of drama. Because apparently hard forks are very controversial.

[03:25:38] Jay Berg: I would like to see Zcash be mentioned, you know, and all the other ones at the next Bitcoin conference instead of stablecoins. Wouldn't that make more sense?

[03:25:51] Vlad Costea: Yeah, but there's not as much money in technology that's actually cypherpunk. There's a lot of money in stablecoins. The Trump family is investing in stablecoins. They have their own USD, whatever.

[03:26:08] Vlad Costea: They have their own fund. It seems like Ethereum is the one that actually got picked by the Trump family to be the host of World Liberty Financial.

[03:26:19] Jay Berg: Yeah, because it's the default for everything. And Ethereum is like the new, Ethereum is the Bitcoin of Solana.

[03:26:34] Jay Berg: It's a shame. Guess who makes a killing here? Instead of having a single token, you have to go from one token to the next, to the next, to the next, to the next. Every single time a swap happens, more MEV, more rock, paper, scissors, more free money. And that's the Wall Street game. I'm not saying there's something wrong with it or not wrong with it, but that's the game we're in. And eventually there's a flash crash. Eventually shit gets bad. And I think that with a foundational technology like ours, we could kind of stop it.

[03:27:18] Jay Berg: I'm actually excited about what's happening, is that everything's now back in play. Maybe new technologies will come out of Ethereum. I mean, Bitcoin. BIP 300 I like.

[03:27:37] Jay Berg: Again, CTV, it's ridiculous that it's not merged in. I can't even have a discussion about Bitcoin Core.

[03:27:49] Jay Berg: I kind of say whatever's happening with that, what is it? Civil war, are they forking? I'm not sure what they're doing. Whatever they do do, I blame it on not having CTV. And I don't think there's a resolution. Not to end on a negative note, but I don't see. Do you see a resolution here?

[03:28:15] Vlad Costea: No, because it seems like both sides are very stubborn and nobody wants to admit that they could be wrong. Yesterday there was this situation with a JPEG that was inscribed on Bitcoin using a very large transaction that was not using the Ordinal Inscription Protocol. It was what they call a STAMP, basically a large multisig that was adding small chunks of data. And it takes a lot of block space, it also gets stored in the UTXO set forever. And Luke Dashjr had to confront the reality that his filters against what he calls spam could never work against this because it does look like a very legitimate Bitcoin transaction.

[03:28:59] Vlad Costea: And there is no way that he can actually filter that because he's going to filter a lot of good transactions also. But in the face of this realization, which I'm pretty sure that he's had a long time ago, but it was the first time when people tagged him and teased him about it. He said, STAMPs don't exist. And STAMPs is the protocol that Mike In Space has made for this purpose. And he said they don't exist. Like he's in absolute denial of what's happening.

[03:29:29] Jay Berg: One second. Are you saying STAMPs is something that he doesn't think is spam?

[03:29:34] Vlad Costea: No, it's something that he doesn't think exists, because if he did acknowledge it, he would have to confront it and he cannot.

[03:29:42] Jay Berg: Why can't he filter STAMPs?

[03:29:45] Vlad Costea: Well, because of their composition, their structure. They're made to not be prunable, so they are on the side that doesn't use SegWit. And it's just that they look like a multisig.

[03:30:00] Jay Berg: But then there's no issue with porn or stuff. I think that's the trick. If it's not filterable, I can't believe I'm getting into this debate, but if it's filterable, then there's risk of whatever CP risk. But if it's not filterable, then it's not really a JPEG anyway.

[03:30:26] Jay Berg: The real truth is that there's no such thing as JPEGs on Bitcoin. Like it doesn't exist.

[03:30:32] Vlad Costea: Right. Unless you go to JPEG generator and you copy the hash of any transaction, and you're going to get a random JPEG from that string of data, which I think is a very witty response to this whole situation.

[03:30:45] Jay Berg: If whoever made that JPEG viewer was part of the people that made that Ordinals thing, then, yeah, they could probably get arrested. But it's just ones and zeros. I don't think it's a problem. And you know what's so fucked up? By kind of telling the police, the CP police, the story, you're kind of creating the problem in itself. It's not a problem. It doesn't exist. But we're creating the problem by saying these things. By saying there's something illegal on Bitcoin, because there isn't, because it doesn't exist. Right. It's just ones and zeros.

[03:31:30] Jay Berg: I mean, I could actually make a program to take the Declaration of Independence and turn it into something illegal. But if I did that, I should be the one going to jail for doing that. Not the Declaration of Independence. It's not the ones and zeros on Bitcoin. It's the person that's pointing to the ones and zeros on Bitcoin. Of course, this nuance goes over everyone's head. So this whole thing is kind of stupid.

[03:32:00] Vlad Costea: I also think there's an agenda behind it, because there was a coordinated attack against Gloria Zhao, who's a maintainer of Bitcoin Core. And the latest character assassination attempt involves saying that she did not get there by merit, because she was just a university graduate in computer science. And what actually happened is that she was the girlfriend of another core developer. And that's how she got into developing for core. And then they just ignore the fact that she made more than 700 commits to the project in four years, which is...

[03:32:35] Jay Berg: Who's they? I mean, who's doing all this? Like, people on Twitter?

[03:32:40] Vlad Costea: There's a guy named Matthew Kratter. And he has a YouTube channel that's called Bitcoin University. And it seems like he specializes in this sort of content. I don't even know. It's kind of ironic, because universities start out educating you. Like even in real life, real universities, they educate you and then they go woke and they decide that social justice...

[03:33:03] Jay Berg: Is the result of the FUD foundation. He is the result of all the FUD foundation. His foundation is just completely false. He believes all the fake narratives because he's not a coder. And the result is this insanity of what's that become? And he has a... And it's also like he thinks it's immoral for him to do this.

[03:33:29] Jay Berg: Because it's... But it's based on FUD that kind of put in there in order to explain the nuance to the [unclear: FUBs], right? And that's... Yeah, of course. I've listened to it. I saw him a couple of times. It's a joke. And Mechanic, I would say the same thing. I don't want to call people out. But if I'm calling Adam Back, I might as well call out Mechanic. It's just as stupid.

[03:33:58] Vlad Costea: I have this conspiracy theory about Mechanic being the handler of Luke Dashjr. Someone working for a three-letter agency. And he's just the guy who's making sure that the right kind of stuff is being said.

[03:34:15] Jay Berg: Yeah, I mean, I liked Luke for a while. I mean, he was fine, writes good code. I mean, I didn't appreciate his takes on abortion and stuff like that. But it wasn't about that.

[03:34:31] Vlad Costea: Or eating cats or some other stuff that he said.

[03:34:38] Jay Berg: I think he lost everyone once he lost all that Bitcoin. I think for a couple of reasons. Like, first of all, everyone thought he was broke and trying to raise money for himself. But he had millions of dollars in Bitcoin. It was crazy. And then he lost it, which is even crazier. So that was, you know, all the heroes fit all in this space. But then there's new ones. And no one could just no one in the cult could actually see that this is about to happen again.

[03:35:18] Jay Berg: And by the time it happens, there's a whole new cult. There's nothing you could do. It reminds you of HEX. You know the Hexicans?

[03:35:29] Vlad Costea: Unfortunately, I do remember that. And I was one of the first people to debate Richard Heart in 2018, when he was about to call it BitcoinHEX. And I ran this sort of investigation and I explained why he was about to scam people and he blocked me and that there was a bit of drama. But in hindsight, it did not matter. People still bought into it because they were watching his four hour live streams where he was giving life advice and he was acting like this wise, successful person.

[03:36:01] Vlad Costea: They just bought into the [unclear: content].

[03:36:04] Jay Berg: He's the most impressive. He's the most impressive Ponzi since Ponzi. I think he's even better than Charles Ponzi. I think he's the best of all time. And I did have a debate with him. And, you know, he obviously wiped the floor with everyone. He's really good at it. But I did force him into making a prediction. And I was saying, okay, let's just predict. So and whoever gets it right, maybe your followers will, you know, see. So I don't think it worked, but obviously he said Bitcoin is going to go to zero and HEX is going to go to a million or whatever.

[03:36:51] Jay Berg: Yeah, I think I just I just think that maximalism just has to stop. Like, I had a guy like a hardcore Bitcoin maximalist, like hated Ethereum so much. Right. Hated Ethereum. Like just just despised it. And all he wanted was to see them die. But guess what? When he gave me, he invested in one of my projects, he gave me Ethereum. He literally used Ethereum to scale Bitcoin and hated Ethereum, but actually used it.

[03:37:29] Vlad Costea: It's Gresham's law, bro. He gave you the weaker money.

[03:37:34] Jay Berg: Yeah, Gresham's law. Right. It's not weaker money. It's literally better money because if it was easy. No, it's harder to move Bitcoin because all this technology sucks. Ethereum is easy to use. Right. So the Gresham's law, it's the opposite of Gresham's law. But yeah, just to be very clear, Gresham's law has to do with silver not having the full amount of ounces of physical silver in the coin. So you use the one with less physical silver first. That's Gresham's law. Right. We get that. It has nothing to do with valuation or digital currency.

[03:38:14] Jay Berg: It's physical.

[03:38:16] Vlad Costea: No, but Taleb came up with his own interpretation and then Saifedean took it and published it in his book and now it's gospel.

[03:38:24] Jay Berg: Right. And can't we use Bitcoin mining to like nuclear defense or something? Wasn't that another thing?

[03:38:31] Vlad Costea: Oh, Jason Lowery. Yeah.

[03:38:33] Jay Berg: Yeah, that's the craziest, Softwar. That's the craziest of all crazies. Right. Softwar. Softwar. Right. And it's crazy that that became Bitcoin. Like, how crazy is that?

[03:38:48] Vlad Costea: I still think it was some sort of psy-op because the guy just went away, disappeared. Or maybe he blocked me and that's why I don't see his stuff anymore. But he used to be very hot like two years ago. And now nobody even remembers that he was pushing this agenda.

[03:39:07] Jay Berg: So did you originally, were you originally a Bcash or a Bitcoin Maxi?

[03:39:13] Vlad Costea: No, I think I was a Blockstream simp in 2017.

[03:39:18] Jay Berg: How'd you actually, how'd you get out of the cult?

[03:39:22] Vlad Costea: I interviewed Roger Ver last year.

[03:39:25] Jay Berg: Yeah, I remember. I remember like seeing you make your exit.

[03:39:28] Vlad Costea: But I've always had questions, right? But I just try to keep them quiet and try to not step out of the line and try to please the people who actually were not even listening to my podcast. Unless I stepped out of line and that's when they listened. It's funny.

[03:39:45] Jay Berg: The funny thing is that I just tell all the people in the cult that you could try to say something against, you know, the morals and no one's gonna, no one's gonna even say shit to you anymore.

[03:39:57] Vlad Costea: Oh, yeah, because at this point, everyone is demoralized by all of these Bitcoin reserve companies, treasury companies, the reserve thing.

[03:40:09] Jay Berg: NAKA is, thank God we don't have shitcoins when we have NAKA.

[03:40:14] Vlad Costea: Now it's fine to invest in companies because it's a proxy for shitcoining and people have been holding on to shitcoining, virtue signaling, saying, well, we're not supposed to do this. And now they just like Wall Street and companies and tokens and equity.

[03:40:28] Jay Berg: Yeah, I think NAKA, what is it called? KindlyMD? What's the NAKA thing? NAKA is a great...

[03:40:34] Vlad Costea: No, KindlyMD was a company that became part of the Nakamoto whatever, which is David Bailey's little business.

[03:40:41] Jay Berg: Right, I think that's a great token, right? It's a perfect one, right? Don't buy a shitcoin, buy NAKA. Oh, it's at $1.03.

[03:40:52] Vlad Costea: Wasn't it very much down?

[03:40:56] Jay Berg: Yeah, I mean...

[03:40:58] Vlad Costea: And it's one of the best ones. The others that were launched are even worse.

[03:41:08] Jay Berg: The treasury company. So I mean, it's funny, you could watch it happen in real time. Like, as soon as Wall Street showed up, like treasury, you knew within a couple of months, there's going to be a huge ETH move, right? Because you've seen it every cycle, how someone's, all the big, everyone shows up like, oh, Bitcoin. They're like, oh, what about smart contracts?

[03:41:29] Vlad Costea: Oh, yeah. They were saying that this bull market is reserved to Bitcoin and nothing else will pump.

[03:41:35] Jay Berg: Right. Then all of a sudden, ETH became the thing. And then, you know, but the thing is, we've seen this cycle, right? From what, a nocoiner finds Bitcoin, then ETH, right? Then they finish the cycle, then they become Bitcoin maxis, then they start a podcast.

[03:41:52] Vlad Costea: Oh, yeah. That's going to be a lot of fun to see all the podcasts coming out and saying, oh, I finally found the light. It's such a strange cult. It combines elements from Christianity, like that part where you've been such a sinner. And then you find out so much about your high priests who are supposed to keep you in line and they tell you, don't shitcoin, don't do this, don't do that. And then you realize what they're really into and what kind of affairs they've been involved in in the past.

[03:42:23] Vlad Costea: Right. USDT, right? It's not even USDT. It's maybe Dogecoin or maybe that some developer who is some high priest worked on Litecoin. And then you're like, oh, my God, how is that even possible? I've been told that Litecoin is a shitcoin. And then you find out that they do some auditing on the side. They have a side hustle taking money from other projects just to look at code. And then you sort of start to question everything. And you're like, wait a second, are these people trying to keep me from actually doing something which might be beneficial for myself?

[03:43:05] Vlad Costea: And then they say, well, it's impossible for anything to outperform Bitcoin, which is why I made my Freedom Gains Index, which consists of five privacy coins, which is outperforming Bitcoin very much right now by a lot. The only two underperforming ones are Litecoin, which I think is just going to do its thing and pump one time and then go back.

[03:43:29] Jay Berg: Yeah. So I think if you want help with the index, I think a better way to do this is that just index it priced in Bitcoin and then it could just...

[03:43:37] Vlad Costea: But that's what I've been doing.

[03:43:39] Jay Berg: OK, so OK, so it's just a it's just an index. So it starts at 100 and you just have to say how much it's up. And by default, by it being up, it's up more than against the dollar, more than Bitcoin is or if it's down right.

[03:43:57] Vlad Costea: Let me send you the link to the tweet. So pay attention to Twitter for like 30 seconds. I'm going to send you this. So this is the way in which I indexed and I don't know because I don't have Twitter on this particular computer. I try to stay productive so I don't use it. I keep it on my phone for the breaks.

[03:44:20] Vlad Costea: I'm not sure if that's normal, if people actually do that, but I have different devices for different reasons.

[03:44:26] Jay Berg: You sent me a message?

[03:44:28] Vlad Costea: I sent it to you. Now you can take a look. And this is like the updated version of it where basically I have the Bitcoin price.

[03:44:44] Jay Berg: So it's not an index. It's just each one is separate.

[03:44:47] Vlad Costea: Well, sure, I can. So for indexing, I need to average, right?

[03:44:51] Jay Berg: No, you need to, you need to have like, like the S&P, you need to figure out like how you're weighting, a weighting average, and then you need to come up with like a point where it starts at 100. Right. So, you know, there's many ways to do it. Years ago, there was a bunch of a bunch of indexes, small cap, large cap. I don't know. Yeah. OK, so you have BTC. There you go. OK, what's NYM? I never heard of that one.

[03:45:22] Vlad Costea: Oh, it's NYM. It's my worst investment ever. But at the same time, it's a good investment because they built something that's called the mixnet, which is better than a VPN and better than Tor.

[03:45:36] Jay Berg: I have a problem with... So I would say something with so many zeros beforehand is is a problem. Can explain right now why, but yeah, so that that you got to remember. So here's the thing about NYM BTC. One tick could be 50, like this could go up a thousand percent with like $30 because of all those zeros.

[03:46:07] Vlad Costea: But that's BTC. It's not even.

[03:46:10] Jay Berg: Yeah, but this is how that's the problem. So when there's when the decimals, anything that trades below a dollar, it's you just can't look at the percent changes. Right. Because, yeah, maybe NYM is down 42 percent. But I guarantee within I guarantee within six months, there'll be, NYM will be up 500, 600% in three days, which doesn't mean anything when it's at this price. Going from, you know, going from one penny to six pennies doesn't mean anything. Really doesn't.

[03:46:51] Jay Berg: Or 0.000878. Right. Like that's how hex that's how hex does a lot of their scams. But I'm not saying NYM is a scam. I've never seen that thing. But I just would say that... How do you, how do you spell NYM token? NYM.

[03:47:12] Vlad Costea: It's actually a pretty big project. They have Chelsea Manning on the team doing some security audits, a bunch of cypherpunks working on this. So it's just a token that initially was supposed to be your way to access their VPN service and their mix net. And then they decided when they launched their product that they don't want to use their token anymore. And you can just pay with Bitcoin. So basically, the token was a way for them to fundraise to build this because they just kept dumping.

[03:47:47] Jay Berg: Yeah. So it's a 42... It's, yeah, the token's worth 42, [unclear: 49] million dollars.

[03:47:55] Jay Berg: So it's not even [unclear: down].

[03:48:00] Vlad Costea: Yeah, interesting. I mean, it's actually interesting because it's sort of the revenge chain of big blockers. A lot of the guys from Bitcoin Cash are into it right now. It's CryptoNote, which is the code base of Monero that's optimized for creating tokens that have the same privacy as the base currency. And now they have their own stablecoin that's called FUSD. And basically they're using that one to transact the US dollar with privacy on their network. And Roger Ver is maybe the biggest cheerleader of the project.

[03:48:39] Vlad Costea: He mentioned that in multiple interviews, and he's also the one who onboarded me when it was like two dollars. He sent me one and he was like, check this out.

[03:48:53] Jay Berg: Yeah. So it's just in a different class. I think NYM and [unclear: Zano are in the] index. Yeah, cool. Very interesting. Yeah. CryptoNote. CryptoNote first came out...

[03:49:07] Vlad Costea: 2012 or something.

[03:49:09] Jay Berg: We weren't sure if it was the government. Nobody knew what was going on. I think it was the guy was anonymous for a while.

[03:49:20] Vlad Costea: Nicolas van Saberhagen or something. And apparently he worked in Russia with some developers. He had a company like a software team that worked on this. And one of the guys worked for him, an engineer who actually got sued by Microsoft a few years ago, is the lead developer of Zano right now.

[03:49:46] Vlad Costea: So that's sort of the OG provenance of the project, because they don't say they're a fork of Monero. They sort of hate the concept of being a fork of Monero because this guy says he's so OG. He was around before Monero even existed. And he worked on the codebase. Very cool.

[03:50:09] Vlad Costea: Had him on the show last year.

[03:50:16] Jay Berg: Yeah. So it's...

[03:50:17] Vlad Costea: Basically the premise of this, quote unquote, index, because I did not follow the process correctly. But I did diversify. I think that's the more correct way of describing it, is that I wanted to prove that you can outperform Bitcoin with an ideological approach to privacy projects and get something that offers privacy and outperform Bitcoin, because I gambled basically. And I said, privacy is going to be the next big narrative after this memecoin.

[03:50:50] Jay Berg: Yeah, but this was October. When did you start this? October 1st last year?

[03:50:57] Vlad Costea: No, you can see at the top, it's July 31st, 2024, when I came back from Nashville.

[03:51:11] Jay Berg: OK, so just be careful, because, you know, these things have things have a tendency to.

[03:51:23] Jay Berg: Yeah, we could get into some financial markets a little bit, you know, the difference between alpha and beta?

[03:51:29] Vlad Costea: The alpha and beta, what?

[03:51:31] Jay Berg: You know, do you know the difference between alpha and beta?

[03:51:35] Vlad Costea: In what context?

[03:51:38] Jay Berg: [unclear: In the] context of...

[03:51:41] Vlad Costea: Not the Greek alphabet, right?

[03:51:43] Jay Berg: The price of your index.

[03:51:45] Vlad Costea: No.

[03:51:47] Jay Berg: OK, so let's take Litecoin BTC, right? So there's some, as Bitcoin, if Bitcoin goes up, right, there's some correlation that Litecoin BTC will go up as well. Well, it has like a in the options market, they call it delta, or delta, delta means gamma. Well, basically, if Bitcoin is in a bull market, then your LTC BTC will outperform, will go up, which means that Litecoin will outperform Bitcoin. That's the beta. The alpha is independent of what Bitcoin does, Litecoin will go up, right? So if you're constructing a portfolio, and you want to compare it to Bitcoin, you need to... You know, the alpha is what the underlying, you know, privacy coins are performing independent of what Bitcoin is doing against the dollar. So that's the alpha. The beta is, you know, what if Litecoin is just a leveraged Bitcoin trade, right?

[03:53:02] Jay Berg: And you could actually figure this stuff out through what's called principal component analysis of the historical data. You could actually extract this is like what quant finance people do, right? You could extract and then you could use financial markets to hedge. So if you want to, like, let's say you just want to get the core of Litecoin without any of the Bitcoin in it, right? You basically hedge the Bitcoin part and just hold on to the Litecoin part and that becomes the alpha, right? So what you're looking for is what part of this price is related to the actual Litecoin itself independent of what Bitcoin is doing.

[03:53:43] Jay Berg: Independent of macro or Bitcoin or Ethereum or like Trump or whatever, inflation, right? Like trying to pull out the pieces. And that's like, anyway, this is what they teach you in like, I think, you know, MBA course one, it's called principal component analysis. So, yeah, this could get more and more involved, right? Trying to figure out which part of this is the bull market in Bitcoin and which part of it is people buying privacy coins, right?

[03:54:22] Vlad Costea: For example, I do see how you're right. But the thesis behind this is that people were saying you can't possibly outperform Bitcoin.

[03:54:32] Jay Berg: That's the craziest thing I've ever heard. You could outperform Bitcoin by leverage. What if you just go leverage Bitcoin? Then you outperform Bitcoin.

[03:54:40] Vlad Costea: Well, it sort of doesn't count because you're still...

[03:54:43] Jay Berg: Well, Ethereum, but that's the point. Delta, that's literally the point. Beta, if Ethereum is a greater than one beta Bitcoin, it is leveraged Bitcoin. But Ethereum is leveraged Bitcoin. So when Bitcoin goes up, Ethereum is going to outperform Bitcoin. If Bitcoin goes down, Ethereum is going to outperform Bitcoin. Like that's the point, right? I think people don't understand that they think, oh, there's something called a Zoomer trade, right? When Bitcoin's having a breakout and all of a sudden Ethereum, right, starts getting a bid, what happens? People sell Bitcoin and buy Ethereum.

[03:55:25] Jay Berg: Everyone thinks there's competition between the two when they're both really the same thing. They're both like the same alpha. The dollar's going down and crypto's going up. So Bitcoin and Ethereum are both going up and it's just relative to how much. So yeah, I mean, there's a lot of misunderstanding because a lot of people in this space never got financial. Didn't come from finance. And then all the finance guys come in, right, and they don't really understand the tech. And then there's also the C++. So I think what's happening now is there's a huge opportunity.

[03:56:09] Jay Berg: I sound like a VC thing, but yeah, there's a huge opportunity. Something big is about to happen here. I just hope that we could, somehow Bitcoin could be part of it in a positive way. And just, I'm sorry, I get it. I just can't even be on Twitter anymore or even talk to any of those people again. I'm messed up. So we need to find something. And I think you're doing a great job. So, you know, congratulations on doing something right in this space. Not sure if you're making any money off of it, but you should.

[03:56:46] Vlad Costea: Well, I'm having a lot of fun, at least.

[03:56:54] Vlad Costea: But hey, if Zcash goes to $1,000 or something, maybe I'll be able to afford housing or whatever. Or...

[03:57:03] Jay Berg: You could like, you know, chop up these videos, make little YouTube shorts, you know, market it, make some money, make some money off it. Yeah.

[03:57:19] Vlad Costea: Yeah. From my experience, so the kind of audience that I have is super smart. And if I try to appeal to a dumber audience, I have to either lower the quality of the content to appeal to the lowest common denominator, or I'm just going to attract some attention from these people. And they're just going to scroll by on their TikTok or Instagram reels or whatever, because they need something stupid simple. And I don't have that kind of content. I really don't. And I'm sort of comfortable. That's the same problem.

[03:57:54] Jay Berg: Yeah, this is the problem. So then you get left out of capitalism like all the rest of us. And then who's going to fund all these Bitcoin projects? So we're in this doom loop, right? So that's why Jack Dorsey is the only one that funds anything.

[03:58:15] Jay Berg: So how do we resolve this? But I think you just, someone has to bite the bullet and sell out.

[03:58:26] Vlad Costea: There are two approaches. Either there is a renaissance of projects and the culture changes, or else it's going to all burn to the ground and then we pick it up from there. We're there. Yeah. And we let the tourists leave and we start over.

[03:58:48] Vlad Costea: The problem, I think, sometimes is that the number kept going up in spite of the bad fundamentals and the fact that we haven't really solved any problem. And I think also part of the reason why we don't have CTV is that people are afraid of killing the goose that lays the golden eggs.

[03:59:12] Jay Berg: Which is what?

[03:59:14] Vlad Costea: Bitcoin? Which is, Bitcoin as this digital gold meme coin or something. Institutional money, reserve asset for governments, whatever it is that they're trying to push as an agenda. And to their credit, it worked very nicely. People bought into that.

[03:59:38] Jay Berg: Yeah, I mean, in one hand, Bitcoin is a success and the other hand is a complete failure, right?

[03:59:46] Jay Berg: So what if I told you we'd probably be at a, maybe we'd be at a million dollars if the mempool, you know, went a different way, right? It's not a failure. It's just like it's not digital cash, right?

[04:00:05] Vlad Costea: So the mission at large has been continued by other projects, I think. Every attempt to make Bitcoin a medium of exchange has sort of fallen short, mostly because people are reluctant to spend it. And it seems like there's still this mentality. I saw this news the other day that the two pizzas that Laszlo Hanyecz bought with 10,000 Bitcoins are now worth more than a billion dollars. And I was thinking about this, like there are so many guys who feel like this is going to go to a trillion or whatever, and they feel like if they sell any of their Bitcoin or they use it for any purpose, they're going to be the next pizza guy.

[04:00:50] Jay Berg: It doesn't make any sense. It doesn't, it doesn't track. So everyone knows about Bitcoin now. Whatever amount of dollars is going to become a trillion dollars, even if you don't own Bitcoin, you still have that amount of money. So you should have that same fear, like having Bitcoin now versus having having one Bitcoin now versus having $125,000 worth of, you know, gold or Microsoft stock is the same thing. Everyone knows Bitcoin exists. Everyone could buy, if you have $125,000, you could buy a Bitcoin. If you're afraid that if you sell it, it's going to go to a billion, then you should buy, right? You should buy it now. So this whole idea of what are you going to do when it goes, what are you going to do when Bitcoin 10xes, you're going to sell it and then buy your house? But it already has 10xed many, many times. It doesn't track, right?

[04:01:54] Jay Berg: I think there's an opportunity to just start fixing some of the Bitcoin technology. Whether, you know, because it's still the asset, it's still the number one asset and still needs to be used by people. And, you know, making swaps better and faster with other coins or USD, you know, is the way to get there. So, yeah. And remember, every single time anyone in this entire space goes from dollars to Bitcoin to ZEC to ETH, a lot of people are making a lot of money. And who are these people? I guess it's the fucking banks again. Can you believe it? Like, come on, why don't we just keep that for ourselves? That's what we're trying to do at Sidepit, right?

[04:03:02] Vlad Costea: Like, why? I'm old enough to remember when the Lightning Network was supposed to replace centralized exchanges by doing atomic swaps.

[04:03:12] Jay Berg: Yeah, well, that was always, it took many, many years for people to understand that atomic swaps can't work on blockchain without manipulation. Right. And we didn't have that time. Right.

[04:03:31] Jay Berg: But yeah, so I think it's an interesting time we're in. I'm glad that, you know, there's less fighting, I think. Maybe it's just on your shows because, you know, you don't bring in the drama, but I kind of don't see it anymore. Besides on Twitter, but like, I guess I don't really go on clubhouse or anything like that or to the events. So I'm much happier as a Bitcoiner now than I was before.

[04:04:06] Vlad Costea: Well, this is a happy ending.

[04:04:09] Jay Berg: Yeah.

[04:04:10] Vlad Costea: By the way, you should drink some water because your voice has been going lower and lower in volume as we went by. But what I was going to say is that if you go on Bitcoin talk, you're going to find what they call shitcoiners on Twitter. If you go on Twitter, you find the virtue signallers and the people who fight like that. I do think that the new generation of Bitcoiners is looking to have their own block size war and they feel like this is their crusade.

[04:04:40] Vlad Costea: This filter thing is when they're going to step in and save Bitcoin. And that's how they feel about this situation. So that's what you get on Twitter. If you go to Reddit, you find moonboys who post stories about how they got rich or how they recovered their old coins or how they bought their first house or car or something like this. So in some ways, it's more hopeful and wholesome. There's not much drama there. And on Nostr, it's just the most clueless and silly bubble you'll ever find with people who think that they're building the future of something.

[04:05:16] Jay Berg: Right. Because they have JSON that they could sign, right? I get it.

[04:05:21] Vlad Costea: It's really incredible how these people live in their own bubble and they ignore everything else. And I've asked someone recently when was the last time you looked at CoinMarketCap or CoinGecko or whatever to see what's happening in the markets because she was surprised that Zcash still exists. And she was like, never. I haven't looked at that in five, six years and I never look nowadays. And I realized that on one hand, Bitcoiners are this group of people who say that they care about markets and that the free market relays information.

[04:05:58] Vlad Costea: But on the other hand, they ignore and they dismiss what happens outside of BTC because they have this superior or sentiment of superior morality where they say that it's a shitcoin. It's going to go to zero on a long enough time frame. Ethereum has been dying for like 10 years now and it was supposed to be a disaster, which hasn't happened.

[04:06:21] Jay Berg: Right. So I think the only solution is to change the "they." Like, I think, they're just not... There is no "they." They're, they're, they're not, they're not Bitcoiners. So, like, I know this is a crazy idea, but yeah, I think it's the shitcoiners. Shitcoiners are the new Bitcoiners. Shitcoin Uncensored. It's basically what Bitcoin maximalism [unclear: happens]. But I'm too old to be involved with this stuff, really.

[04:06:55] Vlad Costea: I think it's part of the game theory, right? If Bitcoin stops competing to be Internet money that people can use to send around, then something else needs to step up and become like a serious threat.

[04:07:10] Jay Berg: Yeah, I mean, it hasn't been competing. And this has already happened with [unclear: us]... Well, with stablecoins.

[04:07:21] Vlad Costea: Well, sure. But stablecoins are not I mean, I don't find anything interesting about them, except that people in the third world can use them to access the U.S. Dollar if they need that. I mean, maybe third world is a harsh term, but authoritarian regimes and places where they don't have access to banking or capital markets. But there needs to be something which is purely peer to peer and fairly mined or launched to give people the power to participate, just like Bitcoin was. And I think with the developments that we've seen in cryptography and computer science, something truly revolutionary is going to be something that solves the double spending problem without the blockchain.

[04:08:11] Vlad Costea: Because the blockchain was always sort of the element that makes it slow or inefficient.

[04:08:21] Jay Berg: I mean, I think 2010 to 2014 Bitcoin, so I would say 2010 to 2014 Bitcoin is the last, the first and last time we're ever going to see [unclear: decentralized digital] money. And I think that everything else and I think that's why Bitcoin is going to be solid forever because of that base. Right. So [unclear: pre-ASIC] almost. Right. It was the first and last time it can happen. Right. It can never happen again. It's not possible. Right. Because of Sybil. It's only the only way it worked is because no one knew about it and it was happening naturally.

[04:09:02] Jay Berg: Right. I think Bitcoin will always be the base currency here somehow. And yeah, new stuff is like, yeah, it could be like a scaling thing. ZK, whatever. And it just comes down to what's the what's the currency ticker and how you're going to swap. So remember, I don't know if you remember way back in the day, it was OK, we got we got digital cash. Now we need a digital exchange. Right. That was always the next thing. And then Mt. Gox happened. And then the idea of what a digital exchange is became no central point of failure.

[04:09:42] Jay Berg: But that was never that was never what an exchange is. An exchange is a place to discover price and not get screwed by a counterparty. That's that's what the exchange was like an escrow. It's by definition, a trusted place, trusted in quotes. Right. Like the exchange is the place where you don't trust the person you're swapping with. So you have to find someone that you do trust to help you out. That was the whole idea in the beginning. And then when Mt. Gox went down, they're like, oh, we need an exchange that we don't have to trust.

[04:10:24] Jay Berg: But then you basically lost the game of not being manipulated. And that's that's the cycle we're in. And I think what we add to the mix is a final piece. Right. If we could go in and out really quickly without the cost, then maybe more a multi-currency world, and work out with swaps.

[04:10:56] Vlad Costea: Sounds good to me. Where can people follow Sidepit?

[04:11:00] Jay Berg: So I'm JayBNY everywhere, JayBNY on all socials, sidepit.com, and Twitter, it's SidepitExchange. Again, we're looking for someone to join the team, some ideas on funding the next iteration for launch.

[04:11:28] Jay Berg: We reach out, reach out to me, reach out to us and look out for our launch. We're not going to say when, but we're hoping this quarter. Yeah, exciting stuff.

[04:11:44] Vlad Costea: Okay. Thank you very much, Jay. It's been a long time since we planned to do this, and I think right now it was the perfect storm for this to happen and have a long conversation. Thank you for your time. I don't think we had any sort of agreement on how long this should be. It just became this long. Yeah, it's been over two hours.

[04:12:05] Jay Berg: Yeah, I had, I had something. Oh, shit. I got it. It's four hours? It's already been four hours? Oh, shit. Wow.

[04:12:15] Vlad Costea: Okay, it happens. The longest episode I ever had was eight hours, 20 minutes or something. And it sort of evolved since last year when Amir Taaki joined the show and he spoke for seven hours. And then people wanted to challenge that record and said, wait a second, you're the guy who can sit for seven hours and listen. And let me tell you, I have a lot to say. I had to deal with some of these situations, but this is what's fun. So thank you, Buddy, the guy from the chat who has been commenting.

[04:12:52] Vlad Costea: He said, thank you, guys. This was great. The whole point of Internet content is that you can publish stuff without having a format and you can have ideas that basically are spontaneous. It's not scripted. It's real. It's natural. People express their views on stuff without any boundaries, and it can go for as long as it needs to be. And I'm not going to cut this. I'm not going to make it a one hour format or whatever just to get more listeners. I'm happy with my audience. I love you guys.

[04:13:22] Vlad Costea: You're the best. And in the next interview, which is going to happen, today's the sixth, it's on the ninth. So that's Thursday. I will have Sean Bowe, who is the cryptographer, who sort of figured out a lot of interesting stuff with the Zcash protocol and sort of saved them a couple of times. And now he's working on something that's called Tachyon, that's meant to scale this zk-SNARK design to billions of users, because for the longest time, the criticism against privacy was that it doesn't scale and it leads to larger transactions.

[04:13:55] Vlad Costea: And he made something that's called oblivious synchronization. And he published a paper and it seems it's going to launch next year. This is why I'm excited about this. It's what I remember Bitcoin was like when I first joined with smart people coming up with interesting solutions. Not that there are not any right now. There are a lot of them in Bitcoin. But I see so many frustrated developers who are like, oh, if we just get CTV or OP_CAT or whatever, I can change the world. I can launch my project and I can show everyone that we're going to destroy Ethereum or we're going to bring something very interesting to Bitcoin.

[04:14:33] Vlad Costea: It's just not happening and it's sad.

[04:14:37] Jay Berg: Let's fix that. Thank you so much for your time. I think you're doing great.

[04:14:42] Vlad Costea: You too, sir. Have a nice rest of your day and thank you, everyone, for listening. And also thanks to the sponsors. Once again, SideShift, Citrea, Bitcoin.com News, LayerTwo Labs, NoOnes.com. I'll see you in the next one.