You're listening to T. I.P. Hey, everyone, welcome to our Wednesday release of the podcast where I'm covering Bitcoin. Today's guest is a well-known software engineer and core developer to the Bitcoin protocol, Mr. Jimmy Song Jimmy has numerous contributions to the current software baseline, and he's the author of the go to textbook "Programming Bitcoin". On today's show, we get into how updates are made to the code, how these updates are tested by a decentralized group of software engineers.

Then how does the update get deployed? How do full node operators adopt the code? What risks are associated with this process? And much, much more. Jimmy talks about other block chains. He talks about quantum computing. There's a lot of variety in this and it all relates to the engineering and it comes from a guy that's written some of the code itself. So without further delay, here's my chat with the one and only Jimmy song.

And you're listening to Bitcoin Fundamentals by the The Investors Podcast Network. Now for your host, Kristen. All right, so hey, everyone, welcome to the show. I'm super pumped to be here with Jimmy Song talking Bitcoin and Bitcoin Tech. Jimmy, welcome to the show.

Well, thanks for having me. It's a pleasure to be on. I appreciate that you were on my podcast. So this a little nice exchange here.

This is fun because we were talking all investing and now we can talk all the tech and engineering and all the really good stuff. So let's dive into this. Jimmy, let's start off. A lot of the folks that listen to our show really kind of come out of traditional finance and are just getting introduced to Bitcoin for the first time through the show. And you've been in this space for years. So I just want to give the audience a little bit of background on you.

So tell us your story. Tell us how you got attracted to Bitcoin. What year was it? Talk to us about some of that stuff.

I'm a programmer. I've been one since I graduated college in the late 90s. So I've been in the programming world for a long time and I program for a lot of different startups. I think I counted at one point I did like 13 different startups in one way, shape or form.

I did manage to get exit twice with public offerings at two of the companies that I was at. So that was kind of nice. But when I first heard about Bitcoin back in 2011, so it's been about ten years now and it was on a tech website called Slashdot. And the big news then was that Bitcoin has broken one dollar. And I didn't really I couldn't even understand what that sentence meant. I was like, OK, what is this thing and why is this significant that it broke a dollar?

And that's when I clicked on it, read it and tried to understand what it was. The thing that immediately attracted me was one of the first things I learned, which is that there's a twenty one million. And that human instinct, I think, is to collect anything scarce. And as soon as you find out that there's only twenty one million, there's sort of like a tendency to want it right. And this is something that I recognize that sort of important.

I remember like collecting baseball cards when I was little. I still remember I think it was the Billy Ripken Fleer card that had like a little curse word at the end of the bat. There was only like a small number of them that got printed before they airbrushed that out or something like that, subsequent printings. But that was worth something because it was rare, right? It was scarce. That same instinct, I think, sort of caught me when I first learned about Bitcoin in 2011.

Of course, I was kind of primed for it because two thousand eight was when all of the financial stuff was happening. And that led me sort of down a libertarian rabbit hole of what's going on. Why does the system this way? And I wouldn't say that I understood all of what was going on back then, but it gave me enough of an impetus to be sort of open to Bitcoin. And the ten years since then has been something of a journey and learning the various aspects of Bitcoin, not just programming, which we're going to talk a lot about, and the technical, but also the economic aspect of it, the social aspect of the game theory aspect of it and so on.

So you find out about this and you see people talking about it online and you immediately start diving into some of the conversations with some of the people that are working on updates to the code. Is that correct? Well, I didn't get into actual contribution as a coder until 2013, so it took me a couple of years at that time, like it was just sort of like it was so hard to get any information whatsoever. In 2011, it was literally just maybe a few websites.

Nowadays you have like explainers and YouTube videos and all that stuff. Back then it was literally just like Bitcoin talk forums and then like Mt. Gox that was about it, like it was a guy who had tried to sell Bitcoin for PayPal that I found. But his account was shut down like three months before that. So I obviously couldn't buy from him. It was like difficult even to just get your hands on Bitcoin at the time you get to the only way was really Mt.

Gox or there was an exchange where they would take a personal check. But that sounds super sketchy to me.

So if you bought it on Mt. Gox back in this 2011, 2012 timeframe, were you just keeping it on the exchange? Because there was it was too hard to really kind of secure it yourself.

Yeah, more or less so I had to get it to Dwolla and then Dwolla, I had to transfer to Mt. Gox and then you could go buy Bitcoin. And then if you had your only own wallet software, then, yeah, you could do it. But there really weren't that many wallets, right? There was literally the Bitcoin core wallet, which you had to run like a full node in order to do. And that took I mean, it was a lot less back then, but you had to sync it and so on.

You can use I think Armory was the other one block chain. That info was another one. I didn't really want an online wallet. I think I did open one. And I remember getting like point zero five Bitcoin from a fosset and I kept it in that wallet and now it's like worth a few thousand dollars. So it's like, oh, man. So that was from a it just people were giving it away. So things have changed significantly.

But yeah, I mean twenty thirteen was when I really got into the coding aspect of it and that was actually kind of triggered by what you said it was. My coins were on Mt. Gox at the time and and I had some friends that were telling me, hey, you know, to really get your coins off of Mt. Gox. I'm just hearing some sketchy things going on over there. And this was summer of 2013. So I looked into the different wallets and I found the armory downloaded Armony and put the coins in my arm or my wallet.

I thought it was very nonperformance and stuff, which is ironic because I ended up going working there like a couple of years later. But that's that was how I got my Bitcoin. And thank God I did that because, you know, a few months later, Mt. Gox turned out to be insolvent and they're still in litigation over, like getting compensated for the coins that they had got. So I got it off and I was very fortunate. I'm very grateful to the friend that told me to take it off.

Because I mean, back then, I mean, you're talking it was not uncommon for a person to have thousands of coins on Mt. Gox, thousands or crazy easily, thousands or a lot of people that lost a significant amount of Bitcoin on Mt. Gox because it wasn't a thing to, like, sort of self custody or people hadn't learned the lessons.

And the thing is, there were other exchanges besides Mt. Gox that had gone bankrupt because they got hacked or something before then and people still didn't learn. And this is why you call yourself blessed these days, because there's so many wallets and many of them are hardware based and so on. So it's a lot easier now. But back then it was. And you can see how ingrained this is in the culture, if you're on Twitter and you're talking to anybody that's been in the space for a while, I mean, it's just like you got as a karaoke's no matter what, because, you know, Mt.

Gox and whatnot.

But you started doing contributions to the code come twenty, thirteen, twenty, fourteen. Talk us through what that process is like. Yeah.

So I attribute it to lots of different bitcoin projects and there's not just one. There's like lots of Bitcoin core is the one that everyone knows because that's the node software that you run if you want to validate the entire bitcoin ledger and so on, which is very helpful because then you don't have to compromise your privacy, whatever you want to know, your own transactions and so on. I first started contributing to sort of like a fringe project at the time.

I was called Collect Coins in 2013 and it was headed up by a guy in the Ukraine. And basically the way open source contribution works is that you write code and then you put in what's called a pull request, which is sort of like code changes that you'd like to see, usually adding some functionality or testing or something like that. Somebody reviews it and it could be one or more people and then they accept the whole request. It gets merged into the code base and it becomes part of that software.

And this is this is just a normal process in a lot of software development organizations, though, to be honest, like in an industry like that, level of verification actually is followed a bit of development where people like patch things directly on production and things like that, which is kind of crazy to me.

But that's what they do and they haven't been burned yet. So I guess that's OK or whatever. That's how open source contribution is. You make a contribution, you do a pull request. The contributor sort of like puts it in and then the people that sort of like other people review it and then it gets merged and so on.

And this is how Bitcoin core works, except the process is a little more strict because we're talking about people's money and you want to be absolutely certain that it's not going to harm any kind of like the Hippocratic Oath. First, do no harm. So, Jimmy, how who determines that it's a stricter process because it's a centralized. Bitcoin core basically is a project on GitHub right now, though, I think Vladimír has put it on various Tor services in case like they ever do platform Bitcoin core.

But basically it's its software. And there's a lot of core developers, I think over 500 people have contributed to or including like anonymous developers. Right after you put in a pull request, members of the community review it. And usually you need multiple members of the community to say this looks good and it's not going to do any harm. And if it's a critical part of the code that might cause some harm, then a lot more review is required.

And usually they ask for test to prove that it's not going to do any harm, maybe even like some performance metrics or studies and so on. Just just to make absolutely certain. When Peter Wolly did that Séguret many years ago, there were a lot I mean, there were literally like 20 people that reviewed it and multiple people that made sure that everything worked the way it was supposed to.

And so on that level of of caution is definitely good because it makes sure that nothing bad gets in. But at the same time, it's decentralized because anyone conforto the code at any time. Right. I can copy the entire code base and run my own software with whatever changes I want. Now, if I make a mistake in that code, then it's entirely my fault. That's sort of like anyone's right. So Lukash Junior, for example, is a core developer.

He has it's own his own forkball called bitcoin nuts. And that's that has some of the enhancements that he wanted to see that poor developers didn't necessarily agree belong there. So he made his own. And you can go run Bitcoin Knot's if you want. He makes it available. And there's that's part of what makes it decentralized. And Bitcoin core isn't the only software that runs, quote unquote, a full node or validates the entire ledger and so on.

There's also something called BTC, the coin. There's another one written in C by a mere TOKIE. I can't remember its name for some reason and there's another one written in Haskell and so on. So there's a lot of different software that can do essentially the same thing and they have their own processes and so on. I'm just describing to Bitcoin core because that's the one that most people tend to use because it's based on Tosches original software and and so on.

You had mentioned earlier that Peter Woolie with his update for Segway, this is the twenty, seventeen time frame for people that don't understand what that update was, this was really to allow Bitcoin to scale this up. It was massive in the twenty, seventeen timeframe. How did people how so when you make this update and you put it out there, how do you get all the full mode operators to adopt it, like the network effect of running the code that already exists versus an update?

Seems to me like it would be such a hard hurdle or such a hard sell for people to update. So talk us through what what that's like. Is it hard? Is it easy in some respects, like just kind of give us some inside information on how that process goes down. One of the things about Bitcoin that's I think more or less unique among all of the other all coins and so on, is that it's always backwards compatible. So you don't have to upgrade.

If you don't want to, it'll be just fine. That was true of sapwood, as was every other update, more or less. It didn't require, quote unquote, a hard fork, which would be a backwards incompatible. So because it's a backwards compatible, no one forces anyone to upgrade. But if you do upgrade, you get all these benefits. For example, you have one of the things that said we're fix was transaction malleability. If you you can now do secure transactions using an upgraded node, which don't allow transaction malleability.

And if you don't have transaction malleability, well, now you can open lightning channels much easier. And that that means that you can use it for a lightning wallet and so on. So there are all these benefits. If you want to use them, then you have to go and get the upgrade.

But you can run software from two thousand fourteen if you want to, and it'll still work on the network. But if you want these new features, it's sort of like gives you a natural incentive to go do it.

Jimmy, I'm sure you don't know the exact number off the top of your head, I'm curious how many people are still running some of the older versions like. So when you look at the latest version that's out, what percentage of the full node operators are running that versus the version before the version before that? I think Jamous in La Paz, Satoshi dot info or something like that, and you can you can go look at what clients people are running and you can query the network, they can lie to you, but there's no real reason to and you can find out what client they're running.

And it might be most of them are running Bitcoin or I think something like 90 percent or some version of Bitcoin core. But others are running BCD or Bitcoin or some of these other clients.

And you can find out exactly the split. That's something that you can go and find out at any point. Of course, not every note is sort of like broadcasting or connectable or what Lukash Junior calls reachable. So it's possible that those statistics aren't exactly accurate, but at least you can get a good idea of who's running previous versions. But generally, like what I've noticed is that note operators or if you're running your own, know generally what people will do is they won't upgrade until six months after its release.

And a lot of car buyers are the same way. They won't buy the newest year model if they just changed everything, though, by the year after, because they'll fix all of the things that they didn't think of or whatever. That's that's a perfectly legitimate way to go, especially when you're talking about other people's money. Different people have different risk profiles. But that's that's the beauty of it, is that you don't have to upgrade if you don't want to.

But there are benefits to upgrading. So many people do.

So there's a lot of talk right now about Taproot. And first, just describe what this is. This is an upgrade to Bitcoin. Tell us it's not a hard fork, but it's an upgrade. Talk to us about what it is and what benefits it brings to the network. So Taproot is is something that Greg Maxwell, I think, proposed a couple of years ago, and it's got a lot of things and there's a lot of different technologies that are sort of clumped them with Taproot.

But essentially it allows you to sort of get a little bit more privacy currently if you are a single key address. It's pretty obvious that you're a single key address versus a multi sig address.

What that does is it combines those so you can't tell if it's single Sigge or multi sig just by looking at the address. It allows a lot more complicated logic that is very useful. So instead of two of three, you could have two of three or four or five or seven of eight, many more different combinations. And you can essentially have infinitely many conditions to unlock a particular coin. So this can be very useful for security. So if you can, for example, have a single key, but should you lose the phone that had the single key you could have as a backup three, four of your friends whom you give slices to or you use their keys or something like that, then they can recover your coins for you, which is absolutely magical.

So that's a huge win from a security standpoint. There's also something called Schnoor Signatures, which which let you essentially do multi sig, but in a way that it's not obvious so. Right. And doesn't take up as much block space right now if you're doing like a two or three multi sig on the block chain as as part of the transaction that unlocks two of three, Multi said you have to have two different signatures and three different keys that are in it.

And those are fairly expensive signatures, like 70 something bytes and a pocket is like thirty three bytes. So if it's large multi sig like five or seven that it adds up and it gets kind of expensive. Washtenaw allows you to do is to aggregate signatures and aggregate Pokey's. So that means that you might have seven Pokey's, you can aggregate it down to one. So it ends up being like thirty two bytes or something like that, a signature instead of like five times seventy three bytes because of the new formatting and stuff like that, it ends up being a single thing of sixty four bytes always.

So all of those things are absolutely wonderful for sort of saving block space and getting it and cheaper and stuff. But the real thing for me is the next upgrade which this enables, which is cost input aggregation which eventually will incentivize. Quoin joins by making it economically advantageous to combine transactions with other people, which I think will be really good for Bitcoin privacy.

So give us an example of that.

So, for example, what a coin joint is, is you take all your inputs of a transaction and all your outputs and combine it with lots of other people's inputs and lots of other people's outputs, and that sort of obscures where your coins are going right now, that if you have like 10 inputs and outputs, well, then you have 10 inputs worth of Pokey's and signatures, which Schnoor you reduce them down to one and one, which will be after Taproot, but with with cost input.

What you can do is you can take all ten of those inputs signatures and combine them down to one, all 10 of those input of keys and combine them down to one. So now you only have one signature, one and one popke for 10 inputs and those in a few matter if you have 10 inputs or 30 inputs. Right. It's always one signature at one Popke. So from a fee perspective, you have less data going in on a per input basis.

So that means that it's going to be cheaper. So as a result, what you end up getting is coin joins lots of coin joints. It's economically incentivized so more people will do it, meaning that then anonymity gets bigger and you get more fungibility, if you will. Let's take a quick break and hear from his sponsor.

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So I'm going to jump to a question I had later on, Michael Flaxman, he had a question about your thoughts on transitioning to a fee based and we're talking years from now. But based on that update that you just described, it seem like that the miners are going to have less incentive to capture some of the fee like that would be some of the offset of what you just described. Well, I mean, they're not going to capture as much of the fee because essentially you'll be able to fit more transactions in a block.

But I mean, transaction demand is continually increasing. And I think that that's just going to be the case as Bitcoin gets more popular. His question, though, is about like how will this transition happen? Because right now miners are getting the miner reward, which is six point two, five Bitcoins and Bitcoin fees, which I think is around one Bitcoin, if I'm not mistaken. Two more having from that. I think that that the fees are going to actually be greater than the reward at that point.

The fees are the majority of minor revenue and the having after that, it'll be over seventy five percent and so on. So I suspect that that will continue to be the case and that will sort of change the economics quite a bit and where miners will be very hyper vigilant about fees and making sure that they take the best transactions that pay the most and like optimizing for that rather than like finding the block, which many miners do, they'll find like an empty block to just get that reward sometimes because it's optimal for them.

But that will no longer be the optimum at a certain point when these are the majority. Going back to the taproot to just cover this just a little bit more, so how many years was this in development by the person that's developing it or the people? So it's been in development for a few years now, and it's it's had a lot of different people contribute to it. I think Peter might have written the actual code at the end that that's being merged.

But AJ Towns and lots of other developers, I would say easily 10 developers have worked on this and there's been a lot of another 20 or so that have reviewed it.

There was a Bitcoin core review club where they just went over all of the different aspects of Taproot and went over the code and had basically like kind of reviewed it as a group and so on. So it's been going on for a couple of years. This past year, I think was a lot of review. They found some things that they wanted to change, so it had to be resubmitted. I believe the code has been merged into the latest release, but it's not activated yet.

And right now, the big point of contention is how do we activate it? Because the last activation system that we used in twenty seventeen didn't go so well.

So I think you talked about that Jeff Garcia thing, the activation thing, the mechanism in 2017 was something called Bit9. And essentially what Bit9 does is it waits for miners to say that they're ready. Ninety five percent of mining hash power to say they are ready before it actually activates. It was meant to be sort of like a courtesy to the miners, like, OK, you guys need to update this. And then when you're ready, we'll we'll we'll trigger it.

They they saw it sort of as like their ability to veto this change. A lot of people in the community didn't like that. And this this led to a lot of words back and forth. And then Barry Silver came up with a to agreement, which, like none of the users, were invited to the Clippers, that it was just a bunch of companies. And, of course, like there was a there was a lot of strife and arguing back and forth.

Ultimately, the users won because they said, you know what, like, you guys can do whatever you want, but we're going on our own way. We're going to have something called the user activated software and we're going to activate Cygwin no matter what you want to do.

And that one that made the miners capitulate. This is a really, really important part for the history of Bitcoin that people are hearing right now, because in this situation, this all happened in the summer of twenty seventeen that he's talking about what really at the end of this the so what?

At least in my opinion, I want to hear your say what myself what was Myners can have this opinion. But at the end of the day, the users, the people that are running full node's, the person who can set up a full node in their house and say this is the software that works best for the majority of participants in this network. They have the voting rights. It's almost like a corporate governance thing. And in that example, that was very contentious, like you're describing, we all learned that the that the users, everybody who's part of this network know, I'll just say the small people like myself had the power to really kind of govern where the network was going.

And you agree with that?

Yeah, and then that was a significant moment in Bitcoin's history, and for me it proved that the corporations weren't in charge and this is just so rare in anything and anything because whatever like corporations and government get together, they get whatever they want.

That's right. Anywhere. And this is the one instance where, like all these corporations came together and they failed and the users won. And it was just sort of like what we can. This is actually possible when in history has happened. Yes, it was a it was significant because, like you said, your master of your own note, if you run the code, they can't make you change it. And that's essentially what these corporations were trying to do, is say you have to run the code that we tell you.

And the user said, nah, no thanks. And and they they managed to get everybody else to capitulate and say, what do X never happen, although Bitcoin cash did happen. And that that was an interesting experiment as well, because we didn't know if, like, a hard fork would survive and it did. And it still survives to this day, although it has very little of the value, like I think it has like one and a half percent of the value of Bitcoin or something like that, taught us a lot of lessons.

And it showed us essentially that Bitcoin is antifragile in many ways. Yes, very much so. So this kind of topic is interesting because when I hear complaints or you hear the flood on Twitter, one of the things that comes up a lot of the times is this idea of hashing power being consolidated into a specific region. And the one that is most often brought up is China. And I think that what we were just talking about is this this vote of a full node operator in the corporate governance is the terminology I'm using for that node operator having a vote.

I think you get into a really interesting discussion when you combine that with this idea of concentrated hashing power. So I'm curious to hear some of your thoughts on that idea. A lot of that hashing power is in China right now, and and the reason is actually much more practical than you would think. Essentially, a lot of chip manufacturing is in that region, a lot of heat sinks and parts, transistors and all that stuff. It's all manufactured over there.

So it's not a surprise that a lot of the people that can take advantage of that are Chinese. In addition, they also have a lot of really cheap electricity, in large part because the Chinese government has subsidized the construction of these very large hydroelectric dams and may basically in the middle of nowhere, because if you're building a dam, you don't want a near population center, because if something happens to them, then the population center screwed. So these are often in the middle of nowhere.

And as a result of that, because of electricity transmission costs, what you end up having is these dams that can generate a lot of electricity, but it's not worth transmitting them to sort of the nearest city beyond a certain amount because it cost too much. So the uniqueness of Bitcoin mining is that the mining equipment can actually be moved. It's portable and you can put it wherever there is electricity. And a lot of these Chinese miners, they they have access to the equipment and they are they were able to go to these these hydroelectric dams during rainy season when electricity is especially cheap and get a lot of that excess capacity and use it for mining and so on.

After the rainy season, they might go elsewhere and so on. But that's sort of been why mining has been concentrated in China.

But the latest reports that I'm seeing is that less than 50 percent of all hashing power is now in China. There are countries that you wouldn't expect that have a significant amount of passion power right now, including countries like Iran, which apparently currently has somewhere around eight percent of all hachim power, which I think is more than Canada, which is kind of crazy. There are other places like Russia and Kazakhstan and Sweden and Iceland that have access to really cheap electricity that end up going towards those as well.

Now, as far as sort of the decentralization aspect of this hashing power, if China went offline tomorrow, if the Chinese government said that it is illegal to mine in our country and just completely redid all of these mining facilities and said and shut them down, what would happen? Well, you still have the other 50 percent of national power, and that means that locks would be slower, fees would be higher, but the Bitcoin network would still chug on.

And in fact, this was one of the arguments during said with two X was even if the miners held 80 percent of the hashing power, which we thought was on the high end of the miners that would cooperate with Secretary X, Bitcoin would still have 20 percent of the hashing power. So you get 50 minute blocks our block, something like that. It would still keep chugging along. And because Bitcoin has difficulty adjustment every 20, 16 blocks after twenty 16 blocks fast, then it goes back more or less towards 10 minutes anyway.

Now it's possible that the miners collude to try to attack the network and there was a lot of discussions around that. But that ends up not being that much of a threat given what we've learned about different works. For example, Bitcoin cash right now has like one point five percent of the hashing rate of Bitcoin, and any large miner could easily attack Bitcoin cash, but they don't in part because, you know, they don't matter. In a sense, if you've already won, then you don't you don't really care.

And the thing is, like the economic game theory is such that whatever has a more more economic value, that's where miners were be incentivized to go. You'd be mining at a loss and have a tremendous opportunity cost, if you mind, on a worse chain.

So even if Bitcoin at that point had 20 percent of the hashing rate, the other 80 percent would be mining at a loss and they would either go bankrupt or have to switch. So in a sense, the miners this is one of the things that we recognize after game theory about everything is that the miners work for the network. It's not that the network works for the miners. And that was one of the big key things that we learned out of out of that whole year was that wherever the miners are economically, they are incentivized to go with the strong and strongest network, the network that the users want.

And that's why users are ultimately sovereign over the entire network. So let's just pull the thread on a scenario that doesn't make any sense, but if you've got a sovereign nation that really wanted to go after this thing and let's just say let's just say that in China, there's fifty five percent of the hashing there, even though we know that these aren't the numbers. Let's say the the sovereign nation steps in and says, we want to attack this network, we want to take it down.

They get all their miners to come online and they try to attack it. What is the attack when we talk about a fifty one percent attack? Describe what it is and describe in detail what it is that they're able to actually attack and then talk about as we would March 15 days into the future after the attack happened, how it has to be sustained and all those types of factors. Walk us through this attack. Here's what a 51 percent attack is every 10 minutes, you essentially get a new page in the ledger.

We call this a block, right? It's a list of transactions that's in the ledger that goes into the ledger that every node in the world validates as consistent with the rest of the ledger and so on. But sometime once in a while, though, you'll get two candidates for the next page and they might have some differences.

And in that case, every node is supposed to figure out, like, wait until one of them has an additional page built on top of it. And whichever is longer, that's what they keep. So at any time, if you see a longer chain than the one that you currently have, then you're supposed to take the longer chain with more work. That's at the heart of what, a fifty one percent attack is, is it rearranges the ledger in some way.

So a very simple fifty one percent attack would be you first send one hundred bitcoins to an exchange as part of that block. Say that they don't wait for more than one confirmation, in which case you get credited right away. Somehow you're able to withdraw. I guess one hundred bitcoins is like I'm thirty five thousand I guess three three and a half billion dollars or something like that.

Yes. You are able to withdraw three and a half million dollars and then using the hash power you have on hand, you create two blocks before before the rest of the network finds finds one. And instead of the one hundred bitcoins going to the exchange, you send one hundred bitcoins back to yourself, in which case that transaction is no longer valid. And you have one hundred bitcoins and three and a half million dollars, that that would be a way to attack it.

But you're only talking about one transaction in that block, you're not talking about rearranging all the transactions in that block, correct? That's correct. So essentially, what a fifty one percent attack is, is it allows you to do what's called a double spin. It lets you spend one hundred bitcoins twice, once to the exchange and once to yourself. So you get to have your cake and eat it, too. Essentially, you can eat it by converting it to three and a half dollars.

There's a lot of a lot of risks in that scenario. Right.

First of all, the exchange might sue you if you if you try to do that. Well, they know where they sent the money through the fiat system. So they're going to they're going to go and find out from the bank and see if they can recover the bank that way or slap slap a lawsuit on the bank. And I know of no exchange that gives you like a suitcase full of cash. So that's not going to happen. And second, you don't know that you're able to get more blocks then and then the other part, like it's all probabilistic.

You don't actually know that you have fifty five percent of the network. Now, you might, but it's still probabilistic. The other chain might find it faster than you just because it's a 60 40. Well, 40 percent of the time they're actually going to find bits to block before you. So you don't know. And and essentially you have to be longer before you can broadcast that. So there's a there's a lot of tricky things there. Well, don't you have to keep up, you have to keep becoming the longer chain and and outpacing everybody else block after block.

How far out under an attack like this would you have to keep finding the very next block faster than everybody else for everyone else to start building on the chain that you had that you had built? So the way that nodes work is basically if I if I'm a node and I see one chain with one block and another chain with two blocks, then I have to take the two or that. That's how the logic in the code works. But here's a weird social aspect of it.

Say you have three blocks and then suddenly something with four block for four blocks comes along.

You're supposed to take the four, but pretty much everyone is going to be alerted that you had a three block reorgs, which is going to ring alarm bells. Everyone, including exchanges where they're going to be like, OK, we accept that this deposit now we're going to have to do something. And every exchange has or at least any good exchange should have some protocol for what they do. If you have a four block reorgs or something like that, especially if you take three confirmations because it might be an attack against you.

Yeah, that means that at that point, we don't really know what's going to happen. It really hasn't happened. But one of the things that you can do as a node operator, remember your master of your own node, if you are a node operator and you're running, you know, one of the things you can say is not reject before I'm going to go with the three and you can say disconnect block. It's a simple command. You type it in and it says, well, I'm going to go with the one that that was there before instead of this four block chain that just suddenly came online in the last five minutes, in which case it might not succeed.

So there are so many ways in which this this thing can go wrong for this sovereign nation state. And one of the things that I remember about Andreas Antonopoulos said, like, OK, so they they produce all this equipment, they run this thing and they do it for one double spread. Then he starts clapping.

I mean, it's it's crazy talk. I'm curious for a lot of these exchanges, how many how many blocks do they need to call it officially cleared and they'll let you start transacting with it again. For Bitcoin, it's usually three, maybe if they're a particularly strict exchange, they might require five or six. But I mean, even three blocks is a lot of hashing power and that's a lot of energy. But you have to expend in order to do that and the like for this, quote unquote, sovereign nation state.

That's three blocks of money reward at least. So that's why six point two, five times three, eighteen point seven five. I mean, you're you're looking at close to a million dollars. I mean, not quite, but I think it's like seven hundred thousand dollars or something. Yeah. That's a lot of money just to do that. And you're only reversing one transaction. Yeah, I mean, I guess you can do multiple exchanges at the same time or something if you're if you're particularly committed to it, but that's seven hundred thousand dollars just in energy costs.

There's also capital costs of all the mining equipment. And there's, of course, sort of like social coordination to make sure that, you know, you have some arguments so people don't just disconnect your chain. And I mean, there are just so many aspects to it that an attack like that is, at least in my mind, like not realistic. Really improbable. Yeah, really. Like socially, I don't think anyone would accept it. And they would clearly see this as an attack and just cut it off like you could try.

I mean, you could have a nation state through one hundred block reorgs. There's no way in hell anyone is going to accept that because they're going to say, OK, these hundred blocks appeared out of nowhere. I'm just going to disconnect. That's it. Now, with with other change, this is a little different. The game theory is a little different. And there's a reason why if you're trying to deposit Bitcoin S.B into Phoenix, that they don't accept anything until 50 blocks have gone.

Wow. Because there's there's a lot of ways in which the exchange can get screwed. So that's just sort of a game theory of it all. Let's take a quick break.

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That's the investors podcast, Dotcom Helix Sleep. Let's get back into the podcast. So, Jimmy, we stopped the flow, suggesting we're gone from probably 10 miles from here, if true, the seven hundred thousand becomes seven million for three blocks just within a year from now.

So I guess an energy costs just in energy cost alone, not even getting into what you were describing earlier, which is that people just unplug. When does this question that I just asked you go away. I mean, I think it'll always sort of exist in the popular mind in a way, but the longer it doesn't happen, the longer the more people are able to dismiss it. It's one of those things that will sort of always be kind of a question in their mind.

I mean, I hear questions about like quantum computing, right? It's like one of my pet peeves. Let's go. Let's go there.

Well, the thing is, very few people actually know the details of quantum computing, and they have like these popular misconceptions that somehow quantum computing can do exponential calculations in like linear time or something like that when that's not the case at all. And if you know anything about quantum computing, you recognize that the engineering challenges are so difficult that like you need like three or four breakthroughs that are the equivalent of essentially doing cold fusion before you're anywhere near, like being able to do something like that.

And we still don't have cold fusion. So, like, there you go. Do you really see the engineering challenges as being equivalent or at parity with cold fusion type things? Even setting up a cubit is like incredibly difficult. It's literally atoms at like nano degrees above absolute zero. And you have to keep them in this weird quantum state for a significant amount of time. And you have to error, correct, for the fact that they these atoms have like half lives and things like that.

So. And then you have to keep it in a like you got you have to keep it in some sort of like that quantum state until you observe the thing that you want to observe. So if anything leaks and that shows prematurely, then you're not going to be able to observe the thing that you need to observe. There's so many little things like that from an engineering standpoint that I mean, like obviously it's captured the imagination of.

So, of course, they're going to write articles about it or whatever.

But from an engineering standpoint, it is extremely difficult. And I don't think people really appreciate how difficult it is. When I hear people talk about it as if it's inevitable. It's like it is anything but kind of like cold fusion, right? Like people thought it was inevitable in the 80s because there were all these popular articles about it.

You know, I still remember Back to the future to write. It's like there's little miss their future. It's like cold.

It's just going to happen to any physicist. And they're like, there's no way it's not going to happen in my lifetime. That's how it is. I think what you get, though, is you have people that read a couple articles, they see Google is now they've got their own quantum computing. Right. This is this is where everyone goes and they say, well, if Google's got this computer and it's got this many kupets of processing like it, it is real.

Jimmy, this is happening now. It's only a couple of years out. So that. What do you say to that person? Then go tell me what the Google paper actually said, because what they did was actually not that impressive. I mean, essentially they define quantum supremacy as the ability to come up with a random number. Oh, gee, quantum computer, anything quantum related always spits out random stuff. So, of course, is going to be better at it than like a conventional computer, which is deterministic, acting like that's something like incredible breakthrough is just really disingenuous.

Yeah.

And more marketing than anything.

And it's Mark, that's the thing about any sort of like I just want to go on a rant here for just a little bit.

This is one of the one of my pet peeves about like all these like corporate R&D departments is that almost always you have somebody in charge of that R&D department that needs to justify why that lab exists and why their job is important. So they love press releases and they will see the hell out of any reporter and make their achievements sound like it's way more than it is. And and it's not just Google, right? It's every company that's ever done anything block chain related.

It's like, oh, we did this, this and this. And it's so incredible. And it's going to change everything. Yeah, they're just justifying their jobs. Well, then you combine it with the fact that the people on the other end that are reading it, they are very excited to bring up in casual conversation that they're talking about quantum computing.

It's kind of like, yeah, it ends up being something that they can use to sound smart, and the unfortunate reality is that I don't know, quantum computing to me has jumped the shark like maybe 10 years ago. It was it was something that was exciting that we didn't know that much about it. But then, like, you learn more about the engineering challenges related to that and you go, OK, there's no way this is going to happen any time soon.

And even if it did, there are mitigations anyway. So people place just way too much importance on stuff that, you know, the press sort of like tells you about it. I mean, we're all kind of over consuming media. So there's a tendency to get manipulated by the media in ways that we don't really recognize. And this is one of them is from a science perspective, there's the illusion of making more progress than there actually is. There's actually very little progress and a lot of areas.

It's just a lot of people that need to justify their salaries. So they make it sound like they are.

I want to capture some of your thoughts on some of the other things that are happening in the space, mostly because I get a lot of complaints in my feet. I'm sure you get a lot of complaints in your feed. People saying, Preston, I'm making justice, I'm making more money. In theory, I'm in this and that. And you're totally missing the boat. You know, my background, my undergrad was in engineering.

And so that's immediately where I gravitate way before the finance, to be quite honest with you. I'm curious how you view a theorem. And then I would also like to get into a little bit of unit swap, some of the stuff that's happening there.

But let's talk let's talk a theorem first. And just from a very high level standpoint, what are your concerns and what are some of the things that just kind of raise the flag for you?

Short story before we get into all of that, so two thousand thirteen, I was working on something called color coins on Bitcoin and this is what you might call like photo Ethereum Icko stuff.

And it was on the Bitcoin protocol. You could be coins that are, quote unquote colored. So you can trade them as assets that are other than Bitcoin, something like that. So that that was where that was sort of my first experience doing open source development on Bitcoin related projects. And and one of the people that that we had actually writing a white paper for colored coins was without Peter.

And he actually wrote the white paper. It wasn't what we had written. So there was a little bit of back and forth. And he said, you know what, I'm not going to change the white paper to say what you wanted to say. It's like, but that's what it is technically. And he's like, I'm not going to do it. And it's like, OK, he's like, I think I'm going to go make my own coin anyway.

So that ended. That coin, of course, ended up being Ethereum and that that he launched maybe like three months later with yellow paper and a white paper. And he did the crowd fund raising in early 2014 and so on.

Now, at the time, this was my assessment of Ethereum just given sort of the ambitions that he had. For first, he wanted to bring complete scripting language. Why?

Because when I look at what Adam Backes doing with simplicity, isn't it the polar opposite of that? It is, and he wanted to bring completeness, he thought that was a weakness of the Bitcoin smart contract language square, but Satoshi specifically made it not too complete because you could see dots, all nodes with an infinite loop. And as soon as you have turned completeness, you just have you know, you just put an infinite loop out there. And this is why Ethereum has such complicated mechanics like the idea of gas.

It's so that you can't have infinite loop. So like every time you run through a loop, you use up some gas. And if you run out of gas, too bad. And this is why if your transaction doesn't go through any theory, you lose your fees anyway. This one of the one of the subtle gotchas. The thing is, like Batalla is has sort of like this reputation as some sort of prodigy or whatever.

You didn't see it. I mean I mean, I'm just a coder, right. And I you know, I've been voting for like I since I was nine, but professionally for like twenty three years or something like that.

And I got to say, I've looked at his code and the thing is like he started as sort of like a 19 year old, like getting into Bitcoin and then, you know, 30 theorem and all that. And everyone kind of like has this incentive to make them out to be this child prodigy genius or whatever thing is. What I see is like a kid that doesn't really know how to code well as a programmer. Right. You just have no experience at that age.

Yeah, exactly. Thirty years of experience. Like, how could you. Yeah, and I look at him and I see all these flaws right initially, like Ethereum addresses, simple example, but Bitcoin addresses their base.

Fifty eight at least on the back. Thirty two, if you're using native segment, then that's something else. But Bitcoin addresses our base. Fifty eight. And the last four or five, five or six characters are what you what you call the checksum.

So it makes sure that if you wrote it down wrong or you pasted something wrong in that address, any wallet can easily detect it and say, you know what this is, you pasted it wrong or maybe maybe did something wrong. Can you check again and make sure you get the right address? And that's just good practice, right. In case you write, if you didn't have just the checksum and you wrote the wrong thing, then it'll go somewhere else.

That and you'll lose those coins and the person won't receive them. So that's that's just good engineering. That's that's that's what you would call something. You make it hard for the user to do the wrong. Ethereum, they had this brilliant idea. We're going to ditch base fifty eight and we're going to use hexadecimal and all our address is going to start with zero X.. They took out the checksum. So what happens? Lots of people put the wrong address in and they just burn their etherial.

So they obviously recognize their mistake. But there are all sorts of things like that throughout the entire thing. They tell it to me like it is, is sort of like that. And I've seen this. I manage college kids that came out and work for me in different capacities or whatever. And the typical sort of mentality of somebody that comes out of college as a maybe they study software engineering college is they just want to use like something cool and do something new or whatever.

And Battal, it's almost exactly fits that profile to a T.. Right. Like his mentality is, if it's not built here, I want to make my own because I think I can make it better. He kind of has that and the result is usually something that's a complete mess. And this is in stark contrast to Satoshi Strauss'.

Almost all of Satoshi choices in creating the Bitcoin protocol is take some standard that already existed instead of trying to roll your own crypto, which is which unfortunately is what Retallack seems to have done with everything. A theory related. And this is why solidity is such a mess and it has so many security flaws and it's very difficult to analyze and you don't know what's going on and you're not sure how long it'll run. And it's just a Jamot. At the heart of it for me is going back to a conversation that you and I had earlier, which is about this governance, this this full node operator that any person in the world can go out and do inside their house.

And more importantly, 10, 15, 20 years from now, there's still going to be able to do it from their house. When I think about a theory is, is that even possible for a full node? I mean, today, but not not even talk in 10 or 15 or 20 years from now running a full node in order to say, hey, this is my vote on the direction I I think the the protocol needs to go.

You're just nowhere near that with a theory.

You know, you don't you don't have a vote whatsoever. You don't think about a theory is that they hard for every six months or whenever they need to because and which is essentially backwards, incompatible. And this is sort of built in so that the theory and foundation and the theory developers will have all the power perpetually forever. And and this was, I think one of the early things that happened to him was the quote unquote, Dow hack. It wasn't so much a hack as it was more like good smart contract work.

But essentially what had happened was you had this thing called the Dow, which was supposed to be a decentralized, autonomous organization where you could name the crowd with the side where the fund would invest.

So it was sort of like a crowd funded D.C. fund or something like that. And that that was the idea behind it. But, of course, like the contracts were written wrong and somebody figured out how to drain it of all its money. And basically they did. And then they decided, oh, you know what? Like I think at the time, one sixth of all the theory was in the contract. So they decided, OK, it's getting drained of all this money.

We're going to roll that back.

So when you say they you're saying the ethereal foundation.

Yeah, essentially it was a bit talagi. And I still remember to this day what the Talet said, like the week before he made that decision or not, Vitalii. But other people in the Ethereum community were saying before the decision there was a guy that was literally on YouTube saying, you know, I would understand if Italic decided that code is law and that he would let this go. I would also understand if he decided to roll it back, which tells me there was no principle here.

It was just let's just follow our our dear leader into whatever he wants to do. And of course, a week later, he decided, OK, we're going to roll all those transactions back. And that that caused what was at that time known as the theorem theory, classic split theory. And classic node operators were basically saying, you know what, we think code is law and we're going to keep going with it. Barry Silber bought into that soon afterwards.

And he's, I think, pretty much the only one that pumps it at this point. But then that proved that the tallit controls the entire Ethereum ledger. Had all all of these bends to that contract.

We're going to just roll them back. We're not going to we're going to pretend they didn't happen. I mean, this is nothing different than a government bailout of an industry. And that's essentially what the theory is, that there's no reason to think that he wouldn't do it again if it was sufficiently harmful to theory to not do so. And just for the record, if somebody well, I think we just had the example, I've been seeing the article the last two days or whatever, this person who lost their private keys on their computer, and I think it's 100 million dollars or more or something like that.

It's not like any one person can roll that back no matter what. Right. With Bitcoin, it's impossible. It is it is impossible because it's a barer instrument and somebody told me that, like the last 50 years of US policy has been getting rid of their instruments and Bitcoin's kind of bringing them back. Yeah, the reason why they've been taking it away is because then they can have their hands in the middle of it and they can be the intermediary that can control you sort of financially with Bitcoin.

You get that back with Ethereum. You don't have that at all because you had this intermediary central party that can do whatever the heck they want. But with Bitcoin, you lose your keys, you it's losing the four hundred ounce gold bar that you had in your safe or buried in your backyard and forgot where it is. You're not getting it back. And, you know, it's both sort of a thrilling prospect because you you're your own bank. But it's also a scary prospect because you're your own bank, because people are not used to taking custody of their own stuff or having that much responsibility.

We're used to outsourcing it to trusted third parties, which in a sense, I can kind of understand.

It makes it more difficult for certain types of attacks, but it makes you way more vulnerable to another type of attack, which is that the government can take it away, that shut down or manipulate it or whatever.

All right, real fast, talk to us about what Yuni swap is and then talk to us about your thoughts on just decentralized lending and things like that moving forward with Bitcoin specifically. You need swap is is what they call a device platform and decentralized finance, which I think is a misnomer because it's anything but decentralized, because you have the union of token token issuers and the swap contract writers. Right. And they have back doors and all this other stuff.

Who knows?

But but basically, it's a platform for some sort of lending or whatever, and you have different assets on there. For some reason, they're named after lots of different foods.

But essentially you you have different ways in which you can collateralize your Bitcoin or Ethereum or whatever. You have to wrap it. And the Ethereum contract. And of course, that Bitcoin is held by Bitcoin, but it's wrapped. So you have some guarantees, but you're it's it's like the worst thing to call it decentralized because it's centralized at like six different point. And it's it's not decentralized at all. It's more like anonymous finance or something like that or pseudonymous finance, because you just put up the collateral and you get the loan and you can, I don't know, maybe go buy more of the period or more of whatever.

And that's how most people use it is some way to leverage it. And, you know, as a result, you know, you have this platform for doing some playing financial games that Wall Street has been playing for many years on Ethereum. And of course, most of these games are zero sum. So really, you're just sort of taking sucker's money if you're good at it or you're the sucker. I'm looking at him because the whole yield farming, I mean, is just a total scam, right?

My thing that I'm looking at it more from is the technology of using an exchange, basically decentralizing an exchange. And even though this particular example with unit swap and you're saying that it's centralized, I agree with you.

Is there a way to do this in a way that would be decentralized in the future? Let's say we're five, 10 years from now. Is this something that the engineering can actually catch up to? And is this something that could actually be applied to the Bitcoin block chain protocol?

First, here's a difficult thing, and this is what you always end up at when you talk about smart contracts is something called the Oracle problem.

And the Oracle problem is that almost anything interesting requires some information from the real world, like whether or not a house changed hands or that legally something happened in the real world, the score of a baseball game or something, whatever it is.

So this would be a good one, the weather. So everyone wants to do futures contracts based on the way that the weather was reported. Right.

And so if it was 50, between 50 need Oracle, you need somebody to add that data to the smart contract. There are many ways to do that, but all of them are essentially centralized on that oracle because the Oracle needs to report truthfully and you have no guarantees that they will.

And I mean, you can you can try to say, OK, well, well, then use 10 oracles and the majority will listen to the majority. Well, there's no guarantees that they're, first of all, ten different entities. And second of all, that they won't collude with each other. You you have no idea. So you get into these weird situations with all of this where you still have to trust a third party.

And when you're asking for something decentralized, what you're asking for is no trust. The third party. That is essentially what you're asking. And from a metaphysical standpoint, it's not even at the layer of engineering. You can't get away from that. If it has anything to do with the real world in any way, shape or form, it can not even in principle be a decentralized thing because because of the external data that you need now within an ecosystem.

So even like price based contracts or something like that on Bitcoin. Right. You still need somebody to say that Bitcoin exchange for this many dollars on this day, on this exchange, that that's data that needs to come in from the outside.

So I have a hard time, unless it's a purely digital and it's like, OK, blocks will be found within or difficulty will be this and the next difficult adjustment or something that's within the Bitcoin ecosystem that you can sort of measure without trusting a third party to report data from outside the block chain. It's in principle impossible because it requires some trust on something. When I think about my experience in financial markets over the last 20 years, there's never been a situation where I've said to myself, I wish this exchange was decentralized.

I wish that these stock certificates that I'm buying or this derivatives exchange that I'm using, the buy call options was decentralized. Never I've never had a need for that. Sure, the fees could be lower. But I mean, look at Robin Hood right now. There's no fees for any of it.

Now they're selling the data out to make some money. But at the end of the day, I just don't have when you go to the fundamental root, like, what is the problem that we're solving for society? Where is the value capture that we're adding that that the customer isn't getting right now? I just don't see what problem you're solving.

When I look at Bitcoin, my issue with the Bitcoin solves is like you and I talked about last week when we were talking about the whole valuation process, you can't conduct a valuation on something if the units you're using are getting the debased that 15 or 20 percent annually, like you're using a ruler. That's a that's a Gumby ruler that's changing by the day.

And so I guess when I look at at the heart of what it is, the theorem swap, like we're just talking about like I just can't wrap my head around what the problem is that they're solving. It just seems like they've they've discovered all this neat tech. They've discovered this massive influx of capital that's that people are just willingly throwing at it because it's it's effectively coming from the the problem that I was just describing, the Bitcoin solving. And so I think you have this this really interesting scenario where you got a lot of engineers who might not be looking at the big picture of what is the problem that we're solving, but they're able to play with a bunch of levers and a bunch of gears and a bunch of code.

And they're having fun. Right. It goes back to your description of his personality, and that's totally reflective in how I see what he's what he's doing and what the what the code is is actually doing from a performance standpoint. Yeah, I would say that that's a very accurate description, essentially. I like when you have you guys that want to play with new technology or whatever, you know, they kind of get lost. And when they come back with whatever project you gave them and they come back with this thing like barely works, it's not performance.

You're just like, OK, go do it again and use the tech stock that I told you. You know, they they learn that way with something like Ethereum, you swap all that. They don't have that feedback loop because they get a new injection of money by printing their own money like they they'll create a new token for some reason. And then they they sell it to investors or whatever. So they get this new influx of cash so they can play this game or ever or for as long as that money lasts.

And the unfortunate reality is that there's a lot of that money and it's not going away. We can go back to exactly where that money comes from, but they have influx of new cash coming in from retail or DCS or whoever that want them to keep creating these like group or Goldburg machines that aren't really doing anything.

They're essentially like the one need that I do think that they are filling is a need to gamble a lot of people and we can talk about exactly why that is in this sort of economy. But there's a lot of people that want to gamble on stuff. And and this this looks like it's a decent gamble. They might not understand that, but they're fine buying lots of different lottery tickets and seeing how many how many of them pay off. That's the only actual human need that seems to be fulfilled.

Nothing actually in the market that people want. You couldn't explain it any better than a bunch of lottery tickets. Really, I mean, at the end of the day, I think I think most people approach this and they say this is really complex stuff. This is really hard to understand. There's no way I can understand at all. And therefore, what I'm going to do is I'm just going to typical Wall Street portfolio style. I'm going to invest in 10 different things.

I might throw a little money over here, a little over there.

I mean, when you have I mean, we're almost at a trillion dollars, Jimmy. This is this is getting wild. We're almost at a trillion dollars in the space collectively. And when you look at the growth rate of it, it's going parabolic. And so that money is just getting thrown at everything. People are just throwing it at the wall because they don't want to do the hard homework to try to understand the countless technological rabbit holes that are out there, like sort of psychologically, you know, how if people win at a casino, they don't really feel like they deserve it on the inside.

So they'll they'll just sort of spend it very freely on stuff that they would never spend their own money on. I think it's kind of like that with a lot of people that have received money from some sort of government subsidy or whatever. They're spending it on stuff that very frivolously on things that they'd never otherwise would spend on as never. Yeah, yeah. And it's going towards projects like this that absolutely do not deserve it, that that have no value prop.

It's just sort of like gambling vehicles. And I'm thinking now that maybe like all coins are a symptom of sort of the Fiat biz's. It's one of the ways in which it manifests itself is that people will just sort of gamble and spray and pray or whatever like that. That's sort of the style that people tend towards when they don't know what to do. So, yeah, that that seems to be the case. It's why there's like five LOUI veterans inside of Caesar's.

That's right. That's right.

Because, you know, at least you could come away with a nice bag, because if you didn't see the first one, the one that's for four stores down, you might see.

Yeah, it is hilarious. All right, last question for you, man, this time has gone so fast, wow, I've really enjoyed this conversation. The last question I got for you is Jack Maulers, his big announcement. I mean, it's just really exciting to see some of the stuff that's happening out in the payment space. I'm curious if there's any other projects from an like an engineering standpoint that you're seeing that you're really excited about, particularly with Bitcoin that you see really kind of playing out in the next three to five years.

I really like Jack's project. I always thought strike was revolutionary for the fact that it can convert Fiat to Bitcoin within that transaction of a customer to merchant.

It's almost like every other merchant that's quote unquote taking Bitcoin. It's gone the other way, like somebody will pay in Bitcoin and then the merchant will convert that to Fiat. And it's essentially people selling their Bitcoin for goods. And for that reason, most of these companies soon saw their Bitcoin sales dry up very quickly after maybe a little bit of an initial burst. And then they all stopped taking it because the engineering costs of keeping that on their website would be would be very high.

What what Jaxx thing does that that's absolutely brilliant is that for people that want to receive or have no other choice, this is perfect because you see, you can your customer just need souled dollars, but you receive Bitcoin and you don't have to convert it in between. So the customer gets to choose the worst money to spend, but the merchant receives the better money. It's it's sort of like subverting Gresham's law for both parties in a way that works out for both of them.

Now he's planning to do the same for remittances, which I think is absolutely awesome, because if you're on the other end of remittances, you want the currency that's going to store value because you're you're generally you're in a country that doesn't have very good stores of value and you have legal tender laws that make it make you have to spend your local currency. But no one actually wants to hold it. So if you're receiving Bitcoin, that's great, because now now you're you don't you don't have to worry about your your currency inflating away, and that helps you save.

Not that just on during that transaction, but in other transactions as well. So I think this project is great. But as far as other ones that I'm excited about, these might sound pretty mundane, but I think they're significant from a consumer standpoint. One is Specter multi wallet. So it's essentially multi security that is pretty excessive use, multiple hardware wallets and so on. I know so many Bitcoin holders that have a single point of failure and they get nervous as hell about it.

And not having a single point of failure is actually very freeing because now even if something goes wrong with one thing, you have backups, you have ways to get around that. That's always been there. It's just that, you know, the user experience has been kind of terrible. So now now you have a user experience that's actually doable and it's not that hard and people can set it up themselves. So that's one. The other one would be sort of the the mentality of dollar cost averaging, which a lot of exchanges, different apps have have put in.

This makes investing a lot easier. And from a practical standpoint, I think that will sort of accelerate adoption and get people thinking much more about it. And so those are the two I know people want to hear there's some space mining project or some Mars thing. But I mean, for me, it's just making Bitcoin good for what it is, which is the store value. And that means security is important and that means getting money into the system that you won is important.

Both of those things have improved significantly. So, Jimi, you have a new book out, this is called Thank God for Bitcoin, and it is very easy read you and the other people that assisted in the writing of this. You guys just got straight to the point and you guys made it in a manner where you're not trying to impress with your writing. You're trying to make sure that it's easily digestible and you're hitting the stuff that's important. That's what I love about this.

So feel free.

Just tell people where they can get it.

And then anything else that you want to promote or highlight to that we can put in the show notes, thank God for Bitcoin is as a book that I wrote several other people.

It's kind of a child of covid. And it started kind of as a book club slash Bible study. And we started a couple of books, Ethics of Money Production by Guido von Halsman and Honest Money by Garry North. Both our books from sort of an Austrian perspective by talking about the morality of money. And that's what this book is about. The thing we didn't like about either of those books was that it didn't mention Bitcoin and we wanted to write one but did mention Bitcoin and that made the moral argument for it.

And it comes from a Christian perspective. All of us that wrote the book are Christian. But the thing that we wanted to make sure that we got out there is is that moral argument, because generally people you know, I mean, you can make the investment case and people will want to do it out of self-interest. But a moral case is one that causes people to think on another level. It becomes sort of a moral imperative, which we argue that it is in this book.

Then there's way more reason to do it. And it's not just sort of a selfish endeavor. So you can go buy a Lambo. It's much more about doing something that's good for the world, that's good for civilization and make civilization better. And that's that's the argument that we make. It's on Amazon. And you can get that print or Kindle edition and we'll have the audio book out soon. So very exciting stuff. I want to highlight one other thing for poor folks, because anyone listening to this knows you, you clearly have some programming chops here.

Jimmy has another book on Amazon as well that he wrote by himself called Programming Bitcoin Learn How to Program Bitcoin from Scratch. And having flipped through this book, I'm not a programmer having flipped through this book and it's over three hundred pages long, I don't know how in the world you could write a book that that captures everything that's going on and not everything, but it's capturing a significant portion of the really important stuff from a coding standpoint. And I know we have people that have an engineering, a computer science background that are listening to this show right now.

I, I just want to make sure that they understand that you have this other book out there as well that I think they might be very interested in.

Yeah, so programming Bitcoin, that's published by O'Reilley, all of you tech geeks know about O'Reilley, they make a lot of books on different technical topics and stuff.

I was privileged to be able to write that book for them. And it came out of frustration from my early days in Bitcoin where there wasn't that much documentation and nobody taught me anything.

And I couldn't find any of the details for anything. So that just as a programmer, I this is the resource that I wish I had when it came as a result of me teaching a lot of different people how to program Bitcoin stuff. And through doing that, I, I understood where people are getting stuck and so on. It's a very interactive book, so it has a lot of programming exercises for you to do to make sure that you understand what the heck is going on.

So if you don't understand it, you're not going to be able to complete the exercise. So you might want to read that part again. And it's meant to be a way for you to really understand everything from a nuts and bolts level. It starts with math, with a finite fields and elliptic curves, things that you don't necessarily learn in high school or college, but they're not that hard to learn. So I teach those and a lot of programming exercises and then it goes through signatures and public key cryptography and the Bitcoin protocol and what what the anatomy of a transaction block headers and the actual networking aspect.

And by the end of it, you should be able to connect through the Bitcoin network with your programming and and receive transactions and block headers and so on. That's what the book is.

I just have such a smile of admiration, I just can't imagine how long it took you to write this.

Took me like 16 months, and it was it was quite the slog, mostly because writing is a lonely endeavor and it's so true.

It's it's something that you just especially like when you're facing that blank page is sort of like an existential dilemma. It's like, do I really exist unless I write something down? But then you find every excuse imaginable to actually not write words on the page. This is why the other two books that I've written, little Bitcoin book and thank God for Bitcoin. I did it as a group because there's something about writing with other people and having them depend on you.

Yes.

That motivates to way better. And and that's how I want to write every other book for the rest of my life is is with other people and depending on other people. And part of what you described about thank God for Bitcoin is that we get to the point we don't use flowery language and stuff. It's because it has eight authors and we read every page out loud. This was one of the things that we did. And if it sounded supercilious or conceited or something like that, people would say so.

So we would change change up the language so that it's accessible to somebody with like a ninth grade reading level and they can understand the arguments we're making. It's not necessarily because we're more virtuous, it's because we just had a lot more eyes look at it and you can create something beautiful that way. And that's something that I learned from startups and that's what I brought. I can hopefully bring to books and that's what I love about it.

The thing I've learned about writing is the static friction is so much higher than the kinetic friction. It's just so hard to get started each day.

This is why I like writing books with people.

Yeah, yeah, yeah. You're right. You're right.

The static friction like kind of goes away because if the person next to you is writing...

Yeah. You feel guilty. All right, Jimmy, man, thank you so much for coming on the show. We have got to do this again. I thoroughly enjoyed this. People go out, check out the book. Thank God for Bitcoin. Check out Jimmy also has a podcast, very active on Twitter. Where else can they find your Jimmy? There's the spots to hit ya?

So I have a weekly newsletter that's sort of the technical developments in Bitcoin that are happening. It's called the Bitcoin Tech Talk, and it's at Jimmy Song dot substack dot com. And you can go and sign up for my newsletter. You'll get it in your inbox every Monday. The other thing I have is the podcast. Like you said, Bitcoin fixes this. I'm on Twitter at Jimmy Song, GitHub at Jimmy Song LinkedIn Jimmy In/ Jimmy Song.

So medium at Jimmy Song. I don't publish too much there anymore because I'm writing this weekly newsletter, but there's a lot of old articles that might be helpful if you want to understand what happened during Segwit.

Jimmy, thanks for coming on the show.

Thanks for having me.

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